Document:

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                                                                    Exhibit 10.6

HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

                            Effective January 1, 2003

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

                             MASTER TRUST AGREEMENT

                                TABLE OF CONTENTS

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Article                                                                                                 Page
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ARTICLE 1    Name, Intentions, Irrevocability, Deposit and Definitions...................................1

     1.1.    Name........................................................................................1
     1.2.    Intentions..................................................................................1
     1.3.    Irrevocability; Creditor Claims.............................................................1
     1.4.    Initial Deposit.............................................................................2
     1.5.    Additional Definitions......................................................................2
     1.6.    Grantor Trust...............................................................................3

ARTICLE 2    General Administration......................................................................4

     2.1.    Committee Directions and Administration Before Change in Control............................4
     2.2.    Administration Upon Change in Control.......................................................4
     2.3.    Contributions...............................................................................4
     2.4.    Trust Fund..................................................................................5
     2.5.    Distribution of Excess Trust Fund to Employers..............................................5

ARTICLE 3    Powers and Duties of Trustee................................................................5

     3.1.    Investment Directions.......................................................................5
     3.2.    Investment Upon Change in Control...........................................................5
     3.3.    Management of Investments...................................................................6
     3.4.    Securities..................................................................................8
     3.5.    Substitution................................................................................8
     3.6.    Distributions...............................................................................8
     3.7.    Trustee Responsibility Regarding Payments on Insolvency....................................11
     3.8.    Costs of Administration....................................................................13
     3.9.    Trustee Compensation and Expenses..........................................................13
     3.10.   Professional Advice........................................................................13
     3.11.   Payment on Court Order.....................................................................13
     3.12.   Protective Provisions......................................................................14
     3.13.   Indemnifications...........................................................................14

ARTICLE 4    Insurance Contracts........................................................................15

     4.1.    Types of Contracts.........................................................................15
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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

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     4.2.    Ownership..................................................................................15
     4.3.    Restrictions on Trustee's Rights...........................................................15

ARTICLE 5    Trustee's Accounts.........................................................................15

     5.1.    Records....................................................................................15
     5.2.    Annual Accounting; Final Accounting........................................................16
     5.3.    Valuation..................................................................................16
     5.4.    Delegation of Duties.......................................................................17

ARTICLE 6    Resignation or Removal of Trustee..........................................................17

     6.1.    Resignation; Removal.......................................................................17
     6.2.    Successor Trustee..........................................................................17
     6.3.    Settlement of Accounts.....................................................................17

ARTICLE 7    Controversies, Legal Actions and Counsel...................................................18

     7.1.    Controversy................................................................................18
     7.2.    Joinder of Parties.........................................................................18
     7.3.    Employment of Counsel......................................................................18

ARTICLE 8    Insurers...................................................................................18

     8.1.    Insurer Not a Party........................................................................18
     8.2.    Authority of Trustee.......................................................................18
     8.3.    Contract Ownership.........................................................................18
     8.4.    Limitation of Liability....................................................................19
     8.5.    Change of Trustee..........................................................................19

ARTICLE 9    Amendment and Termination..................................................................19

     9.1.    Amendment..................................................................................19
     9.2.    Final Termination..........................................................................20

ARTICLE 10   Miscellaneous..............................................................................20

     10.1.   Directions Following Change in Control.....................................................20
     10.2.   Taxes......................................................................................21
     10.3.   Third Persons..............................................................................21
     10.4.   Nonassignability; Nonalienation............................................................21
     10.5.   Applicable Law.............................................................................21
     10.6.   Notices and Directions.....................................................................21
     10.7.   Successors and Assigns.....................................................................21
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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

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     10.8.   Gender and Number..........................................................................22
     10.9.   Headings...................................................................................22
     10.10.  Counterparts...............................................................................22
     10.11.  Beneficial Interest........................................................................22
     10.12.  The Trust and Plans........................................................................22
     10.13.  Effective Date.............................................................................22

Exhibit A    Plans......................................................................................23
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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

                             MASTER TRUST AGREEMENT
                                       FOR
                           HAYNES INTERNATIONAL, INC.
                    SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN(S)

             THIS MASTER TRUST AGREEMENT ("Master Trust Agreement") is made and
entered into as of January 13, 2003, between Haynes International, Inc., a
Delaware corporation (the "Company"), and Legacy Trust Company, Inc., a Florida
corporation (the "Trustee"), to evidence the master trust (the "Trust") to be
established, pursuant to those executive deferral plans or other arrangements of
the Company listed in Exhibit A (the "Plans") now or hereafter existing that
require the establishment of a trust, for the benefit of a select group of
management or highly compensated employees and/or Directors, as hereinafter
defined, who contribute materially to the continued growth, development and
business success of the Company and those subsidiaries of the Company, if any,
that participate in the Plans (collectively, "Subsidiaries," or singularly,
"Subsidiary").

                                    ARTICLE 1
                        NAME, INTENTIONS, IRREVOCABILITY,
                             DEPOSIT AND DEFINITIONS

1.1.    NAME. The name of the Trust created by this Agreement (the "Trust")
        shall be:

                           MASTER TRUST AGREEMENT FOR
                            HAYNES NTERNATIONAL, INC.
                    SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN(S)

1.2.    INTENTIONS. The Company wishes to establish the Trust and to contribute
        to the Trust assets that shall be held therein, subject to the claims of
        the Company's and the Subsidiaries' creditors in the event of their
        Insolvency (as defined below) until paid to Participants, as hereinafter
        defined, and their Beneficiaries, as hereinafter defined, in such manner
        and at such times as specified in the Plans, as hereinafter defined. It
        is the intention of the parties that this Trust shall constitute an
        unfunded arrangement and shall not affect the status of the Plans as
        unfunded plans maintained for the purpose of providing supplemental
        compensation for a select group of management or highly compensated
        employees and/or Directors for purposes of Title I of ERISA (as defined
        below). In addition, it is the intention of the Company and the
        Subsidiaries to make contributions to the Trust to provide themselves
        with a source of funds to assist them in the meeting of their
        liabilities under the Plans.

1.3.    IRREVOCABILITY; CREDITOR CLAIMS. The Trust hereby established shall be
        irrevocable. Except as otherwise provided in Sections 2.5 and 9.2, the
        principal of the Trust, and any earnings thereon,

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

        shall be held separate and apart from other finds of the Company and the
        Subsidiaries and shall be used exclusively for the uses and purposes of
        the Participants and the general creditors of the Company and the
        Subsidiaries as herein set forth. The Participants and their
        Beneficiaries shall have no preferred claim on, or any beneficial
        ownership interest in, any assets of the Trust. Any rights created under
        the Plans and this Master Trust Agreement shall be mere unsecured
        contractual rights of the Participants and their Beneficiaries against
        the Company and the Subsidiaries. Any assets held by the Trust will be
        subject to the claims of the Company's and the Subsidiaries' general
        creditors under federal and state law in the event of Insolvency.

1.4.    INITIAL DEPOSIT. The Company hereby deposits with the Trustee in trust
        $100, which shall become the principal of the Trust to be held,
        administered and disposed of by the Trustee as provided in this Master
        Trust Agreement

1.5.    ADDITIONAL DEFINITIONS. In addition to the definitions set forth above,
        for purposes hereof, unless otherwise clearly apparent from the context,
        the following terms have the following indicated meanings:

        (a)     "Beneficiary" shall mean one or more persons, trusts, estates or
                other entities, designated in accordance with a Plan, that are
                entitled to receive benefits under a Plan upon the death of a
                Participant.

        (b)     "Board" shall mean the board of directors of the Company.

        (c)     "Change in Control" shall be deemed to occur if.

