EXHIBIT 10.6
1991 BARNES GROUP STOCK INCENTIVE PLAN
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As Amended and Restated as of July 16, 1993
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1. Purpose
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The purpose of the Plan is to authorize the grant to Senior
Executives of the Company or any Subsidiary of (i) nonqualified
options to purchase shares of Common Stock, (ii) Stock
Appreciation Rights, (iii) Incentive Stock Rights, and (iv)
Performance Unit Awards, and thus benefit the Company by giving
such employees a greater personal interest in the success of the
enterprise and an added incentive to continue and advance their
employment.
2. Definitions
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The following terms, when used in the Plan, shall mean:
1981 Plan: The Barnes Group Inc. Stock Incentive Plan
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adopted by the stockholders of the Company in 1981.
Board: The Board of Directors of the Company.
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Committee: Such committee as shall be appointed by the
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Board pursuant to the provisions of Section 11.
Common Stock: The Common Stock of the Company, par value
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$1.00 per share, or such other class of shares or other
securities as may be applicable pursuant to the provisions
of Section 9.
Company: Barnes Group Inc.
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Disability: Inability to perform the services normally
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rendered by the employee due to any physical or mental
impairment that can be expected either to be of indefinite
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duration or to result in death, as determined by the
Committee on the basis of appropriate medical evidence.
Fair Market Value: As applied to the Common Stock on any
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day, the closing market price of such stock as reported in
the New York Stock Exchange Composite Transactions Index for
such day, or if the Common Stock was not traded on such day,
for the last preceding day on which the Common Stock was
traded.
Incentive: An incentive granted under the Plan in one of
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the forms provided for in Section 3.
Option: An option to purchase shares of Common Stock.
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Plan: The 1991 Barnes Group Stock Incentive Plan herein set
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forth, as amended from time to time.
Senior Executive: An employee of the Company or of a
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Subsidiary, including an officer or director who is an
employee, who in the Committee's judgment can contribute
significantly to the growth and successful operations of the
Company or a Subsidiary.
Subsidiary: A corporation in which the Company owns,
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directly or indirectly, at least 50% of the voting stock.
3. Grants of Incentives
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(a) Subject to the provisions of the Plan, the Committee
may at any time, or from time to time, grant Incentives
under the Plan to, and only to, Senior Executives.
(b) Incentives may be in the following forms:
(i) an Option, in accordance with Section 5;
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(ii) a stock appreciation right, in accordance
with Section 6;
(iii) an incentive stock right, in accordance with
Section 7;
(iv) a performance unit award, in accordance with
Section 8; or
(v) a combination of two or more of the
foregoing.
4. Stock Subject to the Plan
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(a) Subject to adjustment as provided in Section 9, the
aggregate number of shares of Common Stock which may be
issued subject to Incentives granted under the Plan
shall not exceed the sum of (i) 500,000 shares and (ii)
the number of shares of stock covered by outstanding
options (or installments thereof) granted under the
1981 Plan which, after its expiration, shall terminate
or expire in whole or in part without being exercised.
Charges against such aggregate number are governed by
the provisions of paragraph (c) of this Section 4,
paragraph (j) of Section 5, paragraph (e) of Section 6,
paragraph (c) of Section 7, and paragraph (e) of
Section 8.
(b) Such shares may be either authorized but unissued
shares or shares issued and thereafter acquired by the
Company.
(c) If any shares subject to an Incentive shall cease to be
subject thereto because of the termination without
exercise or payment, in whole or in part, of such
Incentive, the shares as to which the Incentive was not
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exercised or paid shall no longer be charged against
the limits in paragraph (a) of this Section 4 and may
again be made subject to Incentives.
(d) The Committee may permit the voluntary surrender of all
or a portion of any Incentive granted under this Plan
conditioned upon the granting to the employee of a new
Incentive for the same or a different number of shares
or amount of other payment as the Incentive
surrendered, or it may require such voluntary surrender
as a condition to a grant of a new Incentive to such
employee. Such new Incentive shall be exercisable at
the price, during the period, and in accordance with
any other terms or conditions specified by the
Committee at the time the new Incentive is granted, all
determined in accordance with the provisions of this
Plan without regard to the price, period of exercise,
or any other terms or conditions of the Incentive
surrendered.
5. Options
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Incentives, in the form of options to purchase shares of
Common Stock, shall be subject to the following provisions:
(a) The Option price per share shall be determined as of
the effective date of the grant and shall not be less
than 85% of the Fair Market Value of the Common Stock
at the time of the grant of the Option. In no event
shall the Option price be less than the par value of
the stock which is the subject of the Option.
(b) Each Option shall expire at such time as the Committee
may determine at the time the Option is granted;
provided, however, that no Option may, under any
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circumstances, expire later than ten years from the
date such Option shall have been granted.
