BARNES GROUP INC, DEF 14A, 1996-03-01

BARNES GROUP INC
DEF 14A, 1996-03-01
MISCELLANEOUS FABRICATED METAL PRODUCTS

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<PAGE> 1

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:

<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
BARNES GROUP INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
BARNES GROUP INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.

/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:

------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

------------------------------------------------------------------------
<PAGE> 2

Barnes Group Inc.
Executive Office
123 Main Street
Post Office Box 489
Bristol, CT 06011-0489 U.S.A.
Tel. (860) 583-7070

[LOGO]

March 1, 1996

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 3, 1996
AND PROXY STATEMENT

The Annual Meeting of Stockholders of Barnes Group Inc. will be held at The
Travelers Education Center, 200 Constitution Plaza, Hartford, Connecticut 06103,
at 10:30 a.m., Wednesday, April 3, 1996, for the following purposes:

1. to elect three directors;

2. to approve the selection of independent accountants for 1996;

3. to act on a proposed amendment to the 1991 Barnes Group Stock Incentive Plan;
and

4. to transact any other business that lawfully may come before the meeting or
at any adjournment thereof.

Stockholders of record at the close of business on February 6, 1996, will be
entitled to vote at the meeting.

Stockholders who do not expect to attend the meeting and wish their stock voted
pursuant to the accompanying proxy are requested to date and sign the proxy and
return it as soon as possible in the enclosed reply envelope addressed to Barnes
Group Inc., Midtown Station, P. O. Box 946, New York, NY 10138-0746.

/s/ Mary Louise Beardsley
- --------------------------
Mary Louise Beardsley
Secretary
<PAGE> 3

PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS APRIL 3, 1996

This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Barnes Group Inc. of proxies to be voted at the Annual
Meeting of Stockholders to be held on April 3, 1996, and at any adjournment
thereof. A stockholder who signs and returns a proxy in the accompanying form
may revoke it by notifying the Secretary of the meeting in person or in writing
(including the delivery of a later dated proxy) at any time before it is voted.

ELECTION OF DIRECTORS

Three directors are to be elected at the meeting for the terms set forth below
or otherwise as provided in the By-Laws. William S. Bristow, Jr., Robert J.
Callander, and Theodore E. Martin are nominated for re-election for terms
expiring at the 1999 Annual Meeting. Wallace Barnes and A. Stanton Wells are
retiring at the 1996 Annual Meeting pursuant to the Board of Directors'
retirement policy.

Pertinent information concerning the nominees for directors and the seven
directors whose terms continue after the meeting is set forth below. Each
director has been associated with his/her present organization for at least the
past five years unless otherwise noted. None of the organizations listed as
business affiliates of the directors is a subsidiary or other affiliate of the
Company.

<TABLE>
<S> <C>
THOMAS O. BARNES
- ------------------- Director since 1978
PHOTO Current term expires 1997
Mr. Barnes, 47, joined the Company in 1993. He is Chairman of the Board of
- ------------------- Directors and Senior Vice President-Administration of the Company. Prior
to joining the Company, he was President of The Olson Brothers Company,
Plainville, CT, a manufacturer of machined metal parts. He is also
Chairman of the Benefits Committee of the Board. Mr. Barnes is an
Associate Director of the Bank of Boston Connecticut. He is the son of Mr.
Wallace Barnes.

GARY G. BENANAV
- ------------------- Director since 1994
PHOTO Current term expires 1997
Mr. Benanav, 50, is Executive Vice President of Aetna Life & Casualty
- ------------------- Company. He is a member of the Audit Committee, the Compensation
Committee, and the Management Development Committee of the Board. He is a
director of Executive Risk Inc.

WILLIAM S. BRISTOW, JR.
- ------------------- Director since 1978
PHOTO Current term expires 1996
Mr. Bristow, 42, is President of W. S. Bristow & Associates, Inc. which
- ------------------- owns a Parcel Plus franchise in North Hampton, NH. From 1992 to 1995, Mr.
Bristow was New England Region Manager of Roberts Express, Inc. From 1989
to 1992 he was a regional manager for Parcel Plus, Inc., a franchiser of
mail and business services. He is Chairman of the Executive Committee and
a member of the Committee on Directors and the Management Development
Committee of the Board.
</TABLE>

1
<PAGE> 4

<TABLE>
<S> <C>
ROBERT J. CALLANDER
- ------------------- Director since 1991
PHOTO Current term expires 1996
Mr. Callander, 65, retired as Vice Chairman of Chemical Banking
- ------------------- Corporation in 1992. He is currently Executive in Residence at the
Columbia University School of Business. He is Chairman of the Compensation
Committee and a member of the Executive Committee, the Committee on
Directors, and the Management Development Committee of the Board. He is a
director of Aramark, Inc., Beneficial Corporation, Omnicom, Inc., The
Latin American Dollar Income Fund, Scudder New Asia Fund, and Scudder
World Income Opportunities Fund.

GEORGE T. CARPENTER
- ------------------- Director since 1985
PHOTO Current term expires 1998
Mr. Carpenter, 55, is President of The S. Carpenter Construction Company,
- ------------------- Bristol, CT, which is involved in real estate management and general
contracting. He is a member of the Executive Committee, the Committee on
Directors, and the Management Development Committee of the Board. He is a
director of Eagle Financial Corp. and the Eagle Federal Savings Bank.

DONNA R. ECTON
- ------------------- Director since 1987
PHOTO Current term expires 1998
Ms. Ecton, 48, is Chairman, President and Chief Executive Officer of
- ------------------- Business Mail Express, Inc., which is engaged in providing expedited mail
and print services to corporations. From 1991 to 1994, she was President
and Chief Executive Officer of Van Houten North America, Inc., and Andes
Candies Inc., manufacturers of confectionery products. From 1989 to 1991,
she was Senior Vice President of Nutri/System, Inc., Blue Bell, PA, a
weight loss business. She is a member of the Audit Committee, the
Compensation Committee, and the Management Development Committee of the
Board. She is a director of Tandy Corporation, Vencor, Inc., H & R Block,
Inc., and PETsMART, Inc.

MARCEL P. JOSEPH
- ------------------- Director since 1991
PHOTO Current term expires 1997
Mr. Joseph, 61, is Chairman of the Board and was formerly Chief Executive
- ------------------- Officer and President of Augat Inc., a multi-national manufacturer of
electromechanical connectors and other components. He is a member of the
Audit Committee, the Compensation Committee, and the Management
Development Committee of the Board.
</TABLE>

2
<PAGE> 5

<TABLE>
<S> <C>
THEODORE E. MARTIN
- ------------------- Director since 1993
PHOTO Current term expires 1996
Mr. Martin, 56, is President and Chief Executive Officer of the Company.
- ------------------- Prior to assuming that position in July 1995, Mr. Martin was Executive
Vice President-Operations of the Company and prior to that, President and
Chief Operating Officer of the Company's Associated Spring group. He is a
member of the Executive Committee of the Board. Mr. Martin is a director
of the Unisys Corporation.

JUAN M. STETA
- ------------------- Director since 1974
PHOTO Current term expires 1998
Mr. Steta, 69, is of counsel to the law firm of Santamarina Y Steta,
- ------------------- Mexico, D.F., Mexico, of which he was a partner prior to 1992. He is
Chairman of the Audit Committee and a member of the Compensation Committee
and the Management Development Committee of the Board. Mr. Steta is a
director of The Gillette Company. He is Chairman of the Board of T & N de
Mexico and serves as a director of numerous other companies in Mexico,
including General Motors de Mexico and SKF Industrias.

