SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR
15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] FOR THE FISCAL
YEAR ENDED DECEMBER 31, 1995 OR
-----------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] FOR THE
TRANSITION PERIOD FROM _____________ TO __________________
Commission file number 1-4801
------
BARNES GROUP INC.
-----------------
(Exact name of registrant as specified in its charter)
Delaware 06-0247840
----------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
123 Main St., Bristol, Connecticut 06011-0489
----------------------------------- --------------------
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code 860/583-7070
------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
------------------- registered
------------------------------
Common Stock par value
------------------------------
$1.00 per share New York Stock Exchange
------------------------------ -----------------------
Securities registered pursuant to Section 12(g) of the Act:
NONE.
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports); and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the registrant's voting stock held
by non-affiliates amounted to $227,402,420 as of February 6,
1996.
The registrant had outstanding 6,570,733 shares of common stock
as of February 6, 1996.
Parts I and II incorporate information by reference from the
registrant's 1995 Annual Report to Stockholders. Part III
incorporates information by reference from the registrant's Proxy
Statement dated March 1, 1996.
Exhibit Index located at pages 16-18.
PART I
Item 1. Business.
---------
The Company is in three businesses: Bowman Distri-
bution, a distributor of consumable repair and replacement
products for industrial, heavy equipment, and transportation
maintenance markets; Associated Spring, a manufacturer and
distributor of custom-made springs and other close -tolerance
engineered metal components; and Barnes Aerospace, a manufacturer
of precision machined and fabricated assemblies for the aircraft
and aerospace industries and a refurbisher of jet engine
components.*
Bowman Distribution. Bowman Distribution is engaged in
-------------------
distributing in the United States, Canada, the United Kingdom and
France a variety of replacement parts and other products,
including fasteners and special purpose hardware, automotive
parts, automotive specialties and accessories, general purpose
electric and gas welding supplies, industrial maintenance
supplies, and industrial aerosols such as adhesives, lubricants,
and sealants.
The products sold by Bowman Distribution are, for the
most part, not manufactured by the Company, but are obtained from
a number of outside suppliers. The vast majority of the products
are repackaged and sold under Bowman's labels.
Sales by Bowman Distribution in the United States and
Canada are primarily to industrial and food processing plants,
chemical and petrochemical process industries, contractors, new
car dealers, garages, service stations, operators of vehicle
fleets, railroads, electric utilities, and airline ground
maintenance facilities.
In 1992, the Company sold substantially all of the
assets of the Pioneer division of Bowman.
Associated Spring. Associated Spring manufactures and
-----------------
distributes a wide variety of custom metal parts for mechanical
purposes. It is equipped to produce practically every type of
spring requiring precision engineering, as well as an extensive
variety of precision metal components and assemblies. Its
-----------------------
*As used in this annual report, "Company" refers to the
registrant and its consolidated subsidiaries except where the
context requires otherwise, and "Associated Spring," "Barnes
Aerospace," and "Bowman Distribution" refer to the above-defined
businesses, but not to separate corporate entities.
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<PAGE>
products range in size from fine hairsprings for instruments to
large springs for heavy machinery, and its output of a given
metal part may vary in amount from a few units to several
million. Associated Spring does not produce leaf springs or bed
springs.
Associated Spring's custom metal parts are sold in the
United States and through the Company's foreign subsidiaries to
manufacturers in many industries, chiefly for use as components
in their own products. Custom metal parts are sold primarily
through Associated Spring's sales employees. In view of the
diversity of functions which Associated Spring's custom metal
parts perform, Associated Spring's output is characterized by
little standardization, with the major portion being manufactured
to customer specifications.
The automotive and automotive parts industries
constitute Associated Spring's largest single custom metal parts
market. Other important outlets include manufacturers of
industrial and textile machinery, motors, generators, electronic
equipment, aircraft, diesel and other internal combustion
engines, household appliances and fixtures, hardware, office
equipment, agricultural equipment, railroad equipment, general
machinery, and scientific instruments.
The Associated Spring Distribution division is engaged
in the distribution of industrial products to the tool and die
market, of which die springs manufactured primarily by Associated
Spring are the principal item. It also distributes certain
standard parts manufactured by Associated Spring consisting
primarily of stock wire and flat springs which are sold under the
Company's SPEC registered trademark.
Associated Spring also has manufacturing operations in
Brazil, Canada, Mexico, and Singapore, and distribution
operations in the United Kingdom and France. In 1993, the
Company closed its spring manufacturing plant in Memphis,
Tennessee and transferred the warehouse operations conducted in
Corry, Pennsylvania to a new warehouse facility located in
Ypsilanti, Michigan. In 1994, it closed its spring manufacturing
plants in Gardena, California, and Monterrey, Mexico. The
Company has retained a minority interest of 15% in its former
subsidiary in Argentina.
The Company is a partner in a joint venture corporation
in the United States with NHK Spring Co., Ltd. of Japan. The
joint venture corporation, NHK-Associated Spring Suspension
Components Inc. ("NASCO"), has a manufacturing facility in
Bowling Green, Kentucky. It manufactures and sells hot-wound
coil springs for automotive suspension systems and counterbalance
torque bars for trunk lids. Barnes Group owns a minority
interest of 45% in NASCO.
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<PAGE>
Barnes Aerospace. Barnes Aerospace is engaged in the
----------------
advanced fabrication and precision machining of components for
jet engines and airframes as well as the repair and overhaul of
jet engine components. Windsor Manufacturing, Windsor Airmotive,
and Advanced Fabrications constitute the Barnes Aerospace Group.
Windsor Manufacturing manufactures machined and
fabricated parts as well as assemblies. It specializes in the
machining of difficult-to-process aircraft engine superalloys.
Manufacturing processes include computer numerically controlled
machining, electrical discharge machining, laser drilling,
creep-feed grinding, and automated deburring. Customers include
gas turbine engine manufacturers for commercial and military jets
as well as land-based turbines. In 1993, the operations of the
Company's Central Metal Products plant were consolidated with
Windsor Manufacturing.
Windsor Airmotive specializes in refurbishing jet
engine components. Electron beam welding and plasma spray are
two of the major processes used in this division, and customers
include approximately 30 airlines worldwide and the military. In
1995, Windsor Airmotive's Singapore operations moved into a
larger facility.
Advanced Fabrications, through its Jet Die and Flameco
plants, specializes in hot forming and fabricating titanium and
other high-temperature alloys such as hastelloy and inconel for
use in precision details and assemblies for aircraft engine and
airframe applications. It utilizes advanced manufacturing
processes including superplastic forming and diffusion bonding.
Segment Analysis. The analysis of the Company's
-----------------
revenue from sales to unaffiliated customers, operating income,
and identifiable assets by industry segments and geographic areas
appearing on pages 26 and 27 of the Company's 1995 Annual Report
to Stockholders, included as Exhibit 13 to this report, is
incorporated by reference.
Competition. The Company competes with many other
-----------
companies, large and small, engaged in the manufacture and sale
of custom metal parts (including aerospace components). The
Company believes Associated Spring is the largest domestic
manufacturer of precision springs used for mechanical purposes.
The Company also faces active competition in the products sold by
Bowman Distribution. The principal methods of competition for
the Company's three businesses include service, quality, price,
reliability of supply, and also, in the case of Associated Spring
and Barnes Aerospace, technology and design.
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<PAGE>
Backlog. The backlog of the Company's orders believed
-------
to be firm amounted to $111,125,000 at the end of 1995, as
compared with $108,143,000 at the end of 1994. Of the 1995 year-
end backlog, $54,411,000 is attributable to the Barnes Aerospace
Group and all of the balance is attributable to the Associated
Spring Group. $3,601,000 of Barnes Aerospace's backlog is not
expected to be shipped in 1996. Substantially all of the remainder
of the Company's backlog is expected to be shipped during 1996.
Raw Materials and Customers. None of the Company's
---------------------------
divisions or groups are dependent upon any single source for any
of their principal raw materials or products for resale, and all
such materials and products are readily available. No one
customer accounted for more than 10% of total sales in 1995.
Automotive manufacturers and manufacturers of electronic products
are important customers of Associated Spring. Sales by Barnes
Aerospace to two domestic jet engine manufacturers accounted for
approximately 52% of its business. Bowman Distribution is not
dependent on any one or a few customers for a significant portion
of its sales.
Research and Development. Although most of the products
------------------------
manufactured by the Company are custom parts made to the
customers' specifications, the Company is engaged in continuing
efforts aimed at discovering and implementing new knowledge that
is useful in developing new products or services or improving
significantly an existing product or service. The Company spent
approximately $3,087,000 on its research and development
activities in 1995, as compared to expenditures of approximately
$2,640,000 in 1994 and $1,846,000 in 1993. There were no
significant customer-sponsored research and development
activities in 1995 and 1994. Barnes Aerospace divisions spent
approximately $495,000 in 1993 on customer-sponsored research and
development activities.
Patents and Trademarks. Patents, licenses, franchises
----------------------
and concessions are not material to any of the Company's
businesses.
Employees. As of the date of this report, the Company
---------
employs approximately 3,900 persons.
Environmental Laws. Compliance with federal, state, and
------------------
local laws which have been enacted or adopted regulating the
discharge of materials into the environment or otherwise relating
to the protection of the environment has not had a material
effect and is not expected to have a material effect upon the
capital expenditures, earnings, or competitive position of the
Company.
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<PAGE>
Item 2. Properties.
----------
The Company and its Canadian subsidiary operate 12
manufacturing plants and 15 warehouses at various locations
throughout the United States and Canada, of which all of the
plants and 6 of the warehouses are owned in fee, and the others
are leased. Of the properties which are owned, none is subject
to any encumbrance. The Company's other foreign subsidiaries own
or lease plant or warehouse facilities in the countries where
their operations are conducted. The listing of the facility
locations of each of the Company's businesses contained in the
Directory of Operations on the inside back cover of the 1995
Annual Report to Stockholders, included as Exhibit 13 to this
report, is incorporated by reference.
The Company believes that its owned and leased
properties have been adequately maintained, are in satisfactory
operating condition, are suitable and adequate for the business
activities conducted therein, and have productive capacities
sufficient to meet current needs.
Item 3. Legal Proceedings.
-----------------
There are no material pending legal proceedings to
which the Company or any of its subsidiaries is a party, or of
which any of their property is the subject.
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
No matter was submitted during the fourth quarter of
1995 to a vote of security holders.
The following information is included in accordance
with the provisions of Item 401(b) of Regulation S-K:
<TABLE>
<CAPTION>
Executive Officers of the Company
---------------------------------
Age as of
December 31,
Executive Officer Position 1995
----------------- -------- ------------
<S> <C> <C>
Theodore E. Martin President and Chief Executive 56
Officer (since 1995)
Thomas O. Barnes Chairman of the Board of 46
Directors (since 1995) and
Senior Vice President-
Administration (since 1993)
Mary Louise Beardsley Associate General Counsel 41
and Secretary (since 1994)
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Age as of
December 31,
Executive Officer Position 1995
----------------- -------- ------------
<S> <C> <C>
John E. Besser Senior Vice President-Finance 53
and Law (since 1993)
Francis C. Boyle, Jr. Assistant Controller 45
(since 1987)
Leonard M. Carlucci Vice President, Barnes Group 49
Inc. (since 1994) and President,
Bowman Distribution (since 1995)
Ali A. Fadel Vice President, Barnes Group 40
Inc. and President,
Associated Spring (since 1994)
Joseph R. Kowalchik Senior Vice President- 48
Human Resources (since 1995)
John J. Locher Vice President, Treasurer 51
(since 1992)
</TABLE>
Except for Messrs. Barnes, Fadel, and Kowalchik, each
of the Company's executive officers has been employed by the
Company or its subsidiaries in an executive or managerial
capacity for at least the past five years. Each officer holds
office until his or her successor is chosen and qualified, or
otherwise as provided in the By-Laws. No family relationships
exist among the executive officers of the Company.
Mr. Barnes was elected Senior Vice President-
Administration effective December 16, 1993. From 1982 to 1993,
Mr. Barnes was employed by The Olson Brothers Company as
Executive Vice President and President, which position he held
since 1983. Prior to joining Olson Brothers, Mr. Barnes held a
variety of management positions with The Connecticut Bank and
Trust Company, The S. Carpenter Construction Company, and the
Company's Bowman Distribution division.
Mr. Fadel was elected Vice President of Barnes Group
Inc. and President, Associated Spring effective January 21, 1994.
Mr. Fadel joined the Company in 1991 as Group Director of
Advanced Engineering and Technology for Associated Spring. In
addition, Mr. Fadel served as Division Manager at the Associated
Spring plant in
Saline, Michigan from 1992 to 1994. From 1989 to 1991, Mr. Fadel
was employed by Herman Miller, Inc. as Manager of Chemical
- 6 -
<PAGE>
Engineering and Senior Project Manager. Prior to joining Herman
Miller, he held industrial and manufacturing engineering
positions at Chrysler Corp., General Dynamics Corp. and the
former Burroughs Corporation.
Mr. Kowalchik was elected Senior Vice President-Human
Resources effective July 17, 1995. Prior to joining the Company,
Mr. Kowalchik held various human resources positions during his
23 year career with Combustion Engineering and its successor,
Asea Brown Boveri, Inc. ("ABB"), most recently serving as Vice
President of Human Resources for ABB's U.S. Power Generation
Business.
PART II
Item 5. Market for the Registrant's Common Stock and Related
----------------------------------------------------
Stockholder Matters.
-------------------
The information regarding the Company's common stock
contained on pages 22 and 29 of the Company's 1995 Annual Report
to Stockholders is incorporated by reference. As of February 6,
1996, the Company's common stock was held by 4,944 stockholders
of record. The Company's common stock is traded on the New York
Stock Exchange.
Item 6. Selected Financial Data.
-----------------------
The selected financial data for the last five years
contained on pages 30 and 31 of the Company's 1995 Annual Report
to Stockholders is incorporated by reference.
Item 7. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations.
-----------------------------------
The financial review and management's analysis thereof
appearing on pages 11 through 13 of the Company's 1995 Annual
Report to Stockholders are incorporated by reference.
Item 8. Financial Statements and Supplementary Data.
-------------------------------------------
The financial statements and report of independent
accountants appearing on pages 14 through 28 of the Company's
1995 Annual Report to Stockholders are incorporated by reference.
See also the reports of independent accountants included on
pages 13 and 14 below pursuant to Item 302(a) of Regulation S-K.
The material under "Quarterly Data" on page 29 of the Company's
1995 Annual Report to Stockholders is also incorporated by
reference.
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<PAGE>
Item 9. Changes and Disagreements with Accountants on Accounting
--------------------------------------------------------
and Financial Disclosure.
------------------------
The material under "Approval of Selection of
Independent Accountants" on pages 13 and 14 of the Company's
Proxy Statement dated March 1, 1996 is incorporated by reference.
PART III
Item 10. Directors and Executive Officers of the Company.
-----------------------------------------------
The material under "Election of Directors" on pages 1
through 3 of the Company's Proxy Statement dated March 1, 1996 is
incorporated by reference. See also "Executive Officers of the
Company," included above pursuant to Item 401(b) of Regulation
S-K.
Item 11. Executive Compensation.
----------------------
The material under "Compensation of Directors"
appearing on page 4, the material under "Non-Employee Director
Deferred Stock Plan" appearing on page 6, and the information
appearing on pages 7 through 12 of the Company's Proxy Statement
dated March 1, 1996 is incorporated by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
---------------------------------------------------
Management.
----------
The information concerning this item appearing on pages
5 and 6 of the Company's Proxy Statement dated March 1, 1996 is
incorporated by reference.
Item 13. Certain Relationships and Related Transactions.
----------------------------------------------
The information concerning this item appearing on page
4 of the Company's Proxy Statement dated March 1, 1996 is
incorporated by reference.
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<PAGE>
PART IV
<TABLE>
<CAPTION>
Item 14. Exhibits, Financial Statement Schedules and Reports on
------------------------------------------------------
Form 8-K.
--------
(a) The reports of Price Waterhouse LLP and Ernst &
Young LLP, independent accountants, and the
following financial statements and financial
statement schedules are filed as part of this
report:
Reference
----------------------------
Annual Report
Form 10-K to Stockholders
(page) (page)
--------- ----------------
<S> <C> <C>
Reports of independent accountants 13 & 14 28
Consolidated balance sheets at 15
December 31, 1995 and 1994
Consolidated statements of income 14
for the years ended
December 31, 1995, 1994 and 1993
Consolidated statements of changes 17
in stockholders' equity for the
years ended December 31, 1995,
1994 and 1993
Consolidated statements of cash 16
flows for the years ended
December 31, 1995, 1994 and 1993
Notes to consolidated financial 18 - 28
statements
Supplementary information 29
Quarterly data (unaudited)
Consolidated schedules for the years
ended December 31, 1995, 1994
and 1993
VIII - Valuation and qualifying 15
accounts
</TABLE>
All other schedules have been omitted since the
required information is not present or not present in amounts
sufficient to require submission of the schedule, or because
the information required is included in the consolidated
financial statements or notes thereto.
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<PAGE>
The consolidated financial statements listed in the
above index which are included in the Annual Report to Stock-
holders of Barnes Group Inc. for the year ended December 31, 1995
are hereby incorporated by reference. With the exception of the
pages listed in the above index and in Items 1, 2, 5, 6, 7, and 8,
the 1995 Annual Report to Stockholders is not to be deemed filed
as part of this report.
(b) No reports on Form 8-K were filed during the last
quarter of the period covered by this report.
(c) The Exhibits required by Item 601 of Regulation
S-K are filed as Exhibits to this Annual Report
and indexed at pages 16 through 18 of this
report.
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<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: February 16, 1996
BARNES GROUP INC.
By /s/ Theodore E. Martin
--------------------------------------
Theodore E. Martin
President and Chief Executive Officer
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below as of
the above date by the following persons on behalf of the
Company in the capacities indicated.
/s/ Theodore E. Martin
-----------------------------
Theodore E. Martin
President and Chief Executive Officer
(the principal executive officer) and Director
/s/ John E. Besser
---------------------------
John E. Besser
Senior Vice President-Finance and Law
(the principal financial officer)
/s/ Francis C. Boyle, Jr.
---------------------------
Francis C. Boyle, Jr.
Assistant Controller
(the principal accounting officer)
/s/ Thomas O. Barnes
---------------------------
Thomas O. Barnes
Director
/s/ Wallace Barnes
--------------------------
Wallace Barnes
Director
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<PAGE>
/s/ Gary G. Benanav
---------------------------
Gary G. Benanav
Director
/s/ William S. Bristow, Jr.
---------------------------
William S. Bristow, Jr.
Director
/s/ Robert J. Callander
--------------------------
Robert J. Callander
Director
/s/ George T. Carpenter
---------------------------
George T. Carpenter
Director
/s/ Donna R. Ecton
---------------------------
Donna R. Ecton
Director
/s/ Marcel P. Joseph
---------------------------
Marcel P. Joseph
Director
/s/ Juan M. Steta
---------------------------
Juan M. Steta
Director
/s/ K. Grahame Walker
---------------------------
K. Grahame Walker
Director
/s/ A. Stanton Wells
--------------------------
A. Stanton Wells
Director
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<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors
of Barnes Group Inc.
Our audits of the consolidated financial statements for the
years ended December 31, 1995 and 1994 referred to in our
report dated January 23, 1996 appearing on page 28 of the 1995
Annual Report to Stockholders of Barnes Group Inc. (which
report and consolidated financial statements are incorporated
by reference in this Annual Report on Form 10-K) also included
an audit of the Financial Statement Schedule for the years
ended December 31, 1995 and 1994 listed in Item 14(a) of this
Form 10-K. In our opinion, this Financial Statement Schedule
presents fairly, in all material respects, the information set
forth therein when read in conjunction with the related
consolidated financial statements. The financial statements of
Barnes Group Inc. for the year ended December 31, 1993 were
audited by other independent accountants whose report dated
January 28, 1994 expressed an unqualified opinion on those
statements.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Hartford, Connecticut
January 23, 1996
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<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Stockholders and Board of Directors
Barnes Group Inc.
We have audited the consolidated statements of income,
stockholders' equity and cash flows of Barnes Group Inc. for
the year ended December 31, 1993. Our audit also included the
financial statement schedule listed in the Index at Item 14(a)
for the year ended December 31, 1993. These financial
statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the
consolidated results of operations and cash flows of Barnes
Group Inc. for the year ended December 31, 1993, in conformity
with generally accepted accounting principles. Also, in our
opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken
as a whole, presents fairly in all material respects the
information set forth therein.
/s/ Ernst & Young LLP
Ernst & Young LLP
Hartford, Connecticut
January 28, 1994
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<PAGE>
BARNES GROUP INC.
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
Years ended December 31, 1995, 1994 and 1993
(in thousands)
<TABLE>
<CAPTION>
Provision
Balance at charged to Balance at
beginning costs and end of
of year expenses Deductions(1) year
---------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
1995
Allowance
for doubtful
accounts $3,222 $1,577 $1,164 $3,635
1994
Allowance
for doubtful
accounts $2,217 $1,523 $ 518 $3,222
1993
Allowance
for doubtful
accounts $2,332 $1,095 $1,210 $2,217
(1) Write-offs, net of recoveries
</TABLE>
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<PAGE>
EXHIBIT INDEX
-------------
Barnes Group Inc.
Annual Report on Form 10-K
for year ended December 31, 1995
--------------------------------
<TABLE>
<CAPTION>
Exhibit No. Description Reference
----------- ----------- ---------
<S> <C> <C>
3.1 Restated Certificate of Incorporated by reference
Incorporation, as amended. to Exhibit 3.1 to the
Company's report on Form
10-K for the year ended
December 31, 1992.
3.2 By-Laws. Filed with this report.
4.1 Revolving Credit Agreement Incorporated by reference
dated as of December 1, to Exhibit 4.1 to the
1991 among the Company and Company's report on Form
several commercial banks. 10-K for the year ended
December 31, 1991.
4.2 First Amendment to Credit Incorporated by reference
Agreement set forth in to Exhibit 4.2 to the
Exhibit 4.1 dated as of Company's report on Form
December 1, 1992. 10-K for the year ended
December 31, 1992.
4.3 Second Amendment to Credit Incorporated by reference
Agreement set forth in to Exhibit 4.3 to the
Exhibit 4.1 dated as of Company's report on Form
December 1, 1993. 10-K for the year ended
December 31, 1993.
4.4 Third Amendment to Credit Incorporated by reference
Agreement set forth in to Exhibit 4.4 to the
Exhibit 4.1 dated as of Company's report on Form
December 1, 1994. 10-K for the year ended
December 31, 1994.
4.5 Fourth Amendment to Credit Filed with this report.
Agreement set forth in
Exhibit 4.1 dated as of
December 1, 1995.
4.6 Rights Agreement dated as Incorporated by reference
of July 16, 1986 between to Exhibit 4.2 to the
the Company and The Company's report on Form
Connecticut Bank & Trust 10-K for the year ended
Company, National December 31, 1991.
Association.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description Reference
----------- ----------- ---------
<S> <C> <C>
4.7 Amendment to the Rights Filed with this report.
Agreement set forth in
Exhibit 4.6 dated
July 15, 1990.
4.8 Note Agreement dated as of Incorporated by reference
September 16, 1991 among to Exhibit 4.4 to the
the Company and several Company's report on Form
insurance companies. 10-K for the year ended
December 31, 1991.
4.9 Note Purchase Agreement Filed with this report.
dated as of December 1,
1995 between the Company
and several insurance
companies.
10.1 The Company's Management Filed with this report.
Incentive Compensation
Plan.
10.2 The Company's Long Term Filed with this report.
Incentive Plan.
10.3 The Company's Retirement Filed with this report.
Benefit Equalization Plan.
10.4 The Company's Supplemental Filed with this report.
Executive Retirement Plan.
10.5 The Company's 1981 Stock Incorporated by reference
Incentive Plan. to Exhibit 10.5 to the
Company's report on Form
10-K for the year ended
December 31, 1991.
10.6 The Company's 1991 Stock Incorporated by reference
Incentive Plan. to Exhibit 10.6 to the
Company's report on Form
10-K for the year ended
December 31, 1994.
10.7 The Company's Non-Employee Incorporated by reference
Director Deferred Stock Plan. to Exhibit 10.7 to the
Company's report on Form
10-K for the year ended
December 31, 1994.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description Reference
----------- ----------- ---------
<S> <C> <C>
10.8 The Company's Directors' Incorporated by reference
Deferred Compensation Plan. to Exhibit 10.8 to the
Company's report on Form
10-K for the year ended
December 31, 1992.
10.9 Consulting Agreement dated Incorporated by reference
as of April 1, 1994 to Exhibit 10.9 to the
between the Company and Company's report on Form
Wallace Barnes. 10-K for the year ended
December 31, 1994.
10.10 Addendum to Consulting Filed with this report.
Agreement set forth in
Exhibit 10.9 dated as of
May 22, 1995.
10.11 The Company's Officer Incorporated by reference
Enhanced Life Insurance to Exhibit 10.11 to the
Program. Company's report on Form
10-K for the year ended
December 31, 1993.
10.12 The Company's Enhanced Incorporated by reference
Life Insurance Program. to Exhibit 10.12 to the
Company's report on Form
10-K for the year ended
December 31, 1993.
13 Portions of the 1995 Annual Filed with this report.
Report to Stockholders.
16 Letter from Ernst & Young Incorporated by reference
LLP Regarding Change in to Exhibit 16 to the
Certifying Accountant. Company's report on Form
8-K filed on March 4, 1994.
22 List of Subsidiaries. Filed with this report.
23.1 Consent of Independent Filed with this report.
Accountants.
23.2 Consent of Independent Filed with this report.
Auditors.
</TABLE>
- 18 -
<PAGE>
The Company agrees to furnish to the Commission,
upon request, a copy of each instrument with respect to which
there are outstanding issues of unregistered long-term debt of
the Company and its subsidiaries the authorized principal amount
of which does not exceed 10% of the total assets of the Company
and its subsidiaries on a consolidated basis.
Except for Exhibit 13, which will be furnished free of
charge, and Exhibits 22, 23.1 and 23.2, which are included
herein, copies of exhibits referred to above will be furnished at
a cost of twenty cents per page to security holders who make
written request therefor to The Secretary, Barnes Group Inc.,
Executive Office, 123 Main Street, P.O. Box 489, Bristol,
Connecticut 06011-0489.
- 19 -
<PAGE>
EXHIBIT 22
BARNES GROUP INC.
LIST OF SUBSIDIARIES
--------------------
<TABLE>
<CAPTION>
Operating Subsidiaries of the Company:
--------------------------------------
Jurisdiction of
Name Incorporation
---- ---------------
<S> <C>
Associated Spring-Asia PTE. LTD. Singapore
Associated Spring SPEC Limited United Kingdom
Barnes Group (Bermuda) Limited Bermuda
Barnes Group Canada Inc. Canada
Barnes Group Holding B.V. Netherlands
Bowman Distribution Europe Limited United Kingdom
Bowman Distribution France S.A. France
Resortes Mecanicos, S.A. Mexico
Ressorts SPEC, EURL France
Stumpp & Schuele do Brasil Industria e Brazil
Comercio Limitada
Windsor Airmotive Asia PTE. LTD. Singapore
</TABLE>
Associated Spring SPEC Limited is wholly-owned by Bowman
Distribution Europe Limited. Ressorts SPEC, EURL is wholly-owned
by Bowman Distribution France S.A. Windsor Airmotive Asia PTE.
LTD. is wholly-owned by Barnes Group Canada Inc. Associated
Spring-Asia PTE. LTD., and Stumpp & Schuele do Brasil Industria e
Comercio Limitada are wholly-owned by Barnes Group (Bermuda)
Limited. Resortes Mecanicos, S.A. is owned by Barnes Group
(Bermuda) Limited (87%) and Barnes Group Canada Inc. (13%).
Barnes Group Canada Inc., Bowman Distribution Europe Limited, and
Bowman Distribution France S.A. are wholly-owned by Barnes Group
Holding B.V. Barnes Group (Bermuda) Limited and Barnes Group
Holding B.V. are wholly-owned by Barnes Group Inc. The Company's
consolidated financial statements include all of the above-named
subsidiaries. For a statement of the principles of consolidation
applicable to these subsidiaries, see note 1 of the Notes to
Consolidated Financial Statements on page 18 of the 1995 Annual
Report to Stockholders.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Registration Statements on Form S-8 (No. 2-56437, pertaining to
the Employee Stock Purchase Plan, No. 2-91285, pertaining to the
1981 Stock Incentive Plan, Nos. 33-20932 and 33-30229, pertaining
to the Guaranteed Stock Plan, and the registration statement
filed on July 18, 1994 pertaining to the 1991 Stock Incentive
Plan) of Barnes Group Inc. of our report dated January 23, 1996
appearing on page 28 of the Annual Report to Stockholders which
is incorporated in this Annual Report on Form 10-K. We also
consent to the incorporation by reference of our report on the
Financial Statement Schedule, which appears on page 13 of this
Form 10-K.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Hartford, Connecticut
March 4, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statements on Form S-8 (No. 2 -56437, pertaining to the Employee
Stock Purchase Plan, No. 2-91285, pertaining to the 1981 Stock
Incentive Plan, Nos. 33-20932 and 33-30229, pertaining to the
Guaranteed Stock Plan, and the unnumbered one filed on July 18,
1994 pertaining to the 1991 Stock Incentive Plan) of Barnes Group
Inc. of our report dated January 28, 1994 with respect to the
consolidated financial statements of Barnes Group Inc. for the
year ended December 31, 1993, included in the Annual Report on
Form 10-K for the year ended December 31, 1995.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
Hartford, Connecticut
March 4, 1996
<PAGE>
EXHIBIT 3.2
BARNES GROUP INC.
BY-LAWS
-------
ARTICLE I: MEETINGS OF STOCKHOLDERS
SECTION 1. Annual Meetings.
The annual meeting of the stockholders of the
Corporation for the election of directors and for the
transaction of such other business as may properly come
before the meeting shall be held at 10:30 A.M. on the first
Wednesday in April of each year or on such other date or
time as may be designated by the Board of Directors.
SEC. 2. Special Meetings.
