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 September 30, 2009

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	06010
(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 has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

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

The registrant had outstanding 54,713,313 shares of common stock as of October 28, 2009.

Barnes Group Inc.

Index to Form 10-Q

For the Quarterly Period Ended September 30, 2009

		Page
Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Income for the three months and nine months ended September 30, 2009 and 2008	3
	Consolidated Balance Sheets as of September 30, 2009 and December 31, 2008	4
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2009 and 2008	5
	Notes to Consolidated Financial Statements	6
	Report of Independent Registered Public Accounting Firm	20
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
Part II.	OTHER INFORMATION
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 6.	Exhibits	32
	Signatures	33
	Exhibit Index	34

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 September 30,						Nine months ended September 30,
	2009			2008			2009		2008
Net sales	$	260,339		$	333,811		$	777,690	$	1,096,720
Cost of sales		170,491			208,068			503,369		677,618
Selling and administrative expenses		75,291			83,130			225,161		273,887
		245,782			291,198			728,530		951,505
Operating income		14,557			42,613			49,160		145,215
Other income		1,545			138			4,205		440
Interest expense		5,293			6,481			17,234		20,331
Other expenses		293			(45	)		1,558		2,141
Income from continuing operations before income taxes		10,516			36,315			34,573		123,183
Income taxes (benefit)		(373	)		7,079			1,778		24,962
Income from continuing operations		10,889			29,236			32,795		98,221
Loss from discontinued operations, net of income tax benefit of $303 and $970, respectively		—			(1,413	)		—		(4,513	)
Net income	$	10,889		$	27,823		$	32,795	$	93,708
Per common share:
Basic:
Income from continuing operations	$	.20		$	.54		$	.61	$	1.81
Loss from discontinued operations, net of income taxes		—			(.03	)		—		(.08	)
Net income	$	.20		$	.51		$	.61	$	1.73
Diluted:
Income from continuing operations	$	.20		$	.52		$	.61	$	1.73
Loss from discontinued operations, net of income taxes		—			(.03	)		—		(.08	)
Net income	$	.20		$	.49		$	.61	$	1.65
Dividends		.08			.16			.40		.46
Weighted average common shares outstanding:
Basic		54,257,791			54,491,638			53,462,672		54,305,152
Diluted		54,563,199			56,336,095			53,710,453		56,659,318

See accompanying notes.

3

BARNES GROUP INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

	September 30, 2009			December 31, 2008
Assets
Current assets
Cash and cash equivalents	$	14,221		$	20,958
Accounts receivable, less allowances (2009 - $6,316; 2008 - $6,174)		164,850			173,215
Inventories		193,533			240,805
Deferred income taxes		25,804			27,650
Prepaid expenses and other current assets		13,336			14,881
Total current assets		411,744			477,509
Deferred income taxes		35,472			31,133
Property, plant and equipment		652,006			625,997
Less accumulated depreciation		(417,186	)		(390,962	)
		234,820			235,035
Goodwill		375,383			361,930
Other intangible assets, net		307,384			316,817
Other assets		13,685			12,931
Total assets	$	1,378,488		$	1,435,355
Liabilities and Stockholders’ Equity
Current liabilities
Notes and overdrafts payable	$	4,212		$	8,905
Accounts payable		85,980			80,495
Accrued liabilities		79,828			84,372
Long-term debt – current		19,181			15,386
Total current liabilities		189,201			189,158
Long-term debt		337,334			441,670
Accrued retirement benefits		140,403			164,796
Other liabilities		41,525			41,156
Commitments and contingencies (Note 15)
Stockholders’ equity
Common stock - par value $0.01 per share
Authorized: 150,000,000 shares
Issued: at par value (2009–55,877,545 shares; 2008–55,229,926 shares)		559			552
Additional paid-in capital		268,824			269,215
Treasury stock, at cost (2009–1,180,841 shares; 2008–3,006,379 shares)		(15,826	)		(46,705	)
Retained earnings		476,834			465,429
Accumulated other comprehensive income (loss)		(60,366	)		(89,916	)
Total stockholders’ equity		670,025			598,575
Total liabilities and stockholders’ equity	$	1,378,488		$	1,435,355

See accompanying notes.

4

BARNES GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

	Nine months ended September 30,
	2009			2008
Operating activities:
Net income	$	32,795		$	93,708
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		38,558			39,675
Loss (gain) on disposition of property, plant and equipment		813			(218	)
Gain on repurchases of convertible notes		(3,773	)		—
Non-cash stock compensation expense		3,279			5,218
Withholding taxes paid on stock issuances		(610	)		(2,568	)
Loss on the sale of Spectrum Plastics		—			846
Changes in assets and liabilities, net of the effects of acquisitions:
Accounts receivable		14,260			(10,448	)
Inventories		50,757			(254	)
Prepaid expenses		4,378			(2,853	)
Accounts payable		4,615			(27,023	)
Accrued liabilities		(3,054	)		(19,586	)
Deferred income taxes		(2,741	)		9,167
Long-term retirement benefits		(16,503	)		(6,800	)
Other		2,962			4,322
Net cash provided by operating activities		125,736			83,186
Investing activities:
Proceeds from disposition of property, plant and equipment		981			703
Proceeds from the sale of Spectrum Plastics, net		—			5,127
Capital expenditures		(24,847	)		(41,982	)
Business acquisitions, net of cash acquired		—			47
Revenue Sharing Program payments		—			(57,500	)
Other		(1,737	)		(2,105	)
Net cash used by investing activities		(25,603	)		(95,710	)
Financing activities:
Net change in other borrowings		(4,861	)		(5,249	)
Payments on long-term debt		(181,242	)		(197,770	)
Proceeds from the issuance of long-term debt		94,900			242,100
Proceeds from the issuance of common stock		5,621			4,944
Common stock repurchases		(314	)		(1,791	)
Dividends paid		(21,220	)		(24,998	)
Excess tax benefit on stock awards		—			1,743
Other		(797	)		(104	)
Net cash provided (used) by financing activities		(107,913	)		18,875
Effect of exchange rate changes on cash flows		1,043			(1,333	)
Increase (decrease) in cash and cash equivalents		(6,737	)		5,018
Cash and cash equivalents at beginning of period		20,958			20,600
Cash and cash equivalents at end of period	$	14,221		$	25,618

Supplemental disclosure of cash flow information:

Non-cash financing activities in 2009 include a stock contribution to the Company’s pension plans of 737,463 treasury shares ($9,816) and the repurchase of certain convertible notes using 1,154,265 treasury shares ($17,019).

See accompanying notes.

5

BARNES GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(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 unaudited 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, 2008 has been derived from the 2008 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, 2008. In the opinion of management, all adjustments, including normal recurring accruals considered necessary for a fair presentation, have been included. Operating results for the three- and nine-month periods ended September 30, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009. Certain reclassifications have been made to prior year amounts to conform to the current year presentation.

See Note 9 for discussion of the impact of the Company’s adoption of a newly issued accounting standard for certain convertible debt instruments as of January 1, 2009 and the retrospective adjustment of previously reported amounts.

See Note 10 for the disclosures required by the provisions of a newly issued accounting standard effective in 2009 related to the disclosures for derivative instruments and hedging activities.

In the fourth quarter of 2008, the Company changed its organizational structure by aligning its strategic business units with a focus on core functional and delivery capabilities. This realignment resulted in two new reportable business segments: Logistics and Manufacturing Services, and Precision Components. All previously reported segment information was adjusted on a retrospective basis to reflect this change.

Additionally, in the fourth quarter of 2008 the Company exited certain non-core businesses within its Logistics and Manufacturing Services segment in the United Kingdom. The actions included selling certain assets of the operation and exiting the businesses. The results of these businesses have been segregated and treated as discontinued operations. See Note 3.

2. Business Divestiture

In February 2008, the Company sold the net assets of Spectrum Plastics Molding Resources, Inc. (“Spectrum Plastics”) for $6,350 resulting in an after-tax transaction loss of $846. The pre-tax loss of $1,241 and related tax benefit of $395 are reflected in other expenses and income taxes, respectively, in the accompanying Consolidated Statements of Income in the nine-month period ended September 30, 2008. The Company did not report Spectrum Plastics as a discontinued operation as it was not significant to any period presented. Accordingly, the operating results of Spectrum Plastics are included in the operating results of the Company in the accompanying Consolidated Statements of Income for the nine-month period ended September 30, 2008 (through the date of the sale).

6

BARNES GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

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

3. Discontinued Operations

In the fourth quarter of 2008, the Company exited certain non-core businesses within its Logistics and Manufacturing Services segment in the United Kingdom. These exit activities included the sale of certain assets and transfer of related employees to the buyers, liquidation of assets, termination of related contracts and severing of employees. The results of these operations are segregated and treated as discontinued operations in the accompanying consolidated statements of income for the three- and nine-month periods ended September 30, 2008 as follows:

	Three months ended September 30, 2008			Nine months ended September 30, 2008
Net sales	$	3,324		$	11,856
Loss before income taxes	$	(1,716	)	$	(5,483	)
Income tax benefit		303			970
Loss from discontinued operations, net of income taxes	$	(1,413	)	$	(4,513	)

4. Net Income Per Common Share

Effective January 1, 2009, the provisions of a newly issued accounting standard for participating securities became effective for the Company. The provisions of this accounting standard clarified that share-based payment awards that entitle their holders to receive nonforfeitable dividends before vesting should be considered participating securities and, as such, should be included in the calculation of basic earnings per share. The Company’s restricted stock unit awards which contain nonforfeitable rights to dividends are considered participating securities.

For the purpose of computing diluted net income per share, the weighted average number of shares outstanding was increased by 305,408 and 1,844,457 for the three-month periods ended September 30, 2009 and 2008, respectively, and 247,781 and 2,354,166 for the nine-month periods ended September 30, 2009 and 2008, respectively, to account for the potential dilutive effects of stock-based incentive plans and convertible senior subordinated notes. There were no adjustments to net income for the purposes of computing income available to common stockholders for those periods.

The calculation of weighted average diluted shares outstanding excludes all anti-dilutive shares. During the three-month periods ended September 30, 2009 and 2008, the Company excluded 2,887,027 and 942,661 options, respectively, from the calculation of weighted average diluted shares outstanding as the stock options were considered anti-dilutive. During the nine-month periods ended September 30, 2009 and 2008, the Company excluded 4,014,717 and 776,525 options, respectively, from the calculation of weighted average diluted shares outstanding as the stock options were considered anti-dilutive.

The Company granted 845,200 stock options, 207,750 restricted stock unit awards, and 149,800 performance unit plan awards in February 2009 as part of its annual grant award. All of the restricted stock unit awards vest upon meeting certain service conditions and are included in basic average common shares outstanding as they contain nonforfeitable rights to dividend payments. The performance unit plan awards are denominated in units with each unit being equivalent in value to one share of the Company’s common stock and are payable in cash. The performance unit plan awards vest upon satisfying established performance goals and are not included in either basic or diluted average common shares outstanding as these awards will be settled in cash.

7

BARNES GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

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

The 3.75% convertible senior subordinated notes due in August 2025 (the “3.75% Convertible Notes”) are convertible, under certain circumstances, into a combination of cash and common stock of the Company. The conversion price as of September 30, 2009 was approximately $20.66 per share of common stock. The dilutive effect of the notes is determined based on the average closing price of the Company’s stock for the last 30 trading days of the quarter as compared to the conversion price of the notes. Under the net share settlement method, these notes were not considered dilutive in the three- and nine-month periods ended September 30, 2009 and there were 412,767 and 671,745 potential shares issuable under the notes that were considered dilutive in the three- and nine-month periods ended September 30, 2008, respectively.

The 3.375% convertible senior subordinated notes due in March 2027 (the “3.375% Convertible Notes”) are convertible, under certain circumstances, into a combination of cash and common stock of the Company. The conversion price as of September 30, 2009 was approximately $28.40 per share of common stock. The dilutive effect of the notes is determined based on the average closing price of the Company’s stock for the last 30 trading days of the quarter as compared to the conversion price of the notes. Under the net share settlement method, these notes were not considered dilutive in the three- and nine-month periods ended September 30, 2009 and 2008.

5. Comprehensive Income

Comprehensive income (loss) includes all changes in equity during a period except those resulting from the investments by, and distributions to, stockholders. For the Company, comprehensive income (loss) for the period includes net income and other non-owner changes to equity, net of taxes.

Statements of Comprehensive Income (Loss)

(Unaudited)

For the three months ended September 30,	2009			2008
Net income	$	10,889		$	27,823
Unrealized gain (loss) on hedging activities, net of tax of $115 and $(279), respectively		313			(1,281	)
Foreign currency translation adjustments, net of tax of $2,533 and $(1,673), respectively		19,400			(44,000	)
Defined benefit pension and other postretirement plans, net of tax of $159 and $429, respectively		504			2,450
Comprehensive income (loss)	$	31,106		$	(15,008	)
For the nine months ended September 30,	2009			2008
Net income	$	32,795		$	93,708
Unrealized gain (loss) on hedging activities, net of tax of $175 and $451, respectively		162			1,050
Foreign currency translation adjustments, net of tax of $1,860 and $(3,615), respectively		29,418			(14,520	)
Defined benefit pension and other postretirement plans, net of tax of $444 and $1,081, respectively		(30	)		4,070
Comprehensive income	$	62,345		$	84,308

8

BARNES GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

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

6. Inventories

The components of inventories consisted of:

	September 30, 2009		December 31, 2008
Finished goods	$	106,082	$	140,596
Work-in-process		56,212		60,931
Raw material and supplies		31,239		39,278
	$	193,533	$	240,805

7. 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 period ended September 30, 2009:

	Logistics and Manufacturing Services		Precision Components		Total Company
January 1, 2009	$	163,296	$	198,634	$	361,930
Foreign currency translation		3,352		10,101		13,453
September 30, 2009	$	166,648	$	208,735	$	375,383

In the second quarter of 2009, management performed its annual impairment testing. Based on this assessment, there was no goodwill impairment.

Other Intangible Assets:

Other intangible assets consisted of:

	Range of Life -Years	September 30, 2009					December 31, 2008
		Gross Amount		Accumulated Amortization			Gross Amount		Accumulated Amortization
Amortized intangible assets:
Revenue sharing programs	Up to 30	$	293,700	$	(26,474	)	$	293,700	$	(20,296	)
Customer lists/relationships	10		28,578		(14,314	)		28,578		(12,142	)
Patents, trademarks/trade names	5-30		22,896		(9,695	)		22,896		(8,118	)
Other	Up to 15		10,405		(2,169	)		10,405		(1,744	)
			355,579		(52,652	)		355,579		(42,300	)
Foreign currency translation			4,457		—			3,538		—
Other intangible assets		$	360,036	$	(52,652	)	$	359,117	$	(42,300	)

Amortization of intangible assets is expected to increase from approximately $14,000 in 2009 to $15,200 in 2013.

9

BARNES GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

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

8. Business Reorganizations

On September 30, 2009, the Company authorized the restructuring of certain operations of the Precision Components segment by moving the operations of two facilities, Burlington, Ontario, Canada (the “Burlington Facility”) and Monterrey, Mexico (the “Monterrey Facility”). The assets and related work of these facilities will be transferred to other Precision Components facilities in the United States to create a more cost effective manufacturing footprint. The movement of operations for the Burlington Facility is expected to be completed by March 2010. The movement of assets at the previously idled Monterrey Facility is expected to be completed by March 2010. The Company recorded restructure and related costs of $3,354 which included $2,140 of employee termination costs and $1,014 of asset write-downs. The Company expects to incur approximately $800 and $3,800 of additional costs in 2009, and 2010 and beyond, respectively. Of these additional costs, approximately $2,000 relates to pension costs and $2,100 relates to equipment transfer expenses and other related costs. In addition, during 2009, the Company implemented other workforce reduction actions at Precision Components and recorded severance expense of $2,576 primarily in the second quarter of 2009. Costs related to the 2009 employee termination actions are primarily recorded in selling and administrative expenses in the accompanying Consolidated Statements of Income.

The following table sets forth the change in the liability for the 2009 employee termination actions at Precision Components:

January 1, 2009	$	—
Severance expense, net		4,716
Payments		(1,141	)
Foreign currency translation		39
September 30, 2009	$	3,614

The remaining balance is expected to be paid in 2009 and 2010.

In 2008, the Company implemented certain right-sizing actions, including workforce reductions and plant consolidations at Logistics and Manufacturing Services and Precision Components, and recorded restructuring and related costs of $7,725 and $7,288, respectively, of which $1,312 was included in the loss from discontinued operations. In addition, Precision Components recorded asset write-downs of $1,468. As a result of these actions, Precision Components expects to incur an additional $2,000 of costs in 2009 related to transfer of work and facility exits of which $1,186 was incurred during the first nine months of 2009. These costs are primarily recorded in selling and administrative expenses in the accompanying Consolidated Statements of Income.

The following table sets forth the change in the liability for 2008 employee termination actions:

	Logistics and Manufacturing Services			Precision Components
January 1, 2009	$	5,190		$	4,357
Severance expense, net		(279	)		(707	)
Payments		(2,166	)		(2,432	)
Foreign currency translation		174			35
September 30, 2009	$	2,919		$	1,253

The remaining balances related to the employee termination actions are expected to be paid in 2009 and 2010.

The Company expects to incur costs primarily related to pre-2008 actions of up to $3,000 related primarily to pension costs which may be incurred at Precision Components in 2010 or later.

10

BARNES GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

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

9. Debt

The following table sets forth the carrying value of the Company’s long-term debt and notes and overdrafts payable:

	September 30, 2009			December 31, 2008
7.80% Notes	$	30,333		$	30,333
3.75% Convertible Notes, net of debt discount		87,633			91,893
3.375% Convertible Notes, net of debt discount		45,923			80,665
Foreign bank notes		1,900			—
$400 million revolving credit agreement		171,000			251,400
$35 million credit agreement		17,000			—
Borrowings under lines of credit		1,000			8,000
Foreign bank overdrafts		3,212			905
Capital leases		2,726			2,765
		360,727			465,961
Less current maturities		(23,393	)		(24,291	)
Long-term debt	$	337,334		$	441,670

In July 2009, the Company entered into a $35,000 unsecured credit agreement with Wells Fargo Bank, N.A. The proceeds from the credit agreement may be used for working capital, capital expenditures and general corporate purposes. The available borrowing period under the credit agreement is from the closing date through December 31, 2009 (“Availability Period”). During the Availability Period, the Company may borrow either under (i) Tranche A which will amortize in 10 quarterly installments beginning April 1, 2010 or (ii) Tranche B which will amortize in six quarterly installments beginning April 1, 2010; provided that the outstanding loans under Tranche B may not exceed the lesser of $20,000 or $35,000 less any Tranche A loans outstanding from time to time; and provided further, that the aggregate outstanding loans under Tranches A and B of the credit agreement may not exceed $35,000. At the Company’s option, the loans will bear interest either at the London Interbank Offered Rate (“LIBOR”) plus 4.25% or at Wells Fargo’s Base Rate plus 1.75%. The Company paid an upfront fee of $438. In addition, the Company is to pay a fee quarterly during the Availability Period equal to 0.50% per annum of the unused commitment. The credit agreement’s covenants are substantially the same as the covenants under the Company’s $400,000 Amended Revolving Credit Agreement, dated September 10, 2007. At September 30, 2009, $17,000 was borrowed under Tranche A of this facility at an interest rate of 4.50%.

11

BARNES GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

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

On January 1, 2009, the provisions of a newly issued accounting standard for certain convertible debt instruments became effective for the Company. The provisions of this accounting standard required the Company to separately account for the liability and equity components of its convertible debt in a manner which reflects the Company’s nonconvertible debt borrowing rate for similar debt. The debt discounts resulting from this allocation are amortized using the effective interest rate method over the expected life of a similar liability without the equity component. The Company determined the expected life to be through the first put date of the Convertible Notes resulting in amortization periods of 5.5 years from the issuance date of August 1, 2005 for the 3.75% Convertible Notes and 7 years from the issuance date of March 15, 2007 for the 3.375% Convertible Notes. The provisions were retroactively applied to all periods and resulted in an adjustment of the following amounts:

	Before Adjustment		Adjustment			As Adjusted
Consolidated Balance Sheet:
December 31, 2008
Deferred income tax asset – long-term	$	40,731	$	(9,598	)	$	31,133
Other assets – long-term		15,612		(2,681	)		12,931
Long-term debt		469,113		(27,443	)		441,670
Additional paid-in capital		243,463		25,752			269,215
Retained earnings		476,017		(10,588	)		465,429
Consolidated Statements of Income:
Three months ended September 30, 2008
Interest expense	$	4,693	$	1,788		$	6,481
Income taxes		7,757		(678	)		7,079
Income from continuing operations		30,346		(1,110	)		29,236
Net income		28,933		(1,110	)		27,823
Income from continuing operations per common share – basic		.56		(.02	)		.54
Net income per common share – basic		.53		(.02	)		.51
Income from continuing operations per common share – diluted		.54		(.02	)		.52
Net income per common share – diluted		.51		(.02	)		.49
Nine months ended September 30, 2008
Interest expense	$	15,063	$	5,268		$	20,331
Income taxes		26,960		(1,998	)		24,962
Income from continuing operations		101,491		(3,270	)		98,221
Net income		96,978		(3,270	)		93,708
Income from continuing operations per common share – basic		1.87		(.06	)		1.81
Net income per common share – basic		1.79		(.06	)		1.73
Income from continuing operations per common share – diluted		1.79		(.06	)		1.73
Net income per common share – diluted		1.71		(.06	)		1.65

During the third quarter of 2009, the Company repurchased $22,214 par value of its 3.375% Convertible Notes and $7,500 par value of its 3.75% Convertible Notes from certain holders of these Notes for cash consideration of $11,269 and 1,154,265 shares of treasury stock valued at $17,019. Of the total consideration of $28,287, $23,301 was attributed to the debt component and $4,986 was attributed to the equity component. At the dates of the repurchases, the notes had a carrying value of $25,295, net of the unamortized debt discount of $4,419. As a result of these transactions, the Company reduced the carrying value of the equity component by $3,095, net of tax of $1,891, reduced its unamortized deferred debt issuance costs by $508, and recorded a total gain on the repurchases of $1,486 ($922 after-tax) which is recorded in Other income in the accompanying Consolidated Statements of Income. The tax impact was treated as a discrete item to the third quarter 2009 tax rate. The issuance of treasury stock resulted in a $1,586 increase to Additional paid-in capital.

12

BARNES GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

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

The Company also repurchased certain of its convertible notes in the second quarter of 2009. During the nine-month period ended September 30, 2009, the Company repurchased $44,364 par value of its 3.375% Convertible Notes and $7,500 par value of its 3.75% Convertible Notes from certain holders of these Notes for cash consideration of $28,651 and 1,154,265 shares of treasury stock valued at $17,019. Of the total consideration of $45,669, $38,852 was attributed to the debt component and $6,817 was attributed to the equity component. At the dates of the repurchases, the notes had a carrying value of $43,560, net of the unamortized debt discount of $8,304. As a result of these transactions, the Company reduced the carrying value of the equity component by $4,232, net of tax of $2,585, reduced its unamortized deferred debt issuance costs by $934, and recorded a total gain on the repurchases of $3,773 ($2,342 after-tax) which is recorded in Other income in the accompanying Consolidated Statements of Income.

The following table sets forth balance sheet information regarding the Company’s convertible notes:

	September 30, 2009			December 31, 2008
3.75% Convertible Notes:
Carrying value of equity component, net of tax	$	11,731		$	11,731
Principal value of liability component	$	92,500		$	100,000
Unamortized debt discount		(4,867	)		(8,107	)
Net carrying value of liability component	$	87,633		$	91,893
3.375% Convertible Notes:
Carrying value of equity component, net of tax	$	10,772		$	15,004
Principal value of liability component	$	55,636		$	100,000
Unamortized debt discount		(9,713	)		(19,335	)
Net carrying value of liability component	$	45,923		$	80,665

As of September 30, 2009, the remaining unamortized debt discount on the 3.75% Convertible Notes will be amortized over a period of 16 months. The effective interest rate on the liability component for the three- and nine-month periods ended September 30, 2009 and 2008 was 8.125%. As of September 30, 2009, the remaining unamortized debt discount on the 3.375% Convertible Notes will be amortized over a period of 54 months. The effective interest rate on the liability component for the three- and nine-month periods ended September 30, 2009 and 2008 was 8.00%.

The following table sets forth the components of interest expense for the Company’s convertible notes for the three- and nine-month periods ended September 30, 2009 and 2008.

	Three months ended September 30,				Nine months ended September 30,
	2009		2008		2009		2008
Interest expense – 3.75% coupon	$	887	$	938	$	2,762	$	2,813
Interest expense – 3.75% debt discount amortization		895		892		2,772		2,624
Interest expense – 3.375% coupon		547		844		2,159		2,532
Interest expense – 3.375% debt discount amortization		379		740		1,785		2,176
	$	2,708	$	3,414	$	9,478	$	10,145

The 3.75% Convertible Notes are subject to redemption at their par value at any time, at the option of the Company, on or after February 1, 2011. These notes may be converted by the holders, under certain circumstances, into a combination of cash and common stock of the Company at a conversion value equal to 48.4024 shares per note, equivalent to a conversion price of approximately $20.66 per share of common stock. The first $1 of the conversion value of each note would be paid in cash and the additional conversion value, if any, would be paid in cash or common stock, at the option of the Company. As of September 30, 2009, the “if converted value” does not exceed the principal amount of the 3.75% Convertible Notes.

13

BARNES GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

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

The 3.375% Convertible Notes are subject to redemption at their par value at any time, at the option of the Company, on or after March 20, 2014. These notes may be converted, under certain circumstances, into a combination of cash and common stock of the Company at a conversion value equal to 35.2138 shares per note, equivalent to a conversion price of approximately $28.40 per share of common stock. The first $1 of the conversion value of each note would be paid in cash and the additional conversion value, if any, would be paid in cash or common stock, at the option of the Company. As of September 30, 2009, the “if converted value” does not exceed the principal amount of the 3.375% Convertible Notes.

The 3.75% Convertible Notes and the 3.375% Convertible Notes are eligible for conversion upon meeting certain conditions as provided in the respective indenture agreements. The eligibility for conversion is determined quarterly. During the third quarter of 2009, neither the 3.75% Convertible Notes nor the 3.375% Convertible Notes were eligible for conversion. During the fourth quarter of 2009, neither of the Convertible Notes will be eligible for conversion.

The Company’s debt agreements contain financial covenants that require the maintenance of interest coverage and leverage ratios, and minimum levels of net worth. The Company is in compliance with its debt covenants as of September 30, 2009, and is closely monitoring its future compliance based on current and future economic conditions.

10. Derivatives

The Company has manufacturing, sales and distribution facilities around the world and thus makes investments and conducts business transactions denominated in various currencies. The Company is also exposed to fluctuations in interest rates and commodity price changes. These financial exposures are monitored and managed by the Company as an integral part of its risk management program.

The Company uses financial instruments to hedge its exposures to fluctuations in interest rates. The Company currently has two, three-year interest rate swap agreements expiring in March 2011 which together convert the interest on the first $100,000 of the Company’s one-month LIBOR-based borrowings from a variable rate plus the borrowing spread to a fixed rate of 2.947% plus the borrowing spread.

The Company also uses financial instruments to hedge its exposures to fluctuations in foreign currency exchange rates. The Company has various contracts outstanding which primarily hedge recognized assets or liabilities, and anticipated transactions in various currencies including the British pound sterling, Canadian dollar, Euro, Singapore dollar, Swedish krona and Swiss franc. All foreign exchange contracts are due within one year.

Net investment hedges have been used by the Company to mitigate exposure to foreign currency volatility on its future return on capital. In 2007, the Company had entered into a series of forward currency contracts to hedge a portion of its foreign currency net investment exposure in one of its Canadian operations. This hedge was terminated by the Company in the fourth quarter of 2008. The Company currently does not have any net investment hedges outstanding.

The Company does not use derivatives for speculative or trading purposes or to manage commodity exposures.