K. GRAHAME WALKER
- ------------------- Director since 1988
PHOTO Current term expires 1997
Mr. Walker, 58, is Chairman and Chief Executive Officer of The Dexter
- ------------------- Corporation, Windsor Locks, CT, a global manufacturer of specialty
materials. He is Chairman of the Committee on Directors and a member of
the Audit Committee and the Management Development Committee of the Board.
He is Chairman of Life Technologies Inc.
</TABLE>

THE BOARD AND ITS COMMITTEES

In 1995, the Board held seven meetings and the Executive Committee held two
meetings. The Audit Committee is responsible for matters relating to accounting
policies and practices, financial reporting, and the internal control structure.
Each year it recommends to the Board the appointment of a firm of independent
accountants to audit the financial statements of the Company. It reviews with
representatives of the independent accountants the scope of their audit of the
Company's financial statements, results of audits, audit fees, and any
recommendations with respect to the internal control structure. The Audit
Committee also reviews non-audit services rendered by the Company's independent
accountants and periodically meets with or receives reports from principal
corporate officers and the Director, Internal Audit. The Audit Committee held
three meetings in 1995. The Benefits Committee, which met three times last year,
administers the Company's pension, profit-sharing, and welfare benefits plans.
The Compensation Committee, which met six times last year, administers the
incentive and stock plans referred to below, sets the salary for the President
and Chief Executive Officer and the other senior officers of the Company, and
reviews and approves the compensation of the Company's other officers. The
Committee on Directors, which met two times last year, makes recommendations
concerning Board membership, functions, and compensation. The Management
Development Committee is responsible for planning management succession of the
Company's senior officers, reviewing the performance of the Chief Executive
Officer, and monitoring management resources and the performance of key
executives. The Management Development Committee met four times in 1995. All of
these committees are standing committees of the Board.

3
<PAGE> 6

COMPENSATION OF DIRECTORS

The annual retainer for directors is $17,000. The fee for attending a meeting is
$1,000 ($1,500 if held outside of Connecticut or New York City), except that the
committee chairman receives an additional $200 for each meeting at which he or
she presides. Messrs. T. O. Barnes and Martin receive no retainer or meeting
fees for service as directors. The grant of rights to receive stock and the
payment of dividend equivalents under the stock plan for non-employee directors
discussed below are additional forms of compensation.

TRANSACTIONS WITH DIRECTORS OR THEIR FIRMS

The Company has a two-year consulting contract with Mr. Wallace Barnes, a
director of the Company, who is retiring from the Board at this year's Annual
Meeting. The consulting contract commenced April 1, 1994 and terminates on March
31, 1996. During 1995, Mr. W. Barnes received $65,670 for consulting services
rendered pursuant to the contract. The Company and its Mexican subsidiaries have
retained Mr. Steta's law firm this year and during the past year. Companies in
which Mr. Carpenter is a major stockholder rented warehouse space to the Company
at a rate of approximately $59,000 per year and acted as general contractor for
construction work performed at the Company's Executive Office and Bristol, CT
spring plant. The price for the construction work was $97,634.

NEXT ANNUAL MEETING

The Board of Directors requests that any stockholder who wishes to recommend
nominees for directors submit names of such nominees in writing to the Secretary
of the Company at its address given above prior to December 1, 1996.
Stockholders wishing to submit proposals for inclusion in the Company's proxy
statement for the 1997 Annual Meeting of Stockholders must submit proposals to
the Company at such address by November 1, 1996. Stockholders wishing to present
proposals for a formal vote (other than proposals included in the Company's
proxy statement) or to nominate candidates for election as directors at a
meeting of the Company's stockholders, must do so in accordance with the
Company's By-Laws. The By-Laws provide that, in order to be presented at the
1997 Annual Meeting, such stockholder proposals or nominations may be made only
by a stockholder of record who shall have given notice of the proposed business
or nomination to the Company between January 3, 1997 and February 2, 1997. The
notice must contain, among other things, the name and address of the
stockholder, a brief description of the business desired to be brought before
the Annual Meeting and the reasons for conducting the business at the Annual
Meeting, the stockholder's ownership of the Company's capital stock, and in the
case of nominations, background and stock ownership information with respect to
each nominee. Stockholders may obtain a copy of the relevant provisions of the
By-Laws by writing to the Secretary of the Company at its address given above.

4
<PAGE> 7

MANAGEMENT'S STOCK OWNERSHIP

As of January 1, 1996, the Company's directors, five most highly-paid executive
officers, and its directors and officers as a group, beneficially owned the
number of shares of the Company's common stock shown below:

<TABLE>
<CAPTION>
Amount and
Nature of
Name of Person Beneficial Percent of
or Group Ownership(1) Common Stock
<S> <C> <C>
- ---------------------------------------------------------------------
Thomas O. Barnes(2) 443,203 6.7%
Wallace Barnes(2) 444,095 6.7%
Gary G. Benanav 2,570 *
John E. Besser 25,569 *
William S. Bristow, Jr. 47,402 *
Robert J. Callander 3,035 *
Leonard M. Carlucci 19,478 *
George T. Carpenter 60,722 *
Donna R. Ecton 2,918 *
Ali A. Fadel 10,864 *
Marcel P. Joseph 2,935 *
Theodore E. Martin 28,270 *
Juan M. Steta 8,246 *
K. Grahame Walker 3,120 *
A. Stanton Wells 38,234 *
Directors & Officers as a Group (19) 1,175,852 17.9%
- ---------------------------------------------------------------------
</TABLE>

* Less than 1% of common stock beneficially owned.

NOTES TO THE STOCK OWNERSHIP TABLE:

(1) The person or group has sole voting and investment power with respect to the
shares listed in this column, except as set forth in this Note. Mr. T. O. Barnes
has sole voting power and no investment power with respect to 240,660 shares
pursuant to a revocable power of attorney given to him by Mr. W. Barnes. To
avoid duplication, these shares, over which Mr. W. Barnes has sole investment
power, are included in Mr. T. O. Barnes' holdings only. Mr. T. O. Barnes also
has sole voting and shared investment power with respect to 112,479 shares and
no voting and shared investment power with respect to 22,056 shares. Mr. W.
Barnes has sole voting and shared investment power with respect to 278,001
shares. 55,482 of Mr. Carpenter's shares are held by corporations over which he
has voting control. All of Mr. Bristow's shares are held in a trust which he has
the power to revoke. In addition, Messrs. T. O. Barnes, Besser, and Martin share
investment power with respect to 3,000 shares; to avoid duplication, these
shares are included in Mr. T. O. Barnes' holdings only.

The shares listed for Messrs. T. O. Barnes, Besser, Carlucci, Fadel, Martin, and
Wells, and the Directors and Officers as a group include 2,500, 17,550, 14,100,
9,225, 12,205, 24,975 and 100,980 shares, respectively, which they have the
right to purchase within 60 days after January 1, 1996. The shares listed for
Messrs. T. O. Barnes, Besser, Carlucci, Fadel, Martin, and Wells, and the
Directors and Officers as a group also include 768, 5,043, 2,982, 1,639, 2,375,
5,757 and 30,424 shares, respectively, over which they have voting power and
limited investment power. These shares are held under the Company's Guaranteed
Stock Plan (an employee stock ownership plan).

The shares listed for Messrs. T. O. Barnes, W. Barnes, Benanav, Bristow,
Callander, Carpenter, Ecton, Joseph, Steta, and Walker include 2,000 shares each
that each of them has the right to receive under the Non-Employee Director
Deferred Stock Plan described below.

5
<PAGE> 8

Except for the shares under the Non-Employee Director Deferred Stock Plan, the
number of shares reported as beneficially owned have been determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934.

(2) His address is 123 Main Street, Bristol, CT 06011-0489.

The Board of Directors believes that, except for matters required to be
submitted to stockholders, the Company is controlled by its Board of Directors
acting as such. The Messrs. Barnes and Bristow may also be considered in control
of the Company; they and members of their families beneficially own
approximately 30% of the Company's outstanding common shares.

The Company believes that its officers and directors have complied in 1995 with
the filing requirements of Section 16(a) of the Securities Exchange Act of 1934
except that Mr. Donald E. Snowberger, a former officer, was late in reporting
one transaction and Mr. J. Gary Lewis, a former officer, was late in reporting
the exercise of a stock option and the subsequent sale of stock and failed to
file a required form for one other transaction.

NON-EMPLOYEE DIRECTOR DEFERRED STOCK PLAN

In 1987, the Company adopted a plan under which the non-employee directors have
been granted the right to receive 2,000 shares each of the common stock of the
Company when their membership on the Board terminates. The plan provides that
each newly elected director will receive the same grant. The plan also provides
for the payment of dividend equivalents equal to 2,000 times the dividend per
share for each dividend payment date.(1)

BENEFICIAL OWNERS OF MORE THAN 5% OF SHARES

In addition to Mr. T. O. Barnes and Mr. W. Barnes, Mr. Carlyle F. Barnes and the
institutions set forth below beneficially owned more than 5% of the Company's
shares.

