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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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[ ] Definitive Proxy Statement
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[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
Barnes Group Inc.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
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Barnes Group Inc.
Executive Office
123 Main Street
Post Office Box 489
Bristol, Connecticut 06011-0489
U.S.A.
Tel. (860) 583-7070
[LOGO]
March 4, 1997
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 2, 1997
The Annual Meeting of Stockholders of Barnes Group Inc. will be held at The
Travelers Education Center, 200 Constitution Plaza, Hartford, Connecticut 06103,
at 10:30 a.m. on Wednesday, April 2, 1997, for the following purposes:
1. to elect three directors for a three-year term;
2. to elect one director to fill a vacancy;
3. to act upon a proposed amendment to the Company's Restated Certificate of
Incorporation increasing the number of authorized shares of common stock from
20 million shares to 60 million shares and reducing the par value of the
Company's common stock and preferred stock from $1.00 per share to $0.01 per
share;
4. to ratify the selection of independent accountants for 1997; and
5. to transact any other business that lawfully may come before the meeting or
at any adjournment thereof.
Stockholders of record at the close of business on February 4, 1997 will be
entitled to vote at the meeting.
Stockholders who do not expect to attend the meeting and wish their stock voted
pursuant to the accompanying proxy are requested to date and sign the proxy and
return it as soon as possible in the enclosed reply envelope addressed to Barnes
Group Inc., Midtown Station, P. O. Box 946, New York, New York 10138-0746.
/s/ MARY LOUISE BEARDSLEY
- -------------------------
Mary Louise Beardsley
Secretary
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PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
APRIL 2, 1997
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Barnes Group Inc. (the "Company") of proxies to be voted
at the Annual Meeting of Stockholders to be held on April 2, 1997 and at any
adjournment thereof. A stockholder who signs and returns a proxy in the
accompanying form may revoke it by notifying the Secretary of the meeting in
person or in writing (including by delivery of a later dated proxy) at any time
before it is voted. This Proxy Statement and the enclosed form of proxy are
first being sent to stockholders on or about March 4, 1997.
ELECTION OF DIRECTORS FOR A THREE-YEAR TERM
Three directors are nominated for election at the 1997 Annual Meeting for a
three-year term (unless any of them earlier dies, resigns or is removed, as
provided in the Company's By-Laws). Thomas O. Barnes, Gary G. Benanav and Marcel
P. Joseph are nominated for re-election to the Board of Directors for terms
expiring at the Annual Meeting in 2000. K. Grahame Walker, whose term expires at
the 1997 Annual Meeting, is not standing for re-election to the Board. In
addition, Juan M. Steta, whose term would have expired at the Annual Meeting in
1998, is retiring at the 1997 Annual Meeting pursuant to the Board of Directors'
retirement policy.
Pertinent information concerning the nominees for re-election as directors and
the five directors whose terms continue after the meeting is set forth below.
Each director has been associated with his/her present organization for at least
the past five years unless otherwise noted. Except as expressly stated below,
none of the organizations listed as business affiliates of the directors is a
subsidiary or other affiliate of the Company.
NOMINEES FOR RE-ELECTION
THOMAS O. BARNES
- ------------------- Director since 1978
PHOTO Current term expires 1997
- ------------------- Mr. Barnes, 48, joined the Company in 1993. He is Chairman of the Board of
Directors and Senior Vice President-Administration of the Company. Prior
to joining the Company, he was President of The Olson Brothers Company, a
manufacturer of machined metal parts. He is also Chairman of the Benefits
Committee and a member of the Executive Committee of the Board.
GARY G. BENANAV
- ------------------- Director since 1994
PHOTO Current term expires 1997
- ------------------- Mr. Benanav, 51, is Chief Executive Officer of Aeris Ventures, L.L.C., a
venture capital firm. Since 1996, he has served as interim Chief Operating
Officer of ProHealth Physicians, a newly-formed medical management
services organization. From 1993 to 1996, he was an Executive Vice
President of Aetna Life & Casualty Company. From 1992 to 1993, he was
Group Executive of that company. He is a member of the Audit Committee,
the Compensation Committee, the Executive Committee and the Management
Development Committee of the Board. He is a director of Executive Risk
Inc.
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MARCEL P. JOSEPH
- ------------------- Director since 1991
PHOTO Current term expires 1997
- ------------------- Mr. Joseph, 62, is the retired Chairman of the Board, Chief Executive
Officer and President of Augat Inc., a multi-national manufacturer of
electromechanical connectors and other components. He is a member of the
Audit Committee, the Compensation Committee and the Management Development
Committee of the Board.
CONTINUING DIRECTORS
GEORGE T. CARPENTER
- ------------------- Director since 1985
PHOTO Current term expires 1998
- ------------------- Mr. Carpenter, 56, is President of The S. Carpenter Construction Company,
which is involved in real estate management and general contracting. He is
a member of the Executive Committee and the Management Development
Committee of the Board. He is a director of Eagle Financial Corp. and
Eagle Federal Savings Bank.
DONNA R. ECTON
- ------------------- Director since 1987
PHOTO Current term expires 1998
- ------------------- Ms. Ecton, 49, is Chief Operating Officer of PETsMART, Inc., an
international retailer of pet food and supplies. From 1995 to 1996, she
was Chairman, President and Chief Executive Officer of Business Mail
Express, Inc., which is engaged in providing expedited print and mail
services to corporations. From 1991 to 1994, she was President and Chief
Executive Officer of Van Houten North America, Inc. and Andes Candies
Inc., manufacturers of confectionery products. She is Chairman of the
Compensation Committee and a member of the Committee on Directors and the
Management Development Committee of the Board. She is a director of
Vencor, Inc., H & R Block, Inc. and PETsMART, Inc.
WILLIAM S. BRISTOW, JR.
- ------------------- Director since 1978
PHOTO Current term expires 1999
- ------------------- Mr. Bristow, 43, is President of W. S. Bristow & Associates, Inc., which
is engaged in small business development. From 1992 to 1995, Mr. Bristow
was New England Region Manager of Roberts Express, Inc., a provider of
expedited transportation services. He is Chairman of the Executive
Committee and a member of the Audit Committee, the Committee on Directors
and the Management Development Committee of the Board.
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ROBERT J. CALLANDER
- ------------------- Director since 1991
PHOTO Current term expires 1999
- ------------------- Mr. Callander, 66, is Executive in Residence at the Columbia University
School of Business. He retired as Vice Chairman of Chemical Banking
Corporation in 1992. He is Chairman of the Management Development
Committee and a member of the Committee on Directors and the Executive
Committee of the Board. He is a director of Aramark, Inc., Beneficial
Corporation, Omnicom, Inc., The Latin American Dollar Income Fund, Scudder
New Asia Fund, Scudder World Income Opportunities Fund and the Korea Fund.
THEODORE E. MARTIN
- ------------------- Director since 1993
PHOTO Current term expires 1999
- ------------------- Mr. Martin, 57, is President and Chief Executive Officer of the Company.