14

BARNES GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

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

The following table sets forth the fair value amounts of derivative instruments held by the Company as of September 30, 2009.

	Asset Derivatives		Liability Derivatives
Derivatives designated as hedging instruments:
Interest rate contracts	$	—	$	(3,097	)
Foreign exchange contracts		289		—
		289		(3,097	)
Derivatives not designated as hedging instruments:
Foreign exchange contracts		10		(827	)
Total derivatives	$	299	$	(3,924	)

Asset derivatives are recorded in Prepaid expenses and other current assets in the accompanying Consolidated Balance Sheets. Liability derivatives related to interest rate contracts and foreign exchange contracts are recorded in Other liabilities and Accrued liabilities, respectively, in the accompanying Consolidated Balance Sheets.

The following table sets forth the gain (loss) recorded in Accumulated other comprehensive income (loss), net of tax, for the three- and nine-month periods ended September 30, 2009 for derivatives held by the Company.

Derivatives in hedging relationships	Three months ended September 30, 2009		Nine months ended September 30, 2009
Cash flow hedges:
Interest rate contracts	$	188	$	287
Foreign exchange contracts		125		(125	)
	$	313	$	162

Amounts included within Accumulated other comprehensive income (loss) that were reclassified to income during the three- and nine-month periods ended September 30, 2009 resulted in a fixed rate of interest of 2.947% plus the borrowing spread for the first $100,000 of one-month LIBOR borrowings. The amounts reclassified for the foreign exchange contracts were not material. Additionally, there were no amounts recognized in income for hedge ineffectiveness during the three- and nine-month periods ended September 30, 2009.

The following table sets forth the gain (loss) recorded in Other income (expense) in the Consolidated Statements of Income for the three- and nine-month periods ended September 30, 2009 for derivatives held by the Company. Such amounts were substantially offset by gains (losses) recorded on the underlying hedged asset or liability.

Derivatives in hedging relationships	Three months ended September 30, 2009		Nine months ended September 30, 2009
Non-designated hedges:
Foreign exchange contracts	$	2,786	$	2,438

15

BARNES GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

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

11. Fair Value Measurements

On January 1, 2009, the Company adopted the provisions of an accounting standard related to fair value measurements of non-financial assets and non-financial liabilities. The non-financial assets and non-financial liabilities for which the Company will apply the fair value provisions of this accounting standard include: goodwill, intangible and other long-lived asset impairment testing; asset retirement obligations; liabilities for exit or disposal activities; and business combinations. Application of the fair value provisions to non-financial assets and non-financial liabilities did not impact the Consolidated Balance Sheet as of September 30, 2009 or the Consolidated Statement of Income for the three- or nine-month periods ended September 30, 2009. See Note 16.

The accounting standard defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This standard classifies the inputs used to measure fair value into the following hierarchy:

Level 1	Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2	Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability
Level 3	Unobservable inputs for the asset or liability

The following table provides the assets and liabilities reported at fair value and measured on a recurring basis as of September 30, 2009:

				Fair Value Measurements Using
Description	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Asset derivatives	$	299		$	—	$	299		$	—
Liability derivatives		(3,924	)		—		(3,924	)		—
Rabbi trust assets		1,298			1,298		—			—
	$	(2,327	)	$	1,298	$	(3,625	)	$	—

The fair values of rabbi trust assets are based on quoted market prices from various financial exchanges. The fair values for the derivative contracts are valued using observable current market information as of the reporting date such as the prevailing LIBOR-based and treasury interest rates and forward currency spot and forward rates. The Company assessed credit risk when determining the fair values of these instruments. This assessment did not result in any significant adjustments to the fair values.

As disclosed within the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, the fair values of the 3.75% Convertible Notes and 3.375% Convertibles Notes were approximately $0.877 and $0.645 per $1 note, respectively. As of September 30, 2009, the fair values of the 3.75% Convertible Notes and the 3.375% Convertible Notes were approximately $1.049 and $0.881 per $1 note, respectively.

16

BARNES GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

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

12. Pension and Other Postretirement Benefits

Pension and other postretirement benefits expenses consisted of the following:

	Three months ended September 30,						Nine months ended September 30,
Pensions	2009			2008			2009			2008
Service cost	$	1,582		$	1,864		$	4,994		$	5,743
Interest cost		5,718			5,471			16,843			17,219
Expected return on plan assets		(7,693	)		(7,646	)		(22,767	)		(23,801	)
Amortization of prior service cost		236			311			709			933
Recognized losses		503			411			1,401			1,581
Curtailment loss		200			—			200			—
Net periodic benefit cost	$	546		$	411		$	1,380		$	1,675
	Three months ended September 30,						Nine months ended September 30,
Other Postretirement Benefits	2009			2008			2009			2008
Service cost	$	119		$	179		$	349		$	565
Interest cost		902			1,062			2,645			3,377
Amortization of prior service cost		(190	)		229			(559	)		738
Recognized losses		52			67			152			212
Net periodic benefit cost	$	883		$	1,537		$	2,587		$	4,892

The Company currently expects to contribute approximately $26,000 to its pension plans in 2009, an increase of approximately $10,000 from the amount previously disclosed within the Company’s Annual Report on Form 10-K for the year ended December 31, 2008. In April 2009, the Company made a cash contribution of approximately $9,500 and an incremental contribution of approximately $9,800 to its pension plans in the form of treasury stock. These contributions will serve to mitigate potential required contributions beyond 2009 and to increase the funded status of the plans. The contribution of treasury stock resulted in a $6,555 reduction to Additional paid-in capital.

13. Income Taxes

The Company’s effective tax rate from continuing operations for the first nine months of 2009 was 5.1%, a decrease from a rate of 8.9% used for the first half of 2009. This decrease in the effective tax rate including certain discrete items resulted in a net tax benefit of $373 for the third quarter of 2009. In 2008, the Company’s effective tax rate was 20.3% in the first nine months of the year and 22.1% for the full year. The decrease in the effective tax rate from the full year 2008 and first half 2009 rates was primarily driven by the projected change in the mix of income to lower taxing jurisdictions.

17

BARNES GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

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

14. Information on Business Segments

The following table sets forth information about the Company’s operations by its two reportable business segments:

	Three months ended September 30,						Nine months ended September 30,
	2009			2008			2009			2008
Net sales
Logistics and Manufacturing Services	$	131,309		$	168,742		$	410,546		$	545,778
Precision Components		130,041			168,409			371,560			561,197
Intersegment sales		(1,011	)		(3,340	)		(4,416	)		(10,255	)
Total net sales	$	260,339		$	333,811		$	777,690		$	1,096,720
Operating profit
Logistics and Manufacturing Services	$	11,871		$	23,467		$	38,777		$	73,702
Precision Components		2,686			19,146			10,383			71,482
Total operating profit		14,557			42,613			49,160			145,184
Interest income		54			137			371			414
Interest expense		(5,293	)		(6,481	)		(17,234	)		(20,331	)
Other income (expense), net		1,198			46			2,276			(2,084	)
Total income from continuing operations before income taxes	$	10,516		$	36,315		$	34,573		$	123,183

15. Commitments and 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. Product warranty liabilities were not significant as of September 30, 2009 and December 31, 2008.

Income Taxes

In connection with an Internal Revenue Service (“IRS”) audit for the tax years 2000 through 2002, the IRS proposed adjustments to these tax years of approximately $16,500, plus a potential penalty of 20% of the tax assessment plus interest. The adjustment relates to the federal taxation of foreign income of certain foreign subsidiaries. The Company filed an administrative protest of these adjustments. In the third quarter of 2009, the Company was informed that its protest was denied and a tax assessment was received from the Appeals Office of the IRS. The Company continues to believe its tax position on the issues raised by the IRS is correct and the Company plans to continue to take appropriate actions to vigorously defend its position. The Company believes it will prevail on this issue. Any additional impact on the Company’s liability for income taxes cannot presently be determined, but the Company continues to believe it is adequately provided for and the outcome will not have a material impact on its results of operations, financial position or cash flows.

16. Accounting Changes

In September 2006, the Financial Accounting Standards Board (“FASB”) issued a standard related to fair value measurements. This standard defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and expands disclosures about fair value measurements. The Company adopted the provisions of this standard effective January 1, 2008 except as it related to those nonfinancial assets and nonfinancial liabilities excluded for which the provisions of this standard were adopted effective January 1, 2009. See Note 11.

The Company adopted the provisions of a revised standard for business combinations as it relates to acquisitions made after December 31, 2008. The provisions of this revised standard change how business acquisitions are accounted for and impacts financial statements both on the acquisition date and in subsequent periods. The Company has not made any acquisitions subsequent to the effective date of this standard for which the provisions must be applied.

18

BARNES GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

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

In the first quarter of 2009, the Company adopted the provisions of a newly issued standard related to the disclosures for derivative instruments and hedging activities. See Note 10.

Effective January 1, 2009, the Company retroactively adopted the provisions of a newly issued standard related to certain convertible debt instruments. See Note 9.

Effective January 1, 2009, the Company adopted the provisions of a newly issued standard for participating securities. This standard clarifies that share-based payment awards that entitle their holders to receive nonforfeitable dividends before vesting should be considered participating securities and, as such, should be included in the calculation of basic earnings per share. The Company did not retrospectively adjust prior periods for the impact on basic and diluted earnings per share as the amount of the adjustment would not have been significant.

In the second quarter of 2009, the Company adopted the provisions of a newly issued standard related to subsequent events. The provisions of this standard set forth the period after the balance sheet date during which management of a reporting entity shall evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity shall recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity shall make about events or transactions that occurred after the balance sheet date. See Note 17.

In June 2009, the FASB issued the FASB Accounting Standards Codification. This standard identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in accordance with U.S. GAAP. This standard was adopted by the Company in the third quarter of 2009. The adoption of the provisions of this standard did not have a material effect on the Company’s consolidated financial position, results of operations or cash flows.

In August 2009, the Company adopted the provisions of a newly issued Accounting Standards Update related to measuring liabilities at fair value. This update provides clarification that in circumstances in which a quoted price is not available, a reporting entity is required to measure fair value using certain valuation techniques. This update was effective for the Company in the third quarter of 2009. The adoption of this update did not have a material effect on the Company’s consolidated financial position, results of operations or cash flows.

17. Subsequent Event

The Company’s management has evaluated potential subsequent events for recording and / or disclosure through October 30, 2009, the date the accompanying Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 was issued.

With respect to the unaudited consolidated financial information of Barnes Group Inc. for the three- and nine-month periods ended September 30, 2009 and 2008, 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 October 30, 2009 appearing herein, states that they did not audit and they do not express an opinion on that unaudited consolidated financial information. Accordingly, the degree of reliance on their report on such information 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, 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 Securities Act of 1933, as amended.

19

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 sheet of Barnes Group Inc. and its subsidiaries as of September 30, 2009, and the related consolidated statements of income for the three-month and nine-month periods ended September 30, 2009 and September 30, 2008 and the consolidated statement of cash flows for the nine-month periods ended September 30, 2009 and September 30, 2008. 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 (United States), 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.

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2008, and the related consolidated statements of income, of stockholders’ equity and of cash flows for the year then ended (not presented herein), and in our report dated February 24, 2009, we expressed an unqualified opinion on those consolidated financial statements. As discussed in Note 9 to the accompanying consolidated interim financial information, the Company changed the manner in which it accounts for its convertible debt instruments. The accompanying consolidated balance sheet as of December 31, 2008 reflects this change.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Hartford, Connecticut

October 30, 2009

20

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, 2008. The Annual Report on Form 10-K and other documents related to the Company are located on the Company’s website: www.bginc.com. 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.

In the fourth quarter of 2008, the Company changed its organizational structure by aligning its strategic business units with a focus on core functional and delivery capabilities. This realignment resulted in two new reportable business segments: Logistics and Manufacturing Services, and Precision Components.

In the fourth quarter of 2008, the Company exited certain non-core businesses within its Logistics and Manufacturing Services segment in the United Kingdom. These actions included selling certain assets of the operation and exiting the businesses. The results of these businesses in prior periods have been segregated and treated as discontinued operations.

Effective January 1, 2009, the Company retroactively adopted the provisions of a newly issued accounting standard for certain convertible debt instruments. See Note 9 of the Notes to the Consolidated Financial Statements of this Quarterly Report on Form 10-Q for further discussion of the impact of adoption.

All previously reported financial information has been adjusted on a retrospective basis to reflect the segment realignment, the discontinued operations and the change in the accounting for convertible debt for all periods presented.

Third Quarter 2009 Highlights

In the third quarter of 2009, the economic challenges from the first half of the year continued in many of our end-markets. The Logistics and Manufacturing Services segment was negatively affected by lower demand across the end-markets of its distribution business and by deferred maintenance in its aerospace aftermarket business. Precision Components’ industrial manufacturing business was impacted by the declines in end-markets it serves, including the transportation-related market, while its aerospace OEM business was affected by reduced customer inventory and production levels. As a result of this volatility, third quarter sales decreased 22.0% from the third quarter of 2008 to $260.3 million.

In the third quarter 2009, the Company took actions to further restructure the operations of the Precision Components segment by moving the operations of two facilities. These actions resulted in charges of $3.4 million in the third quarter of 2009 primarily related to employee termination costs and asset write-downs. These actions, along with the actions taken by the Company in the fourth quarter of 2008 and in the first half of 2009, improved the Company’s cost structure and its manufacturing footprint, thereby strengthening its global competitive position.

During the third quarter of 2009, the Company continued to focus its efforts on cash generation and working capital management. Particular attention on collecting receivables, reducing inventory and managing payment terms with vendors contributed to the generation of $77.8 million of cash from operating activities in the third quarter of 2009 which was used primarily to reduce overall debt levels. The Company also repurchased certain of its convertible notes in exchange for treasury shares during the third quarter of 2009. These actions to reduce overall debt levels contributed to the Company’s ability to comply with its debt covenants.

21

RESULTS OF OPERATIONS

Sales

	Three months ended September 30,											Nine months ended September 30,
(in millions)	2009			2008			Change					2009			2008			Change
Logistics and Manufacturing Services	$	131.3		$	168.7		$	(37.4	)	(22.2	)%	$	410.5		$	545.8		$	(135.2	)	(24.8	)%
Precision Components		130.0			168.4			(38.4	)	(22.8	)%		371.6			561.2			(189.6	)	(33.8	)%
Intersegment sales		(1.0	)		(3.3	)		2.3		69.7	%		(4.4	)		(10.3	)		5.8		56.9	%
Total	$	260.3		$	333.8		$	(73.5	)	(22.0	)%	$	777.7		$	1,096.7		$	(319.0	)	(29.1	)%

The Company reported net sales of $260.3 million in the third quarter of 2009, a decrease of $73.5 million or 22.0% from the third quarter of 2008. The sales decrease reflected $71.1 million of organic sales declines which included $35.6 million at Logistics and Manufacturing Services and $37.8 million at Precision Components. The strengthening of the U.S. dollar against foreign currencies as compared to the same period in 2008, primarily in Europe and Canada, decreased net sales by approximately $2.4 million in the third quarter of 2009.

Sales for the nine-month period ended September 30, 2009 were $777.7 million, a decrease of $319.0 million or 29.1% from the nine-month period ended September 30, 2008. The sales decrease reflected $291.1 million of organic sales declines which included $118.7 million at Logistics and Manufacturing Services and $178.2 million at Precision Components. Additionally, the sale of Spectrum Plastics in 2008 resulted in a reduction in sales of $1.3 million as compared to 2008. The strengthening of the U.S. dollar against foreign currencies as compared to the same period in 2008, primarily in Europe and Canada, decreased net sales by approximately $26.6 million in the first nine months of 2009.

Expenses and Operating Income

	Three months ended September 30,											Nine months ended September 30,
(in millions)	2009			2008			Change					2009			2008			Change
Cost of sales	$	170.5		$	208.1		$	(37.6	)	(18.1	)%	$	503.4		$	677.6		$	(174.2	)	(25.7	)%
% of sales		65.5	%		62.3	%							64.7	%		61.8	%
Gross profit		89.8			125.7			(35.9	)	(28.5	)%		274.3			419.1			(144.8	)	(34.5	)%
% of sales		34.5	%		37.7	%							35.3	%		38.2	%
Selling and administrative expenses		75.3			83.1			(7.8	)	(9.4	)%		225.2			273.9			(48.7	)	(17.8	)%
% of sales		28.9	%		24.9	%							29.0	%		25.0	%
Operating income		14.6			42.6			(28.1	)	(65.8	)%		49.2			145.2			(96.1	)	(66.1	)%
% of sales		5.6	%		12.8	%							6.3	%		13.2	%

Cost of sales in the third quarter of 2009 decreased 18.1% from the 2008 period which was less than the percentage reduction in sales and resulted in an increase in cost of sales as a percentage of sales and a reduction in gross profit margin of 3.2 percentage points to 34.5%. Selling and administrative expenses in the third quarter of 2009 decreased 9.4% from the third quarter of 2008. The decreases in cost of sales and selling and administrative expenses resulted primarily from the significantly lower sales volumes in each of the businesses of Logistics and Manufacturing Services and Precision Components, and, to a lesser extent, from the benefits of discrete cost reduction actions taken in 2008 and the first half of 2009 and other cost saving initiatives. Selling and administrative costs in the third quarter of 2009 included $3.4 million primarily related to employee termination costs and asset write-downs at Precision Components. As a result, operating income in the third quarter of 2009 decreased 65.8% from the third quarter of 2008 and operating margin declined from 12.8% to 5.6%.

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Cost of sales in the first nine months of 2009 decreased 25.7% from the 2008 period which was less than the percentage reduction in sales and resulted in an increase in cost of sales as a percentage of sales and a reduction in gross profit margin of 2.9 percentage points to 35.3%. Selling and administrative expenses in the first nine months of 2009 decreased 17.8% from the 2008 period. The decreases in cost of sales and selling and administrative expenses resulted primarily from the significantly lower sales volumes in each of the businesses of Logistics and Manufacturing Services and Precision Components as well as the benefits of the discrete cost reduction actions taken in 2008 and the first half of 2009. As a result, operating income in the first nine months of 2009 decreased 66.1% from the first nine months of 2008 and operating margin declined from 13.2% to 6.3%.

Other Income/Expense

Other income, net of Other expenses, increased $1.1 million in the third quarter of 2009 compared to the same period of 2008 primarily as a result of a $1.5 million gain on the repurchase of certain convertible notes. See Note 9 of the Notes to the Consolidated Financial Statements. Interest expense decreased $1.2 million in the third quarter of 2009 as a result of lower interest rates and borrowings.

For the nine-month period ended September 30, 2009, Other income, net of Other expenses, increased $4.3 million compared to the first nine months of 2008 primarily as a result of a $3.8 million gain on the repurchase of convertible notes recorded in 2009 and the $1.2 million loss on the sale of Spectrum Plastics recorded in 2008. Interest expense decreased $3.1 million in the first nine months of 2009 as a result of lower interest rates.

Income Taxes

The Company’s effective tax rate from continuing operations for the first nine months of 2009 was 5.1%, a decrease from a rate of 8.9% used for the first half of 2009. This decrease in the effective tax rate including certain discrete items resulted in a net tax benefit of $0.4 million for the third quarter of 2009. In 2008, the Company’s effective tax rate was 20.3% in the first nine months of the year and 22.1% for the full year. The decrease in the effective tax rate from the full year 2008 and first half 2009 rates was primarily driven by the projected change in the mix of income to lower taxing jurisdictions.

In connection with an IRS audit for the tax years 2000 through 2002, the IRS proposed adjustments to these tax years of approximately $16.5 million, plus a potential penalty of 20% of the tax assessment plus interest. The adjustment relates to the federal taxation of foreign income of certain foreign subsidiaries. The Company filed an administrative protest of these adjustments. In the third quarter of 2009, the Company was informed that its protest was denied and a tax assessment was received from the Appeals Office of the IRS. The Company continues to believe its tax position on the issues raised by the IRS is correct and the Company plans to continue to take appropriate actions to vigorously defend its position. The Company believes it will prevail on this issue. Any additional impact on the Company’s liability for income taxes cannot presently be determined, but the Company continues to believe it is adequately provided for and the outcome will not have a material impact on its results of operations, financial position or cash flows.

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Net Income and Net Income per Share

(in millions, except per share data)	Three months ended September 30,										Nine months ended September 30,
	2009		2008			Change					2009		2008			Change
Income from continuing operations	$	10.9	$	29.2		$	(18.3	)	(62.8	)%	$	32.8	$	98.2		$	(65.4	)	(66.6	)%
Net income		10.9		27.8			(16.9	)	(60.9	)%		32.8		93.7			(60.9	)	(65.0	)%
Per common share:
Basic:
Income from continuing operations		.20		.54			(.34	)	(63.0	)%		.61		1.81			(1.20	)	(66.3	)%
Loss from discontinued operations, net of tax		—		(.03	)		.03		100.0	%		—		(.08	)		.08		100.0	%
Net income	$	.20	$	.51		$	(.31	)	(60.8	)%	$	.61	$	1.73		$	(1.12	)	(64.7	)%
Diluted:
Income from continuing operations		.20		.52			(.32	)	(61.5	)%		.61		1.73			(1.12	)	(64.7	)%
Loss from discontinued operations, net of tax		—		(.03	)		.03		100.0	%		—		(.08	)		.08		100.0	%
Net income	$	.20	$	.49		$	(.29	)	(59.2	)%	$	.61	$	1.65		$	(1.04	)	(63.0	)%
Weighted average common shares outstanding:
Basic		54.3		54.5			(0.2	)	(0.4	)%		53.5		54.3			(0.8	)	(1.6	)%
Diluted		54.6		56.3			(1.8	)	(3.1	)%		53.7		56.7			(2.9	)	(5.2	)%

In the third quarter of 2009, basic and diluted income from continuing operations per share decreased 63.0% and 61.5%, respectively, as compared to the third quarter of 2008, and in the first nine months of 2009 decreased 66.3% and 64.7%, respectively, as compared to the first nine months of 2008. The decreases were directly attributable to the decline in income from continuing operations in these periods.

Basic weighted average shares outstanding decreased mainly as a result of the impact of stock repurchases primarily in the fourth quarter of 2008 offset in part by 737,463 shares of treasury stock contributed to the Company’s pension plans in April 2009 and 1,154,265 shares of treasury stock used to repurchase certain of the Company’s convertible notes in August 2009. Diluted weighted average shares outstanding decreased as a result of the decrease in basic weighted average shares outstanding and the decrease in the dilutive effect of potentially issuable shares under the employee stock plans and the convertible notes which was driven by a decline in the Company’s stock price.

Financial Performance by Business Segment

Logistics and Manufacturing Services

	Three months ended September 30,											Nine months ended September 30,
(in millions)	2009			2008			Change					2009			2008			Change
Sales	$	131.3		$	168.7		$	(37.4	)	(22.2	)%	$	410.5		$	545.8		$	(135.2	)	(24.8	)%
Operating profit		11.9			23.5			(11.6	)	(49.4	)%		38.8			73.7			(34.9	)	(47.4	)%
Operating margin		9.0	%		13.9	%							9.4	%		13.5	%

Logistics and Manufacturing Services recorded sales of $131.3 million in the third quarter of 2009, a 22.2% decrease from the third quarter of 2008, and $410.5 million in the first nine months of 2009, a 24.8% decrease from the first nine months of 2008. The decreases in the third quarter and first nine months of 2009 were primarily a result of a reduction in organic sales in all businesses of $35.6 million and $118.7 million, respectively. The lower organic sales in 2009 were largely the result of softness in the distribution businesses in North America and Europe due primarily to continued weakness in the transportation-related and industrial markets served and, to a lesser extent, a reduced sales force compared to 2008. In addition, sales declines in the aerospace aftermarket were driven by lower aircraft utilization and deferred maintenance activities. The negative impact of foreign currency translation decreased sales by approximately $1.8 million in the third quarter of 2009 and $16.5 million in the first nine months of 2009 as the U.S. dollar strengthened against foreign currencies primarily in Europe and Canada as compared to the same period in 2008.

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Operating profit at Logistics and Manufacturing Services in the third quarter of 2009 decreased 49.4% from the third quarter of 2008 to $11.9 million and operating profit in the first nine months of 2009 decreased 47.4% to $38.8 million. The decline in both periods was driven by the profit impact of the lower sales volumes in each of its businesses due to the impact of economic conditions on the end-markets served. Partially offsetting these declines was the positive impact of operational and productivity initiatives, including the lower operating costs resulting from the discrete actions taken in 2008 to address deteriorating market conditions and geographical complexities and actions taken in the first half of 2009 to further align the cost structure with sales volumes.

Outlook:

Organic sales levels in the distribution businesses of the Logistics and Manufacturing Services segment are largely dependent upon the economy in the regions served, the retention of its customers and continuation of sales volumes to such customers, and its sales force. The current economic conditions are expected to provide challenges to these businesses as customers continue to actively manage costs and inventory levels. Management believes future sales growth will result from improvements in economic and end-market conditions, further market penetration and sales force productivity initiatives. Near-term sales growth in the aerospace aftermarket business is expected to continue to be impacted by deferred maintenance activities and lower capacity usage within the industry. Management believes its aerospace aftermarket business is favorably positioned based on strong customer relationships, including long-term maintenance and repair contracts in the overhaul and repair business, and expected future demand in the aftermarket spare parts business.

Operating profit at Logistics and Manufacturing Services is expected to be negatively affected by the profit impact of the decline in sales volume in each of its businesses as well as pricing pressures. Profitability is expected to be favorably impacted by lower costs resulting from discrete fourth quarter 2008 actions, structural changes made in the distribution businesses and other cost control efforts. Management continues to evaluate additional initiatives needed to align the cost structures of its businesses with the expected sales volumes. The aftermarket Revenue Sharing Programs (“RSP”) will continue to be impacted by the management fees payable to its customer which generally increase in the fourth or later years of each program. These and other similar fees are deducted from sales and temper aftermarket RSP sales growth and operating margin.

Precision Components

	Three months ended September 30,											Nine months ended September 30,
(in millions)	2009			2008			Change					2009			2008			Change
Sales	$	130.0		$	168.4		$	(38.4	)	(22.8	)%	$	371.6		$	561.2		$	(189.6	)	(33.8	)%
Operating profit		2.7			19.1			(16.5	)	(86.0	)%		10.4			71.5			(61.1	)	(85.5	)%
Operating margin		2.1	%		11.4	%							2.8	%		12.7	%

Sales at Precision Components were $130.0 million in the third quarter of 2009, a 22.8% decrease from the third quarter of 2009, and $371.6 million in the first nine months of 2009, a 33.8% decrease from the first nine months of 2008. The lower sales levels were primarily a result of weaker global economic conditions. The industrial manufacturing businesses in North America and Europe reported significant sales declines primarily resulting from the global recession and were most impacted by the recession’s effect on the transportation industry, most notably automotive. Additionally, sales decreased in the aerospace OEM business as customers reduced inventory and lowered production levels. The negative impact of foreign currency translation decreased sales $0.6 million and $10.1 million in the third quarter and first nine months of 2009, respectively. Spectrum Plastics recorded sales of $1.3 million in the nine-month period ended September 30, 2008, thus the sale of this business in 2008 resulted in a reduction in sales of this amount in the nine-month period ended September 30, 2009.

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Operating profit in the third quarter of 2009 at Precision Components was $2.7 million, a decrease of 86.0% from the 2008 third quarter, and $10.4 million in the first nine months of 2009, a decrease of 85.5% from the first nine months of 2008. Operating profit in both the third quarter and the first nine months of 2009 was positively impacted by lower costs resulting from the discrete actions taken in late 2008 to address deteriorating market conditions including personnel reductions and plant consolidations, and initiatives focused on cost savings and cost containment. The favorable impact of these initiatives, however, only partially offset the profit impact of substantially lower sales levels in 2009 and the costs of actions taken throughout 2009 which included the third quarter 2009 restructuring charge of $3.4 million primarily for employee termination costs and asset write-downs associated with moving the operations of two facilities.