(c) Any Option granted under the Plan may be exercised
solely by the person to whom granted, by his/her
guardian or legal representative, or, in the case of
death, by an estate.
(d) No Option may be exercised less than 12 months from the
date it is granted. After completion of any additional
required period of employment specified in the Option
grant, the Option may be exercised, in whole or in
part, at any time or from time to time during the
balance of the term of the Option, except as limited by
provisions contained in the Option (including
provisions regarding exercise in installments).
(e) If the optionee terminates employment prior to
attaining age 55, the Option shall terminate 90 days
after termination of employment, except in the case of
death or disability.
(f) If employment terminates as a result of death or dis-
ability, or if the Optionee terminates employment after
attaining age 55, the Option shall terminate five years
after termination of employment; provided, however, if
the Optionee's employment is terminated upon the
request of the Company after the Optionee attains age
55, the Option may be terminated by the Committee
effective 90 days after termination of employment.
(g) Notwithstanding anything else in this Section 5 to the
contrary, the Committee may provide that an option will
terminate prior to time periods specified in paragraphs
5(e) and 5(f) on conditions specified by the Committee
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and incorporated in an Option Agreement between the
Company and the person receiving the option.
(h) Shares purchased upon exercise of an Option shall be
paid for in full within twenty days of the date of
exercise in cash or, with the consent of the Committee,
in whole or in part in shares of Common Stock based on
their Fair Market Value on the date of exercise.
(i) If so authorized by the Committee, the Company may,
with the consent of the optionee, and at any time or
from time to time, cancel all or a portion of any
Option granted under the Plan then subject to exercise
and discharge its obligation in respect of the Option
either by payment to the optionee of an amount of cash
equal to the excess, if any, of the Fair Market Value,
at such time, of the shares subject to the portion of
the Option so cancelled over the aggregate option price
of such shares, or by issuance or transfer to the
optionee of shares of Common Stock with a Fair Market
Value, at such time, equal to any such excess, or by a
combination of cash and shares.
(j) The forms of Option authorized by the Plan may contain
such other provisions as the Committee shall deem
advisable.
(k) Upon the exercise of an Option there shall be charged
against the limits in paragraph (a) of Section 4 the
number of shares issued to the optionee. Upon the
cancellation of any Option pursuant to paragraph (h) of
Section 5, there shall be charged against the
limitations in paragraph (a) of Section 4 a number of
shares equal to (A) the number of any shares issued to
the optionee plus (B) the number of shares purchasable
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with the amount of any cash paid to the optionee on the
basis of the Fair Market Value as of the date of
payment; and the number of shares subject to the
portion of the Option so cancelled, less the number of
shares so charged against such limitations, shall
thereafter be available for other grants of Incentives.
(l) An Option will not be treated as an Incentive Stock
Option within the meaning or section 422A of the
Internal Revenue Code of 1986, as amended.
6. Stock Appreciation Rights
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(a) A Stock Appreciation Right ("SAR") may be granted in
connection with any Option granted under the Plan,
either at the time of the grant of such Option or at
any time thereafter during the term of the Option, or
independently of the grant of an Option.
(b) An SAR shall entitle the holder thereof, upon exercise
of the SAR, to receive a number of shares of Common
Stock or cash or a combination of cash and shares (as
the Committee in its discretion may elect) determined
pursuant to paragraph (d) of this Section 6.
(c) An SAR shall be subject to the following terms and
conditions and to such other terms and conditions not
inconsistent with the Plan as shall from time to time
be approved by the Committee:
(i) If granted in connection with an Option, an SAR
shall be exercisable at such time or times and by
such person or persons and to the extent, but only
to the extent, that the Option to which it relates
shall be exercisable; provided, however, that such
SAR shall be exercisable only during the ten-day
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periods (the "Exercise Periods") beginning on the
third business day following the date of release
of a summary statement of the Company's quarterly
or annual sales and earnings and ending on the
twelfth business day following such date of
release.
(ii) If granted independently of an Option, an SAR
shall be subject to the following provisions:
(A) If a person terminates employment prior to
attaining age 55, the SAR shall terminate 90
days after the termination of employment,
except in the case of death or disability.
(B) If employment terminates as a result of death
or disability or if a person terminates
employment after attaining age 55, the SAR
will terminate one year after the termination
of employment.
(d) Upon exercise of an SAR, the holder thereof shall be
entitled to receive a number of shares equal in Fair
Market Value to (1) the amount by which the Fair Market
Value of a share of Common Stock on the date of such
exercise shall exceed the Fair Market Value of a share
of Common Stock on the date of grant of the related
Option, or, in the case of any SAR granted
independently of an option, on the date of grant of
such SAR, multiplied by (2) the number of shares in
respect of which the SAR shall have been exercised.
