10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2005

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 1-4801

BARNES GROUP INC.

(Exact name of registrant as specified in its charter)

Delaware	06-0247840
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
123 Main Street, Bristol, Connecticut	06011-0489
(Address of Principal Executive Offices)	(Zip Code)

(860) 583-7070

Registrant’s telephone number, including area code

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.     Yes x     No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).     Yes     x No ¨

The registrant had outstanding 23,637,948 shares of common stock as of August 2, 2005.

Barnes Group Inc.

Index to Form 10-Q

For the Quarterly Period Ended June 30, 2005

		Page
Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Income for the three months and six months ended June 30, 2005 and 2004	3
	Consolidated Balance Sheets as of June 30, 2005 and December 31, 2004	4
	Consolidated Statements of Cash Flows for the six months ended June 30, 2005 and 2004	5
	Notes to Consolidated Financial Statements	6-12
	Report of Independent Registered Public Accounting Firm	13
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14-22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
Part II.	OTHER INFORMATION
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 4.	Submission of Matters to a Vote of Security Holders	24
Item 6.	Exhibits	25
	Signatures	26
	Exhibit Index	27-28

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BARNES GROUP INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

	Three months ended June 30,				Six months ended June 30,
	2005		2004		2005		2004
			As Restated (See Note 4)				As Restated (See Note 4)
Net sales	$	280,520	$	251,951	$	554,250	$	499,179
Cost of sales		178,754		164,228		354,502		326,339
Selling and administrative expenses		77,906		69,906		154,794		139,317
		256,660		234,134		509,296		465,656
Operating income		23,860		17,817		44,954		33,523
Other income		9,270		708		9,532		1,406
Interest expense		4,338		3,704		8,505		7,506
Other expenses		173		128		542		258
Income before income taxes		28,619		14,693		45,439		27,165
Income taxes		9,887		3,390		13,924		6,251
Net income	$	18,732	$	11,303	$	31,515	$	20,914
Per common share:
Net income:
Basic	$	.80	$	.49	$	1.35	$	.91
Diluted		.77		.47		1.31		.88
Dividends		.20		.20		.40		.40
Average common shares outstanding:
Basic		23,489,701		23,125,859		23,395,479		23,050,722
Diluted		24,233,729		23,870,324		24,041,453		23,873,745

See accompanying notes.

3

BARNES GROUP INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

	June 30, 2005			December 31, 2004
				As Restated (See Note 4)
Assets
Current assets
Cash and cash equivalents	$	32,258		$	36,335
Accounts receivable, less allowances (2005 - $2,903; 2004 - $2,727)		163,127			138,941
Inventories		149,233			136,960
Deferred income taxes		23,383			26,615
Prepaid expenses		14,841			12,244
Total current assets		382,842			351,095
Deferred income taxes		14,148			18,543
Property, plant and equipment		479,827			484,832
Less accumulated depreciation		(322,475	)		(318,548	)
		157,352			166,284
Goodwill		223,051			221,856
Other intangible assets, net		141,651			125,447
Other assets		44,075			53,737
Total assets	$	963,119		$	936,962
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable	$	2,000		$	—
Accounts payable		138,174			135,983
Accrued liabilities		77,083			79,039
Long-term debt – current		9,214			9,410
Total current liabilities		226,471			224,432
Long-term debt		258,742			258,635
Accrued retirement benefits		84,825			85,685
Other liabilities		17,139			17,686
Commitments and Contingencies (Note 11)
Stockholders’ equity
Common stock - par value $0.01 per share Authorized: 60,000,000 shares Issued: 24,419,694 shares at par value		244			244
Additional paid-in capital		101,642			102,678
Treasury stock, at cost (2005 - 817,550 shares; 2004 - 1,190,949 shares)		(22,868	)		(31,541	)
Retained earnings		314,730			292,852
Accumulated other non-owner changes to equity		(17,806	)		(13,709	)
Total stockholders’ equity		375,942			350,524
Total liabilities and stockholders’ equity	$	963,119		$	936,962

See accompanying notes.

4

BARNES GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

	Six months ended June 30,
	2005			2004
				As Restated (See Note 4)
Operating activities:
Net income	$	31,515		$	20,914
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		17,594			16,836
Gain on disposition of property, plant and equipment		(197	)		(204	)
Non-cash stock compensation expense		3,678			1,942
Gain on the sale of NASCO		(8,893	)		—
Changes in assets and liabilities, net of the effects of acquisitions:
Accounts receivable		(27,324	)		(23,311	)
Inventories		(14,890	)		(8,298	)
Prepaid expenses		(3,375	)		(2,397	)
Accounts payable		4,762			9,957
Accrued liabilities		(361	)		(4,862	)
Deferred income taxes		6,637			(1,160	)
Long-term pension assets		(948	)		(1,024	)
Other		1,157			2,265
Net cash provided by operating activities		9,355			10,658
Investing activities:
Proceeds from disposition of property, plant and equipment		470			1,682
Proceeds from the sale of NASCO		18,600			—
Capital expenditures		(11,588	)		(16,839	)
Business acquisitions, net of cash acquired		(402	)		—
Revenue sharing program payments		(23,000	)		(15,000	)
Other		(530	)		(428	)
Net cash used by investing activities		(16,450	)		(30,585	)
Financing activities:
Net change in other borrowings		5,444			(12,268	)
Payments on long-term debt		(34,592	)		(9,272	)
Proceeds from the issuance of long-term debt		36,500			40,000
Proceeds from the issuance of common stock		3,418			2,792
Common stock repurchases		(48	)		(106	)
Dividends paid		(9,376	)		(9,243	)
Other		—			(1,498	)
Net cash provided by financing activities		1,346			10,405
Effect of exchange rate changes on cash flows		1,672			(1,096	)
Decrease in cash and cash equivalents		(4,077	)		(10,618	)
Cash and cash equivalents at beginning of period		36,335			49,788
Cash and cash equivalents at end of period	$	32,258		$	39,170

Supplemental Disclosure of Cash Flow Information:

Non-cash financing and investing activities include the acquisitions of $18.5 million and $43.0 million of intangible assets and the recognition of the corresponding liabilities in connection with aftermarket revenue sharing programs (“RSPs”) in 2005 and 2004, respectively.

See accompanying notes.

5

BARNES GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All dollar amounts included in the notes are stated in thousands except per share data.)

1. Summary of Significant Accounting Policies

The accompanying unaudited consolidated balance sheet and the related consolidated statements of income and cash flows have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The consolidated financial statements do not include all information and notes required by generally accepted accounting principles for complete financial statements. The balance sheet as of December 31, 2004, as restated, has been derived from the 2004 financial statements of Barnes Group Inc. (the “Company”). For additional information, please refer to the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, as restated in the Company’s Current Report on Form 8-K filed on July 25, 2005 (the “July 25, 2005 Form 8-K”) for the Company’s change in the method of determining the cost of certain U.S. inventories from the last-in, first-out (“LIFO”) method to the first-in, first-out (“FIFO”) method. In the opinion of management, all adjustments, including normal recurring accruals considered necessary for a fair presentation, have been included. Operating results for the six-month period ended June 30, 2005 are not necessarily indicative of the results that may be expected for the year ending December 31, 2005. Certain reclassifications have been made to prior year amounts to conform with the current year presentation.

See Note 4 for discussion of the Company’s change in the method of accounting for the cost of certain U.S. inventories as of January 1, 2005 and the restatement of previously reported amounts.

Stock-Based Compensation

The Company accounts for stock-based employee compensation plans under the recognition and measurement principles of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related interpretations. The following table illustrates the effect on net income and net income per share if the Company had applied the fair value recognition provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation.

	Three months ended June 30,						Six months ended June 30,
	2005			2004			2005			2004
				As Restated						As Restated
Net income, as reported	$	18,732		$	11,303		$	31,515		$	20,914
Add: Stock-based employee compensation expense included in reported net income, net of related tax effects		1,281			674			2,271			1,194
Deduct: Stock-based employee compensation expense determined under fair value-based method for all awards, net of related tax effects		(2,489	)		(1,592	)		(4,758	)		(3,123	)
Pro forma net income	$	17,524		$	10,385		$	29,028		$	18,985
Net income per share:
Basic - as reported	$	.80		$	.49		$	1.35		$	.91
Basic - pro forma		.75			.45			1.24			.82
Diluted - as reported		.77			.47			1.31			.88
Diluted - pro forma		.72			.43			1.20			.79

6

The average fair value of options granted in the three months ended June 30, 2005 and 2004 was $5.08 and $4.23, respectively, and in the six months ended June 30, 2005 and 2004 was $4.99 and $5.09, respectively. The fair value of each stock option on the date of grant was estimated using the Black-Scholes option-pricing model based on the following weighted average assumptions:

	Three months ended June 30,				Six months ended June 30,
	2005		2004		2005		2004
Risk-free interest rate	3.65	%	2.52	%	3.66	%	2.42	%
Expected life (years)	2.0		2.1		2.7		3.2
Expected volatility	30	%	30	%	30	%	30	%
Expected dividend yield	2.75	%	3.00	%	2.92	%	3.00	%

2. Net Income Per Common Share

For the purpose of computing diluted earnings per share, the weighted-average number of shares outstanding was increased by 744,028 and 744,465 for the three-month periods ended June 30, 2005 and 2004, respectively, and 645,974 and 823,023 for the six-month periods ended June 30, 2005 and 2004, respectively, to account for the potential dilutive effects of stock-based incentive plans. As of June 30, 2005, there were 3,537,650 options for shares of common stock outstanding of which 3,463,639 were considered dilutive. As of June 30, 2004, there were 3,541,395 options for shares of common stock outstanding of which 2,925,819 were considered dilutive. There were no adjustments to net income for the purposes of computing income available to common stockholders for those periods.

3. Comprehensive Income

Comprehensive income includes all changes in equity during a period except those resulting from the investment by, and distributions to, stockholders. For the Company, comprehensive income includes net income, and other non-owner changes to equity, which comprise foreign currency translation adjustments and deferred gains and losses related to certain derivative instruments.

Statements of Comprehensive Income

(Unaudited)

	Three months ended June 30,					Six months ended June 30,
	2005			2004		2005			2004
				As Restated					As Restated
Net income	$	18,732		$	11,303	$	31,515		$	20,914
Unrealized gains (losses) on hedging activities, net of income taxes		(280	)		133		52			(104	)
Foreign currency translation adjustments		(2,682	)		1,306		(4,149	)		(1,409	)
Comprehensive income	$	15,770		$	12,742	$	27,418		$	19,401

4. Inventories

The components of inventories consisted of:

	June 30, 2005		December 31, 2004
			As Restated
Finished goods	$	95,293	$	93,928
Work-in-process		29,561		23,919
Raw material and supplies		24,379		19,113
	$	149,233	$	136,960

7

As of January 1, 2005, the Company changed the method of determining the cost of certain U.S. inventories which previously utilized the LIFO method to the FIFO method. The change was made as the FIFO method more accurately reflects the replacement cost of inventory. The Company has operated in a low inflationary environment, and frequently a deflationary environment, for a number of years, thus reducing any potential advantages of the LIFO method in matching current revenues with current costs. Additionally, the change enhances the comparability of the Company’s financial statements with its peers’ as FIFO is the predominant method utilized in its industry. As a result, all inventories are now valued at the lower of cost, determined on a FIFO basis, or market. All previously reported results have been restated to reflect the retroactive application of the accounting change as required by APB Opinion No. 20, “Accounting Changes.” Please refer to the consolidated financial statements and notes thereto included in the July 25, 2005 Form 8-K for a restatement of related amounts. As a result of the change in accounting, the following amounts were restated.

	As Previously Reported		LIFO Adjustment			As Restated
Three months ended June 30, 2004
Cost of sales	$	164,298	$	(70	)	$	164,228
Income taxes		3,364		26			3,390
Net income		11,259		44			11,303
Net income per common share - basic		0.49		—			0.49
Net income per common share - diluted		0.47		—			0.47
Six months ended June 30, 2004
Cost of sales	$	326,358	$	(19	)	$	326,339
Income taxes		6,244		7			6,251
Net income		20,902		12			20,914
Net income per common share - basic		0.91		—			0.91
Net income per common share - diluted		0.88		—			0.88

5. Goodwill and Other Intangible Assets

Goodwill:

The following table sets forth the change in the carrying amount of goodwill for each reportable segment and for the Company for the six-month period ended June 30, 2005:

	Barnes Distribution			Associated Spring		Barnes Aerospace		Total Company
January 1, 2005	$	113,472		$	77,598	$	30,786	$	221,856
Goodwill acquired, net of adjustments		—			1,543		—		1,543
Foreign currency translation		(348	)		—		—		(348	)
June 30, 2005	$	113,124		$	79,141	$	30,786	$	223,051

In the first half of 2005, changes in the goodwill recorded at Associated Spring related to purchase price adjustments and the completion of the valuation of fixed assets acquired in the third quarter 2004 acquisition of Barnes Precision Valve and Components (“Barnes Precision Valve”), formerly known as DE-STA-CO Manufacturing. The purchase price allocation of this acquisition is subject to finalization of the valuation of certain assets and liabilities. As a result, preliminary amounts assigned to assets and liabilities are subject to revision.

8

Other Intangible Assets:

Other intangible assets consisted of:

	Range of Life (Years)	June 30, 2005					December 31, 2004
		Gross Amount		Accumulated Amortization			Gross Amount		Accumulated Amortization
Amortized intangible assets:
Revenue sharing programs	Up to 30	$	117,000	$	(1,165	)	$	98,500	$	(633	)
Customer lists/relationships	10		12,260		(2,822	)		12,260		(2,199	)
Patents, trademarks/trade names	5-30		11,128		(2,417	)		11,128		(2,078	)
Other	4.5-10		1,750		(476	)		1,750		(416	)
			142,138		(6,880	)		123,638		(5,326	)
Foreign currency translation			1,304		—			2,046		—
Unamortized intangible pension asset			5,089		—			5,089		—
Other intangible assets		$	148,531	$	(6,880	)	$	130,773	$	(5,326	)

Amortization of intangible assets is expected to be approximately $3,500 in each of the years 2005 - 2009.

The Company entered into a new aftermarket RSP agreement in May 2005 with a major aerospace company under which the Company will be the sole supplier of certain aftermarket parts to the customer. As consideration for this RSP, the Company agreed to pay a participation fee of $18,500 in two installments. The first installment of $3,750 is due in October 2005 and the second installment of $14,750 is due in June 2006. The Company has recorded the participation fee as a long-lived intangible asset which will be recognized as a reduction to sales over the life of the program.

6. Business Reorganization

Business reorganization accruals are included in accrued liabilities in the accompanying consolidated balance sheets. In connection with the acquisition of the assets of Curtis Industries, Inc. in May 2000, the Company recorded certain exit costs. As of June 30, 2005, the remaining balance of $389 related to future lease payments which will continue through the remaining terms of the leases ending in 2013.

In connection with the acquisition of Kar Products, LLC and certain assets of a related company, A.&H. Bolt & Nut Company Ltd. (“Kar”) in February 2003, the Company recorded certain costs. The Company’s reorganization plan included combining the headquarters functions and consolidating warehousing and distribution networks. The accruable integration costs were primarily related to lease consolidations and employee severance payments for reductions primarily in administrative and warehouse personnel. As of June 30, 2005, the remaining balance of $224 related to future lease payments.

7. Debt

In January 2005, the Company entered into three forward currency exchange contracts related to its term loan facility with The Development Bank of Singapore Limited. These contracts effectively converted the interest payment of Yen 25.8 million which was due and paid on June 30, 2005, the remaining interest payment of Yen 25.2 million which is due on December 30, 2005, and one interest and principal payment of Yen 111.4 million due in June 2006 to Singapore dollar payments. The forward contracts are cash flow hedges. The fair value of these forward contracts, in the aggregate, at June 30, 2005 was a liability of $59.

9

At June 30, 2005, the Company classified Yen 2,127 million (U.S. equivalent $19,326) of borrowings under the term loan facility with The Development Bank of Singapore Limited due within one year as long-term debt. The Company has both the intent and the ability, through its revolving credit facility, to refinance this amount on a long-term basis.

8. Pension and Other Postretirement Benefits

Pension and other postretirement benefits expense consisted of the following:

	Three months ended June 30,						Six months ended June 30,
	2005			2004			2005			2004
Pensions
Service cost	$	2,844		$	2,667		$	5,627		$	5,114
Interest cost		5,024			4,850			9,907			9,704
Expected return on plan assets		(8,042	)		(7,928	)		(15,893	)		(15,505	)
Amortization of transition assets		(3	)		(2	)		(6	)		(5	)
Amortization of prior service cost		298			298			583			590
Recognized losses		299			174			551			331
Curtailment		—			39			(466	)		39
Net periodic benefit cost	$	420		$	98		$	303		$	268
	Three months ended June 30,						Six months ended June 30,
	2005			2004			2005			2004
Other Postretirement Benefits
Service cost	$	340		$	229		$	678		$	455
Interest cost		1,115			1,420			2,230			2,823
Amortization of prior service cost		120			118			241			235
Recognized losses		242			470			484			934
Net periodic benefit cost	$	1,817		$	2,237		$	3,633		$	4,447

9. Income Taxes

The Company’s effective tax rate for the first half of 2005 was 30.6% compared with 23.0% for the corresponding period in 2004, and 20.0% for the full year 2004. The higher effective tax rate in 2005 is due in large part to the tax impact of the sale of NHK-Associated Spring Suspension Components Inc. (“NASCO”), which increased the effective tax rate for the first half of 2005 from 24.8% to 30.6%. Additionally, the effective tax rate in 2005 increased due to a higher mix of U.S. income projected for 2005, which is subject to higher tax than income generated by the Company’s foreign operations.

It is currently management’s intention to continue to indefinitely reinvest undistributed foreign earnings of its international subsidiaries. Management has evaluated the one-time favorable foreign dividend provisions enacted as part of the American Jobs Creation Act of 2004 and has decided that no cash will be repatriated from its foreign entities under the provisions of this Act due to future international cash requirements.

10

10. Information on Business Segments

The following tables set forth information about the Company’s operations by its three reportable business segments:

	Three months ended June 30,						Six months ended June 30,
	2005			2004			2005			2004
				As Restated						As Restated
Net sales
Barnes Distribution	$	113,329		$	107,112		$	226,947		$	213,636
Associated Spring		111,494			94,625			221,034			188,160
Barnes Aerospace		58,283			53,263			111,936			102,756
Intersegment sales		(2,586	)		(3,049	)		(5,667	)		(5,373	)
Total net sales	$	280,520		$	251,951		$	554,250		$	499,179
Operating profit
Barnes Distribution	$	6,558		$	4,896		$	12,493		$	8,941
Associated Spring		10,631			8,129			19,997			15,691
Barnes Aerospace		6,830			5,111			12,623			9,603
Total operating profit		24,019			18,136			45,113			34,235
Interest income		290			265			434			552
Interest expense		(4,338	)		(3,704	)		(8,505	)		(7,506	)
Other income (expense), net		8,648			(4	)		8,397			(116	)
Income before income taxes	$	28,619		$	14,693		$	45,439		$	27,165

The Company evaluates the performance of its reportable segments based on the operating profit of the respective businesses, which includes net sales, cost of sales, selling and administrative expenses and certain components of other income and other expenses, as well as an allocation of corporate expenses. As of January 1, 2005, the Company prospectively adjusted its method of allocating corporate expenses to better reflect the allocation of Corporate resources to Barnes Aerospace in connection with the aftermarket RSPs. This resulted in the allocation of additional expenses to the Barnes Aerospace segment. Management believes this method provides a more reasonable allocation of costs.

The aftermarket RSP agreement entered into in 2005 added $18,500 of intangible assets to the Barnes Aerospace segment assets.

During the fourth quarter of 2004, the Company recorded pre-tax charges of $2,184 related to actions needed to offset higher raw material costs at Associated Spring. These charges related mainly to personnel reductions whereby the workforce at Associated Spring was reduced by approximately 4%. During 2005, the accrual was increased by $142 related to this action and $1,311 of the accrual was utilized through severance and benefit payments resulting in a balance of $1,015 to be paid through the severance terms.

During the fourth quarter of 2004, the Company recorded pre-tax charges of $1,298 to enable the realization of benefits from the Kar integration and improved customer service levels at Barnes Distribution. These charges related mainly to personnel reductions whereby the workforce at Barnes Distribution was reduced by approximately 3%. As of January 1, 2005 the accrual balance was $1,183. During 2005, $744 of severance and benefit payments were made resulting in a balance of $439 to be paid through the severance terms.

11

11. Contingencies

Product Warranties

The Company provides product warranties in connection with the sale of products. From time to time, the Company is subject to customer claims with respect to product warranties. A customer of Associated Spring has asserted that the Company is responsible for product warranty liabilities approximating $1,600, which amount includes the value of replacement parts and consequential damages. The Company’s stated warranty is limited to replacement parts, the cost of which is not deemed significant. Management cannot predict the final outcome of this claim at this time. In addition, Associated Spring is a subcontractor to an original equipment manufacturer (“OEM”) which has alleged that the Company’s product did not comply with specifications and has resulted in a warranty recall campaign. The Company believes it is in compliance with the OEM’s part specifications. While no claim for payment has been asserted, management expects the OEM will seek some payment from the Company. The amount of any such payment cannot be estimated, and management cannot predict the final outcome at this time.

Income Taxes

In the normal course of business, the Company and its subsidiaries are examined by various tax authorities, including the Internal Revenue Service (“IRS”). The IRS is currently reviewing the Company for tax years 2000 through 2002. As a result of this review the Company has a disputed IRS tax issue with a potential tax cost of approximately $16,500. The Company and its advisors believe the Company will prevail on this issue. Any additional impact on the Company’s liability for income taxes cannot presently be determined.

12. Business Divestiture

During the second quarter of 2005, the Company sold its 45% investment in NASCO, a joint venture formed in 1986 between the Company and NHK Spring Co., Ltd. of Japan (“NHK”), to NHK for $18,600 resulting in an after-tax gain of $4,000. The pre-tax gain and related tax expense are reflected in Other income and Income taxes, respectively, in the accompanying Consolidated Statements of Income.

13. Subsequent Event

The Company sold $100,000 of Convertible Senior Subordinated Notes due August 1, 2025 bearing interest at a fixed rate of 3.75%. The notes are convertible, under certain circumstances, into a combination of cash and common stock of the Company. The conversion rate will be approximately 23.7029 shares of common stock per $1 principal amount of notes, which is equivalent to a conversion price of approximately $42.19 per share of common stock. Additionally, the notes have a “net share settlement” feature. Under this feature, upon conversion, the Company will deliver cash equal to the lesser of the aggregate principal amount of notes to be converted and the Company’s total conversion obligation, plus cash or shares of the Company’s common stock, at the Company’s election, in respect of the remainder, if any, of the Company’s conversion obligation. The closing of the sale of the notes occurred on August 1, 2005. The proceeds from the offering will be used to repay outstanding indebtedness under the Company’s revolving credit facility and general corporate purposes.

With respect to the unaudited consolidated financial information of Barnes Group Inc. for the three-month and six-month periods ended June 30, 2005 and 2004, PricewaterhouseCoopers LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate report dated August 3, 2005 appearing herein, states that they did not audit and they do not express an opinion on that unaudited consolidated financial information. PricewaterhouseCoopers LLP has not carried out any significant or additional audit tests beyond those that would have been necessary if their report had not been included. Accordingly, the degree of reliance on their report should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933, as amended, (the “1933 Act”) for their report on the unaudited consolidated financial information because that report is not a “report” or a “part” of the registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the 1933 Act.

12

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Barnes Group Inc.