Outlook:

In the industrial manufacturing businesses, management is focused on generating organic sales growth by leveraging the benefits of the diversified products and industrial end markets in which its businesses have a global presence as well as gaining market share. Sales growth in the global markets served by these businesses is expected to remain challenging due to the current economic conditions. However, increased order activity in certain end markets, including transportation, may provide incremental benefits in the near-term. Sales in the aerospace OEM business are driven by its commercial engine order backlog through its participation in certain strategic engine programs. Backlog in this business was $326.5 million at September 30, 2009, of which approximately 64% is expected to be shipped in the next 12 months. The aerospace OEM business may be further impacted by downward adjustments of customer inventory levels, production schedule delays or reductions of specific engine programs, and general softness in the aerospace market driven by the current worldwide economic recession. However, management believes that strong long-term aerospace industry fundamentals remain which, together with new programs, will drive future sales growth in this business.

Operating profit is largely dependant on the sales volumes within all businesses of the segment. Management expects a favorable impact on profitability from the cost actions taken in these businesses and other cost-saving and cost-containment initiatives. Management continues to focus on improving profitability through organic sales growth, pricing initiatives and productivity and process improvements.

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 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. During 2009, management has focused and will continue to focus on cash flow and working capital management, and anticipates that operating activities in 2009 will continue to generate positive cash flow. In light of current economic events, the Company is closely monitoring its cash generation, usage and preservation with particular emphasis placed on managing working capital to generate cash.

Management expects lower levels of cash usage in 2009 particularly with respect to capital expenditures, RSP payments and scheduled debt payments. Management has limited its capital spending and expects discretionary capital spending to be in the range of $30 - $35 million in 2009, down from $51.9 million in 2008. Participation fee payments related to the RSPs were $57.5 million in 2008; however, no payments are anticipated in 2009. Additionally, of the Company’s long-term debt portfolio, only $15.2 million is due and payable in 2009 and $20.7 million is due and payable in 2010.

Recent distress in the financial markets has had an adverse impact on, among other things, security prices and investment valuations. The Company’s pension plans have been impacted by losses in the global equity markets and, together with the requirements set forth by the Federal Pension Protection Act, the Company’s 2009 funding requirements have increased. The return on plan assets impacts the future funding requirements, pension expense and the Company’s balance sheet due to the recognition of the funded status of the plans. The Company took specific actions in the second quarter of 2009 to increase the funded status of the plans, to meet the 2009 funding requirements and to mitigate potential required contributions beyond 2009 by making a cash contribution of $9.5 million and an incremental stock contribution of $9.8 million to its pension plans.

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Operating cash flow may be supplemented with external borrowings to meet near-term organic business expansion needs and the Company’s current financial commitments. The credit markets are presenting companies with significant challenges in maintaining or expanding credit facilities. In the third quarter of 2009, the Company entered into a $35.0 million unsecured credit agreement with Wells Fargo Bank, N.A. which can be used for working capital, capital expenditures and general corporate purposes. The Company has assessed its credit facilities and currently expects that its bank syndicate, comprised of 15 banks, will continue to support the $400.0 million credit facility which matures in September 2012 and that Wells Fargo Bank, N.A. will continue to support the $35.0 million credit facility. At September 30, 2009, the Company had $229.0 million of unused and available for borrowings under its $400.0 million credit facility and $18.0 million of unused and available for borrowings under its $35.0 million credit facility, subject to covenants in the Company’s debt agreements. The Company believes its credit facilities, coupled with cash generated from operations, are adequate for its anticipated future requirements.

Current credit lines are closely monitored to ensure compliance with the Company’s various debt covenants. The Company’s most restrictive financial covenant (the “Debt Ratio”) requires the Company to maintain a ratio of Consolidated Total Debt to Adjusted earnings before interest expense, income taxes, and depreciation and amortization (“EBITDA”) as defined in the amended and restated revolving credit agreement of not more than 4.0 times as of September 30, 2009. The Debt Ratio will decrease to 3.75 times for fiscal quarters ending after September 30, 2009. Any breach of covenant would result in a technical default under the revolving credit agreement, the consequences of which are that the Company’s debt would become callable and other obligations, including the convertible notes, which are subject to the cross-default provisions of the revolving credit agreement, could also be accelerated to become immediately due and payable. The Company has taken and continues to take actions to sustain compliance with the debt covenants through strategies to increase Adjusted EBITDA and reduce debt. The result of these actions in the third quarter of 2009 resulted in an improvement in the Debt Ratio from 3.37 times at June 30, 2009 to 3.26 times at September 30, 2009.

We may from time to time seek to retire or repurchase our outstanding debt through cash purchases and / or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

Cash Flow

	Nine months ended September 30,
(in millions)	2009			2008			Change
Operating activities	$	125.7		$	83.2		$	42.6
Investing activities		(25.6	)		(95.7	)		70.1
Financing activities		(107.9	)		18.9			(126.8	)
Exchange rate effect		1.0			(1.3	)		2.4
Increase (decrease) in cash	$	(6.7	)	$	5.0		$	(11.7	)

Operating activities provided $125.7 million in cash in the first nine months of 2009 compared to $83.2 million provided in the first nine months of 2008. Compared to the 2008 period, operating cash flows in the 2009 period were positively impacted by significant reductions in working capital offset in part by lower operating performance and, to a lesser extent, a $9.5 million contribution to the Company’s pension plans. The reductions in working capital resulted primarily from lower inventory levels at both business segments during the 2009 period compared to the 2008 period reflecting management efforts to generate cash from working capital improvements as well as reduced customer demand. Improvements in cash flow from receivables and payables during 2009 resulted from focused efforts in all businesses to collect receivables and manage payment terms with vendors. The 2008 period included payments for the investment in inventory related to a spare parts product line at Logistics and Manufacturing Services.

Investing activities in the first nine months of 2009 primarily consisted of capital expenditures of $24.8 million compared to $42.0 million in the 2008 period. The 2008 period included cash used for participation fee payments related to the aftermarket RSPs of $57.5 million. No payments are required in 2009. Additionally, investing activities in 2008 included the net proceeds of $5.1 million on the sale of Spectrum Plastics.

27

Cash used by financing activities in the first nine months of 2009 included a net reduction in borrowings of $91.2 million including the repurchase of $34.7 million par value of convertible notes in exchange for cash at a discounted price of $28.7 million. These repurchases were funded with borrowings under revolving credit lines. In the 2009 period, the higher cash generated from operations and cash on hand were used for capital expenditures and dividends as well as debt reduction. A net increase in borrowings of $39.1 million was reported in the comparable 2008 period. Proceeds in the 2008 period were used primarily to finance working capital requirements, capital expenditures, dividends and RSP payments. Total cash used to pay dividends decreased in the 2009 period by $3.8 million from the comparable 2008 period, to $21.2 million due primarily to a decrease in the quarterly cash dividend per share from $0.16 per share to $0.08 per share in the third quarter of 2009.

At September 30, 2009, the Company held $14.2 million in cash and cash equivalents, the majority of which are held outside of the U.S. In general, the repatriation of cash to the U.S. would have adverse tax consequences and the balances remain outside the U.S. to fund future international investments.

The Company maintains borrowing facilities with banks to supplement internal cash generation. At September 30, 2009, $171.0 million was borrowed at an average interest rate of 1.4% under the Company’s $400.0 million revolving credit facility which matures in September 2012. The Company currently has two, three-year interest rate swap agreements which together convert the interest on the first $100.0 million of the Company’s one-month LIBOR-based borrowings from a variable rate plus the borrowing spread to a fixed rate of 2.947% plus the borrowing spread. During the third quarter of 2009, the Company entered into an additional $35.0 million credit agreement with Wells Fargo Bank and had borrowed $17.0 million under this facility as of September 30, 2009. As of September 30, 2009, the Company had borrowed $1.0 million under its short-term bank credit lines. The Company’s total borrowings at September 30, 2009 were comprised of approximately 49% fixed rate debt and approximately 51% variable rate debt. The interest payments on approximately 52% of the variable rate debt have been converted into payments of fixed rate interest plus the borrowing spread under the terms of the respective interest rate swap agreements.

Debt Covenants

The most restrictive financial covenant in the Company’s debt agreements requires the Company to maintain, as of the end of each fiscal quarter, a maximum ratio of Consolidated Total Debt to Adjusted EBITDA for the four fiscal quarters then ending, as defined in the $400.0 million amended and restated revolving credit agreement. That ratio was not more than 4.00 times at September 30, 2009. The ratio requirement will decrease to 3.75 times for any fiscal quarter ending after September 30, 2009. Following is a reconciliation of Adjusted EBITDA, as defined, to the Company’s net income (in millions):

	Four fiscal quarters ended September 30, 2009
Net income	$	21.7
Add back:
Interest expense		23.5
Income taxes		3.1
Depreciation and amortization		51.3
Other adjustments		15.4
Adjusted EBITDA, as defined	$	115.0
Consolidated Total Debt, as defined, as of September 30, 2009	$	375.3
Ratio of Consolidated Total Debt to Adjusted EBITDA		3.26

Other adjustments primarily relate to the loss from discontinued operations recorded in 2008. Consolidated Total Debt excludes the debt discount related to the change in accounting described in Note 9 of the Notes to the Consolidated Financial Statements. The Company’s financial covenants are measured as of the end of each fiscal quarter. At September 30, 2009, additional borrowings of $84.8 million would have been allowed under the covenants.

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OTHER MATTERS

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 Company’s Annual Report on Form 10-K for the year ended December 31, 2008. 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 Company’s Annual Report on Form 10-K for the year ended December 31, 2008. There have been no material changes to such judgments and estimates other than the following update related to business acquisitions and goodwill. Actual results could differ from those estimates.

Business Acquisitions and Goodwill: Goodwill is subject to impairment testing annually or earlier testing if an event or change in circumstances indicates that the fair value of a reporting unit has been reduced below its carrying value. Management completes their annual impairment assessment during the second quarter of each year. Management estimates the fair value of each reporting unit using the income approach, which reflects management’s cash flow projections, and/or the market approach in accordance with current accounting standards. Inherent in management’s development of cash flow projections are assumptions and estimates, including those related to future earnings and growth and the weighted average cost of capital. Many of the factors used in assessing fair value are outside the control of management, and these assumptions and estimates can change in future periods as a result of both Company-specific and overall economic conditions. In the second quarter of 2009, management performed its annual impairment testing. Based on this assessment, there was no goodwill impairment.

Recent Accounting Changes

In December 2008, the FASB issued additional guidance related to employers’ disclosure about postretirement benefit plan assets. The provisions of this standard provide guidance on annual employers’ disclosures about plan assets of a defined benefit pension or other postretirement benefit plan and will be required beginning with the annual disclosures in 2009.

EBITDA

EBITDA for the first nine months of 2009 were $90.4 million compared to $177.7 million in the first nine months of 2008. EBITDA is a measurement not in accordance with generally accepted accounting principles (“GAAP”). The Company defines EBITDA as net income plus interest expense, income taxes and depreciation and amortization which the Company incurs in the normal course of business. 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 with EBITDA as defined by other companies or in the Company’s amended and restated revolving credit agreement. Accordingly, the measurement has limitations depending on its use. 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.

Following is a reconciliation of EBITDA to the Company’s net income (in millions):

	Nine months ended September 30,
	2009		2008
Net income	$	32.8	$	93.7
Add back:
Interest expense		17.2		20.3
Income taxes		1.8		24.0
Depreciation and amortization		38.6		39.7
EBITDA	$	90.4	$	177.7

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Forward-looking Statements

Certain of the statements in this quarterly report may contain certain forward-looking statements as defined in the Private Securities Litigation and Reform Act of 1995. Forward-looking statements are made based upon management’s good faith expectations and beliefs concerning future developments and their potential effect upon the Company and can be identified by the use of words such as “anticipated,” “believe,” “expect,” “plans,” “strategy,” “estimate,” “project,” and other words of similar meaning in connection with a discussion of future operating or financial performance. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements. The risks and uncertainties, which are described in our periodic filings with the Securities and Exchange Commission, include, among others, uncertainties arising from the behavior of financial markets; future financial performance of the industries or customers that we serve; changes in market demand for our products and services; integration of acquired businesses; changes in raw material prices and availability; our dependence upon revenues and earnings from a small number of significant customers; uninsured claims; and numerous other matters of global, regional or national scale, including those of a political, economic, business, competitive, regulatory and public health nature. The Company assumes no obligation to update our forward-looking statements.

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 nine months of 2009. 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, 2008.

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 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 (i) recorded, processed, summarized and reported as and when required and (ii) is accumulated and communicated to the Company’s management, including our President and Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the Company’s third fiscal quarter of 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

30

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)
July 1-31, 2009	—		$	—	—	2,492,683
August 1-31, 2009	30,066		$	14.715	—	2,492,683
September 1-30, 2009	—		$	—	—	2,492,683
Total	30,066	(1)	$	14.715	—

(1) All acquisitions of equity securities during the third quarter of 2009 were the result of the operation of the terms of the Company’s stockholder-approved equity compensation plans and the terms of the equity rights granted pursuant to those plans to pay for the related income tax upon issuance of shares. The purchase price of a share of stock used for tax withholding is the market price on the date of issuance.

(2) The program was publicly announced on May 8, 2008 authorizing repurchase of up to 5.0 million shares of the Company’s common stock.

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Item 6. Exhibits

(a) Exhibits

Exhibit 10.1	Barnes Group 2009 Deferred Compensation Plan
Exhibit 10.2	Trust Agreement between Barnes Group Inc. and Fidelity Management Trust Company, Barnes Group Inc. 2009 Deferred Compensation Plan Trust dated September 1, 2009.
Exhibit 10.3	Amendment No. 1 to the Barnes Group Inc. Retirement Benefit Equalization Plan
Exhibit 10.4	Amendment No. 2 to the Barnes Group Inc. Retirement Benefit Equalization Plan
Exhibit 10.5	Consulting agreement between Barnes Group Inc. and John R. Arrington dated September 1, 2009.
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.

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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: October 30, 2009	/S/    CHRISTOPHER J. STEPHENS, JR.
	Christopher J. Stephens, Jr. Senior Vice President, Finance Chief Financial Officer (the principal Financial Officer)
Date: October 30, 2009	/S/    FRANCIS C. BOYLE, JR.
	Francis C. Boyle, Jr. Vice President, Finance Chief Accounting Officer (the principal Accounting Officer)

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EXHIBIT INDEX

Barnes Group Inc.

Quarterly Report on Form 10-Q

For Quarter ended September 30, 2009

Exhibit No.	Description	Reference
10.1	Barnes Group 2009 Deferred Compensation Plan	Filed with this report.
10.2	Trust Agreement between Barnes Group Inc. and Fidelity Management Trust Company, Barnes Group Inc. 2009 Deferred Compensation Plan Trust dated September 1, 2009.	Filed with this report.
10.3	Amendment No. 1 to the Barnes Group Inc. Retirement Benefit Equalization Plan.	Filed with this report.
10.4	Amendment No. 2 to the Barnes Group Inc. Retirement Benefit Equalization Plan.	Filed with this report.
10.5	Consulting agreement between Barnes Group Inc. and John R. Arrington dated September 1, 2009.	Filed with this report.
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.

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EX-10.1

Exhibit 10.1

BARNES GROUP

2009

DEFERRED COMPENSATION PLAN

IMPORTANT NOTE

This document has not been approved by the Department of Labor, Internal Revenue Service or any other governmental entity. An adopting Employer must determine whether the Plan is subject to the Federal securities laws and the securities laws of the various states. An adopting Employer may not rely on this document to ensure any particular tax consequences or to ensure that the Plan is “unfunded and maintained primarily for the purpose of providing deferred compensation to a select group of management or highly compensated employees” under Title I of the Employee Retirement Income Security Act of 1974, as amended, with respect to the Employer’s particular situation. Fidelity Employer Services Company, its affiliates and employees cannot provide you with legal advice in connection with the execution of this document. This document should be reviewed by the Employer’s attorney prior to execution.

TABLE OF CONTENTS

PREAMBLE

ARTICLE 1 – GENERAL
1.1	Plan
1.2	Effective Dates
1.3	Amounts Not Subject to Code Section 409A
ARTICLE 2 – DEFINITIONS
2.1	Account
2.2	Administrator
2.3	Adoption Agreement
2.4	Beneficiary
2.5	Board or Board of Directors
2.6	Bonus
2.7	Change in Control
2.8	Code
2.9	Compensation
2.10	Director
2.11	Disability
2.12	Eligible Employee
2.13	Employer
2.14	ERISA
2.15	Identification Date
2.16	Key Employee
2.17	Participant
2.18	Plan
2.19	Plan Sponsor
2.20	Plan Year
2.21	Related Employer
2.22	Retirement
2.23	Separation from Service
2.24	Unforeseeable Emergency
2.25	Valuation Date
2.26	Years of Service
ARTICLE 3 – PARTICIPATION
3.1	Participation
3.2	Termination of Participation

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ARTICLE 4 – PARTICIPANT ELECTIONS
4.1	Deferral Agreement
4.2	Amount of Deferral
4.3	Timing of Election to Defer
4.4	Election of Payment Schedule and Form of Payment
ARTICLE 5 – EMPLOYER CONTRIBUTIONS
5.1	Matching Contributions
5.2	Other Contributions
ARTICLE 6 – ACCOUNTS AND CREDITS
6.1	Establishment of Account
6.2	Credits to Account
ARTICLE 7 – INVESTMENT OF CONTRIBUTIONS
7.1	Investment Options
7.2	Adjustment of Accounts
ARTICLE 8 – RIGHT TO BENEFITS
8.1	Vesting
8.2	Death
8.3	Disability
ARTICLE 9 – DISTRIBUTION OF BENEFITS
9.1	Amount of Benefits
9.2	Method and Timing of Distributions
9.3	Unforeseeable Emergency
9.4	Payment Election Overrides
9.5	Cashouts of Amounts Not Exceeding Stated Limit
9.6	Required Delay in Payment to Key Employees
9.7	Change in Control
9.8	Permissible Delays in Payment
9.9	Permitted Acceleration of Payment

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ARTICLE 10 – AMENDMENT AND TERMINATION
10.1	Amendment by Plan Sponsor
10.2	Plan Termination Following Change in Control or Corporate Dissolution
10.3	Other Plan Terminations
ARTICLE 11 – THE TRUST
11.1	Establishment of Trust
11.2	Grantor Trust
11.3	Investment of Trust Funds
ARTICLE 12 – PLAN ADMINISTRATION
12.1	Powers and Responsibilities of the Administrator
12.2	Claims and Review Procedures
12.3	Plan Administrative Costs
ARTICLE 13 – MISCELLANEOUS
13.1	Unsecured General Creditor of the Employer
13.2	Employer’s Liability
13.3	Limitation of Rights
13.4	Anti-Assignment
13.5	Facility of Payment
13.6	Notices
13.7	Tax Withholding
13.8	Indemnification
13.9	Successors
13.10	Disclaimer
13.11	Governing Law
13.12	Plan Addendums

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PREAMBLE

The Plan is intended to be a “plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended, or an “excess benefit plan” within the meaning of Section 3(36) of the Employee Retirement Income Security Act of 1974, as amended, or a combination of both. The Plan is further intended to conform with the requirements of Internal Revenue Code Section 409A and the final regulations issued thereunder and shall be interpreted, implemented and administered in a manner consistent therewith.

ARTICLE 1 – GENERAL

1.1 Plan. The Plan will be referred to by the name specified in the Adoption Agreement.

1.2 Effective Dates.

(a) Original Effective Date. The Original Effective Date is the date as of which the Plan was initially adopted.

(b) Amendment Effective Date. The Amendment Effective Date is the date specified in the Adoption Agreement as of which the Plan is amended and restated. Except to the extent otherwise provided herein or in the Adoption Agreement, the Plan shall apply to amounts deferred and benefit payments made on or after the Amendment Effective Date.

(c) Special Effective Date. A Special Effective Date may apply to any given provision if so specified in Appendix A of the Adoption Agreement. A Special Effective Date will control over the Original Effective Date or Amendment Effective Date, whichever is applicable, with respect to such provision of the Plan.

1.3 Amounts Not Subject to Code Section 409A

Except as otherwise indicated by the Plan Sponsor in Section 1.01 of the Adoption Agreement, amounts deferred before January 1, 2005 that are earned and vested on December 31, 2004 will be separately accounted for and administered in accordance with the terms of the Plan as in effect on December 31, 2004.

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ARTICLE 2 – DEFINITIONS

Pronouns used in the Plan are in the masculine gender but include the feminine gender unless the context clearly indicates otherwise. Wherever used herein, the following terms have the meanings set forth below, unless a different meaning is clearly required by the context:

2.1 “Account” means an account established for the purpose of recording amounts credited on behalf of a Participant and any income, expenses, gains, losses or distributions included thereon. The Account shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant or to the Participant’s Beneficiary pursuant to the Plan.

2.2 “Administrator” means the person or persons designated by the Plan Sponsor in Section 1.05 of the Adoption Agreement to be responsible for the administration of the Plan. If no Administrator is designated in the Adoption Agreement, the Administrator is the Plan Sponsor.

2.3 “Adoption Agreement” means the agreement adopted by the Plan Sponsor that establishes the Plan.

2.4 “Beneficiary” means the persons, trusts, estates or other entities entitled under Section 8.2 to receive benefits under the Plan upon the death of a Participant.

2.5 “Board” or “Board of Directors” means the Board of Directors of the Plan Sponsor.

2.6 “Bonus” means an amount of incentive remuneration payable by the Employer to a Participant.

2.7 “Change in Control” means a “change in control event” within the meaning of Treasury Regulation 1.409A-3(i)(5)(i) & (ii) that occurs with respect to a Participant on or after the date on which an event involving the Plan Sponsor that is described in Section 9.7(a), (b), (c) or (d) occurs.

2.8 “Code” means the Internal Revenue Code of 1986, as amended.

2.9 “Compensation” has the meaning specified in Section 3.01 of the Adoption Agreement.

2.10 “Director” means a non-employee member of the Board who has been designated by the Employer as eligible to participate in the Plan.

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2.11 “Disability” means that the Social Security Administration has determined that a Participant is disabled under the Social Security Act. A Participant shall be considered as incurring a Disability on the last day of the month in which the Participant first becomes eligible for and begins to receive Social Security disability benefits.

2.12 “Eligible Employee” means an employee of the Employer who satisfies the requirements in Section 2.01 of the Adoption Agreement.

2.13 “Employer” means the Plan Sponsor and any other entity which is authorized by the Plan Sponsor to participate in and, in fact, does adopt the Plan.

2.14 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

2.15 “Identification Date” means the date as of which Key Employees are determined which is specified in Section 1.06 of the Adoption Agreement.

2.16 “Key Employee” means an employee who satisfies the conditions set forth in Section 9.6.

2.17 “Participant” means an Eligible Employee or Director who commences participation in the Plan in accordance with Article 3.

2.18 “Plan” means the unfunded plan of deferred compensation set forth herein, including the Adoption Agreement and any trust agreement, as adopted by the Plan Sponsor and as amended from time to time.

2.19 “Plan Sponsor” means the entity identified in Section 1.03 of the Adoption Agreement or any successor by merger, consolidation or otherwise.

2.20 “Plan Year” means the period identified in Section 1.02 of the Adoption Agreement.

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2.21 “Related Employer” means the Employer and (a) any corporation that is a member of a controlled group of corporations as defined in Code Section 414(b) that includes the Employer and (b) any trade or business that is under common control as defined in Code Section 414(c) that includes the Employer.

2.22 “Retirement” has the meaning specified in 6.01(f) of the Adoption Agreement.

2.23 “Separation from Service” means the date that the Participant retires or otherwise has a termination of employment (other than by death) with respect to all entities comprising the Related Employer. A Separation from Service does not occur if the Participant is on military leave, sick leave or other bona fide leave of absence if the period of leave does not exceed six months or such longer period during which the Participant’s right to re-employment is provided by statute or contract. If the period of leave exceeds six months and the Participant’s right to re-employment is not provided either by statute or contract, a Separation from Service will be deemed to have occurred on the first day following the six-month period. If the period of leave is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where the impairment causes the Participant to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a 29 month period of absence shall be substituted for the six month period.

Whether a termination of employment has occurred is based on whether the facts and circumstances indicate that the Related Employer and the Participant reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Participant would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than 20 percent of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36 month period (or the full period of services to the Related Employer if the employee has been providing services to the Related Employer for less than 36 months.

The foregoing will be interpreted, and all determinations of whether a Separation from Service has occurred will be made, in a manner consistent with Code Section 409A and the final regulations thereunder.

2.24 “Unforeseeable Emergency” means a severe financial hardship of the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary, or the Participant’s dependent (as defined in Code Section 152, without regard to Code section 152(b)(i), (b)(2) and (d)(i)(B); loss of the Participant’s property due to casualty; or other similar extraordinary and unforeseeable

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circumstances arising as a result of events beyond the control of the Participant.

2.25 “Valuation Date” means each business day of the Plan Year.

2.26 “Years of Service” means each one year period for which the Participant receives service credit in accordance with the provisions of Section 7.01(d) of the Adoption Agreement.

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ARTICLE 3 – PARTICIPATION

3.1 Participation. The Participants in the Plan shall be those Directors and employees of the Employer who satisfy the requirements of Section 2.01 of the Adoption Agreement.

3.2 Termination of Participation. The Administrator may terminate a Participant’s participation in the Plan in a manner consistent with Code Section 409A. If the Employer terminates a Participant’s participation before the Participant experiences a Separation from Service the Participant’s vested Accounts shall be paid in accordance with the provisions of Article 9.

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ARTICLE 4 – PARTICIPANT ELECTIONS

4.1 Deferral Agreement. If permitted by the Plan Sponsor in accordance with Section 4.01 of the Adoption Agreement, each Eligible Employee and Director may elect to defer his Compensation within the meaning of Section 3.01 of the Adoption Agreement by executing in writing or electronically, a deferral agreement in accordance with rules and procedures established by the Administrator and the provisions of this Article 4.

A new deferral agreement must be timely executed for each Plan Year during which the Eligible Employee or Director desires to defer Compensation. An Eligible Employee or Director who does not timely execute a deferral agreement shall be deemed to have elected zero deferrals of Compensation for such Plan Year.

A deferral agreement may be changed or revoked during the period specified by the Administrator. Except as provided in Section 9.3 or in Section 4.01(c) of the Adoption Agreement, a deferral agreement becomes irrevocable at the close of the specified period.

4.2 Amount of Deferral. An Eligible Employee or Director may elect to defer Compensation in any amount permitted by Section 4.01(a) of the Adoption Agreement.

4.3 Timing of Election to Defer. Each Eligible Employee or Director who desires to defer Compensation otherwise payable during a Plan Year must execute a deferral agreement within the period preceding the Plan Year specified by the Administrator. Each Eligible Employee who desires to defer Compensation that is a Bonus must execute a deferral agreement within the period preceding the Plan Year during which the Bonus is earned that is specified by the Administrator, except that if the Bonus can be treated as performance based compensation as described in Code Section 409A(a)(4)(B)(iii), the deferral agreement may be executed within the period specified by the Administrator, which period, in no event, shall end after the date which is six months prior to the end of the period during which the Bonus is earned, provided the Participant has performed services continuously from the later of the beginning of the performance period or the date the performance criteria are established through the date the Participant executed the deferral agreement and provided further that the compensation has not yet become ‘readily ascertainable’ within the meaning of Reg. Sec 1.409A-2(a)(8). In addition, if the Compensation qualifies as ‘fiscal year compensation’ within the meaning of Reg. Sec. 1.409A -2(a)(6), the deferral agreement may be made not later than the end of the Employer’s taxable year immediately preceding the first taxable year of the Employer in which any services are performed for which such Compensation is payable.

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Except as otherwise provided below, an employee who is classified or designated as an Eligible Employee during a Plan Year or a Director who is designated as eligible to participate during a Plan Year may elect to defer Compensation otherwise payable during the remainder of such Plan Year in accordance with the rules of this Section 4.3 by executing a deferral agreement within the thirty (30) day period beginning on the date the employee is classified or designated as an Eligible Employee or the date the Director is designated as eligible, whichever is applicable, if permitted by Section 4.01(b)(ii) of the Adoption Agreement. If Compensation is based on a specified performance period that begins before the Eligible Employee or Director executes his deferral agreement, the election will be deemed to apply to the portion of such Compensation equal to the total amount of Compensation for the performance period multiplied by the ratio of the number of days remaining in the performance period after the election becomes irrevocable and effective over the total number of days in the performance period. The rules of this paragraph shall not apply unless the Eligible Employee or Director can be treated as initially eligible in accordance with Reg. Sec. 1.409A-2(a)(7).