Prior to assuming that position in July 1995, Mr. Martin was Executive
Vice President- Operations of the Company and prior to that, President and
Chief Operating Officer of the Company's Associated Spring group. He is a
member of the Executive Committee of the Board. Mr. Martin is a director
of Ingersoll-Rand Company and Unisys Corporation.
Directors are elected by a plurality of the vote cast in the election of
directors. The Board of Directors unanimously recommends a vote FOR Messrs.
Barnes, Benanav and Joseph (Item I on the proxy card).
ELECTION OF ONE DIRECTOR TO FILL A VACANCY
By resolution of the Board of Directors, the number of current directors of the
Company is currently fixed at 10. The Board believes maintenance of a
10-director Board currently is in the best interests of the Company and its
stockholders.
Mr. Walker's determination not to stand for re-election to the Board and the
retirement of Mr. Steta from the Board leave two vacancies on the Board. The
Committee on Directors has identified a candidate to fill the vacancy created by
the retirement of Mr. Steta, commencing in June, 1997. In addition, the
Committee on Directors is engaged in a search process to identify a possible
nominee to fill the vacancy left by Mr. Walker's departure from the Board and
anticipates appointing a suitable candidate to serve on the Board in this
connection within the next few months.
Accordingly, Frank E. Grzelecki is nominated for election at the 1997 Annual
Meeting, commencing in June, 1997, for a term expiring at the Annual Meeting in
1998 (unless he earlier dies, resigns or is removed, as provided in the
Company's By-Laws). Pertinent information concerning Mr. Grzelecki is set forth
below. None of the organizations listed as a business affiliate of Mr. Grzelecki
is a subsidiary or other affiliate of the Company.
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FRANK E. GRZELECKI
- -------------------
PHOTO Mr. Grzelecki, 59, is President and Chief Operating Officer of Handy &
- ------------------- Harman, a diversified manufacturer providing engineered products, systems
components and precious metal fabrication. Prior to being named to his
current post, he held the position of Vice Chairman of Handy & Harman from
1989 to 1992. He is a director of Handy & Harman, Chartwell Re
Corporation, Morgan Group, Inc. and Spinnaker Industries, Inc.
A plurality of the votes cast on the proposal is required to elect Mr. Grzelecki
to the Board of Directors. The Board of Directors unanimously recommends a vote
FOR Mr. Grzelecki (Item 2 on the proxy card).
THE BOARD AND ITS COMMITTEES
In 1996, the Board held eight meetings and the Executive Committee held two
meetings. Each incumbent director of the Company attended in excess of 90% of
the meetings of the Board of Directors and committees of the Board of Directors
on which he or she served during 1996. The Audit Committee is responsible for
matters relating to accounting policies and practices, financial reporting and
the internal control structure. Each year it recommends to the Board the
appointment of a firm of independent accountants to audit the financial
statements of the Company. It reviews with representatives of the independent
accountants the scope of their audit of the Company's financial statements,
results of audits, audit fees and any recommendations with respect to the
internal control structure. The Audit Committee also reviews non-audit services
rendered by the Company's independent accountants and periodically meets with or
receives reports from principal corporate officers and the Director, Internal
Audit, of the Company. The Audit Committee held three meetings in 1996. The
Benefits Committee, which met two times last year, administers the Company's
pension, profit-sharing, and welfare benefits plans. The Compensation Committee,
which met three times last year, administers the incentive and stock plans
referred to below, sets the salary for the President and Chief Executive Officer
and the other senior officers of the Company and reviews and approves the
compensation of the Company's other officers. The Committee on Directors, which
met three times last year, makes recommendations concerning Board membership,
functions and compensation. The Committee on Directors will consider director
nominations submitted by stockholders in accordance with the procedures
described below under the caption "Stockholder Proposals for 1998 Annual
Meeting." The Management Development Committee is responsible for planning
management succession of the Company's senior officers, reviewing the
performance of the Chief Executive Officer and monitoring management resources
and the performance of key executives. The Management Development Committee met
once in 1996. All of these committees are standing committees of the Board.
COMPENSATION OF DIRECTORS
The annual retainer for directors is $25,000. The fee for attending a meeting is
$1,000 ($1,500 if held outside of Connecticut or New York City), except that the
committee chairman receives an additional $500 for each meeting at which he or
she presides. Messrs. T. O. Barnes and Martin receive no retainer or meeting
fees for service as directors. The grant of rights to receive stock and the
payment of dividend equivalents under the Non-Employee Director Deferred Stock
Plan are additional forms of director compensation. Under this plan, each
non-employee director has been granted the right to receive 2,000 shares of
Common Stock when his or her membership on the Board terminates. The plan
provides that each newly elected director will receive the same grant. The plan
also provides for the payment of dividend equivalents equal to 2,000 times the
dividend per share for each dividend payment date.(1)
- ---------------
(1) Mr. T. O. Barnes became a participant in the plan when it was adopted in
1987. He became an employee in 1993 and continues to participate in the
plan.
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MANAGEMENT'S STOCK OWNERSHIP
As of February 4, 1997, the Company's directors, nominee for director, named
executive officers and directors and officers as a group, beneficially owned the
number of shares of the Company's common stock, par value $1.00 per share (the
"Common Stock"), shown below:
Amount and
Nature of Percent of
Name of Person Beneficial Common
or Group Ownership(1) Stock
- -------------------------------------------------------------------------------------------------
Thomas O. Barnes(2) 458,887 6.9%
Gary G. Benanav 2,609 *
John E. Besser 22,877 *
William S. Bristow, Jr. 207,962 3.1
Robert J. Callander 3,123 *
Leonard M. Carlucci 36,652 *
George T. Carpenter 61,030 *
Donna R. Ecton 3,018 *
Ali A. Fadel 22,341 *
Frank E. Grzelecki 0 *
Marcel P. Joseph 3,023 *
John J. Locher 14,683 *
Theodore E. Martin 90,482 1.4
Juan M. Steta 8,246 *
K. Grahame Walker 3,219 *
Directors & officers as a group(17 persons) 845,610 14.5
- --------------------------------------------------------------------------------
* Less than 1% of Common Stock beneficially owned.
NOTES TO THE STOCK OWNERSHIP TABLE:
(1) The named person or group has sole voting and investment power with respect
to the shares listed in this column, except as set forth in this Note. Mr. T. O.
Barnes has sole voting power and no investment power with respect to 240,370
shares pursuant to a revocable power of attorney given to him by Mr. Wallace
Barnes. These shares are also included in the holdings for Mr. W. Barnes set
forth below under the caption "Beneficial Owners of More than 5% of Shares." Mr.
T. O. Barnes also has sole voting and shared investment power with respect to
112,479 shares and no voting and shared investment power with respect to 25,056
shares. Of these 25,056 shares, 3,000 shares are also included in the figure for
Mr. Martin who shares investment power. Included in Mr. Carpenter's total are
55,482 shares held by corporations through which he has voting control. Mr.
Bristow has shared voting and shared investment power with respect to 160,560
shares. The remainder of Mr. Bristow's shares are held in a trust which he has
the power to revoke.