Special meetings of the stockholders may be called at
any time by the Chairman, the President or the Board of
Directors. (As used in these by-laws, the term "Chairman"
means the Chairman of the Company appointed pursuant to
Article IV Section 1 unless otherwise specified).
SEC. 3. Place of Meetings.
All meetings of the stockholders shall be held at such
place, within or without the State of Delaware, as may be
designated by the Board of Directors and specified in the
notice to be given to the stockholders in the manner
provided in Section 4 of this Article I.
1
<PAGE>
SEC. 4. Notice of Meetings.
Except as otherwise provided by statute, notice of each
meeting of the stockholders, whether annual or special,
shall be given to each stockholder of record entitled to
vote thereat, not less than ten days before the day on which
the meeting is to be held, by delivering a written or
printed notice thereof to him personally or by posting such
notice in a postage prepaid envelope addressed to him at his
last known post-office address. Except as otherwise
provided by statute, no publication of any notice of a
meeting of the stockholders shall be required. Every notice
of a special meeting of stockholders, besides stating the
time and place of the meeting, shall state briefly the
objects thereof and no business other than that specified in
such notice and matters germane thereto shall be presented
at such meeting, except with the unanimous consent in
writing of the holders of all the outstanding shares of the
Corporation entitled to vote thereon. Nevertheless, notice
of any meeting shall not be required to be given to any
stockholder who shall attend such meeting in person or by
proxy; and if any stockholder shall waive notice of any
meeting in person or by attorney thereunto authorized in
writing or by telegraph, notice thereof need not be given to
him. Notice of any adjourned meeting of stockholders shall
not be required to be given.
SEC. 5. Quorum.
At each meeting of stockholders the holders of record
of a majority of the shares outstanding and entitled to vote
2
<PAGE>
at such meeting, present in person or represented by proxy,
shall be necessary and sufficient to constitute a quorum for
the transaction of business; provided that any number of
stockholders entitled to vote, present in person or
represented by proxy at any annual election of directors,
though holding less than a majority of the shares out-
standing and entitled to vote at such election, may elect
the directors. In the absence of a quorum, a majority in
interest of the stockholders entitled to vote, present in
person or represented by proxy, or, if no such stockholder
is present or represented, any officer entitled to preside
or act as Secretary of such meeting, may adjourn the meeting
from time to time. At any such adjourned meeting at which a
quorum may be present, any business may be transacted which
might have been transacted at the meeting as originally
called.
SEC. 6. Voting.
The Secretary or other officer who has charge of the
stock ledger shall prepare and make, at least ten days
before every election of directors, a complete list of the
stockholders entitled to vote at said election, arranged in
alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name
of each stockholder. Such list shall be open to the
examination of any stockholder during ordinary business
hours, for a period of at least ten days prior to the
election, either at a place within the city, town or village
where the election is to be held and which place shall be
3
<PAGE>
specified in the notice of the meeting, or, if not so
specified, at the place where said meeting is to be held,
and the list shall be produced and kept at the time and
place of election during the whole time thereof, and subject
to the inspection of any stockholder who may be present.
Unless otherwise provided in the Certificate of
Incorporation or these By-Laws, each stockholder shall at
every meeting of the stockholders be entitled to one vote in
person or by proxy for each share of stock held by such
stockholder, but no proxy shall be voted on after three
years from its date unless the proxy provides for a longer
period. Except where the transfer books of the Corporation
shall have been closed or a date shall have been fixed as a
record date for the determination of its stockholders
entitled to vote, as provided in Section 5 of Article VII of
these By-Laws, no share of stock shall be voted on at any
election for directors which shall have been transferred on
the books of the Corporation within twenty days next pre-
ceding such election. Persons holding shares in a fiduciary
capacity shall be entitled to vote the shares so held. At
all meetings of the stockholders all matters, other than
those the manner of deciding which is expressly regulated by
statute, by the Certificate of Incorporation, or by these
By-Laws, shall be decided by the vote of a majority in
interest of the stockholders present in person or
represented by proxy and entitled to vote, a quorum being
present. The vote for directors shall be by ballot.
4
<PAGE>
SEC. 7. Nominations.
Only persons who are nominated in accordance with the
following procedures shall be eligible for election as
directors of the Corporation, except as may be otherwise
provided in the Certificate of Incorporation of the
Corporation with respect to the right of holders of
preferred stock of the Corporation to nominate and elect a
specified number of directors in certain circumstances.
Nominations of persons for election to the Board of
Directors may be made at any annual meeting of stockholders,
or at any special meeting of stockholders called for the
purpose of electing directors, (a) by or at the direction of
the Board of Directors (or any duly authorized committee
thereof) or (b) by any stockholder of the Corporation (i)
who is a stockholder of record on the date of the giving of
the notice provided for in this Section 7 of this Article I
and on the record date for the determination of stockholders
entitled to vote at such meeting and (ii) who complies with
the notice procedures set forth in this Section 7 of this
Article I.
In addition to any other applicable requirements, for a
nomination to be made by a stockholder, such stockholder
must have given timely notice thereof in proper written form
to the Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary
must be delivered to or mailed and received at the principal
executive offices of the Corporation (a) in the case of an
annual meeting, not less than sixty (60) days nor more than
ninety (90) days prior to the anniversary date of the
5
<PAGE>
immediately preceding annual meeting of stockholders;
provided, however, that in the event that the annual meeting
is called for a date that is not within thirty (30) days
before or after such anniversary date, notice by the stock-
holder in order to be timely must be so received not later
than the close of business on the tenth (10th) day following
the day on which such notice of the date of the annual
meeting was mailed or such public disclosure of the date of
the annual meeting was made, whichever first occurs; and (b)
in the case of a special meeting of stockholders called for
the purpose of electing directors, not later than the close
of business on the tenth (10th) day following the day on
which notice of the date of the special meeting was mailed
or public disclosure of the date of the special meeting was
made, whichever first occurs.
To be in proper written form, a stockholder's notice to
the Secretary must set forth (a) as to each person whom the
stockholder proposes to nominate for election as a director
(i) the name, age, business address and residence address of
the person, (ii) the principal occupation or employment of
the person, (iii) the class or series and number of shares
of capital stock of the Corporation which are owned
beneficially or of record by the person and (iv) any other
information relating to the person that would be required to
be disclosed in a proxy statement or other filings required
to be made in connection with solicitations of proxies for
election of directors pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder;
6
<PAGE>
and (b) as to the stockholder giving the notice (i) the name
and record address of such stockholder, (ii) the class or
series and number of shares of capital stock of the
Corporation which are owned beneficially or of record by
such stockholder, (iii) a description of all arrangements or
understandings between such stockholder and each proposed
nominee and any other person or persons (including their
names) pursuant to which the nomination(s) are to be made by
such stockholder, (iv) a representation that such stock-
holder intends to appear in person or by proxy at the
meeting to nominate the persons named in its notice and (v)
any other information relating to such stockholder that
would be required to be disclosed in a proxy statement or
other filings required to be made in connection with
solicitations of proxies for election of directors pursuant
to Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder. Such notice must be
accompanied by a written consent of each proposed nominee to
being named as a nominee and to serve as a director if
elected.
No person shall be eligible for election as a director
of the Corporation unless nominated in accordance with the
procedures set forth in this Section 7 of this Article I.
If the Chairman of the meeting determines that a nomination
was not made in accordance with the foregoing procedures,
the Chairman shall declare to the meeting that the
nomination was defective and such defective nomination shall
be disregarded.
7
<PAGE>
SEC. 8. Proposals.
No business may be transacted at an annual meeting of
stockholders, other than business that is either (a)
specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of
Directors (or any duly authorized committee thereof), (b)
otherwise properly brought before the annual meeting by or
at the direction of the Board of Directors (or any duly
authorized committee thereof) or (c) otherwise properly
brought before the annual meeting by any stockholder of the
Corporation (i) who is a stockholder of record on the date
of the giving of the notice provided for in this Section 8
of this Article I and on the record date for the
determination of stockholders entitled to vote at such
annual meeting and (ii) who complies with the notice
procedures set forth in this Section 8 of this Article I.
In addition to any other applicable requirements, for
business to be properly brought before an annual meeting by
a stockholder, such stockholder must have given timely
notice thereof in proper written form to the Secretary of
the Corporation.
To be timely, a stockholder's notice to the Secretary
must be delivered to or mailed and received at the principal
executive offices of the Corporation not less than sixty
(60) days nor more than ninety (90) days prior to the
anniversary date of the immediately preceding annual meeting
of stockholders; provided, however, that in the event that
the annual meeting is called for a date that is not within
thirty (30) days before or after such anniversary date,
8
<PAGE>
notice by the stockholder in order to be timely must be so
received not later than the close of business on the tenth
(10th) day following the day on which such notice of the
date of the annual meeting was mailed or such public
disclosure of the date of the annual meeting was made,
which-ever first occurs.
To be in proper written form, a stockholder's notice to
the Secretary must set forth as to each matter such stock-
holder proposes to bring before the annual meeting (i) a
brief description of the business desired to be brought
before the annual meeting and the reasons for conducting
such business at the annual meeting, (ii) the name and
record address of such stockholder, (iii) the class or
series and number of shares of capital stock of the
Corporation which are owned beneficially or of record by
such stockholder, (iv) a description of all arrangements or
understandings between such stockholder and any other person
or persons (including their names) in connection with the
proposal of such business by such stockholder and any
material interest of such stockholder in such business and
(v) a representation that such stockholder intends to appear
in person or by proxy at the annual meeting to bring such
business before the meeting.
No business shall be conducted at the annual meeting of
stockholders except business brought before the annual
meeting in accordance with the procedures set forth in this
Section 8 of this Article I; provided, however, that, once
business has been properly brought before the annual meeting
in accordance with such procedures, nothing in this Section
9
<PAGE>
8 of this Article I shall be deemed to preclude discussion
by any stockholder of any such business. If the Chairman of
an annual meeting determines that business was not properly
brought before the annual meeting in accordance with the
foregoing procedures, the Chairman shall declare to the
meeting that the business was not properly brought before
the meeting and such business shall not be transacted.
10
<PAGE>
ARTICLE II: BOARD OF DIRECTORS
SECTION 1. General Powers.
The property, affairs and business of the Corporation
shall be managed by the Board of Directors.
SEC. 2. Number, Classification, Term of Office, and
Qualifications.
The number of directors to constitute the whole Board
of Directors shall be nine, but such number may from time to
time be increased, or diminished to not less than three, by
resolution adopted by the Board of Directors. The Board of
Directors shall be divided into three classes as nearly
equal in number as may be, with the term of office of one
class expiring each year. At the annual meeting of
stockholders in 1970, directors of the first class shall be
elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class
shall be elected to hold office for a term expiring at the
second succeeding annual meeting and directors of the third
class shall be elected to hold office for a term expiring at
the third succeeding annual meeting. At each annual meeting
of stockholders after 1970, successors to the directors
whose terms shall then expire shall be elected to hold
office for terms expiring at the third succeeding annual
meeting, except that any director elected to a directorship
newly created since the last annual meeting shall hold
office for the same term as the other directors of the class
to which such director has been assigned. When the number
11
<PAGE>
of directors is changed, any newly created directorships or
any decrease in directorships shall be so assigned among the
classes by the Board of Directors as to make all classes as
nearly equal in number as may be. Each director shall
continue in office until his successor shall have been
elected and qualified or until his death or until his
resignation or removal in the manner hereinafter provided.
No director need be a stockholder, nor a resident of the
State of Delaware.
SEC. 3. Election of Directors.
At each meeting of the stockholders for the election of
directors, the directors shall be elected by a plurality of
the votes given at such election.
SEC. 4. Place of Meetings, etc.
The directors may hold their meetings and have one or
more offices, and keep the books of the Corporation, outside
of Delaware, at the office or place of business of the
Corporation in the City of Bristol, Connecticut, or at such
other places as they may from time to time determine.
SEC. 5. Time of Meetings, Notices, etc.
There shall be a meeting of the Board of Directors for
organization, for the election of officers and for the
transaction of such other business as may properly come
before the meeting on the date of the annual meeting of
stockholders or within thirty days thereafter upon the
notice hereinafter provided for a special meeting. The
12
<PAGE>
directors may, however, without notice, hold such meeting in
the city where the annual meeting of stockholders is held
and immediately following such annual meeting of stock-
holders. At the organizational meeting, the Directors shall
elect one of the directors as Chairman of the Board of
Directors. The Chairman of the Board of Directors, or in
his/her absence, the Chairman of the Board's Executive
Committee, shall preside at all meetings of the Board of
Directors. The Chairman of the Board of Directors, or in
his/her absence, the chief executive officer of the Company,
shall preside at all meetings of the stockholders. The
Chairman of the Board of Directors may be removed as
Chairman of the Board of Directors at any time by the Board
of Directors. The Board of Directors by resolution may
provide for the holding of regular meetings and may fix the
time of holding such meetings. Such regular meetings of the
Board of Directors may be held without notice. Special
meetings of the Board of Directors may be called by the
Chairman of the Board of Directors, the Chairman, the
President or any three directors. Unless otherwise
specified in the notice or waiver of notice thereof, all
meetings of the Board of Directors shall be held at the
office of the Corporation in Bristol, Connecticut. Notice
of each special meeting shall be mailed to each director
addressed to him at his residence or usual place of business
at least seven days before the day on which the meeting is
to be held or shall be sent to him at such place by
telegraph, or telephoned or delivered to him personally, not
later than three days before the day on which the meeting is
13
<PAGE>
to be held, unless the Chairman of the Board of Directors,
the Chairman or the President determines that circumstances
require that a meeting be held on shorter notice. Notice of
any meeting need not be given to any director, however, if
waived by him in writing or by telegraph. Any meeting of
the Board of Directors shall be a legal meeting without any
notice thereof having been given if all the directors shall
be present thereat.
SEC. 6. Quorum and Manner of Acting.
A majority of the directors at the time in office (but
not less than one-third of the number necessary to
constitute the whole Board) at a meeting duly assembled
shall be necessary and sufficient to constitute a quorum for
the transaction of business, subject, however, to the
provisions of Section 9 of this Article II. Except as
otherwise provided by law or in these By-Laws, the act of a
majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board of
Directors. In the absence of a quorum, a majority of the
directors present at any meeting may adjourn the meeting
from time to time until a quorum be had. Notice of any
adjourned meeting need not be given. The directors shall
act only as a Board and the individual directors shall have
no power as such.
SEC. 7. Resignations.
Any director may resign at any time by giving written
notice to the Chairman of the Board, the Chairman, the
14
<PAGE>
President or the Secretary. Such resignation shall take
effect at the time specified therein; and unless otherwise
specified therein the acceptance of such resignation shall
not be necessary to make it effective.
SEC. 8. Removal of Directors.
Any director may be removed at any time for cause, at
a meeting of stockholders called for the purpose, by the
affirmative vote of the holders of not less than two-thirds
of the outstanding shares of stock of the Corporation
entitled to vote in elections of directors, considered for
the purposes of this Section 8 as one class.
SEC. 9. Vacancies and Newly Created Directorships.
Any vacancy occurring among the directors by death,
resignation, removal or otherwise and any newly created
directorships may be filled by a majority of the directors
then in office, though less than a quorum, or, in the event
such directors are unable to act, by the stockholders. Each
director elected to fill a vacancy shall hold office for the
unexpired term in respect of which such vacancy occurred.
Each director elected to a newly created directorship shall
hold office until the next annual meeting of stockholders.
15
<PAGE>
ARTICLE III
COMMITTEES OF THE BOARD OF DIRECTORS
SECTION 1. How Constituted.
The Board of Directors, by resolution or resolutions
passed by a majority of the whole Board, may appoint an
Executive Committee, an Audit Committee and such other
committees as the Board of Directors may determine. The
Executive Committee and Audit Committee shall consist of
three or more directors, and each such other committee shall
consist of two or more directors, as determined by the Board
of Directors. The Executive Committee shall have the powers
set out in Section 2 of this Article III; other committees
shall have such powers as the Board of Directors delegates
thereto. The Board of Directors may appoint alternate
committee members who, at the invitation of the committee
chairman, may attend a committee meeting in the place of a
regular member who is unable to attend. When attending in
the place of regular members, alternate members shall have
all the powers of regular members and their presence shall
be included in the determination of whether a quorum exists.
SEC. 2. Powers of the Executive Committee.
During the intervals between the meetings of the Board
of Directors, the Executive Committee shall possess and may
exercise the powers of the Board of Directors, in the
management of the business and affairs of the Corporation,
and may authorize the seal of the Corporation to be affixed
to all papers which may require it.
16
<PAGE>
SEC. 3. Proceedings.
Each committee of the Board of Directors may appoint a
secretary of such committee, may fix its own rules of
procedure and may meet at such place or places and at such
time or times as the committee from time to time shall
determine. Each such committee shall cause its proceedings
to be recorded, and the minutes of committee meetings shall
be distributed to the Board of Directors.
SEC. 4. Quorum and Manner of Acting.
A majority of the number of regular members of any
committee of the Board of Directors shall constitute a quorum
thereof for the transaction of business and the act of a
majority of those present at a meeting thereof at which a
quorum shall be present shall be the act of such committee.
The members of any such committee shall act only1 as a committee
and the individual members thereof shall have no powers as such.
SEC. 5. Removal.
Any member of any committee of the Board of Directors,
may be removed at any time by a vote of the majority of the
directors then in office at any meeting of the Board of
Directors at which a quorum is present.
SEC. 6. Vacancies.
Any vacancy in any committee of the Board of Directors
shall be filled in the manner prescribed in these By-Laws
for the original appointment of such committee.
17
<PAGE>
ARTICLE IV
OFFICERS, COMMITTEES AND OTHER EXECUTIVES
SECTION 1. Number.
The officers of the Corporation shall be a President,
one or more Vice Presidents, a Secretary and a Treasurer,
and such other offices, including a Chairman, as may be
determined by the Board of Directors. The Board of
Directors may designate a Vice President as Senior Vice
President or Executive Vice President. Any two of the
offices established by or pursuant to this Section I may be
held by the same person.
SEC. 2. Election, Term of Office and Qualifications.
Each officer shall be chosen by the Board of Directors
and shall hold his/her office until his/her successor shall
have been duly chosen and qualified or until death or until
he/she shall resign or shall have been removed in the manner
hereinafter provided.
SEC. 3. Divisional Executives, Department Heads, Committees and
Agents.
The Board of Directors or the Executive Committee from
time to time may appoint group and divisional executives,
department heads, committees and agents (with such
designations as may be determined in the resolution
appointing them), each of whom shall act for such period,
have such powers, and perform such duties as the Board of
Directors or the Executive Committee from time to time may
18
<PAGE>
determine; provided, however, that the Board of Directors or
the Executive Committee may delegate to any officer or
committee the power to appoint, or to provide for the
appointment of, divisional executives, department heads,
committees or agents authorized by the provisions of this
Section 3, who shall have such designations, powers and
duties as the person or committee appointing them may
determine.
SEC. 4. Removal.
The Chairman, if any, and the President may be removed
either with or without cause by a vote of a majority of the
directors then in office at any meeting of the Board of
Directors at which a quorum is present. Any other officer
may be removed in a like manner or may be removed either
with or without cause by the Chairman, or if there is no
Chairman, by the President.
SEC. 5. Resignations.
Any officer may resign at any time by giving written
notice to the Board of Directors, the Chairman, the
President or the Secretary.
SEC. 6. Vacancies.
A vacancy in any office because of death, resignation,
removal or disqualification or any other cause, shall be
filled for the unexpired portion of the term in the manner
prescribed by these By-Laws for regular election or
appointment to such office.
19
<PAGE>
SEC. 7. The Chairman and the President.
The Chairman, or if no Chairman is elected by the Board
of Directors, the President shall be the chief executive
officer of the Corporation and, subject to the instructions
of the Board of Directors and the committees of the Board of
Directors, he/she shall have general charge of the business,
affairs and property of the Corporation and control over its
several officers. The chief executive officer shall see
that all orders and resolutions of the Board of Directors
and of all committees of the Board of Directors are carried
into effect. He/she may sign, with any other officer
thereunto authorized, certificates of stock of the
Corporation, and may sign and execute, in the name of the
Corporation, deeds, mortgages, bonds and other instruments
authorized by the Board of Directors or the Executive
Committee, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of
Directors or the Executive Committee to some other officer
or agent. From time to time the chief executive officer
shall report to the Board of Directors and to the committees
of the Board of Directors all matters within his/her
knowledge which the interests of the Corporation may require
to be brought to their notice. He/she shall do and perform
such other duties as from time to time may be assigned by
the Board of Directors or any committee of the Board of
Directors.
20
<PAGE>
SEC. 8. The President.
If a Chairman has been elected by the Board of
Directors, the President shall have the powers and duties
set forth in this Section 8. The President shall be the
chief operating officer and shall have general supervision
over the operations of the Corporation and the conduct of
its business. In the absence of the Chairman, the President
shall preside at all meetings of the stockholders, and shall
perform the other duties assigned to the Chairman by Section
7 of this Article IV. The President may sign, with any
other officer thereunto authorized, certificates of stock of
the Corporation, and may sign and execute, in the name of
the Corporation, deeds, mortgages, bonds and other
instruments authorized by the Board of Directors or the
Executive Committee, except in cases where the signing and
execution thereof shall be expressly delegated by the Board
of Directors or the Executive Committee to some other
officer or agent. He/she shall do and perform such other
duties as from time to time may be assigned to him/her by
the Board of Directors, any committee of the Board of
Directors, or the Chairman.
SEC. 9. The Vice Presidents.
At the request of the President or in his absence or
disability, the Vice President designated by the President
(or in the absence of such designation, the Vice President
designated by the Chairman, or if there is no Chairman, the
Chairman of the Board of Directors) shall perform all the
duties of the President, and when so acting, he/she shall
21
<PAGE>
have all the powers of, and be subject to all restrictions
upon, the President. Any vice President may also sign, with
any other officer thereunto authorized, certificates of
stock of the Corporation, and may sign and execute, in the
name of the Corporation, deeds, mortgages, bonds and other
instruments authorized by the Board of Directors or the
Executive Committee, except in cases where the signing and
execution thereof shall be expressly delegated by the Board
of Directors or the Executive Committee to some other
officer or agent, and shall perform such other duties as
from time to time may be assigned to him/her by the Board of
Directors, the Executive Committee, the Chairman of the
Board, the Chairman of the Executive Committee or the
President.
SEC. 10. The Secretary.
The Secretary shall be sworn to the faithful discharge
of his duties. He/she shall:
(a) Keep the minutes of the meetings of the stockholders
and of the Board of Directors and cause the same,
together with the minutes of each meeting of any
committee of the Board of Directors, to be recorded in
books provided for that purpose.
(b) See that all notices are duly given in accordance with
the provisions of these By-Laws or as required by law.
22
<PAGE>
(c) Whenever any committee shall be appointed in pursuance
of a resolution of the Board of Directors, furnish the
chairman of the committee with a copy of the
resolution.
(d) Be custodian of the records of the Corporation, the
Board of Directors and the committees thereof, and of
the seal of the Corporation and see that the seal is
affixed to all stock certificates prior to their
issuance and to all documents, the execution of which
on behalf of the Corporation under its seal shall be
duly authorized.
(e) Sign, with the Chairman, the President or a Vice
President, certificates of stock.
(f) See that the books, reports, statements, certificates
and the other documents and records required by law are
properly kept and filed.
(g) In general, perform all duties incident to the office
of Secretary and such other duties as from time to time
may be assigned to him/her by the Board of Directors,
the Executive Committee, the Chairman or the President.
SEC. 11. Assistant Secretaries.
At the request of the Secretary or in his/her absence
or disability, the Assistant Secretary designated by him/her
(or in the absence of such designation, the Assistant
23
<PAGE>
Secretary designated by the Board of Directors or the
Executive Committee) shall perform all the duties of the
Secretary, and when so acting, he/she shall have all the
powers of and be subject to all restrictions upon the
Secretary. The Assistant Secretaries shall perform such
other duties as from time to time may be assigned to them
respectively by the Board of Directors, the Executive
Committee or the Secretary, and shall be sworn to the
faithful discharge of their duties.
SEC. 12. The Treasurer.
The Treasurer shall have supervision over the funds,
securities, receipts and disbursements of the Corporation.
He/she shall cause all moneys and other valuable effects to
be deposited in the name and to the credit of the
Corporation, in such banks or trust companies or with such
bankers or other depositaries as shall be selected in
accordance with the provisions of Section 3 of Article VI of
these By-Laws. He/she shall cause the funds of the
Corporation to be disbursed by checks or drafts upon the
authorized depositaries of the Corporation. The Treasurer
shall cause to be taken and preserved proper vouchers for
all moneys disbursed. The Treasurer may also sign, with the
Chairman, the President or a Vice President, certificates of
stock of the Corporation. The Treasurer shall have the
right and is hereby empowered from time to time to require
from the officers or agents of the Corporation reports or
statements giving such information as he/she may desire with
24
<PAGE>
respect to any and all financial transactions of the
Corporation.
SEC. 13. Assistant Treasurers.
At the request of the Treasurer or in his/her absence
or disability, the Assistant Treasurer designated by him/her
(or in the absence of such designation, the Assistant
Treasurer designated by the Board of Directors or the
Executive Committee) shall perform all the duties of the
Treasurer, and when so acting, he shall have all the powers
of and be subject to all restrictions upon the Treasurer.
The Assistant Treasurers shall perform such other duties as
from time to time may be assigned to them respectively by
the Board of Directors, the Executive Committee or the
Treasurer.
SEC. 14. Surety Bonds.
Any officer or agent of the Corporation from whom the
Board of Directors or the Executive Committee may at any
time think fit to require a bond shall execute to the
Corporation the same in such sum and with such surety or
sureties as the Board of Directors or the Executive
Committee may direct, conditioned upon the faithful
performance of his duties to the Corporation, including
responsibility for negligence and for the accounting for all
property, moneys or securities of the Corporation which may
come into his hands.
25
<PAGE>
ARTICLE V
REIMBURSEMENT AND INDEMNIFICATION OF
DIRECTORS, OFFICERS AND EMPLOYEES
SECTION 1. Reimbursement.
Each director and officer of the Corporation shall be
entitled to reimbursement for his reasonable expenses
incurred in connection with his attention to the affairs of
the Corporation, including attendance at meetings. Each
employee of the Corporation other than an officer shall be
entitled to such reimbursement for his reasonable expenses
incurred in connection with his attention to the affairs of
the Corporation as the Board of Directors, the Executive
Committee or any person designated by one of them may
authorize.
SEC. 2. Indemnification.
(a) Each person who was or is a party or is threatened to
be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative
or investigative (hereinafter a "proceeding"), by
reason of the fact that he/she, or a person of whom
he/she is the legal representative, is or was a
director or officer of the Corporation or is or was
serving at the request of the Corporation as a
director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust
or other enterprise, including service with respect to
employee benefit plans, whether the basis of such
26
<PAGE>
proceeding is alleged action or inaction in an official
capacity or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified
and held harmless by the Corporation to the fullest extent
permitted by the laws of Delaware, as the same exist or may
hereafter be amended, against all costs, charges, expenses,
liabilities and losses (including attorneys' fees,
judgments, fines, employee benefit plan excise taxes or
penalties and amounts paid or to be paid in settlement
reasonably incurred or suffered by such person in connection
therewith, and such indemnification shall continue as to a
person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of his/her heirs,
executors and administrators; provided, however, that,
except as provided in subdivision (b) of this Section 2, the
Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the Board. The right to
indemnification conferred in this Section 2 shall include
the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its
final disposition; provided, however, that, if the Delaware
General Corporation Law requires, the payment of such
expenses incurred by a director or officer in his/her
capacity as a director or officer (and not in any other
capacity in which service was or is rendered by such person
27
<PAGE>
while a director or officer, including, without limitation,
service to any employee benefit plan) in advance of the
final disposition of a proceeding, shall be made only upon
delivery to the Corporation of an undertaking, by or on
behalf of such director or officer, to repay all amounts so
advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under
this subdivision (a) or otherwise. The Corporation may, by
action of the Board, provide indemnification to employees
and agents of the Corporation with the same scope and effect
as the foregoing indemnification of directors and officers.
(b) If a claim under subdivision (a) of this Section 2 is
not paid in full by the Corporation within sixty days
after a written claim has been received by the
Corporation, the claimant may at any time thereafter
bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole
or in part, the claimant shall be entitled to be paid
also the expense of prosecuting such claim. It shall
be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final
disposition where the required undertaking, if any is
required, has been tendered to the Corporation) that
the claimant has failed to meet a standard of conduct
which makes it permissible under the Delaware law for
28
<PAGE>
the Corporation to indemnify the claimant for the
amount claimed. Neither the failure of the Corporation
(including the Board, independent legal counsel, or its
stockholders) to have made a determination prior to the
commencement of such action that indemnification of the
claimant is permissible in the circumstances because
he/she has met such standard of conduct, nor an actual
determination by the Corporation (including the Board,
independent legal counsel, or its stockholders) that
the claimant has not met such standard of conduct,
shall be a defense to the action or create a presumption
that the claimant has failed to meet such standard of
conduct.
(c) The right to indemnification and the payment of
expenses incurred in defending a proceeding in advance
of its final disposition conferred in this Section 2
shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute,
provision of the Certificate of Incorporation, By-Laws,
agreement, vote of stockholders or disinterested
directors or otherwise.
(d) The Corporation may maintain insurance, at its expense,
to protect itself and any director, officer, employee
or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or
not the Corporation would have the power to indemnify
29
<PAGE>
such person against such expense, liability or loss
under Delaware law.
(e) To the extent that any director, officer, employee or
agent of the Corporation is by reason of such position,
or a position with another entity at the request of the
Corporation, a witness in any action, suit or
proceeding, he shall be indemnified against all costs
and expenses actually and reasonably incurred by him or
on his behalf in connection therewith.
(f) The Corporation may enter into agreements with any
director, officer, employee or agent of the Corporation
providing for indemnification to the full extent
permitted by Delaware law.
(g) For purposes of this Section 2, the term "Board" shall
mean the Board of Directors of the Corporation or, to
the extent permitted by the laws of Delaware, as the
same exist or may hereafter be amended, its Executive
Committee. On vote of the Board, the Corporation may
assent to the adoption of this Article V by any
subsidiary, whether or not wholly owned.