Mr. Carlyle F. Barnes, Peacedale Street, Bristol, CT 06010, reported that as of
December 31, 1995, he beneficially owned 497,808 (7.6%) shares of the Company's
common stock. He has sole voting and investment power with respect to 144,823
shares, sole voting power and shared investment power with respect to 130,743
shares, and shared voting and shared investment power with respect to 222,242
shares.

As of December 31, 1995, State Street Bank and Trust Company, 225 Franklin
Street, Boston, MA 02110, ("State Street") reported that it held 1,158,819
(17.7%) shares of the Company's common stock in its capacity as trustee for the
Company's Guaranteed Stock Plan (an employee stock ownership plan). The plan
provides that the stock shall be voted by the Trustee as directed by the
participants in the plan. State Street also reported that it had sole voting and
investment power with respect to 14,100 shares.

As of December 31, 1995, Fleet Bank, N.A., One Constitution Plaza, Hartford, CT
06115, ("Fleet") reported that it was the beneficial owner of 872,859 (13.3%)
shares of the Company's common stock. Fleet reported that it had sole voting and
sole investment power with respect to 161,553 shares, sole voting and shared
investment power with respect to 6,485 shares, sole voting and no investment
power with respect to 5,704 shares (of which 3,000 shares are included above as
beneficially owned by Mr. T. O. Barnes), shared voting and shared investment
power with respect to 161,360 shares, shared voting and no investment power with
respect to 234 shares, and no voting and shared investment power with respect to
537,883 shares. Of the last number, 134,535 shares are included above as
beneficially owned by Mr. T. O. Barnes and 278,001 shares as beneficially owned
by Mr. W. Barnes.

- ---------------------------------------------------------------
(1) Mr. T. O. Barnes became a participant in the plan when it was adopted in
1987. He became an employee in 1993 and continues to participate in the plan.

6
<PAGE> 9

EXECUTIVE OFFICER COMPENSATION

REPORT OF THE COMPENSATION COMMITTEE

The Company's compensation program for executive officers is designed to
attract, retain, and motivate superior executive talent and to align a
significant portion of each officer's total compensation with the performance of
the applicable business unit, the Company, and the interests of our
stockholders. To this end, the Company has implemented a competitive total
compensation program for executive officers composed of the following elements
which are separately discussed below: base salary, annual bonus, and long-term
compensation, including awards under the Company's Long Term Incentive Plan and
stock options.

BASE SALARY

Base salaries for the chief executive officer and the other executive officers
are established by considering competitive levels for positions of similar
responsibility, the experience of the individual, and his/her expected
contribution to the Company. Merit increases are determined by evaluating the
overall performance of the individual, including the performance of the business
unit for which the officer has responsibility, overall Company performance, and
by competitive levels.

Mr. Martin became President and Chief Executive Officer on July 1, 1995. In
determining his base compensation, the Committee primarily took into account his
experience, his current and expected contributions to the Company, and the
salaries of chief executive officers of companies similar in size to Barnes
Group.

The salary of Mr. Wells, the former President and Chief Executive Officer, was
reviewed and increased at the beginning of 1995. In reviewing Mr. Wells' salary,
the Compensation Committee considered many factors including the following:
leadership of, and individual contribution to, the Company; the Company's
progress with respect to financial and strategic targets and objectives; trends
with respect to sales, earnings per share, return on equity, return on capital
employed, operating margin, and cash flow; and the salaries of chief executive
officers of companies similar in size to Barnes Group.

ANNUAL BONUSES

Annual bonuses may be earned by executive officers and other key employees under
the Company's annual bonus plans. Payments under these plans are based on the
performance of the business unit over which the individual has a direct
influence. The Committee establishes annual financial measurements in terms of
thresholds, targets, and maximums for the Company and each major operating unit,
the achievement of which will determine the level of the bonus. The measurements
for the Company, which are applicable to the President and Chief Executive
Officer and the corporate staff officers, are based on the Company's
consolidated income after taxes and before certain one-time provisions such as
restructuring charges. The measurements for operating units, which are
applicable to officers having direct responsibilities relating to one of the
Company's three operating units, are based on the operating income of the
applicable unit less a charge for the capital employed by the unit. A maximum of
50% of salary was payable for achievement of financial goals in 1995.

The award of bonuses in 1995 was based solely on the achievement of the
Company's financial goals. The Company's performance in 1995 was strong, and its
earnings per share increased from $3.20 in 1994 to $4.20 in 1995. Mr. Martin and
Mr. Wells received bonuses of $187,503 and $200,004, respectively, for 1995.

LONG TERM COMPENSATION

Management and the Committee believe that in the long run, stockholder value is
created by the generation of cash flow in excess of the risk-adjusted cost of
the stockholders' equity invested in the Company. The Company's Long Term
Incentive Plan ("LTIP") rewards executive officers for increasing over time the
excess of cash flow from operations over the risk-adjusted cost of equity.

7
<PAGE> 10

Under the LTIP, the Committee grants performance units to executive officers,
and cash payments are equal to the increase in the value of the performance
units over a three-year period. The value of a performance unit for any single
year is a function of cash flow from operations, less the risk-adjusted cost of
equity capital, for the current year plus the previous four years. Awards for
the three-year cycle are paid in the year following the end of the cycle.

Awards under the LTIP paid in 1995 were based on a small increase in the value
of performance units over the three-year period from 1992 to 1994 resulting from
an increase in cash flow in excess of the cost of equity capital. In 1995, Mr.
Martin and Mr. Wells received payments of $4,620 and $6,534, respectively, for
the 1992-1994 period.

Under the 1991 Barnes Group Stock Incentive Plan, which was approved by the
stockholders, the Committee grants stock options to executive officers and other
key executives. Like the LTIP, stock options are designed to align the interests
of executives with those of the stockholders. Except for one-time initial grants
(which have been at 85% of market value) to certain senior executive officers
upon assumption of their positions, options have been granted at the market
price of the stock on the date of grant. In July 1993, the Committee decided to
make special option grants at that time to executive officers and other key
managers that would be in lieu of grants that would normally be given in the
four-year period 1994 through 1997. To ensure that option recipients are not
rewarded unless stockholders have had good gains, these options contain special
provisions relating to exercisability. They do not become exercisable until 1997
at the earliest, and then only if the market price of the Company's stock is
$44. (The exercise price is $31.25, the market price on the date of grant.) If
the stock does not reach $44 for at least 30 consecutive trading days during the
period 1/1/97 to 7/16/97, the hurdle price increases at the rate of 8% per year
thereafter.

In 1993, Messrs. Martin and Wells each received options under this special grant
to purchase 14,800 shares. In January 1994, in recognition of Mr. Martin's
additional responsibilities in assuming the position of Executive Vice
President-Operations and Mr. Wells' additional responsibilities in assuming the
position of President and Chief Executive Officer, they received additional
options under the terms of the special grant for 13,200 and 28,400 shares,
respectively, at an exercise price of $31.13, the market price on the date of
the additional grant. In recognition of Mr. Martin's additional responsibilities
in assuming the position of President and Chief Executive Officer on July 1,
1995, he received additional options on June 30, 1995, under the terms of
regular stock option grants, for 40,000 shares at an exercise price of $40.25,
the market price on the date of the additional grant.

The number of performance units granted under the LTIP and the number of stock
options granted under the Stock Incentive Plan are based on the performance of
the individual and the market median of long term incentive opportunities for
persons in similar positions at companies whose size is comparable to Barnes
Group.

OTHER

Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
limits the Company's tax deduction to $1 million per year (the "Million Dollar
Cap") for certain compensation paid to each of its Chief Executive Officer
("CEO") and the four highest compensated executives other than the CEO named in
the proxy statement (the "covered executives"). Regulations issued under the
Code exclude from the Million Dollar Cap compensation that is calculated based
on attainment of pre-established, objective performance goals, if certain other
requirements are met. Accordingly, amendments to the 1991 Barnes Group Stock
Incentive Plan, which was approved by the stockholders, are being submitted to
the Company's stockholders for their approval at this year's Annual Meeting. The
Committee's policy is to structure compensation awards for covered executives
that will be deductible without limitation where doing so will further the
purposes of the Company's executive compensation programs. The Committee also
considers it important, however, to retain flexibility to design compensation
programs that recognize a full range of performance criteria important to the
Company's success, even where compensation payable under such programs may not
be fully deductible.