The shares listed for Messrs. T. O. Barnes, Besser, Carlucci, Fadel, Locher and
Martin, and the directors and officers as a group, include 18,200, 14,340,
22,350, 11,250, 8,400, 48,920 and 139,835 shares, respectively, which they have
the right to acquire within 60 days after February 4, 1997. The shares listed
for Messrs. T. O. Barnes, Besser, Carlucci, Fadel, Locher and Martin and the
directors and officers as a group also include 1,020, 5,561, 3,454, 2,024,
5,787, 2,808 and 28,319 shares, respectively, over which they have voting power
and limited investment power. These shares are held under the Company's
Guaranteed Stock Plan (an employee stock ownership plan). The shares listed for
Messrs. T. O. Barnes, Benanav, Bristow, Callander, Carpenter, Ecton, Joseph,
Steta and Walker include 2,000 shares each that each of them have the right to
receive under the Non-Employee Director Deferred Stock Plan described above.
The shares listed for Messrs. Carlucci, Fadel and Martin include 8,031, 9,067
and 20,725 incentive stock units, respectively, that each currently may have the
right to receive on February 16, 2001 pursuant to an
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Incentive Stock Right Agreement. A description of the Incentive Stock Right
Agreement is contained in Note (c) to the Summary Compensation Table.
Except for the shares under the Non-Employee Director Deferred Stock Plan and
the incentive stock rights of Messrs. Carlucci, Fadel and Martin, the number of
shares reported as beneficially owned have been determined in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
(2) Mr. T. O. Barnes's address is 123 Main Street, Bristol, Connecticut 06010.
The Board of Directors believes that, except for matters required to be
submitted to stockholders, the Company is controlled by its Board of Directors
acting as such.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company believes that its officers and directors have complied in 1996 with
the filing requirements of Section 16(a) of the Exchange Act, except that Mr. T.
O. Barnes was late in reporting one transaction involving a trust of which he is
a co-trustee.
BENEFICIAL OWNERS OF MORE THAN 5% OF SHARES
As of December 31, 1996, in addition to Mr. T. O. Barnes, whose beneficial
ownership of Common Stock is set forth above under the caption "Management's
Stock Ownership," the individuals and institutions set forth below are the only
persons known by the Company to be beneficial owners of more than 5% of the
outstanding shares of Common Stock:
Amount and
Nature of Percent of
Name and Address Beneficial Common
of Beneficial Owner Ownership Stock
- ------------------------------------------------------------------------
Mr. Wallace Barnes(1) 682,465 10.2%
1875 Perkins Street
Bristol, Connecticut 06010
Fleet National Bank(2) 868,675 13.0
777 Main Street
Hartford, Connecticut 06115
State Street Bank and Trust Company(3) 1,173,422 17.9
225 Franklin Street
Boston, Massachusetts 02110
- ---------------
(1) As of December 31, 1996, Mr. Wallace Barnes reported that he beneficially
owned 682,465 (10.2%) shares of Common Stock. He has sole voting and investment
power with respect to 164,094 shares, sole voting power and shared investment
power with respect to 278,001 shares, and no voting and sole investment power
with respect to 240,370 shares.
(2) As of December 31, 1996, Fleet National Bank ("Fleet") reported that it was
the beneficial owner of 868,675 (13.0%) shares of Common Stock. Fleet reported
that it had sole voting and sole investment power with respect to 157,419
shares, sole voting and shared investment power with respect to 4,373 shares,
sole voting and no investment power with respect to 3,350 shares, shared voting
and shared investment power with respect to 161,360 shares, shared voting and no
investment power with respect to 234 shares, and no voting and shared investment
power with respect to 541,939 shares.
(3) As of December 31, 1996, State Street Bank and Trust Company ("State
Street") reported that it held 1,149,622 (17.6%) shares of Common Stock in its
capacity as trustee for the Company's Guaranteed Stock Plan (an employee stock
ownership plan). The plan provides that the stock shall be voted by the Trustee
as directed by the participants in the plan. State Street also reported that it
had sole voting and
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investment power with respect to 23,600 shares and sole voting and shared
investment power with respect to 200 shares.
REPORT OF THE COMPENSATION COMMITTEE
The Company's compensation program for executive officers is designed to
attract, retain and motivate superior executive talent and to align a
significant portion of each officer's total compensation with the performance of
the applicable business unit, the Company and the interests of the Company's
stockholders. To this end, the Company has implemented a competitive total
compensation program for executive officers composed of the following elements,
each of which are separately discussed below: base salary; annual bonus; and
long-term compensation, including both awards under the Company's Long Term
Incentive Plan and 1991 Barnes Group Stock Incentive Plan.
BASE SALARY
Base salaries for the President and Chief Executive Officer and the other
executive officers are established by considering competitive levels for
positions of similar responsibility, the experience of the individual and the
executive's expected contribution to the Company. Merit increases are determined
based upon both the overall performance of the individual and the Company as a
whole and changes in competitive compensation levels.
Mr. Martin became President and Chief Executive Officer on July 1, 1995. His
annual base salary was reviewed and increased to $500,000 at the beginning of
1996. In reviewing and adjusting Mr. Martin's salary, the Compensation Committee
considered many factors, including the following: Mr. Martin's leadership of,
and individual contribution to, the Company; the Company's progress with respect
to financial and strategic targets and objectives; trends with respect to the
Company's sales, earnings per share, return on equity, return on capital
employed, operating margin and cash flow; and the salaries of chief executive
officers of companies similar to the Company in size and complexity.
ANNUAL BONUS
Annual bonuses may be earned by executive officers and other key employees under
the Company's annual bonus plans. Payments under these plans are based on the
performance of the Company as a whole or the business unit over which the
individual has a direct influence. The Committee establishes annual financial
measurements for the Company and each major operating unit, the achievement of
which will determine the level of the bonus. The measurements for the Company,
which are applicable to the President and Chief Executive Officer and the
corporate staff officers, are based on the Company's consolidated net income. In
addition, the plan allows for the exclusion of certain provisions such as
restructuring charges. The measurements for operating units, which are
applicable to officers having direct responsibilities relating to one of the
Company's three operating units, are based on the operating income of the
applicable unit less a charge for the capital employed by the unit.
Each of the Company's officers is eligible to receive a percentage of his or her
base salary as a bonus if the Company achieves its financial goals. The
percentage varies depending on the individual's position with the Company. In
1996, the maximum amount of base salary payable as a bonus under the plan to
each of the Company's officers was: 100% for the President and Chief Executive
Officer; 90% for the Group Presidents; 80% for the Senior Vice Presidents; and
50% for the Company's other officers and senior executives. For exceptional
performance results, the Compensation Committee may award amounts in excess of
maximum to any participant. Mr. Martin received a bonus of $575,000 for 1996.
LONG-TERM COMPENSATION
Management and the Committee believe that, over the long term, stockholder value
is created by the generation of cash flow in excess of the risk-adjusted cost of
the stockholders' equity invested in the
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Company. The Company's Long Term Incentive Plan ("LTIP") rewards executive
officers for increasing over time the excess of cash flow from operations over
the risk-adjusted cost of equity.
