EXHIBIT 10.1
BARNES GROUP INC.
MANAGEMENT INCENTIVE COMPENSATION PLAN
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SECTION 1. PURPOSE
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The Management Incentive Compensation Plan is designed to
provide incentive compensation opportunities to persons in key
positions who contribute importantly to the success of Barnes
Group Inc. (the "Company").
SECTION 2. ADMINISTRATION
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The MICP shall be administered in part by the Compensation
Committee of the Board of Directors or its successor (the
"Committee"). Amounts paid or projected to be paid under the
MICP are referred to herein as "Awards".
SECTION 3. DEFINITIONS
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3.1 "Plan Net Headquarters Expense" shall mean headquarters
expense, less headquarters expense allocated to divisions
plus any operating plan contingency.
3.2 "Threshold" shall mean a Performance Profit level above
which an Award will be earned.
3.3 "Target" shall mean a Performance Profit level at which 25%
of the total base salaries in the fund for persons other
than the President and Chief Executive Officer ("CEO"),
Group Presidents and Senior Vice Presidents (hereafter
collectively referred to as "Senior Officers") shall be paid
as an award if Performance Profit equals the Target. For
the CEO, Group Presidents and Senior Vice Presidents, 50% of
salary, 45% of
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salary and 40% of salary, respectively shall be paid as an
award if performance profit equals the Target.
3.4 "Maximum" shall mean a Performance Profit level at which 50%
of the total base salaries in the fund for persons other
than the Senior Officers, 100% of the salary of the CEO, 90%
of the salaries of the Group Presidents and 80% of the
salaries of the Senior Vice Presidents, shall be paid as an
award if performance profit equals the Maximum.
3.5 "Plan Group Threshold" shall mean the sum of the Thresholds
for all divisions in the group less Plan Net Headquarters
Expense.
3.6 "Plan Group Target" shall mean the sum of the Targets for
all divisions in the group less Plan Net Headquarters
Expense.
3.7 "Plan Group Maximum" shall mean the sum of the Maximums for
all divisions in the group less Plan Net Headquarters
Expense.
3.8 "Net Income" shall mean consolidated net income for the
company plus (a) and (b) where (a) equals the after-tax
amount of any payments made to any participant in the MICP
for achievement over the Maximum and (b) equals the after-
tax amount of any expense attributable to Incentive Stock
Unit Awards under the Barnes Group Stock Incentive Plan.
Net Income may be adjusted to exclude amounts for
extraordinary and non-recurring items designated for
exclusion by the Committee or other factors deemed
appropriate by the Committee.
3.9 "Performance Profit" shall mean performance profit as
calculated under the company's normal procedures; provided,
however that net income rather than performance profit may
be used in the calculation hereunder for units based outside
the United States. Performance Profit may be adjusted to
exclude amounts for extraordinary and non-
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recurring items or other factors deemed appropriate by the
President and Chief Executive Officer.
SECTION 4. CORPORATE INCENTIVE FUND
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Prior to March 1st of each year the Committee shall
establish for the Corporate Incentive Fund a Threshold, a Target
and a Maximum; provided, however that Net Income shall be used
rather than Performance Profit.
The Committee may also designate intermediate levels of Net
Income between a Threshold and the Maximum and the percent of
salary which will be paid as an Award if Net Income equals any
such intermediate point.
Based on the above determinations by the Committee and the
total actual base salaries of the participants in each incentive
fund, the Controller shall calculate the applicable participation
rates.
Unless otherwise determined by the Committee, a
participation rate for performance above the Maximum shall be set
equal to the participation rate for performance between the
Target and the Maximum.
The Incentive Fund available at the end of the year for
payment of Awards shall be equal to the participation rate(s)
times the applicable amount by which Performance Profit exceeds
the profit objective(s).
SECTION 5. GROUP GOALS
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Prior to March 1st of each year the Committee shall
establish for Associated Spring, Bowman Distribution and Barnes
Aerospace the Plan Group Threshold, the Plan Group Target and the
Plan Group Maximum.
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SECTION 6. GROUP FUNDS
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Prior to March 1st of each year, the President and Chief
Executive Officer (the "CEO") will determine which units, other
than the Corporate Headquarters, should have separate incentive
funds. For each fund he will then set a Threshold, a Target and
a Maximum.