We have reviewed the accompanying consolidated balance sheets of Barnes Group Inc. and its subsidiaries as of June 30, 2005 and 2004, and the related consolidated statements of income for each of the three-month and six-month periods ended June 30, 2005 and 2004 and the consolidated statements of cash flows for the six-month periods ended June 30, 2005 and 2004. This interim financial information is the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 4 to the consolidated financial information, the Company changed its method for determining the cost of certain U.S. inventories from the last-in, first-out (“LIFO”) method to the first-in, first-out (“FIFO”) method effective January 1, 2005. All prior periods have been restated.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2004, and the related consolidated statements of income, of stockholders’ equity and of cash flows for the year then ended, as restated, management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004 and the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004; and in our report dated February 25, 2005, except for Notes 3 and 18 as to which the date is July 22, 2005, we expressed unqualified opinions thereon. The consolidated financial statements and management’s assessment of the effectiveness of internal control over financial reporting referred to above are not presented herein. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2004, as restated, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Hartford, Connecticut

August 3, 2005

13

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

Please refer to the Overview found in the Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, as restated in the July 25, 2005 Form 8-K. This Overview sets forth key management objectives and key performance indicators used by management as well as key industry and economic data tracked by management.

Restatement

All financial information presented has been restated to reflect the Company’s change, as of January 1, 2005, in the method of determining the cost of certain U.S. inventories from the LIFO method to the FIFO method. See Note 4 of the Notes to the Consolidated Financial Statements of this Quarterly Report on Form 10-Q for further discussion of the impact of this restatement.

Second Quarter 2005 Highlights

In the second quarter, the Company achieved record sales of $280.5 million driven by organic sales growth in all three business segments and the incremental sales of the recent acquisition of the Barnes Precision Valve business.

In May 2005, the Company sold its 45% investment in NASCO to NHK for $18.6 million, resulting in an after-tax gain of $4.0 million.

Operating income increased 33.9% to $23.9 million as a result of higher sales and profitability improvements in all three business segments while net income grew 65.7% to $18.7 million, or $0.77 per diluted share.

Barnes Aerospace entered into its sixth RSP with a major aerospace company, expanding its position for long-term aftermarket sales of engine parts.

RESULTS OF OPERATIONS

SALES

	Three months ended June 30,										Six months ended June 30,
(in millions)	2005			2004			$ Change		% Change		2005			2004			$ Change			% Change
Barnes Distribution	$	113.3		$	107.1		$	6.2	5.8	%	$	226.9		$	213.6		$	13.3		6.2	%
Associated Spring		111.5			94.6			16.9	17.8	%		221.0			188.2			32.8		17.5	%
Barnes Aerospace		58.3			53.3			5.0	9.4	%		111.9			102.8			9.1		8.9	%
Intersegment sales		(2.6	)		(3.0	)		0.4	15.2	%		(5.5	)		(5.4	)		(0.1	)	(5.5	)%
Total	$	280.5		$	252.0		$	28.5	11.3	%	$	554.3		$	499.2		$	55.1		11.0	%

The Company reported net sales of $280.5 million in the second quarter of 2005, an increase of $28.5 million, or 11.3%, over the second quarter of 2004. The sales increase reflected $16.4 million of organic sales growth, $8.8 million of incremental sales relating to the September, 2004 acquisition of Barnes Precision Valve and $3.3 million from the strengthening of foreign currencies against the U.S. dollar.

Sales for the six months ended June 30, 2005 were $554.3 million, an increase of $55.1 million, or 11.0%, over the 2004 period driven largely by $31.3 million of organic sales growth. Sales from Barnes Precision Valve contributed $17.2 million of incremental sales while the strengthening of foreign currencies against the U.S. dollar contributed approximately $6.6 million of incremental sales. For further discussion, see the Financial Performance by Business Segment section below.

14

Expenses and Operating Income

	Three months ended June 30,										Six months ended June 30,
(in millions)	2005			2004			$ Change		% Change		2005			2004			$ Change		% Change
				As Restated										As Restated
Cost of sales	$	178.8		$	164.2		$	14.6	8.8	%	$	354.5		$	326.3		$	28.2	8.6	%
% of sales		63.7	%		65.2	%						64.0	%		65.4	%
Gross profit	$	101.8		$	87.7		$	14.1	16.0	%	$	199.8		$	172.8		$	27.0	15.6	%
% of sales		36.3	%		34.8	%						36.0	%		34.6	%
Selling and administrative expenses	$	77.9		$	69.9		$	8.0	11.4	%	$	154.8		$	139.3		$	15.5	11.1	%
% of sales		27.8	%		27.7	%						27.9	%		27.9	%
Operating income	$	23.9		$	17.8		$	6.1	33.9	%	$	45.0		$	33.5		$	11.5	34.1	%
% of sales		8.5	%		7.1	%						8.1	%		6.7	%

Operating income was $23.9 million in the second quarter of 2005, an increase of 33.9% over $17.8 million reported in the same period in 2004. For the year-to-date period, operating income improved to $45.0 million in 2005, a 34.1% increase. All three business segments contributed to the significant increase in operating income.

As a result of higher sales volume, cost of sales increased 8.8% in the second quarter of 2005 compared with the year ago period. This increase in cost of sales was lower than the 11.3% growth rate in sales which resulted in a 1.5 percentage point improvement in gross margin. Gross profit margins improved in each of the operating segments driven by higher sales volumes and cost savings.

Selling and administrative expenses increased 11.4% in the second quarter of 2005 compared to the same period in 2004. Although overall sales mix shifted slightly from Barnes Distribution to the manufacturing businesses, which have a lower selling and administrative component, sales and administrative expenses as a percentage of sales remained relatively consistent from the 2004 period. This was due in large part to higher incentive compensation expense.

Other Income/Expense

Other income, net of other expense, increased in both the three-month and six-month periods over the comparable 2004 periods mainly as a result of the sale of the Company’s investment in NASCO in the second quarter. The sale resulted in a pre-tax gain of $8.9 million and was offset, in part, by lower equity income from NASCO in the period through the sale date and higher foreign exchange losses during the 2005 periods. Interest expense increased in 2005 compared to 2004 due to higher average borrowings and a higher interest rate on the Company’s revolving credit facility.

Income Taxes

The Company’s effective tax rate for the first half of 2005 was 30.6% compared with 23.0% for the corresponding period in 2004, and 20.0% for the full year 2004. The higher effective tax rate in 2005 is due in large part to the tax impact on the sale of NASCO, which increased the effective tax rate for the first half of 2005 from 24.8% to 30.6%. Additionally, the effective tax rate was increased due to a higher mix of U.S. income projected for 2005, which is subjected to higher tax than income generated by the Company’s foreign operations. The Company expects the tax rate, including the impact on the NASCO sale, to be in the high-20% range for the full year 2005. The major item impacting the future tax rate is the mix of income between U.S. and foreign operations.

15

In the normal course of business, the Company and its subsidiaries are examined by various tax authorities, including the IRS. The IRS is currently reviewing the Company for the tax years 2000 through 2002. As a result of this review the Company has a disputed IRS tax issue with a potential tax cost of approximately $16.5 million. The Company and its advisors believe the Company will prevail on this issue. Any additional impact on the Company’s liability for income taxes cannot presently be determined.

Net Income and Net Income Per Share

	Three months ended June 30,								Six months ended June 30,
(in millions, except per share)	2005		2004		$ Change		% Change		2005		2004		$ Change		% Change
			As Restated								As Restated
Net income	$	18.7	$	11.3	$	7.4	65.7	%	$	31.5	$	20.9	$	10.6	50.7	%
Net income per share:
Basic	$	0.80	$	0.49	$	0.31	63.3	%	$	1.35	$	0.91	$	0.44	48.4	%
Diluted		0.77		0.47		0.30	63.8	%		1.31		0.88		0.43	48.9	%

Basic and diluted net income per share increased in line with the increase in net income. Basic and diluted average shares outstanding increased slightly as a result of shares issued for stock compensation awards. Additionally, diluted average shares outstanding increased due to the increase in the Company’s per share market price.

Financial Performance by Business Segment

Barnes Distribution

	Three months ended June 30,										Six months ended June 30,
(in millions)	2005			2004			$ Change		% Change		2005			2004			$ Change		% Change
				As Restated										As Restated
Sales	$	113.3		$	107.1		$	6.2	5.8	%	$	226.9		$	213.6		$	13.3	6.2	%
Operating profit		6.6			4.9			1.7	33.9	%		12.5			8.9			3.6	39.7	%
Operating margin		5.8	%		4.6	%						5.5	%		4.2	%

Barnes Distribution achieved record sales of $113.3 million in the second quarter of 2005, a 5.8% increase over the second quarter of 2004, and $226.9 million in the first half of 2005, a 6.2% increase over the first half of 2004. Excluding the positive impact of foreign exchange translation on sales of approximately $1.3 million in the second quarter of 2005, sales grew approximately 4.6%. Organic sales growth in both the second quarter of 2005 and the first six months of 2005 was driven in large part by the positive results of the Company’s strategic initiatives in the U.S. and Canada. Additionally, Barnes Distribution’s locations in Europe recorded sales increases in the second quarter of 2005 and during the first half of 2005. The U.S. daily sales average, or DSA, for the second quarter of 2005 increased 4.3% from the 2004 period.

Barnes Distribution’s operating profit for the second quarter of 2005 increased 33.9% over the comparable 2004 period while operating profit in the first half of 2005 increased 39.7% compared to the same period in 2004. Operating profit increases in both periods were positively impacted by higher sales volume and improved gross margins driven by higher selling prices, operational improvements and cost savings. The personnel reductions in late 2004 generated savings of approximately $0.6 million in the second quarter of 2005. These items were offset, in part, by higher incentive compensation expense, higher sales personnel costs and increased product costs. Additionally, operating profits in the second quarter of 2004 were adversely impacted by approximately $1.2 million of integration and other costs related to improving customer service levels which did not recur in 2005.

16

Outlook: The markets served by Barnes Distribution, particularly in the U.S., have continued to strengthen in the first six months of 2005 and management expects this to continue through the end of 2005. Management continues to focus on its strategic growth initiatives with an emphasis on targeting large and regional customers and expanding business with Tier 2 customers. Operating profit is expected to continue to be positively impacted during the remainder of 2005 by higher sales volumes, the benefits of operational improvements, and management’s effort to share its supplier price increases with its customers. Additionally, management is actively seeking lower product costs through its global sourcing initiative which would improve profitability going forward. Operating profit will also be positively impacted by the savings from the late 2004 personnel reductions, which are estimated to generate annual savings of $1.9 million.

Associated Spring

	Three months ended June 30,										Six months ended June 30,
(in millions)	2005			2004			$ Change		% Change		2005			2004			$ Change		% Change
				As Restated										As Restated
Sales	$	111.5		$	94.6		$	16.9	17.8	%	$	221.0		$	188.2		$	32.8	17.5	%
Operating profit		10.6			8.1			2.5	30.8	%		20.0			15.7			4.3	27.4	%
Operating margin		9.5	%		8.6	%						9.0	%		8.3	%

Associated Spring’s sales for the second quarter of 2005 were $111.5 million, a 17.8% increase over the second quarter of 2004, and $221.0 million for the first half of 2005, a 17.5% increase over the first half of 2004. The increase in the second quarter of 2005 was driven in large part by the incremental sales of $8.8 million from the Barnes Precision Valve acquisition, $6.1 million in organic sales growth and approximately $2.0 million related to the positive impact of foreign currency translation, primarily in Brazil, Germany and Canada. The increase in second quarter 2005 sales came from most of Associated Spring’s market segments, particularly the industrial and transportation markets, which was primarily a result of the incremental sales from the reed valve business acquisition. Additionally, sales of nitrogen gas products increased as a result of solid activity in Europe and Asia. On a year-to-date basis when compared to the 2004 period, sales growth was achieved in most of Associated Spring’s market segments with the most significant growth in the industrial, nitrogen gas and transportation markets, which increased 27.5%, 22.0% and 13.0%, respectively.

Associated Spring’s operating profit was $10.6 million in the second quarter of 2005, a 30.8% increase from the comparable 2004 period. On a year-to-date basis, operating profit increased 27.4% to $20.0 million. The increase in operating profit in both 2005 periods was driven in large part by the profit contribution on higher sales volume, including the reed valve business acquisition. During the second quarter of 2005, incremental raw material price increases from vendors were partially offset by price increases and other initiatives. Operating profit in the second quarter was positively impacted by the savings from the personnel reductions in late 2004, which generated savings of approximately $0.9 million, a 2004 capacity issue in certain North American plants which did not recur in 2005, and a gain of $0.8 million realized on the sale of shares received in the demutualization of a medical insurance carrier. These improvements were offset, in part, by incentive compensation expense related to improved performance, approximately $0.5 million of costs related to the start-up of the Monterrey, Mexico facility, and a $0.5 million charge for additional profit sharing expense in Mexico resulting from an adverse court decision. Associated Spring is negotiating certain labor and union pension and retiree healthcare agreements which have expired or will expire in 2005 and has incurred approximately $0.7 million in professional fees related to the negotiations.

17

Outlook: Management believes it is well-positioned and expects sales growth in most of its end markets. In particular, management expects improvements in the transportation market, particularly in the heavy truck market. The improving U.S. economy has positively impacted the industrial products market and management believes this will continue through the remainder of 2005. Additionally, management expects continued increases in nitrogen gas products sales, particularly in Europe and Asia. Operating profits are expected to be positively impacted by the personnel reductions in late 2004 which are expected to generate annual savings of approximately $3.6 million. Additionally, certain manufacturing processes have been transferred to the newly-opened manufacturing facility in Monterrey, Mexico, a lower-cost facility. Based on current market conditions, management does not expect further significant raw material price increases in the second half of 2005. Management is continuing to monitor raw material supply in an effort to ensure future availability. Additionally, any costs increases or labor actions resulting from current labor and union pension and retiree healthcare negotiations could adversely impact profit margins going forward.

Barnes Aerospace

	Three months ended June 30,										Six months ended June 30,
(in millions)	2005			2004			$ Change		% Change		2005			2004			$ Change		% Change
				As Restated										As Restated
Sales	$	58.3		$	53.3		$	5.0	9.4	%	$	111.9		$	102.8		$	9.1	8.9	%
Operating profit		6.8			5.1			1.7	33.6	%		12.6			9.6			3.0	31.4	%
Operating margin		11.7	%		9.6	%						11.3	%		9.3	%

Barnes Aerospace’s second quarter 2005 sales were $58.3 million, a 9.4% increase over the second quarter of 2004, and $111.9 million for the first half of 2005, an 8.9% increase over the first half of 2004. The second quarter and year-to-date sales increases reflect solid growth in aftermarket sales of 25.9% and 34.4%, respectively, driven mainly by sales from the RSPs and increased overhaul and repair sales in Asia. Additionally, OEM sales increased 5.9% and 3.6%, respectively, for the quarter and year-to-date periods. The order backlog at Barnes Aerospace at the end of the second quarter of 2005 was $245.7 million, up 60.1% from $153.4 million at June 30, 2004. Barnes Aerospace generated orders of $74.8 million in the second quarter, including $14.5 million of direct and indirect military orders and $5.6 million in orders for a large commercial engine program. In May of 2005, the Company entered into its sixth RSP agreement, further expanding opportunities in the aftermarket. The six RSPs have had a positive impact on 2005 operating results.

Barnes Aerospace’s operating profit was $6.8 million in the second quarter of 2005, a 33.6% increase from the 2004 period. For the year-to-date period, operating profit in 2005 increased 31.4% to $12.6 million from the comparable 2004 period. In both periods, operating profit was positively impacted by the increased contribution from the aftermarket RSPs and the increase in higher-margin overhaul and repair sales, primarily in Asia.

Outlook: Sales at Barnes Aerospace are expected to continue to improve over 2004 levels due to the impact of the aftermarket RSPs, continued improvement in the OEM business and increases in overhaul and repair sales, mainly in Asia. Additionally, management expects commercial sales to increase as a result of a large commercial engine program. Military sales have decreased from 2004; however, management expects increasing sales levels during the remainder of 2005 and beyond as a result of increased order volume over 2004 levels. Operating profits are expected to continue to be positively impacted by the profit contribution from the aftermarket RSPs and from the higher OEM sales volume, however, in the near term, they may be negatively impacted by the development costs associated with the high level of new product introduction. Management continues to monitor raw material availability, particularly for titanium. Higher costs for titanium and other raw materials could negatively impact sales and profits going forward.

18

LIQUIDITY AND CAPITAL RESOURCES

Management assesses the Company’s liquidity in terms of its overall ability to generate cash to fund its operating and investing activities. Of particular importance in the management of liquidity are cash flows generated from operating activities, capital expenditure levels, dividends, capital stock transactions, effective utilization of surplus cash positions overseas and adequate bank lines of credit.

The Company’s ability to generate cash from operations in excess of its internal operating needs is one of its financial strengths. Management continues to focus on cash flow and working capital and anticipates that operating activities in 2005 will generate significant cash. This operating cash flow may be supplemented with external borrowings to meet near-term organic business expansion and the Company’s current financial commitments. Any future acquisitions are expected to be financed through internal cash, borrowing or equity, or a combination thereof.

Cash Flow

	Six months ended June 30,
(in millions)	2005			2004			$ Change			% Change
				As Restated
Operating activities	$	9.4		$	10.7		$	(1.3	)	(12.2	)%
Investing activities		(16.5	)		(30.6	)		14.1		46.2	%
Financing activities		1.3			10.4			(9.1	)	(87.1	)%
Exchange rate effect		1.7			(1.1	)		2.8		NM	*
Decrease in cash	$	(4.1	)	$	(10.6	)	$	6.5		61.6	%

* NM - not meaningful

Operating activities provided $9.4 million in cash in the first six months of 2005 compared to $10.7 million in the first half of 2004. In the first half of 2005, operating cash flows were positively impacted by the improvement in net income including the gain on the sale of NASCO offset in part by the increase in working capital. The additional working capital in 2005 supported the organic sales growth and included higher investments in inventory at Associated Spring and Barnes Aerospace and higher investments in receivables at Associated Spring compared to 2004. This was offset in part by decreases in receivables at Barnes Aerospace, inventory at Barnes Distribution and company-wide payable levels. The change in deferred taxes relates primarily to the tax on the NASCO gain which offset the carry-forward of tax net operating losses in the United States.

Cash used by investing activities in the first half of 2005 included $23.0 million in participation fee payments related to the aftermarket RSPs which are more fully discussed in Note 5 of the Notes to the Consolidated Financial Statements. The payments were funded with cash held outside the United States. As of June 30, 2005, the Company had a $44.5 million liability for participation fees under the aftermarket RSPs, all of which is included in accounts payable. These payments will be made mainly with cash generated outside of the U.S. The remaining payment schedule for the aftermarket RSPs follows (in thousands):

July 2005	$	13,500
October 2005		3,750
December 2005		12,500
June 2006		14,750
	$	44,500

19

Capital expenditures in the first half of 2005 were $11.6 million compared to $16.8 million in the first half of 2004. The majority of this decrease relates to the 2004 investments in distribution centers for Barnes Distribution which did not recur in 2005. For the Company in total, capital expenditures are expected to be in the $30 million range for the year.

Cash from financing activities in the first half of 2005 included a net increase in borrowings of $7.4 million. Proceeds were used in part to finance operating activities in the U.S., particularly working capital requirements, as well as to fund capital expenditures and dividends. Cash dividends remained at $0.20 per share through the second quarter. Total cash used to pay dividends increased slightly in the first half of 2005 over the comparable 2004 period to $9.4 million due to an increase in the number of shares outstanding. Cash dividends will increase to $0.22 per share in the third quarter of 2005.

At June 30, 2005, the Company held $32.3 million in cash and cash equivalents, nearly all of which are held outside of the U.S. Since the repatriation of this cash to the U.S. could have adverse tax consequences, the balances remain outside the U.S. to fund future international growth investments, including acquisitions and aftermarket RSP participation fees. Management has evaluated the one-time favorable foreign dividend provisions enacted as part of the American Jobs Creation Act of 2004 and has decided that no cash will be repatriated from its foreign entities under the provisions of this Act due to future international cash requirements. It is currently management’s intention to continue to indefinitely reinvest undistributed foreign earnings of its international subsidiaries.

The Company maintains borrowing facilities with banks to supplement internal cash generation. At June 30, 2005, $101.0 million was borrowed at an interest rate of 4.38% under the Company’s $175.0 million borrowing facility which matures in June 2009. The Company had $2.0 million of borrowings under uncommitted short-term bank credit lines at June 30, 2005.

Borrowing capacity is limited by various debt covenants in the revolving credit agreement. The most restrictive borrowing covenant requires the Company to maintain a ratio of Total Debt to EBITDA, as defined in the revolving credit agreement, of not more than 3.25 times at June 30, 2005. The ratio requirement will decrease to 2.75 times on June 30, 2008. The actual ratio at June 30, 2005 was 2.5 times and would have allowed additional borrowings of $77.8 million.

The Company believes its credit facilities, coupled with cash generated from operations, are adequate for its anticipated future requirements. The senior subordinated convertible debt offering, as described in Note 13 of the Notes to the Consolidated Financial Statements of this Quarterly Report on Form 10-Q, which closed on August 1, 2005, will provide the Company with additional borrowing capacity and a higher percentage of fixed rate borrowings.

OTHER MATTERS

Critical Accounting Policies

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant accounting policies are disclosed in Note 1 of the Notes to the Consolidated Financial Statements in the July 25, 2005 Form 8-K. The most significant areas involving management judgments and estimates are described in Management’s Discussion and Analysis of Financial Conditions and Results of Operations in the July 25, 2005 Form 8-K. There have been no material changes to such judgments and estimates. Actual results could differ from those estimates.

20

Recent Accounting Changes

In November 2004, the FASB issued SFAS No. 151, “Inventory Costs, an amendment of ARB No. 43, Chapter 4.” This Statement amends the guidance in ARB No. 43 to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material and requires that those items be recognized as current-period charges. Additionally, the Statement requires that allocation of fixed production overhead to the costs of conversion be based on the normal capacity of the production facilities. The provisions of this Statement will be effective for inventory costs incurred by the Company in 2006. The Company is currently evaluating the impact this Statement will have on the Company’s financial position, results of operations and cash flows.

In December 2004, the FASB issued a revision to FASB No. 123. SFAS No. 123R, “Share-Based Payment,” focuses primarily on the accounting for transactions in which a company obtains employee services in exchange for stock options or share-based payments. Currently, the Company grants stock options and other equity-based compensation to its employees which are accounted for under APB No. 25 and discloses the pro forma effect of compensation expense had the Company applied the provisions of SFAS No. 123 in Note 1 of the Notes to the Consolidated Financial Statements of this Quarterly Report. Under SFAS No. 123R, the Company will be required to record this compensation expense in the Company’s results of operations. In March 2005, the Securities and Exchange Commission (“SEC”) released Staff Accounting Bulletin (“SAB”) No. 107, “Share-Based Payment,” which expresses the views of the SEC staff regarding the application of SFAS No. 123R and interpretive guidance. Additionally, the SEC recently approved a new rule which delays the effective date of SFAS No. 123R for public companies. As such, this Statement will be effective for the Company beginning in the first quarter of 2006. The Company is currently evaluating its transition alternatives and the effect of this Statement on the Company, which will be dependent in large part upon future equity-based grants. Management believes the impact upon adoption will be significantly lower than the historical amounts disclosed in Note 1 of the Notes to the Consolidated Financial Statements of this Quarterly Report based on anticipated changes to the structure of the equity-based compensation program.

In March 2005, the FASB issued Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations.” This Interpretation clarifies that the term conditional asset retirement obligation as used in SFAS No. 143, “Accounting for Asset Retirement Obligations,” refers to a legal obligation to perform an asset retirement activity in which the timing and / or method of settlement are conditional on a future event that may or may not be within the control of the entity. This Interpretation also clarifies the timing and estimation of fair value as it relates to an asset retirement obligation. This Interpretation is effective for the Company for the year ending December 31, 2005. The Company is currently evaluating the impact this Interpretation will have on the Company’s financial position, results of operations and cash flows.