Under the LTIP, the Committee grants performance units to executive officers,
and cash payments are equal to the increase in the value of the performance
units over a three-year period. The value of a performance unit for any single
year is a function of cash flow from operations, less the risk-adjusted cost of
equity capital, for the current year plus the previous four years. Awards for
the three-year cycle are paid in the year following the end of the cycle.
Awards under the LTIP paid in 1996 were based on an increase in the value of
performance units over the three-year period from 1993 to 1995 resulting from an
increase in cash flow in excess of the cost of equity capital. In 1996, Mr.
Martin received an award of $72,480 for the 1993-1995 period.
Under the 1991 Barnes Group Stock Incentive Plan, the Committee grants stock
options and other stock-based awards to executive officers and other key
executives in an effort to align the interests of executives with those of the
stockholders. Except for one-time initial grants (which are typically awarded at
85% of market value) to certain senior executive officers upon assumption of
their positions, options generally have been granted on an annual basis at the
market price of the Common Stock on the date of grant to vest and become
exercisable over time.
In July, 1993, however, the Committee made special option grants to executive
officers and other key managers in lieu of grants that would normally have been
given over the four-year period 1994 through 1997. To ensure that option
recipients were not rewarded unless the market price of the Common Stock
experienced a significant increase, these options contained special provisions
relating to exercisability. They did not become exercisable until 1997 at the
earliest, and then only if the market price of the Common Stock reached $44 per
share for at least 30 consecutive trading days beginning January 1, 1997. The
market price threshold was achieved and sustained for the required 30-day
period, and the options became exercisable on February 13, 1997.
Mr. Martin received options under this special grant to purchase 14,800 shares
at an exercise price of $31.25 per share, the market price of the Common Stock
on the date of grant. In January, 1994, in recognition of Mr. Martin's
assumption of the position of Executive Vice President-Operations, he received
additional options to purchase 13,200 shares under substantially the same terms
as the 1993 special grant at an exercise price of $31.13 per share, the market
price of the Common Stock on the date of grant. In addition, on June 30, 1995,
in recognition of Mr. Martin's assumption of the position of President and Chief
Executive Officer, he received options to purchase 40,000 shares under the terms
of regular stock option grants at an exercise price of $40.25 per share, the
market price on the date of grant.
On February 16, 1996, Mr. Martin and two other executive officers of the Company
each were awarded incentive stock rights, with attached dividend equivalent
rights, described in footnote (c) to the Summary Compensation Table. These
awards, like the special option grants, serve as incentives for these key
executive officers both to remain with the Company and to enhance stockholder
value.
In general, the number of performance units granted under the LTIP and the
number of stock options and other stock-based awards granted under the 1991
Barnes Group Stock Incentive Plan are based on the responsibilities and
performance of the individual and the market median of long-term incentive
opportunities for persons in similar positions to the Company in size and
complexity.
OTHER
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
limits the Company's tax deduction to $1 million per year (the "Million Dollar
Cap") for certain compensation paid to each of its Chief Executive Officer
("CEO") and the four highest compensated executives other than the CEO named in
the proxy statement (the "Covered Executives"). Regulations issued under the
Code exclude from the Million Dollar Cap compensation that is calculated based
on attainment of pre-established, objective performance goals, if certain other
requirements are met. The Committee's policy is to
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structure compensation awards for Covered Executives that will be deductible
without limitation where doing so will further the purposes of the Company's
executive compensation programs. The Committee also considers it important,
however, to retain flexibility to design compensation programs that recognize a
full range of performance criteria important to the Company's success, even
where compensation payable under such programs may not be fully deductible.
CONCLUSION
The Committee believes that the elements of the compensation programs described
above combine to provide competitive total compensation packages to the
Company's executive officers. Most importantly, an executive's total
compensation is heavily dependent on corporate performance in a manner which
aligns the interests of the executive with those of the stockholders over the
long term.
COMPENSATION COMMITTEE:
Donna R. Ecton, Chairman
Gary G. Benanav
Marcel P. Joseph
Juan M. Steta
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1996, the Compensation Committee consisted of Ms. Ecton and Messrs.
Benanav, Carpenter, Joseph and Steta. Companies in which Mr. Carpenter is a
major stockholder acted as general contractor for construction work performed at
the Company's Executive Office and at its manufacturing plants in Windsor and
Bristol, Connecticut. The aggregate price for the construction work was
$200,710.
COMPENSATION
The following table sets forth compensation paid by the Company to its Chief
Executive Officer and to the four remaining most highly-paid persons who were
executive officers at the end of 1996 based on salary and any payments made
under the Company's annual bonus plan. Pursuant to applicable rules,
compensation information is also provided for John E. Besser who resigned as an
officer of the Company in 1996.
SUMMARY COMPENSATION TABLE
Long Term Compensation
----------------------------------------
Awards Payouts
------------------------- ----------
Annual Compensation
---------------------------------
Other Restricted Securities
Annual Stock Underlying
Compen- Awards(c) Options LTIP
Name and Principal Position(a) Year Salary Bonus sation(b) ($) (#) Payouts(d)
- ---------------------------------- ---- -------- -------- ------- ---------- ---------- ----------
T. E. Martin 1996 $500,004 $575,000 $18,764 $1,660,000 -0- $ 72,480
President and 1995 375,006 187,503 14,011 -0- 40,000 4,620
Chief Executive Officer 1994 280,008 139,164 8,866 -0- 13,200 3,060
A. A. Fadel 1996 240,012 183,202 1,248 726,250 -0- 34,500
Vice President, Barnes Group Inc. 1995 197,504 80,000 1,275 -0- -0- 1,344
and President, 1994 167,404 83,702 905 -0- 26,200 -0-
Associated Spring
T. O. Barnes 1996 230,004 184,003 1,696 -0- -0- 38,240
Chairman of the Board and 1995 212,502 106,251 1,611 -0- -0- 1,555
Senior Vice President- 1994 180,000 89,280 -0- -0- 23,200 -0-
Administration
L. M. Carlucci 1996 210,000 189,000 4,377 643,250 -0- 38,880
Vice President, Barnes Group Inc. 1995 176,374 88,187 3,613 -0- -0- 1,250
and President, Bowman 1994 151,849 74,323 2,916 -0- 4,000 -0-
Distribution
J. J. Locher 1996 152,316 76,158 4,139 -0- -0- 48,960
Vice President, Treasurer 1995 152,316 76,158 4,179 -0- -0- 1,782
1994 147,876 73,198 3,740 -0- -0- 1,404
J. E. Besser 1996 240,012 -0- 8,590 -0- -0- 67,200
Former Senior Vice President- 1995 240,012 120,006 8,649 -0- -0- 4,752
Finance and Law 1994 220,008 106,923 7,454 -0- 4,400 3,276
All
Other
Compen-
Name and Principal Position(a) sation(e)
- ---------------------------------- ---------
T. E. Martin $29,984
President and 25,619
Chief Executive Officer 22,107
A. A. Fadel 6,536
Vice President, Barnes Group Inc. 6,580
and President, 6,122
Associated Spring
T. O. Barnes 9,479
Chairman of the Board and 10,328
Senior Vice President- 9,596
Administration
L. M. Carlucci 11,642
Vice President, Barnes Group Inc. 10,396
and President, Bowman 9,955
Distribution
J. J. Locher 11,252
Vice President, Treasurer 11,252
11,084
J. E. Besser 18,516
Former Senior Vice President- 18,612
Finance and Law 18,133
(a) Mr. Martin was promoted to President and Chief Executive Officer in July,
1995. Mr. Carlucci assumed his current position in December, 1995.
(b) Reimbursement for taxes paid on insurance premiums paid by the Company. The
figure for Mr. Martin also includes "above-market" interest (as defined in
rules promulgated by the Securities and Exchange Commission) paid on
deferred compensation.