(h) The rights provided by this Section 2 shall not be
available with respect to any claim asserted against
the director, officer, employee or agent which is based
on matters which antedate the adoption of this Section
30
<PAGE>
2; any such claim will be governed by the By-Laws in
effect prior to April 2, 1987.
(i) If any provision of this Section 2 shall for any reason
be determined to be invalid, the remaining provisions
hereof shall not be affected thereby but shall remain
in full force and effect.
31
<PAGE>
ARTICLE VI
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
SECTION 1. Contracts, etc. How Executed.
Except as in these By-Laws otherwise provided, the
Board of Directors or the Executive Committee may authorize
any officer or officers, agent or agents, to enter into any
contract or execute and deliver any instrument in the name
of and on behalf of the Corporation, and such authority may
be general or confined to specific instances; and, unless so
authorized, no officer, agent or employee shall have any
power or authority to bind the Corporation by any contract
or engagement or to pledge its credit or to render it liable
pecuniarily for any purpose or to any amount.
SEC. 2. Loans.
No loans or advances shall be contracted on behalf of
the Corporation and no negotiable paper shall be issued in
its name, unless and except as authorized by the Board of
Directors or the Executive Committee. Any officer or agent
of the Corporation thereto authorized by the Board of
Directors or the Executive Committee may effect loans and
advances for the Corporation from any bank, trust company or
other institution, or from any firm, corporation or
individual, and for such loans and advances may make,
execute and deliver promissory notes, bonds or other
evidences of indebtedness of the Corporation and, when
authorized as aforesaid, may pledge, hypothecate or transfer
as security for the payment of any and all loans, advances,
32
<PAGE>
indebtedness and liabilities of the Corporation, any and all
stocks, securities and other personal property at any time
held by the Corporation and to that end may endorse, assign
and deliver the same. Such authority may be general or
confined to specific instances. But no mortgage (other than
a purchase money mortgage) upon its property and franchises
shall be created by the Corporation unless first there shall
have been obtained the consent of the holders of not less
than two-thirds of the shares of the capital stock of the
Corporation then issued and outstanding, given by vote at a
meeting of the stockholders called for the purpose.
SEC. 3. Deposits.
All funds shall be deposited from time to time to the
credit of the Corporation in such banks or trust companies
or with such bankers or other depositaries as the Board of
Directors or the Executive Committee may select or as may be
selected by any officer or officers, agent or agents of the
Corporation to whom such power may from time to time be
delegated by the Board of Directors or the Executive
Committee.
SEC. 4. Checks, Drafts, etc.
All notes, drafts, acceptances, checks, endorsements,
or other evidences of indebtedness, shall be signed by the
Treasurer or an Assistant Treasurer and countersigned by the
Chairman or the President, or shall be signed by one or more
officers or agents of the Corporation as may from time to
time be designated by resolution of the Board of Directors
33
<PAGE>
or of the Executive Committee. Endorsements for deposit to
the credit of the Corporation in any of its duly authorized
depositaries may be made by the Treasurer or Assistant
Treasurer, or by any other officer or agent who may be
designated by resolution of the Board of Directors or the
Executive Committee, without counter-signature, or by
hand-stamped impression in the name of the Corporation.
34
<PAGE>
ARTICLE VII
SHARES AND THEIR TRANSFER
SECTION 1. Certificate of Stock.
Every holder of stock in the Corporation shall be
entitled to have a certificate signed by, or in the name of
the Corporation by, the Chairman, the President or a Vice
President, and the Treasurer or an Assistant Treasurer, or
the Secretary or an Assistant Secretary, certifying the
number of shares owned by him/her in the Corporation. Any
of or all the signatures on the certificate may be a
facsimile. In case of any officer, transfer agent or
registrar who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate
is issued, the certificate may be issued by the Corporation
with the same effect as if he/she were such officer,
transfer agent or registrar at the date of issue.
Certificates representing shares of stock of the Corporation
shall be in such form as shall be approved by the Board of
Directors. There shall be entered upon the stock books of
the Corporation at the time of issuance of each share the
number of the certificate issued, the name of the person
owning the shares and the date of issuance thereof.
SEC. 2. Transfer of Stock.
Transfer of shares of stock of the Corporation shall be
made on the books of the Corporation by the holder of record
thereof, or by his/her attorney thereunto duly authorized by
35
<PAGE>
a power of attorney duly executed in writing and filed with
the Secretary of the Corporation or any of its transfer
agents, and on surrender of the certificate or certificates
representing such shares. The Corporation and its transfer
agents and registrars, if any, shall be entitled to treat
the holder of record of any share or shares of stock as the
absolute owner thereof for all purposes, and accordingly
shall not be bound to recognize any legal, equitable or
other claim to or interest in such share or shares on the
part of any other person whether or not it or they shall
have express or other notice thereof, except as otherwise
expressly provided by the statutes of the State of Delaware;
provided, however, that whenever any transfer of shares
shall be made for collateral security and not absolutely,
and written notice thereof shall be given to the Secretary
of the Corporation or to any of its transfer agents, such
fact shall be expressed in the entry of the transfer.
SEC. 3. Lost or Destroyed Certificates.
The holder of any shares of the Corporation shall
immediately notify the Corporation of any loss or
destruction of the certificate therefor. The Corporation
may issue a new certificate in the place of any certificate
theretofore issued by it, alleged to have been lost or
destroyed, but the Board of Directors or Executive Committee
may require the owner of the lost or destroyed certificate
or his/her legal representatives to give a bond in such sum,
not exceeding double the value of the shares, and with such
surety or sureties, as it may direct, to indemnify the
36
<PAGE>
Corporation and its transfer agents and registrars of
transfers, if any, against any claim that may be made
against it on account of the alleged loss or destruction of
any such certificate or the issuance of such new
certificate.
SEC. 4. Regulations.
The Board of Directors may make such rules and
regulations as it may deem expedient concerning the
issuance, transfer and registration of certificates for
shares of the stock of the Corporation. It may appoint
transfer agents or registrars of transfers, or both, and may
require all certificates of stock to bear the signature of
either or both.
SEC. 5. Closing of Transfer Books and Fixing of Record Date.
The Board of Directors shall have power to close the
stock transfer books of the Corporation for a period not
exceeding seventy days preceding the date of any meeting of
stockholders or the date for payment of any dividend or the
date for the allotment of rights or the date when any change
or conversion or exchange of capital stock shall go into
effect; provided, however, that in lieu of closing the stock
transfer books as aforesaid, the Board of Directors may fix
in advance a date, not exceeding seventy days preceding the
date of any meeting of stockholders or the date for the
payment of any dividend, or the date for the allotment of
rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, as a record
37
<PAGE>
date for the determination of the stockholders entitled to
notice of, and to vote at, any such meeting, or entitled to
receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect of
any such change, conversion or exchange of capital stock,
and in such case only such stockholders as shall be
stockholders of record on the date so fixed shall be enti-
tled to such notice of, and to vote at, such meeting, or to
receive payment of such dividend, or to receive such
allotment or rights, or to exercise such rights, as the case
may be, notwithstanding any transfer of any stock on the
books of the Corporation after any such record date fixed as
aforesaid.
38
<PAGE>
ARTICLE VIII
CORPORATE SEAL
The corporate seal shall be in the form of a circle and
shall bear the words and figures "Barnes Group Inc., 1925,
Delaware," or words and figures of similar import, provided that
the form of such seal shall be subject to alteration by the Board
of Directors.
39
<PAGE>
ARTICLE IX
FISCAL YEAR
The fiscal year of the Corporation shall begin on the
first day of January and end on the thirty-first day of the
following December.
40
<PAGE>
ARTICLE X
AMENDMENTS
All By-Laws of the Corporation shall be subject to
alteration or repeal, and new By-Laws may be made, either (1) by
the affirmative vote of the holders of record of a majority of
the outstanding shares of the stock of the Corporation entitled
to vote given at an annual meeting or at any special meeting, or
(2) by the affirmative vote of at least a majority of the number
of directors necessary to constitute the whole Board.
* * *
2/16/96
A:\BY-LAWS
41
<PAGE>
EXHIBIT 4.5
FOURTH AMENDMENT
TO
CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this
"Amendment"), dated as of December 1, 1995, by and between BARNES
GROUP, INC. (the "Borrower"), the Lenders parties to the Credit
Agreement (as defined below) from time to time (the "Lenders"),
and MELLON BANK, N.A., a national banking association, as Agent
(in such capacity, the "Agent").
WHEREAS, the Agent, the Lenders and the Borrower are
parties to a certain Credit Agreement dated as of December 1,
1991 (as amended, the "Credit Agreement"); and
WHEREAS, the Borrower has requested that the Lenders
extend the Revolving Credit Maturity Date for a period of one
year;
WHEREAS, the Agent, the Lenders and the Borrower desire
to amend the Credit Agreement as set forth herein; and
WHEREAS, all words and terms used in this Amendment
which are defined in the Credit Agreement are used herein with
the same meanings unless otherwise defined herein or required by
the context;
NOW, THEREFORE, in consideration of the foregoing
premises and intending to be legally bound, the Agent, the
Lenders and the Borrower hereby agree as follows:
Section 1. Extension of Revolving Credit Maturity Date.
-------------------------------------------
Pursuant to Section 2.03 of the Credit Agreement and as requested
by the Borrower in a letter to the Agent dated October 2, 1995,
the Lenders and the Agent hereby agree to extend the Revolving
Credit Maturity Date for a period of one year. On and after
December 6, 1995 (the "Effective Date"), as provided in Section
2.03 of the Credit Agreement, the Revolving Credit Maturity Date
shall be December 6, 2000, as such date may be further extended by
the Lenders pursuant to Section 2.03 of the Credit Agreement.
Section 2. Conditions. The obligation of the Agent
----------
and the Lenders to extend the Revolving Credit Maturity Date
shall be subject to satisfaction by the Borrower of the following
conditions precedent:
(a) The Agent shall have received (with a copy
for each Lender) the following documents dated as of
the date of the issuance of the Amendment (the "Closing
Date") and in form and substance satisfactory to the
Lenders:
<PAGE>
(i) An executed counterpart of this Amendment;
and
(ii) A certificate signed by a duly authorized
officer of the Borrower stating that (A) the
representations and warranties contained in
Article III of the Credit Agreement (except for
Section 3.06 which continues to be true as of the
date set forth therein) are correct on and as of
the Closing Date and as though made on and as of
the Closing Date and (B) no Event of Default and
no event, act or omission which, with the giving
of notice or the lapse of time or both, would
constitute such an Event of Default has occurred
and is continuing or would result from the
execution and delivery of the Amendment.
(b) The Agent shall have received (with a copy
for each Lender) such other approvals, certificates,
opinions or documents, in form and substance
satisfactory to the Lenders, as the Lenders may
reasonably request.
Section 3. Effect of Amendment. The Credit Agreement,
-------------------
as amended by this Amendment, is in all respects ratified,
approved and confirmed and shall, as so amended, remain in full
force and effect. From and after the date hereof, all references
in any document or instrument to the Credit Agreement shall mean
and include the Credit Agreement, as amended by this Amendment.
Section 4. Governing Law. This Amendment shall be
-------------
governed by and shall be interpreted and enforced in accordance
with the laws of the State of New York.
Section 5. Counterparts. This Amendment may be
------------
executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to
be an original, and all of which counterparts, taken together,
shall constitute but one and the same Amendment.
Section 6. Expenses. The Borrower shall reimburse the
--------
Lenders for all costs and expenses (including fees and expenses
of counsel to the Agent) incurred in connection with this
Amendment.
- 2 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective
officers thereunto duly authorized.
BARNES GROUP, INC.
By /s/ John J. Locher
--------------------------
Title V.P. Treasurer
-----------------------
MELLON BANK, N.A.,
individually and as Agent
By /s/ J. Paul Marotta
-----------------------------
Title Assistant Vice President
--------------------------
CHEMICAL BANK
By /s/ Scott S. Ward
--------------------------
Title Vice President
-----------------------
SHAMUT BANK, N.A.
By /s/ Paul A. Veiga
--------------------------
Title Vice President
-----------------------
NBD BANK, N.A.
By /s/ Carolyn J. Parks
--------------------------
Title Vice President
-----------------------
- 3 -
<PAGE>
SOCIETY NATIONAL BANK
By /s/ Lawrence A. Mack
--------------------------
Title Vice President
-----------------------
FLEET BANK, N.A.
By /s/ Marlene K. Haddad
--------------------------
Title Vice President
-----------------------
- 4 -
<PAGE>
EXHIBIT 4.7
FIRST AMENDMENT TO RIGHTS AGREEMENT
-----------------------------------
This Amendment, dated as of July 15, 1990, by and among
Barnes Group Inc., a Delaware corporation (the "Company"), The
Connecticut Bank and Trust Company, National Association ("CBT")
and Mellon Bank, N.A. ("Mellon") to the Rights Agreement between
the Company and CBT dated as of July 16, 1986, (the "Rights
Agreement").
WHEREAS, the Company and the Rights Agent have
heretofore executed and entered into the Rights Agreement under
which CBT served as the Rights Agent;
WHEREAS, pursuant to Section 26 of the Rights
Agreement, the Company and CBT may from time to time supplement
or amend the Rights Agreement in accordance with the provisions
of Section 26 thereof;
WHEREAS, the Company desires to appoint Mellon as the
sole and successor Rights Agent to CBT effective as of August 1,
1990 (the "Appointment Time");
WHEREAS, the Company desires to make certain amendments
to the Rights Agreement on account of the appointment of Mellon
as Rights Agent;
WHEREAS, the Company intends to provide notice to
registered holders of the Rights Certificates pursuant to Section
21 of the Rights Agreement; and
WHEREAS, the execution and delivery of this Amendment
by the Company, CBT and Mellon have been in all respects duly
authorized by each of them;
- 1 -
<PAGE>
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby agree
as follows:
Section 1. The Company hereby appoints Mellon as the
sole Rights Agent, and Mellon hereby accepts such appointment,
effective as of the Appointment Time.
Section 2. Effective as of the Appointment Time, all
references in the Rights Agreement (and in any Exhibit thereto)
to "The Connecticut Bank and Trust Company, National Association"
shall be deemed to be amended to be references to "Mellon Bank,
N.A."
Section 3. The legend set forth in Section 3(c) of the
Rights Agreement is amended, effective as of the Appointment
Time, to read in its entirety as follows:
"This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights
Agreement between Barnes Group Inc. (the 'Company') and
Mellon Bank, N.A. (the 'Right Agent') dated as of July 16,
1986, as amended, (the 'Rights Agreement'), the terms of
which are hereby incorporated herein by reference and a copy
of which is on file at the principal offices of the Company.
Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on
the date of mailing, without charge, promptly after receipt
of a written request therefor."
- 2 -
<PAGE>
Section 4. Section 21 of the Rights Agreement is
amended, effective as of the Appointment Time, to add immediately
after each use of the word "Connecticut" the phrase "or the
Commonwealth of Pennsylvania."
Section 5. Section 25 of the Rights Agreement is
amended, effective as of the Appointment Time, by replacing the
words:
"The Connecticut Bank and Trust Company, National
Association
One Constitution Plaza
Hartford, Connecticut 06115
Attention: Stock Transfer Department"
with the words:
"Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258-0001
Attention: Corporate Trust Group"
Section 6. Effective as of the Appointment Time, CBT
shall no longer be a Rights Agent for any purposes of the Rights
Agreement, and its agreement or consent shall not be required for
any amendment thereto or in connection with any action taken
thereunder. The parties hereto agree that, effective as of the
Appointment Time, Mellon shall be vested with the same powers,
rights, duties, and responsibilities as if it had been originally
named as a Rights Agent without further act or deed. CBT agrees
to deliver and transfer to Mellon any and all books, records,
funds, certificates, documents, instruments and other property of
any kind held by it under the Rights Agreement as of the
Appointment Time and to execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose.
Section 7. Except as expressly set forth herein, the
Rights Agreement shall remain in full force and effect.
- 3 -
<PAGE>
Section 8. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but
all of which together shall constitute but one agreement.
IN WITNESS WHEREOF, this Agreement has been signed by
or on behalf of each of the parties hereto as of the day and year
first above written.
Attest: BARNES GROUP INC.
By:/s/ Mary Louise Beardsley By:/s/ John E. Besser
------------------------- ------------------------
Name: Mary Louise Beardsley Name: John E. Besser
Title: Assistant Secretary Title Vice President
Attest: THE CONNECTICUT BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION
By:/s/ Clifford J. Heisler By:/s/ Karl H. Wagner
------------------------ --------------------------
Name: Clifford J. Heisler Name: Karl H. Wagner
Title: Assistant Vice President Title: Vice President
Attest: MELLON BANK, N.A.
By:/s/ Joan B. Hayes By:/s/ Tracie Lvicki
------------------------- --------------------------
Name: Joan B. Hayes Name: Tracie Lvicki
Title: Assistant Vice President Title: Assistant Vice President
- 4 -
<PAGE>
EXHIBIT 4.9
BARNES GROUP INC.
123 MAIN STREET
BRISTOL, CONNECTICUT 06010
NOTE PURCHASE AGREEMENT
$25,OOO,OOO
7.13% SENIOR NOTES DUE DECEMBER 5, 2005
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
As of December 1, 1995
Dear Sirs:
Barnes Group Inc. (the "Company"), a Delaware corporation, hereby
agrees with you as follows:
SECTION 1. PURCHASE AND SALE OF NOTES.
1.1 Issue of Notes.
The Company will issue $25,000,000 in aggregate principal
amount of its 7.13% Senior Notes due December 5, 2005 (herein
called the "Notes"), Each Note will bear interest on the unpaid
principal balance thereof from the date of the Note at the rate
of 7.13% per annum, payable semi-annually on the fifth day of
June and the fifth day of December in each year, commencing with
the payment date next succeeding the date of the Note, until the
principal amount shall be due and payable, and will bear
interest, payable on demand, on any overdue payment (including
any overdue prepayment) of principal or premium and (to the
extent permitted by law) on any overdue payment of interest at a
fluctuating rate per annum, to be adjusted daily, equal to the
greater of (a) the rate announced publicly by Citibank, N.A. in
New York, New York from time to time as its prime rate and (b)
9.13% per annum (but in no event higher than the maximum rate
permitted by law); and will mature on December 5, 2005. The
Notes will be registered notes in the form set out in Exhibit B.
1.2 The Closing.
The Company agrees to sell to you and you agree to purchase
from the Company, in accordance with the provisions of this
Agreement, the principal amount of the Notes set forth opposite
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your name on Exhibit A hereto at 100% of the principal amount
thereof.
The closing of your purchase shall be held at 9:00 a.m. on
December 5, 1995 ("Closing Date") at the office of CIGNA
Investments, Inc., Bloomfield, Connecticut 06002. At the closing
the Company will deliver to you, unless you otherwise request, a
single Note in the principal amount of your purchase, dated the
Closing Date and payable to you, or your nominee, as set forth in
Exhibit A, against payment in immediately available funds.
1.3 Purchase for Investment.
You represent to the Company that you are purchasing the
Notes for investment for your own account and the account of your
affiliated entities and with no present intention of distributing
or reselling the Notes or any part thereof to anyone other than
an affiliated entity, but without prejudice, however, to your
right at all times to sell or otherwise dispose of all or any
part of the Notes under a registration under the Securities Act
of 1933, as amended, or under a registration exemption available
under that Act. It is understood that, in making the
representations set out in Sections 2.9 and 2.11, the Company is
relying, to the extent applicable, upon your representation as
aforesaid.
1.4 Failure to Deliver.
If, at the closing, the Company fails to tender to you the
Notes to be purchased by you or if the conditions specified in
Section 3 have not been fulfilled, you may thereupon elect to be
relieved of all further obligations under this Agreement.
Nothing in this Section shall operate to relieve the Company from
any of its obligations hereunder or to waive any of your rights
against the Company.
1.5 Expenses; Issue Taxes.
Whether or not the Notes are sold, the Company will pay all
expenses relating to this Agreement, including but not limited
to:
(a) the cost of reproducing this Agreement and the Notes;
(b) the reasonable fees and disbursements of your special
counsel, if any, and of your in-house counsel;
(c) your out-of-pocket expenses;
(d) the cost of delivering to or from your home office,
insured to your satisfaction, the Notes purchased by
you at the closing, any Note surrendered by you to the
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Company pursuant to this Agreement and any Note issued
to you in substitution or replacement for a
surrendered Note;
(e) the cost of obtaining the Private Placement Number
referred to in Section 3.6;
(f) all expenses, including attorneys, fees, relating to
any amendments or waivers pursuant to the provisions
hereof; and
(g) all costs and expenses, including attorneys' fees,
incurred by the holder of any Note in enforcing any
rights under this Agreement or the Notes or in
responding to any subpoena or other legal process
issued in connection with this Agreement or the
transactions contemplated hereby, including without
limitation, costs and expenses incurred in any
bankruptcy case.
The Company will pay all taxes in connection with the
issuance and sale of the Notes and in connection with any
modification of the Notes and will save you harmless against any
and all liabilities with respect to such taxes. The obligations
of the Company under this Section 1.5 shall survive the payment
of the Notes and the termination of this Agreement.
SECTION 2. WARRANTIES AND REPRESENTATIONS
The Company warrants and represents to you as of the date hereof
that:
2.1 Subsidiaries.
Exhibit C to this Agreement correctly identifies (i) each of
the Company's active Subsidiaries (indicating which Subsidiaries
are Domestic Subsidiaries), its jurisdiction of incorporation and
the percentage of its voting stock owned by the Company and each
other Subsidiary and (ii) each of the Company's Affiliates (other
than Subsidiaries) which is a corporation or partnership or which
is a holder of 5% or more of the voting stock of the Company and
the nature of the affiliation. The Company and each Subsidiary
is the legal and beneficial owner of all of the shares of voting
stock it purports to own of each Subsidiary, free and clear in
each case of any Lien. All such shares have been duly issued and
are fully paid and non-assessable.
2.2 Corporate Organization and Authority.
The Company, and each Subsidiary,
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(a) is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of
incorporation,
(b) has all requisite power and authority and all
necessary licenses, permits, franchises and other
governmental authorizations to own and operate its
Properties and to carry on its business as now
conducted and as presently proposed to be conducted,
and
(c) has duly qualified and is authorized to do business
and in good standing as a foreign corporation in each
jurisdiction where the character of its Properties or
the nature of its activities makes such qualification
necessary and where the failure to be so qualified
would have a material adverse effect on the Company's
or Subsidiary's business or financial position.
2.3 Business, Property, Indebtedness and Liens.
(a) The Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 filed by the Company with the
Securities and Exchange Commission and previously delivered to
you correctly describes the general nature of the business and
principal Properties of the Company and its Subsidiaries.
(b) Exhibit C correctly lists all outstanding Indebtedness
for borrowed money (including all Capitalized Leases) of, and all
Liens (other than those (x) permitted by clauses (i) - (v) of
Section 7.6(a) and (y) those on Property which individually does
not have a Fair Market Value in excess of $500,000 and which,
when aggregated with other Property subject to Liens not included
pursuant to this clause (y), does not have a Fair Market Value in
excess of $2,000,000) on Property of, the Company and its
Subsidiaries as of September 30, 1995. Neither the Company nor
any Subsidiary has agreed or consented to cause or permit in the
future (upon the happening of a contingency or otherwise) any of
its Property, whether now owned or hereafter acquired, to be
subject to a Lien not permitted by Section 7.6(a).
2.4 Financial Statements.
(a) The consolidated balance sheets of the Company and its
Consolidated Subsidiaries as of December 31 in the years 1991,
1992, 1993, and 1994 and the related statements of income,
retained earnings and changes in financial position or cash flows
for the fiscal years ended on such dates, all accompanied by
reports thereon containing opinions without qualification, except
as therein noted, by Ernst & Young or by Price, Waterhouse,
L.L.P., independent certified public accountants, and the
consolidated balance sheets of the Company and its Consolidated
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Subsidiaries as of June 30, 1995 and as of September 30, 1995, if
the representation is being made as of the Date of Closing, and
the related statements of income, retained earnings and cash
flows for the 6-month or 9-month period, as appropriate, then
ended, certified by the Company's chief financial officer or
chief accounting officer, have been prepared in accordance with
generally accepted accounting principles consistently applied,
and present fairly the financial position of the Company and its
Consolidated Subsidiaries as of such dates and the results of
their operations for such periods, provided, however, that the
1995 financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial
statements.
(b) Since December 31, 1994 there have been no materially
adverse changes in the Properties, business, prospects, profits
or financial condition of the Company or the Company and its
Subsidiaries taken as a whole.
2.5 Full Disclosure.
The financial statements referred to in Section 2.4 do not,
nor does this Agreement nor the other written materials described
in Exhibit F furnished to you by the Company contain any untrue
statement of a material fact or omit a material fact necessary to
make the statements contained therein or herein not misleading.
There is no agreement, restriction or other factual matter
which the Company has not disclosed to you in writing which so
far as the Company can now reasonably foresee, will have a
material adverse impact on the long-term financial condition or
prospects of the Company and its Subsidiaries or the ability of
the Company to perform this Agreement.
2.6 Pending Litigation; Compliance with Law.
There are no proceedings or investigations pending, or to
the knowledge of the Company threatened, against or affecting the
Company or any Subsidiary in or before any court, governmental
authority or agency or arbitration board or tribunal which, so
far as the Company can now reasonably foresee, individually or in
the aggregate, will have a material adverse impact on the long-
term financial condition or prospects of the Company and its
Subsidiaries, or would impair the ability of the Company to
perform this Agreement. Neither the Company nor any Subsidiary
is in default with respect to any order of any court,
governmental authority or agency or arbitration board or tribunal
or in violation of any laws or governmental rules or regulations
where, so far as the Company can now reasonably foresee, such
default or violation will have a material adverse impact on the
long-term financial condition or prospects of the Company and its
Subsidiaries, or the ability of the Company to perform this
Agreement.
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2.7 Title to Properties.
Except where the failure to possess good and marketable
title in fee simple or good title, as the case may be, would not
have a material adverse impact on the Company or on the Company
and its Subsidiaries taken as a whole, the Company, and each
Subsidiary, has good and marketable title in fee simple (or its
equivalent under applicable law) to all the real Property, and
has good title to all the other Property, it purports to own,
including that reflected in the most recent balance sheet
referred to in Section 2.4 (except as sold or otherwise disposed
of in the ordinary course of business), free from Liens not
permitted by Section 7.6(a).
2.8 Patents and Trademarks.
The Company, and each Subsidiary, owns or possesses all the
patents, trademarks, service marks, trade names, copyrights,
licenses and rights with respect to the foregoing necessary for
the present and planned future conduct of its business, without
any conflict with the rights of others known by Senior
Management.
2.9 Sale is Legal and Authorized.
The sale of the Notes by the Company and compliance by the
Company and each Subsidiary with all of the provisions of this
Agreement and of the Notes:
(a) have been duly authorized and are within the corporate
powers of the Company and each Subsidiary; and
(b) are legal and will not conflict with, constitute a
violation of, or result in the creation of any Lien
upon any Property of the Company or any Subsidiary
under the provisions of, any agreement, charter
instrument, by-law or other instrument to which the
Company or any Subsidiary is a party or by which any
of them or their respective Properties may be bound.
The Company is not a party to any agreement, or subject to
any charter or other corporate restriction, which restricts its
right or ability to incur Indebtedness, other than this Agreement
and the agreements listed on Exhibit C.
2.10 No Defaults.
No event has occurred and no condition exists which, upon
the issue of the Notes, would constitute a Default or an Event of
Default. The Company is not in violation (whether or not
temporarily waived) of any term of any certificate of
incorporation or by-law and neither the Company nor any
PAGE 6
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Subsidiary is in default under any agreement or other instrument
with respect to borrowed money. Neither the Company nor any
Subsidiary is in violation of any term of any other agreement or
instrument to which it is a party or by which it or any of its
Property may be bound which violation, individually or in the
aggregate with other violations, will have a materially adverse
impact on the long-term business or prospects of the Company or
the Company and its Subsidiaries taken as a whole.
2.11 Governmental Consent.
Neither the nature of the Company or of any Subsidiary, or
of any of their respective businesses or Properties, nor any
relationship between the Company or any Subsidiary and any other
Person, nor any circumstance in connection with the offer, issue,
sale or delivery of the Notes or the execution, delivery and
performance of this Agreement is such as to require a consent,
approval or authorization of, or filing, registration or
qualification with, any governmental authority on the part of the
Company or any Subsidiary in connection with the execution,
delivery and performance of this Agreement or the offer, issue,
sale or delivery of the Notes.
2.12 Taxes.
Consolidated Federal income tax returns for the Company and
its Domestic Subsidiaries have been examined by the Internal
Revenue Service for all years up to and including the year ended
December 31, 1989. The Company and each of its Subsidiaries have
filed or caused to be filed all Federal, state and local tax
returns which, to the knowledge of Senior Management are required
to be filed and have paid or caused to be paid all taxes as shown
on such returns or on any assessment received by it or by any of
them, to the extent that such taxes have become due, except any
such tax or assessment the validity of which is being contested
in good faith by appropriate proceedings and with respect to
which the Company or a Subsidiary, as appropriate, has set aside
on its books adequate reserves to the extent the Company or any
Subsidiary and a nationally recognized independent certified
public accountant believes such reserves are necessary. To the
extent that the Company in good faith believes is necessary, the
Company and its Subsidiaries have set up reserves which are
believed by the Company to be adequate for the payment of
additional taxes. All assessed deficiencies resulting from
examinations by the Internal Revenue Service up to and including
the year ended December 31, 1989 have been discharged, reserved
against or will not impair the Company's ability to repay the
Loans.
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2.13 Use of Proceeds.
The Company will apply the proceeds from the sale of the
Notes to refinance outstanding Indebtedness for borrowed money.
None of the transactions contemplated in this Agreement
(including, without limitation thereof, the use of the proceeds
from the sale of the Notes) will violate or result in a violation
of Section 7 of the Securities Exchange Act of 1934, as amended,
or any regulations issued pursuant thereto, including, without
limitation, Regulations G, T and X of the Board of Governors of
the Federal Reserve System, 12 C.F.R., Chapter II.