                (i)     Any "person" (as that term is used in Section 13 and
                        14(d)(2) of the Securities Exchange Act of 1934
                        ("Exchange Act")) becomes the beneficial owner (as that
                        term is used in Section 13(d) of the Exchange Act),
                        directly or indirectly, of fifty percent (50%) or more
                        of the Company's capital stock entitled to vote in the
                        election of Directors;

                (ii)    During any period of not more than two consecutive
                        years, not including any period prior to the adoption of
                        this Plan, individuals who, at the beginning of such
                        period constitute the Board, and any new Director (other
                        than a Director designated by a person, who has entered
                        into an agreement with the Company to effect a
                        transaction described in clause (i), (iii), (iv) or (v)
                        of this Section 1.5(c)) whose election by the board of
                        directors or nomination for election by the Company's
                        stockholders was approved by a vote of at least
                        three-fourths (3/4ths) of the Directors then still in
                        office, who either were Directors at the beginning of
                        the period or whose election or nomination for election
                        was previously so approved, cease for any reason to
                        constitute at least a majority thereof;

                (iii)   The shareholders of the Company approve any
                        consolidation or merger of the Company, other than a
                        consolidation or merger of the Company in which the
                        holders of the common stock of the Company immediately
                        prior to the

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

                        consolidation or merger hold more than fifty (50%) of
                        the common stock of the surviving corporation
                        immediately after the consolidation or merger;

                (iv)    The shareholders of the Company approve any plan or
                        proposal for the liquidation or dissolution of the
                        Company, or

                (v)     The shareholders of the Company approve the sale or
                        transfer of all or substantially all of the assets of
                        the Company to parties that are not within a "controlled
                        group of corporations" (as defined in Code Section 1563)
                        in which the Company is a member.

        (d)     "Committee" shall mean the Retirement Committee appointed by the
                Board to administer this Trust.

        (e)     "Director" shall mean any member of the Board of Directors of
                the Company or any Subsidiary.

        (f)     "ERISA" shall mean the Employee Retirement Income Security Act
                of 1974, as it may be amended from time to time.

        (g)     "Insolvent" shall have the meaning set forth in Section 3.7(a)
                below.

        (h)     "Insolvent Entity" shall have the meaning set forth in Section
                3.7(a) below.

        (i)     "IRS" shall mean the Internal Revenue Service.

        (j)     "Participant" shall mean a person who is a participant in one or
                more of the Plans in accordance with their terms and conditions.

        (k)     "Payment Schedule" shall have the meaning set forth in Section
                3.6(b) below.

        (l)     "Plan(s)" shall mean those executive deferral plans or other
                arrangements of the Company listed in Exhibit A.

        (m)     "Plan Year" shall mean the Plan Year chosen for this Master
                Trust Agreement by the Board.

        (n)     "Trust Fund" shall mean the assets held by the Trustee pursuant
                to the terms of this Master Trust Agreement and for the purposes
                of the Plans.

1.6.    GRANTOR TRUST. The Trust is intended to be a "grantor trust," of which
        the Company and the Subsidiaries are the grantors, within the meaning of
        subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal
        Revenue Code of 1986, as amended, and the Trust shall be construed
        accordingly.

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

                                    ARTICLE 2
                             GENERAL ADMINISTRATION

2.1.    COMMITTEE DIRECTIONS AND ADMINISTRATION BEFORE CHANGE IN CONTROL. Until
        a Change in Control has occurred, this Section 2.l shall be effective
        and the Committee shall direct the Trustee as to the administration of
        the Trust in accordance with the following provisions.

        (a)     The Committee shall be identified to the Trustee by a copy of
                the resolution of the Board appointing the Committee. In the
                absence thereof, the Board shall be the Committee. Persons
                authorized to give directions to the Trustee on behalf of the
                Committee shall be identified to the Trustee by written notice
                from the Committee, and such notice shall contain specimens of
                the authorized signatures. The Trustee shall be entitled to rely
                on such written notice as evidence of the identity and authority
                of the persons appointed until a written cancellation of the
                appointment, or the written appointment of a successor, is
                received by the Trustee.

        (b)     Directions by the Committee, or its delegate, to the Trustee
                shall be in writing and signed by the Committee or persons
                authorized by the Committee, or may be made by such other method
                as is acceptable to the Trustee.

        (c)     The Trustee may conclusively rely upon directions from the
                Committee in taking any action with respect to this Master Trust
                Agreement, including the making of payments from the Trust Fund
                and the investment of the Trust Fund pursuant to this Master
                Trust Agreement. The Trustee shall have no liability for actions
                taken, or for failure to act, on the direction of the Committee.
                The Trustee shall have no liability for failure to act in the
                absence of proper written directions.

        (d)     The Trustee may request instructions from the Committee and
                shall have no duty to act or liability for failure to act if
                such instructions are not forthcoming from the Committee. If
                requested instructions are not received within a reasonable
                time, the Trustee may, but is under no duty to, act on its own
                discretion to carry out the provisions of this Master Trust
                Agreement in accordance with this Master Trust Agreement and the
                Plans.

2.2.    ADMINISTRATION UPON CHANGE IN CONTROL. In the event of a Change in
        Control, the authority of the Committee to administer the Trust and
        direct the Trustee, as set forth in Section 2.1 above, shall cease, and
        the Trustee shall have complete authority to administer the Trust.

2.3.    CONTRIBUTIONS. Except as provided in any Plan, the Company and the
        Subsidiaries, in their sole discretion, may at any time, or from time to
        time, make additional deposits of cash, marketable securities, annuities
        or insurance policies in trust with the Trustee to augment the principal
        to be held, administered and disposed of by the Trustee as provided in
        this Master Trust Agreement. Neither the Trustee nor any Participant or
        Beneficiary shall have any right to compel such additional deposits. The
        Trustee shall have no duty to collect or enforce payment to it of any
        contributions or to require that any contributions be made, and shall
        have no duty to compute any

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

        amount to be paid to it nor to determine whether amounts paid comply
        with the terms of the Plans; provided, however, that following a Change
        in Control, the Trustee shall have the right, in its sole and absolute
        discretion, to compel a contribution to the Trust from the Company to
        make up for any shortfall between (i) the anticipated benefit
        obligations and administrative expenses that are to be paid under the
        Plans and Trust and (ii) the assets of the Trust Fund.

2.4.    TRUST FUND. The contributions received by the Trustee from the Company
        and the Subsidiaries shall be held and administered pursuant to the
        terms of this Master Trust Agreement as a single fund without
        distinction between income and principal and without liability for the
        payment of interest thereon except as expressly provided in this Master
        Trust Agreement. During the term of this Trust, all income received by
        the Trust, net of expenses and taxes, shall be accumulated and
        reinvested.

2.5.    DISTRIBUTION OF EXCESS TRUST FUND TO EMPLOYERS. In the event that the
        Committee, prior to a Change in Control, or the Trustee in its sole and
        absolute discretion, after a Change in Control, determines that the
        Trust Fund exceeds 1125 percent of the anticipated benefit obligations
        and administrative expenses that are to be paid under the Plans, the
        Trustee, at the direction of the Committee prior to a Change in Control,
        or in its sole and absolute discretion after a Change in Control, shall
        distribute to the Company and the Subsidiaries such excess portion of
        the Trust Fund.

                                    ARTICLE 3
                          POWERS AND DUTIES OF TRUSTEE

3.1.    INVESTMENT DIRECTIONS. Except as provided in this Section and Section
        3.2 below, the Committee shall provide the Trustee with all investment
        instructions in writing. The Trustee shall neither affect nor change
        investments of the Trust Fund, except as directed in writing by the
        Committee, and shall have no right, duty or responsibility to recommend
        investments or investment changes; provided, that the Trustee may (i)
        deposit cash on hand from time to time in any bank savings account,
        certificate of deposit, or other instrument creating a deposit liability
        for a bank, including the Trustee's own banking department, if the
        Trustee is a bank, without such prior direction, or (ii) invest in
        government securities, bonds with specific ratings, equities, or mutual
        funds composed of such investments, all within broad investment
        guidelines established by the Committee from time to time.