(c) On February 16, 1996, Messrs. Martin, Fadel and Carlucci were each awarded
incentive stock rights consisting of 40,000, 17,500 and 15,500 incentive
stock units, respectively. Incentive stock units are denominated in shares
of Common Stock. Half of the rights awarded to each executive entitle the
holder to receive, without payment to the Company, shares of Common Stock
equal to the number of incentive stock units credited to the holder on
February 16, 2001, provided that the holder is an
10
13
employee of the Company on that date. Units underlying these rights were
credited to each executive as of the date of the award. The other half of
the rights awarded to each executive entitle the holder to receive, without
payment to the Company, shares of Common Stock equal to the number of
incentive stock units credited to the holder on February 16, 2001, provided
that the holder is an employee of the Company on that date and that
specified performance targets for the Company's earnings per share are met.
Units underlying these rights are credited in increments to each executive
over the term of the award, commencing February 15, 1997, in accordance with
a schedule based on the attainment by the Company of specified levels of
earnings per share. Pursuant to the terms of the award, the holder is
credited with dividend equivalents on all incentive stock units credited to
him based upon dividends paid on outstanding shares of Common Stock. Such
dividend equivalents, once credited, are converted into a number of
additional incentive stock units, as of each dividend payment date, equal to
the amount of dividends that would have been paid on the number of shares of
Common Stock equal to the number of incentive stock units credited to the
holder immediately prior to the dividend payment date divided by the market
price of the Common Stock on the dividend payment date. As of December 31,
1996, Messrs. Martin, Fadel and Carlucci were credited with 20,725, 9,067
and 8,031 incentive stock units, respectively, having a value as of December
31, 1996 of $1,243,500, $544,020 and $481,860, respectively.
(d) Payment in the designated year with respect to three-year performance cycles
ending the prior year. Thus, the payment made in 1996 covered the three-year
cycle ending in 1995.
(e) Includes Company matching contributions under the Guaranteed Stock Plan and
premiums paid for life insurance. In the case of Mr. Barnes, it also
includes the amount of dividend equivalents that he received under the
Company's Non-Employee Director Deferred Stock Plan described above under
the caption "Non-Employee Director Deferred Stock Plan."
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STOCK OPTIONS
No stock options were granted in 1996 to any of the executive officers listed in
the Summary Compensation Table.
The following table provides information relating to stock option exercises in
1996 by the named executive officers and the number and value of each such
officer's unexercised in-the-money options/SARs on December 31, 1996, based on
the difference between the exercise price and the $60 per share year-end market
price of the Common Stock.
AGGREGATED OPTION/SAR EXERCISES IN 1996
AND YEAR-END OPTION/SAR VALUES
NUMBER OF SECURITIES UNDERLYING
VALUE OF UNEXERCISED IN-THE-
SHARES UNEXERCISED OPTIONS/SARS AT MONEY OPTIONS/SARS AT
ACQUIRED FISCAL YEAR-END(#) FISCAL YEAR-END($)
ON VALUE ------------------------------- -------------------------------
EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ----------- ----------- ------------- ----------- -------------
T. E. Martin 2,235 $ 27,237 19,970 58,950 $ 571,510 $ 1,425,684
A. A. Fadel -0- -0- 9,225 22,575 296,700 686,094
T. O. Barnes -0- -0- 2,500 18,200 83,850 548,784
L. M. Carlucci 5,000 54,193 11,600 10,750 382,575 309,280
J. J. Locher 7,600 63,284 1,600 6,800 34,592 195,200
J. E. Besser 15,600 253,461 2,600 14,340 89,700 412,787
LONG-TERM INCENTIVE PLAN AWARDS
The following table provides information relating to grants of performance units
in 1996 under the LTIP.
LONG-TERM INCENTIVE PLANS -- AWARDS IN 1996
PERFORMANCE OR
NUMBER OF OTHER PERIOD
SHARES, UNITS UNTIL
OR OTHER MATURATION
NAME RIGHTS(#) OR PAYOUT
-------------- --------------
T. E. Martin 47,400 units 1996-1998(a)
A. A. Fadel 14,600 units 1996-1998(a)
T. O. Barnes 12,000 units 1996-1998(a)
L. M. Carlucci 13,300 units 1996-1998(a)
J. J. Locher 2,600 units 1996-1998(a)
J. E. Besser -0- N/A
(a) Under the LTIP, there are no thresholds, targets or maximums (as those terms
are used in the Securities and Exchange Commission's rules). Payments are
based on the increase in the value of performance units during the indicated
performance period. The value of a performance unit over the three-year
period ending December 31, 1996 increased by $5.38. However, this is not
necessarily representative of the increase, if any, that will occur during
the period 1996-1998. During 1996, the first year of the current performance
period, the value of a performance unit increased by $2.91. Payments under
the LTIP made in the prior three years are shown in the Summary Compensation
Table. Performance units granted under the LTIP are described above under
the caption "Report of the Compensation Committee."
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15
PENSION PLANS
The following table gives examples of estimated annual retirement benefits
payable to a named executive officer (other than Messrs. T. O. Barnes, Carlucci,
Fadel and Martin, whose benefits are estimated in Pension Plan Table B below) as
though he had retired in 1996 at age 65 in specified compensation and years of
service classifications under the Company's Salaried Retirement Income Plan,
Retirement Benefit Equalization Plan and Supplemental Executive Retirement Plan.
PENSION PLAN TABLE A
Years of Service
-------------------------------------------------------------------------
Remuneration 15 20 25 30 35 40
- ------------ -------- -------- -------- -------- -------- --------
$125,000 $ 43,508 $ 58,010 $ 72,513 $ 75,638 $ 78,763 $ 81,888
150,000 52,695 70,260 87,825 91,575 95,325 99,075
200,000 71,070 94,760 118,450 123,450 128,450 133,450
250,000 89,445 119,260 149,075 155,325 161,575 167,825
300,000 107,820 143,760 179,700 187,200 194,700 202,200
350,000 126,195 168,260 210,325 219,075 227,825 236,575
400,000 144,570 192,760 240,950 250,950 260,950 270,950
450,000 162,945 217,260 271,575 282,825 294,075 305,325
500,000 181,320 241,760 302,200 314,700 327,200 339,700
550,000 199,695 266,260 332,825 346,575 360,325 374,075
600,000 218,070 290,760 363,450 378,450 393,450 408,450
The compensation included in Pension Plan Table A in determining earnings for
retirement plan purposes includes only annual salaries as shown in the column
labeled "Salary" in the Summary Compensation Table. Benefits are computed based
on a straight-life annuity. The benefits listed in the table are not subject to
a deduction for Social Security.