In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections.” SFAS No. 154 replaces APB Opinion No. 20, “Accounting Changes” and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements.” Among other provisions, this Statement requires that a voluntary change in accounting principle be applied retrospectively and all prior period financial statements be presented using the new accounting principle. Additionally, changes in accounting estimates shall continue to be accounted for in the period of change and corrections of an error continue to be reported by restating prior period financial statements. This Statement is effective for the Company beginning in the year ending December 31, 2006 and the Company will apply its provisions, as applicable.

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EBITDA

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the first half of 2005 were $71.5 million, up 38.8% from $51.5 million in the first half of 2004. EBITDA is a measurement not in accordance with generally accepted accounting principles (“GAAP”). The Company defines EBITDA as net income plus income taxes, interest expense and depreciation and amortization. The Company does not intend EBITDA to represent cash flows from operations as defined by GAAP, and the reader should not consider it as an alternative to net income, net cash provided by operating activities or any other items calculated in accordance with GAAP, or as an indicator of the Company’s operating performance. The Company’s definition of EBITDA may not be comparable to EBITDA as defined by other companies. The Company believes EBITDA is commonly used by financial analysts and others in the industries in which the Company operates and, thus, provides useful information to investors. The Company’s non-GAAP measure of EBITDA excludes income taxes, depreciation and amortization, and interest expense which the Company incurs in the normal course of business. Accordingly, the measurement has limitations depending on its use.

The following is a reconciliation of EBITDA to the Company’s net income (in millions). The 2005 EBITDA results include the $8.9 million gain on the sale of NASCO.

	Six months ended June 30,
	2005		2004
			As Restated
Net income	$	31.5	$	20.9
Add back:
Income taxes		13.9		6.3
Depreciation and amortization		17.6		16.8
Interest expense		8.5		7.5
EBITDA	$	71.5	$	51.5

Forward-looking Statements

This quarterly report may contain certain forward-looking statements as defined in the Private Securities Litigation and Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in the statements. Investors are encouraged to consider these risks and uncertainties as described within the Company’s periodic filings with the Securities and Exchange Commission including the following: the ability of the Company to integrate newly acquired businesses and to realize acquisition synergies on schedule; changes in market demand for the types of products and services produced and sold by the Company; the Company’s success in identifying and attracting customers in new markets; the Company’s ability to develop new and enhanced products to meet customers’ needs timely; the effectiveness of the Company’s marketing and sales programs; uninsured claims; increased competitive activities that could adversely affect customer demand for the Company’s products; the availability of raw materials at prices that allow the Company to make and sell competitive products; changes in economic, political and public health conditions worldwide and in the locations where the Company does business; interest and foreign exchange rate fluctuations; regulatory changes; the possibility of declines in the stock market; risks related to consolidation occurring in the Company’s industries; risks related to dependence on government spending for defense-related products; the possibility of a downturn in the automotive industry; risks related to loss or delay in purchases by customers; risks related to pricing leverage of original equipment manufacturers; risks related to not realizing all sales expected from backlog or anticipated orders; the possibility of not recovering all up-front costs related to original equipment manufacturing programs and revenue sharing programs; risks related to cost overruns and losses on fixed-price contracts; and the possibility of loss of key personnel, a shortage of skilled employees and labor problems. The Company assumes no obligation to update any forward-looking statements contained in this report.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no significant change in the Company’s exposure to market risk during the first six months of 2005. For discussion of the Company’s exposure to market risk, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.

Item 4. Controls and Procedures

Management, including the Company’s President and Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon, and as of the date of, that evaluation, the President and Chief Executive Officer and the Chief Financial Officer concluded that the disclosure controls and procedures were effective, in all material respects, to ensure that information required to be disclosed in the reports the Company files and submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported as and when required.

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PART II. OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(c) Issuer Purchases of Equity Securities

Period	(a) Total Number of Shares (or Units) Purchased		(b) Average Price Paid Per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (2)
April 1 - 30, 2005	16,526		$	29.41	1,620	409,358
May 1 - 31, 2005	313,337		$	30.39	—	409,358
June 1 - 30, 2005	11,431		$	31.20	—	409,358
Total	341,294	(1)	$	30.37	1,620

(1) Other than 1,620 shares purchased in April which were purchased as part of the Company’s publicly announced plan, all acquisitions of equity securities during the second quarter of 2005 were the result of the operation of the terms of the Company’s stockholder-approved equity compensation plans and the terms of the equity grants pursuant to those plans to pay for the exercise price through attestation of ownership and related income tax upon the exercise of options. The purchase price of a share of stock used for tax withholding is the market price on the date of the exercise of the option.

(2) The program was publicly announced on April 12, 2001 authorizing repurchase of up to 1 million shares of its common stock.

Item 4. Submission of Matters to a Vote of Security Holders

(a) The Annual Meeting of the Company’s stockholders was held on April 21, 2005. Proxies for the meeting were solicited pursuant to Regulation 14 A.

(b) The following directors were elected:

Director	Votes in Favor	Votes Withheld	For Terms Expiring
William S. Bristow	18,243,694	890,054	2008
Edmund M. Carpenter	18,502,088	631,660	2008
G. Jackson Ratcliffe, Jr.	17,914,612	1,219,136	2008

(c)    (1)     The stockholders ratified the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2005. The proposal was ratified as 18,705,464 shares voted for, 343,888 shares voted against and 84,396 shares abstained.

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Item 6. Exhibits

(a) Exhibits

Exhibit 10.1*	Executive Compensation.
Exhibit 10.2*	Directors Compensation.
Exhibit 10.3*	Form of Restricted Stock Unit Award Agreement for the President and Chief Executive Officer (“CEO”).
Exhibit 10.4*	Form of Restricted Stock Unit Award Agreement for Named Executive Officers other than the CEO.
Exhibit 10.5*	Form of Non-Qualified Stock Option Agreement for the CEO.
Exhibit 10.6*	Form of Non-Qualified Stock Option Agreement for Named Executive Officers other than the CEO.
Exhibit 10.7*	Form of Performance Share Award Agreement for the CEO.
Exhibit 10.8*	Form of Performance Share Award Agreement for Named Executive Officers other than the CEO.
Exhibit 10.9*	Form of Contingent Dividend Equivalent Rights Agreement for the CEO.
Exhibit 10.10*	Form of Contingent Dividend Equivalent Rights Agreement for Named Executive Officers other than the CEO.
Exhibit 10.11	Purchase Agreement among the Company and several initial purchasers named therein, dated July 26, 2005.
Exhibit 10.12	Indenture between the Company and the Bank of New York Trust Company, N.A., as trustee under the Indenture.
Exhibit 10.13	Registration Rights Agreement between the Company and Banc of America Securities LLC, as representative of the Initial Purchasers.
Exhibit 15	Letter regarding unaudited interim financial information.
Exhibit 31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32	Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Barnes Group Inc. (Registrant)
Date: August 5, 2005	/s/    WILLIAM C. DENNINGER
	William C. Denninger Senior Vice President, Finance Chief Financial Officer (the principal Financial Officer)
Date: August 5, 2005	/s/    FRANCIS C. BOYLE, JR.
	Francis C. Boyle, Jr. Vice President, Controller (the principal Accounting Officer)

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EXHIBIT INDEX

Barnes Group Inc.

Quarterly Report on Form 10-Q

For Quarter ended June 30, 2005

Exhibit No.	Description	Reference
10.1*	Executive Compensation.	Incorporated by reference to Item 1.01 of Form 8-K filed by the Company on July 25, 2005.
10.2*	Directors Compensation.	Incorporated by reference to Item 1.01 of Form 8-K filed by the Company on July 26, 2005.
10.3*	Form of Restricted Stock Unit Award Agreement for the President and Chief Executive Officer (“CEO”).	Filed with this report.
10.4*	Form of Restricted Stock Unit Award Agreement for Named Executive Officers other than the CEO.	Filed with this report.
10.5*	Form of Non-Qualified Stock Option Agreement for the CEO.	Filed with this report.
10.6*	Form of Non-Qualified Stock Option Agreement for Named Executive Officers other than the CEO.	Filed with this report.
10.7*	Form of Performance Share Award Agreement for the CEO.	Filed with this report.
10.8*	Form of Performance Share Award Agreement for Named Executive Officers other than the CEO.	Filed with this report.
10.9*	Form of Contingent Dividend Equivalent Rights Agreement for the CEO.	Filed with this report.
10.10*	Form of Contingent Dividend Equivalent Rights Agreement for Named Executive Officers other than the CEO.	Filed with this report.
10.11	Purchase Agreement among the Company and several initial purchasers named therein, dated July 26, 2005.	Incorporated by reference to Exhibit 4.1 to Form 8-K filed by the Company on August 2, 2005.

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10.12	Indenture between the Company and the Bank of New York Trust Company, N.A., as trustee under the Indenture.	Incorporated by reference to Exhibit 4.3 to Form 8-K filed by the Company on August 2, 2005.
10.13	Registration Rights Agreement between the Company and Banc of America Securities LLC, as representative of the Initial Purchasers.	Incorporated by reference to Exhibit 4.4 to Form 8-K filed by the Company on August 2, 2005.
15	Letter regarding unaudited interim financial information.	Filed with this report.
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed with this report.
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed with this report.
32	Certification pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Furnished with this report.

* Management contract or compensatory plan or arrangement.

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EX-10.3

Exhibit 10.3

RESTRICTED STOCK UNIT AWARD AGREEMENT

PURSUANT TO THE

BARNES GROUP INC.

STOCK AND INCENTIVE AWARD PLAN

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933.

RESTRICTED STOCK UNIT AWARD AGREEMENT executed in duplicate as of March 7, 2005 (the “Grant Date”), between Barnes Group Inc., a Delaware corporation (the “Company”), and [NAME OF GRANTEE], a person regularly employed by the Company (the “Holder”).

In accordance with the provisions of the Barnes Group Inc. Stock and Incentive Award Plan (the “Plan”), the Compensation and Management Development Committee of the Company’s Board of Directors (the “Committee”) has authorized the execution of this Agreement and issuance of shares pursuant thereto.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows:

1. GRANT OF RESTRICTED STOCK UNIT AWARD. Subject to the terms, conditions and restrictions set forth in this Agreement and the Plan, the Company hereby grants to the Holder an award of              restricted stock units (each a “Restricted Stock Unit” and, collectively, the “Award”). The Award entitles the Holder to receive, without payment to the Company and at the applicable time or times provided by Section 6 hereof (if any), a number of shares of common stock, par value $.01 per share, of the Company (“Common Stock”), equal to the number of the Restricted Stock Units (if any) that become non-forfeitable pursuant to Section 4 hereof, subject, however, to Section 5 and the other provisions of this Agreement. The Award also entitles the Holder to be paid Dividend Equivalents on the terms and subject to the conditions set forth in Section 2. In no event shall the Holder acquire any rights under this Agreement unless the Holder executes and delivers to the Company, no later than 120 days after the Grant Date, a counterpart of this Agreement duly countersigned by the Holder.

2. DIVIDEND EQUIVALENTS. On each date on which a dividend (other than a Common Stock dividend) is paid to the holders of Common Stock the record date of which falls during the period commencing on the Grant Date and ending on the first date on which all of the Restricted Stock Units have either been forfeited pursuant to Section 5 or paid pursuant to Section 6, the Company shall pay the Holder an amount of money determined by multiplying (a) the number of the Restricted Stock Units that were neither forfeited nor paid on or before such dividend record date, times (b) the dividend per share paid on such

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dividend payment date. However, if the dividend is paid in property other than cash or Common Stock, the amount of money to be paid to the Holder in respect of such dividend shall be determined by multiplying (i) the number of the Restricted Stock Units that were neither forfeited nor paid on or before such dividend record date, times (ii) the fair market value on such dividend payment date of the property that was paid per share of Common Stock as a dividend on such dividend payment date.

3. RESTRICTIONS ON AWARD. In no event (a) may the Holder sell, exchange, transfer, assign, pledge, hypothecate, mortgage or dispose of the Award or any interest therein, nor (b) shall the Award or any interest therein be subject to anticipation, attachment, garnishment, levy, encumbrance or charge of any nature, voluntary or involuntary, by operation of law or otherwise. Any attempt, whether voluntary or involuntary, to sell, exchange, transfer, assign, pledge, hypothecate, mortgage, dispose, anticipate, attach, garnish, levy upon, encumber or charge the Award or any interest therein shall be null and void and the other party to the transaction shall not obtain any rights to or interest in the Award. The foregoing provisions of this Section 3 shall not prevent the Award or any Restricted Stock Unit from being forfeited pursuant to the terms and conditions of this Agreement, and shall not prevent the Holder from designating a Beneficiary to receive the Award in the event of his or her death in accordance with Section 2(d) of the Plan. Any such Beneficiary shall receive the Award subject to all of the terms, conditions and restrictions set forth in this Agreement, including but not limited to the forfeiture provisions set forth in Section 5.

4. VESTING OF RESTRICTED STOCK UNITS.

(a) Normal Vesting. Subject to Sections 4(b), (c), (d) and (e) and Section 5, the Restricted Stock Units will become non-forfeitable if and when both (i) and, if applicable, (ii) occur: (i) the employment of the Holder by the Company terminates on or after December 31, 2006 other than for Cause, and (ii) except if the employment of the Holder by the Company terminates by reason of death or Disability, the Holder executes a covenant not to compete and a release of claims effective as of the date of termination of employment, each in a form acceptable to the Committee. For purposes of this Agreement, “Cause” shall have the meaning set forth in the Employment Agreement dated December 8, 1998 between the Company and the Holder (the “Employment Agreement”), and “Disability” shall have the meaning set forth in the Company’s long-term disability plan as in effect from time to time (or, if that plan is not in effect at the time in question, as it was last in effect).

(b) Acceleration of Vesting in Event of Death or Disability. Notwithstanding Section 4(a) but subject to Section 5, if the Holder’s employment by the Company terminates as a result of death or Disability, then on the date of such termination of employment any of the Restricted Stock Units that did not become non-forfeitable before such termination of employment shall immediately become non- forfeitable.

(c) Exception for Termination by Company without Cause. Notwithstanding Section 4(a) but subject to Section 5, if the Holder’s employment by the Company is

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terminated by the Company before December 31, 2006 without Cause, and if, in addition, the Holder executes a covenant not to compete and a release of claims effective as of the date of such termination of employment, each in a form acceptable to the Committee, then any Restricted Stock Units that did not become non-forfeitable in accordance with the other provisions of this Section 4 before such termination of employment shall become non-forfeitable as of the date of such termination of employment.

(d) Acceleration of Vesting in Event of Change in Control. Notwithstanding Section 4(a) but subject to Section 5, if the Holder remains in the continuous employ of the Company from the Grant Date to the date, if any, on which a Change in Control occurs, any of the Restricted Stock Units that are not then non-forfeitable shall immediately become non-forfeitable. However, if such Change in Control occurs less than six months after the Grant Date and the Committee requests in writing before the date of such Change in Control that the Holder agree in writing to remain in the employment of the Company through the date which is six months after the Grant Date with substantially the same title, duties, authority, reporting relationships, compensation and indemnification as on the day immediately preceding the Change in Control, then in that event the Restricted Stock Units that are not then non-forfeitable shall become non-forfeitable pursuant to this Section 4(d) only if the Holder executes such written agreement and delivers it to the Company not later than one week after the date of such Change in Control, in which case such Restricted Stock Units shall become non-forfeitable when the Holder delivers such written agreement or, if later, on the date on which such Change in Control occurs.

(e) Additional Vesting Provisions. Any provision above of this Section 4 to the contrary notwithstanding, a Restricted Stock Unit shall not become non-forfeitable pursuant to this Section 4 if (i) prior to the date (if any) on which such Restricted Stock Unit would become non-forfeitable pursuant to this Section 4, such Restricted Stock Unit was forfeited pursuant to Section 5(b), or (ii) prior to December 31, 2006 and prior to the date (if any) on which such Restricted Stock Unit becomes non-forfeitable pursuant to Section 4(d) the Holder terminates his employment for any reason (whether or not for Good Reason as such term is defined in the Employment Agreement). Any provision of this Agreement to the contrary notwithstanding, in no event shall the number of Restricted Stock Units that become non-forfeitable pursuant to this Agreement or any provision thereof exceed in the aggregate 100% of the Restricted Stock Units unless the excess is attributable solely to an adjustment referred to in Section 7 of this Agreement or Section 10 of the Plan.

5. FORFEITURE OF RESTRICTED STOCK UNITS.

(a) Any Restricted Stock Units that have not become non-forfeitable pursuant to Section 4 above on or before the date on which the Holder ceases to be an employee of the Company shall be forfeited as of that date, and all of the Holder’s rights and interest in and to such forfeited Restricted Stock Units shall thereupon terminate without

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payment of consideration by the Company. For purposes of the preceding sentence, Restricted Stock Units that become non-forfeitable pursuant to Section 4(a) or 4(c) shall be considered to be non-forfeitable on the date on which the Holder ceases to be an employee of the Company even if the Holder executes the covenant not to compete and release referred to therein after the date of termination, provided that he does so within a reasonable period of time after that date and the covenant and release are effective as of that date. No Award or other amount payable to the Holder shall be reduced by the amount of any dividend equivalents previously paid to the Holder with respect to the forfeited Restricted Stock Units. For purposes of this Agreement, the continuous employment of the Holder by the Company will not be deemed to be interrupted by reason of the transfer of the Holder’s employment from the Company to any Subsidiary or from any Subsidiary to the Company or another Subsidiary, or by reason of an approved leave of absence.

(b) If the Holder, at any time before payment is made pursuant to Section 6 for all of the Restricted Stock Units that become non-forfeitable: (i) directly or indirectly, whether as an owner, partner, shareholder, consultant, agent, employee, investor or in any other capacity, accepts employment with, renders services to or otherwise assists any other business which competes with the business conducted by the Company or any of its Subsidiaries in which the Holder has worked, during the Holder’s last two years with the Company or any of its Subsidiaries; (ii) directly or indirectly, hires or solicits or arranges for the hiring or solicitation of any employee of the Company or any of its Subsidiaries on behalf of any business or enterprise other than the Company or a Subsidiary, or encourages any such employee to leave such employment; (iii) uses, discloses, misappropriates or transfers confidential or proprietary information concerning the Company or any of its Subsidiaries (except as required by the Holder’s work responsibilities with the Company or any of its Subsidiaries); or (iv) is convicted of a crime against the Company or any of its Subsidiaries; or (v) engages in any activity in violation of the policies of the Company or any of its Subsidiaries, including without limitation the Company’s Code of Business Ethics and Conduct, or, at any time, engages in conduct adverse to the best interests of the Company or any of its Subsidiaries; then should any of the foregoing events occur, any Restricted Stock Units for which payment has not theretofore been made pursuant to Section 6 shall be forfeited unless the Committee, in its sole discretion, elects otherwise. The provisions of this Section 5(b) are in addition to any other agreements related to non-competition, non-solicitation and preservation of Company confidential and proprietary information entered into between the Holder and the Company, and nothing herein is intended to waive, modify, alter or amend the terms of any such other agreement.

(c) By executing this Agreement, the Holder irrevocably consents to any forfeiture of Restricted Stock Units required or authorized by this Agreement.

6. DELIVERY OF SHARES. Subject to Section 5, one share of Common Stock shall be credited to a book entry account with the Company’s transfer agent in the name of the Holder in payment of each Restricted Stock Unit that becomes non-forfeitable in

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accordance with Section 4. The date or dates on which those shares of Common Stock shall be so credited are as follows:

(a) Ten thousand six hundred and sixty-seven (10,667) of those shares shall be credited on each of August 16, 2007 and August 16, 2008 and ten thousand six hundred and sixty-six (10,666) of those shares shall be credited on August 16, 2009, provided, in the case of each of such three installments, that prior to the applicable crediting date (i) the Holder complied with the covenant not to compete and release which he executed pursuant to Section 4, and (ii) the shares were not credited to the Holder pursuant to Section 6(b), (c) or (d) below;

(b) If the Holder dies before August 16, 2009, any of those shares which were not credited to the Holder before his death shall be credited to him (or his estate) as soon as practicable following the date of death, provided that prior to that date the Holder complied with any covenant not to compete and release which he executed pursuant to Section 4;

(c) If the Holder’s employment by the Company terminates by reason of Disability before August 16, 2009, then, at the first time on or after such termination of employment that the Holder is considered to be disabled within the meaning of Section 409A(a)(2)(A)(ii) & (C) of the Code, or as soon as practicable thereafter, any of those shares which were not credited to the Holder before that time shall be credited to him; and

(d) If a Change in Control occurs, then, at the first time on or after the date on which such Change in Control occurs that “a change in the ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets of the corporation” is deemed to have taken place within the meaning of Section 409A(a)(2)(A)(v) of the Code, any of those shares which were not credited to the Holder before that time shall be credited to him, provided that the Committee as constituted before the Change in Control did not determine that before the Change in Control the Holder failed to comply with any covenant not to compete and release which he executed pursuant to Section 4.

In lieu of crediting any of those shares to a book entry account with the Company’s transfer agent, at the election and expense of the Holder, a stock certificate representing those shares shall be delivered to the Holder as soon as practicable after the Company’s receipt of the Holder’s election. All shares of Common Stock delivered under this Agreement will be duly authorized, validly issued, fully paid and non-assessable.

7. CAPITAL ADJUSTMENTS. In addition to any other adjustments that may be made pursuant to Section 10 of the Plan, (a) if the number of outstanding shares of Common Stock of the Company is changed as a result of a stock dividend, stock split, reverse stock split or the like without additional consideration to the Company, the number of Restricted Stock Units shall be adjusted to correspond to the change in the outstanding shares of Common Stock, and (b) in the case of any reorganization or recapitalization of the

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Company (by reclassification of its outstanding Common Stock or otherwise), or its consolidation or merger with or into another corporation, or the sale, conveyance, lease or other transfer by the Company of all or substantially all of its property, pursuant to any of which events the then outstanding shares of Common Stock are combined, or are changed into or become exchangeable for other shares of stock or property, the Holder shall be entitled to earn and receive, in lieu of the shares that he would otherwise be entitled to earn and receive pursuant to the Award and without any payment, the shares of stock or property which the Holder would have received upon such reorganization, recapitalization, consolidation, merger, sale or other transfer, if immediately prior thereto he had owned the shares that he would otherwise be entitled to earn and receive pursuant to the Award and had exchanged such shares in accordance with the terms of such reorganization, recapitalization, consolidation, merger, sale or other transfer.

8. TAXES AND WITHHOLDING. The Company shall have the right, in its discretion, to deduct from any dividend equivalents payable pursuant to Section 2, and from any shares to be delivered pursuant to Section 6, cash and/or shares, valued at Fair Market Value on the date of payment, in an amount necessary to satisfy all Federal, state and local taxes required by law to be withheld with respect to such dividend equivalents and/or shares, and the Holder may be required to pay to the Company prior to delivery of certificates representing such shares and prior to such shares being credited to a book entry account in the Holder’s name, the amount of any such taxes. The Company shall accept whole shares of Common Stock of equivalent Fair Market Value in payment of the Company’s minimum statutory withholding tax obligations if the Holder of the Award elects to make payment in such manner.

9. COMPLIANCE WITH LAW. The Company will make reasonable efforts to comply with all applicable federal and state securities laws. However, the Company will not issue any shares or other securities pursuant to this Agreement if their issuance would result in a violation of any such law. If at any time the Committee shall determine, in its discretion, that the listing, registration or qualification of any shares subject to this Award upon any securities exchange or under any state or Federal law, or the consent or approval of any government regulatory body, is necessary or desirable as a condition of, or in connection with, the granting of this Award or the issue of shares hereunder, no rights under the Award may be exercised and shares of Common Stock may not be delivered pursuant to the Award, in whole or in part, unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee and any delay caused thereby shall in no way affect the dates of vesting or forfeiture of the Award.