4.4 Election of Payment Schedule and Form of Payment.

All elections of a payment schedule and a form of payment will be made in accordance with rules and procedures established by the Administrator and the provisions of this Section 4.4.

(a)    If the Plan Sponsor has elected to permit annual distribution elections in accordance with Section 6.01(h) of the Adoption Agreement the following rules apply. At the time an Eligible Employee or Director completes a deferral agreement, the Eligible Employee or Director must elect a distribution event (which includes a specified time) and a form of payment for the Compensation subject to the deferral agreement from among the options the Plan Sponsor has made available for this purpose and which are specified in 6.01(b) of the Adoption Agreement. Prior to the time required by Reg. Sec. 1.409A-2, the Eligible Employee or Director shall elect a distribution event (which includes a specified time) and a form of payment for any Employer contributions that may be credited to the Participant’s Account during the Plan Year. If an Eligible Employee or Director fails to elect a distribution event, he shall be deemed to have elected Separation from Service as the distribution event. If he fails to elect a form of payment, he shall be deemed to have elected a lump sum form of payment.

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(b) If the Plan Sponsor has elected not to permit annual distribution elections in accordance with Section 6.01(h) of the Adoption Agreement but does allow elections of the time and/or form of payment of amounts credited to a Participant’s Account, the following rules apply. At the time an Eligible Employee or Director first completes a deferral agreement but in no event later than the time required by Reg. Sec. 1.409A-2, the Eligible Employee or Director must elect a distribution event (which includes a specified time) and a form of payment for amounts credited to his Account from among the options the Plan Sponsor has made available for this purpose and which are specified in Section 6.01(b) of the Adoption Agreement. If an Eligible Employee or Director fails to elect a distribution event, he shall be deemed to have elected Separation from Service in the distribution event. If he fails to elect a form of payment, he shall be deemed to have elected a lump sum form of payment.

(c) If the Plan Sponsor has elected not to permit any distribution elections to be made by a Participant the following rule shall apply. The amount credited to a Participant’s Account shall be paid at the time and in the form specified in Section 6.01 of the Adoption Agreement.

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ARTICLE 5 – EMPLOYER CONTRIBUTIONS

5.1 Matching Contributions. If elected by the Plan Sponsor in Section 5.01(a) of the Adoption Agreement, the Employer will credit the Participant’s Account with a matching contribution determined in accordance with the formula specified in Section 5.01(a) of the Adoption Agreement. The matching contribution will be treated as allocated to the Participant’s Account at the time specified in Section 5.01(a)(iii) of the Adoption Agreement.

5.2 Other Contributions. If elected by the Plan Sponsor in Section 5.01(b) of the Adoption Agreement, the Employer will credit the Participant’s Account with a contribution determined in accordance with the formula or method specified in Section 5.01(b) of the Adoption Agreement. The contribution will be treated as allocated to the Participant’s Account at the time specified in Section 5.01(b)(iii) of the Adoption Agreement.

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ARTICLE 6 – ACCOUNTS AND CREDITS

6.1 Establishment of Account. For accounting and computational purposes only, the Administrator will establish and maintain an Account on behalf of each Participant which will reflect the credits made pursuant to Section 6.2, distributions or withdrawals, along with the earnings, expenses, gains and losses allocated thereto, attributable to the hypothetical investments made with the amounts in the Account as provided in Article 7. The Administrator will establish and maintain such other records and accounts, as it decides in its discretion to be reasonably required or appropriate to discharge its duties under the Plan.

6.2 Credits to Account. A Participant’s Account will be credited for each Plan Year with the amount of his elective deferrals under Section 4.1 at the time the amount subject to the deferral election would otherwise have been payable to the Participant and the amount of Employer contributions treated as allocated on his behalf under Article 5.

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ARTICLE 7 – INVESTMENT OF CONTRIBUTIONS

7.1 Investment Options. The amount credited to each Account shall be treated as invested in the investment options designated for this purpose by the Administrator.

7.2 Adjustment of Accounts. The amount credited to each Account shall be adjusted for hypothetical investment earnings, expenses, gains or losses in an amount equal to the earnings, expenses, gains or losses attributable to the investment options selected by the party designated in Section 9.01 of the Adoption Agreement from among the investment options provided in Section 7.1. If permitted by Section 9.01 of the Adoption Agreement, a Participant (or the Participant’s Beneficiary after the death of the Participant) may, in accordance with rules and procedures established by the Administrator, select the investments from among the options provided in Section 7.1 to be used for the purpose of calculating future hypothetical investment adjustments to the Account or to future credits to the Account under Section 6.2 effective as of the Valuation Date coincident with or next following notice to the Administrator. Each Account shall be adjusted as of each Valuation Date to reflect: (a) the hypothetical earnings, expenses, gains and losses described above; (b) amounts credited pursuant to Section 6.2; and (c) distributions or withdrawals. In addition, each Account may be adjusted for its allocable share of the hypothetical costs and expenses associated with the maintenance of the hypothetical investments provided in Section 7.1.

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ARTICLE 8 – RIGHT TO BENEFITS

8.1 Vesting. A Participant, at all times, has the 100% nonforfeitable interest in the amounts credited to his Account attributable to his elective deferrals made in accordance with Section 4.1.

Subject to the amendment and termination provisions of Article 10, a Participant’s right to the amounts credited to his Account attributable to Employer contributions made in accordance with Article 5 shall be determined in accordance with the relevant schedule and provisions in Section 7.01 of the Adoption Agreement.

8.2 Death. The Plan Sponsor may elect to accelerate vesting upon the death of the Participant in accordance with Section 7.01(c) of the Adoption Agreement and/or to make distributions upon Death in accordance with Section 6.01(b) or Section 6.01(d) of the Adoption Agreement

A Participant may designate a Beneficiary or Beneficiaries, or change any prior designation of Beneficiary or Beneficiaries in accordance with rules and procedures established by the Administrator and subject to the Administrator’s approval. Although the rules of the Administrator may permit a Participant to designate one or more alternative Beneficiaries (for example, an individual who shall become a Participant’s Beneficiary in case the Participant’s first choice of a Beneficiary dies before benefits become payable), a Participant may not designate persons who shall jointly receive benefits as Beneficiaries (for example, the designation of two or more children to jointly receive benefits as Beneficiaries is prohibited). Subject to the approval of the Administrator as provided above, a Participant may designate a trust as a Beneficiary.

A copy of the death notice or other sufficient documentation must be filed with and approved by the Administrator. If upon the death of the Participant there is, in the opinion of the Administrator, no designated Beneficiary for part or all of the Participant’s vested Account, the Administrator shall apply default rules determined by it, in its sole discretion, but generally following a priority list of living persons in the following order: Spouse, children, parents, siblings, estate.

The term “Spouse” shall mean the individual to whom the Participant is legally married by civil or religious ceremony under the laws of the state in which the Participant is legally domiciled on the date the determination of whether there is a Spouse is being made. After a Participant’s death, his or her “Spouse” shall be the individual, if any, who met these criteria as of the date of the Participant’s death.

8.3 Disability. If the Plan Sponsor has elected to accelerate vesting upon the occurrence of a Disability in accordance with Section 7.01(c) of the Adoption Agreement and/or to permit distributions upon Disability in

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accordance with Section 6.01(b) or Section 6.01(d) of the Adoption Agreement, the determination of whether a Participant has incurred a Disability shall be made in accordance with Section 2.11 of this Plan.

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ARTICLE 9 – DISTRIBUTION OF BENEFITS

9.1 Amount of Benefits. The vested amount credited to a Participant’s Account as determined under Articles 6, 7 and 8 shall determine and constitute the basis for the value of benefits payable to the Participant under the Plan.

9.2 Method and Timing of Distributions. Distributions under the Plan shall be made in accordance with the terms of this Plan and the Adoption Agreement. Subject to the provisions of Section 9.6 requiring a six month delay for certain distributions to Key Employees, distributions following a distribution event shall commence at the time specified in Section 6.01 of the Adoption Agreement. If permitted by Section 6.01(g) of the Adoption Agreement, a Participant may elect, at least twelve months before a scheduled distribution event, to delay the payment date for a minimum period of sixty months from the originally scheduled date of payment, provided the election does not take effect for at least twelve months from the date on which the election is made. The distribution election change must be made in accordance with procedures and rules established by the Administrator. The Participant may, at the same time the date of payment is deferred, change the form of payment but such change in the form of payment may not effect an acceleration of payment in violation of Code Section 409A or the provisions of Reg. Sec. 1.409A-2(b). For purposes of this Section 9.2, a series of installment payments is always treated as a single payment and not as a series of separate payments.

9.3 Unforeseeable Emergency. A Participant may request a distribution due to an Unforeseeable Emergency if the Plan Sponsor has elected to permit Unforeseeable Emergency withdrawals under Section 8.01(a) of the Adoption Agreement. The request must be in writing and must be submitted to the Administrator along with evidence that the circumstances constitute an Unforeseeable Emergency. The Administrator has the discretion to require whatever evidence it deems necessary to determine whether a distribution is warranted, and may require the Participant to certify that the need cannot be met from other sources reasonably available to the Participant. Whether a Participant has incurred an Unforeseeable Emergency will be determined by the Administrator on the basis of the relevant facts and circumstances in its sole discretion, but, in no event, will an Unforeseeable Emergency be deemed to exist if the hardship can be relieved: (a) through reimbursement or compensation by insurance or otherwise, (b) by liquidation of the Participant’s assets to the extent such liquidation would not itself cause severe financial hardship, or (c) by cessation of deferrals under the Plan.

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A distribution due to an Unforeseeable Emergency must be limited to the amount reasonably necessary to satisfy the emergency need and may include any amounts necessary to pay any federal, state, foreign or local income taxes and penalties reasonably anticipated to result from the distribution. The distribution will be made in the form of a single lump sum cash payment. If permitted by Section 8.01(b) of the Adoption Agreement, a Participant’s deferral elections for the remainder of the Plan Year will be cancelled upon a withdrawal due to an Unforeseeable Emergency. If the payment of all or any portion of the Participant’s vested Account is being delayed in accordance with Section 9.6 at the time he experiences an Unforeseeable Emergency, the amount being delayed shall not be subject to the provisions of this Section 9.3 until the expiration of the six month period of delay required by Section 9.6.

9.4 Payment Election Overrides. If the Plan Sponsor has elected one or more payment election overrides in accordance with Section 6.01(d) of the Adoption Agreement, the following provisions apply. Upon the occurrence of the first event selected by the Plan Sponsor, the remaining vested amount credited to the Participant’s Account shall be paid in the form designated to the Participant or his Beneficiary regardless of whether the Participant had made different elections of time and /or form of payment or whether the Participant was receiving installment payments at the time of the event.

9.5 Cashouts Except as provided in Section 9.9(c) of this Plan, lump sum cashouts shall not be made under the Plan,

9.6 Required Delay in Payment to Key Employees. Except as otherwise provided in this Section 9.6, a distribution made on account of Separation from Service (or Retirement, if applicable) to a Participant who is a Key Employee as of the date of his Separation from Service (or Retirement, if applicable) shall not be made before the date which is six months after the Separation from Service (or Retirement, if applicable).

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(a) A Participant is treated as a Key Employee if (i) he is employed by a Related Employer any of whose stock is publicly traded on an established securities market, and (ii) he satisfies the requirements of Code Section 416(i)(1)(A)(i), (ii) or (iii), determined without regard to Code Section 416(i)(5), at any time during the twelve month period ending on the Identification Date.

(b) A Participant who is a Key Employee on an Identification Date shall be treated as a Key Employee for purposes of the six month delay in distributions for the twelve month period beginning on the first day of a month no later than the fourth month following the Identification Date. The Identification Date and the effective date of the delay in distributions shall be determined in accordance with Section 1.06 of the Adoption Agreement.

(c) The Plan Sponsor may elect to apply an alternative method to identify Participants who will be treated as Key Employees for purposes of the six month delay in distributions if the method satisfies each of the following requirements. The alternative method is reasonably designed to include all Key Employees, is an objectively determinable standard providing no direct or indirect election to any Participant regarding its application, and results in either all Key Employees or no more than 200 Key Employees being identified in the class as of any date. Use of an alternative method that satisfies the requirements of this Section 9.6(c) will not be treated as a change in the time and form of payment for purposes of Reg. Sec. 1.409A-2(b).

(d) The six month delay does not apply to payments described in Section 9.9(a),(b) or (d) or to payments that occur after the death of the Participant. If the payment of all or any portion of the Participant’s vested Account is being delayed in accordance with this Section 9.6 at the time he incurs a Disability which would otherwise require a distribution under the terms of the Plan, no amount shall be paid until the expiration of the six month period of delay required by this Section 9.6.

9.7 Change in Control. If the Plan Sponsor has elected to permit distributions upon a Change in Control, the following provisions shall apply. A distribution made upon a Change in Control will be made at the time specified in Section 6.01(a) of the Adoption Agreement in the form elected by the Participant in accordance with the procedures described in Article 4.

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Alternatively, if the Plan Sponsor has elected in accordance with Section 11.02 of the Adoption Agreement to require distributions upon a Change in Control, the Participant’s remaining vested Account shall be paid to the Participant or the Participant’s Beneficiary at the time specified in Section 6.01(a) of the Adoption Agreement as a single lump sum payment. A Change in Control, for purposes of the Plan, will occur upon the occurrence of an event described in this Section 9.7. All distributions made in accordance with this Section 9.7 are subject to the provisions of Section 9.6.

If a Participant continues to make deferrals in accordance with Article 4 after he has received a distribution due to a Change in Control, the residual amount payable to the Participant shall be paid at the time and in the form specified in the elections he makes in accordance with Article 4 or upon his death or Disability as provided in Article 8.

Whether a Change in Control has occurred will be determined by the Administrator in accordance with the rules and definitions set forth in this Section 9.7. A distribution to the Participant will be treated as occurring upon a Change in Control within the meaning of Section 11.01 of the Adoption Agreement and this Section 9.7 if the Plan Sponsor terminates the Plan in accordance with Section 10.2 and distributes the Participant’s benefits within twelve months of the date the Plan Sponsor irrevocably takes all necessary action to terminate the Plan as provided in Section 10.2.

A Change in Control means a “change in control event” within the meaning of Treasury Regulation 1.409A-3(i)(5)(i) & (ii) that occurs with respect to a Participant on or after the date on which any of the following events occurs:

(a) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Plan Sponsor (not including in the securities beneficially owned by such Person any securities acquired directly from the Plan Sponsor or its Affiliates) representing 25% or more of the combined voting power of the Plan Sponsor’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (A) of paragraph (c) below; or

(b) the following individuals cease for any reason to constitute a majority of the number of directors serving on the Board: individuals who, at the beginning of any period of two consecutive years, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation,

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relating to the election of directors of the Plan Sponsor) whose appointment or election by the Board or nomination for election by the Plan Sponsor’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of such period or whose appointment, election or nomination for election was previously so approved or recommended; or

(c) there is consummated a merger or consolidation of the Plan Sponsor or any Subsidiary with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of the Plan Sponsor outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Plan Sponsor or any Subsidiary, at least 60% of the combined voting power of the securities of the Plan Sponsor or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Plan Sponsor (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Plan Sponsor (not including in the securities beneficially owned by such Person any securities acquired directly from the Plan Sponsor or its Affiliates) representing 25% or more of the combined voting power of the Company’s then outstanding securities; or

(d) the shareholders of the Plan Sponsor approve a plan of complete liquidation or dissolution of the Plan Sponsor or there is consummated an agreement for the sale or disposition by the Plan Sponsor of all or substantially all of the Plan Sponsor’s assets, other than a sale or disposition by the Plan Sponsor of all or substantially all of the Plan Sponsor’s assets to an entity, at least 60% of the combined voting power of the voting securities of which are owned by shareholders of the Plan Sponsor in substantially the same proportions as their ownership of the Plan Sponsor immediately prior to such sale.

For purposes of the foregoing provisions of this Section 9.7,

(i) the term “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act;

(ii) the term “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act; and

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(iii) the term “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) any member of the Barnes family (by blood or marriage) or any entity for the benefit of, or controlled by, a member of the Barnes family (by blood or marriage), (ii) the Plan Sponsor or any of its subsidiaries, (iii) a trustee or other fiduciary holding securities under an employee benefit plan of the Plan Sponsor or any of its Affiliates, (iv) an underwriter temporarily holding securities pursuant to an offering of such securities, or (v) a corporation owned, directly or indirectly, by the shareholders of the Plan Sponsor in substantially the same proportions as their ownership of stock of the Plan Sponsor.

9.8 Permissible Delays in Payment. Distributions may be delayed beyond the date payment would otherwise occur in accordance with the provisions of Articles 8 and 9 in any of the following circumstances as long as the Employer treats all payments to similarly situated Participants on a reasonably consistent basis.

(a) The Employer may delay payment if it reasonably anticipates that its deduction with respect to such payment would be limited or eliminated by the application of Code Section 162(m). Payment must be made during the Participant’s first taxable year in which the Employer reasonably anticipates, or should reasonably anticipate, that if the payment is made during such year the deduction of such payment will not be barred by the application of Code Section 162(m) or during the period beginning with the Participant’s “separation from service” and ending on the later of the last day of the Employer’s taxable year in which the Participant separates from service or the 15th day of the third month following the Participant’s “separation from service.” If a scheduled payment to a Participant is delayed in accordance with this Section 9.8(a), all scheduled payments to the Participant that could be delayed in accordance with this Section 9.8(a) will also be delayed. The term “separation from service” and the other provisions hereof shall be determined in a manner consistent with applicable Treasury regulations.

(b) The Employer may also delay payment if it reasonably anticipates that the making of the payment will violate federal securities laws or other applicable laws provided payment is made at the earliest date on which the Employer reasonably anticipates that the making of the payment will not cause such violation.

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(c) The Employer reserves the right to amend the Plan to provide for a delay in payment upon such other events and conditions as the Secretary of the Treasury may prescribe in generally applicable guidance published in the Internal Revenue Bulletin.

9.9 Permitted Acceleration of Payment. The Employer may permit acceleration of the time or schedule of any payment or amount scheduled to be paid pursuant to a payment under the Plan provided such acceleration would be permitted by the provisions of Reg. Sec. 1.409A-3(j)(4), including the following events:

(a) Domestic Relations Order. A payment may be accelerated if such payment is made to an alternate payee pursuant to and following the receipt and qualification of a domestic relations order as defined in Code Section 414(p).

(b) Compliance with Ethics Agreements and Legal Requirements. A payment may be accelerated as may be necessary to comply with ethics agreements with the Federal government or as may be reasonably necessary to avoid the violation of Federal, state, local or foreign ethics law or conflicts of laws, in accordance with the requirements of Code Section 409A.

(c) De Minimis Amounts. In the discretion of the Administrator, a payment may be accelerated if (i) the amount of the payment is not greater than the applicable dollar amount under Code Section 402(g)(1)(B), and (ii) at the time the payment is made the amount constitutes the Participant’s entire interest under the Plan and all other plans that are aggregated with the Plan under Reg. Sec. 1.409A-1(c)(2).

(d) FICA Tax. A payment may be accelerated to the extent required to pay the Federal Insurance Contributions Act tax imposed under Code Sections 3101, 3121(a) and 3121(v)(2) of the Code with respect to compensation deferred under the Plan (the “FICA Amount”). Additionally, a payment may be accelerated to pay the income tax on wages imposed under Code Section 3401 of the Code on the FICA Amount and to pay the additional income tax at source on wages attributable to the pyramiding Code Section 3401 wages and taxes. The total payment under this subsection (d) may not exceed the aggregate of the FICA Amount and the income tax withholding related to the FICA Amount.

(e) Section 409A Additional Tax. A payment may be accelerated if the Plan fails to meet the requirements of Code Section 409A; provided that such payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Code Section 409A.

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(f) Offset. A payment may be accelerated in the Employer’s discretion as satisfaction of a debt of the Participant to the Employer, where such debt is incurred in the ordinary course of the service relationship between the Participant and the Employer, the entire amount of the reduction in any of the Employer’s taxable years does not exceed $5,000, and the reduction is made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant.

(g) Other Events. A payment may be accelerated in the Administrator’s discretion in connection with such other events and conditions as permitted by Code Section 409A.

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ARTICLE 10 – AMENDMENT AND TERMINATION

10.1 Amendment and Termination by Plan Sponsor. The Plan Sponsor reserves the right to amend and/or terminate the Plan (for itself and each Employer) through action of its Board of Directors at any time for whatever reasons it may deem appropriate (or for no reason), except that no such amendment or termination shall adversely affect the benefits payable to any person who has begun to receive benefits hereunder and no such amendment or termination may accelerate or defer the payment of compensation except as permitted by Section 409A of the Code.

10.2 Plan Termination Following Change in Control or Corporate Dissolution. If so elected by the Plan Sponsor in Section 11.01 of the Adoption Agreement, the Plan Sponsor reserves the right to terminate the Plan pursuant to irrevocable action taken within the 30 days preceding or the twelve months following a Change in Control as determined in accordance with the rules set forth in Section 9.7. For this purpose, the Plan will be treated as terminated only if all agreements, methods, programs and other arrangements sponsored by the Related Employer immediately after the Change in Control which are treated as a single plan with the Plan under Treas. Reg. Sec. 1.409A-1(c)(2) are also terminated so that all participants under the Plan and all similar arrangements that experienced the Change in Control are required to receive all amounts deferred under the terminated arrangements within twelve months of the date the Plan Sponsor irrevocably takes all necessary action to terminate the arrangements. The foregoing provisions of this Section 10.2 and Section 11.01 of the Adoption Agreement shall be administered, interpreted and construed in accordance with Treasury Regulation 1.409A-3(j)(4)(ix)(B). In addition, the Plan Sponsor reserves the right to terminate and liquidate the Plan within twelve months of a corporate dissolution taxed under Code Section 331 or with the approval of a bankruptcy court pursuant to 11 U. S. C. Section 503(b)(1)(A) provided that amounts deferred under the Plan are included in the gross incomes of Participants in the latest of the following years (or, if earlier, the taxable year in which the amount is actually or constructively received): (a) the calendar year in which the termination and liquidation occurs, (b) the first calendar year in which the amount is no longer subject to a substantial risk of forfeiture, or (c) the first calendar year in which payment is administratively practicable. The preceding sentence shall be administered, interpreted and construed in accordance with Treasury Regulation 1.409A-3(j)(4)(ix)(A).

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10.3 Other Plan Terminations. The Plan Sponsor retains the discretion to terminate the Plan if (a) all arrangements sponsored by the Plan Sponsor that would be aggregated with any terminated arrangement under Code Section 409A and Reg. Sec. 1.409A-1(c)(2) are terminated, (b) no payments other than payments that would be payable under the terms of the arrangements if the termination had not occurred are made within twelve months of the termination of the arrangements, (c) all payments are made within twenty-four months of the termination of the arrangements, (d) the Plan Sponsor does not adopt a new arrangement that would be aggregated with any terminated arrangement under Code Section 409A and the regulations thereunder at any time within the three year period following the date of termination of the arrangement, and (e) the termination does not occur proximate to a downturn in the financial health of the Plan sponsor. The foregoing provisions of this Section 10.3 shall be administered, interpreted and construed in accordance with Treasury Regulation 1.409A-3(j)(4)(ix)(C).

The Plan Sponsor also reserves the right to amend the Plan to provide that termination of the Plan will occur under such conditions and events as may be prescribed by the Secretary of the Treasury in generally applicable guidance published in the Internal Revenue Bulletin.

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ARTICLE 11 – THE TRUST

11.1 Establishment of Trust. The Plan Sponsor may but is not required to establish a trust to hold amounts which the Plan Sponsor may contribute from time to time to correspond to some or all amounts credited to Participants under Section 6.2. If the Plan Sponsor elects to establish a trust in accordance with Section 10.01 of the Adoption Agreement, the provisions of Sections 11.2 and 11.3 shall become operative.

11.2 Grantor Trust. Any trust established by the Plan Sponsor shall be between the Plan Sponsor and a trustee pursuant to a separate written agreement under which assets are held, administered and managed, subject to the claims of the Plan Sponsor’s creditors in the event of the Plan Sponsor’s insolvency. The trust is intended to be treated as a grantor trust under the Code, and the establishment of the trust shall not cause the Participant to realize current income on amounts contributed thereto. The Plan Sponsor must notify the trustee in the event of a bankruptcy or insolvency.

11.3 Investment of Trust Funds. Trust investments need not reflect the hypothetical investments selected by Participants under Section 7.1 for the purpose of adjusting Accounts and the earnings or investment results of the trust need not affect the hypothetical investment adjustments to Participant Accounts under the Plan.

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ARTICLE 12 – PLAN ADMINISTRATION

12.1 Powers and Responsibilities of the Administrator. The Administrator has the full power and discretion, and the full responsibility, to administer, interpret, and construe the Plan in all of its details, subject, however, to any applicable requirements of ERISA. The Administrator’s powers and responsibilities include, but are not limited to, the following:

(a) To make and enforce such rules and procedures as it deems necessary or proper for the efficient administration of the Plan;

(b) To interpret the Plan, its interpretation thereof to be final on all persons claiming benefits under the Plan;

(c) To decide all questions concerning the Plan and the eligibility of any person to participate in the Plan;

(d) To compute the amount of benefits which will be payable to any Participant, former Participant or Beneficiary in accordance with the provisions of the Plan;

(e) To determine the person or persons to whom such benefits will be paid;

(f) To authorize the payment of benefits;

(g) To appoint such agents, counsel, accountants, and consultants as may be required to assist in administering the Plan;

(h) To allocate and delegate its responsibilities to administer the Plan.

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12.2 Claims and Review Procedures. The claims and review procedures applicable to this Plan are set forth in a supplemental document; the following provisions of this Section 12.2 are inapplicable.

(a) Claims Procedure.

If any person believes he is being denied any rights or benefits under the Plan, such person may file a claim in writing with the Administrator. If any such claim is wholly or partially denied, the Administrator will notify such person of its decision in writing. Such notification will contain (i) specific reasons for the denial, (ii) specific reference to pertinent Plan provisions, (iii) a description of any additional material or information necessary for such person to perfect such claim and an explanation of why such material or information is necessary, and (iv) a description of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the person’s right to bring a civil action following an adverse decision on review. Such notification will be given within 90 days after the claim is received by the Administrator. The Administrator may extend the period for providing the notification by 90 days if special circumstances require an extension of time for processing the claim and if written notice of such extension and circumstance is given to such person within the initial 90 day period. If such notification is not given within such period, the claim will be considered denied as of the last day of such period and such person may request a review of his claim.

(b) Review Procedure.

Within 60 days after the date on which a person receives a written notification of denial of claim (or, if written notification is not provided, within 60 days of the date denial is considered to have occurred), such person (or his duly authorized representative) may (i) file a written request with the Administrator for a review of his denied claim and of pertinent documents and (ii) submit written issues and comments to the Administrator. The Administrator will notify such person of its decision in writing. Such notification will be written in a manner calculated to be understood by such person and will contain specific reasons for the decision as well as specific references to pertinent Plan provisions. The notification will explain that the person is entitled to receive, upon request and free of charge, reasonable access to and copies of all pertinent documents and has the right to bring a civil action following an adverse decision on review.

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The decision on review will be made within 60 days. The Administrator may extend the period for making the decision on review by 60 days if special circumstances require an extension of time for processing the request such as an election by the Administrator to hold a hearing, and if written notice of such extension and circumstances is given to such person within the initial 60-day period. If the decision on review is not made within such period, the claim will be considered denied.

(c) Special Procedure for Claims Due to Disability.