3.2.    INVESTMENT UPON CHANGE IN CONTROL. In the event of a Change in Control,
        the authority of the Committee to direct investments of the Trust Fund
        shall cease and the Trustee shall have complete authority to direct
        investments of the Trust Fund. The president of the Company shall notify
        the Trustee in writing when a Change in Control has occurred. The
        Trustee has no duty to inquire whether a Change in Control has occurred
        and may rely on notification by the president of the Company of a Change
        in Control; provided, however, that if any officer, former officer,
        Director or former Director of the Company or any Subsidiary (other than
        the president of the

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

        Company), or any Participant notifies the Trustee that there has been or
        there may be a Change in Control, the Trustee shall have the duty to
        satisfy itself as to whether a Change in Control has in fact occurred.
        The Company and the Subsidiaries shall indemnify and hold harmless the
        Trustee for any damages or costs (including attorneys' fees) that may be
        incurred because of reliance on the president's notice or lack thereof.

3.3.    MANAGEMENT OF INVESTMENTS. Subject to Section 3.1 above, the Trustee
        shall have, without exclusion, all powers conferred on the Trustee by
        applicable law, unless expressly provided otherwise herein, and all
        rights associated with assets of the Trust shall be exercised by the
        Trustee or the person designated. by the Trustee, and shall in no event
        be exercisable by or rest with Participants or their Beneficiaries. The
        Trustee shall have full power and authority to invest and reinvest the
        Trust Fund in any investment permitted by law, exercising the judgment
        and care that persons of prudence, discretion and intelligence would
        exercise under the circumstances then prevailing, considering the
        probable income and safety of their capital, including, without limiting
        the generality of the foregoing, the power:

        (a)     To invest and reinvest the Trust Fund, together with the income
                therefrom, in common stock, preferred stock, convertible
                preferred stock, mutual funds, bonds, debentures, convertible
                debentures and bonds, mortgages, notes, time certificates of
                deposit, commercial paper and other evidences of indebtedness
                (including those issued by the Trustee or any of its
                affiliates), other securities, policies of life insurance,
                annuity contracts, options to buy or sell securities or other
                assets, and other property of any kind (personal, real, or
                mixed, and tangible or intangible); provided, however, that in
                no event may the Trustee invest in securities (including stock
                or rights to acquire stock) or obligations issued by the Company
                or the Subsidiaries, other than a de minimis amount held in
                common investment vehicles in which the Trustee invests;

        (b)     To deposit or invest all or any part of the assets of the Trust
                Fund in savings accounts or certificates of deposit or other
                deposits which bear a reasonable interest rate in a bank,
                including the commercial department of the Trustee, if such bank
                is supervised by the United States or any State;

        (c)     To hold, manage, and control all financial assets, forming part
                of the Trust Fund and to sell, convey, transfer, exchange,
                partition, lease for any term, even extending beyond the
                duration of this Trust, and otherwise dispose of the same from
                time to time in such manner, for such consideration, and upon
                such terms and conditions as the Trustee shall determine;

        (d)     To have, respecting securities, all the rights, powers and
                privileges of an owner, including the power to give proxies, pay
                assessments and other sums deemed by the Trustee to be necessary
                for the protection of the Trust Fund, to vote any corporate
                stock either in person or by proxy, with or without power of
                substitution, for any purpose; to participate in voting trusts,
                pooling agreements, foreclosures, reorganizations,
                consolidations,

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

                mergers and liquidations, and in connection therewith to deposit
                securities with and transfer title to any protective or other
                committee under such terms as the Trustee may deem advisable; to
                exercise or sell stock subscriptions or conversion rights; and,
                regardless of any limitation elsewhere in this instrument
                relative to investment by the Trustee, to accept and retain as
                an investment any securities or other property received through
                the exercise of any of the foregoing powers;

        (e)     To hold in cash, without liability for interest, such portion of
                the Trust Fund which, in its discretion, shall be reasonable
                under the circumstances, pending investments, or payment of
                expenses, or the distribution of benefits;

        (f)     To take such actions as may be necessary or desirable to protect
                the Trust Fund from loss due to the default on mortgages held in
                the Trust including the appointment of agents or trustees in
                such other jurisdictions as may seem desirable, to transfer
                property to such agents or trustees, to grant such powers as are
                necessary or desirable to protect the Trust or its assets, to
                direct such agents or trustees, or to delegate such power to
                direct, and to remove such agents or trustees;

        (g)     To employ such agents including custodians and counsel as may be
                reasonably necessary and to pay them reasonable compensation; to
                settle, compromise or abandon all claims and demands in favor of
                or against the Trust assets;

        (h)     To cause title to property of the Trust to be issued, held or
                registered in the individual name of the Trustee, or in the name
                of its nominee(es) or agents, or in such form that title will
                pass by delivery;

        (i)     To exercise all of the further rights, powers, options and
                privileges granted, provided for, or vested in trustees
                generally under the laws of the State whose laws are applicable
                to this Master Trust Agreement, as provided in Section 10.5
                below, so that the powers conferred upon the Trustee herein
                shall not be in limitation of any authority conferred by law,
                but shall be in addition thereto;

        (j)     To borrow money from any source (including the Trustee) and to
                execute promissory notes, mortgages or other obligations and to
                pledge or mortgage any Trust assets as security;

        (k)     To lend certificates representing stocks, bonds, or other
                securities to any brokerage or other firm selected by the
                Trustee;

        (l)     To institute, compromise and defend actions and proceedings; to
                pay or contest any claim; to settle a claim by or against the
                Trustee by compromise, arbitration, or otherwise; to release, in
                whole or in part, any claim belonging to the Trust to the extent
                that the claim is uncollectible;

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

        (m)     To use securities depositories or custodians and to allow such
                securities as may be held by a depository or custodian to be
                registered in the name of such depository or its nominee or in
                the name of such custodian or its nominee;

        (n)     To invest the Trust Fund from time to time in one or more
                investment funds, which funds shall be registered under the
                Investment Company Act of 1940; and

        (o)     To do all other acts necessary or desirable for the proper
                administration of the Trust Fund, as if the Trustee were the
                absolute owner thereof.

        However, nothing in this section shall be construed to mean the Trustee
        assumes any responsibility for the performance of any investment made by
        the Trustee in its capacity as trustee under the operations of this
        Master Trust Agreement. Notwithstanding any powers granted to the
        Trustee pursuant to this Master Trust Agreement or to applicable law,
        the Trustee shall not have any power that could give this Trust the
        objective of carrying on a business and dividing the gains therefrom,
        within the meaning of section 301.7701-2 of the Procedure and
        Administrative Regulations promulgated pursuant to the Internal Revenue
        Code of 1986, as amended.

3.4.    SECURITIES. Voting or other rights in securities shall be exercised by
        the person or entity responsible for directing such investments, and the
        Trustee shall have no duty to exercise voting or proxy or other rights
        relating to any investment managed or directed by the Committee. If any
        foreign securities are purchased pursuant to the direction of the
        Committee, it shall be the responsibility of the person or entity
        responsible for directing such investments to advise the Trustee in
        writing of any laws or regulations, either foreign or domestic, that
        apply to such foreign securities or to the receipt of dividends or
        interest on such securities.

3.5.    SUBSTITUTION. Notwithstanding any provision of any Plan or the Trust to
        the contrary, the Company and/or any Subsidiary shall at all times have
        the power to reacquire the Trust Fund by substituting readily marketable
        securities (other than stock, a debt obligation or other security issued
        by the Company or any Subsidiary) and/or cash of an equivalent value and
        such other property shall, following such substitution, constitute the
        Trust Fund. Notwithstanding the foregoing, after a Change in Control,
        any such substitution shall be subject to the approval of the Trustee.

3.6.    DISTRIBUTIONS.

        (a)     The establishment of the Trust and the payment or delivery to
                the Trustee of money or other property shall not vest in any
                Participant or Beneficiary any right, title, or interest in and
                to any assets of the Trust. To the extent that any Participant
                or Beneficiary acquires the right to receive payments under any
                of the Plans, such right shall be no greater than the right of
                an unsecured general creditor of the Company and the
                Subsidiaries and such Participant or Beneficiary shall have only
                the unsecured promise of the Company and the Subsidiaries that
                such payments shall be made.