Settlement for any fraction of a share due shall be
made in cash. The Committee may settle all or any part
of the Company's obligation arising out of an exercise
of any SAR by the payment of cash equal to the
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aggregate value of the shares of Common Stock that it
would otherwise be obligated to deliver under the
provisions of this paragraph (d).
(e) Upon exercise of any SAR, (i) there shall be charged
against the limitations in paragraph (a) of Section 4 a
number of shares equal to (A) the number of shares
issued to the grantee under paragraph (d) of this
Section 6 plus (B) the number of shares purchasable
with the amount of any cash paid to the grantee on the
basis of the Fair Market Value as of the date of
payment and (ii) the portion of the Incentive in
respect of which such SAR shall have been exercised
shall be cancelled and the number of shares subject to
such portion, less the number of shares so charged
against such limitations, shall thereafter be available
for other grants of Incentives.
7. Incentive Stock Rights
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(a) An Incentive Stock Right will consist of incentive
stock units, each of which will be equivalent to one
share of Common Stock. An Incentive Stock Right will
be evidenced by an agreement in form approved by the
Committee, will be nontransferable, will entitle the
holder to receive shares of Common Stock, without
payment to the Company, after the lapse of the
incentive period or periods established by the
Committee and will be subject to the limitations in
paragraph (a) of Section 4. Holders of Incentive Stock
Rights will be entitled, from the date of the award, to
receive from the Company cash payments equal to the
amount of dividends declared on the number of shares of
Common Stock equal to the number of incentive stock
units held by them, such payments to be made on or
about the Company's dividend payment dates.
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(b) If an employee terminates employment prior to attaining
age 55, all Incentive Stock Rights will terminate on
the date employment terminates, except in the case of
death or disability. If employment terminates as a
result of death or disability, or after attainment of
age 55, the Committee may elect, at the end of the
Incentive period, to award a portion of the shares of
Common Stock that would have been awarded, but for the
termination of employment, equal to the number of
months in the incentive period prior to the termination
date divided by the number of months in the award
period.
(c) After the lapse of the incentive period and the
issuance of shares, there will be charged against the
limitations in paragraph (a) of Section 4 the number of
shares equal to the number of shares issued.
8. Performance Unit Awards
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(a) A Performance Unit Award will consist of performance
units granted to Senior Executives selected by the
Committee which can be paid in cash or shares of Common
Stock. Performance units may be granted alone or in
conjunction with and related to an Option. When
granted in conjunction with an Option, the number of
performance units, unless otherwise provided by the
Committee, will be equal to the number of shares under
the related Option. To the extent that the Committee
elects to pay performance units granted with a related
Option, there will be a proportionate reduction in the
number of shares available under such Option and any
related SAR. To the extent the related Option or an
SAR granted in connection with such Option is
exercised, the related number of performance units will
be proportionately reduced.
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(b) The Committee will establish an initial value for each
performance unit at the time of grant. At that time,
the Committee will also establish performance targets
to be achieved during the award period of not less than
one year set by the Committee. The value of the
performance units at the end of the award period will
be determined by the degree to which the performance
targets are achieved. Performance Unit Awards will be
subject to the limitations in paragraph (a) of Section
4 and will be evidenced by agreements setting forth the
initial value for each performance unit, the
performance targets, the award period and such other
terms and conditions not inconsistent with the Plan as
the Committee may determine.
(c) Payment, if any, at the end of the award period will be
made in cash, shares of Common Stock, or both, as
determined by the Committee. A Performance Unit Award
granted alone, not in conjunction with an Option, is
automatically payable if the conditions are met. A
Performance Unit Award granted in conjunction with an
Option is payable only at the election of the
Committee, as an alternative to the continuance of the
related option and any related SAR. The Committee may
make this election to pay only during the first two
months after the end of the award period. If the
election to pay is not made, the Performance Unit Award
terminates and the related Option and SAR continue in
effect.
(d) In the event of termination of employment prior to the
end of the award period by reason of death, disability,
or termination of employment after attainment of 55
years of age, a pro rata portion of the value of the
performance units at the end of the award period will
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be paid to the employee (or his/her estate in the case
of death), unless the Committee determines that a
different portion should be payable or elects to
terminate the award. Upon termination of employment
under any other circum-stances, the Performance Unit
Award will terminate.
(e) Upon payment of a Performance Unit Award, there shall
be charged against the aggregate limitations in
paragraph (a) of Section 4 a number of shares equal to
(i) the number of any shares issued to the employee in
respect of the Performance Unit Award plus (ii) the
number of shares purchasable with the amount of any
cash paid to the employee in respect of the Performance
Unit Award on the basis of the Fair Market Value of the
Common Stock as of the date of payment.