To the extent an application for distribution as a result of a Disability requires the Administrator or the panel reviewing the Administrator’s determination, as applicable, to make a determination of Disability under the terms of the Plan, then such determination shall be subject to all of the general rules described in this Section, except as they are expressly modified by this Section 12(c).

(i) The initial decision on the claim for a Disability distribution will be made within forty-five (45) days after the Plan receives the claimant’s claim, unless special circumstances require additional time, in which case the Administrator will notify the claimant before the end of the initial forty-five (45)-day period of an extension of up to thirty (30) days. If necessary, the Administrator may notify the claimant, prior to the end of the initial thirty (30)-day extension period, of a second extension of up to thirty (30) days. If an extension is due to the claimant’s failure to supply the necessary information, then the notice of extension will describe the additional information and the claimant will have forty-five (45) days to provide the additional information. Moreover, the period for making the determination will be delayed from the date the notification of extension was sent out until the claimant responds to the request for additional information. No additional extensions may be made, except with the claimant’s voluntary consent. The contents of the notice shall be the same as described in Section 12.2(a) above. If a disability distribution claim is denied in whole or in part, then the claimant will receive notification, as described in Section 12.2(c).

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(ii) If an internal rule, guideline, protocol or similar criterion is relied upon in making the adverse determination, then the denial notice to the claimant will either set forth the internal rule, guideline, protocol or similar criterion, or will state that such was relied upon and will be provided free of charge to the claimant upon request (to the extent not legally-privileged) and if the claimant’s claim was denied based on a medical necessity or experimental treatment or similar exclusion or limit, then the claimant will be provided a statement either explaining the decision or indicating that an explanation will be provided to the claimant free of charge upon request.

(iii) Any claimant whose application for a Disability distribution is denied in whole or in part, may appeal the denial by submitting to the panel reviewing the administrator’s determination (the “Review Panel”) a request for a review of the application within one hundred and eighty (180) days after receiving notice of the denial. The request for review shall be in the form and manner prescribed by the Review Panel. In the event of such an appeal for review, the provisions of Section 12.2(b) regarding the claimant’s rights and responsibilities shall apply. Upon request, the Review Panel will identify any medical or vocational expert whose advice was obtained on behalf of the Review Panel in connection with the denial, without regard to whether the advice was relied upon in making the determination. The entity or individual appointed by the Review Panel to review the claim will consider the appeal de novo, without any deference to the initial denial. The review will not include any person who participated in the initial denial or who is the subordinate of a person who participated in the initial denial.

(iv) If the initial Disability distribution denial was based in whole or in part on a medical judgment, then the Review Panel will consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment, and who was neither consulted in connection with the initial determination nor is the subordinate of any person who was consulted in connection with that determination; and upon notifying the claimant of an adverse determination on review, include in the notice either an explanation of the clinical basis for the determination, applying the terms of the Plan to the claimant’s medical circumstances, or a statement that such explanation will be provided free of charge upon request.

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(v) A decision on review shall be made promptly, but not later than forty-five (45) days after receipt of a request for review, unless special circumstances require an extension of time for processing. If an extension is required, the claimant will be notified before the end of the initial forty-five (45)-day period that an extension of time is required and the anticipated date that the review will be completed. A decision will be given as soon as possible, but not later than ninety (90) days after receipt of a request for review. The Review Panel shall give notice of its decision to the claimant; such notice shall comply with the requirements set forth in Section 12.2(a). In addition, if the claimant’s claim was denied based on a medical necessity or experimental treatment or similar exclusion, then the claimant will be provided a statement explaining the decision, or a statement providing that such explanation will be furnished to the claimant free of charge upon request. The notice shall also contain the following statement: “You and your Plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your local U.S. Department of Labor Office and your State insurance regulatory agency.”

(d) Exhaustion of Claims Procedure and Right to Bring Legal Claim No action in law or equity shall be brought more than one (1) year after the Review Panel’s affirmation of a denial of the claim, or, if earlier, more than four (4) years after the facts or events giving rise to the claimant’s allegation(s) or claim(s) first occurred.

12.3 Plan Administrative Costs. All reasonable costs and expenses (including legal, accounting, and employee communication fees) incurred by the Administrator in administering the Plan shall be paid by the Plan Sponsor.

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ARTICLE 13 – MISCELLANEOUS

13.1 Unsecured General Creditor of the Employer. Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Employer. For purposes of the payment of benefits under the Plan, any and all of the Employer’s assets shall be, and shall remain, the general, unpledged, unrestricted assets of the Employer. Each Employer’s obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future.

13.2 Employer’s Liability. Each Employer’s liability for the payment of benefits under the Plan shall be defined only by the Plan and by the deferral agreements entered into between a Participant and the Employer. An Employer shall have no obligation or liability to a Participant under the Plan except as provided by the Plan and a deferral agreement or agreements. An Employer shall have no liability to Participants employed by other Employers.

13.3 Limitation of Rights. Neither the establishment of the Plan, nor any amendment thereof, nor the creation of any fund or account, nor the payment of any benefits, will be construed as giving to the Participant or any other person any legal or equitable right against the Employer, the Plan or the Administrator, except as provided herein; and in no event will the terms of employment or service of the Participant be modified or in any way affected hereby.

13.4 Anti-Assignment. None of the benefits or rights of a Participant or any Beneficiary of a Participant shall be subject to the claim of any creditor. In particular, to the fullest extent permitted by law, all such benefits and rights shall be free from attachment, garnishment, or any other legal or equitable process available to any creditor of the Participant and his or her Beneficiary. Neither the Participant nor his or her Beneficiary shall have the right to alienate, anticipate, commute, pledge, encumber, or assign any of the payments which he or she may expect to receive, contingently or otherwise, under the Plan, except the right to designate a Beneficiary to receive death benefits provided hereunder.

13.5 Facility of Payment. If the Administrator determines, on the basis of medical reports or other evidence satisfactory to the Administrator, that the recipient of any benefit payments under the Plan is incapable of handling his affairs by reason of minority, illness, infirmity or other incapacity, the Administrator may direct the Employer to disburse such payments to a person or institution designated by a court which has jurisdiction over such recipient or a person or institution otherwise having the legal authority under State law for the care and control of such recipient. The receipt by such person or institution of any such payments therefore, and any such payment to the extent thereof, shall discharge the liability of the Employer, the Plan and the Administrator for the payment of benefits hereunder to such recipient.

13.6 Notices. Any notice or other communication to the Employer or Administrator in connection with the Plan shall be deemed delivered in writing if addressed to the Plan Sponsor at the address specified in Section 1.03 of the Adoption Agreement and if either actually delivered at said address or, in the case or a letter, 5 business days shall have elapsed after the same shall have been deposited in the United States mails, first-class postage prepaid and registered or certified.

13.7 Tax Withholding. If the Employer concludes that tax is owing with respect to any deferral or payment hereunder, the Employer shall withhold such amounts from any payments due the Participant, as permitted by law, or otherwise make appropriate arrangements with the Participant or his Beneficiary for satisfaction of such obligation. Tax, for purposes of this Section 13.7 means any federal, state, local or any other governmental income tax, employment or payroll tax, excise tax, or any other tax or assessment owing with respect to amounts deferred, any earnings thereon, and any payments made to Participants under the Plan.

13.8 Indemnification.

(a) Each Indemnitee (as defined in Section 13.8(e)) shall be indemnified and held harmless by the Employer for all actions taken by him and for all failures to take action (regardless of the date of any such action or failure to take action), to the fullest extent permitted by the law of the jurisdiction in which the Employer is incorporated, against all expense, liability, and loss (including, without limitation, attorneys’ fees, judgments, fines, taxes, penalties, and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Indemnitee in connection with any Proceeding (as defined in Subsection (e)). No indemnification pursuant to this Section shall be made, however, in any case where (1) the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness or (2) there is a settlement to which the Employer does not consent.

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(b) The right to indemnification provided in this Section shall include the right to have the expenses incurred by the Indemnitee in defending any Proceeding paid by the Employer in advance of the final disposition of the Proceeding, to the fullest extent permitted by the law of the jurisdiction in which the Employer is incorporated; provided that, if such law requires, the payment of such expenses incurred by the Indemnitee in advance of the final disposition of a Proceeding shall be made only on delivery to the Employer of an undertaking, by or on behalf of the Indemnitee, to repay all amounts so advanced without interest if it shall ultimately be determined that the Indemnitee is not entitled to be indemnified under this Section or otherwise.

(c) Indemnification pursuant to this Section shall continue as to an Indemnitee who has ceased to be such and shall inure to the benefit of his heirs, executors, and administrators. The Employer agrees that the undertakings made in this Section shall be binding on its successors or assigns and shall survive the termination, amendment or restatement of the Plan.

(d) The foregoing right to indemnification shall be in addition to such other rights as the Indemnitee may enjoy as a matter of law or by reason of insurance coverage of any kind and is in addition to and not in lieu of any rights to indemnification to which the Indemnitee may be entitled pursuant to the by-laws of the Employer.

(e) For the purposes of this Section, the following definitions shall apply:

(1) “Indemnitee” shall mean each person serving as an Administrator (or any other person who is an employee, director, or officer of the Employer) who was or is a party to, or is threatened to be made a party to, or is otherwise involved in, any Proceeding, by reason of the fact that he is or was performing administrative functions under the Plan.

(2) “Proceeding” shall mean any threatened, pending, or completed action, suit, or proceeding (including, without limitation, an action, suit, or proceeding by or in the right of the Employer), whether civil, criminal, administrative, investigative, or through arbitration.

13.9 Successors. The provisions of the Plan shall bind and inure to the benefit of the Plan Sponsor, the Employer and their successors and assigns and the Participant and the Participant’s designated Beneficiaries.

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13.10 Disclaimer. It is the Plan Sponsor’s intention that the Plan comply with the requirements of Code Section 409A. Neither the Plan Sponsor nor the Employer shall have any liability to any Participant should any provision of the Plan fail to satisfy the requirements of Code Section 409A.

13.11 Governing Law. The Plan will be construed, administered and enforced according to the laws of the State specified by the Plan Sponsor in Section 12.01 of the Adoption Agreement.

13.12 Plan Addendums. The Plan Sponsor may adopt one or more addendums that shall constitute a part of this Plan and, to the extent provided therein, supplement or supersede other provisions of the Plan and Adoption Agreement.

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ADOPTION AGREEMENT

1.01 PREAMBLE

By the execution of this Adoption Agreement the Plan Sponsor hereby [complete (a) or (b)]

(a)	x	adopts a new plan as of September 1, 2009 [month, day, year]
(b)	¨	amends and restates its existing plan as of                      [month, day, year] which is the Amendment Restatement Date. Except as otherwise provided in Appendix A, all amounts deferred under the Plan prior to the Amendment Restatement Date shall be governed by the terms of the Plan as in effect on the day before the Amendment Restatement Date.
		Original Effective Date:                      [month, day, year]
		Pre-409A Grandfathering:       ¨ Yes    ¨ No

1.02 PLAN

Plan Name:	Barnes Group 2009 Deferred Compensation Plan
Plan Year:	January 1 - December 31, except that the first Plan Year will begin on September 1, 2009 and end on December 31, 2009.

1.03 PLAN SPONSOR

Name:	Barnes Group Inc.
Address:	123 Main Street, Bristol, CT 06010
Phone #:	(860) 583-7070
EIN:	06-0247846
Fiscal Yr:	January 1 - December 31

Is stock of the Plan Sponsor, any Employer or any Related Employer publicly traded on an established securities market?

  x Yes        ¨  No

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1.04 EMPLOYER

The following entities have been authorized by the Plan Sponsor to participate in and have adopted the Plan (insert “Not Applicable” if none have been authorized):

Entity	Publicly Traded on Est. Securities Market
	Yes	No
Barnes Group Inc.	x	¨
	¨	¨
	¨	¨
	¨	¨
	¨	¨
	¨	¨

1.05 ADMINISTRATOR

The following provisions are subject to the applicable provisions of any addendum to the Plan and Adoption Agreement.

The Plan Sponsor has designated the following party or parties to be responsible for the administration of the Plan:

Name:	Plan Sponsor
Address:	See Section 1.03

Note: The Administrator is the person or persons designated by the Plan Sponsor to be responsible for the administration of the Plan. Neither Fidelity Employer Services Company nor any other Fidelity affiliate can be the Administrator.

1.06 KEY EMPLOYEE DETERMINATION DATES

The Employer has designated See Addendum I as the Identification Date for purposes of determining Key Employees.

In the absence of a designation, the Identification Date is December 31.

The Employer has designated See Addendum I as the effective date for purposes of applying the six month delay in distributions to Key Employees.

In the absence of a designation, the effective date is the first day of the fourth month following the Identification Date.

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2.01 PARTICIPATION

(a)	x	Employees [complete (i), (ii) or (iii)]
	(i)	¨	Eligible Employees are selected by the Employer.
	(ii)	x	Eligible Employees are those employees of the Employer who satisfy the following criteria:
			Designated as eligible to participate (without any revocation or other change in such designation) by the Compensation and Management Development Committee of the Plan Sponsor’s Board of Directors
	(iii)	¨	Employees are not eligible to participate.
(b)	x	Directors [complete (i), (ii) or (iii)]
	(i)	¨	All Directors are eligible to participate.
	(ii)	¨	Only Directors selected by the Employer are eligible to participate.
	(iii)	x	Directors are not eligible to participate.

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3.01 COMPENSATION

For purposes of determining Participant contributions under Article 4 and Employer contributions under Article 5, Compensation shall be defined in the following manner [complete (a) or (b) and select (c) and/or (d), if applicable]:

(a)	x	Compensation is defined as:
		The sum of (a) the Participant’s ‘compensation’ as defined by the Barnes Group Inc. Retirement Savings Plan, determined as if there were no limitation under Section 401(a)(17) of the Code, and (b) bonuses paid pursuant to the Management Incentive Compensation Plan and the Performance-Linked Bonus Plan for Selected Executive Officers, or any successor plans, reduced by the Section 401(a)(17) of the Code limitation in effect for the Plan Year. It shall be assumed for this purpose that the Retirement Savings Plan ends on the December 31 immediately succeeding the December 30 on which it actually ends.
(b)	¨	Compensation as defined in          [insert name of qualified plan] without regard to the limitation in Section 401(a)(17) of the Code for such Plan Year.
(c)	¨	Director Compensation is defined as:
(d)	¨	Compensation shall, for all Plan purposes, be limited to $          .
(e)	¨	Not Applicable.

3.02 BONUSES

Compensation, as defined in Section 3.01 of the Adoption Agreement, includes the following type of bonuses:

Type	Will be treated as Performance Based Compensation
	Yes	No
As defined in Section 3.01	¨	x
	¨	¨
	¨	¨
	¨	¨
	¨	¨

  ¨    Not Applicable.

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4.01 PARTICIPANT CONTRIBUTIONS

If Participant contributions are permitted, complete (a), (b), and (c). Otherwise complete (d).

(a) Amount of Deferrals

A Participant may elect within the period specified in Section 4.01(b) of the Adoption Agreement to defer the following amounts of remuneration. For each type of remuneration listed, complete “dollar amount” and / or “percentage amount”.

  (i)   Compensation Other than Bonuses [do not complete if you complete (iii)]

	Dollar Amount		% Amount
Type of Remuneration	Min	Max	Min	Max	Increment
(a)
(b)
(c)

Note: The increment is required to determine the permissible deferral amounts. For example, a minimum of 0% and maximum of 20% with a 5% increment would allow an individual to defer 0%, 5%, 10%, 15% or 20%.

  (ii)   Bonuses [do not complete if you complete (iii)]

	Dollar Amount		% Amount
Type of Bonus	Min	Max	Min	Max	Increment
(a)
(b)
(c)

  (iii)   Compensation [do not complete if you completed (i) and (ii)]

Dollar Amount		% Amount
Min	Max	Min	Max	Increment

  (iv)   Director Compensation

	Dollar Amount		% Amount
Type of Compensation	Min	Max	Min	Max	Increment
Annual Retainer
Meeting Fees
Other:
Other:

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(b) Election Period

(i)	Performance Based Compensation
	A special election period
	¨	Does	¨    Does Not
	apply to each eligible type of performance based compensation referenced in Section 3.02 of the Adoption Agreement.
	The special election period, if applicable, will be determined by the Employer.
(ii)	Newly Eligible Participants
	An employee who is classified or designated as an Eligible Employee during a Plan Year
	¨	May	¨    May Not
	elect to defer Compensation earned during the remainder of the Plan Year by completing a deferral agreement within the 30 day period beginning on the date he is eligible to participate in the Plan.

(c) Revocation of Deferral Agreement

A Participant’s deferral agreement
¨	Will
¨	Will Not
be cancelled for the remainder of any Plan Year during which he receives a hardship distribution of elective deferrals from a qualified cash or deferred arrangement maintained by the Employer. If cancellation occurs, the Participant may resume participation in accordance with Article 4 of the Plan.

(d) No Participant Contributions

x Participant contributions are not permitted under the Plan.

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5.01 EMPLOYER CONTRIBUTIONS

If Employer contributions are permitted, complete (a) and/or (b). Otherwise complete (c).

(a) Matching Contributions

  (i)   Amount

For each Plan Year, the Employer shall make a Matching Contribution on behalf of each Participant who defers Compensation for the Plan Year and satisfies the requirements of Section 5.01(a)(ii) of the Adoption Agreement equal to [complete the ones that are applicable]:

(A)	¨	[insert percentage] of the Compensation the Participant has elected to defer for the Plan Year
(B)	¨	An amount determined by the Employer in its sole discretion
(C)	¨	Matching Contributions for each Participant shall be limited to $         and/or         % of Compensation.
(D)	¨	Other:
(E)	x	Not Applicable [Proceed to Section 5.01(b)]

  (ii)   Eligibility for Matching Contribution

A Participant who defers Compensation for the Plan Year shall receive an allocation of Matching Contributions determined in accordance with Section 5.01(a)(i) provided he satisfies the following requirements [complete the ones that are applicable]:

(A)	¨	Describe requirements:
(B)	¨	Is selected by the Employer in its sole discretion to receive an allocation of Matching Contributions
(C)	¨	No requirements

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(iii)	Time of Allocation
	Matching Contributions, if made, shall be treated as allocated [select one]:
	(A)	¨	As of the last day of the Plan Year
	(B)	¨	At such times as the Employer shall determine in it sole discretion
	(C)	¨	At the time the Compensation on account of which the Matching Contribution is being made would otherwise have been paid to the Participant
	(D)	¨	Other:

(b) Other Contributions

(i)	Amount
	For each Plan Year, the Employer shall make a contribution on behalf of each Participant who satisfies the requirements of Section 5.01(b)(ii) equal to [complete the ones that are applicable]:
	(A)	¨	An amount equal to [insert number] % of the Participant’s Compensation
	(B)	¨	An amount determined by the Employer in its sole discretion
	(C)	¨	Contributions for each Participant shall be limited to $
	(D)	x	Other:
			An amount equal to 20% of the Participant’s Compensation unless a greater or lesser amount (including 0%) is otherwise determined (for all Participants or for any one or more Participants) by the Compensation and Management Development Committee of the Plan Sponsor’s Board of Directors. “Compensation” shall be determined on the basis of the Plan Year for which the contribution is made; provided, however, that for the short Plan Year beginning on September 1, 2009, “Compensation” shall be determined on the basis of calendar year 2009.
	(E)	¨	Not Applicable [Proceed to Section 6.01]

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(ii)	Eligibility for Other Contributions
	A Participant shall receive an allocation of other Employer contributions determined in accordance with Section 5.01(b)(i) for the Plan Year if he satisfies the following requirements [complete the one that is applicable]:

(A)	¨	Describe requirements:
(B)	¨	Is selected by the Employer in its sole discretion to receive an allocation of other Employer contributions
(C)	x	No requirements

(iii)	Time of Allocation
	Employer contributions, if made, shall be treated as allocated [select one]:

(A)	¨	As of the last day of the Plan Year
(B)	x	At such time or times as the Employer shall determine in its sole discretion
(C)	¨	Other:

(c) No Employer Contributions

¨   Employer contributions are not permitted under the Plan.

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6.01 DISTRIBUTIONS

The timing and form of payment of distributions made from the Participant’s vested Account shall be made in accordance with the elections made in this Section 6.01 of the Adoption Agreement except when Section 9.6 of the Plan requires a six month delay for certain distributions to Key Employees of publicly traded companies.

(a) Timing of Distributions

(i)	All distributions shall commence in accordance with the following [choose one]:
	(A)	x	As soon as administratively feasible following the “distribution event” (described in Section 6.01(b) of this Adoption Agreement) and, in all cases except when a six-month delay rules applies, within 90 days after such distribution event; provided, however, that when the distribution event is Separation from Service plus 6 months (and regardless of whether a Participant is actually a Key Employee for whom a six-month delay in payment is required), distributions will commence on the first day of the seventh month following Separation from Service.
	(B)	¨	Monthly on specified day 5th [insert day]
	(C)	¨	Annually on specified month and day         [insert month and day]
	(D)	¨	Calendar quarter on specified month and day [         month of quarter (insert 1,2 or 3);         day (insert day)]
(ii)	The timing of distributions as determined in Section 6.01(a)(i) shall be modified by the adoption of:
	(A)	¨	Event Delay - Distribution events other than those based on Specified Date or Specified Age will be treated as not having occurred for            months [insert number of months].
	(B)	¨	Hold Until Next Year – Distribution events other than those based on Specified Date or Specified Age will be treated as not having occurred for twelve months from the date of the event if payment pursuant to Section 6.01(a)(i) will thereby occur in the next calendar year or on the first payment date in the next calendar year in all other cases.
	(C)	¨	Immediate Processing – The timing method selected by the Plan Sponsor under Section 6.01(a)(i) shall be overridden for the following distribution events [insert events]:
	(D)	x	Not applicable.

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(b) Distribution Events

The items checked below represent the Plan’s distribution events. Except as specifically provided elsewhere in the Plan and Adoption Agreement, all distributions will be made in five installments, with the first installment paid at the time described in Section 6.01(a) hereof and the last four installments paid on anniversaries of the first installment payment. Each installment shall be equal to the applicable percentage below multiplied by the value of the Participant’s Account:

Installment	Percentage
First	20%
Second	25%
Third	33 1/3%
Fourth	50%
Fifth	100%

			Lump Sum	Installments
(i)	¨	Specified Date		years
(ii)	¨	Specified Age		years
(iii)	¨	Separation from Service		years
(iv)	x	Separation from Service plus 6 months		5 years
(v)	¨	Separation from Service plus            months [not to exceed            months]		years
(vi)	¨	Retirement		years
(vii)	¨	Retirement plus 6 months		years
(viii)	¨	Retirement plus            months [not to exceed            months]		years
(ix)	¨	Later of Separation from Service or Specified Age		years
(x)	¨	Later of Separation from Service or Specified Date		years
(xi)	x	Disability		5 years
(xii)	x	Death		5 years
(xiii)	¨	Change in Control		years

The minimum deferral period for Specified Date or Specified Age event shall be N/A years.

Installments will be paid [select each that applies]

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¨ Monthly

¨ Quarterly

x Annually - as described above

(c) Specified Date and Specified Age elections may not extend beyond age Not Applicable [insert age or “Not Applicable” if no maximum age applies].

- 12 -

(d) Payment Election Override

Payment of the remaining vested balance of the Participant’s Account will automatically occur at the time specified in Section 6.01(a) of the Adoption Agreement in the form indicated upon the earliest to occur of the following events [check each event that applies and for each event include only a single form of payment]:

	EVENTS	FORM OF PAYMENT
¨	Separation from Service		Lump sum	Installments
¨	Separation from Service before Retirement		Lump sum	Installments
¨	Death		Lump sum	Installments
¨	Disability		Lump sum	Installments
x	Not Applicable

(e) Involuntary Cashouts – As per Plan, Section 9.9

¨ If the Participant’s vested Account at the time of his Separation from Service does not exceed $         distribution of the vested Account shall automatically be made in the form of a single lump sum in accordance with Section 9.5 of the Plan.

¨ There are no involuntary cashouts.

(f) Retirement

¨ Retirement shall be defined as a Separation from Service that occurs on or after the Participant [insert description of requirements]:

x No special definition of Retirement applies.

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(g) Distribution Election Change

A Participant

¨ Shall

x Shall Not

be permitted to modify a scheduled distribution date and/or payment option in accordance with Section 9.2 of the Plan.

A Participant shall generally be permitted to elect such modification             number of times.

Administratively, allowable distribution events will be modified to reflect all options necessary to fulfill the distribution change election provision.

(h) Frequency of Elections

The Plan Sponsor

¨ Has

x Has Not

Elected to permit annual elections of a time and form of payment for amounts deferred under the Plan.

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7.01 VESTING

(a) Matching Contributions

The Participant’s vested interest in the amount credited to his Account attributable to Matching Contributions shall be based on the following schedule:

¨	Years of Service	Vesting %
	0		(insert ‘100’ if there is immediate vesting)
	1
	2
	3
	4
	5
	6
	7
	8
	9
¨	Other:
¨	Class year vesting applies.
x	Not applicable.

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(b) Other Employer Contributions

The Participant’s vested interest in the amount credited to his Account attributable to Employer contributions other than Matching Contributions shall be based on the following schedule:

¨	Years of Service	Vesting %
	0		(insert ‘100’ if there is immediate vesting)
	1
	2
	3
	4
	5
	6
	7
	8
	9
x	Other: A Participant shall have no vested interest in the amount credited to his Account attributable to Employer contributions until he has both attained age 55 and completed 10 Years of Service at which time his vested interest shall be 100%, subject to Section 10.1 of the Plan. Notwithstanding the foregoing, and subject to Section 10.1 of the Plan, a Participant’s vested interest shall be 100% if (i) the Participant’s Separation from Service occurs on or after attainment of age 55 and completion of five Years of Service, and the Participant’s retirement was either requested by the President and Chief Executive Officer of the Plan Sponsor and approved by the Compensation and Management Development Committee of the Board of Directors or was requested and approved by the such Committee; or (ii) the Plan Sponsor so determines, in its sole discretion.
¨	Class year vesting applies.
¨	Not applicable.

(c) Acceleration of Vesting

A Participant’s vested interest in his Account will automatically be 100% upon the occurrence of the following events, subject to Section 10.1 of the Plan: [select the ones that are applicable]:

(i)	¨	Death
(ii)	¨	Disability
(iii)	¨	Change in Control
(iv)	¨	Eligibility for Retirement
(v)	x	Other: Death or Disability on or after the date the Participant has both attained age 55 and completed at least 5 Years of Service.

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(vi) ¨ Not applicable.

- 17 -

(d) Years of Service

(i)	A Participant’s Years of Service shall include all service performed for the Employer and
	x	Shall
	¨	Shall Not
	include service performed for the Related Employer.
(ii)	Years of Service shall also include service performed for the following entities:
(iii)	Years of Service shall be determined in accordance with (select one)
	(A)	¨	The elapsed time method in Treas. Reg. Sec. 1.410(a)-7
	(B)	¨	The general method in DOL Reg. Sec. 2530.200b-1 through b-4
	(C)	¨	The Participant’s Years of Service credited under [insert name of plan]
	(D)	x	Other:  Notwithstanding (i) above or any other provision of the Plan and Adoption Agreement, the methodology for determining a Participant’s Years of Service hereunder shall be consistent with the methodology for determining the Participant’s years of “Vesting Service” under the Barnes Group Inc. Retirement Savings Plan as such plan is in effect at the time the individual becomes a Participant in this Plan, excluding, however, any period after a Separation from Service (or death or Disability); provided, however, that (i) the determination of a Participant’s Years of Service shall take into account the provisions of any applicable written employment agreement or other individual agreement between the Employer and the Participant as in effect at the time the individual becomes a Participant in this Plan; and (ii) the final determination of a Participant’s Years of Service shall be made by the Administrator, it being the intent that Years of Service shall be determined in a predetermined, nondiscretionary, and objective manner.
(iv)	¨	Not applicable.

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8.01 UNFORESEEABLE EMERGENCY

(a) A withdrawal due to an Unforeseeable Emergency as defined in Section 2.24:

¨	Will
x	Will Not [if Unforeseeable Emergency withdrawals are not permitted, proceed to Section 9.01]
be allowed.