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

        (b)     Concurrent with the establishment of this Trust, the Company
                shall deliver to the Trustee a schedule (the "Payment Schedule")
                that indicates the amounts payable in respect of each
                participant (and his or her Beneficiaries) on a Plan by Plan
                basis, provides a formula or formulas or other instructions
                acceptable to the Trustee for determining the amounts so
                payable, specifies the form in which such amount is to be paid
                (as provided for or available under the applicable Plans), and
                the time of commencement for payment of such amounts. The
                Payment Schedule shall be updated annually and upon a Change in
                Control and from time to time as is necessary thereafter. Except
                as otherwise provided herein, prior to a Change in Control, the
                Trustee shall make payments to the Participants and their
                Beneficiaries in accordance with such Payment Schedule. Despite
                the foregoing, after a Change in Control, the Trustee shall make
                payments in accordance with the terms and provisions of each of
                the Plans and related plan agreements. The Trustee, at the
                direction of the Committee or, after a Change in Control, on its
                own volition, may make any distribution required to be made by
                it hereunder by delivering:

                (i)     Its check payable to the person to whom such
                        distribution is to be made, to the person, or, if prior
                        to a Change in Control, to the Company for redelivery to
                        such person; provided that before a Change in Control,
                        the Committee may direct the Trustee to deliver one or
                        more lump sum checks payable to the Company, and the
                        Company shall prepare and deliver individual checks for
                        each Participant or Beneficiary; or

                (ii)    Its check payable to an insurer for the benefit of such
                        person, to the insurer, or, if prior to a Change in
                        Control, to the Company for redelivery to the insurer;
                        or

                (iii)   Contracts held on the life of the Participant to whom or
                        with respect to whom the distribution is being made, to
                        the Participant or Beneficiary, or, if prior to a Change
                        in Control, to the Company for redelivery to the person
                        to whom such distribution is to be made; or

                (iv)    If a distribution is being made, in whole or in part, of
                        other assets, assignments or other appropriate documents
                        or certificates necessary to effect a transfer of title,
                        to the Participant or Beneficiary, or, if prior to a
                        Change in Control, to the Company for redelivery to such
                        person.

        (c)     If the principal of the Trust, and any earnings thereon, are not
                sufficient, determined on a Plan by Plan basis, to make payments
                of benefits in accordance with the terms of the Plans, the
                Company and the Subsidiaries shall make the balance of each such
                payment as it falls due. The Trustee shall notify the Company
                and the Subsidiaries when principal and earnings are not
                sufficient. To the extent that the total Trust assets available
                to make benefit payments to Participants or Beneficiaries who
                are currently entitled to payment are less than the liabilities
                of the Plans, the Trustee shall make benefit payments

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

                proportionate to the ratio of assets available to pay benefits
                to the total values of the liabilities.

        (d)     The Company and the Subsidiaries may make payment of benefits
                directly to Participants or their Beneficiaries as they become
                due under the terms of the Plans. The Company and the
                Subsidiaries shall notify the Trustee of their decisions to make
                payment of benefits directly prior to the time amounts are
                payable to Participants or their Beneficiaries.

        (e)     Notwithstanding anything contained in this Master Trust
                Agreement to the contrary, if at any time the Trust is finally
                determined by the IRS not to be a "grantor trust" with the
                result that the income of the Trust Fund is not treated as
                income of the Company or the Subsidiaries pursuant to Sections
                671 through 679 of the Internal Revenue Code of 1986, as
                amended, or if a tax is finally determined by the IRS to be
                payable by one or more Participants or Beneficiaries with
                respect to any interest in the Plans or the Trust Fund prior to
                payment of such interest to any such Participant or Beneficiary,
                the Trustee shall immediately determine each Participant's share
                of the Trust Fund in accordance with the Plans, and the Trustee
                shall immediately distribute such share in a lump sum to each
                Participant or Beneficiary entitled thereto, regardless of
                whether such Participant's employment has terminated (provided
                such Participant has a vested interest in his or her accrued
                benefits under the Plans) and regardless of form and time of
                payments specified in or pursuant to the Plans. Any remaining
                assets (less any expenses or costs due under Sections 3.8 and
                3.9 of this Master Trust Agreement) shall then be paid by the
                Trustee to the Company and the Subsidiaries in such amounts, and
                in the manner instructed by the Committee. If the value of the
                Trust Fund is less than the benefit obligations under the Plans,
                the foregoing described distributions will be limited to a
                Participant's share of the Trust Fund, determined by allocating
                assets to the Participant based on the ratio of the
                Participant's benefit obligations under the Plans to the total
                benefit obligations under the Plans. Prior to a Change in
                Control, the Trustee shall rely solely on the written directions
                of the Committee with respect to the occurrence of the foregoing
                events and the resulting distributions to be made, and the
                Trustee shall not be responsible for any failure to act in the
                absence of such direction.

        (f)     The Trustee shall make provision for the reporting and
                withholding of any federal, state or local taxes that may be
                required to be withheld with respect to the payment of benefits
                pursuant to the terms of the Plans and at the discretion of the
                Retirement Committee shall pay amounts withheld to the
                appropriate taxing authorities or determine that such amounts
                have been reported, withheld and paid by the Company and the
                Subsidiaries.

        (g)     Prior to a Change in Control, payments by the Trustee shall be
                delivered or mailed to addresses supplied by the Retirement
                Committee and the Trustee's obligation to make such payments
                shall be satisfied upon such delivery or mailing. Prior to a
                Change in Control, the Trustee shall have no obligation to
                determine the identity of persons entitled to benefits or their
                mailing addresses. After a Change in Control, the Retirement

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

                Committee shall provide written directions as to the identity of
                persons entitled to benefits and their mailing addresses.

        (h)     Prior to a Change in Control, the entitlement of a Participant
                or his or her Beneficiaries to benefits under the Plans shall be
                determined by the Company and the Subsidiaries or such party as
                they shall designate under the Plans, and any claim for such
                benefits shall be considered and reviewed under the procedures
                set out in the Plans.

        (i)     Notwithstanding Section 3.6(h), upon and after the occurrence of
                a Change in Control, the Plan shall be administered by (i) an
                independent third party (the "Administrator") selected by the
                Trustee and approved by the individual who, immediately prior to
                such event, was the Company's Chief Executive Officer or, if not
                so identified, the Company's highest ranking officer (the
                "Ex-CEO"), or (ii) if an independent third party is not selected
                within ninety (90) days of a Change in Control, the Committee.
                The Administrator shall have the discretionary power to
                determine all questions arising in connection with the
                administration of the Plan and the interpretation of the Plan
                and Trust including, but not limited to benefit entitlement
                determinations; provided, however, upon and after the occurrence
                of a Change in Control, the Administrator shall have no power to
                direct the investment of Plan or Trust assets or select any
                investment manager or custodial firm for the Plan or Trust. Upon
                and after the occurrence of a Change in Control, the Company
                must: (1) pay all reasonable administrative expenses and fees of
                the Administrator; (2) indemnify the Administrator against any
                costs, expenses and liabilities including, without limitation,
                attorney's fees and expenses arising in connection with the
                performance of the Administrator hereunder, except with respect
                to matters resulting from the gross negligence or willful
                misconduct of the Administrator or its employees or agents; and
                (3) supply full and timely information to the Administrator or
                all matters relating to the Plan, the Trust, the Participants
                and their Beneficiaries, the Account Balances of the
                Participants, the date of circumstances of the Retirement,
                Disability, death or Termination of Employment of the
                Participants, and such other pertinent information as the
                Administrator may reasonably require. Upon and after a Change in
                Control, the Administrator may be terminated (and a replacement
                appointed) by the Trustee only with the approval of the Ex-CEO.
                Upon and after a Change in Control, the Administrator may not be
                terminated by the Company.

3.7.    TRUSTEE RESPONSIBILITY REGARDING PAYMENTS ON INSOLVENCY.

        (a)     The Trustee shall cease payment of benefits to Participants and
                their Beneficiaries if the Company, or any Subsidiary, is
                Insolvent (the "Insolvent Entity"). The Insolvent Entity shall
                be considered "Insolvent" for purposes of this Master Trust
                Agreement if:

                (i)     the Insolvent Entity is unable to pay its debts as they
                        become due, or

                (ii)    the Insolvent Entity is subject to a pending proceeding
                        as a debtor under the United States Bankruptcy Code.