Messrs. T. O. Barnes, Carlucci, Fadel and Martin all participate in the
Company's Supplemental Senior Officer Retirement Plan. The following table gives
examples of estimated annual retirement benefits payable under the Company's
Supplemental Senior Officer Retirement Plan to each of these senior executive
officers as though he had retired in 1996 at age 65 in specified compensation
and years of service classifications.
PENSION PLAN TABLE B
15 or More
Remuneration Years of Service
- ------------ ----------------
$ 125,000 $ 68,750
150,000 82,500
200,000 110,000
250,000 137,500
300,000 165,000
350,000 192,500
400,000 220,000
450,000 247,500
500,000 275,000
600,000 330,000
700,000 385,000
800,000 440,000
900,000 495,000
1,000,000 550,000
1,100,000 605,000
1,200,000 660,000
1,300,000 715,000
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16
The compensation included in determining earnings for the Supplemental Senior
Officer Retirement Plan includes only annual salary and bonus as shown in the
columns labeled "Salary" and "Bonus" in the Summary Compensation Table. Benefits
are computed based on a straight-life annuity. This plan functions as an
"umbrella" plan, and benefits listed in the table above are subject to deduction
for Social Security benefits, benefits derived from other employers' pension
plans and any benefits earned under the Company's other defined benefit plans,
including, without limitation, the Salaried Retirement Income Plan, Retirement
Benefit Equalization Plan and Supplemental Executive Retirement Plan.
Years of service as of December 31, 1996, rounded to the nearest whole year, for
the named executive officers are as follows: T. E. Martin, 6 years; A. A. Fadel,
5 years; T. O. Barnes, 6 years; L. M. Carlucci, 21 years; J. J. Locher, 15
years; and J. E. Besser, 16 years.
PERFORMANCE GRAPH
A stock performance graph based on cumulative total returns (price change plus
reinvested dividends) for $100 invested on December 31, 1991 is set forth below.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN OF BARNES GROUP INC.,
THE S&P 500 INDEX AND THE S&P MANUFACTURING (INDUSTRIAL DIVERSIFIED) INDEX
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) S&P 500 S&P MANUFACTURING BARNES GROUP INC.
DEC-91 100 100 100
DEC-92 107.61 108.39 90.18
DEC-93 118.41 131.58 96.56
DEC-94 119.97 136.11 122.37
DEC-95 165.00 191.66 120.53
DEC-96 202.85 255.58 208.30
14
17
PROPOSAL TO AMEND CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
AND DECREASE PAR VALUES PER SHARE
On February 21, 1997, the Board of Directors unanimously approved a
three-for-one stock split in the form of a stock dividend of the Common Stock
(the "Stock Split"), subject to the approval by the stockholders of a proposed
amendment to the Company's Restated Certificate of Incorporation, as amended
(the "Certificate of Incorporation"), to increase the number of authorized
shares of Common Stock from 20,000,000 shares to 60,000,000 shares and decrease
the par values of the Common Stock and the Company's preferred stock (the
"Preferred Stock") from $1.00 per share to $0.01 per share (the "Proposed
Amendment"). In connection with the Stock Split, the Board of Directors
unanimously approved the Proposed Amendment. If the Proposed Amendment is not
approved by the stockholders of the Company, the Stock Split will not be
effected. Accordingly, the Board of Directors recommends that the stockholders
approve the Proposed Amendment to increase the number of authorized shares of
Common Stock from 20,000,000 to 60,000,000 and decrease the par values of the
Common Stock and Preferred Stock from $1.00 per share to $0.01 per share.
On February 21, 1997, the Board of Directors announced its approval of the Stock
Split, subject to stockholder approval of the Proposed Amendment, and also
announced that, after the Annual Meeting, the Board intends to consider
increasing the regular quarterly dividend on the Common Stock by $0.0167 per
share (or $0.05 per share of Common Stock before occurrence of the Stock Split).
The determination of whether to increase the regular quarterly dividend on the
Common Stock is scheduled to be made by the Board of Directors at its regular
May meeting.
If the Proposed Amendment is approved by the stockholders, two additional shares
of Common Stock (at the new, reduced par value) will be issued for each issued
share of Common Stock, and two additional shares of Common Stock will be
reserved for each share currently reserved for issuance pursuant to the
Company's stock-based compensation plans. If the Proposed Amendment is approved
by the stockholders, the payment date for the stock dividend effecting the Stock
Split will be the close of business on April 25, 1997 (the "Effective Date"),
and the record date for determination of holders of the Common Stock entitled to
additional shares resulting from the Stock Split will be the close of business
on April 3, 1997. A total of approximately 14,700,000 additional shares of
Common Stock is expected to be issued as a result of the Stock Split. Approval
of the Proposed Amendment will not affect the validity of Common Stock
certificates outstanding on the Effective Date. Such certificates will continue
to represent the number of shares of Common Stock shown thereon at the reduced
par value per share and, accordingly, would not have to be surrendered to the
Company or any of its agents for exchange.
The number of authorized shares of Common Stock under the Certificate of
Incorporation as presently in effect is 20,000,000 shares. As of February 4,
1997, 6,669,471 shares of Common Stock were issued and outstanding (exclusive of
treasury shares), and 1,268,440 shares of Common Stock were reserved for
issuance pursuant to the Company's stock-based compensation plans. Thus, as of
February 4, 1997, the maximum number of unreserved shares of Common Stock which
may be issued (including treasury shares) was 12,062,089 shares. The Proposed
Amendment would increase the number of authorized shares of Common Stock to
60,000,000 shares of Common Stock. No change in the number of authorized shares
of Preferred Stock is proposed.
Adoption of the Proposed Amendment and effectuation of the Stock Split would
provide approximately 36,200,000 shares of Common Stock (at a reduced par value
of $0.01 per share) for future issuance. Although the unreserved shares would
provide future flexibility, there are no present plans for their use. The
additional shares of Common Stock resulting from the Stock Split will have one
vote per share. The holders of Common Stock have no preemptive rights as to
additional issuances of Common Stock or securities convertible into or entitling
the holder to purchase Common Stock. The Company intends to apply to The New
York Stock Exchange, Inc., on which the Common Stock is currently listed, for
the listing thereon of the additional shares to be issued and reserved for
future issuance as a result of the Stock Split.