8
<PAGE> 11

CONCLUSION

The Committee believes that the elements of the compensation programs described
above combine to provide competitive total compensation packages to the
Company's executive officers. Most importantly, an executive's total
compensation is heavily dependent on corporate performance in a manner which
aligns the interests of the executive with those of the stockholders over the
long term.

COMPENSATION COMMITTEE:

Robert J. Callander, Chairman
Gary G. Benanav
Donna R. Ecton
Marcel P. Joseph
Juan M. Steta

9
<PAGE> 12

COMPENSATION

The following table sets forth compensation paid by the Company to its Chief
Executive Officer and to the four remaining most highly-paid persons who were
executive officers at the end of 1995 based on salary and any payments made
under the Company's annual bonus plan. Pursuant to the applicable rules,
compensation information is also provided for Mr. Wells who retired as the
Company's President and Chief Executive Officer in 1995.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
----------------------------------- -------------------------
Awards Payouts
---------- ----------
Other Securities All
Annual Underlying Other
Compen- Options LTIP Compen-
Name and principal position(a) Year Salary Bonus sation(b) (#) Payouts(c) sation(d)
- ---------------------------------- ---- -------- -------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
T. E. Martin 1995 $375,006 $187,503 $14,011 40,000 $ 4,620 $25,619
President and 1994 280,008 139,164 8,866 13,200 3,060 22,107
Chief Executive Officer 1993 201,160 100,580 9,046 18,600 32,405 19,114

J. E. Besser 1995 240,012 120,006 8,649 -0- 4,752 18,612
Senior Vice President - 1994 220,008 106,923 7,454 4,400 3,276 18,133
Finance and Law 1993 176,454 -0- 6,708 13,000 42,069 16,423

T. O. Barnes 1995 212,502 106,251 1,611 -0- 1,555 10,328
Chairman of the Board and 1994 180,000 89,280 -0- 23,200 -0- 9,596
Senior Vice President - 1993 7,826 -0- -0- -0- -0- -0-
Administration

A. A. Fadel 1995 197,504 80,000 1,275 -0- 1,344 6,580
Vice President, Barnes Group Inc. 1994 167,404 83,702 905 26,200 -0- 6,122
and President, Associated Spring 1993 113,316 54,391 -0- 4,700 -0- 5,288

L. M. Carlucci 1995 176,374 88,187 3,613 -0- 1,250 10,396
Vice President, Barnes Group Inc. 1994 151,849 74,323 2,916 4,000 -0- 9,955
and President, Bowman 1993 126,036 63,017 2,916 7,800 -0- 8,965
Distribution

A. S. Wells 1995 400,008 200,004 23,147 -0- 6,534 42,266
Former President and 1994 325,008 160,879 16,031 28,400 4,122 38,054
Chief Executive Officer 1993 238,039 -0- 15,333 18,500 57,987 32,462
</TABLE>

(a) Mr. Martin was promoted to this position in July 1995. Messrs. Wells and
Besser were promoted to these positions in December 1993, and Mr. Barnes
became a Company officer at the same time. Mr. Fadel assumed his current
position in January 1994 and Mr. Carlucci assumed his current position in
December 1995.

(b) Reimbursement for taxes paid on insurance premiums paid by the Company. The
figure for Mr. Martin also includes "above-market" interest (as defined in
rules promulgated by the Securities and Exchange Commission) paid on
deferred compensation.

(c) Payment in the designated year with respect to three-year performance cycles
ending the prior year. Thus, the payment made in 1995 covered the three-year
cycle ending in 1994.

(d) Includes Company-matching contributions under the Guaranteed Stock Plan and
premiums paid for life insurance. In the case of Mr. Barnes, it also
includes the amount of dividend equivalents that he received under the
Company's Non-Employee Director Deferred Stock Plan described on page 6.

10
<PAGE> 13

STOCK OPTIONS

The following table provides information on grants of stock options in 1995
pursuant to the 1991 Barnes Group Stock Incentive Plan to the executive officers
listed in the Summary Compensation Table. Mr. Martin was the only executive
officer listed in the Summary Compensation Table who received a stock option
grant in 1995.

OPTION/SAR GRANTS IN 1995

<TABLE>
<CAPTION>
Potential Realizable
Percent Value at Assumed
of Annual Rates of
Number of Total Stock Price
Securities Options Appreciation to
Underlying Granted Market End of Option Term
Options to Exercise Price On in 2005(b)
Granted(a) Employees Price Date of Expiration -----------------------
Name (#) in 1995 ($/Sh) Grant Date 5% 10%
- ----------------- ---------- --------- -------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
T. E. Martin 40,000 50.57% $40.25 $40.25 6/29/05 $1,012,400 $2,566,000
</TABLE>

(a) The options granted to Mr. Martin vest at the rate of 25% per year and are
fully vested four years from the grant date.

(b) With respect to options expiring on June 29, 2005, the stock price in 2005
would be $65.56 based on 5% annual appreciation from the price on the date
of the grant and $104.40 based on 10% annual appreciation.

The following table provides information relating to stock option exercises in
1995 by the named executive officers and the number and value of each such
officer's unexercised in-the-money options/SARs on December 31, 1995, based on
the difference between the exercise price and the year-end stock price.

AGGREGATED OPTION/SAR EXERCISES IN 1995 AND YEAR-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
Number of
unexercised options/SARs Value of unexercised
at fiscal year-end in-the-money options/SARs
Shares (No. Shares) at fiscal year-end
acquired on Value --------------------------- ---------------------------
Name exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- -------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
T. E. Martin 13,545 $ 180,616 11,255 69,900 $ 140,287 $ 142,184
J. E. Besser -0- -0- 16,250 16,750 51,987 76,028
T. O. Barnes 2,500 39,475 -0- 20,700 -0- 135,834
A. A. Fadel -0- -0- 4,975 26,825 38,313 181,282
L. M. Carlucci -0- -0- 13,450 13,900 92,121 77,755
A. S. Wells -0- -0- 23,125 45,975 73,982 216,471
</TABLE>

11
<PAGE> 14

LONG TERM INCENTIVE PLAN AWARDS

The following table provides information relating to grants of performance units
in 1995 under the Company's Long Term Incentive Plan.

LONG TERM INCENTIVE PLAN -- AWARDS IN 1995(a)

<TABLE>
<CAPTION>
Number of Performance
Name Performance Units(b) Period
- ---------------- -------------------- -----------
<S> <C> <C>
T. E. Martin 32,300 1995-1997
J. E. Besser 19,500 1995-1997
T. O. Barnes 16,200 1995-1997
A. A. Fadel 16,100 1995-1997
L. M. Carlucci 9,000 1995-1997
A. S. Wells 37,500 1995-1997
</TABLE>

(a) Under the Company's Long Term Incentive Plan ("LTIP"), there are no
thresholds, targets, or maximums as those terms are used in the Securities
and Exchange Commission's rules. Payments are based on the increase in the
value of performance units during the indicated performance period. The
value of a performance unit over the three-year period ending December 31,
1995 increased by $2.40. However, this is not necessarily representative of
the increase, if any, that will occur during the period 1995-1997. During
1995, the first year of the current performance period, the value of a
performance unit increased by $1.99. Payments under the LTIP made in the
prior three years are shown in the Summary Compensation Table on page 10.

(b) Performance units granted under the Company's Long Term Incentive Plan are
described in the Report of the Compensation Committee on pages 7 and 8.

PENSION PLANS

The following table gives examples of estimated annual retirement benefits
payable to an executive officer who retired in 1995 at age 65 under the
Company's Salaried Retirement Income Plan, Retirement Benefit Equalization Plan,
and Supplemental Executive Retirement Plan.