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

                For purposes of this Section 3.7, if an entity is determined to
                be Insolvent, each Subsidiary in which such entity has an equity
                interest shall also be deemed to be an Insolvent Entity.
                However, the insolvency of a Subsidiary will not cause a parent
                corporation to be deemed Insolvent.

        (b)     At all times during the continuance of this Trust, as provided
                in Section 1.3 above, the principal and income of the Trust
                shall be subject to claims of the general creditors of the
                Company and its Subsidiaries under federal and state law as set
                forth below:

                (i)     The Board and the president of the Company shall have
                        the duty to inform the Trustee in writing of the
                        Company's or any Subsidiary's Insolvency. If a person
                        claiming to be a creditor of the Company or my
                        Subsidiary alleges in writing to the Trustee that the
                        Company or any Subsidiary has become Insolvent, the
                        Trustee shall determine whether the Company or any
                        Subsidiary is Insolvent and, pending such determination,
                        the Trustee shall discontinue payment of benefits to the
                        Insolvent Entity's Participants or their Beneficiaries.
                        Prior to a Change in Control, the Trustee may
                        conclusively rely on any determination it receives from
                        the Board or the president of the Company with respect
                        to the Insolvency of the Company or any Subsidiary.

                (ii)    Unless the Trustee bas actual knowledge of the Company's
                        or a Subsidiary's Insolvency, or has received notice
                        from the Company, a Subsidiary, or a person claiming to
                        be a creditor alleging that the Company or a Subsidiary
                        is Insolvent, the Trustee shall have no duty to inquire
                        whether the Company or any Subsidiary is Insolvent. The
                        Trustee may in all events rely on such evidence,
                        concerning the Company's or any Subsidiary's solvency as
                        may be furnished to the Trustee and that provides the
                        Trustee with a reasonable basis for making. a
                        determination concerning the Company's or any
                        Subsidiary's solvency. In this regard, the Trustee may
                        rely upon a letter from the Company's or a Subsidiary's
                        auditors as to the Company's or any Subsidiary's
                        financial status.

                (iii)   If at any time the Trustee has determined that the
                        Company or any Subsidiary is Insolvent, the Trustee
                        shall discontinue payments to the Insolvent Entity's
                        Participants or their Beneficiaries, and shall hold the
                        portion of the assets of the Trust allocable to the
                        Insolvent Entity for the benefit of the Insolvent
                        Entity's general creditors. Nothing in this Master Trust
                        Agreement shall in any way diminish any rights of
                        Participants or their Beneficiaries to pursue their
                        rights as general creditors of the Insolvent Entity with
                        respect to benefits due under the Plans or otherwise.

                (iv)    The Trustee shall resume the payment of benefits to
                        Participants or their Beneficiaries in accordance with
                        this Article 3 of this Master Trust Agreement

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

                        only after the Trustee has been provided proof that the
                        alleged Insolvent Entity is not Insolvent (or is no
                        longer Insolvent).

        (c)     Provided that there are sufficient assets, if the Trustee
                discontinues the payment of benefits from the Trust pursuant to
                Section 3.7(b) hereof and subsequently resumes such payments,
                the first payment following such discontinuance shall include
                the aggregate amount of all payments due to Participants or
                their Beneficiaries under the terms of the Plans for the period
                of such discontinuance, less the aggregate amount of any
                payments made to Participants or their Beneficiaries by the
                Company or any Subsidiary in lieu of the payments provided for
                hereunder during any such period of discontinuance. Prior to a
                Change in Control, the Committee shall instruct the Trustee as
                to such amounts, and after a Change in Control, the Trustee
                shall determine such amounts in accordance with the terms and
                provisions of the Plans.

3.8.    COSTS OF ADMINISTRATION. The Trustee is authorized to incur reasonable
        obligations in connection with the administration of the Trust,
        including attorneys' fees, Administrator fees, other administrative fees
        and appraisal fees. Such obligations shall be paid by the Company and
        the Subsidiaries. The Trustee is authorized to pay such amounts from the
        Trust Fund if the Company or the Subsidiaries fail to pay them within 60
        days of presentation of a statement of the amounts due.

3.9.    TRUSTEE COMPENSATION AND EXPENSES. The Trustee shall be entitled to
        reasonable compensation for its services as from time to time agreed
        upon between the Trustee and the Company. If the Trustee and the Company
        fail to agree upon a compensation, or following a Change in Control, the
        Trustee shall be entitled to compensation at a rate equal to the rate
        charged by the Trustee for similar services rendered by it during the
        current fiscal year for other trusts similar to this Trust. The Trustee
        shall be entitled to reimbursement for expenses incurred by it in the
        performance of its duties as the Trustee, including reasonable fees for
        legal counsel. The Trustee's compensation and expenses shall be paid by
        the Company and the Subsidiaries. The Trustee is authorized to withdraw
        such amounts from the Trust Fund if the Company or the Subsidiaries fail
        to pay them within 60 days of presentation of a statement of the amounts
        due.

3.10.   PROFESSIONAL ADVICE. The Company and the Subsidiaries specifically
        acknowledge that the Trustee and/or the Administrator may find it
        desirable or expedient to retain legal counsel (who may also be legal
        counsel for the Company generally) or other professional advisors to
        advise it in connection with the exercise of any duty under this Master
        Trust Agreement, including, but not limited to, any matter relating to
        or following a Change in Control or the Insolvency of the Company or any
        Subsidiary. The Trustee and/or Administrator shall be fully protected in
        acting upon the advice of such legal counsel or advisors.

3.11.   PAYMENT ON COURT ORDER. To the extent permitted by law, the Trustee is
        authorized to make any payments directed by court order in any action in
        which the Trustee has been named as a party. The Trustee is not
        obligated to defend actions in which the Trustee is named, but shall

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

        notify the Company or Committee of any such action and may tender
        defense of the action to the Company, Committee, Participant or
        Beneficiary whose interest is affected. The Trustee may in its
        discretion defend any action in which the Trustee is named, and any
        expenses incurred by the Trustee shall be paid by the Company and the
        Subsidiaries. The Trustee is authorized to pay such amounts from the
        Trust Fund if the Company or the Subsidiaries fail to pay them within
        sixty (60) days of presentation of a statement of the amounts due.

3.12.   PROTECTIVE PROVISIONS. Notwithstanding any other provision contained in
        this Master Trust Agreement to the contrary, the Trustee shall have no
        obligation to (i) determine the existence of any conversion, redemption,
        exchange, subscription or other right relating to any securities
        purchased of which notice was given prior to the purchase of such
        securities and shall have no obligation to exercise any such right
        unless the Trustee is advised in writing by the Committee both of the
        existence of the right and the desired exercise thereof within a
        reasonable time prior to the expiration of the right to exercise, or
        (ii) advance any funds to the Trust. Furthermore, the Trustee is not a
        party to the Plans.

3.13.   INDEMNIFICATIONS.

        (a)     The Company and the Subsidiaries shall indemnify and hold the
                Trustee harmless from and against all loss or liability
                (including expenses and reasonable attorneys' fees) to which it
                may be subject by reason of its execution of its duties under
                this Trust, or by reason of any acts taken in good faith in
                accordance with any directions, or acts omitted in good faith
                due to absence of directions, from the Company, the Committee or
                a Participant, unless such loss or liability is due to the
                Trustee's gross negligence or willful misconduct. The indemnity
                described herein shall be provided by the Company and the
                Subsidiaries.

        (b)     In the event that the Trustee is named as a defendant in a
                lawsuit or proceeding involving one or more of the Plans or the
                Trust Fund, the Trustee shall be entitled to receive on a
                current basis the indemnity payments provided for in this
                Section, provided however that if the final judgment entered in
                the lawsuit or proceeding holds that the Trustee is guilty of
                gross negligence or willful misconduct with respect to the Trust
                Fund, the Trustee shall be required to refund the indemnity
                payments that it has received.