10. RELATION TO OTHER BENEFITS. The benefits received by the Holder under this Agreement will not be taken into account in determining any other benefits to which the Holder may be entitled under any profit sharing, retirement or other benefit or compensation plan maintained by the Company, including the amount of any life insurance coverage available to any beneficiary of the Holder under any life insurance plan covering employees of the Company.

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11. AMENDMENTS; INTEGRATED AGREEMENT. This Agreement may only be amended in a writing signed by the Holder and an officer of the Company duly authorized to do so. This Agreement contains the entire agreement of the parties relating to the subject matter of this Agreement and supersedes and replaces all prior agreements and understandings with respect to such subject matter, and the parties have made no agreements, representations or warranties relating to the subject matter of this Agreement which are not set forth herein.

12. RELATION TO PLAN; INTERPRETATION. The Award is granted under the Plan, and the Award and this Agreement are each subject to the terms and conditions of the Plan, which are hereby incorporated in this Agreement by reference. In the event of any inconsistent provisions between this Agreement and the Plan, the provisions of the Plan control. Capitalized terms used in this Agreement without definition have the meanings assigned to them in the Plan. References to Sections are to Sections of this Agreement unless otherwise noted. The titles to Sections of this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to the title of any Section.

13. NO IMPLIED PROMISES. By accepting the Award and executing this Agreement, the Holder recognizes and agrees that the Company and its Subsidiaries, and each of their officers, directors, agents and employees, including but not limited to the Board and the Committee, in their oversight or conduct of the business and affairs of the Company and its Subsidiaries, may in good faith cause the Company and/or a Subsidiary to act or omit to act in a manner that will, directly or indirectly, prevent all or part of the Restricted Stock Units from becoming non-forfeitable. No provision of this Agreement shall be interpreted or construed to impose any liability upon the Company, any Subsidiary, or any officer, director, agent or employee of the Company or any Subsidiary, or the Board or the Committee, for any forfeiture of Restricted Stock Units that may result, directly or indirectly, from any such action or omission, or shall be interpreted or construed to impose any obligation on the part of any such entity or person to refrain from any such action or omission.

14. NOTICES. Any notice hereunder by the Holder shall be given to the Committee in writing and such notice by the Holder hereunder shall be deemed duly given or made only upon receipt by the Corporate Secretary at Barnes Group Inc., P. O. Box 489, 123 Main Street, Bristol, Connecticut 06011-0489, U.S.A., or at such other address as the Company may designate by notice to the Holder. Any notice to the Holder shall be in writing and shall be deemed duly given if delivered to the Holder in person or mailed or otherwise delivered to the Holder at such address as the Holder may have on file with the Company from time to time.

15. INTERPRETATION AND DISPUTES. The Committee shall interpret and construe this Agreement and make all determinations thereunder, and any such interpretation, construction or determination by the Committee shall be binding and conclusive on the Company and the Holder and on any person or entity claiming under or through either of them.

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Any claim, demand or controversy arising from such interpretation, construction or determination by the Committee shall be submitted first to a mediator in accordance with the rules of the American Arbitration Association (“AAA”) by submitting a mediation request to the Corporate Secretary of the Company within thirty (30) days of the date of the Committee’s interpretation or construction. The mediation process shall conclude upon the earlier of: (a) the resolution of the dispute; (b) a determination by either the mediator or one or more of the parties that all settlement possibilities have been exhausted and there is no possibility of resolution; or (c) thirty (30) days have passed since the filing of a request to mediate with the AAA. A party who has previously submitted a dispute to mediation, and which dispute has not been resolved, may submit such dispute to binding arbitration pursuant to the rules of the AAA. Any arbitration proceeding for such dispute must be initiated within fourteen (14) days from the date that the mediation process has concluded. The prevailing party shall recover its costs and reasonable attorney’s fees incurred in such arbitration proceeding. The Holder and the Company specifically understand and agree that the failure of a party to timely initiate a proceeding hereunder shall bar the party from any relief or other proceeding and any such dispute shall be deemed to have been finally and completely resolved. All mediation and arbitration proceedings shall be conducted in Bristol, Connecticut or such other location as the Company may determine and the Holder agrees that no objection shall be made to such jurisdiction or venue, as a forum non conveniens or otherwise. The arbitrator’s authority shall be limited to resolution of the legal disputes between the parties and the arbitrator shall not have authority to modify or amend this Agreement or the Committee’s interpretation or construction thereof, or abridge or enlarge rights available under applicable law. Any court with jurisdiction over the parties may enforce any award made hereunder.

16. GENERAL.

(a) Nothing in this Agreement shall confer upon the Holder any right to continue in the employ or other service of the Company or any Subsidiary, or shall limit in any manner the right of the Company, its stockholders or any Subsidiary to terminate the employment or other service of the Holder or adjust the compensation of the Holder.

(b) The Holder shall have no rights as a stockholder with respect to any shares that may be issued or transferred pursuant to this Agreement until the date of issuance to the Holder of a stock certificate for the shares or the date of entry of a credit for the shares in a book entry account in the Holder’s name.

(c) This Agreement shall be binding upon the successors and assigns of the Company and upon any Beneficiary of the Holder referred to in Section 2(d) of the Plan.

(d) Any waiver by a party of another party’s performance of, or compliance with, a term or condition of this Agreement shall not operate, or be construed, as a waiver of any subsequent failure by such other party to perform or comply.

(e) Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the

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remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

(f) This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of laws thereof.

17. CODE SECTION 409A. Any dividend equivalents and shares that may be earned pursuant to this Agreement are intended to qualify for the treatment applicable to short-term deferrals under Q&A-4(c) of Section IV.A. of IRS Notice 2005-1 (guidance relating to Section 409A of the Code), or are intended to meet the requirements of Section 409A(a)(2), (3) or (4) of the Code, so that none of the dividend equivalents and shares that may be earned pursuant to this Agreement will be includible in the Holder’s gross income pursuant to Section 409A(a)(1)(A) of the Code. The Award and this Agreement shall be administered, interpreted and construed to carry out such intention, and any provision of this Agreement that cannot be so administered, interpreted and construed shall to that extent be disregarded. However, the Company does not represent, warrant or guarantee that any dividend equivalents or shares that may be earned pursuant to this Agreement will not be includible in the Holder’s gross income pursuant to Section 409A(a)(1)(A) of the Code, nor does the Company make any other representation, warranty or guaranty to the Holder as to the tax consequences of the Award or this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

BARNES GROUP INC.	HOLDER
BY:

Approved by the Compensation and Management

Development Committee of the Board of Directors: 3/7/05

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EX-10.4

Exhibit 10.4

RESTRICTED STOCK UNIT AWARD AGREEMENT

PURSUANT TO THE

BARNES GROUP INC.

STOCK AND INCENTIVE AWARD PLAN

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933.

RESTRICTED STOCK UNIT AWARD AGREEMENT executed in duplicate as of February 16, 2005 (the “Grant Date”), between Barnes Group Inc., a Delaware corporation (the “Company”), and [NAME OF GRANTEE], a person regularly employed by or providing services to the Company or one of its Subsidiaries (the “Holder”).

In accordance with the provisions of the Barnes Group Inc. Stock and Incentive Award Plan (the “Plan”), the Compensation and Management Development Committee of the Company’s Board of Directors (the “Committee”) has authorized the execution of this Agreement and issuance of shares pursuant thereto.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows:

1. GRANT OF RESTRICTED STOCK UNIT AWARD. Subject to the terms, conditions and restrictions set forth in this Agreement and the Plan, the Company hereby grants to the Holder an award of [# Restricted Stock Units] restricted stock units (each a “Restricted Stock Unit” and, collectively, the “Award”). The Award entitles the Holder to receive, without payment to the Company and at the applicable time or times provided by Section 6 hereof (if any), a number of shares of common stock, par value $.01 per share, of the Company (“Common Stock”), equal to the number of the Restricted Stock Units (if any) that become non-forfeitable pursuant to Section 4 hereof, subject, however, to Section 5 and the other provisions of this Agreement. The Award also entitles the Holder to be paid Dividend Equivalents on the terms and subject to the conditions set forth in Section 2. In no event shall the Holder acquire any rights under this Agreement unless the Holder executes and delivers to the Company, no later than 120 days after the Grant Date, a counterpart of this Agreement duly countersigned by the Holder.

2. DIVIDEND EQUIVALENTS. On each date on which a dividend (other than a Common Stock dividend) is paid to the holders of Common Stock the record date of which falls during the period commencing on the Grant Date and ending on the first date on which all of the Restricted Stock Units have either been forfeited pursuant to Section 5 or paid pursuant to Section 6, the Company shall pay the Holder an amount of money determined by multiplying (a) the number of the Restricted Stock Units that were neither forfeited nor paid on or before such dividend record date, times (b) the dividend per share paid on such

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dividend payment date. However, if the dividend is paid in property other than cash or Common Stock, the amount of money to be paid to the Holder in respect of such dividend shall be determined by multiplying (i) the number of the Restricted Stock Units that were neither forfeited nor paid on or before such dividend record date, times (ii) the fair market value on such dividend payment date of the property that was paid per share of Common Stock as a dividend on such dividend payment date.

3. RESTRICTIONS ON AWARD. In no event (a) may the Holder sell, exchange, transfer, assign, pledge, hypothecate, mortgage or dispose of the Award or any interest therein, nor (b) shall the Award or any interest therein be subject to anticipation, attachment, garnishment, levy, encumbrance or charge of any nature, voluntary or involuntary, by operation of law or otherwise. Any attempt, whether voluntary or involuntary, to sell, exchange, transfer, assign, pledge, hypothecate, mortgage, dispose, anticipate, attach, garnish, levy upon, encumber or charge the Award or any interest therein shall be null and void and the other party to the transaction shall not obtain any rights to or interest in the Award. The foregoing provisions of this Section 3 shall not prevent the Award or any Restricted Stock Unit from being forfeited pursuant to the terms and conditions of this Agreement, and shall not prevent the Holder from designating a Beneficiary to receive the Award in the event of his or her death in accordance with Section 2(d) of the Plan. Any such Beneficiary shall receive the Award subject to all of the terms, conditions and restrictions set forth in this Agreement, including but not limited to the forfeiture provisions set forth in Section 5.

4. VESTING OF RESTRICTED STOCK UNITS.

(a) Normal Vesting Dates. Subject to Sections 4(b), (c), (d) and (e) and Section 5, the Holder must remain in the continuous employ of the Company through (i) the third anniversary of the Base Date (as hereafter defined) for 33.4% of the Restricted Stock Units to become non-forfeitable, (ii) the fourth anniversary of the Base Date for an additional 33.3% of the Restricted Stock Units to become non-forfeitable, and (iii) the fifth anniversary of the Base Date for the balance of the Restricted Stock Units to become non-forfeitable. The number of Restricted Stock Units that become non-forfeitable on the third and fourth anniversaries of the Base Date pursuant to the foregoing shall be rounded to the nearest whole Restricted Stock Unit. For purposes of this Agreement, the “Base Date” means August 16, 2004.

(b) Acceleration of Vesting in Event of Death or Disability. Notwithstanding Section 4(a) but subject to Section 5, if the Holder’s employment by the Company terminates before the fifth anniversary of the Base Date as a result of death or Disability, then on the date of such termination of employment any of the Restricted Stock Units that did not become non-forfeitable before such termination of employment shall immediately become non-forfeitable. For purposes of this Agreement, “Disability” shall have the meaning set forth in the Company’s long-term disability plan as in effect from time to time (or, if that plan is not in effect at the time in question, as it was last in effect).

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(c) Exception for Retirement. Notwithstanding Section 4(a) but subject to Section 5, if the Holder’s employment by the Company terminates (i) more than thirty (30) months after the Base Date and before the fifth anniversary of the Base Date by reason of retirement at or after age 62 with a minimum of five (5) years of credited service with the Company and/or its Subsidiaries, and (ii) under circumstances that do not constitute “cause” as hereafter defined (any such termination of employment being hereafter referred to as “Retirement”), and if, in addition, the Holder executes a covenant not to compete and a release of claims effective as of the date of Retirement, each in a form acceptable to the Committee, and complies with the terms of such covenant and release, then any Restricted Stock Units that have not yet become non-forfeitable in accordance with the other provisions of this Section 4 as of the date of Retirement shall thereafter become non-forfeitable in accordance with the other provisions of this Section 4 as if the Holder had continued as an employee through the fifth anniversary of the Base Date, unless the Holder dies after the date of Retirement and before all of such Restricted Stock Units have become non-forfeitable, in which case any Restricted Stock Units that have not yet become non-forfeitable as of the date of death shall become non-forfeitable on that date. For purposes of this Agreement, “cause” shall mean (A) the willful and continued failure by the Holder to substantially perform the Holder’s duties with the Company (other than any such failure resulting from the Holder’s incapacity due to physical or mental illness) or (B) the willful engaging by the Holder in conduct which is demonstrably and materially injurious to the Company or its Subsidiaries, monetarily or otherwise.

(d) Acceleration of Vesting in Event of Change in Control. Notwithstanding Section 4(a) but subject to Section 5, if the Holder remains in the continuous employ of the Company from the Grant Date to the date, if any, on which a Change in Control occurs, any of the Restricted Stock Units that are not then non-forfeitable shall immediately become non-forfeitable. However, if such Change in Control occurs less than six months after the Grant Date and the Committee requests in writing before the date of such Change in Control that the Holder agree in writing to remain in the employment of the Company through the date which is six months after the Grant Date with substantially the same title, duties, authority, reporting relationships, compensation and indemnification as on the day immediately preceding the Change in Control, then in that event the Restricted Stock Units that are not then non-forfeitable shall become non-forfeitable pursuant to this Section 4(d) only if the Holder executes such written agreement and delivers it to the Company not later than one week after the date of such Change in Control, in which case such Restricted Stock Units shall become non-forfeitable when the Holder delivers such written agreement or, if later, on the date on which such Change in Control occurs.

(e) Additional Vesting Provisions. Any provision above of this Section 4 to the contrary notwithstanding, a Restricted Stock Unit shall not become non-forfeitable pursuant to this Section 4 if, prior to the date (if any) on which such Restricted

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Stock Unit would become non-forfeitable pursuant to this Section 4, such Restricted Stock Unit was forfeited pursuant to Section 5(c). Any provision of this Agreement to the contrary notwithstanding, in no event shall the number of Restricted Stock Units that become non-forfeitable pursuant to this Agreement or any provision thereof exceed in the aggregate 100% of the Restricted Stock Units unless the excess is attributable solely to an adjustment referred to in Section 7 of this Agreement or Section 10 of the Plan.

5. FORFEITURE OF RESTRICTED STOCK UNITS.

(a) Except as provided otherwise in Section 4(c) above or in the second sentence of Section 5(b) below, any Restricted Stock Units that have not become non-forfeitable pursuant to Section 4 above on or before the date on which the Holder ceases to be an employee of the Company shall be forfeited as of that date, and all of the Holder’s rights and interest in and to such forfeited Restricted Stock Units shall thereupon terminate without payment of consideration by the Company. For purposes of the preceding sentence, Restricted Stock Units that become non-forfeitable pursuant to Section 4(c) shall be considered to be non-forfeitable on the date on which the Holder ceases to be an employee of the Company even if the Holder executes the covenant not to compete and release referred to therein after the date of termination, provided that s/he does so within a reasonable period of time (in no event to exceed 30 days) after that date and the covenant and release are effective as of that date. No Award or other amount payable to the Holder shall be reduced by the amount of any dividend equivalents previously paid to the Holder with respect to the forfeited Restricted Stock Units. For purposes of this Agreement, the continuous employment of the Holder by the Company will not be deemed to be interrupted by reason of the transfer of the Holder’s employment from the Company to any Subsidiary or from any Subsidiary to the Company or another Subsidiary, or by reason of an approved leave of absence.

(b) If the Holder’s employment terminates by Retirement as defined in Section 4(c), but the Holder does not execute the covenant and release referred to in Section 4(c), any Restricted Stock Units that have not yet become non-forfeitable as of the date of Retirement shall be forfeited as of the date of Retirement. If the Holder executes but fails to comply with such covenant and release, any Restricted Stock Units that have not yet become non-forfeitable as of the date of such failure to comply shall be forfeited as of that date.

(c) If the Holder, at any time before all of the Restricted Stock Units become non-forfeitable: (i) directly or indirectly, whether as an owner, partner, shareholder, consultant, agent, employee, investor or in any other capacity, accepts employment with, renders services to or otherwise assists any other business which competes with the business conducted by the Company or any of its Subsidiaries in which the Holder has worked, during the Holder’s last two years with the Company or any of its Subsidiaries; (ii) directly or indirectly, hires or solicits or arranges for the hiring or solicitation of any employee of the Company or any of its Subsidiaries on behalf of any business or enterprise other than the Company or a Subsidiary, or encourages

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any such employee to leave such employment; (iii) uses, discloses, misappropriates or transfers confidential or proprietary information concerning the Company or any of its Subsidiaries (except as required by the Holder’s work responsibilities with the Company or any of its Subsidiaries); or (iv) is convicted of a crime against the Company or any of its Subsidiaries; or (v) engages in any activity in violation of the policies of the Company or any of its Subsidiaries, including without limitation the Company’s Code of Business Ethics and Conduct, or, at any time, engages in conduct adverse to the best interests of the Company or any of its Subsidiaries; then should any of the foregoing events occur, any Restricted Stock Units that have not theretofore become non-forfeitable shall be forfeited unless the Committee, in its sole discretion, elects otherwise. The provisions of this Section 5(c) are in addition to any other agreements related to non-competition, non-solicitation and preservation of Company confidential and proprietary information entered into between the Holder and the Company, and nothing herein is intended to waive, modify, alter or amend the terms of any such other agreement.

(d) By executing this Agreement, the Holder irrevocably consents to any forfeiture of Restricted Stock Units required or authorized by this Agreement.

6. DELIVERY OF SHARES. If and when a Restricted Stock Unit becomes non-forfeitable within the meaning of Section 4 or as soon as practicable thereafter (but in no event later than the date that is 2½ months from the end of the taxable year of the Holder in which such Restricted Stock Unit becomes non-forfeitable within the meaning of Section 4), a share of Common Stock shall be credited to a book entry account with the Company’s transfer agent in the name of the Holder in payment of such Restricted Stock Unit. In lieu of crediting any such share to a book entry account with the Company’s transfer agent, at the election and expense of the Holder, a stock certificate representing such share shall be delivered to the Holder as soon as practicable after the Company’s receipt of the Holder’s election. All shares of Common Stock delivered under this Agreement will be duly authorized, validly issued, fully paid and non-assessable.

7. CAPITAL ADJUSTMENTS. In addition to any other adjustments that may be made pursuant to Section 10 of the Plan, (a) if the number of outstanding shares of Common Stock of the Company is changed as a result of a stock dividend, stock split, reverse stock split or the like without additional consideration to the Company, the number of Restricted Stock Units shall be adjusted to correspond to the change in the outstanding shares of Common Stock, and (b) in the case of any reorganization or recapitalization of the Company (by reclassification of its outstanding Common Stock or otherwise), or its consolidation or merger with or into another corporation, or the sale, conveyance, lease or other transfer by the Company of all or substantially all of its property, pursuant to any of which events the then outstanding shares of Common Stock are combined, or are changed into or become exchangeable for other shares of stock or property, the Holder shall be entitled to earn and receive, in lieu of the shares that s/he would otherwise be entitled to earn and receive pursuant to the Award and without any payment, the shares of stock or property which the Holder would have received upon such reorganization, recapitalization, consolidation, merger, sale or other transfer, if immediately prior thereto s/he had owned

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the shares that s/he would otherwise be entitled to earn and receive pursuant to the Award and had exchanged such shares in accordance with the terms of such reorganization, recapitalization, consolidation, merger, sale or other transfer.

8. TAXES AND WITHHOLDING. The Company shall have the right, in its discretion, to deduct from any dividend equivalents payable pursuant to Section 2, and from any shares to be delivered pursuant to Section 6, cash and/or shares, valued at Fair Market Value on the date of payment, in an amount necessary to satisfy all Federal, state and local taxes required by law to be withheld with respect to such dividend equivalents and/or shares, and the Holder may be required to pay to the Company prior to delivery of certificates representing such shares and prior to such shares being credited to a book entry account in the Holder’s name, the amount of any such taxes. The Company shall accept whole shares of Common Stock of equivalent Fair Market Value in payment of the Company’s minimum statutory withholding tax obligations if the Holder of the Award elects to make payment in such manner.

9. COMPLIANCE WITH LAW. The Company will make reasonable efforts to comply with all applicable federal and state securities laws. However, the Company will not issue any shares or other securities pursuant to this Agreement if their issuance would result in a violation of any such law. If at any time the Committee shall determine, in its discretion, that the listing, registration or qualification of any shares subject to this Award upon any securities exchange or under any state or Federal law, or the consent or approval of any government regulatory body, is necessary or desirable as a condition of, or in connection with, the granting of this Award or the issue of shares hereunder, no rights under the Award may be exercised and shares of Common Stock may not be delivered pursuant to the Award, in whole or in part, unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee and any delay caused thereby shall in no way affect the dates of vesting or forfeiture of the Award.

10. RELATION TO OTHER BENEFITS. The benefits received by the Holder under this Agreement will not be taken into account in determining any other benefits to which the Holder may be entitled under any profit sharing, retirement or other benefit or compensation plan maintained by the Company, including the amount of any life insurance coverage available to any beneficiary of the Holder under any life insurance plan covering employees of the Company.

11. AMENDMENTS; INTEGRATED AGREEMENT. This Agreement may only be amended in a writing signed by the Holder and an officer of the Company duly authorized to do so. This Agreement contains the entire agreement of the parties relating to the subject matter of this Agreement and supersedes and replaces all prior agreements and understandings with respect to such subject matter, and the parties have made no agreements, representations or warranties relating to the subject matter of this Agreement which are not set forth herein.

12. RELATION TO PLAN; INTERPRETATION. The Award is granted under the Plan, and the Award and this Agreement are each subject to the terms and conditions of the Plan,

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which are hereby incorporated in this Agreement by reference. In the event of any inconsistent provisions between this Agreement and the Plan, the provisions of the Plan control. Capitalized terms used in this Agreement without definition have the meanings assigned to them in the Plan. References to Sections are to Sections of this Agreement unless otherwise noted. The titles to Sections of this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to the title of any Section.

13. NO IMPLIED PROMISES. By accepting the Award and executing this Agreement, the Holder recognizes and agrees that the Company and its Subsidiaries, and each of their officers, directors, agents and employees, including but not limited to the Board and the Committee, in their oversight or conduct of the business and affairs of the Company and its Subsidiaries, may in good faith cause the Company and/or a Subsidiary to act or omit to act in a manner that will, directly or indirectly, prevent all or part of the Restricted Stock Units from becoming non-forfeitable. No provision of this Agreement shall be interpreted or construed to impose any liability upon the Company, any Subsidiary, or any officer, director, agent or employee of the Company or any Subsidiary, or the Board or the Committee, for any forfeiture of Restricted Stock Units that may result, directly or indirectly, from any such action or omission, or shall be interpreted or construed to impose any obligation on the part of any such entity or person to refrain from any such action or omission.

14. NOTICES. Any notice hereunder by the Holder shall be given to the Committee in writing and such notice by the Holder hereunder shall be deemed duly given or made only upon receipt by the Corporate Secretary at Barnes Group Inc., P. O. Box 489, 123 Main Street, Bristol, Connecticut 06011-0489, U.S.A., or at such other address as the Company may designate by notice to the Holder. Any notice to the Holder shall be in writing and shall be deemed duly given if delivered to the Holder in person or mailed or otherwise delivered to the Holder at such address as the Holder may have on file with the Company from time to time.