PENSION PLAN TABLE

<TABLE>
<CAPTION>
Years of Service
-------------------------------------------------------------------------
Remuneration 15 20 25 30 35 40
- ------------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$125,000 $ 43,508 $ 58,010 $ 72,513 $ 75,638 $ 78,763 $ 81,888
150,000 52,695 70,260 87,825 91,575 95,325 99,075
200,000 71,070 94,760 118,450 123,450 128,450 133,450
250,000 89,445 119,260 149,075 155,325 161,575 167,825
300,000 107,820 143,760 179,700 187,200 194,700 202,200
350,000 126,195 168,260 210,325 219,075 227,825 236,575
400,000 144,570 192,760 240,950 250,950 260,950 270,950
450,000 162,945 217,260 271,575 282,825 294,075 305,325
500,000 181,320 241,760 302,200 314,700 327,200 339,700
550,000 199,695 266,260 332,825 346,575 360,325 374,075
600,000 218,070 290,760 363,450 378,450 393,450 408,450
</TABLE>

The compensation included in determining earnings for retirement plan purposes
includes only annual salaries as shown in the first column of the Summary
Compensation Table. Years of service as of December 31, 1995, for the named
executive officers are as follows: T. E. Martin, 5 years; J. E. Besser, 15
years; T. O. Barnes, 5 years; A. A. Fadel, 4 years; L. M. Carlucci, 20 years;
and A. S. Wells, 16 years. Benefits are computed based on a straight-life
annuity. Although Social Security benefits are taken into account in the formula
under which benefits are calculated, the amounts set forth in the table are not
subject to deduction for Social Security or other offset amounts.

12
<PAGE> 15

PERFORMANCE GRAPH

A stock performance graph based on cumulative total returns (price change plus
reinvested dividends) for $100 invested on December 31, 1990, is set forth
below.

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN BETWEEN BARNES GROUP INC.,
THE S&P 500 INDEX, AND THE S&P MANUFACTURING (INDUSTRIAL DIVERSIFIED) INDEX

<TABLE>
<CAPTION>
MEASUREMENT PERIOD BARNES GROUP S&P
(FISCAL YEAR COVERED) INC. S&P 500 MANUFACTURING
<S> <C> <C> <C>
DEC-90 100.00 100.00 100.00
DEC-91 142.52 130.34 120.85
DEC-92 128.52 140.25 129.02
DEC-93 137.61 154.32 154.38
DEC-94 174.39 156.42 157.60
DEC-95 171.77 214.99 221.94
</TABLE>

APPROVAL OF SELECTION OF INDEPENDENT ACCOUNTANTS

In the fourth quarter of each year the Audit Committee of the Board of Directors
makes a recommendation to the Board of Directors concerning the selection of
independent accountants for the next fiscal year. Although not required by the
Company's Restated Certificate of Incorporation or its By-Laws, it has been the
practice for many years to have the stockholders act on a proposal of the Board
of Directors relating to the selection of independent accountants.

As part of its ordinary procedure, the Audit Committee met in the fourth quarter
of 1993 to consider the selection of independent accountants for 1994. The Audit
Committee, upon the recommendation of management, decided that it was in the
Company's best interests to change its independent accountants. The Committee
recommended to the Board of Directors that Price Waterhouse LLP be selected as
the Company's independent accountants for 1994. At a meeting held on December
15, 1993, the Board of Directors accepted the recommendation of the Audit
Committee and proposed that the stockholders approve the selection of Price
Waterhouse LLP as the Company's independent accountants for 1994. At the
Company's Annual Meeting on April 6, 1994, the Company's stockholders approved
the selection of Price Waterhouse LLP as the Company's independent accountants.

The report of Ernst & Young LLP dated January 28, 1994 for the fiscal year ended
December 31, 1993, contained no adverse opinion, disclaimer of opinion, or
qualification or modification as to uncertainty, audit scope or accounting
principles. The reports of Price Waterhouse LLP dated January 23, 1995, for the
fiscal year ended December 31, 1994, and January 23, 1996, for the fiscal year
ended December 31, 1995, contained no adverse opinion, disclaimer of opinion, or
qualification or modification as to uncertainty, audit scope, or accounting
principles.

13
<PAGE> 16

With respect to the fiscal year ended December 31, 1993, there were no
disagreements between the Company and Ernst & Young LLP on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure which, if not resolved to the satisfaction of Ernst & Young
LLP, would have caused it to make reference to the subject matter of the
disagreement in connection with its report.

No reportable event described in paragraph (a)(1)(v) of Item 304 of Regulation
S-K has occurred during the Company's fiscal years ended December 31, 1994, and
December 31, 1995.

Prior to engaging Price Waterhouse LLP, the Company did not consult with it
during the fiscal years ended December 31, 1993, and December 31, 1994, on the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
the Company's financial statements, or any matter that was the subject of any
disagreement or any reportable event.

The accompanying proxy will be voted for approval of selection of Price
Waterhouse LLP as independent accountants unless otherwise specified by the
stockholder. A representative of Price Waterhouse LLP is expected to be present
at the meeting with the opportunity to make a statement if the representative
wishes and to be available to respond to appropriate questions.

PROPOSED AMENDMENT TO STOCK INCENTIVE PLAN

The 1991 Barnes Group Stock Incentive Plan was adopted by the stockholders in
1991 and amended by the stockholders in 1994 (the "SIP"). The SIP provides for
the grant of stock options, stock appreciation rights, incentive stock rights,
and performance units payable in stock or cash. The Board of Directors believes
that stock-based incentives are an important element of an executive's total
compensation and that they align the interests of the executive with those of
the stockholders over the long term. Presently, only 160,570 shares of stock are
available for incentives under the SIP. In view of this number, on February 16,
1996, the Board of Directors adopted, subject to stockholder approval,
amendments to the SIP (the "Amended SIP").

The purpose of the amendments was to increase by 500,000 the number of shares
available for incentives under the Amended SIP and to include terms and
provisions that enable most incentives granted under the Amended SIP to qualify
as performance-based compensation within the meaning of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"). Section 162(m) limits
the Company's tax deduction to $1 million per year (the "Million Dollar Cap")
for certain compensation paid to each of its Chief Executive Officer ("CEO") and
the four highest compensated executives other than the CEO named in the proxy
statement. Regulations issued under the Code exclude from the Million Dollar Cap
compensation that is calculated based on attainment of pre-established,
objective performance goals, if certain requirements are met.

SUMMARY

A summary of the principal features of the SIP and the Amended SIP is set forth
below, qualified in its entirety by the full text of the Amended SIP attached
hereto as Appendix A.

SIP

TERM

The SIP has a term of ten years and provides that no incentives can be granted
after April 4, 2001.

THE COMMITTEE

The SIP is administered by a committee of the Board of Directors that consists
of not less than three of its members (the "Committee"). No member of the
Committee may participate in the SIP.

14
<PAGE> 17

PARTICIPANTS

Participants are officers and other senior executives of the Company who, in the
judgment of the Committee, can contribute significantly to the growth and
successful operation of the Company or a subsidiary. The Committee designates
the employees to be granted incentives under the SIP and determines the type and
amount of each incentive. Currently, approximately 50 people are eligible to
participate in the SIP. The Committee determines the timing and amount of grants
under the SIP. Accordingly, the amount of any such grant is not determinable at
this point.

NUMBER OF SHARES

Under the SIP, the maximum number of shares that can be issued subject to
incentives may not exceed 643,235 shares plus the number of shares of stock
underlying outstanding options under the predecessor plan that may terminate or
expire without being exercised after December 31, 1995. As of December 31, 1995,
95,955 shares were covered by these outstanding options. The shares subject to
incentives under the SIP may be either authorized but unissued shares or
treasury shares.

At the time of exercise of a stock option or stock appreciation right granted
under the SIP, the number of shares issued, or the number of shares that could
be purchased with the amount of cash paid (on the basis of the fair market value
of the shares of common stock on the date of payment) to the employee will be
charged against the maximum number of shares covered by the SIP. Similar charges
will be made at the time of payment of shares under incentive stock rights or at
the time of payment of a performance unit award.

The SIP contains provisions regarding equitable adjustment in the terms of
incentives granted under the SIP and the maximum limitations under the SIP in
the event of certain corporate events such as reorganizations, mergers,
recapitalizations, and stock splits.

STOCK OPTIONS

The option price per share will not be less than 85% of the fair market value of
a share of the Company's common stock at the time the option is granted. As of
February 1, 1996, the market value per share of the Company's common stock was
$41.38. No option granted under the SIP will be exercisable until at least 12
months following its grant. Each option will expire at such time as the
Committee may determine at the time of grant, but not later than ten years after
the date it is granted.

STOCK APPRECIATION RIGHTS

A stock appreciation right ("SAR") is a right to receive an amount equal to the
increase, between the date of its grant and the date of its exercise, in the
fair market value of the number of shares of common stock subject to the SAR.
The amount is payable in stock or in cash at the option of the Committee.