        (c)     The Company and the Subsidiaries shall indemnify and hold the
                Administrator harmless from and against all loss or liability
                (including expenses and reasonable attorneys' fees) to which it
                may be subject by reason of its execution of its duties under
                this Trust, or by reason of any acts taken in good faith in
                accordance with any directions, or acts omitted in good faith
                due to absence of directions, from the Company, the Committee or
                a Participant, unless such loss or liability is due to the
                Administrator's gross negligence or willful misconduct. The
                indemnity described herein shall be provided by the Company and
                the Subsidiaries.

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

        (d)     In the event that the Administrator is named as a defendant in a
                lawsuit or proceeding involving one or more of the Plans or the
                Trust Fund, the Administrator shall be entitled to receive on a
                current basis the indemnity payments provided for in this
                Section, provided however that if the final judgment entered in
                the lawsuit or proceeding holds that the Administrator is guilty
                of gross negligence or willful misconduct with respect to its
                duties under the Plans or the Trust, the Administrator shall be
                required to refund the indemnity payments that it has received.

        (e)     All releases and indemnities provided in this Master Trust
                Agreement shall survive the termination of this Master Trust
                Agreement.

                                    ARTICLE 4
                               INSURANCE CONTRACTS

4.1.    TYPES OF CONTRACTS. To the extent that the Trustee is directed by the
        Committee prior to a Change in Control to invest part or all of the
        Trust Fund in insurance contracts, the type and amount thereof shall be
        specified by the Committee. The Trustee shall be under no duty to make
        inquiry as to the propriety of the type or amount so specified.

4.2.    OWNERSHIP. Each insurance contract issued shall provide that the Trustee
        shall be the owner thereof with, the power to exercise all rights,
        privileges, options and elections granted by or permitted under such
        contract or under the rules of the insurer. The exercise by the Trustee
        of any incidents of ownership under any contract shall, prior to a
        Change in Control, be subject to the direction of the Committee.

4.3.    RESTRICTIONS ON TRUSTEE'S RIGHTS. The Trustee shall have no power to
        name a beneficiary of the policy other than the Trust, to assign the
        policy (as distinct from conversion of the policy to a different form)
        other than to a successor Trustee, or to loan to any person the proceeds
        of any borrowing against such policy. Despite the foregoing, the Trustee
        may (i) loan to the Company or any Subsidiary the proceeds of any
        borrowing against an insurance policy held in the Trust Fund or (ii)
        assign all, or any portion, of a policy to the Company or any Subsidiary
        if under other provisions of this Master Trust Agreement the Company or
        any Subsidiary is entitled to receive assets from the Trust.

                                    ARTICLE 5
                               TRUSTEE'S ACCOUNTS

5.1.    RECORDS. The Trustee shall maintain accurate records and detailed
        accounts of all investments, receipts, disbursements and other
        transactions hereunder. Such records shall be available at all
        reasonable times for inspection by the Company and Subsidiaries or their
        authorized representative. The Trustee, at the direction of the
        Committee, shall submit to the Committee

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

        and to any insurer such valuations, reports or other information as the
        Committee may reasonably require and, in the absence of fraud or bad
        faith, the valuation of the Trust Fund by the Trustee shall be
        conclusive.

5.2.    ANNUAL ACCOUNTING; FINAL ACCOUNTING.

        (a)     Within 60 days following the end of each Plan Year and within 60
                days after the removal or resignation of the Trustee or the
                termination of the Trust, the Trustee shall file with the
                Committee a written account setting forth a description of all
                properties purchased and sold, all receipts, disbursements and
                other transactions effected by it during the Plan Year or, in
                the case of removal, resignation or termination, since the close
                of the previous Plan Year, and listing the properties held in
                the Trust Fund as of the last day of the Plan Year or other
                period and indicating their values. Such values shall be either
                cost or market as directed by the Committee in accordance with
                the terms of the Plans.

        (b)     The Committee may approve such account either by written notice
                of approval delivered to the Trustee or by its failure to
                express written objection to such account delivered to the
                Trustee within 60 days after the date of which such account was
                delivered to the Committee.

        (c)     The approval by the Committee of an accounting shall be binding
                as to all matters embraced in such accounting on all parties to
                this Master Trust Agreement and on all Participants and
                Beneficiaries, to the same extent as if such accounting had been
                settled by a judgment or decree of a court of competent
                jurisdiction in which the Trustee, the Committee, the Company,
                the Subsidiaries and all persons having or claiming any interest
                in any Plan or the Trust Fund were made parties.

        (d)     Despite the foregoing, nothing contained in this Master Trust
                Agreement shall deprive the Trustee of the right to have an
                accounting judicially settled, if the Trustee, in the Trustee's
                sole discretion, desires such a settlement.

5.3.    VALUATION. The assets of the Trust Fund shall be valued at their
        respective fair market values on the date of valuation, as determined by
        the Trustee based upon such sources of information as it may deem
        reliable, including, but not limited to, stock market quotations,
        statistical valuation services, newspapers of general circulation,
        financial publications, advice from investment counselors, brokerage
        firms or insurance companies, or any combination of sources. Prior to a
        Change in Control, the Committee shall instruct the Trustee as to the
        value of assets for which market values are not readily obtainable by
        the Trustee. If the Committee fails to provide such values, the Trustee
        may take whatever action it deems reasonable, including employment of
        attorneys, appraisers, life insurance companies or other professionals,
        the expense of which shall be an expense of administration of the Trust
        Fund and payable by the Company and the Subsidiaries. The Trustee may
        rely upon information from the Company and the Subsidiaries, the
        Committee, appraisers or other sources and shall not incur any liability
        for an inaccurate valuation based in good faith upon such information.

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

5.4.    DELEGATION OF DUTIES. The Company or the Committee, or both, may at any
        time employ the Trustee as their agent to perform any act, keep any
        records or accounts and make any computations that are required of the
        Company, any Subsidiary or the Committee by this Master Trust Agreement
        or the Plans. The Trustee may be compensated for such employment and
        such employment shall not be deemed to be contrary to the Trust. Nothing
        done by the Trustee as such agent shall change or increase its
        responsibility or liability as Trustee hereunder.

                                    ARTICLE 6
                        RESIGNATION OR REMOVAL OF TRUSTEE

6.1.    RESIGNATION; REMOVAL. The Trustee may resign at any time by written
        notice to the Company, which shall be effective 60 days after receipt of
        such notice unless the Company and the Trustee agree otherwise. Prior to
        a Change in Control, the Trustee may be removed by the Company on 60
        days notice or upon shorter notice accepted by the Trustee. After a
        Change in Control, the Trustee may be removed by a majority vote of the
        Participants, and if a Participant is dead, his or her Beneficiaries
        (who collectively shall have one vote among them and shall vote in place
        of such deceased Participant), on 60 days notice or upon shorter notice
        accepted by the Trustee.

6.2.    SUCCESSOR TRUSTEE. If the Trustee resigns or is removed, a successor
        shall be appointed by the Company, in accordance with this Section, by
        the effective date of the resignation or removal under Section 6.1
        above. The successor shall be a bank, trust company, or similar
        independent third party that is granted corporate trustee powers under
        state or federal law. After the occurrence of a Change in Control, a
        successor Trustee may not be appointed without the consent of a majority
        of the Participants. If no such appointment has been made within six
        months, the Trustee may apply to a court of competent jurisdiction for
        appointment of a successor or for instructions. All expenses of the
        Trustee in connection with the proceeding shall be allowed as
        administrative expenses of the Trust.

6.3.    SETTLEMENT OF ACCOUNTS. Upon resignation or removal of the Trustee and
        appointment of a successor Trustee, all assets shall subsequently be
        transferred to the successor Trustee. The transfer shall be completed
        within 90 days after receipt of notice of resignation, removal or
        transfer, unless the Company extends the time limit. Upon the transfer
        of the assets, the successor Trustee shall succeed to all of the powers
        and duties given to the Trustee in this Master Trust Agreement. The
        resigning or removed Trustee shall render to the Committee an account in
        the form and manner and at the time prescribed in Section 5.2. The
        approval of such accounting and discharge of the Trustee shall be as
        provided in such Section.