15. INTERPRETATION AND DISPUTES. The Committee shall interpret and construe this Agreement and make all determinations thereunder, and any such interpretation, construction or determination by the Committee shall be binding and conclusive on the Company and the Holder and on any person or entity claiming under or through either of them. Without limiting the generality of the foregoing, any determination of whether the Holder’s employment terminates by reason of “Retirement” or for “cause” within the meaning of Section 4(c) above shall be made by and in the sole discretion of the Committee, whose decision shall be final and binding on the Company, the Holder and any person or entity claiming under or through any of them.

Any claim, demand or controversy arising from such interpretation, construction or determination by the Committee shall be submitted first to a mediator in accordance with the rules of the American Arbitration Association (“AAA”) by submitting a mediation request to the Corporate Secretary of the Company within thirty (30) days of the date of the Committee’s interpretation or construction. The mediation process shall conclude upon the

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earlier of: (a) the resolution of the dispute; (b) a determination by either the mediator or one or more of the parties that all settlement possibilities have been exhausted and there is no possibility of resolution; or (c) thirty (30) days have passed since the filing of a request to mediate with the AAA. A party who has previously submitted a dispute to mediation, and which dispute has not been resolved, may submit such dispute to binding arbitration pursuant to the rules of the AAA. Any arbitration proceeding for such dispute must be initiated within fourteen (14) days from the date that the mediation process has concluded. The prevailing party shall recover its costs and reasonable attorney’s fees incurred in such arbitration proceeding. The Holder and the Company specifically understand and agree that the failure of a party to timely initiate a proceeding hereunder shall bar the party from any relief or other proceeding and any such dispute shall be deemed to have been finally and completely resolved. All mediation and arbitration proceedings shall be conducted in Bristol, Connecticut or such other location as the Company may determine and the Holder agrees that no objection shall be made to such jurisdiction or venue, as a forum non conveniens or otherwise. The arbitrator’s authority shall be limited to resolution of the legal disputes between the parties and the arbitrator shall not have authority to modify or amend this Agreement or the Committee’s interpretation or construction thereof, or abridge or enlarge rights available under applicable law. Any court with jurisdiction over the parties may enforce any award made hereunder.

16. GENERAL.

(a) Nothing in this Agreement shall confer upon the Holder any right to continue in the employ or other service of the Company or any Subsidiary, or shall limit in any manner the right of the Company, its stockholders or any Subsidiary to terminate the employment or other service of the Holder or adjust the compensation of the Holder.

(b) The Holder shall have no rights as a stockholder with respect to any shares that may be issued or transferred pursuant to this Agreement until the date of issuance to the Holder of a stock certificate for the shares or the date of entry of a credit for the shares in a book entry account in the Holder’s name.

(c) This Agreement shall be binding upon the successors and assigns of the Company and upon any Beneficiary of the Holder referred to in Section 2(d) of the Plan.

(d) Any waiver by a party of another party’s performance of, or compliance with, a term or condition of this Agreement shall not operate, or be construed, as a waiver of any subsequent failure by such other party to perform or comply.

(e) Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

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(f) This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of laws thereof.

17. CODE SECTION 409A. Any dividend equivalents and shares that may be earned pursuant to this Agreement are intended to qualify for the treatment applicable to short-term deferrals under Q&A-4(c) of Section IV.A. of IRS Notice 2005-1 (guidance relating to Section 409A of the Code), or are intended to meet the requirements of Section 409A(a)(2), (3) and (4) of the Code, so that none of the dividend equivalents and shares that may be earned pursuant to this Agreement will be includible in the Holder’s gross income pursuant to Section 409A(a)(1)(A) of the Code. The Award and this Agreement shall be administered, interpreted and construed to carry out such intention, and any provision of this Agreement that cannot be so administered, interpreted and construed shall to that extent be disregarded. However, the Company does not represent, warrant or guarantee that any dividend equivalents or shares that may be earned pursuant to this Agreement will not be includible in the Holder’s gross income pursuant to Section 409A(a)(1)(A) of the Code, nor does the Company make any other representation, warranty or guaranty to the Holder as to the tax consequences of the Award or this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

BARNES GROUP INC.		HOLDER
BY:
	Senior Vice President – Human Resources	[HOLDER]

Approved by the Compensation and Management

Development Committee of the Board of Directors: 2/16/05

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EX-10.5

Exhibit 10.5

NON-QUALIFIED STOCK OPTION AGREEMENT

PURSUANT TO THE

BARNES GROUP INC.

STOCK AND INCENTIVE AWARD PLAN

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.

OPTION AGREEMENT executed in duplicate as of March 7, 2005 (the “Grant Date”), between Barnes Group Inc., a Delaware corporation, (the “Company”) and [NAME OF GRANTEE], an employee of the Company or of one of its Subsidiaries (the “Optionee”).

In accordance with the provisions of the Barnes Group Inc. Stock and Incentive Award Plan (the “Plan”), the Compensation and Management Development Committee of the Company’s Board of Directors (the “Committee”) has authorized the execution of this Agreement. Capitalized terms used in this Agreement and not otherwise defined herein shall have the same meaning as provided for in the Plan.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows:

1. Grant of Option. Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Optionee the option to purchase              shares of Common Stock (the “Option”).

2. Purchase Price. The purchase price of the shares of Common Stock covered by this Option shall be $             per share which is one hundred percent (100%) of the Fair Market Value of the Common Stock on the Grant Date (the “Purchase Price”).

3. Exercise of Option.

(a) The Option shall vest (i.e., become exercisable) with respect to              of the shares covered by the Option on each of August 16, 2006 and August 16, 2007 and with respect to the remaining              shares covered by the Option on August 16, 2008, provided, in the case of each of such three installments, that the Optionee is employed by the Company on the date on which such installment vests.

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(b) Subject to Section 4, any portion of the Option which has not vested pursuant to Section 3(a) before the date, if any, on which a Change in Control occurs while the Optionee is employed by the Company shall vest on that date. However, if a Change in Control occurs less than six months after the Grant Date and the Committee requests in writing before the date of such Change in Control that the Optionee agree in writing to remain in the employment of the Company through the date which is six months after the Grant Date with substantially the same title, duties, authority, reporting relationships, compensation and indemnification as on the day immediately preceding the Change in Control, then in that event any portion of the Option which has not vested pursuant to Section 3(a) before the date on which such Change in Control occurs shall vest pursuant to this Section 3(b) only if the Optionee executes such written agreement and delivers it to the Company not later than one week after the date of such Change in Control, in which case such portion of the Option shall vest when the Optionee delivers such written agreement or, if later, on the date on which such Change in Control occurs.

4. Termination. The Option shall terminate on February 16, 2015 (the “Termination Date”) unless it terminates earlier in accordance with the following:

(a) If the Optionee’s employment by the Company terminates before December 31, 2006 for any reason other than death or Disability (as hereafter defined), the Option shall terminate as of the date of such termination of employment.

(b) If the Optionee’s employment by the Company terminates as a result of death or Disability, whether before December 31, 2006 or thereafter, any portion of the Option which has not yet become exercisable shall become immediately exercisable as of the date of such termination of employment and the Option shall terminate one (1) year after the date of such termination of employment. For purposes of this Agreement, “Disability” shall have the meaning set forth in the Company’s long-term disability plan as in effect from time to time (or, if that plan is not in effect at the time in question, as it was last in effect).

(c) If the Optionee’s employment by the Company terminates on or after December 31, 2006 other than by reason of death or Disability, and the Optionee executes a covenant not to compete in a form acceptable to the Committee at the time of termination, and complies with the terms of said covenant not to compete, then (i) any portion of the Option which has not yet become exercisable shall continue to become exercisable as if the Optionee continued as an employee until the date on which that portion of the Option becomes exercisable in accordance with Section 3(a) or 3(b) above, and (ii) the Option shall terminate one (1) year after the date of such termination of employment (or five (5) years after such termination of employment if the Optionee executes a release of claims in a form

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acceptable to the Committee at the time of such termination of employment) but in no event shall any portion of the Option that becomes exercisable after the date of such termination of employment pursuant to clause (i) of this Section 4(c) terminate before the expiration of one (1) year after the date on which that portion of the Option becomes exercisable.

(d) Notwithstanding Sections 4(a), (b) and (c) above, if the Optionee’s employment is terminated for “cause” (and even if Section 4(c) would otherwise apply to such termination), the Option shall terminate in its entirety on the date of such termination of employment. For purposes of this Agreement, “cause” shall mean (i) the willful and continued failure by the Optionee to substantially perform the Optionee’s duties with the Company (other than any such failure resulting from the Optionee’s incapacity due to physical or mental illness) or (ii) the willful engaging by the Optionee in conduct which is demonstrably and materially injurious to the Company or its Subsidiaries, monetarily or otherwise.

(e) Notwithstanding any other provision of this Agreement, no portion of the Option may be exercised on or after the Termination Date.

(f) If the Optionee’s employment by the Company terminates before February 16, 2015 and Section 4(a), 4(b) or 4(c) above does not apply to such termination of employment, then the Option shall terminate in its entirety upon such termination of employment.

5. Method of Exercising Option. This Option shall be exercised in whole or in part by delivery of written notice to the stock plan administrator of the Company (the “Administrator”), in a form satisfactory to the Administrator, specifying the number of shares which will be purchased and the date on which the shares will be purchased (the “Purchase Date”). Except as set forth below, the notice shall be accompanied by full payment for the shares to be purchased.

If the Optionee elects to pay the Purchase Price in whole or in part through proceeds generated by the sale of stock acquired under this Option through a broker under a cashless exercise arrangement referred to in Section 7(b)(iii) of the Plan and approved by the Committee, that part of the Purchase Price to be paid with proceeds of such sale may be paid pursuant to the arrangement approved by the Committee.

Payment for shares being purchased pursuant to the Option may be in whole or in part with shares of Common Stock by either actual delivery of shares or by attestation, provided that such shares have been owned by the Optionee for at least six months or were acquired on the open market. The value of the shares shall be their Fair Market Value on the Purchase Date. Stock certificates representing any shares being actually delivered as payment must be delivered to the Administrator on the Purchase Date or as soon thereafter as possible.

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In connection with the exercise of the Option, the Common Stock to be issued shall be credited to a book entry account in the name of the Optionee. In lieu of crediting such shares to a book entry account, at the election and expense of the Optionee, stock certificates representing shares purchased will be delivered to the Optionee as soon as administratively practicable after the exercise of the Option.

6. Commitments of the Optionee. If the Optionee, at any time before the Option terminates: (a) directly or indirectly, whether as an owner, partner, shareholder, consultant, agent, employee, investor or in any other capacity, accepts employment, renders services or otherwise assists any other business which competes with the business conducted by the Company or any of its Subsidiaries in which the Optionee has worked, during the Optionee’s last two years with the Company or any of its Subsidiaries; (b) directly or indirectly, hires or solicits or arranges for the hiring or solicitation of any employee of the Company or any of its Subsidiaries, or encourages any such employee to leave such employment; (c) uses, discloses, misappropriates or transfers confidential or proprietary information concerning the Company or any of its Subsidiaries (except as required by the Optionee’s work responsibilities with the Company or any of its Subsidiaries); or (d) is convicted of a crime against the Company or any of its Subsidiaries; or (e) engages in any activity in violation of the policies of the Company or any of its Subsidiaries, including without limitation the Company’s Code of Business Ethics and Conduct, or, at any time, engages in conduct adverse to the best interests of the Company or any of its Subsidiaries; then should any of the foregoing events occur, the Option shall be canceled, unless the Committee, in its sole discretion, elects not to cancel such Option. The obligations in this Section 6 are in addition to any other agreements related to non-competition, non-solicitation and preservation of Company confidential and proprietary information entered into between the Optionee and the Company, and nothing herein is intended to waive, modify, alter or amend the terms of any such other agreement.

7. Non-Transferability. This Option shall not be transferable by the Optionee otherwise than to a Beneficiary, and during the lifetime of the Optionee, this Option may be exercised only by the Optionee.

8. Withholding of Taxes. The Committee may cause to be made, as a condition precedent to any payment or transfer of stock hereunder, appropriate arrangements for the withholding of any Federal, state or local taxes. The Company shall accept whole shares of Stock of equivalent Fair Market Value in payment of the Company’s minimum statutory withholding tax obligations if the Optionee elects to make payment in such manner.

9. Notices. Any notice hereunder by the Optionee shall be given to the Administrator in writing and such notice and any payment by the Optionee hereunder shall be deemed duly given or made only upon receipt by the Administrator at Barnes Group Inc., P. O. Box 489, 123 Main Street, Bristol, Connecticut 06011-0489,

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U.S.A., or at such other address as the Company may designate by notice to the Optionee. Any notice to the Optionee shall be in writing and shall be deemed duly given if mailed or otherwise delivered to the Optionee at such address as the Optionee may have on file with the Company or in case of the Company at its principal office in Bristol, Connecticut.

10. Interpretation and Disputes. This Agreement shall be interpreted and construed by the Committee, and any such interpretation or construction shall be binding and conclusive on the Company and the Optionee. In the event there is any inconsistency between the provisions of this Agreement and the Plan, the provisions of the Plan shall govern.

Any claim, demand or controversy arising from such interpretation or construction by the Committee shall be submitted first to a mediator in accordance with the rules of the American Arbitration Association (“AAA”) by submitting a mediation request to the Administrator within thirty (30) days of the date of the Committee’s interpretation or construction. The mediation process shall conclude upon the earlier of: (i) the resolution of the dispute; (ii) a determination by either the mediator or one or more of the parties that all settlement possibilities have been exhausted and there is no possibility of resolution; or (iii) thirty (30) days have passed since the filing of a request to mediate with the AAA. A party who has previously submitted a dispute to mediation, and which dispute has not been resolved, may submit such dispute to binding arbitration pursuant to the rules of the AAA. Any arbitration proceeding for such dispute must be initiated within fourteen (14) days from the date that the mediation process has concluded. The prevailing party shall recover its costs and reasonable attorney’s fees incurred in such arbitration proceeding. The Optionee and the Company specifically understand and agree that the failure of a party to timely initiate a proceeding hereunder shall bar the party from any relief or other proceeding and any such dispute shall be deemed to have been finally and completely resolved. All mediation and arbitration proceedings shall be conducted in Bristol, Connecticut or such other location as the Company may determine and the Optionee agrees that no objection shall be made to such jurisdiction or venue, as a forum non conveniens or otherwise. The arbitrator’s authority shall be limited to resolution of the legal disputes between the parties and the arbitrator shall not have authority to modify or amend this Agreement or the Committee’s interpretation or construction thereof, or abridge or enlarge rights available under applicable law. Any court with jurisdiction over the parties may enforce any award made hereunder.

11. General.

(a) Nothing in this Agreement shall confer upon the Optionee any right to continue in the employ of the Company or any Subsidiary.

(b) The Optionee shall have no rights as a stockholder with respect to any shares covered by this Agreement until the date of issuance to the Optionee

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of a stock certificate for such shares or of entry of a credit for such shares in Optionee’s book entry account.

(c) This Agreement shall be binding upon the successors and assigns of the Company and upon the Beneficiary of the Optionee.

(d) Any waiver by a party of another party’s performance of, or compliance with, the obligations under this Agreement shall not operate, or be construed, as a waiver of any subsequent failure by such other party to perform or comply.

(e) Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

(f) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflict of laws provisions.

(g) The Option is intended to qualify as an “Option” that is a “Non-Statutory Stock Option” as defined in the Plan, a copy of which has been or is herewith being supplied to the Optionee and the terms and conditions of which are hereby incorporated in this Agreement by reference.

(h) The Option is intended to qualify as an option that “does not provide for a deferral of compensation” within the meaning of Q&A-4(d)(ii) of Section IV.A. of IRS Notice 2005-1 (guidance relating to Section 409A of the Code). The Option and this Agreement shall be administered, interpreted and construed to carry out such intention, and any provision of this Agreement that cannot be so administered, interpreted and construed shall to that extent be disregarded. However, the Company does not represent, warrant or guarantee that the Option does not provide for such a deferral of compensation, nor does the Company make any other representation, warranty or guaranty to the Optionee as to the tax consequences of the Option or this Agreement.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

BARNES GROUP INC.	OPTIONEE
BY:

Approved by the Compensation and Management

Development Committee of the Board of Directors: 3/7/05

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EX-10.6

Exhibit 10.6

NON-QUALIFIED STOCK OPTION AGREEMENT

PURSUANT TO THE

BARNES GROUP INC.

STOCK AND INCENTIVE AWARD PLAN

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.

OPTION AGREEMENT executed in duplicate as of February 16, 2005 (the “Grant Date”), between Barnes Group Inc., a Delaware corporation, (the “Company”) and [NAME OF OPTIONEE], an employee of the Company or of one of its Subsidiaries (the “Optionee”).

In accordance with the provisions of the Barnes Group Inc. Stock and Incentive Award Plan (the “Plan”), the Compensation and Management Development Committee of the Company’s Board of Directors (the “Committee”) has authorized the execution of this Agreement. Capitalized terms used in this Agreement and not otherwise defined herein shall have the same meaning as provided for in the Plan.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows:

1. Grant of Option. Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Optionee the option to purchase [# OF OPTIONS GRANTED] shares of Common Stock (the “Option”).

2. Purchase Price. The purchase price of the shares of Common Stock covered by this Option shall be $____ per share which is one hundred percent (100%) of the Fair Market Value of the Common Stock on the Grant Date (the “Purchase Price”).

3. Exercise of Option.

(a) The Option shall vest (i.e., become exercisable) at the rate of 33.3334% of the shares covered by the Option on August 16, 2006 and 33.3333% of such shares on each of August 16, 2007 and August 16, 2008. The number of shares with respect to which the Option vests on any date shall be rounded to the nearest whole Option; provided, that the aggregate number of shares with respect to which the Option vests shall not exceed the number of shares set forth in Section 1 hereof.

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(b) Subject to Section 4, any portion of the Option which has not vested pursuant to Section 3(a) before the date, if any, on which a Change in Control occurs shall vest on that date. However, if a Change in Control occurs less than six months after the Grant Date and the Committee requests in writing before the date of such Change in Control that the Optionee agree in writing to remain in the employment of the Company through the date which is six months after the Grant Date with substantially the same title, duties, authority, reporting relationships, compensation and indemnification as on the day immediately preceding the Change in Control, then in that event any portion of the Option which has not vested pursuant to Section 3(a) before the date on which such Change in Control occurs shall vest pursuant to this Section 3(b) only if the Optionee executes such written agreement and delivers it to the Company not later than one week after the date of such Change in Control, in which case such portion of the Option shall vest when the Optionee delivers such written agreement or, if later, on the date on which such Change in Control occurs.

4. Termination. The Option shall terminate 10 years after the Grant Date of this Option (the “Termination Date”) unless it terminates earlier under the following conditions:

(a) If the Optionee’s employment terminates for any reason other than death, Disability (as hereafter defined), or retirement on or after the first anniversary of the Grant Date at age 62 or later with a minimum of five (5) full years of service with the Company and/or its Subsidiaries (“Retirement”), or “cause” (as hereinafter defined), that portion of the Option which is exercisable as of the date of such termination of employment shall terminate on the date of such termination of employment (or one (1) year after such termination of employment if the Optionee’s employment was terminated by the Company and/or its Subsidiaries without “cause”). That portion of the Option which has not yet become exercisable as of the date of such termination of employment shall be forfeited as of such date.

(b) If the Optionee’s employment terminates as a result of death or Disability, that portion of the Option which has not yet become exercisable shall become immediately exercisable as of the date of such termination of employment and the Option shall terminate one (1) year after the date of such termination of employment. For purposes of this Agreement, “Disability” shall have the meaning set forth in the Company’s long-term disability plan as in effect from time to time (or, if that plan is not in effect at the time in question, as it was last in effect).

(c) If the Optionee terminates employment by reason of Retirement, that portion of the Option which has not yet become exercisable shall continue to become exercisable as if the Optionee continued as an employee until the

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Termination Date, provided that the Optionee executes a covenant not to compete in a form acceptable to the Committee at the time of Retirement, and complies with the terms of said covenant not to compete, and the Option shall terminate one (1) year after the date of such termination of employment (or five (5) years after such termination of employment if the Optionee executes a release of claims in a form acceptable to the Committee at the time of Retirement).

(d) Notwithstanding the preceding paragraphs, if the Optionee’s employment is terminated for “cause” (even if such termination would otherwise qualify as Retirement), all of the outstanding Options shall terminate on the date of such termination of employment. For purposes of this Agreement, “cause” shall mean (i) the willful and continued failure by the Optionee to substantially perform the Optionee’s duties with the Company (other than any such failure resulting from the Optionee’s incapacity due to physical or mental illness) or (ii) the willful engaging by the Optionee in conduct which is demonstrably and materially injurious to the Company or its Subsidiaries, monetarily or otherwise.

(e) Notwithstanding any other provision of this Agreement, no portion of the Option may be exercised after the Termination Date.

5. Method of Exercising Option. This Option shall be exercised in whole or in part by delivery of written notice to the stock plan administrator of the Company (the “Administrator”), in a form satisfactory to the Administrator, specifying the number of shares which will be purchased and the date on which the shares will be purchased (the “Purchase Date”). Except as set forth below, the notice shall be accompanied by full payment for the shares to be purchased.

If the Optionee elects to pay the Purchase Price in whole or in part through proceeds generated by the sale of stock acquired under this Option through a broker under a cashless exercise arrangement referred to in Section 7(b)(iii) of the Plan and approved by the Committee, that part of the Purchase Price to be paid with proceeds of such sale may be paid pursuant to the arrangement approved by the Committee.

Payment for shares being purchased pursuant to the Option may be in whole or in part with shares of Common Stock by either actual delivery of shares or by attestation, provided that such shares have been owned by the Optionee for at least six months or were acquired on the open market. The value of the shares shall be their Fair Market Value on the Purchase Date. Stock certificates representing any shares being actually delivered as payment must be delivered to the Administrator on the Purchase Date or as soon thereafter as possible.

In connection with the exercise of the Option, the Common Stock to be issued shall be credited to a book entry account in the name of the Optionee. In lieu of

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crediting such shares to a book entry account, at the election and expense of the Optionee, stock certificates representing shares purchased will be delivered to the Optionee as soon as administratively practicable after the exercise of the Option.

6. Commitments of the Optionee. If the Optionee, at any time before the Option terminates: (a) directly or indirectly, whether as an owner, partner, shareholder, consultant, agent, employee, investor or in any other capacity, accepts employment, renders services or otherwise assists any other business which competes with the business conducted by the Company or any of its Subsidiaries in which the Optionee has worked, during the Optionee’s last two years with the Company or any of its Subsidiaries; (b) directly or indirectly, hires or solicits or arranges for the hiring or solicitation of any employee of the Company or any of its Subsidiaries, or encourages any such employee to leave such employment; (c) uses, discloses, misappropriates or transfers confidential or proprietary information concerning the Company or any of its Subsidiaries (except as required by the Optionee’s work responsibilities with the Company or any of its Subsidiaries); or (d) is convicted of a crime against the Company or any of its Subsidiaries; or (e) engages in any activity in violation of the policies of the Company or any of its Subsidiaries, including without limitation the Company’s Code of Business Ethics and Conduct, or, at any time, engages in conduct adverse to the best interests of the Company or any of its Subsidiaries; then should any of the foregoing events occur, the Option shall be canceled, unless the Committee, in its sole discretion, elects not to cancel such Option. The obligations in this Section 6 are in addition to any other agreements related to non-competition, non-solicitation and preservation of Company confidential and proprietary information entered into between the Optionee and the Company, and nothing herein is intended to waive, modify, alter or amend the terms of any such other agreement.

7. Non-Transferability. This Option shall not be transferable by the Optionee otherwise than to a Beneficiary, and during the lifetime of the Optionee, this Option may be exercised only by the Optionee.

8. Withholding of Taxes. The Committee may cause to be made, as a condition precedent to any payment or transfer of stock hereunder, appropriate arrangements for the withholding of any Federal, state or local taxes. The Company shall accept whole shares of Stock of equivalent Fair Market Value in payment of the Company’s minimum statutory withholding tax obligations if the Optionee elects to make payment in such manner.