(b) Upon a withdrawal due to an Unforeseeable Emergency, a Participant’s deferral election for the remainder of the Plan Year:

¨	Will
¨	Will Not
be cancelled. If cancellation occurs, the Participant may resume participation in accordance with Article 4 of the Plan.

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9.01 INVESTMENT DECISIONS

Investment decisions regarding the hypothetical amounts credited to a Participant’s Account shall be made by [select one]:
(a)	x	The Participant or his Beneficiary
(b)	¨	The Employer

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10.01 GRANTOR TRUST

The Employer [select one]:
x	Does
¨	Does Not
intend to establish a grantor trust in connection with the Plan.

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11.01 TERMINATION UPON CHANGE IN CONTROL

The Plan Sponsor
¨	Reserves
x	Does Not Reserve
the right to terminate the Plan and distribute all amounts credited to Participant Accounts upon a Change in Control within the meaning of Section 9.7 of the Plan, in accordance with the provisions of Section 10.2 of the Plan.

11.02 AUTOMATIC DISTRIBUTION UPON CHANGE IN CONTROL

Distribution of the remaining vested balance of each Participant’s Account
¨	Shall
x	Shall Not
automatically be paid as a lump sum payment upon the occurrence of a Change in Control as provided in Section 9.7.

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12.01 GOVERNING STATE LAW

The laws of Connecticut shall apply in the administration of the Plan to the extent not preempted by ERISA.

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EXECUTION PAGE

The Plan Sponsor has caused this Adoption Agreement to be executed this 31st day of August, 2009.

PLAN SPONSOR:	Barnes Group Inc.
By:	s/s Dawn N. Edwards
Title:	Sr. Vice President, Human Resources

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APPENDIX A

SPECIAL EFFECTIVE DATES

Not Applicable

- 25 -

Barnes Group 2009 Deferred Compensation Plan

Addendum I

Purpose; Integral Part of Plan and Adoption Agreement

This Barnes Group 2009 Deferred Compensation Plan Addendum I (“Addendum I”) is intended to be an integral part of the Barnes Group 2009 Deferred Compensation Plan (the “Plan”) and the related Adoption Agreement (the “Adoption Agreement”), supplementing or superseding other provisions of the Plan and Adoption Agreement. As required by the context, the Plan and Adoption Agreement shall collectively be known herein as the “Plan.”

Inapplicable Provisions Disregarded in Construing Documents

The documents reflecting the Plan and Adoption Agreement have been provided to Barnes Group Inc. (the “Company”) by Fidelity Employer Services Company (which, with its affiliates, shall be known as “Fidelity”) and, in general, have been drafted by Fidelity in a manner so that they can be adopted by multiple, unrelated employers. Thus, these documents include certain provisions that, due to elections made by the Company in the Adoption Agreement and related terms of the Plan, are not applicable to the Company and its employees (“inapplicable provisions”). By way of illustration but not by way of limitation, examples of inapplicable provisions include those relating to employee elections to defer compensation and those relating to employer matching contributions.

In construing the Company’s Plan, the inapplicable provisions shall be disregarded, and the Company and its affiliates, and their directors, officers, and employees, shall have no legal, tax-related, or other responsibility or liability in connection with any of the inapplicable provisions (including by way of illustration but not by way of limitation, any responsibility or liability for ensuring that such inapplicable provisions are up-to-date and consistent with current Code or other requirements).

Interpretation, Construction, Administration; Delegation of Authority

When used under the Plan and Adoption Agreement (and notwithstanding Section 2.2 of the Plan document and Section 1.05 of the Adoption Agreement), the term “Administrator” means the Compensation and Management Development Committee of the Company’s Board (the “Committee”), unless the context requires otherwise (and subject to the delegation provisions hereof). To the extent power or authority is not vested in Fidelity or another third party, the Committee shall have full power and authority to interpret and construe the terms of the Plan and Adoption Agreement, and to administer it, and the Committee’s interpretations and construction thereof, including, but not limited to, determining the amount or recipient of any benefits to be made therefrom, shall be binding and conclusive on all persons for all purposes. The Board, the Committee, the Benefits Committee appointed by the Board (the “Benefits Committee”), their individual members, and such persons’ agents and representatives shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Plan unless attributable to willful misconduct or lack of good faith.

- 26 -

The Board, the Committee, and the Benefits Committee may delegate the responsibilities allocated to them under the terms of the Plan to others, including, but not limited to, a Board delegation to the Committee or the Benefits Committee, a Committee or Benefits Committee delegation to one or more members, and a delegation by the Board or one of the committees to Company employees. As long as the delegation is lawful, neither an employee nor any other person shall have the right to raise any questions relating to such delegation of authority and responsibility for interpreting, construing, and administering the Plan.

Key Employee Determination

As permitted by Section 9.6(c) of the Plan, the Plan Sponsor elects to apply an alternative method to identify Participants who will be treated as Key Employees for purposes of the six month delay in distributions, which alternative method is the same as the method for determining “Specified Employees” that is in effect from time to time under Section 7.2 of the Barnes Group Inc. Supplemental Senior Officer Retirement Plan (“SSORP”) or a successor provision of the SSORP or of any successor to the SSORP.

Identification Date for Purposes of Determining Key Employees

The Identification Date for purposes of determining Key Employees under the Plan shall be the same date as the “specified employee identification date” that is in effect from time to time under Section 7.2 of the SSORP or a successor provision of the SSORP or of any successor to the SSORP.

Effective Date for Purposes of Applying the Six Month Delay in Distributions to Key Employees

The effective date for purposes of applying the six month delay in distributions to Key Employees under the Plan shall be the same date as the “specified employee effective date” that is in effect from time to time under Section 7.2 of the SSORP or a successor provision of the SSORP or of any successor to the SSORP.

Certain Code Section 409A Issues

Notwithstanding any provision of the Plan (including, but not limited to Section 9.2), Adoption Agreement, or this Addendum to the contrary, installment payments to a Participant or Beneficiary shall be treated as a series of separate payments and not as a single payment.

Any compensation that may be paid or provided pursuant to this Plan is intended to qualify for an exclusion from Section 409A of the Code or to comply with Section 409A of the Code, so that none of such compensation will be includible in any Plan Participant’s federal gross income pursuant to Section 409A(a)(1)(A) of the Code. This Plan shall be administered, interpreted, and construed to carry out such intention, and any provision of this Plan that cannot be so administered, interpreted and construed shall to that extent be disregarded. However, the Company and any other person or entity with any responsibility for the Plan (including, but not limited to, the Board) do not represent, warrant or guarantee that any compensation that may be paid or provided pursuant to this Plan will not be includible in a Plan Participant’s federal gross income pursuant to Section 409A(a)(1)(A) of the Code, nor do the Company and other persons and entities with any responsibility for the Plan make any other representation, warranty or guaranty to any Plan Participant as to the tax consequences of this Plan or of participation in this Plan. If, notwithstanding the foregoing, amounts are includible in a Plan Participant’s federal gross income pursuant to Section 409A(a)(1)(A) of the Code, the payment of benefits

- 28 -

will be accelerated to the extent determined by the Committee and permitted by Treasury Regulation section 1.409A-3(j)(vii).

Amendment and Termination

This Addendum I (and any other addendum) may be amended and terminated to the same extent as any other provision of the Plan, consistent with Article 10 thereof.

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EX-10.2

Exhibit 10.2

TRUST AGREEMENT

Between

BARNES GROUP INC.

And

FIDELITY MANAGEMENT TRUST COMPANY

BARNES GROUP INC. 2009 DEFERRED COMPENSATION PLAN TRUST

Dated as of September 1, 2009

Confidential Information

TABLE OF CONTENTS

Section 1.      Definitions	2
Section 2.      Trust	5
(a)    Establishment	6
(b)    Grantor Trust	6
(c)    Trust Assets	6
(d)    Non-Assignment	6
Section 3.      Payments to Sponsor	7
Section 4.      Disbursements	7
(a)    Directions from Administrator	7
(b)    Limitations	7
Section 5.      Investment of Trust	7
(a)    Selection of Investment Options	7
(b)    Available Investment Options	7
(c)    Investment Directions	7
(d)    Unfunded Status of Plan	8
(e)    Mutual Funds	8
(i)      Execution of Purchases and Sales	8
(ii)      Voting	8
(f)    Trustee Powers	9
Section 6.      Recordkeeping and Administrative Services to Be Performed	10
(a)    General	10
(b)    Accounts	10
(c)    Inspection and Audit	10
(d)    Notice of Plan Amendment	11
(e)    Returns, Reports and Information	11
Section 7.      Compensation and Expenses	12
Section 8.      Directions and Indemnification	12
(a)    Identity of the Sponsor and the Administrator	12
(b)    Directions from the Sponsor and the Administrator	12
(c)    Directions from Participants	12
(d)    Indemnification	13
(e)    Survival	13
Section 9.      Resignation or Removal of Trustee	13
(a)    Resignation and Removal	13
(b)    Termination	13
(c)    Notice Period	13
(d)    Transition Assistance	13
(e)    Failure to Appoint Successor	14
Section 10.    Successor Trustee	14
(a)    Appointment	14
(b)    Acceptance	14
(c)    Corporate Action	14
Section 11.    Resignation, Removal, and Termination Notices	14
Section 12.    Duration	14
Section 13.    Insolvency of Sponsor	15
Section 14.    Amendment or Modification	15

Confidential Information i

Section 15.    Electronic Services	15
Section 16.    Assignment	16
Section 17.    Force Majeure	17
Section 18.    Confidentiality; Safeguarding of Data	17
Section 19.    General	19
(a)    Performance by Trustee, its Agents or Affiliates	19
(b)    Entire Agreement	19
(c)    Waiver	19
(d)    Successors and Assigns	19
(e)    Partial Invalidity	19
(f)    Section Headings	19
Section 20.    Situs of Trust Assets	20
Section 21.    Governing Law	20
(a)    Massachusetts Law Controls	20
(b)    Trust Agreement Controls	20
SCHEDULES	22
Schedule “A”         Recordkeeping and Administrative Services	22
Schedule “B”         Fee Schedule	25
Schedule “C”         Investment Options	26
Schedule “D”         Operational Guidelines for Non-Fidelity Mutual Funds	27

Confidential Information ii

TRUST AGREEMENT, dated as of the first day of September 2009 (“Effective Date”), between BARNES GROUP INC., a Delaware corporation, having an office at 123 Main Street, Bristol, Connecticut 06011 (the “Sponsor”), and FIDELITY MANAGEMENT TRUST COMPANY, a Massachusetts trust company, having an office at 82 Devonshire Street, Boston, Massachusetts 02109 (the “Trustee”).

WITNESSETH:

WHEREAS, the Sponsor is the sponsor of the Barnes Group Inc. 2009 Deferred Compensation Plan (the “Plan”); and

WHEREAS, the Sponsor wishes to establish an irrevocable trust (the “Trust”)” with regard to the Plan and to contribute to the Trust assets that shall be held therein, subject to the claims of Sponsor’s creditors in the event of Sponsor’s Insolvency, as herein defined, until paid to Participants and their beneficiaries in such manner and at such times as specified in the Plan; and

WHEREAS, it is the intention of the parties that this Trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”); and

WHEREAS, it is the intention of the Sponsor to make contributions to the Trust to provide itself with a source of funds to assist it in the meeting of its liabilities under the Plan; and

WHEREAS, the Trustee is willing to hold and invest the aforesaid plan assets in trust among several investment options selected by the Sponsor; and

WHEREAS, the Sponsor also wishes to have the Trustee perform certain ministerial recordkeeping and administrative functions under the Plan; and

WHEREAS, the Trustee is willing to perform recordkeeping and administrative services for the Plan if the services are ministerial in nature and are provided within a framework of plan provisions, guidelines and interpretations conveyed in writing to the Trustee by the Sponsor or by the Administrator (as defined herein).

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements set forth below, the Sponsor and the Trustee agree as follows:

Section 1. Definitions.

The following terms as used in this Trust Agreement have the meaning indicated unless the context clearly requires otherwise:

(a) “Administrator”

“Administrator” shall mean the Compensation and Management Development Committee of the Sponsor’s Board of Directors or such other person or persons (including any entity) identified in the Plan document as the “administrator” of the Plan and, as the context requires, any person authorized to act on behalf of the Administrator.

(b) “Agreement”

“Agreement” shall mean this Trust Agreement, and the Schedules and/or Exhibits attached

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hereto, as the same may be amended and in effect from time to time.

(c) “Business Day”

“Business Day” shall mean each day the NYSE is open. The closing of a Business Day generally shall mean the NYSE’s normal closing time of 4:00 p.m.(ET); however, in the event the NYSE closes before such time or alters its closing time, all references to the NYSE closing time shall mean the actual or altered closing time of the NYSE.

(d) “Code”

“Code” shall mean the Internal Revenue Code of 1986, as it has been or may be amended from time to time.

(e) “EDT”

“EDT” shall mean electronic data transfer.

(f) “Electronic Services”

“Electronic Services” shall mean communication and services made available via electronic media.

(g) “ERISA”

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it has been or may be amended from time to time.

(h) “Fidelity Mutual Fund”

“Fidelity Mutual Fund” shall mean any investment company advised by Fidelity Management & Research Company or any of its affiliates.

(i) “FIIOC”

“FIIOC” shall mean Fidelity Investments Institutional Operations Company, Inc.

(j) “In Good Order”

“In Good Order” shall mean in a state or condition acceptable to the Trustee in its sole discretion, which the Trustee determines is reasonably necessary for accurate execution of the intended transaction.

(k) “Insolvency” or “Insolvent”

“Insolvency” or “Insolvent” shall mean that (i) the Sponsor is unable to pay its debts as they become due, or (ii) the Sponsor is subject to a pending proceeding as a debtor under the United States Bankruptcy Code.

(l) “Losses”

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“Losses” shall mean any and all loss, damage, penalty, liability, cost and expense, including without limitation, reasonable attorney’s fees and disbursements.

(m) “Mutual Fund”

“Mutual Fund” shall refer both to Fidelity Mutual Funds and Non-Fidelity Mutual Funds.

(n) “NAV”

“NAV” shall mean Net Asset Value.

(o) “NFSLLC”

“NFSLLC” shall mean National Financial Services LLC.

(p) “Non-Fidelity Mutual Fund”

“Non-Fidelity Mutual Fund” shall mean certain investment companies not advised by Fidelity Management & Research Company or any of its affiliates.

(q) “NYSE”

“NYSE” shall mean the New York Stock Exchange.

(r) “Participant”

“Participant” shall mean, with respect to the Plan, any employee (or former employee) with an account under the Plan which has not yet been fully distributed and/or forfeited and shall include the designated beneficiary(ies) with respect to the account of any deceased employee (or deceased former employee) until such account has been fully distributed and/or forfeited.

(s) “Participant Recordkeeping Reconciliation Period”

“Participant Recordkeeping Reconciliation Period” shall mean the period beginning on the date of the initial transfer of assets to the Trust and ending on the date of the completion of the reconciliation of Participant records.

(t) “Person”

“Person” shall mean any corporation, joint stock company, limited liability company, association, partnership, joint venture, organization, individual, business or other trust or any other entity or organization of any kind or character, including a court or other governmental authority.

(u) “PIN”

“PIN” shall mean personal identification number.

(v) “Plan”

“Plan” shall mean the Barnes Group Inc. 2009 Deferred Compensation Plan.

(w) “Plan Administration Design & Discovery Document”

“Plan Administration Design & Discovery Document” shall mean the document which sets forth the administrative and recordkeeping duties and procedures to be followed by the Trustee in administering the Plan, as such document may be amended and in effect from time to time during

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the initial implementation of the Plan onto the Fidelity Participant Recordkeeping System (“FPRS”). This document is an interim document and shall be superseded by the approved Plan Administration Manual.

(x) “Plan Administration Manual”

“Plan Administration Manual” shall mean the document which sets forth the administrative and recordkeeping duties and procedures to be followed by the Trustee in administering the Plan, as such document may be amended and in effect from time to time. This definition shall include the Plan Administration Design & Discovery Document from the implementation process until the full Plan Administration Manual can be generated and approved.

(y) “Plan Sponsor Webstation”

“Plan Sponsor Webstation” shall mean the graphical Windows-based application that provides current Plan and Participant information including indicative data, account balances, activity and history.

(z) “Reporting Date”

“Reporting Date” shall mean the last day of each fiscal quarter of the Plan and, if not on the last day of the fiscal quarter, the date as of which the Trustee resigns or is removed pursuant to this Agreement or the date as of which this Agreement terminates pursuant to Section 9 hereof.

(aa) “SEC”

“SEC” shall mean the Securities and Exchange Commission.

(bb) “Sponsor”

“Sponsor” shall mean Barnes Group Inc., a Delaware corporation, or any successor thereto which, by agreement, operation of law or otherwise, assumes the responsibility of the Sponsor under this Agreement.

(cc) “Trust”

“Trust” shall mean the Barnes Group Inc. 2009 Deferred Compensation Plan Trust, being the trust established by the Sponsor and the Trustee pursuant to the provisions of this Agreement.

(dd) “Trustee”

“Trustee” shall mean Fidelity Management Trust Company, a Massachusetts trust company and any successor to all or substantially all of its trust business as described in Section 10. The term Trustee shall also include any successor trustee appointed pursuant to Section 10 to the extent such successor agrees to serve as Trustee under this Agreement.

(ee) “VRS”

“VRS” shall mean Voice Response System.

Section 2. Trust.

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(a) Establishment.

The Sponsor hereby establishes the Trust with the Trustee. The Trust shall consist of an initial contribution of money or other property acceptable to the Trustee, in its sole discretion, made by the Sponsor, such additional sums of money or property as shall from time to time be delivered to the Trustee as directed by the Sponsor, all investments made therewith and proceeds thereof, and all earnings and profits thereon, less the payments that are made by the Trustee as provided herein, without distinction between principal and income. The Trustee hereby accepts the Trust on the terms and conditions set forth in this Agreement. In accepting this Trust, the Trustee shall be accountable for the assets received by it, subject to the terms and conditions of this Agreement.

The Sponsor, in its sole discretion, may at any time, or from time to time, make such deposits of cash or other property acceptable to the Trustee, including policies of life insurance, in trust with Trustee to augment the principal to be held, administered and disposed of by Trustee as provided in this Trust Agreement. Neither Trustee nor any Plan Participant or other person shall have any right to compel such additional deposits. Notwithstanding the foregoing, upon any of the events set forth in Section 9.7(a)(b), (c) or (d) of the Plan (a “Plan Section 9.7 event”), the Sponsor shall, as soon as possible, but in no event longer than fifteen (15) days following the Plan Section 9.7 event, make a contribution to the Trust in an amount that is sufficient to pay the Plan Participants the benefits to which the Plan Participants would be entitled pursuant to the terms of the Plan(s) as of the date on which the Plan Section 9.7 event occurred; provided that the Sponsor has no obligation to transfer money or property to the Trust in connection with a change in the Company’s financial health that would involve income inclusion and tax liability under Internal Revenue Code (“Code”) Section 409A(b) and any regulations and guidance issued thereunder.

Sponsor will notify Trustee if there is a Plan Section 9.7 event.

(b) Grantor Trust.

The Trust is intended to be a grantor trust, of which the Sponsor is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Code, as amended, and shall be construed accordingly.

(c) Trust Assets.

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

(d) Non-Assignment.

Benefit payments to Participants and their beneficiaries funded under this Trust may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered, or subjected to attachment, garnishment, levy, execution, or other legal or equitable process. Nothwithstanding anything in this Agreement to the contrary, the Sponsor can direct the Trustee to disperse monies pursuant to a domestic relations order as defined in Code section 414(p)(1)(B) to the extent consistent with the Plan, the Code, and any other applicable law.

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Section 3. Payments to Sponsor.

Except as provided under this Agreement, the Sponsor shall have no right to retain or divert to others any of the Trust assets before all payment of benefits have been made to Participants pursuant to the terms of the Plan.

Section 4. Disbursements.

(a) Directions from Administrator.

The Trustee shall disburse monies to Participants for benefit payments in the amounts that the Administrator directs from time to time in writing. The Trustee shall have no responsibility to ascertain whether the Administrator’s direction complies with the terms of the Plan or of any applicable law. The Trustee shall be responsible for Federal or State income tax reporting or withholding with respect to such Plan benefits. The Trustee shall not be responsible for FICA (Social Security and Medicare), or any Federal or State unemployment or local tax with respect to Plan distributions, unless required by law or by agreement with the Sponsor.

(b) Limitations.

The Trustee shall not be required to make any disbursement in excess of the net realizable value of the assets of the Trust at the time of the disbursement. The Trustee shall not be required to make any disbursement in cash or shares unless the Administrator has provided a written direction as to the assets to be converted to cash or shares for the purpose of making the disbursement.

Section 5. Investment of Trust.

(a) Selection of Investment Options.

The Trustee shall have no responsibility for the selection of investment options under the Trust and shall not render investment advice to any person in connection with the selection of such options.

(b) Available Investment Options.

The Sponsor shall direct the Trustee as to what investment options the Trust shall be invested in (i) during the Participant Recordkeeping Reconciliation Period, and (ii) following the Participant Recordkeeping Reconciliation Period, subject to the following limitations. The Sponsor may determine to offer as investment options only (i) Mutual Funds; provided, however, that the Trustee shall not be considered a fiduciary with investment discretion. The Sponsor may add or remove investment options with the consent of the Trustee to reflect administrative concerns and upon mutual amendment of this Agreement and the Schedules thereto, to reflect such additions.

(c) Investment Directions.

The Sponsor shall direct the Trustee as to how to invest the assets held in the Trust. In order to provide for an accumulation of assets comparable to the contractual liabilities accruing under the

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Plan, the Sponsor may direct the Trustee in writing to invest the assets held in the Trust to correspond to the hypothetical investments made for Participants in accordance with their direction under the Plan. In such cases, Participants may provide directions with respect to their hypothetical investments under the Plan by use of the system maintained for such purposes by the Trustee or its agents, as may be agreed upon from time to time by the Sponsor and the Trustee, and shall be processed in accordance with the fund exchange provisions set forth in the Plan Administration Manual. The Trustee shall not be liable for any loss or expense that arises from a Participant’s exercise or non-exercise of rights under this Section 5 over the assets in the Participant’s accounts. In the event that the Trustee fails to receive a proper direction, the assets in question shall be invested in the investment option set forth for such purpose on Schedule “C” until the Trustee receives a proper direction.

(d) Unfunded Status of Plan

The Sponsor’s designation of available investment options, the maintenance of accounts for each Participant, the crediting of investments gains (or losses) to such accounts, and the exercise by Participants of any powers relating to investments under this Agreement are solely for the purpose of providing a mechanism for measuring the obligation of the Sponsor to any particular Participant under the applicable Plan. As provided in this Agreement, no Participant will have any preferential claim to or beneficial ownership interest in any asset or investment held in the Trust, and the rights of any Participant under the applicable Plan and this Agreement are solely those of an unsecured general creditor of the Sponsor with respect to the benefits of the Participant under the Plan.

(e) Mutual Funds.

On the effective date of this Agreement, in lieu of receiving a printed copy of the prospectus for each Fidelity Mutual Fund selected by the Sponsor as a Plan investment option or short-term investment fund, the Sponsor hereby consents to receiving such documents electronically. The Sponsor shall access each prospectus on the internet after receiving notice from the Trustee that a current version is available online at a website maintained by the Trustee or its affiliate. Trustee represents that on the effective date of this Agreement, a current version of each such prospectus is available at https://www.fidelity.com or such successor website as Trustee may notify the Sponsor of in writing from time to time. The Sponsor represents that it has accessed/will access each such prospectus as of the effective date of this Agreement at https://www.fidelity.com or such successor website as Trustee may notify the Sponsor of in writing from time to time. Trustee represents that transactions involving Non-Fidelity Mutual Funds shall be executed in accordance with the operational guidelines set forth in Schedule “D” attached hereto. Trust investments in Mutual Funds shall be subject to the following limitations:

(i) Execution of Purchases and Sales.

Purchases and sales of Mutual Funds (other than for exchanges) shall be made on the date on which the Trustee receives from the Sponsor In Good Order all information and documentation necessary to accurately effect such transactions and (if applicable) wire transfer of funds.

Exchanges of Mutual Funds shall be processed in accordance with the fund exchange provisions set forth in the Plan Administration Manual.

(ii) Voting.

The Sponsor directs the Trustee to vote the shares of Mutual Funds held in the Trust in the same manner as directed by Participants for the corresponding hypothetical shares of Mutual Funds

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credited to Participants’ accounts under the Plan. At the time of mailing of notice of each annual or special stockholders’ meeting of any Mutual Fund, the Trustee shall send a copy of the notice and all proxy solicitation materials to each Participant who has hypothetical shares of such Mutual Fund credited to the Participant’s account, together with a voting direction form for return to the Trustee or its designee. The Participant shall have the right to direct the Trustee as to the manner in which the Trustee is to vote the hypothetical shares credited to the Participant’s account. The Trustee shall vote the shares held in the Trust in a manner which corresponds to Participant directions with respect to the hypothetical shares credited to the Participant’s Plan account. The Trustee shall not vote shares for which it has received no corresponding directions from the Participant.

During the Participant Recordkeeping Reconciliation Period, the Sponsor shall have the right to direct the Trustee as to the manner in which the Trustee is to vote the shares of the Mutual Funds in the Trust, including Mutual Fund shares held in any short-term investment fund for liquidity reserve. Following the Participant Recordkeeping Reconciliation Period, the Sponsor shall continue to have the right to direct the Trustee as to the manner in which the Trustee is to vote any Mutual Funds shares held in a short-term investment fund for liquidity reserve. The Trustee shall not vote any such Mutual Fund shares for which it has received no directions from the Sponsor.

With respect to all rights other than the right to vote, the Trustee shall follow the directions of the Sponsor. The Trustee shall have no further duty to solicit directions from the Sponsor or Participants, except as required by law.

(f) Trustee Powers.

The Trustee shall have the following powers and authority:

(i) Subject to this Section 5, to sell, exchange, convey, transfer, or otherwise dispose of any property held in the Trust, by private contract or at public auction. No person dealing with the Trustee shall be bound to see to the application of the purchase money or other property delivered to the Trustee or to inquire into the validity, expediency, or propriety of any such sale or other disposition.

(ii) To cause any securities or other property held as part of the Trust to be registered in the Trustee’s own name, in the name of one or more of its nominees, or in the Trustee’s account with the Depository Trust Company of New York and to hold any investments in bearer form, but the books and records of the Trustee shall at all times show that all such investments are part of the Trust.

(iii) To keep that portion of the Trust in cash or cash balances as the Sponsor or Administrator may, from time to time, deem to be in the best interest of the Trust.

(iv) To make, execute, acknowledge, and deliver any and all documents of transfer or conveyance and to carry out the powers herein granted.

(v) To settle, compromise, or submit to arbitration any claims, debts, or damages due to or arising from the Trust; to commence or defend suits or legal or administrative proceedings; to represent the Trust in all suits and legal and administrative hearings; and to pay all reasonable expenses arising from any such action, from the Trust if not paid by the Sponsor.

(vi) To employ legal, accounting, clerical, and other assistance as may be required in carrying out the provisions of this Agreement and to pay their reasonable expenses and compensation from the Trust if not paid by the Sponsor.

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(vii) To do all other acts, although not specifically mentioned herein, as the Trustee may deem necessary to carry out any of the foregoing powers and the purposes of the Trust.

Notwithstanding any powers granted to the Trustee pursuant to this Agreement or to applicable law, Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of Section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Code. The Trustee will file an annual fiduciary return to the extent required by law.

Section 6. Recordkeeping and Administrative Services to Be Performed.

(a) General.