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

                                    ARTICLE 7
                    CONTROVERSIES,, LEGAL ACTIONS AND COUNSEL

7.1.    CONTROVERSY. If any controversy arises with respect to the Trust, the
        Trustee shall take action as directed by the Committee or, in the
        absence of such direction or after a Change in Control, as it deems
        advisable, whether by legal proceedings, compromise or otherwise. The
        Trustee may retain the funds or property involved without liability
        pending settlement of the controversy. The Trustee shall be under no
        obligation to take any legal action of whatever nature unless there
        shall be sufficient property in the Trust to indemnify the Trustee with
        respect to any expenses or losses to which it may be subjected.

7.2.    JOINDER OF PARTIES. In any action or other judicial proceedings
        affecting the Trust, it shall be necessary to join as parties the
        Trustee, the Committee, the Company and the Subsidiaries. No Participant
        or other person shall be entitled to any notice or service of process.
        Any judgment entered in such a proceeding or action shall be binding on
        all persons claiming under the Trust. Nothing in this Master Trust
        Agreement shall be construed as to deprive a Participant or Beneficiary
        of his or her right to seek adjudication of his or her rights by
        administrative process or by a court of competent jurisdiction.

7.3.    EMPLOYMENT OF COUNSEL. The Trustee may consult with legal counsel (who,
        prior to a Change in Control, but not after a Change in Control, may be
        counsel for the Company or any Subsidiary) and bail be fully protected
        with respect to any action taken or omitted by it in good faith pursuant
        to the advice of counsel.

                                    ARTICLE 8
                                    INSURERS

8.1.    INSURER NOT A PARTY. No insurer shall be deemed to be a party to the
        Trust and an insurer's obligations shall be measured and determined
        solely by the terms of contracts and other agreements executed by it.

8.2.    AUTHORITY OF TRUSTEE. An insurer shall accept the signature of the
        Trustee to any documents or papers executed in connection with such
        contracts. The signature of the Trustee shall be conclusive proof to the
        insurer that the person on whose life an application is being made is
        eligible to have a contract issued on his or her life and is eligible
        for a contract of the type and amount requested.

8.3.    CONTRACT OWNERSHIP. An insurer shall deal with the Trustee as the sole
        and absolute owner of any insurance contracts and shall have no
        obligation to inquire whether any action or failure to act on the part
        of the Trustee is in accordance with or authorized by the terms of the
        Plans or this Master Trust Agreement.

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HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

8.4.    LIMITATION OF LIABILITY. An insurer shall be fully discharged from any
        and all liability for any action taken or any amount paid in accordance
        with the direction of the Trustee and shall have no obligation to see to
        the proper application of the amounts so paid. An insurer shall have no
        liability for the operation of the Trust or the Plans, whether or not in
        accordance with their terms and provisions.

8.5.    CHANGE OF TRUSTEE. An insurer shall be fully discharged from any and all
        liability for dealing with a party or parties indicated on its records
        to be the Trustee until such time as it shall receive at its home office
        written notice of the appointment and qualification of a successor
        Trustee.

                                    ARTICLE 9
                            AMENDMENT AND TERMINATION

9.1.    AMENDMENT. Subject to the limitations set forth in this Section 9.1,
        this Master Trust Agreement may be amended by a written instrument
        executed by the Trustee and the Company. Notwithstanding the foregoing,
        no such amendment shall conflict with the terms of the Plans or shall
        make the Trust revocable after it has become irrevocable in accordance
        with Section 1.3 above. Any amendment, change or modification shall be
        subject to the following rules:

        (a)     GENERAL RULE. Subject to Sections 9.1(b), (c) and (d) below,
                this Master Trust Agreement may be amended:

                (i)     By the Company and the Trustee, provided, however, that
                        if an amendment would in any way adversely affect the
                        rights accrued under the Plans in the Trust Fund by any
                        Participant or Beneficiary, each and every Participant
                        and Beneficiary whose rights in the Trust Fund would be
                        adversely affected must consent to the amendment before
                        this Master Trust Agreement may be so amended; and

                (ii)    By the Company and the Trustee as may be necessary to
                        comply with laws which would otherwise render the Trust
                        void, voidable or invalid in whole or in part.

        (b)     LIMITATION. Notwithstanding that an amendment may be permissible
                under Section 9.1(a) above, this Master Trust Agreement shall
                not be amended by an amendment that would:

                (i)     Cause any of the assets of the Trust to be used for or
                        diverted to purposes other than for the exclusive
                        benefit of Participants and Beneficiaries as set forth
                        in the Plans, or payment of expenses of the Trust,
                        except as is required to satisfy the claims of the
                        Company's or a Subsidiary's general creditors; or

                (ii)    Be inconsistent with the tens of any Plan, including the
                        terms of any Plan regarding termination, amendment or
                        modification of the Plan.

        (c)     WRITING AND CONSENT. Any amendment to this Master Trust
                Agreement shall be set forth in writing and signed by the
                Company and the Trustee and, if consent of any Participant

                                     - 19 -
<Page>

HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

                or Beneficiary is required under Section 9.1(a), the Participant
                or Beneficiary whose consent is required. Any amendment may be
                current, retroactive or prospective, in each case as provided
                therein.

        (d)     THE COMPANY AND TRUSTEE. In connection with the exercise of the
                rights under this Section 9.1:

                (i)     prior to a Change in Control, the Trustee shall have no
                        responsibility to determine whether any proposed
                        amendment complies with the terms and conditions set
                        forth in Sections 9.1(a) and (b) above and may
                        conclusively rely on the directions of the Committee
                        with respect thereto, unless the Trustee has knowledge
                        of a proposed transaction or transactions that would
                        result in a Change in Control; and

                (ii)    after a Change in Control, the power of the Company to
                        amend this Master Trust Agreement shall cease, and the
                        power to amend that was previously held by the Company
                        shall, instead, be exercised by a majority of the
                        Participants and, if a Participant is dead, his or her
                        Beneficiaries (who collectively shall have one vote
                        among them and shall vote in place of such deceased
                        Participant), with the consent of the Trustee, provided
                        that such amendment otherwise complies with the
                        requirements of Sections 9.1(a), (b) and (c) above.

        (e)     TAXATION. This Master Trust Agreement shall not be amended,
                altered, changed or modified in a manner that would cause the
                Participants and/or Beneficiaries under any Plan to be taxed on
                the benefits under any Plan in a year other than the year of
                actual receipt of benefits.

9.2.    FINAL TERMINATION. The Trust shall not terminate until the date on which
        Participants and their Beneficiaries are no longer entitled to benefits
        pursuant to the terms of the Plans and all of the expenses of the Trust
        have been paid, and on such date the Trust shall terminate. Upon
        termination of the Trust, any assets remaining in the Trust shall be
        returned to the Company and the Subsidiaries. Such remaining assets
        shall be paid by the Trustee to the Company and the Subsidiaries in such
        amounts and in the manner instructed by the Company, whereupon the
        Trustee shall be released and discharged from all obligations hereunder.
        From and after the date of termination and until final distribution of
        the Trust Fund, the Trustee shall continue to have all of the powers
        provided herein as are necessary or expedient for the orderly
        liquidation and distribution of the Trust Fund.

                                   ARTICLE 10
                                  MISCELLANEOUS

10.1.   DIRECTIONS FOLLOWING CHANGE IN CONTROL. Despite any other provision of
        this Master Trust Agreement that may be construed to the contrary,
        following a Change in Control, all powers of the Committee, the Company
        and the Board to direct the Trustee under this Master Trust

                                     - 20 -
<Page>

HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

        Agreement shall terminate, and the Trustee shall act on its own
        discretion to carry out the terms of this Master Trust Agreement in
        accordance with the Plans and this Master Trust Agreement.