9. Notices. Any notice hereunder by the Optionee shall be given to the Administrator in writing and such notice and any payment by the Optionee hereunder shall be deemed duly given or made only upon receipt by the Administrator at Barnes Group Inc., P. O. Box 489, 123 Main Street, Bristol, Connecticut 06011-0489, U.S.A., or at such other address as the Company may designate by notice to the Optionee. Any notice to the Optionee shall be in writing and shall be deemed duly given if mailed or otherwise delivered to the Optionee at such address as the

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Optionee may have on file with the Company or in case of the Company at its principal office in Bristol, Connecticut.

10. Interpretation and Disputes. This Agreement shall be interpreted and construed by the Committee, and any such interpretation or construction shall be binding and conclusive on the Company and the Optionee. In the event there is any inconsistency between the provisions of this Agreement and the Plan, the provisions of the Plan shall govern.

Any claim, demand or controversy arising from such interpretation or construction by the Committee shall be submitted first to a mediator in accordance with the rules of the American Arbitration Association (“AAA”) by submitting a mediation request to the Administrator within thirty (30) days of the date of the Committee’s interpretation or construction. The mediation process shall conclude upon the earlier of: (i) the resolution of the dispute; (ii) a determination by either the mediator or one or more of the parties that all settlement possibilities have been exhausted and there is no possibility of resolution; or (iii) thirty (30) days have passed since the filing of a request to mediate with the AAA. A party who has previously submitted a dispute to mediation, and which dispute has not been resolved, may submit such dispute to binding arbitration pursuant to the rules of the AAA. Any arbitration proceeding for such dispute must be initiated within fourteen (14) days from the date that the mediation process has concluded. The prevailing party shall recover its costs and reasonable attorney’s fees incurred in such arbitration proceeding. The Optionee and the Company specifically understand and agree that the failure of a party to timely initiate a proceeding hereunder shall bar the party from any relief or other proceeding and any such dispute shall be deemed to have been finally and completely resolved. All mediation and arbitration proceedings shall be conducted in Bristol, Connecticut or such other location as the Company may determine and the Optionee agrees that no objection shall be made to such jurisdiction or venue, as a forum non conveniens or otherwise. The arbitrator’s authority shall be limited to resolution of the legal disputes between the parties and the arbitrator shall not have authority to modify or amend this Agreement or the Committee’s interpretation or construction thereof, or abridge or enlarge rights available under applicable law. Any court with jurisdiction over the parties may enforce any award made hereunder.

11. General.

(a) Nothing in this Agreement shall confer upon the Optionee any right to continue in the employ of the Company or any Subsidiary.

(b) The Optionee shall have no rights as a stockholder with respect to any shares covered by this Agreement until the date of issuance to the Optionee of a stock certificate for such shares or of entry of a credit for such shares in Optionee’s book entry account.

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(c) This Agreement shall be binding upon the successors and assigns of the Company and upon the Beneficiary of the Optionee.

(d) Any waiver by a party of another party’s performance of, or compliance with, the obligations under this Agreement shall not operate, or be construed, as a waiver of any subsequent failure by such other party to perform or comply.

(e) Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

(f) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflict of laws provisions.

(g) The Option is intended to qualify as an “Option” that is a “Non-Statutory Stock Option” as defined in the Plan, a copy of which has been or is herewith being supplied to the Optionee and the terms and conditions of which are hereby incorporated in this Agreement by reference.

(h) The Option is intended to qualify as an option that “does not provide for a deferral of compensation” within the meaning of Q&A-4(d)(ii) of Section IV.A. of IRS Notice 2005-1 (guidance relating to Section 409A of the Code). The Option and this Agreement shall be administered, interpreted and construed to carry out such intention, and any provision of this Agreement that cannot be so administered, interpreted and construed shall to that extent be disregarded. However, the Company does not represent, warrant or guarantee that the Option does not provide for such a deferral of compensation, nor does the Company make any other representation, warranty or guaranty to the Optionee as to the tax consequences of the Option or this Agreement.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

BARNES GROUP INC.		OPTIONEE
BY:
	Senior Vice President-Human Resources	[OPTIONEE]

Approved by the Compensation and Management

Development Committee of the Board of Directors: 2/16/05

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EX-10.7

Exhbit 10.7

PERFORMANCE SHARE AWARD AGREEMENT

PURSUANT TO THE BARNES GROUP INC.

STOCK AND INCENTIVE AWARD PLAN

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.

PERFORMANCE SHARE AWARD AGREEMENT executed in duplicate as of March 7, 2005 (the “Grant Date”), between Barnes Group Inc., a Delaware corporation (the “Company”), and [NAME OF GRANTEE], an employee of the Company (the “Holder”).

In accordance with the provisions of the Barnes Group Inc. Stock and Incentive Award Plan (the “Plan”), the Compensation and Management Development Committee of the Company’s Board of Directors (the “Committee”) has authorized the execution of this Agreement. Capitalized terms used in this Agreement and not otherwise defined herein shall have the same meaning as provided for in the Plan.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows:

1. Grant of Performance Share Award. Subject to the terms and conditions of the Plan and this Agreement, the Company hereby awards to the Holder              performance share awards for the performance period commencing on January 1, 2005 and ending on December 31, 2006 (the “Performance Share Awards” or, collectively, the “Award”). The Award entitles the Holder to receive, without payment to the Company, shares of Common Stock equal to the number of Performance Share Awards that are deemed earned in the future pursuant to Section 2, Section 4(b) or Section 6 hereof, if any; provided, however, that, except as provided otherwise in Section 4(b), the Holder must be an employee of the Company on the future date as of which the Performance Share Awards are deemed earned to receive such shares. Except in the event of a Change in Control as provided in Section 4(b) and Section 6, no Performance Share Awards will be deemed earned pursuant to this Agreement, nor will the Holder be entitled to receive any shares of Common Stock under this Agreement, unless the applicable Minimum Performance Goal set forth in Section 2 is attained or exceeded for one or more of the Performance Years in the Award Period (as such terms are defined in Section 2). In no event shall the Award entitle the Holder to receive more than 58,000 shares of Common Stock, unless the excess is attributable solely to an adjustment pursuant to Section 7.

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2. Performance Goal.

(a) The maximum number of Performance Share Awards that may be earned pursuant to this Agreement is              Performance Share Awards for the Company’s 2005 fiscal year, and              Performance Share Awards for the Company’s 2006 fiscal year (such two fiscal years being hereafter referred to, collectively, as the “Award Period”, and each, individually, as a “Performance Year”). Subject to the other provisions of this Section 2 (including but not limited to Section 2(c) below) and this Agreement, (i) no Performance Share Awards may be earned for a Performance Year unless the Company’s consolidated basic earnings per share as determined in accordance with Section 6(b) of the Plan (“EPS”) for that Performance Year equal or exceed $1.57, in the case of Performance Year 2005, or $1.45, in the case of Performance Year 2006 (the “Minimum Performance Goal”); (ii) all of the Performance Share Awards that may be earned for a Performance Year will be earned if the Company’s EPS for that Performance Year equal or exceed $1.85, in the case of Performance Year 2005, or $1.70, in the case of each of Performance Year 2006 (the “Maximum Performance Goal”); and (iii) the number of Performance Share Awards that will be earned for a Performance Year will be calculated by multiplying the maximum number of Performance Share Awards that may be earned in such Performance Year as stated above in this Section 2(a) by the performance factor corresponding to the EPS attained in that Performance Year in the applicable table below.

Table for Performance Year 2005:

EPS	Performance Factor		Performance Factor x 29,000 = # Performance Share Awards Earned*
	100	%
	75	%
	50	%
	-0-

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Table for Performance Year 2006:

EPS	Performance Factor		Performance Factor x 29,000 = # Performance Share Awards Earned
	100	%	*	*
	75	%	*	*
	50	%	*	*
	-0-		-0-

Not later than ninety (90) days after the commencement of the Award Period, and notwithstanding the foregoing provisions of this Section 2(a), the Committee may change any or all of the foregoing EPS goals and/or performance factors and/or the calculation of EPS in its discretion. Any such change shall be established in writing by the Committee (within the meaning of Treasury Regulation section 1.162-27(e)(2)(i)).

(b) More than ninety (90) days after the commencement of the Award Period, and notwithstanding the provisions of Section 2(a) above, the Committee may in its discretion, concurrently with its determination of Executive Office Group Performance objectives for a Performance Year under the Company’s Performance-Linked Bonus Plan for Selected Executive Officers or any successor thereto, reduce the number of Performance Share Awards that will be earned in the event the Minimum Performance Goal, the Maximum Performance Goal or any particular level of EPS between the Minimum Performance Goal and the Maximum Performance Goal is attained in such Performance Year. The Committee may effectuate such reduction directly (e.g., by reducing the performance factor and thus the number of Performance Share Awards that will be earned at the levels of EPS shown in the applicable foregoing table) or indirectly (e.g., by increasing the Maximum Performance Goal, the Minimum Performance Goal and/or any other level of EPS at which a given number of Performance Share Awards will be earned in accordance with the applicable foregoing table). In no event may the Committee, directly or indirectly, increase the number of Performance Share Awards that will be earned in the event the Minimum Performance Goal, the Maximum Performance Goal or any particular level of EPS between the Minimum Performance Goal and the Maximum Performance Goal is attained.

(c) Any provision of Section 2(a) or 2(b) to the contrary notwithstanding, Performance Share Awards that may be earned for any Performance Year pursuant to this Section 2 shall not be deemed earned (i) until December 31 of such Performance Year, and (ii) unless the Holder is employed by the Company on December 31 of such Performance Year.

** Subject to reduction in the discretion of the Committee, as provided below in Section 2(b).

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3. Delivery of Shares. A share of Common Stock shall be delivered to the Holder in payment of each Performance Share Award that is deemed earned pursuant to Section 2 above or Section 4(b) below. Such delivery shall occur as of the first day of March (and in no event shall occur later than the 15^th day of March) immediately following the date as of which such Performance Share Award is deemed earned; provided, however, that if a Change in Control occurs after the date on which such Performance Share Award is deemed earned and prior to the first day of March that immediately follows such date, or if such Performance Share Award is deemed earned at the time of a Change in Control pursuant to Section 4(b) below, such share shall be delivered as of the date of such Change in Control. Any provision of this Agreement to the contrary notwithstanding, in no event, except a Change in Control as a result of which Performance Share Awards are deemed earned pursuant to Section 4(b) or Section 6 hereof, shall any shares be delivered in payment of Performance Share Awards unless and until the Committee certifies in writing that the performance goals and any other material terms (within the meaning of Treasury Regulation section 1.162-27(e)(5)) were in fact satisfied with respect to such Performance Share Awards.

The shares of Common Stock delivered under this Agreement will be duly authorized, validly issued, fully paid and non-assessable. The shares to be delivered shall be credited to a book entry account with the Company’s transfer agent in the name of the Holder. At the election of the Holder, stock certificates representing such shares will be delivered to the Holder as soon as practicable after the Company’s receipt of the Holder’s election.

4. Termination.

(a) If the Holder’s employment terminates before December 31 of any Performance Year other than (i) by the Company without “Cause”, or (ii) by reason of the Holder’s death or “Disability”, including without limitation if the Holder terminates his employment before December 31 of any Performance Year, whether or not for “Good Reason” (as such terms are defined in the Employment Agreement dated December 8, 1998 between the Company and the Holder), then the Award shall terminate with respect to all of the Performance Share Awards that have not been deemed earned as of the date of such termination, and the Holder will not be entitled to any payout of shares for such Performance Share Awards.

(b) If the Holder’s employment terminates during the Award Period (i) by the Company without “Cause”, or (ii) by reason of the Holder’s death or “Disability”, then (A) the same number of Performance Share Awards will be deemed earned for the Performance Year in which such employment termination occurs that would have been deemed earned pursuant to Section 2 if the Holder’s employment by the Company had continued through the end of such Performance Year; provided that if a Change in Control occurs

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after such employment termination and during such Performance Year, then at the time of such Change in Control the Holder shall be deemed to earn the maximum number of Performance Share Awards that may be earned for such Performance Year pursuant to the first sentence of Section 2(a) above, whether or not the Minimum Performance Goal has been or is thereafter attained or exceeded for such Performance Year; and (B) the Award shall terminate with respect to all Performance Share Awards that have not otherwise been deemed earned as of the date of such employment termination, and the Holder will not be entitled to any payout of shares for such unearned Performance Share Awards.

5. Additional Condition. If the Holder, at any time while the Award is outstanding: (i) directly or indirectly, whether as an owner, partner, shareholder, consultant, agent, employee, investor or in any other capacity, accepts employment, renders services or otherwise assists any other business which competes with the business conducted by the Company or any of its Subsidiaries in which the Holder has worked, during the Holder’s last two years with the Company or any of its Subsidiaries; (ii) directly or indirectly, hires or solicits or arranges for the hiring or solicitation of any employee of the Company or any of its Subsidiaries, or encourages any such employee to leave such employment; (iii) uses, discloses, misappropriates or transfers confidential or proprietary information concerning the Company or any of its Subsidiaries (except as required by the Holder’s work responsibilities with the Company or any of its Subsidiaries); or (iv) is convicted of a crime against the Company or any of its Subsidiaries; or (v) engages in any activity in violation of the policies of the Company or any of its Subsidiaries, including without limitation the Company’s Code of Business Ethics and Conduct, or, at any time, engages in conduct adverse to the best interests of the Company or any of its Subsidiaries; then should any of the foregoing events occur, the outstanding portion of the Award shall be canceled, unless the Committee, in its sole discretion, elects not to cancel it. The provisions of this Section 5 are in addition to any other agreements related to non-competition, non-solicitation and preservation of Company confidential and proprietary information entered into between the Holder and the Company, and nothing herein is intended to waive, modify, alter or amend the terms of any such other agreement.

6. Exception for Change in Control. Any provision of this Agreement to the contrary notwithstanding, if the Holder remains in the continuous employ of the Company from the Grant Date to the date, if any, on which a Change in Control occurs before the last day of the Award Period, all of the Performance Share Awards that may be earned pursuant to Section 2 hereof for the Performance Year in which the Change in Control occurs and, if the Change in Control occurs in Performance Year 2005, for Performance Year 2006 shall thereupon immediately be deemed earned and non-forfeitable, and shares of Common Stock shall promptly be delivered in payment thereof, whether or not the Minimum Performance Goal has been or is thereafter attained or exceeded for any Performance Year and whether or not the Holder is thereafter employed by the Company.

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7. Adjustments Upon the Occurrence of Certain Events.

(a) In the case of a stock dividend or a stock split with respect to the Common Stock, the number of shares subject to the Award shall be increased by the number of shares the Holder would have received had he owned outright the shares subject to the Award on the record date for payment of the stock dividend or the stock split.

(b) In the case of any reorganization or recapitalization of the Company (by reclassification of its outstanding Common Stock or otherwise), or its consolidation or merger with or into another corporation, or the sale, conveyance, lease or other transfer by the Company of all or substantially all of its property, pursuant to any of which events the then outstanding shares of the Company’s Common Stock are combined, or are changed into or become exchangeable for other shares of stock or property, the Holder shall be entitled to earn and receive, in lieu of the shares that he would otherwise be entitled to earn and receive pursuant to the Award, and without having to make any payment to the Company or otherwise, the shares of stock or property which the Holder would have received upon such reorganization, recapitalization, consolidation, merger, sale or other transfer, if immediately prior thereto he had owned the shares in respect of this Award and had exchanged such shares in accordance with the terms of such reorganization, recapitalization, consolidation, merger, sale or other transfer.

(c) In case of any distribution by the Company of rights to stockholders, the issuance of stock options to persons other than employees or directors of the Company, the issuance by the Company of securities convertible into the Company’s Common Stock or into shares of any stock or security into which such Common Stock shall have been changed or for which it shall have been exchanged, or any other change in the capital structure of the Company (other than as specified above in this Section 7) which, in the judgment of the Committee, would effect a dilution of the Holder’s rights hereunder, the Committee may make such adjustment, if any, as it shall deem appropriate in the number or kind of shares in respect of this Award, and such adjustment shall be effective and binding for all purposes of this Award.

(d) Any provision of this Section 7 to the contrary notwithstanding, only adjustments that qualify for the treatment described in Treasury Regulation section 1.162-27(e)(2)(iii)(C) may be made pursuant to this Section 7.

8. General Restriction. If at any time the Board of Directors of the Company shall determine, in its discretion, that the listing, registration or qualification of any shares subject to this Award upon any securities exchange or under any state or

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Federal law, or the consent or approval of any government regulatory body, is necessary or desirable as a condition of, or in connection with, the granting of this Award or the issue of shares hereunder, no rights under this Award may be exercised and shares of Common Stock may not be delivered pursuant to this Award, in whole or in part, unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Board of Directors and any delay caused thereby shall in no way affect the date of termination of this Award. The Board of Directors shall use reasonable best efforts to effect or obtain such listing, registration, qualification, consent or approval and will issue such shares as soon as practicable thereafter.

9. No Assignment or Transferability. This Award shall not be (i) assignable or subject to any encumbrance, pledge or charge of any nature, whether by operation of law or otherwise, (ii) subject to execution, attachment or similar process, or (iii) transferable by the Holder except by will or by the laws of descent and distribution or to a Beneficiary as defined in Section 2(d) of the Plan.

10. Withholding of Taxes. The Committee may cause to be made, as a condition precedent to any delivery or transfer of stock hereunder, appropriate arrangements to satisfy any Federal, state or local taxes as required by law to be withheld with respect to such payment or transfer of stock and the Holder may be required to pay to the Company prior to delivery of such stock, the amount of any such taxes which the Company is required to withhold, if any, with respect to such stock. The Company will accept shares of Company stock of equivalent Fair Market Value which would otherwise have been issued to the Holder hereunder, in payment of the Company’s minimum statutory withholding tax obligations if the Holder elects to make payment in such manner.

11. Notices. Any notice hereunder by the Holder shall be given to the Senior Vice President, General Counsel and Secretary in writing and such notice by the Holder hereunder shall be deemed duly given or made only upon receipt by the Senior Vice President, General Counsel and Secretary at Barnes Group Inc., 123 Main Street, P. O. Box 489, Bristol, Connecticut 06011-0489, or at such other address as the Company may designate by notice to the Holder. Any notice to the Holder shall be in writing and shall be deemed duly given if mailed or otherwise delivered to the Holder at such address as the Holder may have on file with the Company or in care of the Company at its principal office in Bristol, Connecticut.

12. Interpretation and Disputes. The Committee shall interpret and construe this Agreement and determine whether the Holder has satisfied the performance goals set forth in Section 2. Any such interpretation, construction or determination shall be final, binding and conclusive on the Company and the Holder. In the event there is any inconsistency between the provisions of this Agreement and the Plan, the provisions of the Plan shall govern.

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Any claim, demand or controversy arising from such interpretation, construction or determination by the Committee shall be submitted first to a mediator in accordance with the rules of the American Arbitration Association (“AAA”) by submitting a mediation request to the Administrator within thirty (30) days of the date of the Committee’s interpretation or construction. The mediation process shall conclude upon the earlier of: (i) the resolution of the dispute; (ii) a determination by either the mediator or one or more of the parties that all settlement possibilities have been exhausted and there is no possibility of resolution; or (iii) thirty (30) days have passed since the filing of a request to mediate with the AAA. A party who has previously submitted a dispute to mediation, and which dispute has not been resolved, may submit such dispute to binding arbitration pursuant to the rules of the AAA. Any arbitration proceeding for such dispute must be initiated within fourteen (14) days from the date that the mediation process has concluded. The prevailing party shall recover its costs and reasonable attorney’s fees incurred in such arbitration proceeding. The Holder and the Company specifically understand and agree that the failure of a party to timely initiate a proceeding hereunder shall bar the party from any relief or other proceeding and any such dispute shall be deemed to have been finally and completely resolved. All mediation and arbitration proceedings shall be conducted in Bristol, Connecticut or such other location as the Company may determine and the Holder agrees that no objection shall be made to such jurisdiction or venue, as a forum non conveniens or otherwise. The arbitrator’s authority shall be limited to resolution of the legal disputes between the parties and the arbitrator shall not have authority to modify or amend this Agreement or the Committee’s interpretation or construction thereof, or abridge or enlarge rights available under applicable law. Any court with jurisdiction over the parties may enforce any award made hereunder.

13. General.

(a) Nothing in this Agreement shall confer upon the Holder any right to continue in the employ of the Company or any of its subsidiaries.

(b) The Holder shall have no rights as a shareholder with respect to any shares covered by this Agreement until the date of issuance to him of a stock certificate for such shares or of entry of a credit for such shares in the Holder’s book entry account.

(c) This Agreement shall be binding upon the successors and assigns of the Company and upon the Beneficiaries, personal representatives, legatees and heirs of the Holder.

(d) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflicts of laws provisions.

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(e) Nothing in this Agreement is intended to be a substitute for, or shall preclude or limit the establishment or continuation of, any plan, practice or arrangement for the payment of compensation or fringe benefits to the Holder or any other employee of the Company or any of its subsidiaries which the Company or any of its subsidiaries now has or may hereafter put into effect, including without limitation any retirement, pension, savings or thrift, insurance, death benefit, stock purchase, incentive compensation or bonus plan.

(f) Any shares that may be earned pursuant to Section 2 of this Agreement are intended to qualify as “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code. Any provision of this Agreement that would prevent any such shares from so qualifying shall be administered, interpreted and construed to carry out such intention, and any provision that cannot be so administered, interpreted and construed shall to that extent be disregarded.

(g) Any shares that may be earned pursuant to this Agreement are intended to qualify for the treatment applicable to short-term deferrals under Q&A-4(c) of Section IV.A. of IRS Notice 2005-1 (guidance relating to Section 409A of the Code), so that none of the shares that may be earned pursuant to this Agreement will be includible in the Holder’s gross income pursuant to Section 409A(a)(1)(A) of the Code. The Award and this Agreement shall be administered, interpreted and construed to carry out such intention, and any provision of this Agreement that cannot be so administered, interpreted and construed shall to that extent be disregarded. However, the Company does not represent, warrant or guarantee that any shares that may be earned pursuant to this Agreement will not be includible in the Holder’s gross income pursuant to Section 409A(a)(1)(A) of the Code, nor does the Company make any other representation, warranty or guaranty to the Holder as to the tax consequences of the Award or this Agreement.

(h) This Agreement is intended to document a Performance Share Award granted pursuant to and subject to Section 5.II. and the other applicable terms and conditions of the Plan, a copy of which has been or is herewith being supplied to the Holder and the terms and conditions of which are hereby incorporated by reference. Anything herein to the contrary notwithstanding, each and every provision of this Agreement shall be subject to the terms and conditions of the Plan.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

BARNES GROUP INC.	HOLDER
BY:

Approved by the Compensation and Management

Development Committee of the Board of Directors: 3/7/05

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EX-10.8

Exhibit 10.8

PERFORMANCE SHARE AWARD AGREEMENT

PURSUANT TO THE BARNES GROUP INC.

STOCK AND INCENTIVE AWARD PLAN

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.

PERFORMANCE SHARE AWARD AGREEMENT executed in duplicate as of February 16, 2005 (the “Grant Date”), between Barnes Group Inc., a Delaware corporation (the “Company”), and                     , an employee of the Company (the “Holder”).