2.14 Private Offering.
The Company has not offered any of the Notes or any similar
Security of the Company for sale to, or solicited offers to buy
any thereof from, or otherwise approached or negotiated with
respect thereto with, any prospective purchaser, other than the
purchasers of the Notes and not more than five (5) other
institutional investors, each of whom was offered all or a
portion of the Notes at private sale for investment. The Company
agrees that neither the Company nor anyone acting on its behalf
will offer the Notes or any part thereof or any similar
Securities for issue or sale to, or solicit any offer to acquire
any of the same from, anyone so as to bring the issuance and sale
of the Notes within the provisions of Section 5 of the Securities
Act of 1933, as amended.
2.15 ERISA.
(a) Relationship of Vested Benefits to Pension Plan Assets.
------------------------------------------------------
The present aggregate value of all benefits vested under all
qualified "defined benefit pension plans", as such term is defined
in Section 3 of ERISA, maintained by the Company and its Related
Persons, or in which employees of the Company or any Related
Person are entitled to participate, as from time to time in effect
(herein called the "Pension Plans"), did not, as of January 1,
1994, the last annual valuation date, exceed the actuarial or
market value of the assets of the Pension Plans allocable to such
vested benefits.
(b) Prohibited Transactions. Neither the Company or any
-----------------------
Related Person nor any of the Pension Plans nor any trusts
created thereunder, nor any trustee or administrator thereof, has
engaged in a "prohibited transaction", as such term is defined in
Section 4975 of the Internal Revenue Code of 1986, as amended, or
described in Section 406 of ERISA, which could subject the
Company, any Related Person, any of the Pension Plans, any such
trust, or any trustee or administrator thereof, or any party
dealing with the Pension Plans or any such trust to the tax or
penalty on prohibited transactions imposed by said Section 4975
or by Section 502(i) of ERISA.
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(c) Reportable Events. Since December 31, 1986, neither
-----------------
any of the Pension Plans nor any such trusts have been
terminated, nor have there been any "reportable events", as that
term is defined in Section 4043 of ERISA, since the effective
date of ERISA.
(d) Accumulated Funding Deficiency. Neither any of the
------------------------------
Pension Plans nor any such trusts have incurred any "accumulated
funding deficiency", as such term is defined in Section 302 of
ERISA (whether or not waived), since the effective date of ERISA.
2.16 Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder nor
its use of the proceeds thereof will violate the Trading with the
Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto.
2.17 Status under Certain Statutes.
Neither the Company nor any Subsidiary is subject to
regulation under the Investment Company Act of 1940, as amended,
the Public Utility Holding Company Act of 1935, as amended, the
Interstate Commerce Act, as amended, or the Federal Power Act, as
amended.
2.18 Environmental Matters.
Neither the Company nor any Subsidiary has knowledge of any
claim or has received any notice of any claim, and no proceeding
has been instituted raising any claim against the Company or any
of its Subsidiaries or any of their respective real properties
now or formerly owned, leased or operated by any of them or other
assets, alleging any damage to the environment or violation of
any Environmental Laws, except, in each case, such as could not
reasonably be expected to result in a material adverse effect on
the Company or the Company and its Subsidiaries taken as a whole.
Except as otherwise disclosed to you in writing,
(a) neither the Company nor any Subsidiary has knowledge
of any facts which would give rise to any claim, public or
private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way
related to real properties now or formerly owned, leased or
operated by any of them or to other assets or their use,
except, in each case, such as could not reasonably be
expected to result in a material adverse effect on the
Company or the Company and its Subsidiaries taken as a
whole;
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(b) neither the Company nor any of its Subsidiaries has
stored any Hazardous Materials on real properties now or
formerly owned, leased or operated by any of them and has
not disposed of any Hazardous Materials in a manner contrary
to any Environmental Laws in each case in any manner that
could reasonably be expected to result in a material adverse
effect on the Company or the Company and its Subsidiaries
taken as a whole; and
(c) all buildings on all real properties now owned,
leased or operated by the Company or any of its Subsidiaries
are in compliance with applicable Environmental Laws, except
where failure to comply could not reasonably be expected to
result in a material adverse effect on the Company or the
Company and its Subsidiaries taken as a whole.
SECTION 3. CLOSING CONDITIONS
Your obligation to purchase and pay for the Notes to be delivered
to you at the closing shall be subject to the following
conditions precedent:
3.1 Opinions of Counsel.
You shall have received from John E. Besser, Esq., Senior
Vice President/Finance and Law of the Company, the closing
opinion described in Exhibit D and at your option from your
counsel stating that the opinion from Company counsel is
satisfactory in scope and form and that, in their opinion, you
are justified in relying thereon.
3.2 Warranties and Representations True as of Closing Date.
(a) The warranties and representations contained in
Section 2 shall (except as affected by transactions contemplated
by this Agreement) be true in all material respects on the
Closing Date with the same effect as though made on and as of
that date.
(b) Neither the Company nor any Subsidiary shall have
taken any action or permitted any condition to exist which would
have been prohibited by Section 7 if such Section had been
binding and effective at all times during the period from
December 31, 1994 to and including the Closing Date.
3.3 Compliance with this Agreement.
The Company shall have performed and complied with all
agreements and conditions contained herein which are required to
be performed or complied with by the Company before or at the
closing.
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3.4 Officers' Certificate.
You shall have received a certificate dated the Closing Date
and signed by the President or a Vice President and the Treasurer
or an Assistant Treasurer of the Company, certifying that the
conditions specified in Sections 3.2 and 3.3 have been fulfilled.
3.5 Proceedings Satisfactory.
All proceedings taken in connection with the sale of the
Notes and all documents and papers relating thereto shall be
satisfactory to you and your counsel. You and your counsel shall
have received copies of such documents and papers as you or they
may reasonably request in connection therewith or as a basis for
your counsel's closing opinion, if any, all in form and substance
satisfactory to you and your counsel.
3.6 Private Placement Number.
The Company shall have obtained from Standard & Poor's
Corporation and provided to you a Private Placement Number for
the Notes.
3.7 Legal Investment.
Each Note to be purchased by you shall qualify as a legal
investment for life insurance companies under the New York
Insurance Law and any other law applicable to you (other than
under any "basket" or leeway provisions thereof), and the Company
shall have delivered to you such officer's certificates or other
evidence as you may request to establish compliance with this
condition.
SECTION 4. DIRECT PAYMENT
The Company agrees that, notwithstanding any provision in this
Agreement or the Notes to the contrary, it will pay all sums
becoming due to any institutional holder of Notes in the manner
provided in Exhibit A or in any other reasonable manner as any
institutional holder may designate to the Company in writing
(without presentment of or notation on the Notes).
SECTION 5. PREPAYMENTS
5.1 Required Prepayments.
(a) In addition to paying the entire remaining principal
amount and interest due on the Notes at maturity, the Company
will prepay, and there shall become due and payable,
$6,250,000.00 principal amount of the Notes on December 5 in each
year beginning on December 5, 2002 and ending December 5, 2004,
inclusive. Each such prepayment shall be at 100% of the
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principal amount to be prepaid, together with interest accrued
thereon to the date of prepayment.
(b) The acquisition of any Notes by the Company shall not
reduce or otherwise affect its obligation to make any prepayment
required by Section 5.l(a). Upon any exercise by the Company of
the prepayment option in Section 5.2, each remaining scheduled
payment of principal shall be reduced on a pro rata basis to
reflect such reduction in outstanding principal amount.
5.2 Option to Prepay.
The Company may make optional prepayments to prepay the
Notes in whole or in part, in multiples of $1,000,000, at any
time at a price equal to the greater of (i) the principal amount
to be prepaid together with accrued interest on the principal
amount so prepaid to the prepayment date, and (ii) the Makewhole
Price applicable at such time with respect to the amount of the
Notes being prepaid.
5.3 Notice of Optional Prepayment.
The Company will give notice of any optional prepayment of
the Notes to each holder of the Notes not less than 10 Business
Days nor more than 60 days before the date fixed for prepayment,
specifying (a) such date, (b) the section of this Agreement under
which the prepayment is to be made, (c) the principal amount of
the Notes and of such holder's Notes to be prepaid on such date,
and (d) the accrued interest applicable to the prepayment, and
setting forth a detailed calculation of what the Makewhole Price
would be if the Notes were being prepaid on the date of such
notice. Notice of prepayment having been so given, the principal
amount of the Notes specified in such notice, together with the
premium, if any, and accrued interest thereon, shall become due
and payable on the prepayment date. The Company will provide a
supplemental notice by courier or facsimile confirmed by
telephone to be received by each holder of the Notes by
2:00 p.m., Hartford, Connecticut time, on the Business Day
immediately preceding the date fixed for prepayment which will
set forth a detailed calculation of the Makewhole Price.
5.4 Partial Payment Pro Rata.
If there is more than one Note outstanding at any time, the
aggregate principal amount of each required or optional partial
payment of the Notes shall be allocated among the outstanding
Notes in proportion, as nearly as practicable, to the respective
unpaid principal amounts of the Notes. For the purpose of this
Section 5.4 only, any Notes reacquired by the Company shall be
deemed to be outstanding.
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SECTION 6. REGISTRATION; SUBSTITUTION OF NOTES
6.1 Registration of Notes.
The Company will cause to be kept at its office maintained
pursuant to Section 7.3, a register for the registration and
transfer of the Notes. The names and addresses of the holders of
the Notes, the transfer thereof and the names and addresses of
the transferees of any of the Notes will be registered in the
register. The Person in whose name any Note is registered shall
be deemed and treated as the owner and holder thereof for all
purposes of this Agreement, and the Company shall not be affected
by any notice or knowledge to the contrary.
6.2 Exchange of Notes.
Upon surrender of any Note to the Company at its office
maintained pursuant to Section 7.3, the Company, upon request,
will execute and deliver, at its expense (except as provided
below), new Notes in exchange therefor, in denominations of at
least $100,000 (except as may be necessary to reflect any
principal amount not evenly divisible by $100,000), in an
aggregate principal amount equal to the unpaid principal amount
of the surrendered Note. Each such new Note (a) shall be payable
to such Person as the surrendering holder may request, and (b)
shall be dated and bear interest from the date to which interest
has been paid on the surrendered Note or dated the date of the
surrendered Note if no interest has been paid thereon. The
Company may require payment of a sum sufficient to cover any
stamp tax or governmental charge imposed in respect of any
transfer.
6.3 Replacement of Notes.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note and,
(a) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to it (provided, if
the holder of the Note is an institutional investor,
its own agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and
cancellation of the Note, the Company at its expense
will execute and deliver a new Note of like tenor,
dated and bearing interest from the date to which
interest has been paid on the lost, stolen, destroyed
or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest has
been paid thereon.
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SECTION 7. COMPANY BUSINESS COVENANTS
The Company covenants that on and after the date of this
Agreement until the Notes are paid in full:
7.1 Payment of Taxes and Claims.
Except in situations where the failure to pay would not
result in a material adverse impact on the Company or the Company
and its Subsidiaries taken as a whole, the Company, and each
Subsidiary, will pay, before they become delinquent,
(a) all taxes, assessments and governmental charges or
levies imposed upon it or its Property, and
(b) all claims or demands of any kind (including but not
limited to those of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons) which,
if unpaid, might result in the creation of a Lien upon
its Property, provided that items of the foregoing
description need not be paid while being contested in
good faith and by appropriate proceedings, if and for
so long as book reserves reasonably believed by the
Company and independent certified public accountants
of recognized national standing to be adequate have
been established with respect thereto; provided
further that notwithstanding the foregoing provisions
of this Section 7.1, the Company and each Subsidiary
will pay all taxes known by Senior Management to be
due and payable no later than fifteen days after the
date such taxes are due.
7.2 Maintenance of Properties and Corporate Existence.
(a) Except where the failure to do so would not have a
material adverse impact on the Company or the Company and its
Subsidiaries taken as a whole, the Company, and each Subsidiary,
will:
(i) Property -- maintain its Property in good
--------
condition and make all necessary renewals,
replacements, additions, betterments and
improvements thereto;
(ii) Insurance -- keep its properties adequately
---------
insured at all times, by financially sound and
reputable insurers; maintain such other
insurance, to such extent and against such
risks, including fire and other risks insured
against by extended coverage as is customary
with companies in the same or similar businesses
located or operating in areas with similar
PAGE 14
<PAGE>
geological conditions; maintain in full force
and effect public liability insurance against
claims for personal injury or death or property
damage occurring upon, in, about or in
connection with the use of any properties owned,
occupied or controlled by it, in such amounts as
the Company or any Subsidiary, as the case may
be, shall reasonably deem necessary; and
maintain such other insurance as may be required
by law;
(iii) Financial Records -- keep true books of records
-----------------
and accounts in which full and correct entries
will be made of all its business transactions,
and will reflect in its financial statements
adequate accruals and appropriations to
reserves, all in accordance with generally
accepted accounting principles, consistently
applied; and
(iv) Corporate Existence and Rights -- do or cause to
------------------------------
be done all things necessary to preserve and
keep in full force and effect its existence,
rights and franchises, except as otherwise
permitted by Section 7.4, provided, however that
--------
the Company may liquidate or sell any Subsidiary
if the transaction is permitted by Section 7.4.
(b) The Company will and will cause each of its Sub-
sidiaries to comply with all laws, ordinances or governmental
rules or regulations to which each of them is subject, including,
without limitation, Environmental Laws, and will obtain and
maintain in effect all licenses, certificates, permits,
franchises and other governmental authorizations necessary to the
ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary
to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits,
franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have
a material adverse effect on the Company or any Subsidiary.
7.3 Maintenance of Office.
The Company will maintain an office in the State of
Connecticut where notices, presentations and demands in respect
of this Agreement or the Notes may be made upon it. Such office
shall be maintained at 123 Main Street, Bristol, Connecticut
06010 until such time as the Company shall notify the holders of
the Notes of a change of location.
PAGE 15
<PAGE>
7.4 Sale of Assets or Merger.
(a) Sale of Assets -- The Company will not, nor will it
--------------
permit any of its Subsidiaries to, directly or indirectly, except
in the ordinary course of business, sell, lease, transfer or
otherwise dispose of any of its Property or assets, now owned or
hereafter acquired, if, as a result of such sale, lease, transfer
or disposition, the aggregate net book value or fair market
value, whichever shall be higher, of all Property and assets
sold, leased, transferred or otherwise disposed of by the Company
and its Subsidiaries in the then current fiscal year of the
Company would exceed an amount equal to 10% of the book value
(computed in accordance with GAAP) of all Property and assets of
the Company and its Consolidated Subsidiaries at the end of the
preceding fiscal year.
(b) Consolidation, Merger -- The Company will not, nor
---------------------
will it permit any of its Subsidiaries to, directly or
indirectly, consolidate with or merge into any other corporation,
or permit another corporation to merge into it, provided, however,
-------- -------
that (i) any Subsidiary of the Company may be merged into the
Company or another wholly-owned Subsidiary, (ii) the Company or
any Subsidiary of the Company may merge or consolidate with
another Person or business, if the Company or such Subsidiary, as
the case may be, is the surviving corporation, (iii) the Company
or any Subsidiary may consolidate with or merge with another
Person or business in a transaction where the Company or
Subsidiary is not the surviving entity if (1) the continuing or
surviving entity shall assume in writing all of the obligations
of the Company under this Agreement and the Notes, (2) the
continuing or surviving entity shall not, immediately after such
merger or consolidation, be in default of any of the Company's
obligations under this Agreement or the Notes, (3) the continuing
or surviving entity shall be a corporation organized under the
laws of the United States or any state thereof, and (4) after
giving effect to such consolidation or merger, the continuing or
surviving entity could incur $1 of additional Indebtedness under
Section 7.7.
7.5 Leases.
The Company will not, nor will it permit any of its
Subsidiaries, directly or indirectly, to incur, create or assume
any commitment to make any direct or indirect payment, whether as
rent or otherwise, under any lease, rental or other arrangement
for the use of real or personal Property or both of any other
Person unless (a) after giving effect to such lease the aggregate
rental obligations of the Company and its Subsidiaries (exclusive
of obligations to pay taxes and rental increments attributable to
escalator clauses) during any fiscal year shall not exceed an
amount equal to 15% of the book value (computed in accordance
with GAAP) of all Properties and assets of the Company and its
PAGE 16
<PAGE>
Consolidated Subsidiaries at the end of the preceding fiscal year
or (b) such lease was in existence as of the Closing Date and
disclosed on Schedule I hereto.
7.6 Liens and Encumbrances.
(a) Negative Pledge. The Company will not, nor will it
---------------
permit any of its Subsidiaries to, directly or indirectly incur,
create, assume or permit to exist any mortgage, pledge, security
interest, lien, charge or other encumbrance of any nature
whatsoever (including conditional sales or other title retention
agreements) on any of its Property or assets, whether owned at
the date hereof or hereafter acquired, or assign, or permit any
of its Subsidiaries to assign, any right to receive income,
except:
(i) liens incurred or pledges and deposits made
in connection with workers, compensation,
unemployment insurance, old-age pensions,
social security and public liability and
similar legislation;
(ii) liens securing the performance of bids,
tenders, leases, contracts (other than for
the repayment of borrowed money), statutory
obligations, surety and appeal bonds and
other obligations of like nature, incurred as
an incident to and in the ordinary course of
business;
(iii) statutory liens of landlords and other liens
imposed by law, such as carriers',
warehousemen's, mechanics', materialmen's and
vendors, liens, incurred in good faith in the
ordinary course of business;
(iv) liens securing the payment of taxes,
assessments and governmental charges or
levies, either (1) not delinquent, or
(2) being contested in good faith by
appropriate proceedings;
(v) zoning restrictions, easements, licenses,
reservations, restrictions on the use of real
property or minor irregularities incident
thereto which do not in the aggregate
materially detract from the value of the
Property or assets of the Company or such
Subsidiary, as the case may be, or impair the
use of such Property in the operation of its
business;
PAGE 17
<PAGE>
(vi) purchase money liens on real Property or
equipment (which are filed against the real
Property or equipment within 180 days of
purchase) that do not exceed 100% of the fair
market value of the related Property; and
(vii) other liens, that in the aggregate, do not
exceed 15% of the book value (computed in
accordance with GAAP) of all Properties and
assets of the Company and its Consolidated
Subsidiaries at the end of the preceding
fiscal year.
(b) Equal and Ratable Lien: Equitable Lien. In case
--------------------------------------
any Property is subjected to a Lien in violation of Section
7.6(a), the Company will make or cause to be made provision
whereby the Notes will be secured pursuant to documents
reasonably satisfactory to the holders of at least 51% in
outstanding principal amount of the Notes (exclusive of Notes
owned by the Company, Subsidiaries and Affiliates) equally and
ratably with all other obligations secured thereby, and in any
case the Notes shall have the benefit, to the full extent that,
and with such priority as, the holders may be entitled thereto
under applicable law, of an equitable Lien on such Property
securing the Notes. Such violation of Section 7.6(a) shall
constitute an Event of Default hereunder, whether or not any such
provision is made pursuant to this Section 7.6(b).
7.7 Indebtedness.
The Company will not, nor will it permit any of its
Subsidiaries to, directly or indirectly incur, create, assume or
permit to exist any Indebtedness other than:
(a) Indebtedness incurred by the Company under the
Revolving Credit Agreement;
(b) the Notes;
(c) Indebtedness outstanding on the date hereof under the
Company's $40,000,000, 9.47% Senior Notes due
September 16, 2001;
(d) Indebtedness of the Company which constitutes
extensions, renewals or replacements on substantially
the same terms and conditions (and does not increase
the amount outstanding) of (a) through (c) above; and
(e) additional Indebtedness of the Company and its
Subsidiaries;
PAGE 18
<PAGE>
provided, however, that (i) the total Indebtedness of the
Company's Subsidiaries shall not at any time exceed $50 million;
(ii) total Indebtedness of the Company's Domestic Subsidiaries
shall not at any time exceed $10 million (excluding from the
calculation thereof for all purposes except compliance with
Section 7,4(b)(4) any pre-existing Indebtedness of a newly
acquired Domestic Subsidiary for a period not exceeding 30 days
after acquisition of such Domestic Subsidiary); and (iii) the
aggregate amount of all Indebtedness of the Company and its
Subsidiaries at any time outstanding shall not exceed an amount
equal to 155% of Consolidated Net Worth at such time.
7.8 Net Worth.
The Company will not permit Consolidated Net Worth of the
Company and its Subsidiaries at any time to be less than $135
million plus 50% of Consolidated Net Income for each fiscal year
beginning after December 31, 1994 (but without deduction for any
fiscal year in which Consolidated Net Income is a negative
amount), with the annual adjustments to be applicable as of
December 31, 1995 and as of the end of each subsequent fiscal
year.
7.9 ERISA Compliance.
Neither the Company nor any Related Person will at any time
permit any Pension Plan maintained by it to:
(i) engage in any "prohibited transaction" as such
term is defined in Section 4975 of the Internal
Revenue Code of 1986, as amended, or described in
Section 406 of ERISA;
(ii) incur any accumulated funding deficiency" as such
term is defined in Section 302 Of ERISA, whether or
not waived; or
(iii) terminate under circumstances which could result in
the imposition of a Lien on the Property of the
Company or any Subsidiary pursuant to Section 4068
of ERISA.
7.1O Transactions with Affiliates.
Neither the Company nor any Subsidiary will enter into any
transaction (except transactions which do not in any one calendar
year involve in the aggregate an amount in excess of $500,000),
including without limitations the purchase, sale or exchange of
Property or the rendering of any service, with any Affiliate
except in the ordinary course of and pursuant to the reasonable
requirements of the Company's or such Subsidiary's business and
upon fair and reasonable terms no less favorable to the Company
PAGE 19
<PAGE>
or such Subsidiary than would obtain in a comparable arms-length
transaction with a Person not an Affiliate.
7.11 Tax Consolidation.
The Company will not file or consent to the filing of any
consolidated income tax return with any Person other than a
Subsidiary.
7.12 Acquisition of Notes.
Neither the Company nor any Subsidiary nor any Affiliate
will directly or indirectly acquire or make any offer to acquire
any Notes unless the Company or such Subsidiary or Affiliate has
offered to acquire Notes, pro rata, from all holders of the Notes
and upon the same terms. In case the Company acquires any Notes,
such Notes shall thereafter be cancelled and no Notes shall be
issued in substitution therefor.
7.13 Lines of Business.
Neither the Company nor any Subsidiary will engage in any
line of business if as a result thereof the business of the
Company and its Subsidiaries taken as a whole would be
substantially different from what it was at December 31, 1994 as
described in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994.
7.14 Restricted Loans, Advances and Investments.
The Company shall not, and shall not permit any Subsidiary
to, at any time make or permit to exist any loans or advances to,
or purchase any stock, other securities or evidences of
indebtedness of, or make or permit to exist any investment or
acquire any interest whatsoever in, any other person, except (a)
the purchase of the Company's common or preferred stock, (b)
loans or advances of the Company or any Subsidiary of the Company
(in addition to loans or advances permitted by clauses (d) and
(e) of this Section 7.14) not in excess of $10,000,000 aggregate
principal amount for the Company and its Subsidiaries at any time
outstanding, (c) investments of its cash by the Company or any
Subsidiary of the Company in (i) marketable direct obligations
of, or marketable obligations guaranteed by, the United States of
America or Canada, or marketable obligations of any
instrumentality or agency thereof, the payment of the principal
and interest of which is unconditionally guaranteed by the United
States of America or Canada, (ii) certificates of deposit or
other obligations issued by, or bankers' acceptances of, any bank
or trust company organized under the laws of the Federal Republic
of Germany, France, the United Kingdom, Japan, Canada or the
United States of America or any state thereof (including foreign
branches of any such bank or trust company) and having capital,
PAGE 20
<PAGE>
surplus and undivided profits in excess of $100,000,000, (iii)
open market commercial paper with a maturity not in excess of 270
days from the date of acquisition thereof and having the highest
credit rating by either Standard & Poor's Corporation or Moody's
Investors Service, Inc., or (iv) in the case of any foreign
Subsidiary of the Company in a country in which a Subsidiary
exists as of the date of this agreement, such investments of a
comparable quality and term to the other investments permitted by
this clause (c) as are usually made in the jurisdiction or
jurisdictions in which the business of such foreign Subsidiary is
principally conducted by prudent corporate investors in like
circumstances, (d) loans or advances of the Company to any of its
Subsidiaries and loans or advances of any Subsidiary of the
Company to the Company or another such Subsidiary, (e) purchases
of stock or other securities of any corporations, associations or
other business entities; provided, however, that the aggregate
-------- -------
cost to or fair market value of the consideration paid by the
Company and its Subsidiaries for such stock or securities of any
such corporation, association or other business entity shall not
exceed 40% of the Company's Consolidated Net Worth within any
four-year period commencing on the Closing Date, or (f) such
other investments in an aggregate amount not to exceed $250,000
as the Company or a Subsidiary may elect.
7.15 Limitation on Restrictions on Dividends by Subsidiaries,
etc.
The Company shall not permit any Subsidiary or other entity
in which the Company or any Subsidiary has an equity investment
(a "Subsidiary Investment") to be or become subject to any
restriction (except restrictions applicable to corporations
generally and those restrictions set forth in the Revolving
Credit Agreement), whether arising by agreement, by its articles
of incorporation, by-laws or other constituent documents of such
Subsidiary or Subsidiary Investment or otherwise, on the right of
such Subsidiary or Subsidiary Investment from time to time to (w)
declare and pay Stock Payments with respect to capital stock
owned by the Company from time to time owed to the Company or any
Subsidiary, or (y) make loans or advances to the Company or any
Subsidiary, or ((z) transfer any of its properties or assets to
the Company or any Subsidiary; provided, however, that such
restriction may be permitted with respect to any Subsidiary or
Subsidiary Investment in which the Company or a Subsidiary
directly or indirectly owns less than 80% of the Voting Stock and
in which the Company's or such Subsidiary's cumulative investment
since the Closing Date (in terms of cash invested in and/or
assets contributed to the entity) (i) individually is less than
10% of the book value of the assets of the Company and its
consolidated subsidiaries, and (ii) when taken together with all
such Subsidiaries and Subsidiary Investments subject to any such
restrictions in which the Company or a Subsidiary directly or
indirectly owns less than 80% of the Voting Stock, is less than
PAGE 21
<PAGE>
15% of the book value of the assets of the Company and its
consolidated Subsidiaries.
SECTION 8 INFORMATION AS TO COMPANY
8.1 Financial and Business Information.
The Company will deliver to you, if at the time you or your
nominee holds any Notes (or if you are obligated to Purchase any
Notes), and to each other institutional holder of outstanding
Notes:
(a) Quarterly Statements - within 60 days after the end of
--------------------
each of the first three quarterly fiscal periods in
each fiscal year of the Company, two copies of:
(i) a consolidated balance sheet of the Company and
its Consolidated Subsidiaries as at the end of
that quarter, and
(ii) consolidated statements of income, retained
earnings and cash flows of the Company and its
Consolidated Subsidiaries for that quarter and
(in the case of the second and third quarters)
for the portion of the fiscal year ending with
that quarter,
setting forth in each case in comparative form the
figures for the corresponding periods in the previous
fiscal year, all in reasonable detail and certified by
a principal financial officer of the company as
presenting fairly the financial condition of the
companies being reported upon and as having been
prepared in accordance with generally accepted
accounting principles for interim statements
consistently applied;
(b) Annual Statements - within 90 days after the end of
-----------------
each fiscal year of the Company, two copies of:
(i) a consolidated balance sheet of the Company and
its Consolidated Subsidiaries, as at the end of
that year, and
(ii) consolidated statements of income, retained
earnings and cash flows of the Company and its
Consolidated Subsidiaries, for that year,
setting forth in each case in comparative form the
figures for the previous fiscal year, and accompanied
by an opinion of independent certified public
accountants of recognized national standing stating
PAGE 22
<PAGE>
that such financial statements fairly present the
financial condition of the companies being reported
upon and have been prepared in accordance with
generally accepted accounting principles consistently
applied (except for changes in application in which
such accountants concur), and that the examination of
such accountants in connection with such financial
statements has been made in accordance with generally
accepted auditing standards, and which independent
auditors, report shall not identify either (A) any
departure from the consistent application of generally
accepted accounting principles (except for identified
changes in application in which such accountants
concur), or (B) any tests of the accounting records or
other auditing procedures which were considered
necessary in the circumstances and which were not
performed;
(c) Audit Reports - promptly upon receipt thereof, one
-------------
copy of each other report submitted to the Company or
any Subsidiary by independent accountants in
connection with any material interim or special audit
made by them of the books of the Company or any
material Subsidiary;
(d) SEC and Other Reports - promptly upon their becoming
---------------------
available one copy of each report, notice or proxy
statement sent by the Company to stockholders
generally, and of each periodic report and any
registration statement, filed by the Company with any
securities exchange or the Securities and Exchange
Commission or any successor agency;
(e) ERISA - as soon as practicable, but in no event later
-----
than five days, after a member of Senior Management
becoming aware of the occurrence of any (i)
"reportable event" as such term is defined in
Section 4043 of ERISA, or (ii) "accumulated funding
deficiency" as such term is defined in Section 302 of
ERISA, or (iii) "prohibited transaction", as such term
is defined in Section 4975 of the Internal Revenue
Code of 1986, as amended, or described in Section 406
of ERISA, in connection with any Pension Plan or any
trust created thereunder, a notice specifying the
nature thereof, what action the Company or a Related
Person is taking or proposes to take with respect
thereto, and, when known, any action taken by the
Internal Revenue Service with respect thereto;
(f) Notice of Default or Event of Default - immediately
-------------------------------------
upon becoming aware of the existence of any Default or
PAGE 23
<PAGE>
Event of Default a notice describing its nature and
the action the Company is taking with respect thereto;
(g) Notice of Claimed Default - immediately upon becoming
-------------------------
aware that the holder of any Note or of any
Indebtedness or Security of the Company or any
Subsidiary has given notice or taken any other action
with respect to a claimed Default or Event of Default,
a notice specifying the notice given or action taken
by such holder, the nature of the claimed Default or
Event of Default and the action the Company is taking
with respect thereto;
(h) Report on Proceedings - The Company and each
---------------------
Subsidiary will give each holder of the Notes (a)
notice, promptly, of any action, suit or proceeding at
law or in equity or by or before any court or other
governmental instrumentality or agency (i) which is
not fully covered by insurance without the
applicability of any co-insurance provisions or with
respect to which insurance coverage is being contested
and which has not been bonded and in which either the
aggregate specified dollar amount of all claims
(either as set forth in the complaint, demand letters
or other written communications by or on behalf of the
plaintiff or as otherwise determined in good faith by
the Company or its counsel) against the Company and
its Subsidiaries taken as a whole, exceeds the amount
of any applicable insurance coverage by (x) $1,000,000
for any single proceeding or (y) $5,000,000 in the
aggregate during any fiscal year of the Company;
provided, however, that after giving notice of such
-----------------
claims aggregating at least $5,000,000, notice is only
required of subsequent claims made during the same
fiscal year which exceed insurance coverage by
$500,000 for any single proceeding, or (ii) if the
results thereof may have a material adverse effect on
the business or condition of the Company or any
Subsidiary of the Company, and (b) with respect to any
such action, suit or proceeding such documentation as
the holder of any Note reasonably requests;
(i) Requested Information - with reasonable promptness,
---------------------
such data and information as from time to time may be
reasonably requested.