An SAR may be granted (i) in connection with any option granted under the SIP
either at the time of grant or at any time thereafter during the term of the
option or (ii) independently of the grant of an option. The conditions of
exercise of an SAR are similar to those applicable generally to the exercise of
options, and in addition, are only exercisable during the ten-day periods
beginning on the third business day following the date of release of a summary
statement of the Company's quarterly or annual sales and earnings and ending on
the twelfth business day following such date of release.

INCENTIVE STOCK RIGHTS

An incentive stock right consists of incentive stock units, each of which is
equivalent to one share of the Company's common stock. An incentive stock right
is non-transferrable and entitles the holder to receive shares of common stock,
without payment to the Company, after the lapse of the incentive period or
periods established by the Committee. Holders of incentive stock rights are
entitled to receive cash payments, on the Company's dividend payment dates,
equal to the amount of dividends declared on the same number of shares of common
stock as they hold of incentive stock units ("dividend equivalents").

15
<PAGE> 18

PERFORMANCE UNIT AWARDS

A performance unit award consists of performance units that may be paid in cash
or stock. Performance units may be granted alone or in conjunction with and
related to an option. Performance unit awards related to options will normally
have the same number of units as there are shares subject to such options. To
the extent that a related option (or an SAR related to such option) is
exercised, performance units will be proportionately reduced.

The Committee establishes an initial value for each performance unit at the time
of grant. At that time, the Committee will also establish performance targets to
be achieved during an award period of not less than one year. The value of the
performance units at the end of the award period will be determined by the
degree to which the performance targets are achieved. Payment to the grantee, if
any, at the end of the award period, will be made in cash, shares of common
stock, or both, as determined by the Committee.

OTHER

The SIP provides that it can be amended by the Company's Board of Directors at
any time, provided that, without the approval of the Company's stockholders, no
amendment may be made which (i) increases the aggregate number of shares of
common stock that may be made the subject of incentives under the SIP, (ii)
materially increases the benefits accruing to participants under the SIP, (iii)
materially modifies the requirements as to eligibility for participation in the
SIP, (iv) extends the term of the SIP or (v) amends section 13 of the SIP, which
relates to its amendment or discontinuance.

PROPOSED AMENDMENTS TO THE SIP

TERM

The amendments extend the term of the plan by five years. The Amended SIP has a
term of 15 years and provides that no incentives can be granted under the
Amended SIP after April 2, 2006.

COMMITTEE

The Amended SIP provides that each member of the Committee shall qualify as an
"outside director" within the meaning of Section 162(m) and as a "disinterested
person" within the meaning of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").

NUMBER OF SHARES

The amendments increase the maximum number of shares that may be issued under
the plan by 500,000 shares. A limit of 50,000 per year is imposed on the
aggregate number of grants of options, SARs, and incentive stock rights that an
individual can receive.

INCENTIVE STOCK RIGHTS

Under the Amended SIP, the Committee may make payment of the incentive stock
rights subject to the satisfaction of any performance goals established by the
Committee from the performance criteria set forth in the Amended SIP. In
addition, the Committee can, in lieu of cash dividend equivalents, credit the
holder with additional incentive stock units as of each dividend payment date
which are equal to the number of incentive stock units credited to the holder on
the dividend payment date times the dividend per share of common stock, divided
by the fair market value per share of common stock on the dividend payment date.

PERFORMANCE CRITERIA

The Amended SIP provides that the performance goals or targets established by
the Committee in connection with the grant of incentive stock rights and
performance units shall be expressed in terms of one or more of the financial
criteria or objectives of the Company set forth in the Amended SIP. The Amended
SIP sets forth the following financial criteria as the basis for performance
targets or goals: net

16
<PAGE> 19

income; earnings per share; return on equity; return on invested capital; and
performance profit. For purposes of the Plan: (a) "return on equity" shall mean
net income divided by stockholders' equity; (b) "return on invested capital"
shall mean net income before interest and taxes times one minus the tax rate
divided by interest-bearing debt plus equity; and (c) "performance profit" shall
mean operating income minus the charge for the capital employed in the unit's
basic business that is used in the Company's current operating plan.

OTHER

The amendments to the SIP further provide that the plan may be amended by the
Company's Board of Directors at any time, provided that no amendment may be made
without stockholder approval if stockholder approval is required in order for
the Amended SIP to comply with Rule 16b-3 promulgated under the Exchange Act or
Section 162(m) of the Code.

TAXES

The following is a general summary of the federal income tax treatment of
incentives under the SIP and Amended SIP. Recipients of stock options are not
subject to tax at the time of the grant. Upon exercise of an option, an optionee
will include in ordinary income an amount equal to the difference between the
exercise price and the fair market value of the Company's common stock on the
date of exercise. The market value of shares of common stock received as a
result of a grant of incentive stock rights is includable in ordinary income
when the shares are received. No amount will be includable in an employee's
income in connection with the grant of an SAR or performance unit award. In the
taxable year in which the recipient of an SAR or performance unit award receives
cash pursuant to either such right, the recipient generally must include in
ordinary income the amount of the cash received. If the recipient of an SAR or
performance unit award receives shares of common stock of the Company pursuant
to either such right, the federal income tax treatment upon such receipt will be
identical to that applicable to shares of common stock of the Company acquired
pursuant to the exercise of a stock option.

Under the Amended SIP, with respect to each of the incentives discussed above,
the Company generally will be entitled to a deduction in an amount equal to a
recipient's ordinary income related to the incentive (other than dividend
income) in the Company's taxable year in which the recipient includes such
amount in income. The Company will not be entitled, however, to take a deduction
for compensation paid to a covered employee, as defined in Section 162(m) of the
Code, in the form of stock options granted at less than fair market value or
incentive stock rights that are not subject to performance goals, to the extent
this compensation, together with other nonexempt compensation, exceeds $1
million per tax year.

ADOPTION

A vote of the majority of the Company's stockholders present or represented at
the Company's Annual Meeting is required to approve the Amended SIP.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPROVAL OF THE
PROPOSED AMENDMENTS TO THE SIP.

GENERAL

The cost of solicitation of proxies will be borne by the Company. Such
solicitation will be made by mail and may also be made by the Company's officers
and employees personally or by telephone, facsimile, or telegram without
additional compensation. The Company may also reimburse brokers, dealers, banks,
voting trustees, or their nominees, for their reasonable expenses in sending
proxies, proxy material, and annual reports to beneficial owners. The Company
has retained Georgeson & Company Inc., Wall Street Plaza, New York, NY 10005, to
aid in the solicitation of proxies. Georgeson & Company will solicit proxies by
personal interview, telephone, telegraph, and mail and may request brokerage
houses and other nominees and fiduciaries or custodians to forward soliciting
materials to beneficial

17
<PAGE> 20

owners of the Company's stock. For these services, the Company will pay a fee of
approximately $7,000, plus expenses.

The Company had outstanding 6,570,733 shares of common stock as of February 6,
1996, each of which is entitled to one vote. Only holders of record at the close
of business on February 6, 1996, will be entitled to vote.

Directors are elected by a plurality of the vote cast in the election of
directors. Under applicable Delaware law, abstentions and broker non-votes will
be disregarded and have no effect on the outcome of the election.

If a nominee for director should become unavailable for any reason, it is
intended that votes will be cast for a substitute nominee designated by the
Board of Directors. The Board has no reason to believe the persons nominated
will be unable to serve if elected. The Board does not know of any matters to be
presented for consideration at the meeting other than the matters described in
items 1, 2, and 3 of the Notice of Annual Meeting; however, if other matters are
presented, it is the intention of the persons named in the accompanying proxy to
vote on such matters in accordance with their judgment. All shares represented
by the accompanying proxy, if the proxy is given prior to the meeting, will be
voted in the manner specified therein.

By order of the Board of Directors.

/s/ Mary Louise Beardsley
- --------------------------
Mary Louise Beardsley
Secretary

March 1, 1996

[RECYCLE LOGO] Printed on Recycled Paper

18
<PAGE> 21

APPENDIX A

1991 BARNES GROUP STOCK INCENTIVE PLAN
AS AMENDED AND RESTATED AS OF FEBRUARY 16, 1996

1. PURPOSE

The purpose of the Plan is to authorize the grant to Senior Executives of the
Company or any Subsidiary of (i) nonqualified options to purchase shares of
Common Stock, (ii) Stock Appreciation Rights, (iii) Incentive Stock Rights, and
(iv) Performance Unit Awards, and thus benefit the Company by giving such
employees a greater personal interest in the success of the enterprise and an
added incentive to continue and advance their employment. An additional purpose
of the Plan is to provide "qualified performance-based compensation" (within the
meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, and
the regulations thereunder ("Section 162(m)") to Senior Executives.