The Board of Directors believes that the Stock Split is in the best interests of
the Company and its stockholders because it will place the market price of the
Common Stock in a range more attractive to
15
18
investors, particularly individuals, and may broaden the market for, and
increase the liquidity of, the Common Stock. If the Proposed Amendment is
approved and the Stock Split effected, the authorized but unissued Common Stock
would be available for issuance in the future for such corporate purposes as the
Board of Directors deems advisable from time to time without further action by
the stockholders, unless such action is required by applicable law, regulation
or stock exchange rule. Under the current rules of The New York Stock Exchange,
Inc., stockholder approval is required as a prerequisite to listing shares in
several instances, including, for example, acquisition transactions where the
number of shares of common stock to be issued is or will be equal to or in
excess of 20% of the number of shares of outstanding common stock.
If the Proposed Amendment is approved, the number of shares of Common Stock
covered by each outstanding option issued under the Company's option plans and
the exercise price of each such option will be proportionately adjusted to
reflect the Stock Split. In addition, financial or other standards utilized in
establishing performance targets under the Company's various employee benefit
plans will be equitably restated, as appropriate, to take into account the
effect of the Stock Split. Furthermore, the number of shares awarded to
non-employee directors under the Company's Non-Employee Director Deferred Stock
Plan will also be adjusted to take into account the effect of the Stock Split.
The present par values of the Common Stock and Preferred Stock are not
consistent with current trends among public corporations whose common stock
normally has nominal, if any, par value. Moreover, in reducing the par value of
each share of Common Stock and Preferred Stock to $0.01, the Proposed Amendment
would result in reduced mandatory capital accounts for both the Common Stock and
Preferred Stock and reductions in certain filing fees. Because the Company is
required to keep in its capital accounts an amount equal to or in excess of the
par value for each share of capital stock issued, the lower par values included
in the Proposed Amendment would enable the Company to reduce its stated capital.
Specifically, as of April 3, 1997, the changed par value would allow the Company
to transfer from stated capital to surplus an aggregate of approximately
$15,500,000 after giving effect to the Stock Split, without any negative effect
on the Company's cash position or other assets. Such a transfer may enhance the
ability of the Company to pay a dividend at a future date, since, under Delaware
law, the Company may only declare dividends out of surplus (or, in the event
there is no surplus, out of net profits for the fiscal year in which the
dividend is declared or the preceding fiscal year). On February 21, 1997, the
Board of Directors voted to transfer an amount from stated capital to surplus as
of the Effective Date, subject to stockholder approval of the Proposed
Amendment, equal to the amount by which the current stated capital of the
Company exceeds the minimum required stated capital. Also, the lower par values
included in the Proposed Amendment would reduce the cost of certain filings
which are based on the par value of the Company's stock (including principally
Secretary of State filings relating to the Proposed Amendment and future
amendments to the Certificate of Incorporation to increase the authorized shares
of Common Stock or Preferred Stock).
If the Proposed Amendment is approved and becomes effective, the first sentence
of Article Fourth of the Certificate of Incorporation, which sets forth the
Company's presently authorized capital stock, will be amended to read in its
entirety as follows:
FOURTH: The total number of shares of all classes of stock which the
corporation shall have authority to issue is 63,000,000 shares, consisting
of 3,000,000 shares of preferred stock of the par value of $0.01 per share
and 60,000,000 shares of common stock of the par value of $0.01 per share.
Under existing law and regulation, neither the Proposed Amendment nor the Stock
Split will result in any gain or loss or any other form of taxable income to the
stockholders of the Company for federal income tax purposes. The laws of
jurisdictions other than the United States may impose income taxes on the
issuance of the additional shares in connection with the Stock Split, and
stockholders subject to those laws are urged to consult their tax advisors. A
stockholder's basis in his or her shares held before the Stock Split will be
allocated between such shares and the new shares for the purpose of determining
future gain or loss on a sale of any of the shares, and the holding period of
new shares will include the holding period of the shares with respect to which
they were issued.
16
19
After the Stock Split, purchases and sales of Common Stock by an individual
stockholder may be subject to somewhat higher brokerage charges and applicable
stock transfer taxes than on a pre-split transaction of equivalent market value
because of the greater number of shares of Common Stock outstanding after the
Stock Split. However, the Stock Split should also reduce the expenses of buying
or selling a single "round lot" of Common Stock in some cases. The Company will
incur certain expenses in connection with the Stock Split, such as listing fees
and the cost of preparing and delivering to stockholders new certificates
representing the additional shares.
Although an increase in the authorized shares of Common Stock could, under
certain circumstances, have an anti-takeover effect (for example, by diluting
the stock ownership of a person seeking to effect a change in the composition of
the Board of Directors or contemplating a tender offer or other transaction for
the combination of the Company with another company), immediately after the
Stock Split, the number of shares of Common Stock available for future issuance
would be, on a proportionate basis, the same as the number of shares of Common
Stock available for future issuance prior to the Stock Split. The Proposed
Amendment is not the result of any specific effort to accumulate the Company's
securities or to obtain control of the Company by means of a merger, tender
offer, solicitation in opposition to management or otherwise. Moreover, the
Proposed Amendment is not part of a plan by management to adopt a series of
amendments to its Certificate of Incorporation, and management has no current
intention to propose anti-takeover measures in future proxy solicitations.
The Company's existing Certificate of Incorporation and By-Laws currently
include certain other provisions which could be characterized as having an
anti-takeover effect. For example, the By-Laws classify the Board of Directors
into three classes of directors with staggered terms of office, provide that
Board vacancies may be filled by a majority of the directors remaining in
office, provide that the number of directors shall be determined by the Board of
Directors and provide that special meetings of stockholders may be called only
by the President, the Chairman of the Board or the Board of Directors. In
addition, the Certificate of Incorporation states that no action which is
required to be taken or which may be taken at any annual or special meeting of
stockholders may be taken by consent in writing without a meeting of
stockholders. The Certificate of Incorporation also requires certain forms of
consideration, minimum price and procedural requirements to be met, or
alternatively, the vote of holders of 70 percent of the stock entitled to vote,
in order for there to be consummated specified business combinations with
certain stockholders, unless such combinations are approved by 66 2/3% of
continuing directors who are not affiliated with such stockholders. The Company
has also adopted a stockholder rights plan pursuant to the Rights Agreement
dated as of December 10, 1996 between the Company and ChaseMellon Shareholder
Services, L.L.C. (the "Rights Agreement") which could have a deterrent effect
against a takeover of the Company. If the Proposed Amendment is approved and the
Stock Split is effected, following the Stock Split and in accordance with the
terms of the Rights Agreement, each share of Common Stock (including shares
issued pursuant to the Stock Split) will carry one-third of a preferred stock
purchase right which will trade automatically with the Common Stock and become
exercisable only upon the occurrence of certain events which are fully described
in the Rights Agreement.
The affirmative vote of a majority of the outstanding shares entitled to vote at
the meeting is required to approve the Proposed Amendment. If the Proposed
Amendment is not approved, the Proposed Amendment will not become effective and
the proposed Stock Split will not take place.
The Board of Directors unanimously recommends a vote FOR the approval of the
Proposed Amendment (Item 3 on the proxy card).