8.2 Officers' Certificates.
Each set of financial statements delivered pursuant to
Section 8.1(a) or 8.1(b) will be accompanied by a certificate of
the President or a Vice President and the Treasurer or an
Assistant Treasurer of the Company setting forth:
PAGE 24
<PAGE>
(a) Covenant Compliance - the information required in
-------------------
order to establish compliance with the requirements of
Section 7 during the period covered by the income
statements being furnished; and
(b) Event of Default - that the signers have reviewed the
----------------
relevant terms of this Agreement and have made, or
caused to be made, under their supervision, a review
of the transactions and condition of the Company and
its Subsidiaries from the beginning of the period
covered by the income statements being furnished and
that the review has not disclosed the existence during
such period of any Default or Event of Default or, if
any such Default or Event of Default existed or
exists, describing its nature and the action the
Company has taken with respect thereto.
8.3 Accountants' Certificates.
Each set of annual financial statements delivered pursuant
to Section 8.1(b) will be accompanied by a certificate of the
accountants who certify such financial statements, stating that
they have reviewed this Agreement and whether, in making the
examination necessary for their certification of such statements,
they have become aware of any Default or Event of Default, and,
if any Default or Event of Default then exists, describing its
nature.
8.4 Inspection.
The Company will permit your representatives, while you or
your nominee holds any Note, or the representatives of any other,
institutional holder of the Notes, at your or such holder's
expense, to visit and inspect any of the Properties of the
Company or any Subsidiary, to examine and make copies and
abstracts of all their books of account, records, and other
papers, and to discuss their respective affairs, finances and
accounts with their respective officers, employees designated by
said officers and independent public accountants (and by this
provision the Company authorizes said accountants to discuss the
finances and affairs of the Company and its Subsidiaries) all at
reasonable times, upon notice to a member of Senior Management
(unless there shall exist a Default or an Event of Default), and
as often as may be reasonably requested. Any visit or inspection
made pursuant to this Section 8.4 shall be at the expense of the
holder requesting the same unless, at the time of such visit or
inspection, there shall exist a Default or Event of Default, in
which event the Company shall bear the cost thereof.
PAGE 25
<PAGE>
SECTION 9. EVENTS OF DEFAULT.
9.1 Nature of Events.
An "Event of Default" shall exist if any of the following
occurs and is continuing:
(a) Principal Payments - failure to pay principal or
------------------
Makewhole Price on any Note on or before the date such
payment is due;
(b) Interest Payments - failure to pay interest on any
-----------------
Note on or before the fifth Business Day following the
date such payment is due;
(c) Financial Covenant Defaults - the Company defaults in
---------------------------
the performance of or compliance with any term
contained in Sections 7.7, 7.8 and 8.1(f);
(d) Other Defaults - failure to comply with any other
--------------
provision of this Agreement, which continues for more
than 30 days after it first becomes known to any
member of Senior Management of the Company;
(e) Warranties or Representations - any warranty or
-----------------------------
representation by or on behalf of the Company
contained in this Agreement or in any instrument
delivered under or in reference to this Agreement is
false or misleading in any material respect;
(f) Default on Other Indebtedness - a default or defaults
-----------------------------
shall have occurred under any other Indebtedness or
Securities of the Company having a principal or face
amount, individually or in the aggregate, in excess of
$5,000,000; or any event shall occur or any condition
shall exist, the effect of which is to cause (or
permit any holder of such Indebtedness or Securities
having a principal or face amount, individually or in
the aggregate, in excess of $5,000,000, or a trustee
to cause) such Indebtedness or Security, or a portion
thereof, to become due prior to its stated maturity or
prior to its regularly scheduled dates of payment;
(g) Involuntary Bankruptcy Proceedings - a custodian
-----------------------------------
receiver, liquidator or trustee of the Company or of
any of its Property, is appointed or takes possession
and such appointment or possession remains in effect
for more than 30 days; or the Company is adjudicated
bankrupt or insolvent; or an order for relief is
entered under the Federal Bankruptcy Code against the
Company; or any of the Property of the Company is
sequestered by court order and the order remains in
PAGE 26
<PAGE>
effect for more than 30 days; or a petition is filed
against the Company under any bankruptcy,
reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, and
is not dismissed within 30 days after filing;
(h) Voluntary Petitions - the Company files a petition in
-------------------
voluntary bankruptcy or seeking relief under any
provision of any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction,
whether now or hereafter in effect, or consents to the
filing of any petition against it under any such law;
(i) Assignments for Benefit of Creditors, etc. - the
-----------------------------------------
Company makes an assignment for the benefit of its
creditors, or generally fails to pay its debts as they
become due, or consents to the appointment of or
taking possession by a custodian, receiver, liquidator
or trustee of the Company or of all or any part of the
Property of the Company; or
(j) Undischarged Final Judgments - final judgment or
----------------------------
judgments which are not subject to appeal for the
payment of money aggregating in excess of $5,000,000
is or are outstanding against one or more of the
Company and its Subsidiaries and any one of such
judgments (x) has not been stayed or paid on the date
it is finally due and payable or (y) has resulted in
the attachment of a Lien on any Property of the
Company or any Subsidiary; or
(k) Change of Control - the occurrence of a Change of
-----------------
Control.
9.2 Default Remedies.
(a) If an Event of Default described in Section 9.1(g),
9.1(h) or 9.1(i) occurs, the entire outstanding principal amount
of the Notes shall automatically become due and payable, without
the taking of any action on the part of any holder of the Notes
or any other Person and without the giving of any notice with
respect thereto. If an Event of Default described in
Section 9.1(a) or 9.1(b) exists, any holder of Notes may, at its
option, exercise any right, power or remedy permitted by law,
including but not limited to the right by notice to the Company
to declare the Notes held by such holder to be immediately due
and payable. If any other Event of Default exists, the holder or
holders of at least 51% in outstanding principal amount of the
Notes (exclusive of Notes owned by the Company, Subsidiaries and
Affiliates) may exercise any right, power or remedy permitted by
PAGE 27
<PAGE>
law, including but not limited to the right by notice to the
Company to declare all the outstanding Notes immediately due and
payable. Upon any such acceleration the principal of the Notes
declared due or automatically becoming due shall be immediately
payable together with all interest accrued thereon without any
presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived, and the Company will
immediately pay the greater of (x) the principal of and interest
accrued on such Notes and (y) the Makewhole Price applicable at
such time to such Notes.
(b) No course of dealing or delay or failure on the part
of any holder of the Notes to exercise any right shall operate as
a waiver of such right or otherwise prejudice such holder's
rights, powers and remedies. The Company will pay or reimburse
the holders of the Notes, to the extent permitted by law, for all
costs and expenses, including but not limited to reasonable
attorneys, fees, incurred by them in collecting any sums due on
the Notes or in otherwise enforcing any of their rights.
9.3 Annulment of Acceleration of Notes.
If a declaration is made pursuant to Section 9.2(a), the
holders of at least 51% of the outstanding principal amount of
the Notes may annul such declaration and the consequences thereof
if no judgment or decree has been entered for the payment of any
monies due pursuant to such declaration and if all sums payable
under the Notes and this Agreement (except principal, interest or
premium which has become due solely by reason of such
declaration) have been duly paid. No such annulment shall extend
to or waive any subsequent Default or Event of Default.
SECTION 10. INTERPRETATION OF THIS AGREEMENT
10.1 Terms Defined.
As used in this Agreement (including Exhibits), the
following terms have the respective meanings set forth below or
in the Section indicated:
Affiliate - a Person other than a Subsidiary (1) which
---------
directly or indirectly controls, or is controlled by, or is
under common control with, the Company, (2) which owns 5% or
more of the Voting Stock of the Company or (3) 5% or more of
the Voting Stock (or in the case of a Person which is not a
corporation, 5% or more of the equity interest) of which is
owned by the Company or a Subsidiary. The term "control",
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities,
by contract or otherwise.
PAGE 28
<PAGE>
Business Day - any day other than a Saturday, Sunday or a
------------
national, Connecticut or New York holiday.
Capitalized Lease - any lease which is shown or is required
-----------------
to be shown in accordance with GAAP as a liability on a balance
sheet of the lessee thereunder.
Change of Control - shall mean any Person or group of
-----------------
Persons (as used in Sections 13 and 14 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations thereunder) shall have become the beneficial owner
(as defined in Rules 13d-3 and 13d-5 promulgated by the
Securities and Exchange Commission (the "SEC") under the Exchange
Act) of 30% or more of the Company's outstanding voting stock
provided, however, that members of the Barnes family, Fleet
Norstar financial group and any of its affiliates, successors and
assigns (to the extent that it owns stock in which a member of
the Barnes family has an interest), the Barnes Group Inc.
Guaranteed Stock Plan and State Street Bank & Trust Company, in
its capacity as trustee under such plan, or its successor or
assigns in its capacity as trustee under such plan, and employees
of the Company (except employees of the Company who became
beneficial owners of more than 10% of the Company's voting stock
prior to becoming employees of the Company) shall not be counted
as a person for purposes hereof.
Closing Date - Section 1.2.
------------
Consolidated Net Income - the consolidated net income of the
-----------------------
Company and its Subsidiaries for any period as determined in
accordance with GAAP.
Consolidated Net Worth - shall mean the assets of the
----------------------
Company and its Subsidiaries less the liabilities of the
Company and its Subsidiaries, each as shown on a consolidated
balance sheet of the Company and its Subsidiaries in accordance
with GAAP, plus any negative (less any positive) foreign
currency translation adjustments shown in the equity section of
such a consolidated balance sheet pursuant to FAS 52, plus any
amount shown on such a consolidated balance sheet in the equity
contra account arising from the Guaranty.
Consolidated Subsidiary - shall mean any Subsidiary the
-----------------------
accounts of which shall at the time in question be consolidated
with the Company.
Default - an event or condition which will, with the lapse
-------
of time or the giving of notice or both, become an Event of
Default.
Domestic Subsidiary - shall mean a Subsidiary incorporated
-------------------
in the United States.
PAGE 29
<PAGE>
Environmental Laws - shall mean any and all Federal, state,
------------------
local, and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the
environment or the release of any materials into the en-
vironment, including but not limited to those related to
hazardous substances or wastes, air emissions and discharges to
waste or public systems.
ERISA - means the Employee Retirement Income Security Act of
-----
1974, as amended from time to time.
Event of Default - Section 9.1.
----------------
Fair Market Value - means, at any time and with respect to
-----------------
any property, the sale value of such property that would be
realized in an arm's-length sale at such time between an
informed and willing buyer and an informed and willing seller
(neither being under a compulsion to buy or sell).
GAAP - means generally accepted accounting principles which
----
are consistent with the principles promulgated or adopted by
the Financial Accounting Standards Board and its predecessors;
provided, however, that such principles shall be applied
without giving effect to FAS 106.
Guaranty - means the Company's obligations as guarantor
--------
under a certain Guaranty Agreement, effective as of July 28,
1989, from the Company to Shawmut Bank (formerly known as The
Connecticut National Bank) and NBD Bank (formerly known as
National Bank of Detroit).
Hazardous Material - means any and all pollutants, toxic or
------------------
hazardous wastes or any other substances that might pose a
hazard to health or safety, the removal of which may be
required or the generation, manufacture, refining, production,
processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage,
or filtration of which is or shall be restricted, prohibited or
penalized by any applicable law (including, without limitation,
asbestos, urea formaldehyde foam insulation and
polycholorinated biphenyls).
Indebtedness - with respect to any Person, means, without
------------
duplication, (a) all debt arising from borrowed money and
similar monetary obligations, whether direct or indirect; (b)
all Indebtedness of others secured by any mortgage, pledge,
security interest, lien, charge, or other encumbrance existing
on Property owned by the Company or any Subsidiary or acquired
by the Company or any Subsidiary subject thereto, whether or
not the Indebtedness secured thereby shall have been assumed;
PAGE 30
<PAGE>
(c) all guarantees, endorsements and other contingent
obligations, in respect of Indebtedness of others, including
(x) any obligation to supply funds to or in any manner to
invest in, directly or indirectly, the debtor, to purchase
Indebtedness, or to assure the owner of Indebtedness against
loss, through an agreement to purchase goods, supplies, or
services for the purpose of enabling the debtor to make payment
of the Indebtedness held by such owner or otherwise and (y) any
obligation of any partnership in which the Company or any
Subsidiary is a general partner; and (d) the obligations to
reimburse the issuer in respect of any letters of credit.
Indebtedness shall not include the indebtedness of (i) a
Subsidiary of the Company to the Company or to another
Subsidiary of the Company, or (ii) the Company to a Subsidiary
of the Company; provided, however, that in the case of debt of
a Subsidiary not wholly owned by the Company and/or another
Subsidiary, Indebtedness shall include a percentage of such
Indebtedness equal to the percentage of the total minority
ownership.
Investment - means any investment, made in cash or by
----------
delivery of property, by the Company or any of its Subsidiaries
(i)in any Person, whether by acquisition of stock, Indebtedness
or other obligation or Security, or by loan, guaranty, advance,
capital contribution or otherwise, or (ii) in any property.
Lien - any mortgage, lien, charge, security interest or
----
other encumbrance of any kind upon any Property or assets of
any character, or upon the income or profits therefrom, any
conditional sale or other title retention agreement, device or
arrangement (including Capitalized Leases), or any sale
assignment, pledge or other transfer for security of any
accounts, general intangibles or chattel paper, with or without
recourse.
Makewhole Price - with respect to full or partial optional
---------------
prepayments of the Notes pursuant to Section 5.2 or repayment
of Notes which have become or been declared immediately due and
payable pursuant to Section 9.2, the present value of all
scheduled payments of principal and interest in respect of the
Notes (or portions thereof being prepaid) which, but for such
optional prepayment or required repayment, would be required to
be made following the date of the proposed prepayment or the
date on which such Notes became or are declared due and
payable, determined by discounting (on a semi-annual basis), at
a rate which is equal to the Treasury Constant Yield at such
time plus .50%, the amount of each such payment (or portion
thereof) from the date such payment would be required to be
made to the prepayment or repayment date.
Notes - Section 1.1.
-----
PAGE 31
<PAGE>
Pension Plans - Section 2.15(a).
-------------
Person - shall mean any individual, corporation partnership,
------
joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or
political subdivision thereof.
Property - any interest in any kind of property or asset,
--------
whether real, personal or mixed, or tangible or intangible.
Related Person - any Person (whether or not incorporated)
--------------
which is under common control with the Company within the
meaning of Section 414(c) of the Internal Revenue Code of 1986,
as amended, or of Section 4001(b) of ERISA.
Revolving Credit Agreement - means the $100,000,000
--------------------------
Revolving Credit Agreement dated as of December 1, 1991 among
the Company, Mellon Bank, N.A., as Agent, and the banks
signatory thereto, as amended.
Security - shall have the same meaning as in Section 2(l) of
--------
the Securities Act of 1933, as amended.
Senior Management - shall mean any of the following officers
-----------------
of the Company: President, any Group Vice President, Chief
Financial Officer, Treasurer or General Counsel.
Stock Payment - by any Person shall mean any dividend,
-------------
distribution or payment of any nature (whether in cash,
securities, or other property) on account of or in respect of
any shares of the capital stock (or warrants, options or rights
therefor) of such Person, including but not limited to any
payment on account of the purchase, redemption, retirement,
defeasance or acquisition of any shares of the capital stock
(or warrants, options or rights therefor) of such Person, in
each case regardless of whether required by the terms of such
capital stock (or warrants, options or rights) or any other
agreement or instrument.
Subsidiary - of a Person shall mean any corporation,
----------
association or other business entity of which more than 50% of
the outstanding stock having by its terms ordinary voting power
to elect a majority of the board of directors of such
corporation, or other business entity (irrespective of whether
at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned directly
or indirectly by such Person.
Treasury Constant Yield - at any time with respect to any
-----------------------
optional prepayment of the Notes pursuant to Section 5.2 or
repayment of Notes which have been declared or become
PAGE 32
<PAGE>
immediately due and payable pursuant to Section 9.2, means the
yield to maturity at such time of United States Treasury
obligations with a remaining life to maturity (as compiled by
and published in the most recently published issue of the
United States Federal Reserve Bulletin or its successor
publication) most nearly equal to the Weighted Average Life to
Maturity of the Notes (or portions thereof) to be prepaid or
repaid at the time. If there are United States Treasury
obligations listed in such publication with a remaining life to
maturity equal to the Weighted Average Life to Maturity of the
Notes (or portions thereof), then the yield on such Treasury
obligations shall be the Treasury Constant Yield. If no such
Treasury obligation exists, then the Treasury obligation with
the remaining life to maturity closest to and greater than the
Weighted Average Life to Maturity of the Notes (or portions
thereof) to be prepaid or repaid shall be used, along with the
Treasury obligation with a remaining life to maturity closest
to and less than the Weighted Average Life to Maturity of such
Notes being prepaid or repaid (or portions thereof) in order to
calculate the Treasury Constant Yield. In this event these two
Treasury obligations will be examined together and the Treasury
Constant Yield will be calculated through interpolation of the
yields on such Treasury obligations.
Voting Stock - shall mean, with respect to any corporation,
------------
the capital stock of such corporation having the power to vote
for a majority of the board of directors of such corporation
under ordinary circumstances.
Weighted Average Life to Maturity - of the Notes or any
---------------------------------
portion thereof, at the time of the determination thereof,
means the number of years obtained by dividing the then
Remaining Dollar-years of such Notes or portion thereof by the
then outstanding principal amount of such Notes or portion
thereof. The term "Remaining Dollar-years" of any Indebtedness
for borrowed money means the amount obtained by (1) multiplying
(A) the amount of each then remaining required repayment or
redemption (including repayment or redemption at final
maturity) by (B) the number of years (calculated at the nearest
one-twelfth) which will elapse between the date as of which the
calculation is made and the date that such required repayment
is due and (2) totaling all the products obtained in (1).
10.2 Accounting Principles.
Where the character or amount of any asset or liability or
item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be
made under this Agreement, this shall be done in accordance with
GAAP.
PAGE 33
<PAGE>
10.3 Directly or Indirectly.
Where any provision in this Agreement refers to any action
which a Person is prohibited from taking, the provision shall be
applicable whether such action is taken directly or indirectly by
such Person, including actions taken by or on behalf of any
partnership in which such Person is a general partner and all
liabilities of such partnerships shall be considered liabilities
of such Person for purposes of this Agreement.
10.4 Governing Law.
This Agreement and the Notes shall be governed by and
construed in accordance with Connecticut law.
SECTION 11. MISCELLANEOUS
11.1 Notices.
All notices provided for hereunder shall be in writing and
sent (a) by telecopy if the sender on the same day sends a
-
confirming copy of such notice by a recognized overnight delivery
service (charges prepaid), or (b) by registered or certified mail
-
with return receipt requested (postage prepaid), or (c) by a
-
recognized overnight delivery service (with charges prepaid).
Any such notice must be sent:
a. if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such
other address as you or it shall have specified to the Company
in writing,
b. if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the
Company in writing, or
c. if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of "Treasurer",
or at such other address as the Company shall have specified to
the holder of each Note in writing.
Notices under this Section 11 will be deemed given only when
actually received.
11.2 Reproduction of Documents.
This Agreement and all documents relating thereto,
including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, (b) documents
received by you at the closing of your purchase of the Notes
(except the Notes themselves), and (c) financial statements,
certificates and other information previously or hereafter
PAGE 34
<PAGE>
furnished to you, may be reproduced by you by any photographic,
photostatic, microfilm, micro-card, miniature photographic or
other similar process and you may destroy any original document
so reproduced. The Company agrees and stipulates that any such
reproduction shall, to the extent permitted by applicable law, be
admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in
the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
11.3 Survival.
All warranties, representations, and covenants made by the
Company herein or on any certificate or other instrument
delivered by it or on its behalf pursuant to the terms of this
Agreement shall be considered to have been relied upon by you and
shall survive the delivery to you of the Notes regardless of any
investigation made by you or on your behalf. All statements in
any such certificate or other instrument shall constitute
warranties and representations by the Company hereunder.
11.4 Successors and Assigns.
This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties, except
that the Company's right to require you to purchase the Notes in
accordance with Section 1.2 shall be personal to the Company and
shall not be assignable or transferable to any other Person
(including successors at law) whether voluntarily or
involuntarily. The provisions of this Agreement are intended to
be for the benefit of all holders, from time to time, of the
Notes, and shall be enforceable by any holder, whether or not an
express assignment to such holder of rights under this Agreement
has been made by you or your successor or assign.
11.5 Amendment and Waiver.
This Agreement may be amended, and the observance of any
term of this Agreement may be waived, with (and only with) the
written consent of the Company and the holders of at least
66-2/3% of the outstanding principal amount of the Notes
(exclusive of Notes owned by the Company, Subsidiaries and
Affiliates); provided that no such amendment or waiver of any of
--------
the provisions of Sections 1 through 4 shall be effective as to
you unless consented to by you in writing; and provided further,
--------
that no such amendment or waiver shall, without the written
consent of the holders of all the outstanding Notes, (i) subject
to Section 9.3, change the amount or time of any prepayment or
payment of principal or premium or the rate or time of payment of
interest, (ii) amend Section 9, or (iii) amend this Section 11.5.
PAGE 35
<PAGE>
Executed or true and correct copies of any amendment or waiver
effected pursuant to the provisions of this Section 11.5 shall be
delivered by the Company to each holder of outstanding Notes
promptly following the date on which the same shall become
effective. No such amendment or waiver shall extend to or affect
any provision or obligation not expressly amended or waived.
11.6 Duplicate Originals.
Two or more duplicate originals of this Agreement may be
signed by the parties, each of which shall be an original but all
of which together shall constitute one and the same instrument.
If this Agreement is satisfactory to you, please so indicate by
signing the acceptance at the foot of a counterpart of this
Agreement and return such counterpart to the Company, whereupon
this Agreement will become binding between us in accordance with
its terms.
Very truly yours,
BARNES GROUP INC.
By: /s/ John E. Besser
------------------
Title: Senior Vice President-Finance and Law
Accepted:
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: CIGNA Investments, Inc.
By: /s/ Edward Lewis
----------------
Title: Managing Director
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
ON BEHALF OF ONE OR MORE OF ITS SEPARATE ACCOUNTS
By: CIGNA Investments, Inc.
By: /s/ Edward Lewis
----------------
Title: Managing Director
[Signatures Continued On Next Page]
PAGE 36
<PAGE>
CIGNA PROPERTY AND CASUALTY INSURANCE COMPANY
By: CIGNA Investments, Inc.
By: /s/ Edward Lewis
----------------
Title: Managing Director
LIFE INSURANCE COMPANY OF NORTH AMERICA
By: CIGNA Investments, Inc.
By: /s/ Edward Lewis
----------------
Title: Managing Director
PAGE 37
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A
PAGE 1 of 4
BARNES GROUP, INC.
----------------------------------------------------------------
<S> <C>
Purchaser Name | CONNECTICUT GENERAL LIFE INSURANCE COMPANY
-----------------------------------------------------------------
Name in Which Note | CIG & Co.
is to be Registered |
-----------------------------------------------------------------
Principal Amount | $10,000,000
-----------------------------------------------------------------
Payment on Account |
of Note | Federal Funds Wire Transfer
|
Method |
| Chase NYC/CTR/
Account | BNF=CIGNA Private
Information | Placements/AC=9009001802
| ABA# 021000021
-----------------------------------------------------------------
Accompanying | OBI=BARNES GROUP, INC.; 7.13% Senior
Information | Secured Notes due December, ___ 2005;
| PPN: ________; due date and application
| (as among principal, premium and interest
| of the payment being made; contact name
-----------------------------------------------------------------
Address for Notices | CIG & Co.
Related to Payments | c/o CIGNA Investments, Inc.
| Attention: Securities Processing S-206
| 900 Cottage Grove Road
| Hartford CT 06152-2206
|
| with a copy to:
|
| Chase Manhattan Bank, N.A.
| Private Placement Servicing
| P.O. Box 1508
| Bowling Green Station
| New York, New York 10081
| Attention: CIGNA Private Placements
| FAX: 212-552-3107/1005
-----------------------------------------------------------------
Address for All | CIG & Co.
Other Notices | c/o CIGNA Investments, Inc.
| Attention: Private Securities Division -
| S-307
| 900 Cottage Grove Road
| Hartford, Connecticut 06152-2307
| FAX: 203-726-7203
-----------------------------------------------------------------
Tax Identification | 13-3574027
Number |
-----------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A
PAGE 2 of 4
BARNES GROUP
----------------------------------------------------------------
<S> <C>
Purchaser Name | CONNECTICUT GENERAL LIFE INSURANCE COMPANY
| on behalf of one or more separate accounts
-----------------------------------------------------------------
Name in Which Note | CIG & Co.
is to be Registered |
-----------------------------------------------------------------
Principal Amount | $5,000,000
-----------------------------------------------------------------
Payment on Account |
of Note |
| Federal Funds Wire Transfer
Method |
| Chase NYC/CTR/
Account | BNF=CIGNA Private
Information | Placements/AC=9009001802
| ABA# 021000021
-----------------------------------------------------------------
Accompanying | OBI=BARNES GROUP, INC.; 7.13% Senior
Information | Secured Notes due December, ___ 2005;
| PPN: ________; due date and application
| (as among principal, premium and interest
| of the payment being made; contact name
-----------------------------------------------------------------
Address for Notices | CIG & Co.
Related to Payments | c/o CIGNA Investments, Inc.
| Attention: Securities Processing S-206
| 900 Cottage Grove Road
| Hartford CT 06152-2206
|
| with a copy to:
|
| Chase Manhattan Bank, N.A.
| Private Placement Servicing
| P.O. Box 1508
| Bowling Green Station
| New York, New York 10081
| Attention: CIGNA Private Placements
| FAX: 212-552-3107/1005
-----------------------------------------------------------------
Address for All | CIG & Co.
Other Notices | c/o CIGNA Investments, Inc.
| Attention: Private Securities Division -
| S-307
| 900 Cottage Grove Road
| Hartford, Connecticut 06152-2307
| FAX: 203-726-7203
-----------------------------------------------------------------
Tax Identification | 13-3574027
Number |
-----------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A
PAGE 3 of 4
MATTER NAME: BARNES GROUP, INC.
----------------------------------------------------------------
<S> <C>
Purchaser Name | CIGN PROPERTY AND CASUALTY INSURANCE
-----------------------------------------------------------------
Name in Which Note | CIG & Co.
is to be Registered |
-----------------------------------------------------------------
Principal Amount | $5,000,000
-----------------------------------------------------------------
Payment on Account |
of Note |
| Federal Funds Wire Transfer
Method |
| Chase NYC/CTR/
Account | BNF=CIGNA Private
Information | Placements/AC=9009001802
| ABA# 021000021
-----------------------------------------------------------------
Accompanying | OBI=BARNES GROUP, INC.; 7.13% Senior
Information | Secured Notes due December, ___ 2005;
| PPN: ________; due date and application
| (as among principal, premium and interest
| of the payment being made; contact name
-----------------------------------------------------------------
Address for Notices | CIG & Co.
Related to Payments | c/o CIGNA Investments, Inc.
| Attention: Securities Processing S-206
| 900 Cottage Grove Road
| Hartford CT 06152-2206
|
| with a copy to:
|
| Chase Manhattan Bank, N.A.
| Private Placement Servicing
| P.O. Box 1508
| Bowling Green Station
| New York, New York 10081
| Attention: CIGNA Private Placements
| FAX: 212-552-3107/1005
-----------------------------------------------------------------
Address for All | CIG & Co.
Other Notices | c/o CIGNA Investments, Inc.
| Attention: Private Securities Division -
| S-307
| 900 Cottage Grove Road
| Hartford, Connecticut 06152-2307
| FAX: 203-726-7203
-----------------------------------------------------------------
Tax Identification | 13-3574027
Number |
-----------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A
PAGE 4 of 4
MATTER NAME: BARNES GROUP, INC.
----------------------------------------------------------------
<S> <C>
Purchaser Name | LIFE INSURANCE COMPANY OF NORTH AMERICA
-----------------------------------------------------------------
Name in Which Note | CIG & Co.
is to be Registered |
-----------------------------------------------------------------
Principal Amount | $5,000,000
-----------------------------------------------------------------
Payment on Account |
of Note |
| Federal Funds Wire Transfer
Method |
| Chase NYC/CTR/
Account | BNF=CIGNA Private
Information | Placements/AC=9009001802
| ABA# 021000021
-----------------------------------------------------------------
Accompanying | OBI=BARNES GROUP, INC.; 7.13% Senior
Information | Secured Notes due December, ___ 2005;
| PPN: ________; due date and application
| (as among principal, premium and interest
| of the payment being made; contact name
-----------------------------------------------------------------
Address for Notices | CIG & Co.
Related to Payments | c/o CIGNA Investments, Inc.
| Attention: Securities Processing S-206
| 900 Cottage Grove Road
| Hartford CT 06152-2206
|
| with a copy to:
|
| Chase Manhattan Bank, N.A.
| Private Placement Servicing
| P.O. Box 1508
| Bowling Green Station
| New York, New York 10081
| Attention: CIGNA Private Placements
| FAX: 212-552-3107/1005
-----------------------------------------------------------------
Address for All | CIG & Co.