The Trustee shall perform those recordkeeping and administrative functions described in Schedule “A” attached hereto. These recordkeeping and administrative functions shall be performed within the framework of the Administrator’s written directions regarding the Plan’s provisions, guidelines and interpretations. The Sponsor acknowledges that the Trustee will be working to streamline and standardize its service model and agrees to reasonably cooperate with the Trustee in connection with those efforts. The Trustee will make the Sponsor aware of the service model changes in advance and will work with the Sponsor to determine the most efficient and effective methods of implementing the changes. The Sponsor acknowledges that the Trustee does not provide legal or tax advice, and that the Sponsor must obtain its own legal and tax counsel for advice on the plan design appropriate for its specific situation and on legal and tax issues pertaining to the administration of the Plan. The Sponsor further acknowledges that the Trustee has no continuing responsibility to be aware of and responsive to IRS guidance provided under Section 409A of the Code as the Trustee is not the responsible party for (a) ensuring that direction to the Trustee conforms with that guidance, and (b) the payment of all taxes and penalties associated with a failure to maintain such compliance.

(b) Accounts.

The Trustee shall keep accurate accounts of all investments, receipts, disbursements, and other transactions hereunder, and shall report the value of the assets held in the Trust as of the last day of each Reporting Date. Within thirty (30) days following each Reporting Date or within sixty (60) days in the case of a Reporting Date caused by the resignation or removal of the Trustee, or the termination of this Agreement, the Trustee shall file with the Administrator a written account setting forth all investments, receipts, disbursements, and other transactions effected by the Trustee between the Reporting Date and the prior Reporting Date, and setting forth the value of the Trust as of the Reporting Date. Except as otherwise required under applicable law, upon the expiration of six (6) months from the date of filing such account, the Trustee shall have no liability or further accountability to anyone with respect to the propriety of its acts or transactions shown in such account, except with respect to such acts or transactions as to which a written objection shall have been filed with the Trustee within such six (6) month period.

(c) Inspection and Audit.

Upon the resignation or removal of the Trustee or the termination of this Agreement, the Trustee shall provide to the Sponsor (and to such other persons as the Sponsor reasonably designates in writing), at no expense to the Sponsor, in the format regularly provided to the Sponsor, a statement of each Participant’s account as of the resignation, removal, or termination, and the Trustee shall provide to the Sponsor or the Plan’s new recordkeeper such further records as are reasonable, at the Sponsor’s expense.

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The Trustee will provide to auditors (including third-party auditors and Sponsor’s internal audit staff) as Sponsor may designate in writing, access to any Trustee owned or managed facility at which the services are being performed, to appropriate Trustee management personnel, and to the data and records (and other documentation reasonably requested by the Sponsor) maintained by the Trustee with respect to the services solely for the purpose of examining (i) transactional books and records maintained by the Trustee in order to provide the services, (ii) documentation of service level performance, and (iii) invoices to the Sponsor. Any such audits will be conducted at the Sponsor’s expense. The Sponsor and its auditors will first look to the most recent Type II Service Auditor’s Report (“Type II SAR”) before conducting further audits. Type II SAR’s are reports issued by the Trustee’s or its affiliate’s independent public accounting firm in accordance with Statement on Auditing Standard No. 70 (“SAS 70”). If a matter is not covered in such Type II SAR, then the Sponsor will provide the Trustee with a proposed detailed scope and timeframe of the audit requested by the Sponsor in writing at least sixty (60) days prior to date of the audit. The Sponsor will provide the Trustee with not less than ninety (90) days prior written notice of an audit, excepting audit requests from governmental or regulatory agencies. The Sponsor and its auditors will conduct such audits in a manner that will result in a minimum of inconvenience and disruption to the Trustee’s operations. Audits may be conducted only during normal business hours and no more frequently than annually unless otherwise required as a matter of law or for compliance with regulatory or contractual requirements. Any audit assistance provided by the Trustee in excess of the number of audit hours per annum referenced in the fee schedule shall be provided on a fee-for-service basis. The Sponsor and its auditors will not be entitled to review or audit (i) data or information of other customers or clients of the Trustee, (ii) any of Trustee’s proprietary data, or (iii) any other Confidential Information of the Trustee that is not relevant for the purposes of the audit. The Sponsor and its auditors will not be entitled to logical access to the Trustee’s networks and systems, nor unrestricted physical access to Trustee’s facilities and personnel. Reviews of processes, controls, and support documentation will be facilitated with appropriate Trustee’s personnel. The Trustee will use commercially reasonable efforts to cooperate in the audit, will make available on a timely basis the information reasonably required to conduct the audit and will assist the designated employees of the Sponsor or its auditors as reasonably necessary. The Sponsor will reimburse the Trustee for any costs incurred by the Trustee in connection with an audit conducted pursuant to this section. To the maximum extent possible, audits will be designed and conducted (in such manner and with such frequency) so as not to interfere with the provision of the services. The Sponsor will not use any competitors of the Trustee (or any significant subcontractor of Trustee under this Agreement) to conduct such audits. The auditors and other representatives of the Sponsor will execute and deliver such confidentiality and non-disclosure agreements and comply with such security and confidentiality requirements as the Trustee may reasonably request in connection with such audits.

(d) Notice of Plan Amendment.

The Trustee’s provision of the recordkeeping and administrative services set forth in this Section shall be conditioned on the Sponsor delivering to the Trustee a copy of any amendment to the Plan as soon as administratively feasible following the amendment’s adoption, and on the Administrator providing the Trustee, on a timely basis, with all the information the Trustee deems necessary for the Trustee to perform the recordkeeping and administrative services and such other information as the Trustee may reasonably request.

(e) Returns, Reports and Information.

Except as set forth in the Plan Reporting section of Schedule “A”, or as otherwise required by law, the Trustee shall not be responsible for the preparation or filing of returns, reports or information required of the Trust or Plan. The Trustee shall provide the Administrator and Sponsor with such information as the Administrator and Sponsor may reasonably request to in order to file such

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returns and reports as, in their discretion, are necessary or advisable.

Section 7. Compensation and Expenses.

Sponsor shall pay to Trustee, within thirty (30) days of receipt of the Trustee’s bill, the fees for services in accordance with Schedule “B.” Fees for services are specifically outlined in Schedule “B” and are based on any assumptions identified therein. In the event that the Plan characteristics referenced in the assumptions outlined in Schedule “B” change significantly by either falling below or exceeding current or projected levels, such fees may be subject to revision, upon mutual renegotiation. To reflect increased operating costs, Trustee may once each calendar year amend Schedule “B” without the Sponsor’s consent upon ninety (90) days prior notice to the Sponsor.

All reasonable expenses of Plan administration as shown on Schedule “B” attached hereto, as amended from time to time, shall be a charge against and paid from the appropriate Participants’ accounts, except to the extent such amounts are paid by the Sponsor in a timely manner.

All expenses of the Trustee relating directly to the acquisition and disposition of investments constituting part of the Trust, and all taxes of any kind whatsoever that may be levied or assessed under existing or future laws upon or in respect of the Trust or the income thereof, shall be a charge against and paid from the appropriate Participants’ accounts.

Section 8. Directions and Indemnification.

(a) Identity of the Sponsor and the Administrator.

The Trustee shall be fully protected in relying on the fact that the Sponsor and the Administrator under the Plan are the individual or persons named as such above or such other individuals or persons as the Sponsor may notify the Trustee in writing.

(b) Directions from the Sponsor and the Administrator.

Whenever the Sponsor or the Administrator provides a direction to the Trustee, the Trustee shall not be liable for any loss or expense arising from the direction if the direction is contained in a writing provided by any individual whose name has been submitted (and not withdrawn) in writing to the Trustee by the Sponsor or the Administrator unless it is clear on the direction’s face that the actions to be taken under the direction would be contrary to the terms of this Agreement. The Trustee may rely without further duty of inquiry on the authority of any such individual to provide direction to the Trustee on behalf of the Sponsor.

For purposes of this Section, such direction may also be made via EDT, facsimile or such other secure electronic means in accordance with procedures agreed to by the Sponsor and the Trustee and, in any such case the Trustee shall be fully protected in relying on such direction as if it were a direction made in writing by the Sponsor.

(c) Directions from Participants.

The Trustee shall not be liable for any loss which arises from any Participant’s exercise or non-exercise of rights under the Plan over the assets in the Participants’ hypothetical accounts.

(d) Indemnification.

The Sponsor shall indemnify the Trustee against, and hold the Trustee harmless from, any and all

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Losses that may be incurred by, imposed upon, or asserted against the Trustee by reason of any claim, regulatory proceeding, or litigation arising from any act done or omitted to be done by any individual or person with respect to the Plan or Trust, excepting Losses arising from the Trustee’s negligence or bad faith.

The Trustee shall indemnify the Sponsor against, and hold the Sponsor harmless from, any and all Losses that may be incurred by, imposed upon, or asserted against the Sponsor by reason of any claim, regulatory proceeding, or litigation arising from Trustee’s negligence or bad faith.

(e) Survival.

The provisions of this Section shall survive the termination of this Agreement.

Section 9. Resignation or Removal of Trustee.

(a) Resignation and Removal.

The Trustee may resign at any time in accordance with the notice provisions set forth below. The Sponsor may remove the Trustee at any time in accordance with the notice provisions set forth below. Notwithstanding the foregoing, upon a Plan Section 9.7 event (as defined in Section 2(a) hereof), the Trustee may not be removed by the Sponsor for one (1) year. If Trustee resigns within one (1) year after a Plan Section 9.7 event, the Sponsor shall name a successor trustee. If a successor trustee is not named in a timely manner, the Trustee may apply to a court of competent jurisdiction for the appointment of a successor trustee or for instructions. Following a Plan Section 9.7 event, any successor trustee must be a corporate entity unrelated to the Sponsor and its affiliates and a financial institution with authority to act in a trustee capacity. For purposes of the foregoing, a corporate entity shall not be considered to be related to the Sponsor and its affiliates solely by reason of its providing services to the Sponsor and its affiliates in the ordinary course of business of such corporate entity.

(b) Termination.

This Agreement may be terminated in full, or with respect to only a portion of the Plan at any time by the Sponsor upon prior written notice to the Trustee in accordance with the notice provisions set forth below.

(c) Notice Period.

In the event either party desires to terminate this Agreement or any services hereunder, the party shall provide at least sixty (60) days prior written notice of the termination date to the other party; provided, however, that the receiving party may agree, in writing, to a shorter notice period.

(d) Transition Assistance.

In the event of termination of this Agreement, if requested by Sponsor, the Trustee shall assist Sponsor in developing a plan for the orderly transition of the Plan data, cash and assets then constituting the Trust and services provided by the Trustee hereunder to Sponsor or its designee. The Trustee shall provide such assistance for a period not extending beyond sixty (60) days from the termination date of this Agreement. The Trustee shall provide to Sponsor, or to any person designated by Sponsor, at a mutually agreeable time, one file of the Plan data prepared and maintained by the Trustee in the ordinary course of business, in the Trustee’s format. The

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Trustee may provide other or additional transition assistance as mutually determined for additional fees, which shall be due and payable by the Sponsor prior to any termination of this Agreement.

(e) Failure to Appoint Successor.

If, by the termination date, the Sponsor has not notified the Trustee in writing as to the individual or entity to which the assets and cash are to be transferred and delivered, the Trustee may bring an appropriate action or proceeding for leave to deposit the assets and cash in a court of competent jurisdiction. The Trustee shall be reimbursed by the Sponsor for all costs and expenses of the action or proceeding including, without limitation, reasonable attorneys’ fees and disbursements.

Section 10. Successor Trustee.

(a) Appointment.

If the office of Trustee becomes vacant for any reason, the Sponsor may in writing appoint a successor trustee under this Agreement. The successor trustee shall have all of the rights, powers, privileges, obligations, duties, liabilities, and immunities granted to the Trustee under this Agreement. The successor trustee and predecessor trustee shall not be liable for the acts or omissions of the other with respect to the Trust.

(b) Acceptance.

As of the date the successor trustee accepts its appointment under this Agreement, title to and possession of the Trust assets shall immediately vest in the successor trustee without any further action on the part of the predecessor trustee, except as may be required to evidence such transition. The predecessor trustee shall execute all instruments and do all acts that may be reasonably necessary and requested in writing by the Sponsor or the successor trustee to vest title to all Trust assets in the successor trustee or to deliver all Trust assets to the successor trustee.

(c) Corporate Action.

Any successor of the Trustee or successor trustee, either through sale or transfer of the business or trust department of the Trustee or successor trustee, or through reorganization, consolidation, or merger, or any similar transaction of either the Trustee or successor trustee, shall, upon consummation of the transaction, become the successor trustee under this Agreement.

Section 11. Resignation, Removal, and Termination Notices.

All notices of resignation, removal, or termination under this Agreement must be in writing and mailed to the party to which the notice is being given by certified or registered mail, return receipt requested, to the Sponsor c/o Director of Benefits, Barnes Group Inc., 123 Main Street, Bristol, Connecticut 06010, and to the Trustee c/o Fidelity Investments, Contracts Development & Negotiation, 82 Devonshire Street, MM1M, Boston, Massachusetts 02109, or to such other addresses as the parties have notified each other of in the foregoing manner.

Section 12. Duration.

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This Trust shall continue in effect without limit as to time, subject, however, to the provisions of this Agreement relating to amendment, modification, and termination thereof.

Section 13. Insolvency of Sponsor.

(a) Trustee shall cease disbursement of funds for payment of benefits to Participants if the Sponsor is Insolvent.

(b) All times during the continuance of this Trust, the principal and income of the Trust shall be subject to claims of general creditors of the Sponsor under federal and state law as set forth below.

(i) The Board of Directors and the Chief Executive Officer of the Sponsor shall have the duty to inform Trustee in writing of Sponsor’s Insolvency. If a person claiming to be a creditor of the Sponsor alleges in writing to Trustee that Sponsor has become Insolvent, Trustee shall determine whether Sponsor is Insolvent and, pending such determination, Trustee shall discontinue disbursements for payment of benefits to Participants.

(ii) Unless Trustee has actual knowledge of Sponsor’s Insolvency, or has received notice from Sponsor or a person claiming to be a creditor alleging that Sponsor is Insolvent, Trustee shall have no duty to inquire whether Sponsor is Insolvent. Trustee may in all events rely on such evidence concerning Sponsor’s solvency as may be furnished to Trustee and that provides Trustee with a reasonable basis for making a determination concerning Sponsor’s solvency.

(iii) If at any time Trustee has determined that Sponsor is Insolvent, Trustee shall discontinue disbursements for payments to Participants and shall hold the assets of the Trust for the benefit of Sponsor’s general creditors. Nothing in this Agreement shall in any way diminish any rights of Participants to pursue their rights as general creditors of Sponsor with respect to benefits due under the Plan or otherwise.

(iv) Trustee shall resume disbursement for the payment of benefits to Participants in accordance with this Agreement only after Trustee has determined that Sponsor is not Insolvent (or is no longer Insolvent).

(c) Provided that there are sufficient assets, if Trustee discontinues the payment of benefits from the Trust pursuant to (a) hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments that would have been paid from the Trust if there had been no discontinuance, less the aggregate amount of any payments made to Participants by Sponsor in lieu of the payments provided for hereunder during any such period of discontinuance.

Section 14. Amendment or Modification.

This Agreement may be amended or modified at any time and from time to time only by an instrument executed by both the Sponsor and the Trustee. The individuals authorized to sign such instrument on behalf of the Sponsor shall be those authorized by the Sponsor.

Section 15. Electronic Services.

(a) The Trustee may provide communications and Electronic Services via

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electronic media, including, but not limited to NetBenefits, eWorkplace and Fidelity Plan Sponsor WebStation. The Sponsor agrees to use such Electronic Services only in the course of reasonable administration of or participation in the Plan and to keep confidential and not alter, publish, copy, broadcast, retransmit, reproduce, frame-in, link to, commercially exploit or otherwise redisseminate the Electronic Services, any content associated therewith, or any portion thereof (including, without limitation, any trademarks and service marks associated therewith), without the written consent of the Trustee. Notwithstanding the foregoing, the Trustee acknowledges that certain Electronic Services may, by their nature, be intended for non-commercial, personal use by Participants with respect to their participation in the Plan, or for their other retirement or employee benefit planning purposes, and certain content may be intended or permitted to be modified by the Sponsor in connection with the administration of the Plan. In such cases, the Trustee will notify the Sponsor of such fact, and any requirements or guidelines associated with such usage or modification no later than the time of initial delivery of such Electronic Services. To the extent permission is granted to make Electronic Services available to administrative personnel designated by the Sponsor, it shall be the responsibility of the Sponsor to keep the Trustee informed as to which of the Sponsor personnel are authorized to have such access. Except to the extent otherwise specifically agreed by the parties, the Trustee reserves the right, upon notice when reasonably feasible, to modify or discontinue Electronic Services, or any portion thereof, at any time.

(b) Without limiting the responsibilities of the Trustee or the rights of the Sponsor stated elsewhere in this Agreement, Electronic Services shall be provided to the Sponsor without acceptance of legal liability related to or arising out of the electronic nature of the delivery or provision of such Services. To the extent that any Electronic Services utilize Internet services to transport data or communications, the Trustee will take, and the Sponsor agrees to follow, reasonable security precautions. However, the Trustee disclaims any liability for interception of any such data or communications. The Trustee reserves the right not to accept data or communications transmitted electronically or via electronic media by the Sponsor or a third party if it determines that the method of delivery does not provide adequate data security, or if it is not administratively feasible for the Trustee to use the data security provided. The Trustee shall not be responsible for, and makes no warranties regarding access, speed or availability of Internet or network services, or any other service required for electronic communication, nor does the Trustee make any warranties, express or implied, and specifically disclaims all warranties of merchantability, fitness for a particular purpose, or non-infringement. The Trustee shall not be responsible for any loss or damage related to or resulting from any changes or modifications to the Electronic Services made in violation of this Agreement.

(c) The Sponsor acknowledges that certain web sites through which the Electronic Services are accessed may be protected by passwords or require a login and the Sponsor agrees that neither the Sponsor nor, where applicable, Participants, to the Sponsor’s actual knowledge will obtain or attempt to obtain unauthorized access to such Services or to any other protected materials or information, through any means not intentionally made available by the Trustee for the specific use of the Sponsor. To the extent that a PIN is necessary for access to the Electronic Services, the Sponsor and/or its Participants, as the case may be, are solely responsible for all activities that occur in connection with such PINs.

Section 16. Assignment.

This Agreement, and any of its rights and obligations hereunder, may not be assigned by any party without the prior written consent of the other party(ies), which consent shall not be unreasonably withheld. Notwithstanding the foregoing, Trustee may assign this Agreement in whole or in part, and any of its rights and obligations hereunder, to a subsidiary or affiliate of Trustee without consent of the Sponsor. All provisions in this Agreement shall extend to and be

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binding upon the parties hereto and their respective successors and permitted assigns.

Section 17. Force Majeure.

No party shall be deemed in default of this Agreement to the extent that any delay or failure in performance of its obligation(s) results, without its fault or negligence, from any cause beyond its reasonable control, such as acts of God, acts of civil or military authority, acts of terrorism, whether actual or threatened, quarantines, embargoes, epidemics, war, riots, insurrections, fires, explosions, earthquakes, floods, unusually severe weather conditions, power outages or strikes. This clause shall not excuse any of the parties to the Agreement from any liability which results from failure to have in place reasonable disaster recovery and safeguarding plans adequate for protection of all data each of the parties to the Agreement are responsible for maintaining for the Plan and Trust.

Section 18. Confidentiality; Safeguarding of Data.

(a) Confidential Information. In connection with this Agreement, each of the parties has disclosed and may continue to disclose to the other party information that relates to the disclosing party’s business operations, financial condition, employees, former employees, eligible dependents and beneficiaries of such employees and former employees, customers, business associates, products, services or technical knowledge. Except as otherwise specifically agreed in writing by the parties, Trustee and Sponsor each agree that from and after the Effective Date (i) all information communicated to it before or after the Effective Date by the other and identified as confidential or proprietary, (ii) all information identified as confidential or proprietary to which it has access in connection with the services, whether such access was before or after the Effective Date, (iii) all information communicated to it that reasonably should have been understood by the receiving party to be proprietary and confidential to the disclosing party including without limitation technical, trade secret or business information, financial information, business or marketing strategies or plans, product development or customer information, and (iv) the terms and conditions of this Agreement (collectively, the “Confidential Information”) will be used only in accordance with this Agreement.

(b) Ownership of Information/Safeguarding Information. Each party’s Confidential Information will remain the property of that party except as otherwise expressly provided in this Agreement. Each party will use at least the same degree of care to safeguard and to prevent disclosing to third parties the Confidential Information of the other as it employs to avoid unauthorized disclosure or publication of its own information (or information of its customers) of a similar nature, and in any event, no less than reasonable care. Each party may use and disclose relevant aspects of the other party’s Confidential Information to its employees, affiliates, subcontractors and agents to the extent such disclosure is reasonably necessary for the performance of its obligations under this Agreement or the enforcement of its rights under this Agreement; provided, however, that the disclosing party shall ensure that such parties agree to be bound by confidentiality provisions at least as restrictive as those set forth in this Section 18; and provided further, however, that in no event shall Sponsor disclose such Confidential Information to direct competitors of the Trustee. Each party will be responsible for any improper disclosure of Confidential Information by such party’s employees, affiliates, subcontractors or agents. Neither party will (i) make any use or copies of the Confidential Information of the other except as contemplated by this Agreement, or (ii) sell, assign, lease or otherwise commercially exploit the Confidential Information (or any derivative works thereof) of the other party. Neither party will withhold the Confidential Information of the other party (including in the case of the Sponsor, the Personal Data) or refuse for any reason (including due to the other party’s actual or alleged breach of this Agreement) to promptly return to the other party its Confidential Information (including copies thereof) if requested to do so.

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(c) Return of Information. Upon expiration or any termination of this Agreement and completion of a party’s obligations under this Agreement, each party will return or destroy, as the owner may direct, all documentation in any medium that contains or refers to the other party’s Confidential Information; however, each party may retain copies of Confidential Information of the other party solely to the extent required for compliance with applicable professional standards and applicable law.

(d) Exceptions to Confidential Treatment. Sections 18(a), (b) and (c) shall not apply to any particular information that either party can demonstrate (i) was, at the time of disclosure to it (a) already known to the receiving party (and not subject to a pre-existing confidentiality agreement) or (b) publicly known; (ii) after disclosure to it, becomes publicly known through no fault of the receiving party; (iii) was received after disclosure to it from a third party who did not indicate that the information was to be treated as confidential in connection with the disclosure or (iv) was independently developed by the receiving party without use of the Confidential Information of the disclosing party. In addition, a party will not be considered to have breached its obligations under this Section 18 for disclosing Confidential Information of the other party to the extent required to satisfy any valid subpoena, court order, litigation or regulatory request, or any other legal requirement of a competent governmental authority, provided that following receipt of any such request, or making a determination that disclosure is legally required, and to the extent that it may legally do so, such party advises the other party prior to making such disclosure in order that the other party may object to such disclosure, take action to ensure confidential treatment of the Confidential Information, or take such other action as it considers appropriate to protect the Confidential Information. In addition, Trustee will not be considered to have breached its obligations under this Section 18 for using or disclosing Confidential Information to the extent Trustee or an affiliate of the Trustee is specifically authorized by an individual to use that individual’s personal information (including plan-related and account-related information applicable to that individual) in connection with any other Trustee products or services.

(e) No Duty to Disclose. Nothing contained in this Section 18 will be construed as obligating a party to disclose its Confidential Information to the other party, or as granting to or conferring on a party, expressly or impliedly, any rights or license to the Confidential Information of the other party provided that Trustee shall be excused from its obligations to perform hereunder to the extent Sponsor fails to provide any such information as is reasonably necessary for Trustee to perform the services and otherwise meet its obligations hereunder.

(f) Personal Data. In order to fulfill its obligations under this Agreement, Trustee may receive in connection with this Agreement or the services provided hereunder personal data, including compensation, benefits, tax, marital/family status and other similar information about participants (“Personal Data”). Trustee acknowledges that it is receiving Personal Data only in connection with the performance of the services and Trustee will not use or disclose Personal Data without the permission of the Sponsor for any purpose other than as permitted in this Agreement and in fulfilling its obligations under this Agreement, unless disclosure is required or permitted under this Agreement or by applicable law. With respect to Personal Data it receives under this Agreement, Trustee agrees to (i) safeguard Personal Data in accordance with its privacy policy, and (ii) exercise at least the same standard of care in safeguarding such Personal Data that it uses to protect the personal data of its own employees. Notwithstanding the foregoing, Sponsor may monitor Trustee’s interactions with participants. Nothing in this Agreement shall affect in any way other product or service arrangements entered into separately by Trustee or its affiliates and the Sponsor and/or participants.

(i) Foreign Data Protection Laws. Sponsor is responsible for any and all activities necessary to ensure compliance with applicable laws regarding data protection outside of the United States and for ensuring that the transfer of Personal Data to Trustee is in compliance with such laws. Sponsor will not transfer any Personal Data to Trustee unless Sponsor has satisfied

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such laws, such as through the use of consents. Trustee will be entitled to presume that, unless notified to the contrary by Sponsor, activities necessary to ensure compliance with such laws have been satisfied by Sponsor with respect to all Personal Data furnished to Trustee hereunder. Trustee will have no obligation to process any Personal Data if Trustee is on notice that compliance with such laws has not been met.

Section 19. General.

(a) Performance by Trustee, its Agents or Affiliates.

The Sponsor acknowledges and authorizes that the services to be provided under this Agreement shall be provided by the Trustee and its agents or affiliates, and that certain of such services may be provided pursuant to one or more other contractual agreements or relationships.

(b) Entire Agreement.

This Agreement, together with the Schedules referenced herein, contains all of the terms agreed upon between the parties with respect to the subject matter hereof. This Agreement supersedes any and all other agreements, written or oral, made by the parties with respect to the services.

(c) Waiver.

No waiver by either party of any failure or refusal to comply with an obligation hereunder shall be deemed a waiver of any other obligation hereunder or subsequent failure or refusal to comply with any other obligation hereunder.

(d) Successors and Assigns.

The stipulations in this Agreement shall inure to the benefit of, and shall bind, the successors and assigns of the respective parties.

(e) Partial Invalidity.

If any term or provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

(f) Section Headings.

The headings of the various sections and subsections of this Agreement have been inserted only for the purposes of convenience and are not part of this Agreement and shall not be deemed in any manner to modify, explain, expand or restrict any of the provisions of this Agreement.

(g) Survival.

Trustee’s and Sponsor’s respective obligations under this Agreement, which by their nature would continue beyond the termination of this Agreement, including but not limited to those contained in

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Sections and/or subsections titled “Inspection and Audit,” “Indemnification,” and “Confidentiality; Safeguarding of Data” shall survive any termination of the Agreement.

Section 20. Situs of Trust Assets.

The Sponsor and the Trustee agree that no assets of the Trust shall be located or transferred outside of the United States.

Section 21. Governing Law.

(a) Massachusetts Law Controls.

This Agreement is being made in the Commonwealth of Massachusetts, and the Trust shall be administered as a Massachusetts trust. The validity, construction, effect, and administration of this Agreement shall be governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts, except to the extent those laws are superseded under section 514 of ERISA.

(b) Trust Agreement Controls.

The Trustee is not a party to the Plan, and in the event of any conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of this Agreement shall control.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the day and year first above written. By signing below, the undersigned represent that they are authorized to execute this Agreement on behalf of the respective parties. Each party may rely without duty of inquiry on the foregoing representation.

BARNES GROUP INC.
By:	/s/ Dawn N. Edwards
	Authorized Signatory
Name:	Dawn N. Edwards
Title:	Sr. Vice President, Human Resources
Date:	September 1, 2009

FIDELITY MANAGEMENT TRUST COMPANY
By:	/s/ Stephanie Nick
	FMTC Authorized Signatory
Name:	Stephanie Nick
Date:	September 8, 2009

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SCHEDULES

Schedule “A” Recordkeeping and Administrative Services

Administration

* Establishment and maintenance of Participant account and election percentages.

* Maintenance of the Plan investment options set forth on Schedule “C”.

* Maintenance of the money classifications set forth in the Plan Administration Manual.