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20
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
Although not required by the Certificate of Incorporation or By-Laws, it has
been the Company's practice for many years to have the stockholders act on a
proposal of the Board of Directors relating to the selection of independent
accountants. A representative of Price Waterhouse LLP is expected to be present
at the meeting with the opportunity to make a statement if the representative
wishes and to be available to respond to appropriate questions.
The Board of Directors unanimously recommends a vote FOR ratification of the
selection of Price Waterhouse LLP as independent accountants (Item 4 on the
proxy card).
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
The Board of Directors requests that any stockholder who wishes to recommend
nominees for directors submit names of such nominees in writing to the Secretary
of the Company at its address given above prior to December 1, 1997.
Stockholders wishing to submit proposals for inclusion in the Company's proxy
statement and form of proxy for the 1998 Annual Meeting of Stockholders must
submit proposals to the Company at such address by November 4, 1997.
Stockholders wishing to present proposals for a formal vote (other than
proposals included in the Company's proxy statement) or to nominate candidates
for election as directors at a meeting of the Company's stockholders, must do so
in accordance with the Company's By-Laws. The By-Laws provide that, in order to
be presented at the 1998 Annual Meeting, such stockholder proposals or
nominations may be made only by a stockholder of record who shall have given
notice of the proposed business or nomination to the Company between January 2,
1998 and February 1, 1998. The notice must contain, among other things, the name
and address of the stockholder, a brief description of the business desired to
be brought before the Annual Meeting and the reasons for conducting the business
at the Annual Meeting, the stockholder's ownership of the Company's capital
stock, and in the case of nominations, background and stock ownership
information with respect to each nominee. Stockholders may obtain a copy of the
relevant provisions of the By-Laws by writing to the Secretary of the Company at
its address given above.
GENERAL
The cost of solicitation of proxies will be borne by the Company. Such
solicitation will be made by mail and may also be made by the Company's officers
and employees personally or by telephone, facsimile or telegram without
additional compensation. The Company may also reimburse brokers, dealers, banks,
voting trustees or their nominees for their reasonable expenses in sending
proxies, proxy material and annual reports to beneficial owners. The Company has
retained Georgeson & Company Inc., Wall Street Plaza, New York, New York 10005,
to aid in the solicitation of proxies. Georgeson & Company will solicit proxies
by personal interview, telephone, telecopy and mail and may request brokerage
houses and other nominees and fiduciaries or custodians to forward soliciting
materials to beneficial owners of the Company's stock. For these services, the
Company will pay a fee of approximately $7,000, plus expenses.
The Company had outstanding 6,669,471 shares of common stock as of February 4,
1997, each of which is entitled to one vote. Only holders of record at the close
of business on February 4, 1997 will be entitled to vote.
Under applicable Delaware law, abstentions and broker non-votes as to any
proposal will not be counted as having been voted on the proposal and will have
no effect on the outcome of the vote thereon.
If a nominee for director should become unavailable for any reason, it is
intended that votes will be cast for a substitute nominee designated by the
Board of Directors. The Board has no reason to believe the persons nominated
will be unable to serve if elected. The Board does not know of any matters to be
presented for consideration at the meeting other than the matters described in
items 1, 2, 3 and 4 of the Notice of Annual Meeting; however, if other matters
are presented, it is the intention of the persons named in the accompanying
proxy to vote on such matters in accordance with their judgment. All shares
18
21
represented by the accompanying proxy, if the proxy is given prior to the
meeting, will be voted in the manner specified therein.
By order of the Board of Directors.
/s/ MARY LOUISE BEARDSLEY
- -------------------------
Mary Louise Beardsley
Secretary
March 4, 1997
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22
1997 - BARNES GROUP INC. - PROXY
ANNUAL MEETING OF STOCKHOLDERS
APRIL 2, 1997 - 10:30 A.M.
THE TRAVELERS EDUCATION CENTER, 200 CONSTITUTION PLAZA, HARTFORD, CONNECTICUT
06103 U.S.A.
THE UNDERSIGNED STOCKHOLDER OF BARNES GROUP INC. HEREBY APPOINTS WILLIAM V.
GRICKIS, JR. AND MARY LOUISE BEARDSLEY, EACH WITH THE POWER TO APPOINT HIS OR
HER SUBSTITUTE, AS THE UNDERSIGNED'S PROXIES AND ATTORNEYS-IN-FACT TO VOTE THE
SHARES OF STOCK COVERED BY THIS PROXY AT THE ANNUAL MEETING OF STOCKHOLDERS ON
APRIL 2, 1997, OR AT ANY ADJOURNMENT THEREOF, UPON THE MATTERS SET FORTH IN THE
NOTICE OF SUCH MEETING, WITH ALL THE POWERS THE UNDERSIGNED WOULD POSSESS IF
PERSONALLY PRESENT. EACH OF SAID PERSONS IS INDIVIDUALLY AUTHORIZED TO VOTE AS
SPECIFIED ON ITEMS 1, 2, 3 AND 4 AND OTHERWISE IN HIS OR HER DISCRETION.
(CONTINUED AND TO BE SIGNED, DATED AND VOTED ON THE REVERSE SIDE)
23
1997 -- BARNES GROUP INC. -- PROXY
The Board of Directors unanimously recommends a vote FOR each of the following
nominees and proposals.
(1) ELECTION OF DIRECTORS FOR A THREE-YEAR TERM: Thomas O. Barnes, Gary G.
Benanav and Marcel P. Joseph
FOR WITHHOLD (INSTRUCTION: To withhold authority to
ALL AUTHORITY vote for any individual nominee, write
NOMINEES FOR ALL NOMINEES that nominee's name on the line
[ ] [ ] provided below.)
----------------------------------------
(2) ELECTION OF ONE DIRECTOR TO FILL A
VACANCY:
Frank E. Grzelecki
FOR WITHHOLD
THE AUTHORITY
NOMINEE FOR THE NOMINEE
[ ] [ ]
(3) PROPOSAL TO AMEND CERTIFICATE OF
INCORPORATION TO INCREASE AUTHORIZED
COMMON STOCK AND DECREASE PAR VALUES
PER SHARE:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
(4) RATIFICATION OF SELECTION OF
INDEPENDENT ACCOUNTANTS:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
---------------------------------------------
"PLEASE MARK INSIDE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES"
---------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD
OF DIRECTORS. THIS PROXY WILL BE
VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER.
UNLESS OTHERWISE DIRECTED, THIS PROXY
SHALL BE VOTED FOR ITEMS 1, 2, 3
AND 4.
Please sign exactly as name(s) appear
hereon. If the shares are registered
in the names of two or more persons,
each should sign. Executors,
administrators, trustees, guardians,
attorneys-in-fact, general partners
and other persons acting in a
representative capacity should add
their titles. When the proxy is given
by a corporation, it should be signed
by an authorized officer.
-------------------------------------
Signature
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Dated: ________________, 1997
PLEASE RETURN THIS CARD PROMPTLY
USING THE ENCLOSED POSTAGE-PAID
ENVELOPE.
PLEASE SEE THE REVERSE SIDE.