The CEO may also designate intermediate levels of
Performance Profit between the Threshold and the Maximum and the
percent of salary which will be paid as an Award if Performance
Profit equals any such intermediate point.
Based on the above determinations, which shall be submitted
in writing to the Controller, and the total actual base salaries
of the participants in each incentive fund, the Controller shall
calculate the applicable participation rates. Unless otherwise
determined by the CEO, participation rates for performance above
Maximum shall be equal to the applicable fund's participation
rate for performance between the Target and the Maximum. The
Incentive Fund available at the end of the year for payment of
Awards shall be equal to the participation rate(s) times the
applicable amount by which Performance Profit exceeds the profit
objective(s).
SECTION 7 PARTICIPANTS
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Prior to March 1st of each year, the CEO, upon the
recommendations of the group presidents and the senior staff
officers, shall designate participants in the MICP for the
current year and the funds in which they shall participate. The
CEO shall participate in the Corporate fund. The designations
will be incorporated in a memorandum from the CEO to the
Controller.
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SECTION 8 GRANT OF AWARDS - GROUP FUNDS
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8.1 Each December the CEO shall make determinations relating
to Awards to be made under the MICP.
8.2 The Controller shall provide to the CEO an estimate of each
Incentive Fund for the year and the estimated percent of
salaries earned as Awards by participants based on the
objectives set by the CEO pursuant to Section 6 hereof.
8.3 The CEO will then decide the portion of each Incentive Fund
which will be collectively awarded to the participants in
the fund. The CEO will provide a report to the Committee
summarizing his determinations made pursuant to this
paragraph.
8.4 After the end of the year and based on the final amount of
each Incentive Fund, the CEO, upon recommendation from the
group presidents, shall determine each participant's share
of the Incentive Funds (except for any Company officer who
participates in the fund).
8.5 The CEO shall have full authority to make adjustments to
Incentive Funds. He shall also have the authority to
refrain from making an Award to any participant. Except for
persons who retire, die or become permanently disabled
during the year, a person must be employed by the Company or
one of its subsidiaries on December 1st in order to receive
an Award, unless the CEO decides otherwise in individual
cases.
SECTION 9 GRANT OF AWARDS - CORPORATE FUND
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9.1 The Committee shall meet each December to make
determinations relating to Awards to be made under the MICP
for the Corporate Fund and for all Company officers.
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9.2 The Controller shall provide to the Committee an estimate of
the Corporate Incentive Fund for the year and the estimated
percent of salaries earned as Awards by participants based
on the objectives set by the Committee pursuant to Section
4 hereof.
9.3 The Committee will then decide the portion of the Corporate
Incentive Fund which will be collectively awarded to the
participants in the fund.
9.4 In December the Committee shall decide each officer's
percentage share of his/her applicable fund.
9.5 After the end of the year and based on the final amount of
the Corporate Incentive Fund, the CEO, upon recommendation
from the senior staff officers, shall determine each
participant's share of the Incentive Funds (except for
officers of the Company).
9.6 The Committee shall have full authority to make adjustments
to the Corporate Incentive Fund. It shall also have the
authority to refrain from making an Award to any officer.
It may also award a bonus in excess of a participant's MICP
award to any officer and may recommend to the CEO that a
bonus in excess of a participant's MICP award be paid to a
specified individual(s). Except for persons who retire,
die, or becomes permanently disabled during the year, a
person must be employed by the Company or one of its
subsidiaries on December 1st in order to receive an Award,
unless the Committee decides otherwise in individual cases.
SECTION 10. AWARDS ABOVE MAXIMUM
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10.1 Notwithstanding anything in this Plan to the contrary, no
awards above the Maximum shall be made to any person without
the approval of the Committee.
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SECTION 11. PAYMENT
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11.1 Prior to March 1st, a report signed by the Controller and
Chief Financial Officer specifying the final Incentive Funds
and the percent of salaries to be awarded to Participants
will be given to the Committee.
11.2 Awards shall be paid prior to March 1st, unless otherwise
decided by the Committee.
SECTION 12. GENERAL
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12.1 The interpretation of this plan by the Committee and its
decisions on all questions arising under this plan shall be
conclusive and binding on all concerned parties.
12.2 This plan may be amended at any time, including
retroactively, by the Committee.
Amended: 2/20/96
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