Other Notices | c/o CIGNA Investments, Inc.
| Attention: Private Securities Division -
| S-307
| 900 Cottage Grove Road
| Hartford, Connecticut 06152-2307
| FAX: 203-726-7203
-----------------------------------------------------------------
Tax Identification | 13-3574027
Number |
-----------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT B
FORM OF NOTE
BARNES GROUP INC.
7.13% Senior Unsecured Note,
due December 5, 2005
Private Placement No.:
No. R-B______________ Bloomfield, CT
U.S. $______________ December 5, 1995
Barnes Group Inc., (the "Company"), a Delaware corporation,
for value received, hereby promises to pay to ______________, or
registered assigns, the principal amount of U.S. $____________ on
December 5, 2005, with interest (computed on the basis of a 360-
day year of twelve 30-day months) on the unpaid balance of such
principal amount at the rate of 7.13% per annum from the date
hereof, payable semiannually on each June 5 and December 5 after
the date hereof, until such unpaid balance shall become due and
payable (whether at maturity or at a date fixed for prepayment or
by declaration or otherwise), and with interest on any overdue
principal (including any overdue prepayment of principal) and the
Makewhole Price, as defined in the Note Purchase Agreement (as
hereinafter defined), if any, and (to the extent permitted by
applicable law) on any overdue interest, at the rate of 1% per
annum above the applicable interest rate until paid, payable
semiannually as aforesaid or, at the option of the holder hereof,
on demand. Payments of principal, premium, if any, and interest
on this Note shall be made without tender of the Note in
immediately available funds by federal wire transfer in lawful
money of the United States of America on the due date therefor to
the account of the respective holder hereof at the address shown
in the register maintained by the Company for such purpose, in
the manner provided in the Note Purchase Agreement.
This Note is one of the Company's 7.13% Unsecured Notes, due
December 5, 2005 (the "Notes"), originally issued in the
aggregate principal amount of U.S. $25,000,000 pursuant to the
Note Purchase Agreement (the "Note Purchase Agreement"), dated as
of October ____, 1995, as from time to time amended, between the
Company and each of the Purchasers listed therein. The
registered holder of this Note is entitled to the benefits of
such Note Purchase Agreement and may enforce the agreements of
the Company contained therein and exercise the remedies provided
for thereby or otherwise available in respect thereof.
This Note has not been registered under the Securities Act
of 1933, as amended, or the laws of any state and may be
transferred
<PAGE>
in whole or in part only pursuant to an effective registration
statement under such Act and applicable state laws or under an
exemption from such registration available under such Act and
applicable state law. Subject to the foregoing, transfers of
this Note shall be registered upon registration books maintained
for such purpose by or on behalf of the Company as provided in
the Note Purchase Agreement. Prior to presentation of this Note
for registration of transfer, the Company shall treat the
registered holder hereof as the owner and holder of this Note for
the purpose of receiving all payments of principal and interest
hereon and for all other purposes whatsoever, whether or not this
Note shall be overdue, and the Company shall not be affected by
notice to the contrary. This Note is transferable only in
accordance with the provisions of the Note Purchase Agreement and
the holder hereof is subject to and bound by the provisions of
the Note Purchase Agreement as if it were an original signatory
thereto.
This Note is subject to prepayment, in whole or in part, in
certain cases with the Makewhole Price, all as specified in such
Note Purchase Agreement.
In case an Event of Default, as defined in such Note
Purchase Agreement, shall occur and be continuing, the unpaid
balance of the principal of this Note, together with the
Makewhole Price applicable thereto, may become due and payable in
the manner and with the effect provided in such Note Purchase
Agreement.
This Note is made and delivered in Bloomfield, Connecticut,
and shall be governed by the laws of the State of Connecticut.
BARNES GROUP INC.
By: ______________________________
Name:
Title:
<PAGE>
EXHIBIT C
I. THE COMPANY'S ACTIVE SUBSIDIARIES, EACH OF WHICH HAS ONLY
A SINGLE CLASS OF STOCK OUTSTANDING, ARE AS FOLLOWS:
<TABLE>
<CAPTION>
Jurisdiction of
Name Incorporation
---- ---------------
<S> <C>
Associated Spring-Asia PTE. LTD. Singapore
Associated Spring SPEC Limited United Kingdom
Barnes Group (Bermuda) Limited Bermuda
Barnes Group Canada Inc. Canada
Barnes Group Holding B.V. Netherlands
Bowman Distribution Europe Limited United Kingdom
Bowman Distribution France S.A. France
Resortes Mecanicos, S.A. Mexico
Ressorts SPEC, EURL France
Stumpp & Schuele do Brasil Industria e
Comercio Limitada Brazil
Windsor Airmotive Asia PTE, LTD. Singapore
</TABLE>
Associated Spring SPEC Limited is wholly-owned by Bowman
Distribution Europe Limited. Ressorts SPEC, EURL is wholly-owned
by Bowman Distribution France S.A. Windsor Airmotive Asia PTE.
LTD. is wholly-owned by Barnes Group Canada Inc. Associated
Spring-Asia PTE. Ltd., Resortes Mechanicos, S.A., and Stumpp &
Schuele do Brasil Industria e Comercio Limitada are wholly-owned
by Barnes Group (Bermuda) Limited. Barnes Group Canada Inc.,
Bowman Distribution Europe Limited, and Bowman Distribution
France S.A. are wholly-owned by Barnes Group Holding B.V. Barnes
Group (Bermuda) Limited and Barnes Group Holding B.V. are
wholly-owned by Barnes Group Inc. The Company's consolidated
financial statements include all of the above-named subsidiaries.
For a statement of the principles of consolidation applicable to
these subsidiaries, see note 1 of the Notes to Consolidated
Financial Statements on page 18 of the 1994 Annual Report to
Stockholders.
<PAGE>
EXHIBIT C (CONTINUED)
II. AFFILIATES
The Company's Affiliates, other than Subsidiaries, are as
follows:
<TABLE>
<CAPTION>
Jurisdiction of Nature and Extent
Name of Affiliate Incorporation of Affiliation
----------------- --------------- -----------------
<S> <C> <C>
a) NHK-Associated Spring Delaware 45% of Voting Stock
Owned by Company
b) Carlyle F. Barnes Have beneficial
Thomas O. Barnes ownership of more
Wallace Barnes than 5% of the
Fleet Bank of Connecticut Company's stock as
Mitchell Hutchins Institutional determined under
Investors, Inc. Rule 13d-3 of the
State Street Bank & Trust Company Securities Exchange
(in its capacity as Trustee for Act of 1934
the Company's Guaranteed
Stock Plan)
</TABLE>
<PAGE>
EXHIBIT C (CONTINUED)
III. DESCRIPTION OF INDEBTEDNESS
[UPDATED DESCRIPTION OF INDEBTEDNESS TO BE PROVIDED BY THE
COMPANY]
(A) The Indebtedness for borrowed money (including
Financing Leases) of the Company and its Subsidiaries as of
September 30, 1995 is as follows:
<TABLE>
<CAPTION>
Description Amount
----------- ------
<S> <C> <C> <C>
1. Senior Notes Travelers Insurance Company $23,077,000.00
Allstate Life Insurance $ 9,231,000.00
Company
Aid Association for Lutherans $ 4,615,000.00
2. Revolving Mellon Bank, N.A. Trustee $ -0-
Credit
Agreement
3. Industrial Commercia Bank, N.A. Trustee $ 7,000,000.00
Revenue Bond
Saline, MI
4. Short Term Various $26,500,000.00
Credit Line
5. Bank Overdraft Society National Bank $ 557,000.00
6. Letter of Fuji Bank, Ltd. $ 7,394,000.00
Credit
7. NASCO Guaranty LTCB Trust Co. $ 3,780,000.00
8. NASCO Guaranty Tohlease Corp. $ 1,282,000.00
9. NASCO Guaranty Yokohama Bank $ 450,000.00
10. NASCO Guaranty LTCB Trust Co. $ 1,350,000.00
11. NASCO Guaranty LTCB Trust Co. $ 3,150,000.00
12. ESOP Guaranty Shawmut Bank, N.A. $10,398,000.00
NBD Bank N.A.
13. Standby L/C Shawmut Bank, N.A. $ 6,448,000.00
14. Commercial L/C Shawmut Bank, N.A. $ 2,680,000.00
15. Company Various $ 100,000.00
Guaranty
</TABLE>
Total Debt: $101,012,000.00
Total excludes duplication items listed:
#3 Industrial Revenue Bond, Saline, $7,000,000.00
<PAGE>
EXHIBIT C (CONTINUED)
(B) Agreement Restricting the Company's Ability to Incur
Indebtedness:
1. Senior Notes, Travelers Insurance Company, Allstate Life
------------
Insurance Co., Aid Association for Lutherans, dated
September 16, 1991;
2. Revolving Credit Agreement, Mellon Bank, N.A., agent, dated
--------------------------
December 1, 1991;
3. Reimbursement Agreement, Fuji Bank Limited, New York Branch,
-----------------------
dated February 1, 1986;
4. Guarantee Agreement, Connecticut National Bank and National
-------------------
Bank of Detroit, dated July 28, 1989;
5. Interest Rate Swap Agreement, Chemical Bank, N.A., dated
----------------------------
September 16, 1991;
6. Barnes Group Inc. Company Resolution, Barnes Group Inc.,
------------------------------------
dated April 14, 1990.
IV. LIENS ON PROPERTY
Liens existing as of June 30, 1995 (other than Liens of the
types permitted by clauses (i) through (v) of Section 7.6(a)) on
any Property of the Company and its Subsidiaries which has a cost
or market value greater than $500,000 are as follows:
a. NONE
<PAGE>
EXHIBIT D
DESCRIPTION OF COMPANY COUNSEL'S CLOSING OPINION
The closing opinion of John E. Besser, Esq., Counsel of the
Company, which is called for by Section 3.1, shall be dated the
Closing Date and addressed to you, shall be satisfactory in form
and substance to you, and shall be to the effect that:
(1) Organization, Standing, etc. of the Company--the Company is
a duly incorporated and validly existing corporation in good
standing under the laws of the State of Delaware and has all
requisite power and authority to issue, sell and deliver the
Notes and to carry on its business and own its Property;
(2) Organization, Standing, etc, of Subsidiaries--each
Subsidiary is a duly incorporated and validly existing
corporation in good standing under the laws of its
jurisdiction of incorporation and has all requisite
corporate power and authority to carry on its business and
own its Property;
(3) Authority to Conduct Business--the Company, and each
Subsidiary, is duly authorized to conduct its business in
each jurisdiction in which it operates and has duly
qualified and is in good standing as a foreign corporation
in each jurisdiction where the character of its Properties
or the nature of its activities makes such qualification
necessary or desirable;
(4) Agreement, Notes--the Agreement and the Notes being
delivered to you at the closing have been duly authorized by
all necessary corporate action on the part of the Company
(no action by the stockholders of the Company being required
by law, by the Certificate of Incorporation or By-Laws of
the Company or otherwise), have been duly executed and
delivered by the Company, and are legal, valid and binding
obligations of the Company enforceable in accordance with
their terms except as enforcement of such terms may be
limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors, rights generally or by general
equitable principles;
(5) No Conflict with Charter, By-Laws or Other Agreements--the
issue and sale of the Notes and compliance by the Company
with the terms of the Notes and the Agreement will not
conflict with, or result in any breach of any of the
provisions of, or constitute a default under, or result in
the creation or imposition of any Lien upon any of the
Property of the Company
<PAGE>
EXHIBIT D (CONTINUED)
pursuant to the provisions of, the Certificate of
Incorporation or By-Laws of the Company, or any agreement or
other instrument to which the Company is a party or by which
it is bound;
(6) Title to Stock of Subsidiaries--the Company is the legal and
beneficial owner of all of the shares it purports to own of
the capital stock of each Subsidiary, free and clear in each
case of any Lien and all such shares have been duly issued
and are fully paid and non-assessable;
(7) Governmental Consent, etc,--all consents, approvals or
authorizations, if any, of any governmental authority
required on the part of the Company in connection with the
execution and delivery of the Agreement or the offer, issue,
sale or delivery of the Notes to you have been duly
obtained, and the Company has complied with any applicable
provisions of law requiring any designation, declaration,
filing, registration or qualification with any governmental
authority in connection with such offer, issue, sale or
delivery;
(8) Margin Requirements--none of the transactions contemplated
in the Agreement (including, without limitation thereof, the
use of the proceeds from the sale of the Notes) will violate
or result in a violation of Section 7 of the Securities
Exchange Act of 1934, as amended, or any regulations issued
pursuant thereto, including, without limitation, Regulations
G, T and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R., Chapter II; and
(9) Exempted Offering--the issuance, sale and delivery of the
Notes under the circumstances contemplated by the Agreement
are exempted transactions under the registration provisions
of the Securities Act of 1933, as amended, and do not, under
existing law, require the registration of the Notes under
the Securities Act of 1933, as amended, or qualification of
an indenture under the Trust Indenture Act of 1939.
(10) Litigation--there is no action, suit, or proceeding at law
or in equity or any investigation pending, or to the best
knowledge of such counsel threatened, against or affecting
the Company or any Subsidiary in or before any court,
governmental authority or agency or arbitration board or
tribunal which, individually or in the aggregate will have a
material adverse impact on the long-term financial condition
or prospects of the Company and its Subsidiaries, or the
ability of the Company to perform the Agreement.
<PAGE>
EXHIBIT D (CONTINUED)
(11) The Company is not an "investment company," or a company
"controlled" by an "investment company," within the meaning
of the Investment Company Act of 1940, as amended.
(12) The Company is not a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding
company," as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended.
Such opinion shall also cover such other matters incident to the
transactions contemplated hereby as you or your counsel may
reasonably request.
<PAGE>
EXHIBIT E
DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
The closing opinion of special counsel for you, which is called
for by Section 3.1 of the Agreement, shall be dated the Closing
Date and addressed to you, shall be satisfactory in form and
substance to you, and shall cover the matters referred to in
paragraphs 1 (as to incorporation and good standing only), and 4,
5 (as to Certificate of Incorporation and ByLaws only), 7, 8 and
9 of Exhibit D. Such opinion shall also state that based on such
due investigation and inquiry as deemed relevant and appropriate,
the closing opinion of Company counsel delivered pursuant to
Section 3.1 is satisfactory in scope and form to special counsel
and that in their opinion you are justified in relying thereon,
and shall cover such other matters relating to the sale of the
Notes as you may reasonably request.
<PAGE>
EXHIBIT F
CERTAIN DOCUMENTS FURNISHED TO PURCHASERS
1. Financial Statements for 1991, 1992, 1993 and 1994.
2. The Company's 1994 Proxy Statement and 10k filing.
3. Offering Memorandum with respect to the Company's
$40,000,000 9.47% Senior Notes due September 16, 2001.
<PAGE>
CONFORMED COPY
BARNES GROUP INC.
NOTE PURCHASE AGREEMENT
<PAGE>
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 1. PURCHASE AND SALE OF NOTES 1
1.1 Issue of Notes 1
1.2 The Closing 1
1.3 Purchase for Investment 2
1.4 Failure to Deliver 2
1.5 Expenses; Issue Taxes 2
SECTION 2. WARRANTIES AND REPRESENTATIONS 3
2.1 Subsidiaries 3
2.2 Corporate Organization and Authority 3
2.3 Business, Property, Indebtedness and Liens 4
2.4 Financial Statements 4
2.5 Full Disclosure 5
2.6 Pending Litigation; Compliance with Law 5
2.7 Title to Properties 6
2.8 Patents and Trademarks 6
2.9 Sale is Legal and Authorized 6
2.10 No Defaults 6
2.11 Governmental Consent 7
2.12 Taxes 7
2.13 Use of Proceeds 8
2.14 Private Offering 8
2.15 ERISA 8
2.16 Foreign Assets Control Regulations, etc 9
2.17 Status under Certain Statutes 9
2.18 Environmental Matters 9
SECTION 3. CLOSING CONDITIONS 10
3.1 Opinions of Counsel 10
3.2 Warranties and Representations True as of
Closing Date 10
3.3 Compliance with this Agreement 10
3.4 Officers' Certificate 11
3.5 Proceedings Satisfactory 11
3.6 Private Placement Number 11
3.7 Legal Investment 11
SECTION 4. DIRECT PAYMENT 11
SECTION 5. PREPAYMENTS 11
5.1 Required Prepayments 11
5.2 Option to Prepay 12
5.3 Notice of Optional Prepayment 12
5.4 Partial Payment Pro Rata 12
</TABLE>
<PAGE>
<TABLE>
TABLE OF CONTENTS (CONTINUED)
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 6. REGISTRATION; SUBSTITUTION OF NOTES 13
6.1 Registration of Notes 13
6.2 Exchange of Notes 13
6.3 Replacement of Notes 13
SECTION 7. COMPANY BUSINESS COVENANTS 14
7.1 Payment of Taxes and Claims 14
7.2 Maintenance of Properties and
Corporate Existence 14
7.3 Maintenance of Office 15
7.4 Sale of Assets or Merger 16
7.5 Leases 16
7.6 Liens and Encumbrances 17
7.7 Indebtedness 18
7.8 Net Worth 19
7.9 ERISA Compliance 19
7.10 Transactions with Affiliates 19
7.11 Tax Consolidation 20
7.12 Acquisition of Notes 20
7.13 Lines of Business 20
7.14 Restricted Loans, Advances and Investments 20
7.15 Limitation on Restrictions on Dividends by
Subsidiaries, etc. 21
SECTION 8. INFORMATION AS TO COMPANY 22
8.1 Financial and Business Information 22
8.2 Officers' Certificates 24
8.3 Accountants' Certificates 25
8.4 Inspection 25
SECTION 9. EVENTS OF DEFAULT 26
9.1 Nature of Events 26
9.2 Default Remedies 27
9.3 Annulment of Acceleration of Notes 28
SECTION 10. INTERPRETATION OF THIS AGREEMENT 28
10.1 Terms Defined 28
10.2 Accounting Principles 33
10.3 Directly or Indirectly 34
10.4 Governing Law 34
</TABLE>
<PAGE>
<TABLE>
TABLE OF CONTENTS (CONTINUED)
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 11. MISCELLANEOUS 34
11.1 Notices 34
11.2 Reproduction of Documents 34
11.3 Survival 35
11.4 Successors and Assigns 35
11.5 Amendment and Waiver 35
11.6 Duplicate Originals 36
Exhibit A - Schedule of Purchasers
Exhibit B - Form of Note
Exhibit C - Subsidiaries and Affiliates of Company,
Description of Indebtedness
Exhibit D - Form of Opinion of General Counsel of Company
Exhibit E - Form of Opinion of Special Counsel of Company
Exhibit F - List of Disclosure Documents
Schedule I - List of Leases
</TABLE>
<PAGE>
EXHIBIT 10.1
BARNES GROUP INC.
MANAGEMENT INCENTIVE COMPENSATION PLAN
---------------------------------------
SECTION 1. PURPOSE
---------------------
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
----------------------------
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
-------------------------
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
1
<PAGE>
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-
2
<PAGE>
recurring items or other factors deemed appropriate by the
President and Chief Executive Officer.
SECTION 4. CORPORATE INCENTIVE FUND
--------------------------------------
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
-------------------------
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.
3
<PAGE>
SECTION 6. GROUP FUNDS
-----------------------
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
-------------------------
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.
4
<PAGE>
SECTION 8 GRANT OF AWARDS - GROUP FUNDS
------------------------------------------
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
---------------------------------------------
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.
5
<PAGE>
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
-----------------------------------
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.
6
<PAGE>
SECTION 11. PAYMENT
----------------------
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
----------------------
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
----------------
<PAGE>
EXHIBIT 10.2
BARNES GROUP INC.
1996 LONG TERM INCENTIVE PLAN
-----------------------------
SECTION 1. PURPOSE
---------------------
The 1996 Long Term Incentive Plan ("LTIP") is designed to
provide incentive compensation to key executives of Barnes Group
Inc. (the "Company") and its subsidiaries in a form which
relates the financial reward to an increase in the value of the
Company to its shareholders. The plan shall be administered by
the Compensation Committee of the Board of Directors (the
"Committee"). This plan shall be effective for awards granted
with the 1996-1998 Incentive Award Period.
SECTION 2. DEFINITIONS
-------------------------
2.1 Total Cost of Equity. Total Cost of Equity equals Average
--------------------
Stockholders' Equity, multiplied by a percentage cost of
equity selected by the Committee which shall be held
constant throughout the Incentive Award Period.
Average Stockholders' Equity shall be computed by adding
stockholders' equity on December 31st of the prior year to
stockholders' equity at the end of each month of the
applicable year and dividing the result by 13.
2.2 Economic Return. Economic Return for any year equals Cash
---------------
Flow From Operations less the Cost of Equity divided by the
average number of common shares outstanding for the year.
In computing Economic Return, the Committee may make
adjustments for any extraordinary changes which occur during
an Incentive Award Period.
1
<PAGE>
2.3 Cash Flow from Operations. Cash Flow From Operations equals
-------------------------
net income, less any dividends on preferred stock, plus
depreciation and amortization, plus any losses, less any
gains, on the sale of plant, property and equipment or other
assets where the gain or loss exceeds $500,000 for each
individual transaction.
2.4 Performance Unit. A Performance Unit is the form of award
----------------
under the LTIP. Its value in any year is equal to the sum
of the Economic Returns per share for the current year and
preceding four years.
SECTION 3. ADMINISTRATION
----------------------------
The Committee shall designate participants, award a number
of Performance Units to each participant, and perform all other
actions necessary to the proper administration of the LTIP. The
interpretation by the Committee of the LTIP and any awards made
hereunder shall be binding upon the participants and the Company.
SECTION 4. PARTICIPANTS
--------------------------
Key senior executives of the Company and its subsidiaries
whose activities can contribute significantly to the performance
of the Company are eligible to participate in the LTIP.
SECTION 5. GRANT OF INCENTIVE AWARDS
-------------------------------------
5.1 Prior to March 1 of each year, the Committee shall determine
whether or not Performance Units will be granted in the
current year. If they are to be granted, the Committee
shall:
2
<PAGE>
(a) establish an Incentive Award Period which will commence
on January 1 of the current year and terminate on
January 1 of the year selected by the Committee; provided,
however, that in no event shall it be less than 24 months;
and
(b) designate recipients of Performance Units and the
number of Performance Units to be awarded to each
participant.
5.2 During an Incentive Award Period, new employees and
employees who are promoted or transferred may be granted new
or additional Performance Units.
SECTION 6. PAYMENT
---------------------
6.1 Incentive award payments shall be calculated by multiplying
the number of Performance Units held by a participant times
the increase, if any, in the value of the Performance Unit
between the beginning and end of the Incentive Award Period.
6.2 If a participant becomes employed by the Company after the
beginning of an Incentive Award Period, payment under any
such Performance Unit will be reduced by multiplying its
value by a fraction, the numerator of which shall be the
number of full calendar months of the Incentive Award Period
during which the Participant was employed by the Company,
and the denominator of which shall be the number of calendar
months in the Incentive Award Period.
6.3 Notwithstanding anything in the LTIP to the contrary, the
amount of payment made to each participant shall be in the
sole discretion of the Committee. The amount of all such
payments shall be determined by the Committee within 90 days
after the end of the Incentive Award Period.
3
<PAGE>
6.4 The Committee, in its sole discretion, shall determine
whether all or any portion of any payment made with respect
to the Performance Units held by each participant shall be
deferred and credited to a participant's Incentive Deferred
Compensation Account.
6.5 As soon as practical after the amount of any award is
determined, it shall be paid in cash to the participant or
all or part of it shall be credited to the participant's
Incentive Deferred Compensation Account, all in accord with
the procedures specified in paragraph 9.
SECTION 7. EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH
---------------------------------------------------------
If a participant ceases to be an employee prior to the end
of an Incentive Award Period other than by reason of death,
disability, or retirement after attaining age 55, then the
Performance Units granted to the participant shall terminate. If
a participant ceases to be an employee because of death,
disability, or retirement after attaining age 55, then payment
under his Performance Units may be adjusted as set forth in
paragraph 6.2.
SECTION 8. TRANSFERABILITY
-----------------------------
Performance Units and any amount standing to a person's
credit in the Incentive Deferred Compensation Account may not be
transferred or assigned by a participant except by will or by the
laws of descent and distribution.
SECTION 9. INCENTIVE DEFERRED COMPENSATION ACCOUNT
-----------------------------------------------------
9.1 To the extent that the Committee decided to defer payment of
any award made under the LTIP, the amount of such deferred
award shall be credited to the
4
<PAGE>
Company's Incentive Deferred Compensation Account. The
Company shall not be required to segregate or earmark assets
with respect to such account and participants shall have no
interest in any specific asset as a result of the creation
of such account or of any award under the LTIP. All funds
in such accounts shall be available for general corporate
purposes.
9.2 Interest will be credited quarterly on the unpaid amount
standing to any participant's credit in the Incentive
Deferred Compensation Account at the end of each quarter.
On or as soon as practical after the first business day of
January, the Company will pay to each participant who is
less than 60 years old the interest credited to his account
with respect to the prior year. No cash payment will be
made to participants who are employed by the Company and who
have attained age 60.
9.3 The interest rate for purposes of computing interest under
paragraph 9.2 shall be the rate of interest for prime
commercial loans of 90-day maturities charged by Chemical
Bank (or such other New York City bank as the Committee may
select) on the first business day of each quarter.
9.4 Payments from the amount standing to a participant's credit
in the Incentive Deferred Compensation Account shall begin
on the first day of the month following the month in which
the participant ceases to be an employee of the Company.
Payments shall be made in 120 monthly installments (as equal
as possible); provided, however, that, except if otherwise
decided by the Committee, the entire amount then standing to
the participant's credit in the Incentive Deferred
Compensation Account shall be paid in one lump sum to any
person whose employment is terminated other than by death or
by early or normal retirement
5
<PAGE>
under the applicable retirement plan. Notwithstanding
anything in this section to the contrary, the Committee may
in its discretion either:
(i) without the consent of the participant, advance the time of
payment of any unpaid portion of the award; or
(ii) if the consent of the participant is obtained, further defer
the time of payment of any unpaid portion of the award to a
time not later than 15 years after the termination of the
participant's employment.
9.5 No amendment or termination of the LTIP shall reduce or
cancel any amount standing to a participant's credit in the
Incentive Deferred Compensation Account, prior to the
effective date of such amendment or termination.
9.6 In the event of the death of a participant while there is
still an amount standing to the participant's credit in the
Incentive Deferred Compensation Account, the amount shall be
paid to the beneficiary designated by the participant in
installments; provided, however, that (a) if the beneficiary
is the participant's estate, the funds shall be paid in a
lump sum, and (b) notwithstanding anything in this section
to the contrary, the Committee may advance the time of
payment to a beneficiary of any unpaid funds credited to the
Incentive Deferred Compensation Account. In the absence of
a designated beneficiary, any amount standing to the
participant's credit in the Incentive Deferred Compensation
Account shall be paid in a lump sum to the participant's
estate.
SECTION 10. AMENDMENT
------------------------
The LTIP may be amended at any time by the Committee.
Amended: 2/16/96
-----------------
6
<PAGE>
EXHIBIT 10.3
BARNES GROUP INC.
RETIREMENT BENEFIT EQUALIZATION PLAN
1. Purpose
-------
The purpose of the Retirement Benefit Equalization Plan
(the "Equalization Plan") is to equalize the benefits for those
participants in the Barnes Group Inc. Salaried Retirement Income
Plan (the "Pension Plan") whose benefits are limited by statute
including Section 415 of the Internal Revenue Code of 1954 as
amended from time to time (the "Code").
2. Benefits
--------
2.1 Barnes Group Inc. (the "Company") will pay to any recipient
of benefits pursuant to the Pension Plan the difference
between benefits paid under the Plan and what the recipient
would have received but for the limitations set forth in
section 6.8 (or any successor thereto) of the Pension Plan.
2.2 Benefits payable hereunder will be paid at the same time
and in the same manner as benefits paid pursuant to the
Pension Plan.
3. Administration
--------------
The Retirement Committee which administers the Pension Plan
shall administer the Equalization Plan, and it shall have the
same powers relating to the Equalization Plan as it does with
respect to the Pension Plan.
1
<PAGE>
4. General
-------
4.1 The Equalization Plan may be amended or terminated at any
time by the Board of Directors of the Company, except that
no such amendment or termination shall adversely affect the
benefits payable to any person who has begun to receive
benefits hereunder.
4.2 Benefits payable hereunder shall not be funded and shall be
paid out of the general assets of the Company.
4.3 The Equalization Plan shall be construed, administered and
enforced according to the laws of the State of Connecticut.
As amended January 16, 1986
2
<PAGE>
EXHIBIT 10.4
BARNES GROUP INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
---------------------------------------
1. Purpose
-------
The purpose of the Supplemental Executive Retirement Plan
(the"Supplemental Plan") is to provide supplemental pension
benefits to certain Officers of Barnes Group Inc. ("Officers")
who elect any form of contingent annuity under the Barnes
Group Inc. Salaried Retirement Income Plan (the "Pension
Plan") under which a spouse or former spouse is the contingent
annuitant.
2. Benefits
--------
2.1 The Company will pay to each person who (i) is an Officer on
or after November 16, 1979, and either retires as an Officer
under the Pension Plan with ten years of service with Barnes
Group or a direct or indirect subsidiary of Barnes Group, or
ceases to be an Officer due to disability, and (ii) who is
receiving retirement benefits under the Pension Plan
pursuant to a contingent pensioner form of benefit under
which the contingent pensioner is the Officer's spouse or
former spouse, a monthly supplemental annuity equal to (a)
minus (b) where:
(a) equals the monthly retirement income payable to the
Officer if he/she elected a straight life annuity under
the Plan, including any amount payable pursuant to the
Retirement Benefit Equalization Plan; and
(b) equals the monthly pension benefits to which the
Officer is entitled pursuant to the Pension Plan were
he/she to elect the 50% contingent pensioner form of
annuity, naming such spouse or former spouse as
contingent pensioner.
1
<PAGE>
2.2 Benefits payable hereunder will be paid at the same time and
in the same manner as benefits paid pursuant to the Pension
Plan.
3. Administration
--------------
The Benefits Committee shall administer the Supplemental
Plan, and shall have the same administrative powers relating
to the Supplemental Plan as it does with respect to the
Pension Plan.