(f) The Committee may make such adjustments to the publicly
reported amounts of the Company's consolidated earnings
or book value as it deems appropriate for changes in
accounting practices or principles, for material
acquisitions or disposition of stock or property, for
recapitalizations or reorganizations or for any other
events with respect to which the Committee determines
such an adjustment to be appropriate in order to avoid
distortion in the operation of the Plan.
9. Adjustment Provisions
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The Options granted under the Plan shall contain such
provisions as the Commit-tee may determine with respect to
adjustments to be made in the number and kind of shares covered
by such Options and in the Option price in the event of a
reorganization, recapitalization, stock split, stock dividend,
combination of shares, merger, consolidation, rights offering, or
any other change in the corporate structure or shares of the
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Company, and in the event of any such change, the aggregate
number and kind of shares available under the Plan shall be
appropriately adjusted. In the event of any such change,
equitable adjustments shall also be made by the Committee in its
discretion in the terms and conditions of any SAR, Incentive
Stock Right, or Performance Unit Award granted under the Plan.
10. Term
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The Plan shall become effective if and when approved by the
Company's stockholders. No Incentives shall be granted under the
Plan after April 4, 2001.
11. Administration
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(a) The Plan shall be administered by the Committee, to be
appointed from time to time by the Board consisting of
not less than three members of the Board. No member of
the Committee shall be eligible to participate in the
Plan.
(b) Incentives under the Plan shall be granted in
accordance with the Committee's determinations pursuant
to the Plan, by execution and prompt delivery to the
employee of instruments approved by the Committee. Any
such grant shall be effective on the date of such
determination or, if after, on the date specified in
the instrument evidencing the grant.
(c) The interpretation and construction by the Committee of
any provision of the Plan and of any Incentive granted
thereunder shall, unless otherwise determined by the
Board, be final and conclusive on all persons having
any interest thereunder.
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12. General Provisions
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(a) Absence on leave because of military or governmental
service, or other reason, if such absence is approved
by the Committee, shall not be considered an
interruption or termination of employment for any
purpose of the Plan, or Incentives granted thereunder,
except that no Incentive may be granted to an employee
while he/she is absent on leave.
(b) Nothing in the Plan or in any instrument executed
pursuant thereto shall confer upon any employee any
right to continue in the employ of the Company or a
Subsidiary.
(c) No shares of Common Stock shall be sold, issued, or
transferred pursuant to, or accepted as payment of the
Option price of, an Incentive unless and until there
has been compliance, in the opinion of the Company's
General Counsel, with all applicable legal
requirements, including without limitation those
relating to securities laws and stock exchange
listings.
(d) No employee (individually or as a member of a group),
and no beneficiary or other person claiming under or
through him/her, shall have any right, title, or
interest in or to any shares of Common Stock allocated
or reserved for the Plan or subject to any Incentive
except as to such shares of Common Stock, if any, as
shall have been sold, issued, or transferred to
him/her.
(e) The Company or a Subsidiary may make such provisions as
it may deem appropriate for the withholding of any
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taxes which the Company or Subsidiary determines it is
required to withhold in connection with any Incentive.
(f) No Incentive and no rights under the Plan, contingent
or otherwise, (i) shall be assignable or subject to any
encumbrance, pledge, or charge of any nature, whether
by operation of law or otherwise, (ii) shall be subject
to execution, attachment, or similar process, or (iii)
shall be transferable other than by will or the laws of
descent and distribution, and every Incentive and all
rights under the Plan shall be exercisable during the
employee's lifetime only by him/her or by a guardian or
legal representative.
(g) Nothing in the Plan is intended to be a substitute for,
or shall preclude or limit the establishment or
continuation of, any other plan, practice, or
arrangement for the payment of compensation or fringe
benefits to any employee which the Company or any
Subsidiary now has or may hereafter put into effect,
including without limitation any retirement, pension,
savings or thrift, insurance, death benefit, stock
purchase, incentive compensation, of bonus plan.
13. Amendment or Discontinuance of Plan
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(a) The Plan may be amended by the Board at any time,
provided that, without the approval of the stockholders
of the Company, no amendment shall be made which (i)
increases the aggregate number of shares of Common
Stock that may be made the subject of Incentives as
provided in paragraph (a) of Section 4, (ii) materially
increases the benefits accruing to participants under
the Plan, (iii) materially modifies the requirements as
to eligibility for participation in the Plan, (iv)
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amends Section 10 to extend the term of the Plan, or
(v) amends this Section 13.
(b) The Board may discontinue the Plan at any time.
(c) No amendment or discontinuance of the Plan shall
adversely affect, except with the consent of the
holder, any Incentive theretofore granted.
4/6/94
HVL:B:\SIP.93
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