* The Trustee will provide the recordkeeping and administrative services set forth on this Schedule “A” or as otherwise agreed to in writing (or by means of a secure electronic medium) between Sponsor and Trustee. The Trustee may unilaterally add or enhance services, provided there is no impact on the fees set forth in Schedule “B.”

A) Participant Services

1) Participant service representatives are available each Business Day at the times set forth in the Plan Administration Manual via toll free telephone service for Participant inquiries and transactions.

2) Through the automated voice response system and on-line account access via the world wide web, Participants have virtually 24 hour account inquiry. Through on-line account access via the world wide web, Participants also have virtually 24 hour transaction capabilities.

3) For security purposes, all calls are recorded. In addition, several levels of security are available including the verification of a PIN or such other personal identifier as may be agreed to from time to time by the Sponsor and the Trustee.

4) The following services are available via the telephone or such other electronic means as may be agreed upon from time to time by the Sponsor and the Trustee:

• Process Participant enrollments, in accordance with the procedures set forth in the Plan Administration Manual.

• Provide Plan investment option information.

• Provide and maintain information and explanations about Plan provisions.

• Respond to requests for literature.

• Maintain and process changes to Participants’ contribution allocations for all money sources, if applicable.

• Process exchanges (transfers) between investment options on a daily basis.

B) Plan Accounting

1) Process consolidated payroll contributions according to the Sponsor’s payroll frequency via Plan Sponsor Webstation or other medium permitted by the Trustee. The data format will be provided by the Trustee.

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2) Maintain and update employee data necessary to support Plan administration. The data will be submitted according to payroll frequency.

3) Provide daily Plan and Participant level accounting for all Plan investment options.

4) Provide daily Plan and Participant level accounting for all money classifications for the Plan.

5) Audit and reconcile the Plan and Participant accounts daily.

6) Reconcile and process Participant withdrawal requests and distributions as approved and directed by the Sponsor. All requests are paid based on the current market values of Participants’ accounts, not advanced or estimated values. A distribution report will accompany each check.

7) Maintain and process changes to Participants’ existing hypothetical investment mix elections.

C) Participant Reporting

1) Provide confirmation to Participants of all Participant initiated transactions either online or via the mail. Online confirms are generated upon submission of a transaction and mail confirms are available by mail generally within five (5) calendar days of the transaction.

2) Provide Participant statements in accordance with the procedures set forth in the Plan Administration Manual.

D) Plan Reporting

1) Prepare, reconcile and deliver a monthly Trial Balance Report presenting all money classes and investments. This report is based on the market value as of the last business day of the month. The report will be delivered not later than twenty (20) calendar days after the end of each month in the absence of unusual circumstances.

E) Government Reporting

1) Provide federal and state tax reporting and withholding on benefit payments made to Participants and beneficiaries in accordance with this Agreement.

2) Provide Mutual Fund tax reporting (Forms 1099 DIV. and 1099-B) to the Sponsor.

F) Communication & Education Services

1) Design, produce and distribute a customized comprehensive communications program for Participants. The program may include multimedia informational materials, investment education and planning materials, access to Fidelity’s homepage on the internet and STAGES magazine. Additional fees for such services may apply as mutually agreed upon between Sponsor and Trustee.

G) Other

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1) Plan Sponsor Webstation: The Fidelity Participant Recordkeeping System is available on-line to the Sponsor via the Plan Sponsor Webstation. PSW is a graphical, Windows-based application that provides current Plan and Participant-level information, including indicative data, account balances, activity and history. The Sponsor agrees that PSW access will not be granted to third parties without the prior consent of the Trustee.

BARNES GROUP INC.		FIDELITY MANAGEMENT TRUST COMPANY
By:	/s/ Dawn N. Edwards         9/1/2009	By:	/s/ Stephanie Nick               9/8/2009
	Authorized Signatory            Date		FMTC Authorized Signatory    Date

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Schedule “B” Fee Schedule

Annual Recordkeeping Fee:	$10,000.00 per year billed and payable on a quarterly basis.
Non-Fidelity Mutual Funds:	Payments made directly to Fidelity Investments Institutional Operations Company, Inc. (FIIOC) or its affiliates by Non-Fidelity Mutual Fund vendors shall be posted and updated quarterly on Plan Sponsor Webstation at https://psw.fidelity.com or a successor site.

Other Fees:

• Other Fees: separate charges, to be negotiated by the Sponsor and the Trustee, may apply for extraordinary expenses resulting from large numbers of simultaneous manual transactions, from errors not caused by the Trustee, reports not contemplated in this Agreement, corporate actions, audit support in excess of the standard and customary hours allotted for the annual financial statement audit, or the provision of communications materials in hard copy which are also accessible to Participants via electronic services in the event that the provision of such material in hard copy would result in an additional expense deemed to be material. The Sponsor may withdraw reasonable administrative fees from the Trust by written direction to the Trustee.

Note: These fees are based on the Plan characteristics, asset configuration, net cash flow, fund selection and number of Participants existing as of the date of this Agreement. In the event that one or more of these factors changes significantly, fees may be subject to change after discussion and mutual agreement of the parties. Significant changes in the legal and regulatory environment may also prompt discussion and potential fee changes.

BARNES GROUP INC.		FIDELITY MANAGEMENT TRUST COMPANY
By:	/s/ Dawn N. Edwards         9/1/2009	By:	/s/ Stephanie Nick                   9/8/2009
	Authorized Signatory            Date		FMTC Authorized Signatory        Date

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Schedule “C” Investment Options

In accordance with Section 5(b), the Sponsor hereby directs the Trustee that Participants’ individual hypothetical accounts may be invested in the following investment options:

• Fidelity Equity Income Fund

• Fidelity Blue Chip Growth Fund

• Fidelity Diversified International Fund

• Fidelity Small Cap Independence Fund

• Fidelity Government Money Market Fund

• Fidelity Freedom 2010 Fund^®

• Fidelity Freedom 2020 Fund^®

• Fidelity Freedom 2030 Fund^®

• Fidelity Freedom 2040 Fund^®

• Fidelity Freedom 2050 Fund^®

• Fidelity Freedom Income Fund^®

• Spartan^® Extended Market Index Fund – Investor Class

• Spartan^® U.S. Equity Index Fund – Investor Class

• Eaton Vance Structured Emerging Markets Fund – Class I

• Dreyfus Bond Market Index Fund – Basic Shares

• Munder Mid-Cap Core Growth – Class Y

The Sponsor hereby directs the Trustee to add any additional Fidelity Freedom Funds^®, in the “10” series, as investment options as they are launched, such funds being available as of the open of trading on the NYSE on their respective inception dates or as soon thereafter as administratively possible, unless otherwise directed by the Sponsor.

The Sponsor hereby directs that the investment option referred to in the last sentence of Section 5(c) shall be the Fidelity Freedom Income Fund.

BARNES GROUP INC.
By:	/s/ Dawn N. Edwards         9/1/2009
	Authorized Signatory            Date

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Schedule “D” Operational Guidelines for Non-Fidelity Mutual Funds

Pricing

By 7:00 p.m. Eastern Time (“ET”) each Business Day, the Non-Fidelity Mutual Fund Vendor (“Fund Vendor”) will input the following information (“Price Information”) into the Fidelity Participant Recordkeeping System (“FPRS”) via the remote access price screen that FIIOC, an affiliate of the Trustee, has provided to the Fund Vendor: (1) the NAV for each Fund at the Close of Trading, (2) the change in each Fund’s NAV from the Close of Trading on the prior Business Day, and (3) in the case of an income fund or funds, the daily accrual for interest rate factor (“mil rate”). FIIOC must receive Price Information each Business Day. If on any Business Day the Fund Vendor does not provide such Price Information to FIIOC, FIIOC shall pend all associated transaction activity in the FPRS until the relevant Price Information is made available by Fund Vendor.

Trade Activity and Wire Transfers

By 7:00 a.m. ET each Business Day following Trade Date (“Trade Date Plus One”), FIIOC will provide, via facsimile, to the Fund Vendor a consolidated report of net purchase or net redemption activity that occurred in each of the Funds up to 4:00 p.m. ET on the prior Business Day. The report will reflect the dollar amount of assets and shares to be invested or withdrawn for each Fund. FIIOC will transmit this report to the Fund Vendor each Business Day, regardless of processing activity. In the event that data contained in the 7:00 a.m. ET facsimile transmission represents estimated trade activity, FIIOC shall provide a final facsimile to the Fund Vendor by no later than 9:00 a.m. ET. Any resulting adjustments shall be processed by the Fund Vendor at the net asset value for the prior Business Day.

The Fund Vendor shall send via regular mail to FIIOC transaction confirms for all daily activity in each of the Funds. The Fund Vendor shall also send via regular mail to FIIOC, but no later than the fifth Business Day following calendar month close, a monthly statement for each Fund. FIIOC agrees to notify the Fund Vendor of any balance discrepancies within twenty (20) Business Days of receipt of the monthly statement.

For purposes of wire transfers, FIIOC shall transmit a daily wire for aggregate purchase activity and the Fund Vendor shall transmit a daily wire for aggregate redemption activity, in each case including all activity across all Funds occurring on the same day.

Prospectus Delivery

FIIOC shall be responsible for the timely delivery of Fund prospectuses and periodic Fund reports (“Required Materials”) to Participants, and shall retain the services of a third-party vendor to handle such mailings. The Fund Vendor shall be responsible for all materials and production costs, and hereby agrees to provide the Required Materials to the third-party vendor selected by FIIOC. The Fund Vendor shall bear the costs of mailing annual Fund reports to Participants. FIIOC shall bear the costs of mailing prospectuses to Participants.

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Proxies

The Fund Vendor shall be responsible for all costs associated with the production of proxy materials. FIIOC shall retain the services of a third-party vendor to handle proxy solicitation mailings and vote tabulation. Expenses associated with such services shall be billed directly the Fund Vendor by the third-party vendor.

Participant Communications

The Fund Vendor shall provide internally prepared fund descriptive information approved by the Funds’ legal counsel for use by FIIOC in its written Participant communication materials. FIIOC shall utilize historical performance data obtained from third-party vendors (currently Morningstar, Inc., FACTSET Research Systems and Lipper Analytical Services) in telephone conversations with Participants and in quarterly Participant statements. The Sponsor hereby consents to FIIOC’s use of such materials and acknowledges that FIIOC is not responsible for the accuracy of third-party information. FIIOC shall seek the approval of the Fund Vendor prior to retaining any other third-party vendor to render such data or materials under this Agreement.

Compensation

FIIOC shall be entitled to payments as set forth in a separate agreement with the Fund Vendor.

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[Barnes Group Inc. Letterhead]

Erin Wheeler

FESCO Business Compliance, Attn: Contracts.

Fidelity Investments

82 Devonshire Street, MM3H

Boston, MA 02109

Re: Investment Instructions for Rabbi Trust Assets

Dear Ms. Wheeler:

The Participants under the Barnes Group 2009 Deferred Compensation Plan (“Plan”) have the right to direct the investment of their Plan account in hypothetical investment options, which are currently based on Mutual Funds. Fidelity Management Trust Company has agreed pursuant to a Trust Agreement with Barnes Group Inc. September 1, 2009 to receive such Participant directions.

The Sponsor hereby directs the Trustee to invest funds contributed to the rabbi trust in a manner which corresponds directly to elections made by Participants under the Plan. The Sponsor also hereby directs the Trustee to vote the shares of Fidelity and Non-Fidelity Mutual Funds and vote and/or tender shares of Sponsor Stock in the same manner as directed by the Participants for the corresponding hypothetical shares credited to Participants’ accounts under the Plan. These procedures will remain in effect until a revised instruction letter is provided by the Sponsor and accepted by the Trustee.

Sincerely,

/s/ Dawn N. Edwards

Authorized Signatory

DNE/rs

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EX-10.3

Exhibit 10.3

Amendment No. 1 to the Barnes Group Inc.

Retirement Benefit Equalization Plan (“RBEP”)

Amendment No. 1

Section 3.1 of the RBEP is amended effective January 1, 2009, by adding the following sentence at the end thereof:

An employee who satisfies the minimum criteria set forth in Section 3.2 shall be deemed to have been designated by the Committee as a Participant, unless the Committee takes action before the end of the period in which such minimum criteria are satisfied to exclude such employee from participation in this Plan.

Amended: 7/22/09

EX-10.4

Exhibit 10.4

Amendment No. 2 to the Barnes Group Inc.

Retirement Benefit Equalization Plan (“RBEP”)

Amendment No. 2

A new Section 9 is added to the RBEP to read as follows:

SECTION 9

BENEFITS FOR EXECUTIVE OFFICERS PARTICIPATING

IN THE 2009 DEFERRED COMPENSATION PLAN

9.1 Conditions for Benefits. Notwithstanding any other provisions of this Plan, no benefits provided under this Plan on account of a Participant’s Separation from Service or death shall be payable to or in respect of a Participant who also participates in the Barnes Group 2009 Deferred Compensation Plan (the “2009 DC Plan”) if, at the Participant’s “separation from service” (within the meaning of the 2009 DC Plan) or death, the Participant has met the requisite age and service conditions for payment of a benefit under the 2009 DC Plan.

9.2 Time and Form of Benefits. Notwithstanding any other provisions of this Plan, if a Participant also participates in the 2009 DC Plan, any amount payable to or in respect of the Participant under this Plan on account of the Participant’s Separation from Service or death shall be paid in the form of installments, provided at the same time as installments would have been payable under the 2009 DC Plan, assuming for this purpose that the Participant (or the Participant’s Spouse, in the event of the Participant’s death) was entitled to benefits from the 2009 DC Plan. The methodology for converting from the annuity benefits form described elsewhere in this Plan to the installments form shall be determined by the Committee, in consultation with the Company’s actuary, it being the intent that the installment payments shall be actuarially equivalent to the annuity benefits.

Amended: 7/22/09

EX-10.5

Exhibit 10.5

CONSULTING AGREEMENT

CONSULTING AGREEMENT (the “Agreement”), made and entered into as of this 1st day of September, 2009, by and between Barnes Group Inc., a Delaware corporation (the “Company”), and John R. Arrington, an individual residing at 24 Daniel Trace, Burlington, Connecticut 06013 (the “Consultant”).

WITNESSETH:

WHEREAS, the Consultant has retired from the Company and terminated his employment, as of August 31, 2009, after 11 years of service as the Senior Vice President, Human Resources of the Company during which he has obtained valuable institutional knowledge about the Company and, in particular, its human resources function; and

WHEREAS, the Company desires the services of the Consultant to facilitate his successor’s transition into the position of Senior Vice President, Human Resources of the Company and to access his knowledge of the history of the Company’s human resources function and its operations, and the Consultant desires to provide such services to the Company, upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the premises, and the mutual covenants and agreements hereinafter contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby mutually covenant and agree as follows:

1. Term. The Agreement’s term is the period beginning on the date hereof and ending on February 28, 2010, subject to earlier termination as provided in Paragraph 9 below (the “Term”).

2. Consulting Services. During the Term, the Consultant shall, upon request, provide information and advice to the executive officers of the Company including, without limitation, the Senior Vice President, Human Resources, the President and Chief Executive Officer (the “CEO”) and the Senior Vice President, General Counsel and Secretary, relative to his professional knowledge and expertise in the field of human resources and his firsthand knowledge of the recent execution of the Company’s human resources function and to provide such other services as he and the Senior Vice President, Human Resources shall mutually agree (the “Consulting Services) in a good and workmanlike manner. By way of illustration and not limitation, the Consulting Services may include counsel in preparing for meetings of the Compensation and Management Development Committee of the Board of Directors of the Company, advice and introduction to professional contacts, experts and service providers in connection with executive separations, succession planning and filling key management positions, and assisting the Senior Vice President, Human Resources in addressing unusual or complex issues relative to

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employees. Subject to the mutual agreement of the Senior Vice President, Human Resources and the Consultant, the Consultant shall not be required to be present at the Company’s Corporate Office or any other location of the Company, or to travel to accomplish the Consulting Services. The Consultant shall make good faith efforts to be available not more than 20 hours per week for the performance of the Consulting Services; provided, that the hours of Consulting Services shall not exceed, in the aggregate during the Term, more than 20 percent of the average level of bona fide services performed by the Consultant when he was an employee of the Company during the 36-month period immediately prior to his retirement.

3. Consulting Fee; Expenses.

a. During the Term, the Consultant shall be paid $20,000 per month (the “Consulting Fee) for his availability to perform the Consulting Services (the “Consulting Fee”), regardless of the number of hours worked, if any. The Consultant shall not be paid for travel time unless he is actively providing the Consulting Services then.

b. The Company shall reimburse the Consultant for reasonable out-of-pocket expenses incurred in the performance of the Consulting Services. The Company shall provide reasonable office support for the Consultant. Office overhead expenses, including without limitation rent, salaries and benefits for office support staff, and supplies shall not be reimbursed. The Consultant shall use the services of the Company’s travel office for travel in connection with the Consulting Services, unless he obtains a better price for transportation or lodging expenses. The Consultant shall not be obligated to seek more advantageous prices than those obtained through the Company’s travel office.

c. The Company shall provide to the Consultant a Form 1099 for all income received during each calendar year or any portion thereof during the Term. Consultant shall be responsible for payment of all federal, state and local taxes and contributions imposed or required under applicable unemployment insurance, employment and income tax laws.

d. The payments made under this Section 3 shall constitute the Consultant’s sole compensation for Consulting Services rendered during the Term. Invoices shall be submitted to the Senior Vice President, Human Resources no less frequently than monthly and shall contain an accounting of services rendered and reimbursable expenses incurred during the applicable period.

4. Status as an Independent Contractor. It is expressly understood and agreed by the parties that the Consultant is engaged hereunder as an independent contractor. As an independent contractor, the Consultant shall not be entitled to any pension, bonus, profit-sharing, health or similar benefit which the Company may make available to its employees from time to time. Nothing contained herein shall be construed to make the Consultant an employee of the Company. The Consultant

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represents and warrants that he has and shall, for the Term, maintain adequate insurance coverage for property damage, and public and personal liability.

5. Confidentiality; Trade Secrets. The Consultant acknowledges and agrees that any information constituting a trade secret or otherwise of a proprietary, secret or confidential nature of or relating to any business of the Company, including without limitation the business of any affiliate of the Company (“Affiliate”), (“Confidential Information”) acquired by the Consultant during his performance of the Consulting Services or known by the Consultant with respect to the businesses of the Company or any Affiliate prior to the commencement of the Term is the exclusive property of, and of great value to, the Company and its Affiliates. The Consultant shall safeguard the Confidential Information and agrees that without the prior written permission of the General Counsel, he shall not divulge to any person or entity (other than to officers, directors and employees of the Company and/or its Affiliates or in connection with the proper business and affairs of the Company and/or its Affiliates), either during the Term or at any time thereafter, any Confidential Information unless and to the extent (a) that said information becomes publicly known other than as a result of the Consultant’s acts or omissions to act, or (b) as may be required by applicable law or in connection with any investigation, suit or other proceeding before any court, tribunal, arbitration proceeding or agency having competent jurisdiction thereover; provided, however, that the Consultant shall use his best efforts to provide the Company with adequate and timely written notice so as to enable the Company to seek a protective order or other appropriate relief. As used herein, Confidential Information may include, but is not limited to, the names of suppliers, customers, or employees of the Company and any Affiliate, the fees the Company and/or any Affiliate obtains or has obtained for services, financial information, computer programs, marketing plans, pricing information, the existence or terms of any discussions or negotiations concerning any transaction proposed by the Company and/or Affiliate, the Company’s manner of operation or plans, processes, and data of any kind.

The Consultant acknowledges that with respect to Confidential Information, the Consultant’s relationship to the Company is fiduciary in nature, and that Confidential Information may be furnished, or otherwise made available to the Consultant by the Company, or may be developed by the Consultant incidental to the relationship of trust and confidence which by reason of the arrangement described herein exists between the Consultant and the Company. The disclosure of Confidential Information by the Company to the Consultant or the acquisition or development of Confidential Information by the Consultant shall not be deemed to impair its confidential nature.

6. Use and Return of Materials. All notes, memoranda, notebooks, drawings, records, lists of parties with past or present relationships with the Company, procedures, reports, files and/or documents, and materials related to the confidential information or intellectual property of the Company, including, without limitation, all rights, title and interest to patents, trademarks, service marks, trade names,

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copyrights, mask works, inventions, processes, trade secrets, know-how, confidentiality agreements, consulting agreements, software and any documentation relating to the human resources policies, practices or plans that come into the Consultant’s possession or control by reason of the Consultant’s performance of the Consulting Services hereunder, whether prepared by the Consultant or others (a) are the property of the Company, (b) will not be used by the Consultant in any way adverse to the Company or any Affiliate, or for the benefit of the Consultant (beyond the terms of his Consulting Services), (c) will not be removed from the Company’s premises (except as necessary or advisable for the Consultant to perform the Consulting Services hereunder), and (d) at the termination of the Consulting Services, or upon request by the Company, will be left with or forthwith returned by the Consultant to the Company.

The Consultant shall promptly disclose to the Company all such notes, memoranda, notebooks, drawings, records, lists, procedures, reports, files, documents and materials created by Consultant as a result of performing the Consulting Services. If the Consultant first conceives, reduces to practice, makes or develops in the course of the Consulting Services, any inventions, discoveries or improvements (collectively called “inventions”), the Consultant hereby agrees to irrevocably assign to the Company all of his right, title and interest in and to such inventions.

7. Non-Competition/Non-Solicitation Covenant. The Consultant recognizes that the services to be performed by the Consultant hereunder are special, unique and extraordinary. Accordingly, for all purposes hereunder or in respect hereof, the Consultant agrees that during the Term, the Consultant shall not: (a) directly or indirectly, own, manage, operate, control or participate in any manner in the ownership, management, operation or control of, or be connected as an officer, employee, partner, director, principal, consultant, agent or otherwise with, or have any financial interest in, or aid or assist any Person in any business or line of business in substantially the same fields of business as the Company’s, provided, however, that if the Consultant owns less than five percent (5%) of the outstanding stock of any publicly traded corporation, the Consultant shall not be deemed, solely by reason of such ownership, to own, manage, operate, control, participate in, be connected with, have any financial interest in, or so aid or assist any Person in, the business of such corporation, (b) directly or indirectly, offer for sale or sell goods or solicit or provide services in substantially the same fields of business as the Company to any Person who or which is a competitor of the Company, or (c) directly or indirectly, solicit the employment of or employ any person who was an employee of the Company, or its successors or assigns, at any time during the one (1) year preceding any such solicitation. The provisions of this Section 7 shall survive termination of this Agreement. For purposes of this Agreement, “Person” shall mean and include an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company or partnership, a trust, a joint venture, an unincorporated organization or a governmental entity (or any department, agency or political subdivision thereof).

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8. Enforcement of Covenants. In the event the Consultant materially breaches or, in the good faith judgment of the Company, is alleged to have materially breached, any provision of this Agreement, the Company shall have the right to enforce such covenants through an action at law or in equity, including obtaining a preliminary or permanent injunction against any future breach, and specific performance, of said covenants, together with such other rights and remedies as may be available to the Company at law or in equity.

9. Termination. The Company may immediately terminate this Agreement and cancel any additional payments due to the Consultant under this Agreement if: (a) the Consultant’s misconduct or material failure to perform the Consulting Services under this Agreement has injured the Company (or its Affiliates), financially or otherwise, and the Consultant has not cured such misconduct or failure within thirty (30) days of written notice from the Company; (b) the Consultant has been convicted of a felony; or (c) the Consultant dies or becomes disabled. Either party may terminate this Agreement effective sixty (60) days after giving written notice to that effect to the other party. The Company shall, upon receipt of an invoice therefor, pay the Consultant for hours worked up to 20 hours per week and reimbursable expenses incurred in accordance with this Agreement through the Termination Date.

10. Successors. This Agreement and all rights of the Company hereunder shall inure to the benefit of and be enforceable by the Company and its Affiliates, successors and assigns. This Agreement and any compensation payable hereunder to the Consultant shall not be assignable by the Consultant without the prior written consent of the Company.

11. Enforceability. The provisions of this Agreement shall be regarded as divisible, and if any of said provisions or any part hereof is declared invalid or unenforceable by a court of competent jurisdiction, the validity and enforceability of the remainder of such provisions or parts hereof and the applicability thereof shall not be affected thereby.

12. Amendment. The terms and provisions of this Agreement may be modified or amended only by written agreement executed by all parties hereto.

13. Governing Law. This Agreement and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Connecticut, without giving effect to the conflict of law principles thereof. Any action relating, or incident, to this Agreement shall be brought in, and the parties hereto consent to the jurisdiction of, a federal or state court in the State of Connecticut.

14. Notice. All notices, requests, demands, claims and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given two (2) business days after it is sent by registered or certified U.S. mail, return receipt requested, postage

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prepaid, or upon delivery by personal delivery, expedited or overnight courier or messenger service, or, if sent by facsimile transmission, at the time that receipt thereof has been acknowledged by electronic confirmation or otherwise, or, if sent by electronic mail, the earlier of two (2) business days after it is sent or when receipt thereof has been acknowledged, in each case addressed to the intended recipient as set forth below:

(a)	if to Consultant, to:	John R. Arrington
		24 Daniel Trace Burlington, CT 06013
	Email Address:	seaview302@comcast.net
(b)	if to the Company, to:	Barnes Group Inc.
		123 Main Street Bristol, CT 06010
	Attention:	Dawn N. Edwards
	Facsimile No.:	860-582-3228
	Email Address:	DEdwards@BGInc.com

or to such other address as either party may designate by notice hereunder to the other.

15. Waivers and Consents. No failure to exercise and no delay in exercising, on the part of the Company or the Consultant, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or remedy hereunder preclude any other or further exercise thereof or the exclusive exercise of any other right, power or remedy. The rights provided are cumulative and not exclusive of any rights provided by law.

16. Survival. The expiration of the Term or earlier termination of this Agreement shall not relieve the parties of any of their respective obligations under this Agreement except the Consultant’s obligation to perform further services for the Company and the Company’s obligation to pay for any such further services. All of the parties’ other obligations under this Agreement shall survive such expiration of the Term or earlier termination of this Agreement.

17. Internal Revenue Code Section 409A. It is the Company’s and the Consultant’s understanding and intent that the date of the Consultant’s “termination of employment” and “separation from service,” within the meaning of Treasury Regulation Section 1.409A-1(h)(1) and any related guidance, is August 31, 2009. Further, the Company and the Consultant reasonably anticipate that the level of bona fide services that Consultant will perform for the Company will permanently decrease on and after September 1, 2009 and, for the Term in the aggregate, to no more than 20 percent of the average level of bona fide services performed by the Consultant as an employee over the 36-month period preceding September 1, 2009.

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

BARNES GROUP INC.
By:	/s/ Dawn N. Edwards
Name:	Dawn N. Edwards
Title:	Senior Vice President, Human Resources
CONSULTANT
By:	/s/ John R. Arrington
Name:	John R. Arrington
Social Security No.:  XXXX

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EX-15

EXHIBIT 15

October 30, 2009

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

Commissioners:

We are aware that our report dated October 30, 2009 on our review of interim financial information of Barnes Group Inc. for the three-month and nine-month periods ended September 30, 2009 and September 30, 2008 and included in the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2009 is incorporated by reference in its Registration Statement on Form S-8 (Nos. 002-56437, 333-27339, 333-88518, 333-133597, 333-140922, 333-150741 and 333-154701).

Very truly yours,

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Hartford, Connecticut

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Gregory F. Milzcik, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the period ended September 30, 2009 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: October 30, 2009

/S/    GREGORY F. MILZCIK        

Gregory F. Milzcik

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Christopher J. Stephens, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q for the period ended September 30, 2009 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: October 30, 2009

/S/    CHRISTOPHER J. STEPHENS, JR.        

Christopher J. Stephens, Jr.

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 September 30, 2009 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/    GREGORY F. MILZCIK	/S/    CHRISTOPHER J. STEPHENS, JR.
Gregory F. Milzcik	Christopher J. Stephens, Jr.
President and Chief Executive Officer October 30, 2009	Chief Financial Officer October 30, 2009

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.