10.2.   TAXES. The Company and the Subsidiaries shall from time to time pay
        taxes of any and all kinds whatsoever that at any time are lawfully
        levied or assessed upon or become payable in respect of the Trust Fund,
        the income or any property forming a part thereof, or any security
        transaction pertaining thereto. To the extent that any taxes lawfully
        levied or assessed upon the Trust Fund are not paid by the Company and
        the Subsidiaries, the Trustee shall have the power to pay such taxes out
        of the Trust Fund and shall seek reimbursement from the Company and the
        Subsidiaries. Prior to making any payment, the Trustee may require such
        releases or other documents from any lawful taxing authority as it shall
        deem necessary. The Trustee shall contest the validity of taxes in any
        manner deemed appropriate by the Company or its counsel, but at the
        Company's and the Subsidiaries' expense, and only if it has received an
        indemnity bond or other security satisfactory to it to pay any such
        expenses. Prior to a Change in Control, the Trustee (i) shall not be
        liable for any nonpayment of tax when it distributes an interest
        hereunder on directions from the Committee, and (ii) shall have no
        obligation to prepare or file any tax return on behalf of the Trust
        Fund, any such return being the sole responsibility of the Committee.
        The Trustee shall cooperate with the Committee in connection with the
        preparation and filing of any such return. After a Change in Control,
        the Trustee shall have such duties and obligations.

10.3.   THIRD PERSONS. All persons dealing with the Trustee are released from
        inquiring into the decisions or authority of the Trustee and from seeing
        to the application of any moneys, securities or other property paid or
        delivered to the Trustee.

10.4.   NONASSIGNABILITY; NONALIENATION. Benefits payable to Participants and
        their Beneficiaries under this Master Trust Agreement may not be
        anticipated, assigned (either at law or in equity), alienated, pledged,
        encumbered or subjected to attachment, garnishment, levy, execution or
        other legal or equitable process.

10.5.   APPLICABLE LAW. Except to the extent, if any, preempted by ERISA, this
        Master Trust Agreement shall be governed by and construed in accordance
        with the internal laws of the State of Florida. Any provision of this
        Master Trust Agreement prohibited by law shall be ineffective to the
        extent of any such prohibition, without invalidating the remaining
        provisions hereof.

10.6.   NOTICES AND DIRECTIONS. Whenever a notice or direction is given by the
        Committee to the Trustee, it shall be in the form required by Section
        2.1. Actions by the Company shall be by the Board or a duly authorized
        officer, with such actions certified to the Trustee by an appropriately
        certified copy of the action taken. The Trustee shall be protected in
        acting upon any such notice, resolution, order, certificate or other
        communication believed by it to be genuine and to have been signed by
        the proper party or parties.

10.7.   SUCCESSORS AND ASSIGNS. This Master Trust Agreement shall be binding
        upon and inure to the benefit of the Company, the Subsidiaries and the
        Trustee and their respective successors and assigns.

                                     - 21 -
<Page>

HAYNES INTERNATIONAL, INC.
Supplemental Executive Retirement Plan(s)
MASTER TRUST AGREEMENT

10.8.   GENDER AND NUMBER. Words used in the masculine shall apply to the
        feminine where applicable, and when the context requires, the plural
        shall be read as the singular and the singular as the plural.

10.9.   HEADINGS. Headings in this Master Trust Agreement are inserted for
        convenience of reference only and any conflict between such headings and
        the text shall be resolved in favor of the text.

10.10.  COUNTERPARTS. This Master Trust Agreement may be executed in an original
        and any number of counterparts, each of which shall be deemed to be an
        original of one and the same instrument.

10.11.  BENEFICIAL INTEREST. The Company and the Subsidiaries are the true
        beneficiaries hereunder in that the payment of benefits, directly or
        indirectly to or for a Participant or Beneficiary by the Trustee, is in
        satisfaction of the Company's and the Subsidiaries' liability therefore
        under the Plans. Nothing in this Master Trust Agreement shall establish
        any beneficial interest in any person other than the Company and the
        Subsidiaries.

10.12.  THE TRUST AND PLANS. This Trust, the Plans and each Participant's Plan
        Agreement are part of and constitute a single, integrated employee
        benefit plan and trust, shall be construed together as the entire
        agreement between the Company, the Trustee, the Participants and the
        Beneficiaries with regard to the subject matter thereof, and shall
        supersede all previous negotiations, agreements and commitments with
        respect thereto.

10.13.  EFFECTIVE DATE. The effective date of this Master Trust Agreement shall
        be January 1, 2003.

        IN WITNESS WHEREOF the Company and the Trustee have signed this Master
Trust Agreement as of the date first written above.

TRUSTEE                                       THE COMPANY:

Legacy Trust Company, Inc.                    Haynes International, Inc.
a Florida corporation,                        a Delaware corporation,

By:  /s/ Mary B. Knauer                       By: /s/ Francis J. Petro
   ---------------------------------              -----------------------------

Title:  EVP                                   Title:  President and CEO
      ------------------------------                ---------------------------

     [Exhibit A -Executive Deferral Plans Covered by the Agreement has been
omitted from the Agreement as filed with the Securities and Exchange Commission
(the "SEC"). The omitted information is considered immaterial from an investor's
perspective. The Registrant will furnish supplementally a copy of any of the
omitted exhibit to the SEC upon request from the SEC.]

                                     - 22 -<Page>

                                                                    Exhibit 10.7

                              AMENDMENT NUMBER ONE
                                     TO THE
                             MASTER TRUST AGREEMENT

     THIS AMENDMENT NUMBER ONE to the Master Trust Agreement ("AMENDMENT") is
made and entered into as of this 30th day of August, 2004 (the "EFFECTIVE
DATE"), by and between Haynes International, Inc. (the "COMPANY") and Legacy
Trust Company, Inc. (the "TRUSTEE").

                                   WITNESSETH:

     WHEREAS, the Company and the Trustee previously entered into that certain
Master Trust Agreement for Haynes International, Inc. Supplemental Executive
Retirement Plan(s), dated as of January 13, 2003, a copy of which is attached
hereto and incorporated herein as EXHIBIT A (the "TRUST AGREEMENT"); and

     WHEREAS, pursuant to SECTION 9.1 of the Trust Agreement, the Company and
Trustee desire to amend the Trust Agreement upon the terms and subject to the
conditions set forth in this Amendment;

     NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
                                    AMENDMENT

     1.   The following language is hereby inserted at the end of the definition
of "Change in Control" in SECTION 1.5(c) of the Trust Agreement after the phrase
"the Company is a member" in subsection (v):

     "; provided, however, in no event shall the consummation of the plan of
     reorganization of the Company and the transactions contemplated thereby as
     approved by the Bankruptcy Court for the Southern District of Indiana with
     respect to that certain

<Page>

     voluntary petition for bankruptcy under Chapter 11 of Title 11 of the U.S.
     Code (11 USC Section 101, ET. SEQ.) in the U.S. Bankruptcy Court for the
     Southern District of Indiana on March 29, 2004 constitute a 'Change in
     Control' under this Master Trust Agreement."

     2.   This Amendment may be executed in two (2) counterparts, each of which
shall be deemed an original, but both of which shall constitute one and the same
instrument. The validity, meaning, and effect of this Amendment shall be
determined in accordance with the laws of the State of Indiana applicable to
contracts made and to be performed in that State.

     3.   This Amendment amends the Trust Agreement to the extent provided
herein only and all other provisions thereof shall remain in full force and
effect.

     IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
Effective Date.

"TRUSTEE"                                   "COMPANY"

LEGACY TRUST COMPANY, INC.                  HAYNES INTERNATIONAL, INC.

By:  /s/ Mary B. Knauer
     ------------------------
                                            By:  /s/ Francis J. Petro
Printed: Mary B. Knauer                          -------------------------------
         --------------------                    Francis J. Petro, President

Title:   EVP
         -----------------------------

     [Exhibit A - Supplemental Executive Retirement Plan has been omitted from
the Agreement as filed with the Securities and Exchange Commission (the "SEC").
The omitted information is considered immaterial from an investor's perspective.
The Registrant will furnish supplementally a copy of any of the omitted exhibit
to the SEC upon request from the SEC.]

                                        2

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