4. General
-------
4.1 The Supplemental Plan may be amended in whole or in part or
terminated at any time by the Board of Directors of the
Company, except that no such amendment or termination shall
adversely affect the benefits payable to any person who has
begun to receive benefits hereunder.
4.2 Benefits payable under the Supplemental Plan shall not be
funded and shall be paid out of the general assets of the
Company.
4.3 The Supplemental Plan shall be construed, administered, and
enforced according to the laws of the State of Connecticut.
As amended by the Board of Directors on May 19, 1995
2
<PAGE>
EXHIBIT 10.10
ADDENDUM TO CONSULTING AGREEMENT
--------------------------------
WHEREAS, Wallace Barnes ("Barnes") and Barnes Group
Inc. ("BGI") entered into a Consulting Agreement dated April 1,
1994 for a two year period commencing April 1, 1994 and ending
March 31, 1996; and
WHEREAS, the parties desire to amend said Consulting
Agreement;
NOW THEREFORE, the parties agree as follows:
1. Commencing July 1, 1995 and continuing for the remainder
of the term of the Consulting Agreement, Barnes shall be
paid a supplemental monthly fee of $944.44 in addition to
his annual fee of $60,000 (payable in monthly installments
of $5,000). Payments shall be made on or about the first
day of the month.
2. All other terms and conditions of the Consulting Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have signed this
addendum agreement as of May 22, 1995.
BARNES GROUP INC.
By:
/s/ A. Stanton Wells /s/ Wallace Barnes
--------------------- ----------------------
A. Stanton Wells Wallace Barnes
1
<PAGE> 1
Barnes Group Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS
SALES
In 1995, sales were $593 million, up 4% from 1994. Sales in
1994 were $569 million, a 13% increase over 1993's level of
$502 million.
Associated Spring's 1995 sales increased 2% to $279 million,
following an increase of 17% in 1994. In North America, sales
were down slightly, reflecting in part, a softening of the
U.S. durable goods market and labor issues at its Bristol,
Connecticut plant. Internationally, the group reported very
strong sales growth, led by its Singapore operation which
continued its penetration of the electronics industry. The
group's distribution business, which markets die springs and
precision stock springs, also reported good sales growth.
Bowman Distribution's 1995 sales were $217 million, up
slightly from 1994. Sales in 1994 were $215 million, 11%
higher than 1993's level of $193 million. Sales from Bowman
U.S., the group's largest business unit, kept pace with the
prior year. Bowman's sales in Europe increased nearly 15%
reflecting progress in the development of new systems business
in the U.K. Bowman's Canadian business showed slight
year-over-year gains in sales.
Barnes Aerospace's sales were $97 million in 1995, up 18% from
1994, following an increase of 7% in 1994. Sharply higher
sales were reported by both the group's Advanced Fabrications
and Precision Machining businesses. The sales of the group's
Repair and Overhaul business were marginally higher than 1994.
OPERATING INCOME
Consolidated operating income in 1995 was $48.8 million,
compared to $36.6 million in 1994 and $12.5 million in 1993.
As a result, operating income margin has risen significantly
to 8.2%, an improvement of nearly six percentage points in the
past two years. The gain in operating income in 1995 resulted
primarily from cost reductions and productivity improvements
at Barnes Aerospace and Bowman Distribution, and sharply
higher sales volume in Barnes Aerospace. Increased volume,
manufacturing efficiencies and overall containment of costs in
all three operating groups contributed to the 1994 gain. The
continued focus on cost control led to lower selling and
administrative expenses, as a percent of sales, in both 1995
and 1994 compared to previous years. Operating income in 1993
included provisions of $4.9 million for plant consolidations
and work force reductions.
Associated Spring's increase in operating income, to a record
$42.6 million, kept pace with its sales growth. Strong profit
gains overseas, driven by higher sales volume and
manufacturing efficiencies, offset lower year-over-year
results in its North American manufacturing operations.
Bowman's operating income in 1995 of $17.4 million was $4.8
million above the 1994 level. This gain reflects sharply lower
selling and administrative expenses, primarily at Bowman U.S.
Barnes Aerospace's operating income was $5.0 million in 1995
compared to an operating loss of $1.8 million in 1994. The
1994 operating loss included $1.1 million of severance costs
recognized in the fourth quarter. The sharply higher profits
in 1995 reflect higher sales volume coupled with ongoing
productivity improvements and cost containment. The
improvements in sales volume, gross margins and operating
costs, resulted in the group reporting operating income for
four consecutive quarters.
Please refer to Note 13 of the Notes to Consolidated Financial
Statements on pages 26-27 for further information about the
company's operations by business segment.
11
<PAGE> 2
Barnes Group Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS
NON-OPERATING INCOME/EXPENSE
Other income was $4.4 million in 1995, $4.6 million in 1994
and $4.1 million in 1993 and includes $1.9 million, $2.3
million and $1.7 million, respectively, from the company's
investment in NASCO, a company jointly owned with NHK Spring
Co., Ltd. of Japan. Interest income, another major component
of other income, increased 10% in 1995 to $1.4 million,
primarily due to higher levels of short-term investments in
Brazil.
Interest expense increased slightly in 1995, following a
decrease in 1994. The impact of lower debt in 1995 was
largely offset by higher interest rates.
Other expenses increased in 1995, following a decrease in
1994, primarily due to higher foreign exchange and translation
losses. These losses were $1.1 million, $0.5 million and $1.7
million in 1995, 1994 and 1993, respectively.
INCOME TAXES
The company's effective tax rate was 39.5% in 1995 compared
with 40.1% in 1994 and 47.8% in 1993. Note 6 of the Notes to
Consolidated Financial Statements on page 22 contains an
explanatory table showing the factors affecting the company's
effective tax rate in each of these years.
NET INCOME AND NET INCOME PER SHARE
Consolidated net income was $27.5 million in 1995, $20.3
million in 1994 and $4.4 million in 1993. On a per share
basis, income for 1995 was $4.20 compared to $3.20 in 1994 and
$.70 in 1993.
INFLATION
Management believes that inflation during the 1993-1995
period did not have a material impact on the company's
historical financial statements.
FINANCIAL CONDITION
The company's financial condition, as presented in its
statement of cash flows and balance sheet, is strong. The
following is a discussion of the significant elements of these
financial statements.
CASH FLOWS
Operating activities are the principal source of cash flow for
the company. In 1995, operating activities generated a record
$47 million in cash flow, $10 million more than 1994 and $28
million more than 1993. During the past three years,
operating activities provided over $104 million in cash which
the company used to pay dividends to stockholders and fund
significant investments in new plant and equipment.
Investing activities utilized cash of $37 million in 1995
compared with $31 million in 1994. Capital expenditures
increased to $36 million in 1995, 12% over 1994 and 61% over
1993. Management continued to invest heavily to improve
quality and productivity while adding capacity. During the
past three years the company has invested nearly $90 million
in new plant and equipment with over 65% of that at Associated
Spring. In 1996, capital expenditures are expected to exceed
1995, with the level of investments in all three businesses
expected to increase.
12
<PAGE> 3
Barnes Group Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS
The company's financing activities used cash of $14 million in
1995 compared to $8 million in 1994. The company continued to
use surplus cash generated by its U.S. operations to reduce
borrowings under short-term credit lines. Surplus cash from
foreign operations was used, in part, to fund strategic
investments in Mexico and Europe. In 1995, the annual
dividend per share increased from $1.45 to $1.60. As a
result, total cash dividends paid to the owners of the company
increased by 14% to $10 million. Cash generated from the
exercise of employee stock options partially offset these
uses.
LIQUIDITY AND CAPITAL RESOURCES
The company's liquidity, measured in terms of the level of
working capital, increased $7 million in 1995 to $95 million
at December 31, 1995. The current ratio, a key measure of
liquidity, improved to 2.2 at December 31, 1995 compared to
2.0 at December 31, 1994.
In evaluating the company's working capital position,
consideration should be given to the fact that the majority of
its inventories are accounted for on a LIFO basis. If these
inventories were stated on a current cost basis, their value
would have been higher by $13 million in both 1995 and 1994.
The company's ratio of interest-bearing debt to total
capitalization improved for the sixth consecutive year to 25%
at December 31, 1995 from 28% at December 31, 1994. For this
purpose, total capitalization includes interest-bearing debt,
plus other long-term liabilities, accrued long-term retirement
benefits and stockholders' equity, excluding the guaranteed
ESOP obligation.
To supplement internal cash generation in the U.S., the
company maintains substantial bank borrowing facilities. At
December 31, 1995, the company had $100 million of borrowing
capacity available under a revolving credit agreement which
expires in 2000. In addition, the company has available $135
million in uncommitted, short-term bank credit lines, of which
$1.5 million was in use at December 31, 1995. During 1995 and
1994, the company maintained long-term debt of $70 million
comprised, in part, of borrowings under its short-term bank
credit lines backed by its long-term revolving credit
agreement. In December 1995, substantially all of the credit
line borrowings were replaced with the proceeds of a $25
million private placement with a final maturity in 2005. This
was done to extend the maturity of the company's long-term
financing and to secure an additional block of committed
funding. The company believes its bank credit facilities
coupled with cash generated from operations are adequate for
its anticipated future requirements.
CHANGES IN ACCOUNTING PRINCIPLES
In 1995, the FASB issued Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation,"
effective for years beginning after December 15, 1995. Under
the provisions of this accounting standard, the company is not
required to change its method of accounting for stock-based
compensation. Management expects to retain its current method
of accounting.
13
<PAGE> 4
Barnes Group Inc.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
(Dollars in thousands, except per share data)
Years Ended December 31, 1995 1994 1993
----------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $592,509 $569,197 $502,292
Cost of sales 382,150 366,455 323,950
Selling and administrative expenses 161,555 166,093 160,904
Plant closings and restructurings - - 4,900
----------------------------------------------------------------------------
543,705 532,548 489,754
----------------------------------------------------------------------------
Operating income 48,804 36,649 12,538
Other income 4,373 4,611 4,117
Interest expense 5,274 5,133 5,187
Other expenses 2,453 2,205 3,077
----------------------------------------------------------------------------
Income before income taxes 45,450 33,922 8,391
Income taxes 17,966 13,606 4,008
----------------------------------------------------------------------------
Net income $ 27,484 $ 20,316 $ 4,383
============================================================================
Per common share:
Net income $ 4.20 $ 3.20 $ .70
============================================================================
Dividends $ 1.60 $ 1.45 $ 1.40
============================================================================
Average common shares outstanding 6,546,671 6,353,777 6,249,966
</TABLE>
See accompanying notes.
14
<PAGE> 5
Barnes Group Inc.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Dollars in thousands)
December 31, 1995 1994
----------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 17,868 $ 22,023
Accounts receivable, less allowances
(1995 - $3,635; 1994 - $3,222) 86,086 86,877
Inventories 56,749 50,845
Deferred income taxes 8,344 12,147
Prepaid expenses 3,769 3,645
----------------------------------------------------------------------
Total current assets 172,816 175,537
Deferred income taxes 24,308 23,854
Property, plant and equipment 122,870 112,569
Goodwill 20,028 20,614
Other assets 21,527 19,382
----------------------------------------------------------------------
Total assets $361,549 $351,956
======================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable $ 509 $ 7,903
Accounts payable 31,839 31,424
Accrued liabilities 42,840 45,713
Guaranteed ESOP obligation-current 2,348 2,172
----------------------------------------------------------------------
Total current liabilities 77,536 87,212
Long-term debt 70,000 70,000
Guaranteed ESOP obligation 7,491 9,839
Accrued retirement benefits 68,824 66,817
Other liabilities 8,857 10,949
Stockholders' equity
Common stock - par value $1.00 per share
Authorized: 20,000,000 shares
Issued: 7,345,923 shares stated at 15,737 15,737
Additional paid-in capital 27,360 27,772
Retained earnings 136,092 118,938
Foreign currency translation adjustments (10,656) (8,715)
Treasury stock at cost (1995 - 791,205 shares;
1994 - 916,748 shares) (29,853) (34,582)
----------------------------------------------------------------------
138,680 119,150
Guaranteed ESOP obligation (9,839) (12,011)
----------------------------------------------------------------------
Total stockholders' equity 128,841 107,139
----------------------------------------------------------------------
Total liabilities and stockholders' equity $361,549 $351,956
======================================================================
</TABLE>
See accompanying notes.
15
<PAGE> 6
Barnes Group Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(Dollars in thousands)
Years Ended December 31, 1995 1994 1993
------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $27,484 $20,316 $ 4,383
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation and amortization 26,750 23,733 23,094
Gain on sale of property, plant and equipment (268) (151) (442)
Translation losses 290 356 1,459
Changes in assets and liabilities:
Accounts receivable 365 (9,411) (4,504)
Inventories (6,073) (1,037) 1,599
Accounts payable 794 4,298 3,113
Accrued liabilities (2,664) 2,630 (6,369)
Deferred income taxes 3,479 (485) 1,992
Other liabilities and assets (2,862) (2,549) (4,683)
------------------------------------------------------------------------------------
Net cash provided by operating activities 47,295 37,700 19,642
INVESTING ACTIVITIES:
Proceeds from sale of property, plant
and equipment 1,301 2,835 4,506
Capital expenditures (35,820) (31,848) (22,216)
Other (2,057) (2,252) (3,014)
------------------------------------------------------------------------------------
Net cash used by investing activities (36,576) (31,265) (20,724)
FINANCING ACTIVITIES:
Net decrease in notes payable (7,389) (2,653) (4,377)
Proceeds from the issuance of common stock 5,849 3,956 1,706
Payments to acquire treasury stock (1,746) - -
Dividends paid (10,491) (9,223) (8,756)
------------------------------------------------------------------------------------
Net cash used by financing activities (13,777) (7,920) (11,427)
Effect of exchange rate changes on cash flows (1,097) (621) (2,430)
------------------------------------------------------------------------------------
Decrease in cash and cash equivalents (4,155) (2,106) (14,939)
Cash and cash equivalents at beginning of year 22,023 24,129 39,068
------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $17,868 $22,023 $24,129
====================================================================================
</TABLE>
See accompanying notes.
16
<PAGE> 7
Barnes Group Inc.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Foreign
Additional Currency Guaranteed
Common Paid-In Retained Translation Treasury ESOP Stockholders'
(Dollars in thousands) Stock Capital Earnings Adjustments Stock Obligation Equity
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
January 1, 1993 $15,737 $29,502 $111,838 $ (5,138) $(42,488) $(15,876) $ 93,575
Net income 4,383 4,383
Cash dividends (8,756) (8,756)
Employee stock plans (757) 2,670 1,913
Guaranteed ESOP obligation 1,857 1,857
Income tax benefits on
unallocated ESOP dividends 203 203
Translation adjustments (1,326) (1,326)
- -----------------------------------------------------------------------------------------------------------------------------------
December 31, 1993 15,737 28,745 107,668 (6,464) (39,818) (14,019) 91,849
Net income 20,316 20,316
Cash dividends (9,223) (9,223)
Employee stock plans (973) 5,236 4,263
Guaranteed ESOP obligation 2,008 2,008
Income tax benefits on
unallocated ESOP dividends 177 177
Translation adjustments (2,251) (2,251)
- -----------------------------------------------------------------------------------------------------------------------------------
December 31, 1994 15,737 27,772 118,938 (8,715) (34,582) (12,011) 107,139
Net income 27,484 27,484
Cash dividends (10,491) (10,491)
Employee stock plans (412) 4,729 4,317
Guaranteed ESOP obligation 2,172 2,172
Income tax benefits on
unallocated ESOP dividends 161 161
Translation adjustments (1,941) (1,941)
- -----------------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1995 $15,737 $27,360 $136,092 $(10,656) $(29,853) $ (9,839) $128,841
===================================================================================================================================
</TABLE>
See accompanying notes.
17
<PAGE> 8
Barnes Group Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All dollar amounts included in the notes are stated in
thousands except per share data and the tables in Note 13.)
- -------------------------------------------------------------------------------
1. SUMMARY OF GENERAL: The preparation of financial statements requires
SIGNIFICANT management to make estimates and assumptions that affect the
ACCOUNTING reported amounts of assets and liabilities at the date of the
POLICIES financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could
differ from those estimates.
CONSOLIDATION: The accompanying consolidated financial
statements include the accounts of the company and all of its
subsidiaries. Intercompany transactions and account balances
have been eliminated. The company accounts for its 45%
investment in the common stock of NASCO, an automotive
suspension spring company jointly owned with NHK Spring Co.,
Ltd. of Japan, under the equity method. Other income in the
accompanying income statements includes $1,897, $2,314 and
$1,734 for the years 1995, 1994 and 1993, respectively, of
income from the company's investment in NASCO.
REVENUE RECOGNITION: Sales and related cost of sales are
recognized when products are shipped to customers.
CASH AND CASH EQUIVALENTS: All highly liquid investments
purchased with a maturity of three months or less are cash
equivalents and are carried at fair market value.
INVENTORIES: Inventories are valued at the lower of cost or
market. The last-in, first-out (LIFO) method was used to
accumulate the cost of all U.S. inventories which represent
69% of total inventories. The cost of foreign subsidiary
inventories was determined using the first-in, first-out
(FIFO) method.
PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment
is stated at cost. Depreciation is provided using accelerated
methods over estimated useful lives ranging generally from 20
to 50 years for buildings and 3 to 17 years for machinery and
equipment. Maintenance and repairs charged to expense were
$15,396, $16,341 and $12,966 in 1995, 1994 and 1993,
respectively.
GOODWILL: Goodwill represents the excess purchase price over
the net assets of companies acquired in business combinations.
Goodwill acquired since 1970 is being amortized on a
straight-line basis over 40 years; similar investments for
businesses acquired prior to 1970 (approximately $5,200) are
not being amortized. The company has determined that there is
no indication of any impairment in the value of goodwill.
Accumulated amortization was $7,588 and $7,002 at December 31,
1995 and 1994, respectively.
FOREIGN CURRENCY TRANSLATION: Assets and liabilities of
foreign operations, except those in countries with high rates
of inflation, are translated at year-end rates of exchange;
revenue and expenses are translated at average annual rates of
exchange. The resulting translation gains and losses are
reflected in foreign currency translation adjustments within
stockholders' equity.
For operations in countries that have high rates of inflation,
translation gains and losses are included in net income.
These losses, along with those generated from foreign
currency transactions, were $1,078, $550 and $1,661 in
1995, 1994 and 1993, respectively.
INCOME PER COMMON SHARE: Income per common share is based on
the weighted average number of common shares outstanding
during the year. The effect of common stock equivalents
(stock options) is not material. For purposes of calculating
income per share, Employee Stock Ownership Plan (ESOP) shares
are considered outstanding.
18
<PAGE> 9
Barnes Group Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
2. INVENTORIES Inventories at December 31, consisted of:
<TABLE>
<CAPTION>
1995 1994
---------------------------------------------------------------
<S> <C> <C>
Finished goods $28,541 $28,769
Work-in-process 16,222 13,697
Raw materials and supplies 11,986 8,379
---------------------------------------------------------------
$56,749 $50,845
===============================================================
</TABLE>
Inventories valued by the LIFO method aggregated $39,219 and
$37,781 at December 31, 1995 and 1994, respectively. If LIFO
inventories had been valued using the FIFO method, they would
have been $12,632 and $12,639 higher at those dates.
- --------------------------------------------------------------------------------
3. PROPERTY, Property, plant and equipment at December 31, consisted of:
PLANT AND
EQUIPMENT
<TABLE>
<CAPTION>
1995 1994
---------------------------------------------------------------
<S> <C> <C>
Land $ 5,412 $ 5,651
Buildings 60,064 59,727
Machinery and equipment 232,356 210,807
---------------------------------------------------------------
297,832 276,185
Less accumulated depreciation 174,962 163,616
---------------------------------------------------------------
$122,870 $112,569
===============================================================
</TABLE>
- --------------------------------------------------------------------------------
4. ACCRUED Accrued liabilities at December 31, consisted of:
LIABILITIES
<TABLE>
<CAPTION>
1995 1994
---------------------------------------------------------------
<S> <C> <C>
Payroll and other compensation $ 12,699 $ 15,033
Postretirement/postemployment benefits 6,541 7,631
Vacation pay 4,460 4,500
Accrued income taxes 5,006 3,927
Pension and profit sharing 2,017 1,707
Other 12,117 12,915
---------------------------------------------------------------
$ 42,840 $ 45,713
===============================================================
</TABLE>
- --------------------------------------------------------------------------------
5. DEBT AND Long-term debt at December 31, consisted of:
COMMITMENTS
<TABLE>
<CAPTION>
1995 1994
---------------------------------------------------------------
Carrying Fair Carrying
Amount Value Amount
---------------------------------------------------------------
<S> <C> <C> <C>
9.47% Notes $36,923 $40,228 $40,000
7.13% Notes 25,000 25,302 -
Borrowings under lines of credit 1,077 1,077 23,000
Other 7,000 7,000 7,000
---------------------------------------------------------------
$70,000 $73,607 $70,000
===============================================================
</TABLE>
The 9.47% Notes are payable in thirteen semi-annual payments
of $3,077 beginning on September 16, 1995, while the 7.13%
Notes are payable in four equal installments of $6,250
beginning on December 5, 2002. The fair values of these notes
are determined using discounted cash flows based upon the
company's estimated current interest rate for similar types of
borrowings. The carrying values of other long-term debt,
notes payable and guaranteed ESOP obligation approximate their
fair value.
19
<PAGE> 10
Barnes Group Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The company has a revolving credit agreement with five banks
that allows borrowings up to $100,000 under notes due December
6, 2000. A commitment fee of .17% per annum is paid on the
unused portion of the commitments. The company had no
borrowings under this agreement at December 31, 1995 and 1994.
The company has available $135,000 in uncommitted, short-term
bank credit lines, of which $1,500 and $30,000 were in use at
December 31, 1995 and 1994, respectively. The interest rate
on these borrowings was 6.1% and 6.2% at December 31, 1995 and
1994, respectively.
At December 31, 1995, the company classified $1,077 of
borrowings under its lines of credit and $6,154 of its 9.47%
Notes due within one year as long-term debt. The company has
both the intent and the ability, through its revolving credit
agreement, to refinance these amounts on a long-term basis.
During 1995, the company had outstanding an interest rate
swap, a form of derivative, which effectively converted
$18,462 of its fixed rate 9.47% Notes to floating rate debt
with interest equal to LIBOR plus 83 basis points. The
effective interest rate on this floating rate portion was 6.7%
and 7.3% at December 31, 1995 and 1994, respectively. This
swap decreases as the Notes are repaid. The fair value of the
swap is determined based upon current market prices and was
$1,914 at December 31, 1995. The company does not use
derivatives for trading purposes.
The company guaranteed $9,953 of letters of credit, bank
borrowings and capital lease obligations related to its 45%
investment in NASCO. In addition, the company has other
outstanding letters of credit totaling $7,004 at December 31,
1995.
The required principal payments on the Notes are $6,154 in
each of the next five years. As noted above, the 1996
maturity has been classified as long-term.
Certain of the company's debt arrangements contain
requirements to maintain minimum levels of working capital and
net worth, which as a result, place limitations on dividend
payments and acquisitions of the company's common stock.
Under the most restrictive covenant in any agreement, $43,118
was available for dividends or acquisitions of common stock at
December 31, 1995.
Interest paid was $5,661, $5,626 and $5,496 in 1995, 1994 and
1993, respectively.
- --------------------------------------------------------------------------------
6. INCOME The components of income before income taxes and the provision
TAXES for income taxes follow:
<TABLE>
<CAPTION>
1995 1994 1993
---------------------------------------------------------------
<S> <C> <C> <C>
Income before income taxes:
U.S. $31,722 $23,639 $6,212
International 13,728 10,283 2,179
---------------------------------------------------------------
$45,450 $33,922 $8,391
===============================================================
Income tax provision:
Current:
U.S. - federal $ 7,668 $ 7,975 $ (743)
U.S. - state 1,363 1,639 (172)
International 5,456 4,477 2,931
---------------------------------------------------------------
14,487 14,091 2,016
---------------------------------------------------------------
Deferred:
U.S. - federal 2,479 (403) 1,383
U.S. - state 1,056 355 626
International (56) (437) (17)
---------------------------------------------------------------
3,479 (485) 1,992
---------------------------------------------------------------
$17,966 $13,606 $4,008
===============================================================
</TABLE>
20
<PAGE> 11
Barnes Group Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Deferred income tax assets and liabilities at December 31,
consist of the tax effects of temporary differences related to
the following:
<TABLE>
<CAPTION>
Assets Liabilities
----------------------------------------------------------------------------
1995 1994 1995 1994
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Allowance for doubtful accounts $ 1,296 $ 1,197 $ (10) $ (7)
Depreciation and amortization (6,460) (7,155) 1,980 1,826
Inventory valuation 3,127 6,295 775 594
Postretirement/
postemployment costs 28,921 29,234 (435) -
Tax loss carryforwards 7,665 6,672 - -
Other 4,742 5,744 1,163 1,050
----------------------------------------------------------------------------
39,291 41,987 3,473 3,463
Valuation allowance (6,639) (5,986) - -
----------------------------------------------------------------------------
$32,652 $36,001 $ 3,473 $ 3,463
============================================================================
Current deferred income taxes $ 8,344 $12,147 $ 765 $ 587
Noncurrent deferred
income taxes 24,308 23,854 2,708 2,876
----------------------------------------------------------------------------
$32,652 $36,001 $ 3,473 $ 3,463
============================================================================
</TABLE>
The components of the net deferred income tax balances
recognized in the accompanying balance sheets at December 31,
follow:
<TABLE>
<CAPTION>
1995 1994
----------------------------------------------------------------------------
<S> <C> <C>
Total deferred income tax assets $53,307 $56,892
Total deferred income tax asset valuation allowance (6,639) (5,986)
Total deferred income tax liabilities (17,489) (18,368)
----------------------------------------------------------------------------
$29,179 $32,538
============================================================================
</TABLE>
A portion of the deferred income tax assets can be realized
through carrybacks and reversals of existing taxable temporary
differences with the remainder, net of the valuation
allowance, dependent on future income. Management believes
that sufficient income will be earned in the future to realize
the remaining net deferred income tax assets.
The company has not recognized deferred income taxes on
$69,092 of undistributed earnings of its international
subsidiaries since such earnings are considered to be
reinvested indefinitely. If the earnings were distributed in
the form of dividends, the company would be subject to both
U.S. income taxes and foreign withholding taxes. Determination
of the amount of this unrecognized deferred income tax
liability is not practicable.
21
<PAGE> 12
Barnes Group Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A reconciliation of the U.S. federal statutory income tax
rate to the consolidated effective income tax rate follows:
<TABLE>
<CAPTION>
1995 1994 1993
------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. federal statutory income tax rate 35.0% 35.0% 35.0%
Effect of graduated rates - - (1.0)
State taxes (net of federal benefit) 3.5 3.8 3.6
Foreign losses without tax benefit 2.7 4.0 25.2
Translation losses 0.2 0.4 5.9
Research and development tax credits - (0.3) (1.8)
Foreign tax rates (1.6) (3.1) (5.2)
NASCO income (1.0) (2.0) (5.9)
Goodwill amortization 0.5 0.7 2.7
Income tax benefit of allocated ESOP dividends (0.8) (0.9) (3.2)
Enacted rate change - - (9.5)
Other 1.0 2.5 2.0
------------------------------------------------------------------------
Consolidated effective income tax rate 39.5% 40.1% 47.8%
========================================================================
</TABLE>
Income taxes paid, net of refunds, were $13,269, $8,848 and
$4,255 in 1995, 1994 and 1993, respectively.
- -------------------------------------------------------------------------------
7. COMMON STOCK In 1995, 1994 and 1993, 167,779, 135,692 and 70,504 shares of
common stock were issued from treasury for the exercise of
stock options, purchases by the Employee Stock Purchase Plan
and various other incentive awards. Also in 1995, the company
acquired 42,236 shares of the company's common stock from its
Guaranteed Stock Plan at a cost of $1,746. These acquired
shares were placed in treasury.
Each share of outstanding common stock contains a dividend
distribution right (Right) which entitles the holder to
purchase 1/100 of a share of Series A Junior Participating
Preferred Stock for one hundred dollars.
Separate rights certificates will be mailed to stockholders if
a person or group acquires or commences a tender or exchange
offer for 50% or more of the outstanding shares of the
company's common stock. The Rights, which have no voting or
dividend rights, expire July 29, 1996 and may be redeemed by
the company at a price of five cents per Right at any time
until the tenth day following public announcement that a
person or group has acquired or intends to acquire 50% or more
of the outstanding common stock.
If, following the acquisition by a person or group of 50% or
more of the outstanding shares of the company's common stock,
the company is acquired in a merger or other business
combination or 50% or more of the company's assets or earning
power is sold or transferred, each outstanding Right becomes
exercisable for common stock or other securities of the
acquiring entity having a value of twice the exercise price of
the Right.
- -------------------------------------------------------------------------------
8. PREFERRED At December 31, 1995 and 1994, the company had 3,000,000
STOCK shares of $1 par value preferred stock authorized, none of
which were outstanding.
- -------------------------------------------------------------------------------
9. STOCK PLANS All U.S. salaried and non-union hourly employees are eligible
to participate in the company's Guaranteed Stock Plan (GSP).
The GSP provides for the investment of employer and employee
contributions in the company's common stock. The company
guarantees a minimum rate of return on certain GSP assets.
22
<PAGE> 13
Barnes Group Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The GSP is a leveraged Employee Stock Ownership Plan (ESOP).
In 1989, the GSP purchased 579,310 shares of the company's
common stock at a cost of $21,000 using the proceeds of a loan
guaranteed by the company. These shares are held in trust and
are issued to employees' accounts in the GSP as the loan is
repaid. Principal and interest on the GSP loan are being paid
in quarterly installments through 1999. The loan bears
interest based on LIBOR. At December 31, 1995 the interest
rate was 6.7%. Interest of $747, $653 and $592 was incurred
in 1995, 1994 and 1993, respectively.
Contributions and certain dividends received are used in part
by the GSP to service its debt. Contributions include both
employee contributions up to a maximum of 10% of eligible pay
and company contributions.