2. DEFINITIONS

The following terms, when used in the Plan, shall mean:

1981 Plan: The Barnes Group Inc. Stock Incentive Plan adopted by the
stockholders of the Company in 1981.

Board: The Board of Directors of the Company.

Committee: Such committee as shall be appointed by the Board pursuant to
the provisions of Section 11.

Common Stock: The Common Stock of the Company, par value $1.00 per share,
or such other class of shares or other securities as may be applicable
pursuant to the provisions of Section 9.

Company: Barnes Group Inc.

Disability: Inability to perform the services normally rendered by the
employee due to any physical or mental impairment that can be expected
either to be of indefinite duration or to result in death, as determined by
the Committee on the basis of appropriate medical evidence.

Fair Market Value: As applied to the Common Stock on any day, the closing
market price of such stock as reported in the New York Stock Exchange
Composite Transactions Index for such day, or if the Common Stock was not
traded on such day, for the last preceding day on which the Common Stock
was traded.

Incentive: An incentive granted under the Plan in one of the forms
provided for in Section 3.

Option: An option to purchase shares of Common Stock.

Plan: The 1991 Barnes Group Stock Incentive Plan herein set forth, as
amended from time to time.

Senior Executive: An employee of the Company or of a Subsidiary, including
an officer or director who is an employee, who in the Committee's judgment
can contribute significantly to the growth and successful operations of the
Company or a Subsidiary.

Subsidiary: A corporation in which the Company owns, directly or
indirectly, at least 50% of the voting stock.

3. GRANTS OF INCENTIVES

(a) Subject to the provisions of the Plan, the Committee may at any time, or
from time to time, grant Incentives under the Plan to, and only to, Senior
Executives.

A-1
<PAGE> 22

(b) Incentives may be in the following forms:

(i) an Option, in accordance with Section 5;

(ii) a Stock Appreciation Right, in accordance with Section 6;

(iii) an Incentive Stock Right, in accordance with Section 7;

(iv) a Performance Unit Award, in accordance with Section 8; or

(v) a combination of two or more of the foregoing.

4. STOCK SUBJECT TO THE PLAN

(a) Subject to adjustment as provided in Section 9, the aggregate number of
shares of Common Stock which may be issued subject to Incentives granted under
the Plan shall not exceed the sum of (i) 1,000,000 shares and (ii) the number of
shares of stock covered by outstanding options (or installments thereof) granted
under the 1981 Plan which, after its expiration, shall terminate or expire in
whole or in part without being exercised. Charges against such aggregate number
are governed by the provisions of paragraph (c) of this Section 4, paragraph (k)
of Section 5, paragraph (e) of Section 6, paragraph (c) of Section 7, and
paragraph (e) of Section 8. No Senior Executive may receive grants of Options,
Stock Appreciation Rights or Incentive Stock Rights in any year relating to
shares of Common Stock which in the aggregate exceed 50,000 shares, which number
shall be adjusted pursuant to the terms hereof.

(b) Such shares may be either authorized but unissued shares or shares issued
and thereafter acquired by the Company.

(c) If any shares subject to an Incentive shall cease to be subject thereto
because of the termination without exercise or payment, in whole or in part, of
such Incentive, the shares as to which the Incentive was not exercised or paid
shall no longer be charged against the limits in paragraph (a) of this Section 4
and may again be made subject to Incentives.

(d) The Committee may permit the voluntary surrender of all or a portion of any
Incentive granted under this Plan conditioned upon the granting to the employee
of a new Incentive for the same or a different number of shares or amount of
other payment as the Incentive surrendered, or it may require such voluntary
surrender as a condition to a grant of a new Incentive to such employee. Such
new Incentive shall be exercisable at the price, during the period, and in
accordance with any other terms or conditions specified by the Committee at the
time the new Incentive is granted, all determined in accordance with the
provisions of this Plan without regard to the price, period of exercise, or any
other terms or conditions of the Incentive surrendered.

5. OPTIONS

Incentives, in the form of options to purchase shares of Common Stock, shall be
subject to the following provisions:

(a) The Option price per share shall be determined as of the effective date of
the grant and shall not be less than 85% of the Fair Market Value of the Common
Stock at the time of the grant of the Option. In no event shall the Option price
be less than the par value of the stock which is the subject of the Option.

(b) Each Option shall expire at such time as the Committee may determine at the
time the Option is granted; provided, however, that no Option may, under any
circumstances, expire later than ten years from the date such Option shall have
been granted.

(c) Any Option granted under the Plan may be exercised solely by the person to
whom granted, by his/her guardian or legal representative, or, in the case of
death, by an estate.

(d) No Option may be exercised less than 12 months from the date it is granted.
After completion of any additional required period of employment specified in
the Option grant, the Option may be exercised, in

A-2
<PAGE> 23

whole or in part, at any time or from time to time during the balance of the
term of the Option, except as limited by provisions contained in the Option
(including provisions regarding exercise in installments).

(e) If the optionee terminates employment prior to attaining age 55, the Option
shall terminate 90 days after termination of employment, except in the case of
death or disability.

(f) If employment terminates as a result of death or disability, or if the
Optionee terminates employment after attaining age 55, the Option shall
terminate five years after termination of employment; provided, however, if the
Optionee's employment is terminated upon the request of the Company after the
Optionee attains age 55, the Option may be terminated by the Committee effective
90 days after termination of employment.

(g) Notwithstanding anything else in this Section 5 to the contrary, (1) the
Committee may provide that an Option will terminate prior to time periods
specified in paragraphs 5(e) and 5(f) on conditions specified by the Committee
and incorporated in an Option Agreement between the Company and the person
receiving the option; and (2) in no event may any Option be exercised after the
expiration date thereof.

(h) Shares purchased upon exercise of an Option shall be paid for in full within
twenty days of the date of exercise in cash or, with the consent of the
Committee, in whole or in part in shares of Common Stock based on their Fair
Market Value on the date of exercise.

(i) If so authorized by the Committee, the Company may, with the consent of the
optionee, and at any time or from time to time, cancel all or a portion of any
Option granted under the Plan then subject to exercise and discharge its
obligation in respect of the Option either by payment to the optionee of an
amount of cash equal to the excess, if any, of the Fair Market Value, at such
time, of the shares subject to the portion of the Option so cancelled over the
aggregate option price of such shares, or by issuance or transfer to the
optionee of shares of Common Stock with a Fair Market Value, at such time, equal
to any such excess, or by a combination of cash and shares.

(j) The forms of Option authorized by the Plan may contain such other provisions
as the Committee shall deem advisable.

(k) Upon the exercise of an Option there shall be charged against the limits in
paragraph (a) of Section 4 the number of shares issued to the optionee. Upon the
cancellation of any Option pursuant to paragraph (i) of Section 5, there shall
be charged against the limitations in paragraph (a) of Section 4 a number of
shares equal to (A) the number of any shares issued to the optionee plus (B) the
number of shares purchasable with the amount of any cash paid to the optionee on
the basis of the Fair Market Value as of the date of payment; and the number of
shares subject to the portion of the Option so cancelled, less the number of
shares so charged against such limitations, shall thereafter be available for
other grants of Incentives.

(l) An Option will not be treated as an Incentive Stock Option within the
meaning of section 422 of the Internal Revenue Code of 1986, as amended.

6. STOCK APPRECIATION RIGHTS

(a) A Stock Appreciation Right ("SAR") may be granted in connection with any
Option granted under the Plan, either at the time of the grant of such Option or
at any time thereafter during the term of the Option, or independently of the
grant of an Option.

(b) An SAR shall entitle the holder thereof, upon exercise of the SAR, to
receive a number of shares of Common Stock or cash or a combination of cash and
shares (as the Committee in its discretion may elect) determined pursuant to
paragraph (d) of this Section 6.