In accordance with the provisions of the Barnes Group Inc. Stock and Incentive Award Plan (the “Plan”), the Compensation and Management Development Committee of the Company’s Board of Directors (the “Committee”) has authorized the execution of this Agreement. Capitalized terms used in this Agreement and not otherwise defined herein shall have the same meaning as provided for in the Plan.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows:

1. Grant of Performance Share Award. Subject to the terms and conditions of the Plan and this Agreement, the Company hereby awards to the Holder              performance share awards for the performance period commencing on January 1, 2005 and ending on December 31, 2007 (the “Performance Share Awards” or, collectively, the “Award”). The Award entitles the Holder to receive, without payment to the Company, shares of Common Stock equal to the number of Performance Share Awards that are deemed earned in the future pursuant to Section 2, Section 4(b) or Section 6 hereof, if any; provided, however, that, except as provided otherwise in Section 4(b), the Holder must be an employee of the Company on the future date as of which the Performance Share Awards are deemed earned to receive such shares. Except in the event of a Change in Control as provided in Section 4(b) and Section 6, no Performance Share Awards will be deemed earned pursuant to this Agreement, nor will the Holder be entitled to receive any shares of Common Stock under this Agreement, unless the applicable Minimum Performance Goal set forth in Section 2 is attained or exceeded for one or more of the Performance Years in the Award Period (as such terms are defined in Section 2). In no event shall the Award entitle the Holder to receive more than              shares of Common Stock, unless the excess is attributable solely to an adjustment pursuant to Section 7.

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2. Performance Goal.

(a) The maximum number of Performance Share Awards that may be earned pursuant to this Agreement is             ¹ Performance Share Awards for the Company’s 2005 fiscal year,             ¹ Performance Share Awards for the Company’s 2006 fiscal year, and             ¹ Performance Share Awards for the Company’s 2007 fiscal year (such three fiscal years being hereafter referred to, collectively, as the “Award Period”, and each, individually, as a “Performance Year”). Subject to the other provisions of this Section 2 (including but not limited to Section 2(c) below) and this Agreement, (i) no Performance Share Awards may be earned for a Performance Year unless the Company’s consolidated basic earnings per share as determined in accordance with Section 6(b) of the Plan (“EPS”) for that Performance Year equal or exceed $1.57, in the case of Performance Year 2005, or $1.45, in the case of each of the other Performance Years (the “Minimum Performance Goal”); (ii) all of the Performance Share Awards that may be earned for a Performance Year will be earned if the Company’s EPS for that Performance Year equal or exceed $1.85, in the case of Performance Year 2005, or $1.70, in the case of each of the other Performance Years (the “Maximum Performance Goal”); and (iii) the number of Performance Share Awards that will be earned for a Performance Year will be calculated by multiplying the maximum number of Performance Share Awards that may be earned in such Performance Year as stated above in this Section 2(a) by the performance factor corresponding to the EPS attained in that Performance Year in the applicable table below.

Table for Performance Year 2005:

EPS	Performance Factor		Performance Factor x             1 = # Performance Share Awards Earned*
	100	%	______
	75	%	______
	50	%	______
	-0-		-0-

¹ [Insert one-third of the total number of Performance Share Awards rounded, in the case of a fractional PSA, to the nearest whole number or, if fewer, to the number of PSAs that remain.]

² Number of Performance Share Awards Earned is rounded, in the case of a fraction, to the nearest whole number or, if fewer, the maximum number of Performance Share Awards that may be earned in the Performance Year in question.

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Table for Performance Year 2006:

EPS	Performance Factor		Performance Factor x             1 = # Performance Share Awards Earned*
	100	%	*	*
	75	%	*	*
	50	%	*	*
	-0-		-0-

Table for Performance Year 2007:

EPS	Performance Factor		Performance Factor x             1 = # Performance Share Awards Earned*
	100	%	*	*
	75	%	*	*
	50	%	*	*
	-0-		-0-

Not later than ninety (90) days after the commencement of the Award Period, and notwithstanding the foregoing provisions of this Section 2(a), the Committee may change any or all of the foregoing EPS goals and/or performance factors and/or the calculation of EPS in its discretion. Any such change shall be established in writing by the Committee (within the meaning of Treasury Regulation section 1.162-27(e)(2)(i)).

(b) More than ninety (90) days after the commencement of the Award Period, and notwithstanding the provisions of Section 2(a) above, the Committee may in its discretion, concurrently with its determination of Executive Office Group Performance objectives for a Performance Year under the Company’s Performance-Linked Bonus Plan for Selected Executive Officers or any successor thereto, reduce the number of Performance Share Awards that will be earned in the event the Minimum Performance Goal, the Maximum Performance Goal or any particular level of EPS between the Minimum Performance Goal and the Maximum Performance Goal is attained in such Performance Year. The Committee may effectuate such reduction directly (e.g., by reducing the performance factor and thus the number of Performance Share Awards that will be earned at the levels of

* Number of Performance Share Awards Earned is rounded, in the case of a fraction, to the nearest whole number or, if fewer, the maximum number of Performance Share Awards that may be earned in the Performance Year in question.

** Subject to reduction in the discretion of the Committee, as provided below in Section 2(b).

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EPS shown in the applicable foregoing table) or indirectly (e.g., by increasing the Maximum Performance Goal, the Minimum Performance Goal and/or any other level of EPS at which a given number of Performance Share Awards will be earned in accordance with the applicable foregoing table). In no event may the Committee, directly or indirectly, increase the number of Performance Share Awards that will be earned in the event the Minimum Performance Goal, the Maximum Performance Goal or any particular level of EPS between the Minimum Performance Goal and the Maximum Performance Goal is attained.

(c) Any provision of Section 2(a) or 2(b) to the contrary notwithstanding, Performance Share Awards that may be earned for any Performance Year pursuant to this Section 2 shall not be deemed earned (i) until December 31 of such Performance Year, and (ii) unless the Holder is employed by the Company on December 31 of such Performance Year.

3. Delivery of Shares. A share of Common Stock shall be delivered to the Holder in payment of each Performance Share Award that is deemed earned pursuant to Section 2 above or Section 4(b) below. Such delivery shall occur as of the first day of March (and in no event shall occur later than the 15^th day of March) immediately following the date as of which such Performance Share Award is deemed earned; provided, however, that if a Change in Control occurs after the date on which such Performance Share Award is deemed earned and prior to the first day of March that immediately follows such date, or if such Performance Share Award is deemed earned at the time of a Change in Control pursuant to Section 4(b) below, such share shall be delivered as of the date of such Change in Control. Any provision of this Agreement to the contrary notwithstanding, in no event, except a Change in Control as a result of which Performance Share Awards are deemed earned pursuant to Section 4(b) or Section 6 hereof, shall any shares be delivered in payment of Performance Share Awards unless and until the Committee certifies in writing that the performance goals and any other material terms (within the meaning of Treasury Regulation section 1.162-27(e)(5)) were in fact satisfied with respect to such Performance Share Awards.

The shares of Common Stock delivered under this Agreement will be duly authorized, validly issued, fully paid and non-assessable. The shares to be delivered shall be credited to a book entry account with the Company’s transfer agent in the name of the Holder. At the election of the Holder, stock certificates representing such shares will be delivered to the Holder as soon as practicable after the Company’s receipt of the Holder’s election.

4. Termination.

(a) If the Holder’s employment terminates before December 31 of any Performance Year other than by reason of the Holder’s death or “Disability”, then the Award shall terminate with respect to all of the

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Performance Share Awards that have not been deemed earned as of the date of such termination, and the Holder will not be entitled to any payout of shares for such unearned Performance Share Awards.

(b) If the Holder’s employment terminates during the Award Period by reason of the Holder’s death or “Disability”, then (i) the same number of Performance Share Awards will be deemed earned for the Performance Year in which such employment termination occurs that would have been deemed earned pursuant to Section 2 if the Holder’s employment by the Company had continued through the end of such Performance Year; provided that if a Change in Control occurs after such employment termination and during such Performance Year, then at the time of such Change in Control the Holder shall be deemed to earn the maximum number of Performance Share Awards that may be earned for such Performance Year pursuant to the first sentence of Section 2(a) above, whether or not the Minimum Performance Goal has been or is thereafter attained or exceeded for such Performance Year; and (ii) the Award shall terminate with respect to all Performance Share Awards that have not otherwise been deemed earned as of the date of such employment termination, and the Holder will not be entitled to any payout of shares for such unearned Performance Share Awards. For purposes of this Agreement, “Disability” shall have the meaning set forth in the Company’s long-term disability plan as in effect from time to time (or, if that plan is not in effect at the time in question, as it was last in effect).

5. Additional Condition. If the Holder, at any time while the Award is outstanding: (i) directly or indirectly, whether as an owner, partner, shareholder, consultant, agent, employee, investor or in any other capacity, accepts employment, renders services or otherwise assists any other business which competes with the business conducted by the Company or any of its Subsidiaries in which the Holder has worked, during the Holder’s last two years with the Company or any of its Subsidiaries; (ii) directly or indirectly, hires or solicits or arranges for the hiring or solicitation of any employee of the Company or any of its Subsidiaries, or encourages any such employee to leave such employment; (iii) uses, discloses, misappropriates or transfers confidential or proprietary information concerning the Company or any of its Subsidiaries (except as required by the Holder’s work responsibilities with the Company or any of its Subsidiaries); or (iv) is convicted of a crime against the Company or any of its Subsidiaries; or (v) engages in any activity in violation of the policies of the Company or any of its Subsidiaries, including without limitation the Company’s Code of Business Ethics and Conduct, or, at any time, engages in conduct adverse to the best interests of the Company or any of its Subsidiaries; then should any of the foregoing events occur, the outstanding portion of the Award shall be canceled, unless the Committee, in its sole discretion, elects not to cancel it. The provisions of this Section 5 are in addition to any other agreements related to non-competition, non-solicitation and preservation of Company confidential and proprietary information entered into

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between the Holder and the Company, and nothing herein is intended to waive, modify, alter or amend the terms of any such other agreement.

6. Exception for Change in Control. Any provision of this Agreement to the contrary notwithstanding, if the Holder remains in the continuous employ of the Company from the Grant Date to the date, if any, on which a Change in Control occurs before the last day of the Award Period, all of the Performance Share Awards that may be earned pursuant to Section 2 hereof for the year in which the Change in Control occurs and any Performance Year thereafter shall thereupon immediately be deemed earned and non-forfeitable, and shares of Common Stock shall promptly be delivered in payment thereof, whether or not the Minimum Performance Goal has been or is thereafter attained or exceeded for any Performance Year and whether or not the Holder is thereafter employed by the Company.

7. Adjustments Upon the Occurrence of Certain Events.

(a) In the case of a stock dividend or a stock split with respect to the Common Stock, the number of shares subject to the Award shall be increased by the number of shares the Holder would have received had he owned outright the shares subject to the Award on the record date for payment of the stock dividend or the stock split.

(b) In the case of any reorganization or recapitalization of the Company (by reclassification of its outstanding Common Stock or otherwise), or its consolidation or merger with or into another corporation, or the sale, conveyance, lease or other transfer by the Company of all or substantially all of its property, pursuant to any of which events the then outstanding shares of the Company’s Common Stock are combined, or are changed into or become exchangeable for other shares of stock or property, the Holder shall be entitled to earn and receive, in lieu of the shares that he would otherwise be entitled to earn and receive pursuant to the Award, and without having to make any payment to the Company or otherwise, the shares of stock or property which the Holder would have received upon such reorganization, recapitalization, consolidation, merger, sale or other transfer, if immediately prior thereto he had owned the shares in respect of this Award and had exchanged such shares in accordance with the terms of such reorganization, recapitalization, consolidation, merger, sale or other transfer.

(c) In case of any distribution by the Company of rights to stockholders, the issuance of stock options to persons other than employees or directors of the Company, the issuance by the Company of securities convertible into the Company’s Common Stock or into shares of any stock or security into which such Common Stock shall have been changed or for which it shall have been exchanged, or any other change in the capital structure of the Company (other than as specified above in this Section 7) which, in the

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judgment of the Committee, would effect a dilution of the Holder’s rights hereunder, the Committee may make such adjustment, if any, as it shall deem appropriate in the number or kind of shares in respect of this Award, and such adjustment shall be effective and binding for all purposes of this Award.

(d) Any provision of this Section 7 to the contrary notwithstanding, only adjustments that qualify for the treatment described in Treasury Regulation section 1.162-27(e)(2)(iii)(C) may be made pursuant to this Section 7.

8. General Restriction. If at any time the Board of Directors of the Company shall determine, in its discretion, that the listing, registration or qualification of any shares subject to this Award upon any securities exchange or under any state or Federal law, or the consent or approval of any government regulatory body, is necessary or desirable as a condition of, or in connection with, the granting of this Award or the issue of shares hereunder, no rights under this Award may be exercised and shares of Common Stock may not be delivered pursuant to this Award, in whole or in part, unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Board of Directors and any delay caused thereby shall in no way affect the date of termination of this Award. The Board of Directors shall use reasonable best efforts to effect or obtain such listing, registration, qualification, consent or approval and will issue such shares as soon as practicable thereafter.

9. No Assignment or Transferability. This Award shall not be (i) assignable or subject to any encumbrance, pledge or charge of any nature, whether by operation of law or otherwise, (ii) subject to execution, attachment or similar process, or (iii) transferable by the Holder except by will or by the laws of descent and distribution or to a Beneficiary as defined in Section 2(d) of the Plan.

10. Withholding of Taxes. The Committee may cause to be made, as a condition precedent to any delivery or transfer of stock hereunder, appropriate arrangements to satisfy any Federal, state or local taxes as required by law to be withheld with respect to such payment or transfer of stock and the Holder may be required to pay to the Company prior to delivery of such stock, the amount of any such taxes which the Company is required to withhold, if any, with respect to such stock. The Company will accept shares of Company stock of equivalent Fair Market Value which would otherwise have been issued to the Holder hereunder, in payment of the Company’s minimum statutory withholding tax obligations if the Holder elects to make payment in such manner.

11. Notices. Any notice hereunder by the Holder shall be given to the Senior Vice President, General Counsel and Secretary in writing and such notice by the Holder hereunder shall be deemed duly given or made only upon receipt by the Senior Vice President, General Counsel and Secretary at Barnes Group Inc., 123 Main Street, P. O. Box 489, Bristol, Connecticut 06011-0489, or at such other address as

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the Company may designate by notice to the Holder. Any notice to the Holder shall be in writing and shall be deemed duly given if mailed or otherwise delivered to the Holder at such address as the Holder may have on file with the Company or in care of the Company at its principal office in Bristol, Connecticut.

12. Interpretation and Disputes. The Committee shall interpret and construe this Agreement and determine whether the Holder has satisfied the performance goals set forth in Section 2. Any such interpretation, construction or determination shall be final, binding and conclusive on the Company and the Holder. In the event there is any inconsistency between the provisions of this Agreement and the Plan, the provisions of the Plan shall govern.

Any claim, demand or controversy arising from such interpretation, construction or determination by the Committee shall be submitted first to a mediator in accordance with the rules of the American Arbitration Association (“AAA”) by submitting a mediation request to the Administrator within thirty (30) days of the date of the Committee’s interpretation or construction. The mediation process shall conclude upon the earlier of: (i) the resolution of the dispute; (ii) a determination by either the mediator or one or more of the parties that all settlement possibilities have been exhausted and there is no possibility of resolution; or (iii) thirty (30) days have passed since the filing of a request to mediate with the AAA. A party who has previously submitted a dispute to mediation, and which dispute has not been resolved, may submit such dispute to binding arbitration pursuant to the rules of the AAA. Any arbitration proceeding for such dispute must be initiated within fourteen (14) days from the date that the mediation process has concluded. The prevailing party shall recover its costs and reasonable attorney’s fees incurred in such arbitration proceeding. The Holder and the Company specifically understand and agree that the failure of a party to timely initiate a proceeding hereunder shall bar the party from any relief or other proceeding and any such dispute shall be deemed to have been finally and completely resolved. All mediation and arbitration proceedings shall be conducted in Bristol, Connecticut or such other location as the Company may determine and the Holder agrees that no objection shall be made to such jurisdiction or venue, as a forum non conveniens or otherwise. The arbitrator’s authority shall be limited to resolution of the legal disputes between the parties and the arbitrator shall not have authority to modify or amend this Agreement or the Committee’s interpretation or construction thereof, or abridge or enlarge rights available under applicable law. Any court with jurisdiction over the parties may enforce any award made hereunder.

13. General.

(a) Nothing in this Agreement shall confer upon the Holder any right to continue in the employ of the Company or any of its subsidiaries.

(b) The Holder shall have no rights as a shareholder with respect to any shares covered by this Agreement until the date of issuance to him of a stock

Page 8 of 10

certificate for such shares or of entry of a credit for such shares in the Holder’s book entry account.

(c) This Agreement shall be binding upon the successors and assigns of the Company and upon the Beneficiaries, personal representatives, legatees and heirs of the Holder.

(d) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflicts of laws provisions.

(e) Nothing in this Agreement is intended to be a substitute for, or shall preclude or limit the establishment or continuation of, any plan, practice or arrangement for the payment of compensation or fringe benefits to the Holder or any other employee of the Company or any of its subsidiaries which the Company or any of its subsidiaries now has or may hereafter put into effect, including without limitation any retirement, pension, savings or thrift, insurance, death benefit, stock purchase, incentive compensation or bonus plan.

(f) Any shares that may be earned pursuant to Section 2 of this Agreement are intended to qualify as “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code. Any provision of this Agreement that would prevent any such shares from so qualifying shall be administered, interpreted and construed to carry out such intention, and any provision that cannot be so administered, interpreted and construed shall to that extent be disregarded.

(g) Any shares that may be earned pursuant to this Agreement are intended to qualify for the treatment applicable to short-term deferrals under Q&A-4(c) of Section IV.A. of IRS Notice 2005-1 (guidance relating to Section 409A of the Code), so that none of the shares that may be earned pursuant to this Agreement will be includible in the Holder’s gross income pursuant to Section 409A(a)(1)(A) of the Code. The Award and this Agreement shall be administered, interpreted and construed to carry out such intention, and any provision of this Agreement that cannot be so administered, interpreted and construed shall to that extent be disregarded. However, the Company does not represent, warrant or guarantee that any shares that may be earned pursuant to this Agreement will not be includible in the Holder’s gross income pursuant to Section 409A(a)(1)(A) of the Code, nor does the Company make any other representation, warranty or guaranty to the Holder as to the tax consequences of the Award or this Agreement.

(h) This Agreement is intended to document a Performance Share Award granted pursuant to and subject to Section 5.II. and the other applicable terms and conditions of the Plan, a copy of which has been or is herewith

Page 9 of 10

being supplied to the Holder and the terms and conditions of which are hereby incorporated by reference. Anything herein to the contrary notwithstanding, each and every provision of this Agreement shall be subject to the terms and conditions of the Plan.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

BARNES GROUP INC.		HOLDER
BY:
	Senior Vice President - Human Resources		[OPTIONEE]

Approved by the Compensation and Management

Development Committee of the Board of Directors: 2/16/05

Page 10 of 10

EX-10.9

Exhibit 10.9

CONTINGENT DIVIDEND EQUIVALENT RIGHTS AGREEMENT

CONTINGENT DIVIDEND EQUIVALENT RIGHTS AGREEMENT executed in duplicate as of March 7, 2005 (the “Grant Date”), between Barnes Group Inc., a Delaware corporation (the “Company”), and [NAME OF GRANTEE], an employee of the Company (the “Holder”).

In accordance with the provisions of the Barnes Group Inc. Stock and Incentive Award Plan (the “Plan”), the Compensation and Management Development Committee of the Company’s Board of Directors (the “Committee”) has authorized the execution of this Agreement and the payment of the cash compensation provided for therein.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows:

1. Grant of Contingent Dividend Equivalent Rights. Subject to the terms and conditions of this Agreement, the Company hereby grants the Holder              contingent dividend equivalent rights (the “Rights”). The Rights entitle the Holder to receive from the Company the cash payments described in Section 2 below, if (and only if) Performance Share Awards are deemed earned during the Award Period pursuant to that certain Performance Share Award Agreement between the Company and the Holder dated March 7, 2005 (the “PSA Agreement”). Capitalized terms that are not defined in this Agreement and that are defined in the PSA Agreement or the Plan shall have the meanings assigned to them in the PSA Agreement.

2. Time and Amount of Contingent Dividend Equivalent Payments. On or as soon as practicable after the first day of March (and in no event later than the 15^th day of March) that immediately follows any date on which Performance Share Awards are deemed earned during the Award Period under the PSA Agreement, or, if Performance Share Awards are deemed earned during the Award Period at the time of a Change in Control pursuant to Section 4(b) or Section 6 of the PSA Agreement, on or as soon as practicable after the date on which Performance Share Awards are deemed earned pursuant to Section 4(b) or Section 6 of the PSA Agreement (any of the foregoing dates being hereafter referred to as an “Earnout Date”), the Company will pay the Holder an amount of money equal to the fair market value on the money payment date of the aggregate number of shares of Common Stock that would have been credited to the Holder if, on each date on which a dividend other than a Common Stock dividend was paid to the holders of Common Stock the record date of which dividend fell during the period commencing on January 1, 2005 and ending on the date on which shares of Common Stock are delivered to the Holder in payment of the Performance Share Awards that were deemed earned on such Earnout Date, the Company had credited

Page 1 of 8

the Holder on its books with a number of shares of Common Stock determined in accordance with the following formula:

(A x B) /C

in which “A” equals the number of Performance Share Awards deemed earned on such Earnout Date (in no event other than a Change in Control to exceed              Performance Share Awards and, in the event of a Change in Control, not to exceed              Performance Share Awards unless in either case the excess is attributable solely to an adjustment pursuant to Section 7 of the PSA Agreement) plus the aggregate number of shares of Common Stock credited to the Holder pursuant to this Section 2 before such dividend payment date as dividend equivalents on such Performance Share Awards, “B” equals the dividend per share paid on such dividend payment date, and “C” equals the fair market value per share of Common Stock on such dividend payment date. However, if the dividend is paid in property other than cash, the number of shares of Common Stock credited to the Holder in respect of such dividend pursuant to the preceding sentence shall be determined in accordance with the formula set forth above, except that “B” shall equal the fair market value on the dividend payment date of the property which was paid per share of Common Stock as a dividend on such dividend payment date. Any provision of this Agreement to the contrary notwithstanding, in no event (except a Change in Control as a result of which Performance Share Awards are deemed earned pursuant to Section 4(b) or Section 6 of the PSA Agreement) shall any payment be made pursuant to this Section 2 unless and until the Committee certifies in writing that the performance goals and any other material terms (within the meaning of Treasury Regulation section 1.162-27(e)(5)) applicable to such payment were in fact satisfied. For clarification purposes, (i) dividend equivalents paid pursuant to this Agreement shall be non-forfeitable when paid, and (ii) the Holder will not be entitled to receive any dividend equivalents under this Agreement unless the Minimum Performance Goal set forth in Section 2 of the PSA Agreement is attained or exceeded for one or more of the Performance Years in the Award Period (as such terms are defined in Section 2 of the PSA Agreement) or unless a Change in Control (within the meaning of Section 4(b) and Section 6 of the PSA Agreement) occurs during the Award Period, and (iii) any provision of this Agreement to the contrary notwithstanding, in no event shall this Agreement entitle the Holder to receive shares of Common Stock or any property other than money. An example that illustrates the intended operation of this Section 2 appears in the Appendix.

3. Additional Condition. If the Holder, at any time while dividend equivalents are payable hereunder: (i) directly or indirectly, whether as an owner, partner, shareholder, consultant, agent, employee, investor or in any other capacity, accepts employment, renders services or otherwise assists any other business which competes with the business conducted by the Company or any of its Subsidiaries in which the Holder has worked, during the Holder’s last two years with the Company or any of its Subsidiaries; (ii) directly or indirectly, hires or solicits or arranges for the hiring or solicitation of any employee of the Company or any of its subsidiaries, or encourages any such employee to leave such employment; (iii) uses, discloses,

Page 2 of 8

misappropriates or transfers confidential or proprietary information concerning the Company or any of its subsidiaries (except as required by the Holder’s work responsibilities with the Company or any of its subsidiaries); or (iv) is convicted of a crime against the Company or any of its subsidiaries; or (v) engages in any activity in violation of the policies of the Company or any of its subsidiaries, including without limitation the Company’s Code of Business Ethics and Conduct, or, at any time, engages in conduct adverse to the best interests of the Company or any of its subsidiaries; then should any of the foregoing events occur, the Rights shall be canceled, unless the Committee, in its sole discretion, elects not to cancel the Rights. The provisions of this Section 3 are in addition to any other agreements related to non-competition, non-solicitation and preservation of Company confidential and proprietary information entered into between the Holder and the Company, and nothing herein is intended to waive, modify, alter or amend the terms of any such other agreement.