The company contributions are equal to the amount required by
the Plan to pay the principal and interest due under the Plan
loan plus that required to purchase any additional shares
required to be allocated to participant accounts, less the sum
of participant contributions and dividends received by the
GSP. The GSP used $1,459, $1,323 and $1,277 of company
dividends for debt service in 1995, 1994 and 1993,
respectively. The company expenses all cash contributions
made to the GSP. Compensation expense was $2,245, $2,268 and
$2,452 in 1995, 1994 and 1993, respectively. In addition to
the company shares held in trust, the GSP also purchases the
company's common stock on the open market to meet its
requirements. As of December 31, 1995, the GSP held 1,158,819
shares of the company's common stock, of which 224,968 shares
were unallocated.
For financial statement purposes, the company reflects its
guarantee of the GSP's debt as a liability with a like amount
reflected as a reduction of stockholders' equity.
The company also has an Employee Stock Purchase Plan under
which eligible employees may elect to have up to 10% of base
compensation deducted from payroll for the purchase of the
company's common stock at 85% of market value on the date of
purchase. The maximum number of shares which may be purchased
under the Plan is 675,000. During 1995, 21,012 shares (22,367
and 23,737 shares in 1994 and 1993, respectively) were
purchased. As of December 31, 1995, 221,871 shares may be
issued in the future.
The 1991 Barnes Group Stock Incentive Plan authorizes the
granting of incentives to officers and other executives in the
form of stock options, stock appreciation rights, incentive
stock rights and performance unit awards. A predecessor plan
which provided for similar incentives expired in 1991.
Options granted under that plan continue to be exercisable and
any options which terminate without being exercised become
available for grant under the 1991 Plan. A maximum of 660,926
common shares are subject to issuance under this plan after
December 31, 1995. Data relating to grants under these plans
follow:
<TABLE>
<CAPTION>
Options 1995 1994
--------------------------------------------------------------
<S> <C> <C>
Outstanding, January 1 644,554 713,696
Granted 79,100 117,300
Exercised (at $17.96 to $38.38) 146,046 108,464
Cancelled 77,252 77,978
--------------------------------------------------------------
Outstanding, December 31 (at $20.83
to $42.13) 500,356 644,554
==============================================================
Exercisable, December 31 (at $20.83
to $38.38) 142,400 237,120
==============================================================
Available for future grants, December 31 160,570 162,418
==============================================================
</TABLE>
23
<PAGE> 14
Barnes Group Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Under the Non-employee Director Deferred Stock Plan each
non-employee director is awarded 2,000 shares of the company's
common stock upon retirement. In 1994, 4,000 shares were
issued under this plan. No shares were issued in 1995 or
1993. As of December 31, 1995, 20,000 shares were reserved
for issuance under this plan.
Total shares reserved for issuance under all stock plans
aggregated 902,797 at December 31, 1995.
- -------------------------------------------------------------------------------
10. PENSION The company has noncontributory defined benefit pension plans
PLANS covering a majority of its worldwide employees at Associated
Spring, Bowman Distribution and its Executive Office. Plan
benefits for salaried and non-union hourly employees are based
on years of service and average salary. Plans covering union
hourly employees provide benefits based on years of service.
The company funds U.S. pension costs in accordance with the
Employee Retirement Income Security Act of 1974 (ERISA).
Plan assets consist primarily of common stocks and fixed
income investments.
Pension expense consisted of the following:
<TABLE>
<CAPTION>
1995 1994 1993
--------------------------------------------------------------
<S> <C> <C> <C>
Service cost $ 4,836 $ 5,282 $ 4,467
Interest cost 15,907 15,290 14,946
Actual (return) loss on
plan assets (43,256) 941 (25,875)
Net amortization and deferral 22,960 (20,295) 7,308
--------------------------------------------------------------
$ 447 $ 1,218 $ 846
==============================================================
</TABLE>
The funded status of the plans at December 31, is set forth
below:
<TABLE>
<CAPTION>
1995 1994
--------------------------------------------------------------
<S> <C> <C>
Plan assets at fair value $247,915 $216,767
Actuarial present value of
benefit obligations:
Vested benefits 201,231 176,219
Nonvested benefits 4,124 3,856
--------------------------------------------------------------
Accumulated benefit obligations 205,355 180,075
Additional benefits based on projected
future salary increases 23,026 20,324
--------------------------------------------------------------
Projected benefit obligations 228,381 200,399
--------------------------------------------------------------
Plan assets greater than projected
benefit obligations $ 19,534 $ 16,368
==============================================================
</TABLE>
Reconciliation to net pension asset recognized in the
accompanying balance sheets:
<TABLE>
<CAPTION>
1995 1994
--------------------------------------------------------------
<S> <C> <C>
Plan assets greater than projected
benefit obligations $ 19,534 $ 16,368
Adjustments for unrecognized:
Net gains (6,512) (2,901)
Prior service costs 4,591 4,859
Net asset at transition (9,043) (10,639)
--------------------------------------------------------------
(10,964) (8,681)
--------------------------------------------------------------
Net pension asset $ 8,570 $ 7,687
==============================================================
</TABLE>
24
<PAGE> 15
Barnes Group Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Significant assumptions used in determining pension expense
and the funded status of the plans were:
<TABLE>
<CAPTION>
1995 1994 1993
---------------------------------------------------------------
<S> <C> <C> <C>
Weighted average discount rate 7.25% 8.25% 7.50%
Increase in compensation 5.25% 5.25% 5.25%
Long-term rate of return on plan assets 9.00% 9.00% 9.00%
</TABLE>
The reduction in the weighted average discount rate, from
8.25% to 7.25%, increased the projected benefit obligations by
approximately $23,016 at December 31, 1995 and will increase
annual pension expense by $712.
The company has defined contribution plans covering employees
of Barnes Aerospace and field sales employees of Bowman
Distribution's U.S. operation. Company contributions under
these plans are based primarily on the performance of the
business unit and employee compensation. Total expense
amounted to $1,748, $1,431 and $1,566 in 1995, 1994 and 1993,
respectively.
The pension agreement between the company and the union
representing the three largest Associated Spring plants became
subject to renegotiation during the first quarter of 1995.
Pension negotiations have been delayed, in part, due to
negotiations for a new collective bargaining agreement
covering workers at Associated Spring's largest plant. The
pension negotiation could be further delayed by the fact that
the labor agreement covering workers at another large
Associated Spring plant is scheduled for renegotiation in
1996.
- --------------------------------------------------------------------------------
11. POSTRE- The company provides certain medical, dental and life
TIREMENT insurance benefits for a majority of its retired employees in
HEALTHCARE the U.S. and Canada. It is the company's practice to fund
AND LIFE these benefits as incurred.
INSURANCE
BENEFITS Postretirement benefit expense consisted of the following:
<TABLE>
<CAPTION>
1995 1994 1993
---------------------------------------------------------------
<S> <C> <C> <C>
Service cost $ 679 $ 874 $ 792
Interest cost 5,594 5,199 5,840
Net amortization (158) (158) -
---------------------------------------------------------------
$ 6,115 $ 5,915 $ 6,632
===============================================================
</TABLE>
The amounts included in the accompanying balance sheets at
December 31, were as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---------------------------------------------------------------
<S> <C> <C> <C>
Accumulated benefit obligations:
Retirees $57,160 $50,917 $48,199
Employees eligible to retire 6,904 6,209 8,334
Employees not eligible to retire 13,654 12,020 15,204
Unrecognized prior service cost 1,021 1,245 1,403
Unrecognized net loss (7,339) (986) (4,823)
---------------------------------------------------------------
$71,400 $69,405 $68,317
===============================================================
Postretirement benefit obligations included in:
Accrued liabilities $ 5,673 $ 5,300 $ 5,200
Accrued retirement benefits 65,727 64,105 63,117
---------------------------------------------------------------
$71,400 $69,405 $68,317
===============================================================
</TABLE>
A deferred tax asset is included in the accompanying balance
sheets recognizing the future tax benefit of the
postretirement benefit obligations (See Note 6).
25
<PAGE> 16
Barnes Group Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Cash payments made in 1995, 1994 and 1993 for postretirement
benefits were $5,210, $4,828 and $4,597, respectively.
The company's accumulated benefit obligations take into
account certain cost-sharing provisions. The annual assumed
rate of increase in the cost of covered benefits (i.e.,
healthcare cost trend rate) is assumed to be 10.0% for 1995,
gradually reducing to 5.0% by the year 2001. A one percentage
point increase in the assumed healthcare cost trend rate would
increase the accumulated benefit obligations by approximately
$6,664 at December 31, 1995, and would have increased 1995
expense by approximately $815.
Discount rates of 7.25%, 8.25% and 7.5% were used in
determining the accumulated benefit obligations at December
31, 1995, 1994 and 1993, respectively. While the reduction in
the weighted average discount rate from 8.25% to 7.25%
increased the accumulated benefit obligations by $7,213 at
December 31, 1995, it will have only a minor impact on the
1996 expense.
- -------------------------------------------------------------------------------
12. LEASES Rent expense was $5,866, $6,072 and $5,256 for 1995, 1994 and
1993, respectively. Minimum rental commitments under
noncancellable leases (principally for buildings and
equipment) in years 1996 through 2000 are $3,089, $2,198,
$1,601, $1,023, $837 and $4,895 thereafter.
- -------------------------------------------------------------------------------
13. INFORMATION The company operates three businesses:
ON BUSINESS
SEGMENTS Associated Spring: manufactures and distributes custom-made
springs and other close-tolerance engineered metal components
principally to the transportation, electronics and industrial
markets. Associated Spring's custom metal parts are sold in
the United States and through its foreign subsidiaries.
Foreign manufacturing operations are located in Brazil,
Canada, Mexico and Singapore. The automotive and automotive
parts industries constitute Associated Spring's largest
market.
Bowman Distribution: distributes fast-moving, consumable
repair and replacement products for industrial, heavy
equipment and transportation maintenance markets. Bowman
Distribution's operations and markets are located primarily in
the United States. Other important locations include Canada
and Europe.
Barnes Aerospace: manufactures precision machined parts and
fabricated assemblies, and refurbishes jet engine components
for the aircraft and aerospace industries. Barnes Aerospace's
operations and markets are located primarily in the United
States.
Sales between the business segments and between the geographic
areas are accounted for on the same basis as sales to
unaffiliated customers. Operating income includes net sales
less cost of sales, selling and administrative expenses and
the cost of plant closings and restructurings. In 1993, plant
closings and restructurings included $3,400 for combining
operations of the Aerospace machining units and $1,500 for the
consolidation of Associated Spring's operations in Mexico.
Other income and expenses are not included in operating
income. Corporate assets consist of cash and cash
equivalents, deferred income taxes, other assets,
transportation equipment and the Executive Office building.
Included in the 1995 identifiable international assets are the
assets of manufacturing facilities in Singapore ($19,200),
Brazil ($14,100), Canada ($18,000) and Mexico ($10,300) and
distribution facilities in Canada ($13,100), United Kingdom
($16,300) and France ($8,000). Associated Spring's operation
in Singapore was an important contributor to the company's
international operating income during each of the three years
presented.
26
<PAGE> 17
Barnes Group Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following tables set forth information about the company's operations by its
three business segments and by geographic area:
OPERATIONS BY BUSINESS SEGMENT
<TABLE>
<CAPTION>
Net Sales Operating Income
-----------------------------------------------------
(Dollars in millions) 1995 1994 1993 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Associated Spring $279.0 $272.4 $233.0 $ 42.6 $ 41.7 $ 28.6
Bowman Distribution 217.0 215.1 193.2 17.4 12.6 6.7
Barnes Aerospace 97.3 82.3 77.0 5.0 (1.8) (4.5)
Intersegment sales (0.8) (0.6) (0.9) - - -
-----------------------------------------------------
$592.5 $569.2 $502.3 65.0 52.5 30.8
========================
Plant closings and restructurings - - (4.9)
Corporate expenses (16.2) (15.9) (13.4)
- ----------------------------------------------------------------------------------------------------------
Operating Income $ 48.8 $ 36.6 $ 12.5
==========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Identifiable Assets Capital Expenditures Depreciation Expense
----------------------------------------------------------------------------------
(Dollars in millions) 1995 1994 1993 1995 1994 1993 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Associated Spring $160.3 $144.7 $124.3 $ 24.2 $ 23.7 $ 11.1 $ 11.6 $ 9.0 $ 7.7
Bowman Distribution 79.2 86.0 80.7 3.6 4.3 5.6 4.1 3.1 2.9
Barnes Aerospace 87.0 85.6 90.0 7.8 3.7 5.4 7.2 7.5 8.0
Corporate 35.0 35.7 38.3 0.2 0.1 0.1 0.3 0.2 0.3
- ----------------------------------------------------------------------------------------------------------
$361.5 $352.0 $333.3 $ 35.8 $ 31.8 $ 22.2 $ 23.2 $ 19.8 $ 18.9
==========================================================================================================
</TABLE>
OPERATIONS BY GEOGRAPHIC AREA
<TABLE>
<CAPTION>
Net Sales Operating Income
-----------------------------------------------------
(Dollars in millions) 1995 1994 1993 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Domestic $463.4 $454.8 $404.8 $ 51.3 $ 45.0 $ 28.4
International 137.9 121.9 103.1 13.7 7.5 2.4
Sales between geographic areas (8.8) (7.5) (5.6) - - -
- ----------------------------------------------------------------------------------------------------------
$592.5 $569.2 $502.3 $ 65.0 $ 52.5 $ 30.8
==========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Identifiable Assets
------------------------
(Dollars in millions) 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic $227.5 $226.6 $210.3
International 99.0 89.7 84.7
Corporate 35.0 35.7 38.3
- ----------------------------------------------------------------------------------------------------------
$361.5 $352.0 $333.3
==========================================================================================================
</TABLE>
27
<PAGE> 18
Barnes Group Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
14. CONTINGENCY In December, 1991, the company was notified by the McDonnell
Douglas Corporation that McDonnell Douglas was terminating for
default an $8,200 contract with the company's Advanced
Fabrication division. In 1992, the company wrote off $4,000
of net assets related to this contract previously included in
its financial statements. The company believed from the onset
that it had legitimate defenses to the default claim. In
June, 1995, this dispute was settled to the satisfaction of
both parties with no further financial impact on the results
of operations or on the financial position of the company.
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF BARNES GROUP INC.
In our opinion, the accompanying consolidated balance sheets
and the related consolidated statements of income, changes in
stockholders' equity and of cash flows present fairly, in all
material respects, the financial position of Barnes Group Inc.
and its subsidiaries at December 31, 1995 and 1994, and the
results of their operations and their cash flows for the years
then ended, in conformity with generally accepted accounting
principles. These financial statements are the responsibility
of the Company's management; our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used
and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion
expressed above. The financial statements of Barnes Group
Inc. for the year ended December 31, 1993 were audited by
other independent accountants whose report dated January 28,
1994 expressed an unqualified opinion on those statements.
/s/ PRICE WATERHOUSE LLP
Hartford, Connecticut
January 23, 1996
28
<PAGE> 19
Barnes Group Inc.
QUARTERLY DATA (UNAUDITED)
<TABLE>
<CAPTION>
First Second Third Fourth Full
(Dollars in millions except per share data) Quarter Quarter Quarter Quarter Year
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1995
Net sales $158.6 $151.0 $141.7 $141.2 $592.5
Gross profit* 57.7 54.8 49.8 48.1 210.4
Operating income 14.5 13.4 11.1 9.8 48.8
Net income 8.3 7.3 6.3 5.6 27.5
Per Common Share:
Net income 1.29 1.12 .95 .84 4.20
Dividends .40 .40 .40 .40 1.60
Market prices (high-low) $44 3/8-36 1/4 $45 3/4-40 1/4 $43-40 $40 7/8-35 7/8 $45 3/4-35 7/8
1994
Net sales $142.1 $143.2 $140.3 $143.6 $569.2
Gross profit* 51.4 51.4 50.6 49.3 202.7
Operating income 8.8 9.6 10.2 8.0 36.6
Net income 4.9 5.5 5.4 4.5 20.3
Per Common Share:
Net income .78 .87 .84 .71 3.20
Dividends .35 .35 .35 .40 1.45
Market prices (high-low) $31 1/2-29 1/2 $37 3/4-29 3/4 $38-33 5/8 $39 7/8-35 1/2 $39 7/8-29 1/2
</TABLE>
Note: The fourth quarter of 1994 includes a pretax charge of $1.1 or $.10 per
common share for severance costs at Barnes Aerospace.
*Sales minus cost of sales.
29
<PAGE> 20
Barnes Group Inc.
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
1995 1994 1993(2)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER COMMON SHARE (1)
Income (loss)
Continuing operations $ 4.20 $ 3.20 $ .70
Effect of accounting changes - - -
Discontinued operations - - -
Net income (loss) 4.20 3.20 .70
Dividends paid 1.60 1.45 1.40
Stockholders' equity before deduction of guaranteed
ESOP obligation (at year-end) 21.16 18.53 16.82
Stock price (at year-end) 36 38 31 1/4
- ---------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR (in thousands)
Net sales $592,509 $569,197 $502,292
Operating income 48,804 36,649 12,538
As a percent of sales 8.2% 6.4% 2.5%
Income from continuing operations before income taxes
and effect of accounting changes $ 45,450 $ 33,922 $ 8,391
Income taxes 17,966 13,606 4,008
Income from continuing operations before
effect of accounting changes (8) 27,484 20,316 4,383
As a percent of average stockholders' equity
before deduction of guaranteed ESOP obligation 20.8% 18.0% 4.1%
Effect of accounting changes $ - $ - $ -
Net income (loss) 27,484 20,316 4,383
Net income (loss) applicable to common stock 27,484 20,316 4,383
Depreciation and amortization 26,750 23,733 23,094
Capital expenditures 35,820 31,848 22,216
Average common shares outstanding 6,547 6,354 6,250
- ---------------------------------------------------------------------------------------------------------------------------------
YEAR-END FINANCIAL POSITION (in thousands)
Working capital $ 95,280 $ 88,325 $ 87,011
Current ratio 2.2 to 1 2.0 to 1 2.1 to 1
Property, plant and equipment $122,870 $112,569 $103,043
Total assets 361,549 351,956 333,296
Long-term debt 70,000 70,000 70,000
Stockholders' equity before deduction of
guaranteed ESOP obligation 138,680 119,150 105,868
Guaranteed ESOP obligation 9,839 12,011 14,019
Stockholders' equity 128,841 107,139 91,849
Debt as a percent of total capitalization (9) 24.6% 28.3% 30.5%
- ---------------------------------------------------------------------------------------------------------------------------------
YEAR-END STATISTICS
Employees 3,880 4,181 4,357
<FN>
(1) All per-share data, other than earnings per common share, are based on
common shares outstanding at the end of each year. Earnings per common share
are based on weighted average common shares outstanding during each year.
(2) Includes a $3.4 million pretax, $2.0 million after-tax charge ($.33 per
share) against income related to the plant consolidation and work force
reduction at Barnes Aerospace and a $1.5 million charge without tax
benefit ($.24 per share) for a plant consolidation at Associated Spring's
Mexican operations.
(3) Includes a $17.8 million pretax, $10.7 million after-tax charge ($1.73
per share) against income related to the costs of plant closings at
Associated Spring, Barnes Aerospace charges on a terminated contract and
restructuring of Bowman U.S. sales organization. These charges were
partially offset by a $5.0 million pretax gain, $3.7 million after-tax
($.60 per share) from the sale of Bowman's Pioneer division.
(4) Barnes Group adopted three new accounting standards in 1992 retroactive to
the beginning of the year. Included is a one-time $39.7 million after-tax
charge ($6.41 per share) to comply with FAS 106 and 112 which changes the
accounting for certain postretirement and postemployment benefits to the
accrual method and an additional $1.0 million income tax charge ($.15 per
share) for FAS 109, which changed income tax accounting.
</TABLE>
30
<PAGE> 21
<TABLE>
<CAPTION>
1992(3)(4) 1991 1990 1989(5) 1988 1987(6) 1986(7) 1985
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ .94 $ 2.60 $ 2.76 $ 1.94 $ 3.06 $ 2.80 $ 2.57 $ 2.27
(6.56) - - - - - - -
- - - - - - - (.60)
(5.62) 2.60 2.76 1.94 3.06 2.80 2.57 1.67
1.40 1.40 1.40 1.40 1.20 1.15 1.00 .85
17.59 25.31 23.88 21.96 20.35 17.91 19.27 17.68
30 1/2 35 3/8 25 7/8 29 35 5/8 32 30 1/2 27 1/2
- -----------------------------------------------------------------------------------------------------------
$529,073 $535,660 $545,857 $511,221 $496,060 $458,016 $439,727 $431,762
7,259 37,982 41,198 33,990 43,702 42,265 43,056 40,767
1.4% 7.1% 7.5% 6.6% 8.8% 9.2% 9.8% 9.4%
$ 7,671 $ 28,849 $ 29,952 $ 23,118 $ 33,175 $ 34,576 $ 35,336 $ 33,574
1,838 12,926 13,163 10,745 14,327 16,736 18,733 17,157
5,833 15,923 16,789 11,114 16,711 17,700 16,603 16,417
5.1% 10.5% 12.0% 9.0% 15.9% 14.0% 14.0% 13.4%
$(40,695) $ - $ - $ - $ - $ - $ - $ (4,324)
(34,862) 15,923 16,789 12,373 18,848 17,840 16,603 12,093
(34,862) 15,923 16,789 11,114 16,711 17,700 16,603 12,093
23,741 23,159 22,044 18,167 16,626 15,470 14,511 13,486
16,238 19,099 21,615 18,218 21,821 22,457 18,803 16,232
6,202 6,127 6,078 5,733 5,465 6,321 6,461 7,223
- -----------------------------------------------------------------------------------------------------------
$ 93,500 $102,995 $ 94,087 $ 89,194 $102,126 $ 85,991 $ 54,659 $ 54,077
2.0 to 1 2.2 to 1 1.9 to 1 1.9 to 1 2.3 to 1 2.0 to 1 1.5 to 1 1.6 to 1
$104,437 $114,299 $114,717 $107,491 $100,403 $ 96,066 $ 87,613 $ 87,662
348,346 341,857 342,383 328,116 311,876 297,946 277,828 253,586
70,000 78,428 78,714 79,088 79,287 73,853 32,285 29,837
109,451 156,407 145,614 133,218 112,810 97,103 123,025 113,978
15,876 17,594 19,182 20,650 - - - -
93,575 138,813 126,432 112,568 112,810 97,103 123,025 113,978
31.2% 36.5% 39.8% 41.1% 37.7% 39.7% 28.5% 22.9%
- -----------------------------------------------------------------------------------------------------------
4,051 4,478 4,744 4,799 4,770 4,712 4,697 4,845
<FN>
(5) Includes a $6.5 million pretax, $3.9 million after-tax charge ($.68 per share) against income related
to restructuring costs at Associated Spring.
(6) Includes a $2.9 million pretax, $1.6 million after-tax charge ($.26 per share) against income related
to the transition costs involved in modernizing Associated Spring's valve spring production
facilities in North America.
(7) Barnes Group changed its U.S. pension cost accounting to comply with FAS 87. The effect was to
increase net income by $2.2 million ($.33 per share).
(8) Adjusted for preferred dividends in 1989, 1988 and 1987.
(9) Debt includes all interest-bearing debt and total capitalization includes interest-bearing debt,
accrued long-term retirement benefits, other long-term liabilities, preferred stock and stockholders'
equity, excluding the guaranteed ESOP obligation.
</TABLE>
31
<PAGE> 22
Barnes Group Inc.
DIRECTORS AND OFFICERS
DIRECTORS THOMAS O. BARNES
Chairman of the Board
* WALLACE BARNES
Retired Chairman of the Board
+ ++ GARY G. BENANAV
Executive Vice President
Aetna Life and Casualty Company
Hartford, Connecticut
* WILLIAM S. BRISTOW, JR.
President
W. S. Bristow & Associates, Inc.
Rollinsford, New Hampshire
* ++ ROBERT J. CALLANDER
Executive in Residence
Columbia University
School of Business
Retired Vice Chairman
Chemical Banking Corporation
New York, New York
* GEORGE T. CARPENTER
President
The S. Carpenter
Construction Company
Bristol, Connecticut
+ ++ DONNA R. ECTON
Chairman, President and
Chief Executive Officer
Business Mail Express, Inc.
Reston, Virginia
+ ++ MARCEL P. JOSEPH
Chairman of the Board
Augat Inc.
Mansfield, Massachusetts
* THEODORE E. MARTIN
President and
Chief Executive Officer
+ ++ JUAN M. STETA
Counsel to the law firm of
Santamarina y Steta
Mexico, D.F., Mexico
+ K. GRAHAME WALKER
Chairman and
Chief Executive Officer
The Dexter Corporation
Windsor Locks, Connecticut
* A. STANTON WELLS
Retired President and
Chief Executive Officer
OFFICERS EXECUTIVE OFFICE
THEODORE E. MARTIN
President and
Chief Executive Officer
THOMAS O. BARNES
Senior Vice President -
Administration
JOHN E. BESSER
Senior Vice President -
Finance and Law
JOSEPH R. KOWALCHIK
Senior Vice President -
Human Resources
+ JOHN J. LOCHER
Vice President, Treasurer
MARY LOUISE BEARDSLEY
Associate General Counsel
and Secretary
FRANCIS C. BOYLE, JR.
Assistant Controller
OPERATIONS
ALI A. FADEL
Vice President, Barnes Group Inc.,
and President, Associated Spring
LEONARD M. CARLUCCI
Vice President, Barnes Group Inc.,
and President, Bowman Distribution
THEODORE E. MARTIN
(Acting) President, Barnes Aerospace
* MEMBER OF EXECUTIVE COMMITTEE
+ MEMBER OF AUDIT COMMITTEE
++ MEMBER OF COMPENSATION COMMITTEE
32
<PAGE> 23
Barnes Group Inc.
CORPORATE INFORMATION
DIRECTORY OF BARNES GROUP INC.
OPERATIONS Executive Office
Bristol, Connecticut
ASSOCIATED SPRING
Headquarters
Bristol, Connecticut
Manufacturing Plants
North America:
Bristol, Connecticut
Saline, Michigan
Syracuse, New York
Arden, North Carolina
Corry, Pennsylvania
Dallas, Texas
Milwaukee, Wisconsin
Burlington, Ontario, Canada
Mexico City, Mexico
South America:
Campinas, Brazil
Asia:
Republic of Singapore
Distribution Operations
United States:
Maumee, Ohio
Cerritos, California
Ypsilanti, Michigan
Arlington, Texas
New Berlin, Wisconsin
United Kingdom:
Evesham
France:
Montigny
BOWMAN DISTRIBUTION
Headquarters
Cleveland, Ohio
Distribution Centers
United States:
Bakersfield, California
Norcross, Georgia
Rockford, Illinois
Elizabethtown, Kentucky
Edison, New Jersey
Arlington, Texas
Auburn, Washington
Canada:
Concord, Ontario
Edmonton, Alberta
Moncton, New Brunswick
St. Laurent, Quebec
Distribution Operations
United Kingdom:
Corsham
France:
Voisins Le Bretonneux
BARNES AEROSPACE
Headquarters
Windsor, Connecticut
Manufacturing Plants
United States:
East Granby, Connecticut
Windsor, Connecticut
Lansing, Michigan
Ogden, Utah
Asia:
Republic of Singapore
STOCKHOLDERS' TRANSFER AGENT AND REGISTRAR
INFORMATION Shareholder Inquiries/
Address Changes/Consolidations
Chemical Mellon Shareholder
Services, L.L.C.
P.O. Box 590
Ridgefield Park, NJ 07660
1-800-288-9541
(Continental U.S. only)
or 1-412-236-8000
For Hearing Impaired
1-800-231-5469
Lost Certificates/Replacements
Chemical Mellon Shareholder
Services, L.L.C.
Estoppel Department
P.O. Box 467
Washington Bridge Station
New York, NY 10033
Certificate Transfers
Chemical Mellon Shareholder
Services, L.L.C.
P.O. Box 469
Washington Bridge Station
New York, NY 10033
All certificates should be sent
registered mail.
Dividend Investment/
Shareholder Investment Plans
Dividends on Barnes Group common
stock may be automatically invested
in additional shares.
Further information can be
obtained from:
Mellon Securities Trust Company
c/o Chemical Mellon
Shareholder Services, L.L.C.
P. O. Box 750
Pittsburgh, PA 15230
1-800-288-9541
(Continental U.S. only)
or 1-412-236-8000
For Hearing Impaired
1-800-231-5469
Hand Deliveries
Chemical Mellon Shareholder
Services, L.L.C.
120 Broadway, 13th Floor
New York, NY 10271
STOCK EXCHANGE
New York Stock Exchange
Stock Trading Symbol: B
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
One Financial Plaza
Hartford, CT 06103
ANNUAL MEETING
Barnes Group Inc. annual
meeting of stockholders will be held
at 10:30 a.m., Wednesday, April 3, 1996,
at The Travelers Education Center, Hartford, CT.
INVESTOR INFORMATION
Barnes Group welcomes inquiries from stockholders,
analysts and prospective investors. 10-K Reports
are available on request. Contact:
John F. Sand
Barnes Group Inc.
123 Main St., P.O. Box 489
Bristol, CT 06011-0489
1-860-583-7070
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet of Barnes Group Inc. as of December 31, 1995, the
related consolidated statement of income, Note 3 to the consolidated financial
statements and Schedule VIII of Form 10-K and is qualified in its entirety by
reference to such financial statements, note and schedule.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 17,868
<SECURITIES> 0
<RECEIVABLES> 89,721
<ALLOWANCES> 3,635
<INVENTORY> 56,749
<CURRENT-ASSETS> 172,816
<PP&E> 297,832
<DEPRECIATION> 174,962
<TOTAL-ASSETS> 361,549
<CURRENT-LIABILITIES> 77,536
<BONDS> 77,491
<COMMON> 15,737
0
0
<OTHER-SE> 113,104
<TOTAL-LIABILITY-AND-EQUITY> 361,549
<SALES> 592,509
<TOTAL-REVENUES> 592,509
<CGS> 382,150
<TOTAL-COSTS> 382,150
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,577
<INTEREST-EXPENSE> 5,274
<INCOME-PRETAX> 45,450
<INCOME-TAX> 17,966
<INCOME-CONTINUING> 27,484
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,484
<EPS-PRIMARY> 4.20
<EPS-DILUTED> 4.20
</TABLE>