4. No Assignment or Transferability. The Rights shall not be (i) assignable or subject to any encumbrance, pledge or charge of any nature, whether by operation of law or otherwise, (ii) subject to execution, attachment or similar process, or (iii) transferable by the Holder except by will or by the laws of descent and distribution or to a Beneficiary as defined in Section 2 of the Plan.

5. Withholding of Taxes. The Committee may cause to be made, as a condition precedent to any payment to be made hereunder, appropriate arrangements to satisfy any Federal, state or local taxes as required by law to be withheld with respect to such payment.

6. Notices. Any notice hereunder by the Holder shall be given to the Senior Vice President, General Counsel and Secretary in writing and such notice by the Holder hereunder shall be deemed duly given or made only upon receipt by the Senior Vice President, General Counsel and Secretary at Barnes Group Inc., 123 Main Street, P. O. Box 489, Bristol, Connecticut 06011-0489, or at such other address as the Company may designate by notice to the Holder. Any notice to the Holder shall be in writing and shall be deemed duly given if mailed or otherwise delivered to the Holder at such address as the Holder may have on file with the Company or in care of the Company at its principal office in Bristol, Connecticut.

7. Interpretation and Disputes. The Committee shall interpret and construe this Agreement and make all determinations hereunder. Any such interpretation, construction or determination shall be final, binding and conclusive on the Company and the Holder.

Any claim, demand or controversy arising from such interpretation, construction or determination by the Committee shall be submitted first to a mediator in accordance with the rules of the American Arbitration Association (“AAA”) by submitting a mediation request to the Administrator within thirty (30) days of the date of the Committee’s interpretation or construction. The mediation process shall

Page 3 of 8

conclude upon the earlier of: (i) the resolution of the dispute; (ii) a determination by either the mediator or one or more of the parties that all settlement possibilities have been exhausted and there is no possibility of resolution; or (iii) thirty (30) days have passed since the filing of a request to mediate with the AAA. A party who has previously submitted a dispute to mediation, and which dispute has not been resolved, may submit such dispute to binding arbitration pursuant to the rules of the AAA. Any arbitration proceeding for such dispute must be initiated within fourteen (14) days from the date that the mediation process has concluded. The prevailing party shall recover its costs and reasonable attorney’s fees incurred in such arbitration proceeding. The Holder and the Company specifically understand and agree that the failure of a party to timely initiate a proceeding hereunder shall bar the party from any relief or other proceeding and any such dispute shall be deemed to have been finally and completely resolved. All mediation and arbitration proceedings shall be conducted in Bristol, Connecticut or such other location as the Company may determine and the Holder agrees that no objection shall be made to such jurisdiction or venue, as a forum non conveniens or otherwise. The arbitrator’s authority shall be limited to resolution of the legal disputes between the parties and the arbitrator shall not have authority to modify or amend this Agreement or the Committee’s interpretation or construction thereof, or abridge or enlarge rights available under applicable law. Any court with jurisdiction over the parties may enforce any award made hereunder.

8. General.

(a) Nothing in this Agreement shall confer upon the Holder any right to continue in the employ of the Company or any of its subsidiaries, or any right to receive shares of Common Stock or any right as a shareholder of the Company.

(b) This Agreement shall be binding upon the successors and assigns of the Company and upon the Beneficiaries, personal representatives, legatees and heirs of the Holder.

(c) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflicts of laws provisions.

(d) Nothing in this Agreement is intended to be a substitute for, or shall preclude or limit the establishment or continuation of, any plan, practice or arrangement for the payment of compensation or fringe benefits to the Holder or any other employee of the Company or any of its subsidiaries which the Company or any of its subsidiaries now has or may hereafter put into effect, including without limitation any retirement, pension, savings or thrift, insurance, death benefit, stock purchase, incentive compensation or bonus plan.

Page 4 of 8

(e) Any money that is payable pursuant to this Agreement (other than dividend equivalents paid on Performance Share Awards that are deemed earned at the time of a Change in Control pursuant to Section 4(b) or Section 6 of the PSA Agreement) is intended to qualify as “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code .

(f) Any amount that may be earned pursuant to this Agreement is intended to qualify for the treatment applicable to short-term deferrals under Q&A-4(c) of Section IV.A. of IRS Notice 2005-1 (guidance relating to Section 409A of the Code), so that no amount that may be earned pursuant to this Agreement will be includible in the Holder’s gross income pursuant to Section 409A(a)(1)(A) of the Code. The Rights and this Agreement shall be administered, interpreted and construed to carry out such intention, and any provision of this Agreement that cannot be so administered, interpreted and construed shall to that extent be disregarded. However, the Company does not represent, warrant or guarantee that any amount that may be earned pursuant to this Agreement will not be includible in the Holder’s gross income pursuant to Section 409A(a)(1)(A) of the Code, nor does the Company make any other representation, warranty or guaranty to the Holder as to the tax consequences of the Rights or this Agreement.

(g) The Rights are intended to qualify as “Dividend Equivalents” and “Dollar-Denominated Awards” as defined in the Plan, a copy of which has been or is herewith being supplied to the Holder and the terms and conditions of which are hereby incorporated by reference. Anything herein to the contrary notwithstanding, each and every provision of this Agreement shall be subject to the terms and conditions of the Plan.

Page 5 of 8

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

BARNES GROUP INC.	HOLDER
BY:

Approved by the Compensation and Management

Development Committee of the Board of Directors: 3/7/05

Page 6 of 8

Appendix

Example Illustrating Intended Operation of Section 2

Assumptions – for illustration only

1. [NAME OF GRANTEE] earns the maximum number of Performance Share Awards (PSAs) under the PSA Agreement in each of the Performance Years 2005 and 2006.

2. There are four dividend payment dates after January 1, 2005 the record dates of which precede the delivery of shares to [NAME OF GRANTEE] in payment of the Performance Share Awards he earns in 2005, and eight dividend payment dates after January 1, 2005 the record dates of which precede the delivery of shares in payment of the Performance Share Awards he earns in 2006.

3. The Company pays a dividend of $1.00 per share on all dividend payment dates in question.

4. The fair market value of Company Common Stock is $20 on the first dividend payment date and increases by $1 on each subsequent dividend payment date.

Calculation of Dividend Equivalents Payable on PSAs Earned in Performance Year 2005

# of PSAs earned     =     29,000

Dividend Payment Date	Dividend Equivalent Calc (A x B)/C	=	# Shares Credited as Dividend Equivalents
#1	(29,000 x $1.00)/$20		1,450
#2	(30,450 x $1.00)/$21		1,450
#3	(31,900 x $1.00)/$22		1,450
#4	(33,350 x $1.00)/$23		1,450
Total # Shares Payable in 2006 (in cash) as Dividend Equivalents on PSAs Earned in 2005			5,800

[Example continues on next page]

Page 7 of 8

Appendix – page 2

Calculation of Dividend Equivalents Payable on PSAs Earned in Performance Year 2006

# of PSAs earned     =     29,000

Dividend Payment Date	Dividend Equivalent Calc (A x B)/C	=	# Shares Credited as Dividend Equivalents
#1	(29,000 x $1.00)/$20		1,450
#2	(30,450 x $1.00)/$21		1,450
#3	(31,900 x $1.00)/$22		1,450
#4	(33,350 x $1.00)/$23		1,450
#5	(34,800 x $1.00)/$24		1,450
#6	(36,250 x $1.00)/$25		1,450
#7	(37,700 x $1.00)/$26		1,450
#8	(39,150 x $1.00)/$27		1,450
Total # Shares Payable in 2007 (in cash) as Dividend Equivalents on PSAs Earned in 2006			11,600

Page 8 of 8

EX-10.10

Exhibit 10.10

CONTINGENT DIVIDEND EQUIVALENT RIGHTS AGREEMENT

CONTINGENT DIVIDEND EQUIVALENT RIGHTS AGREEMENT executed in duplicate as of February 16, 2005 (the “Grant Date”), between Barnes Group Inc., a Delaware corporation (the “Company”), and                     , an employee of the Company (the “Holder”).

In accordance with the provisions of the Barnes Group Inc. Stock and Incentive Award Plan (the “Plan”), the Compensation and Management Development Committee of the Company’s Board of Directors (the “Committee”) has authorized the execution of this Agreement and the payment of the cash compensation provided for therein.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows:

1. Grant of Contingent Dividend Equivalent Rights. Subject to the terms and conditions of this Agreement, the Company hereby grants the Holder              contingent dividend equivalent rights (the “Rights”). The Rights entitle the Holder to receive from the Company the cash payments described in Section 2 below, if (and only if) Performance Share Awards are deemed earned during the Award Period pursuant to that certain Performance Share Award Agreement between the Company and the Holder dated February 16, 2005 (the “PSA Agreement”). Capitalized terms that are not defined in this Agreement and that are defined in the PSA Agreement or the Plan shall have the meanings assigned to them in the PSA Agreement.

2. Time and Amount of Contingent Dividend Equivalent Payments. On or as soon as practicable after the first day of March (and in no event later than the 15^th day of March) that immediately follows any date on which Performance Share Awards are deemed earned during the Award Period under the PSA Agreement, or, if Performance Share Awards are deemed earned during the Award Period at the time of a Change in Control pursuant to Section 4(b) or Section 6 of the PSA Agreement, on or as soon as practicable after the date on which Performance Share Awards are deemed earned pursuant to Section 4(b) or Section 6 of the PSA Agreement (any of the foregoing dates being hereafter referred to as an “Earnout Date”), the Company will pay the Holder an amount of money equal to the fair market value on the money payment date of the aggregate number of shares of Common Stock that would have been credited to the Holder if, on each date on which a dividend other than a Common Stock dividend was paid to the holders of Common Stock the record date of which dividend fell during the period commencing on January 1, 2005 and ending on the date on which shares of Common Stock are delivered to the Holder in payment of the Performance Share Awards that were deemed earned on such Earnout Date, the Company had credited

Page 1 of 7

the Holder on its books with a number of shares of Common Stock determined in accordance with the following formula:

(A x B) /C

in which “A” equals the number of Performance Share Awards deemed earned on such Earnout Date (in no event other than a Change in Control to exceed one-third (33 ¹/3%) of the number of Performance Share Awards stated in Section 1 of the PSA Agreement (rounded, in the case of a fraction, to the nearest whole Performance Share Award, as provided in Section 2(a) of the PSA Agreement) and, in the event of a Change in Control, not to exceed 100% of the number of Performance Share Awards stated in Section 1 of the PSA Agreement, unless in either case the excess is attributable solely to an adjustment pursuant to Section 7 of the PSA Agreement) plus the aggregate number of shares of Common Stock credited to the Holder pursuant to this Section 2 before such dividend payment date as dividend equivalents on such Performance Share Awards, “B” equals the dividend per share paid on such dividend payment date, and “C” equals the fair market value per share of Common Stock on such dividend payment date. However, if the dividend is paid in property other than cash, the number of shares of Common Stock credited to the Holder in respect of such dividend pursuant to the preceding sentence shall be determined in accordance with the formula set forth above, except that “B” shall equal the fair market value on the dividend payment date of the property which was paid per share of Common Stock as a dividend on such dividend payment date. Any provision of this Agreement to the contrary notwithstanding, in no event (except a Change in Control as a result of which Performance Share Awards are deemed earned pursuant to Section 4(b) or Section 6 of the PSA Agreement) shall any payment be made pursuant to this Section 2 unless and until the Committee certifies in writing that the performance goals and any other material terms (within the meaning of Treasury Regulation section 1.162-27(e)(5)) applicable to such payment were in fact satisfied. For clarification purposes, (i) dividend equivalents paid pursuant to this Agreement shall be non-forfeitable when paid, and (ii) the Holder will not be entitled to receive any dividend equivalents under this Agreement unless the Minimum Performance Goal set forth in Section 2 of the PSA Agreement is attained or exceeded for one or more of the Performance Years in the Award Period (as such terms are defined in Section 2 of the PSA Agreement) or unless a Change in Control (within the meaning of Section 4(b) and Section 6 of the PSA Agreement) occurs during the Award Period, and (iii) any provision of this Agreement to the contrary notwithstanding, in no event shall this Agreement entitle the Holder to receive shares of Common Stock or any property other than money. An example that illustrates the intended operation of this Section 2 appears in the Appendix.

3. Additional Condition. If the Holder, at any time while dividend equivalents are payable hereunder: (i) directly or indirectly, whether as an owner, partner, shareholder, consultant, agent, employee, investor or in any other capacity, accepts employment, renders services or otherwise assists any other business which competes with the business conducted by the Company or any of its Subsidiaries in which the Holder has worked, during the Holder’s last two years with the Company

Page 2 of 7

or any of its Subsidiaries; (ii) directly or indirectly, hires or solicits or arranges for the hiring or solicitation of any employee of the Company or any of its subsidiaries, or encourages any such employee to leave such employment; (iii) uses, discloses, misappropriates or transfers confidential or proprietary information concerning the Company or any of its subsidiaries (except as required by the Holder’s work responsibilities with the Company or any of its subsidiaries); or (iv) is convicted of a crime against the Company or any of its subsidiaries; or (v) engages in any activity in violation of the policies of the Company or any of its subsidiaries, including without limitation the Company’s Code of Business Ethics and Conduct, or, at any time, engages in conduct adverse to the best interests of the Company or any of its subsidiaries; then should any of the foregoing events occur, the Rights shall be canceled, unless the Committee, in its sole discretion, elects not to cancel the Rights. The provisions of this Section 3 are in addition to any other agreements related to non-competition, non-solicitation and preservation of Company confidential and proprietary information entered into between the Holder and the Company, and nothing herein is intended to waive, modify, alter or amend the terms of any such other agreement.

4. No Assignment or Transferability. The Rights shall not be (i) assignable or subject to any encumbrance, pledge or charge of any nature, whether by operation of law or otherwise, (ii) subject to execution, attachment or similar process, or (iii) transferable by the Holder except by will or by the laws of descent and distribution or to a Beneficiary as defined in Section 2 of the Plan.

5. Withholding of Taxes. The Committee may cause to be made, as a condition precedent to any payment to be made hereunder, appropriate arrangements to satisfy any Federal, state or local taxes as required by law to be withheld with respect to such payment.

6. Notices. Any notice hereunder by the Holder shall be given to the Senior Vice President, General Counsel and Secretary in writing and such notice by the Holder hereunder shall be deemed duly given or made only upon receipt by the Senior Vice President, General Counsel and Secretary at Barnes Group Inc., 123 Main Street, P. O. Box 489, Bristol, Connecticut 06011-0489, or at such other address as the Company may designate by notice to the Holder. Any notice to the Holder shall be in writing and shall be deemed duly given if mailed or otherwise delivered to the Holder at such address as the Holder may have on file with the Company or in care of the Company at its principal office in Bristol, Connecticut.

7. Interpretation and Disputes. The Committee shall interpret and construe this Agreement and make all determinations hereunder. Any such interpretation, construction or determination shall be final, binding and conclusive on the Company and the Holder.

Any claim, demand or controversy arising from such interpretation, construction or determination by the Committee shall be submitted first to a mediator in

Page 3 of 7

accordance with the rules of the American Arbitration Association (“AAA”) by submitting a mediation request to the Administrator within thirty (30) days of the date of the Committee’s interpretation or construction. The mediation process shall conclude upon the earlier of: (i) the resolution of the dispute; (ii) a determination by either the mediator or one or more of the parties that all settlement possibilities have been exhausted and there is no possibility of resolution; or (iii) thirty (30) days have passed since the filing of a request to mediate with the AAA. A party who has previously submitted a dispute to mediation, and which dispute has not been resolved, may submit such dispute to binding arbitration pursuant to the rules of the AAA. Any arbitration proceeding for such dispute must be initiated within fourteen (14) days from the date that the mediation process has concluded. The prevailing party shall recover its costs and reasonable attorney’s fees incurred in such arbitration proceeding. The Holder and the Company specifically understand and agree that the failure of a party to timely initiate a proceeding hereunder shall bar the party from any relief or other proceeding and any such dispute shall be deemed to have been finally and completely resolved. All mediation and arbitration proceedings shall be conducted in Bristol, Connecticut or such other location as the Company may determine and the Holder agrees that no objection shall be made to such jurisdiction or venue, as a forum non conveniens or otherwise. The arbitrator’s authority shall be limited to resolution of the legal disputes between the parties and the arbitrator shall not have authority to modify or amend this Agreement or the Committee’s interpretation or construction thereof, or abridge or enlarge rights available under applicable law. Any court with jurisdiction over the parties may enforce any award made hereunder.

8. General.

(a) Nothing in this Agreement shall confer upon the Holder any right to continue in the employ of the Company or any of its subsidiaries, or any right to receive shares of Common Stock or any right as a shareholder of the Company.

(b) This Agreement shall be binding upon the successors and assigns of the Company and upon the Beneficiaries, personal representatives, legatees and heirs of the Holder.

(c) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflicts of laws provisions.

(d) Nothing in this Agreement is intended to be a substitute for, or shall preclude or limit the establishment or continuation of, any plan, practice or arrangement for the payment of compensation or fringe benefits to the Holder or any other employee of the Company or any of its subsidiaries which the Company or any of its subsidiaries now has or may hereafter put into effect, including without limitation any retirement, pension, savings or

Page 4 of 7

thrift, insurance, death benefit, stock purchase, incentive compensation or bonus plan.

(e) Any money that is payable pursuant to this Agreement (other than dividend equivalents paid on Performance Share Awards that are deemed earned at the time of a Change in Control pursuant to Section 4(b) or Section 6 of the PSA Agreement) is intended to qualify as “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code.

(f) Any amount that may be earned pursuant to this Agreement is intended to qualify for the treatment applicable to short-term deferrals under Q&A-4(c) of Section IV.A. of IRS Notice 2005-1 (guidance relating to Section 409A of the Code), so that no amount that may be earned pursuant to this Agreement will be includible in the Holder’s gross income pursuant to Section 409A(a)(1)(A) of the Code. The Rights and this Agreement shall be administered, interpreted and construed to carry out such intention, and any provision of this Agreement that cannot be so administered, interpreted and construed shall to that extent be disregarded. However, the Company does not represent, warrant or guarantee that any amount that may be earned pursuant to this Agreement will not be includible in the Holder’s gross income pursuant to Section 409A(a)(1)(A) of the Code, nor does the Company make any other representation, warranty or guaranty to the Holder as to the tax consequences of the Rights or this Agreement.

(g) The Rights are intended to qualify as “Dividend Equivalents” and “Dollar-Denominated Awards” as defined in the Plan, a copy of which has been or is herewith being supplied to the Holder and the terms and conditions of which are hereby incorporated by reference. Anything herein to the contrary notwithstanding, each and every provision of this Agreement shall be subject to the terms and conditions of the Plan.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

BARNES GROUP INC.		HOLDER
BY:
	Senior Vice President - Human Resources		[OPTIONEE]

Approved by the Compensation and Management

Development Committee of the Board of Directors: 2/16/05

Page 5 of 7

Appendix

Example Illustrating Intended Operation of Section 2

Assumptions – for illustration only

1. Assume that the Holder is awarded 1,500 Performance Share Awards (PSAs) for the 2005-2007 Award Period, and earns the maximum number (500) of the PSAs under the PSA Agreement in each of the Performance Years 2005, 2006 and 2007.

2. Assume that there are four dividend payment dates after January 1, 2005 the record dates of which precede the delivery of shares to the Holder in payment of the Performance Share Awards s/he earns in 2005, eight dividend payment dates after January 1, 2005 the record dates of which precede the delivery of shares in payment of the Performance Share Awards s/he earns in 2006 , and 12 dividend payment dates after January 1, 2005 the record dates of which precede the delivery of shares in payment of the Performance Share Awards s/he earns in 2007.

3. Assume that the Company pays a dividend of $1.00 per share on all dividend payment dates in question.

4. Assume that the fair market value of Company Common Stock is $20 on the first dividend payment date and increases by $1 on each subsequent dividend payment date.

Calculation of Dividend Equivalents Payable on PSAs Earned in Performance Year 2005

# of PSAs earned = 500

Dividend Payment Date	Dividend Equivalent Calc (A x B)/C	=	# Shares Credited as Dividend Equivalents
#1	(500 x $1.00)/$20		25
#2	(525 x $1.00)/$21		25
#3	(550 x $1.00)/$22		25
#4	(575 x $1.00)/$23		25
Total # Shares Payable in 2006 (in cash) as Dividend Equivalents on PSAs Earned in 2005			100

[Example continues on next page]

Page 6 of 7

Appendix – page 2

Calculation of Dividend Equivalents Payable on PSAs Earned in Performance Year 2006

# of PSAs earned = 500

Dividend Payment Date	Dividend Equivalent Calc (A x B)/C	=	# Shares Credited as Dividend Equivalents
#1	(500 x $1.00)/$20		25
#2	(525 x $1.00)/$21		25
#3	(550 x $1.00)/$22		25
#4	(575 x $1.00)/$23		25
#5	(600 x $1.00)/$24		25
#6	(625 x $1.00)/$25		25
#7	(650 x $1.00)/$26		25
#8	(675 x $1.00)/$27		25
Total # Shares Payable in 2007 (in cash) as Dividend Equivalents on PSAs Earned in 2006			200

Calculation of Dividend Equivalents Payable on PSAs Earned in Performance Year 2007

# of PSAs earned = 500

Dividend Payment Date	Dividend Equivalent Calc (A x B)/C	=	# Shares Credited as Dividend Equivalents
#1	(500 x $1.00)/$20		25
#2	(525 x $1.00)/$21		25
#3	(550 x $1.00)/$22		25
#4	(575 x $1.00)/$23		25
#5	(600 x $1.00)/$24		25
#6	(625 x $1.00)/$25		25
#7	(650 x $1.00)/$26		25
#8	(675 x $1.00)/$27		25
#9	(700 x $1.00)/$28		25
#10	(725 x $1.00)/$29		25
#11	(750 x $1.00)/$30		25
#12	(775 x $1.00)/$31		25
Total # Shares Payable in 2008 (in cash) as Dividend Equivalents on PSAs Earned in 2007			300

Page 7 of 7

EX-15

EXHIBIT 15

August 5, 2005

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

Commissioners:

We are aware that our report dated August 3, 2005 on our review of interim financial information of Barnes Group Inc. (the “Company”) for the three-month and six-month periods ended June 30, 2005 and 2004 and included in the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2005 is incorporated by reference in its Registration Statements on Form S-3 (No. 333-104242), and Form S-8 (Nos. 2-56437, 2-91285, 33-20932, 33-30229, 33-91758, 33-27339, 333-41398, 333-88518, 333-57658, 333-112869 and 333-115333).

Very truly yours,

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Hartford, Connecticut

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Edmund M. Carpenter, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2005 of Barnes Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2005

/S/    EDMUND M. CARPENTER

Edmund M. Carpenter

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, William C. Denninger, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2005 of Barnes Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2005

/S/    WILLIAM C. DENNINGER

William C. Denninger

Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Barnes Group Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/S/    EDMUND M. CARPENTER	/S/    WILLIAM C. DENNINGER
Edmund M. Carpenter President and Chief Executive Officer August 5, 2005	William C. Denninger Chief Financial Officer August 5, 2005

A signed original of this written statement required by Section 906 or other document authenticating, acknowledging, or otherwise adopting the signature that appears in the typed form within the electronic version of this written statement required by Section 906, has been provided to Barnes Group Inc. and will be retained by Barnes Group Inc. and furnished to the Securities and Exchange Commission or its staff upon request.