(c) An SAR shall be subject to the following terms and conditions and to such
other terms and conditions not inconsistent with the Plan as shall from time to
time be approved by the Committee:

(i) If granted in connection with an Option, an SAR shall be exercisable at
such time or times and by such person or persons and to the extent, but
only to the extent, that the Option to which it relates

A-3
<PAGE> 24

shall be exercisable; provided, however, that such SAR shall be exercisable
only during the ten-day periods (the "Exercise Periods") beginning on the
third business day following the date of release of a summary statement of
the Company's quarterly or annual sales and earnings and ending on the
twelfth business day following such date of release.

(ii) If granted independently of an Option, an SAR shall be subject to the
following provisions:

(A) If a person terminates employment prior to attaining age 55, the SAR
shall terminate 90 days after the termination of employment, except in
the case of death or disability.

(B) If employment terminates as a result of death or disability or if a
person terminates employment after attaining age 55, the SAR will
terminate one year after the termination of employment.

(d) Upon exercise of an SAR, the holder thereof shall be entitled to receive a
number of shares equal in Fair Market Value to (1) the amount by which the Fair
Market Value of a share of Common Stock on the date of such exercise shall
exceed the Fair Market Value of a share of Common Stock on the date of grant of
the related Option, or, in the case of any SAR granted independently of an
option, on the date of grant of such SAR, multiplied by (2) the number of shares
in respect of which the SAR shall have been exercised. Settlement for any
fraction of a share due shall be made in cash. The Committee may settle all or
any part of the Company's obligation arising out of an exercise of any SAR by
the payment of cash equal to the aggregate value of the shares of Common Stock
that it would otherwise be obligated to deliver under the provisions of this
paragraph (d).

(e) Upon exercise of any SAR, (i) there shall be charged against the limitations
in paragraph (a) of Section 4 a number of shares equal to (A) the number of
shares issued to the grantee under paragraph (d) of this Section 6 plus (B) the
number of shares purchasable with the amount of any cash paid to the grantee on
the basis of the Fair Market Value as of the date of payment and (ii) the
portion of the Incentive in respect of which such SAR shall have been exercised
shall be cancelled and the number of shares subject to such portion, less the
number of shares so charged against such limitations, shall thereafter be
available for other grants of Incentives.

7. INCENTIVE STOCK RIGHTS

(a) An Incentive Stock Right will consist of incentive stock units, each of
which will be equivalent to one share of Common Stock. An Incentive Stock Right
will be evidenced by an agreement in form approved by the Committee; will be
nontransferable; will entitle the holder to receive shares of Common Stock,
without payment to the Company, after the lapse of the incentive period or
periods established by the Committee and subject to the satisfaction of any
performance goals established by the Committee from the performance criteria set
forth in Section 14 hereof with respect to such Incentive Stock Rights; and will
be subject to the limitations in paragraph (a) of Section 4. The terms of the
agreement evidencing an Incentive Stock Right shall provide that holders of
Incentive Stock Rights will be entitled, from the date of the award, either (1)
to receive from the Company cash payments equal to the amount of dividends
declared on the number of shares of Common Stock equal to the number of
incentive stock units held by them, such payments to be made on or about the
Company's dividend payment dates or (2) to be credited with dividend equivalents
based upon dividends paid on outstanding shares of Common Stock. Such dividend
equivalents, once credited, shall be converted into a number of additional
incentive stock units, as of each dividend payment date, in accordance with the
following formula:

(A X B) / C

in which "A" equals the number of incentive stock units credited to the holder
on the dividend payment date, "B" equals the dividend per share and "C" equals
the Fair Market Value per share of Common Stock on the dividend payment date. If
a dividend is paid in property other than cash, dividend equivalents shall be
credited, as of the dividend payment date, in accordance with the formula set
forth above, except that "B" shall equal the fair market value per share of the
property which the holder would have received in respect of the number of shares
of Common Stock equal to the number of incentive

A-4
<PAGE> 25

stock units credited to the holder as of the dividend payment date, had such
shares been owned as of the record date for such dividend.

(b) If an employee terminates employment prior to attaining age 55, all
Incentive Stock Rights will terminate on the date employment terminates, except
in the case of death or disability. If employment terminates as a result of
death or disability, or after attainment of age 55, the Committee may elect, at
the end of the Incentive period, to award a portion of the shares of Common
Stock that would have been awarded, but for the termination of employment, equal
to the number of months in the incentive period prior to the termination date
divided by the number of months in the incentive period.

(c) After the issuance of shares in respect of Incentive Stock Rights, there
will be charged against the limitations in paragraph (a) of Section 4 a number
of shares equal to the number of shares so issued.

(d) To the extent not inconsistent with Section 162(m), the Committee may make
such adjustments to any performance goals or to the Company's financial results
as it deems appropriate for changes in accounting practices or principles, for
material acquisitions or dispositions of stock or property, for
recapitalizations or reorganizations or for any other events with respect to
which the Committee determines such an adjustment to be appropriate in order to
avoid distortion in the operation of the Plan.

8. PERFORMANCE UNIT AWARDS

(a) A Performance Unit Award will consist of performance units granted to Senior
Executives selected by the Committee which can be paid in cash or shares of
Common Stock. Performance units may be granted alone or in conjunction with and
related to an Option. When granted in conjunction with an Option, the number of
performance units, unless otherwise provided by the Committee, will be equal to
the number of shares under the related Option. To the extent that the Committee
elects to pay performance units granted with a related Option, there will be a
proportionate reduction in the number of shares available under such Option and
any related SAR. To the extent the related Option or an SAR granted in
connection with such Option is exercised, the related number of performance
units will be proportionately reduced.

(b) The Committee will establish an initial value for each performance unit at
the time of grant. At that time, the Committee will also establish performance
targets (from the performance criteria set forth in Section 14 hereof) to be
achieved during the award period of not less than one year set by the Committee.
The value of the performance units at the end of the award period will be
determined by the degree to which the performance targets are achieved.
Performance Unit Awards will be subject to the limitations in paragraph (a) of
Section 4 and will be evidenced by agreements setting forth the initial value
for each performance unit, the performance targets, the award period and such
other terms and conditions not inconsistent with the Plan as the Committee may
determine.

(c) Payment, if any, at the end of the award period will be made in cash, shares
of Common Stock, or both, as determined by the Committee. In no event shall
payment to an individual in respect of any Performance Unit Award exceed
$250,000 in value. A Performance Unit Award granted alone, not in conjunction
with an Option, is automatically payable if the conditions are met. A
Performance Unit Award granted in conjunction with an Option is payable only if
the conditions are met and then at the election of the Committee, as an
alternative to the continuance of the related option and any related SAR. The
Committee may make this election to pay only during the first two months after
the end of the award period. If the election to pay is not made, the Performance
Unit Award terminates and the related Option and SAR continue in effect.

(d) In the event of termination of employment prior to the end of the award
period by reason of death, disability, or termination of employment after
attainment of 55 years of age, a pro rata portion of the value of the
performance units at the end of the award period will be paid to the employee
(or his/her estate in the case of death), unless the Committee determines that a
different portion should be payable or elects to terminate the award. Except as
otherwise determined by the Committee, upon termination of employment under any
other circumstances, the Performance Unit Award will terminate.

A-5
<PAGE> 26

(e) Upon payment of a Performance Unit Award, there shall be charged against the
aggregate limitations in paragraph (a) of Section 4 a number of shares equal to
(i) the number of any shares issued to the employee in respect of the
Performance Unit Award plus (ii) the number of shares purchasable with the
amount of any cash paid to the employee in respect of the Performance Unit Award
on the basis of the Fair Market Value of the Common Stock as of the date of
payment.

(f) To the extent not inconsistent with Section 162(m), the Committee may make
such adjustments to the performance goals or to the Company's financial results
as it deems appropriate for changes in accounting practices or principles, for
material acquisitions or disposition of stock or property, for recapitalizations
or reorganizations or for any other events with respect to which the Committee
determines such an adjustment to be appropriate in order to avoid distortion in
the operation of the Plan.

9. ADJUSTMENT PROVISIONS

The Options granted under the Plan shall contain such provisions as the
Committee may determine with respect to adjustments to be made in the number and
kind of shares covered by such Options and in the Option price in the event of a
reorganization, recapitalization, stock split, stock dividend, combination of
shares, merger, consolidation, rights offering, or any other change in the
corporate structure or shares of the Company, and in the event of any such
change, the aggregate number and kind of shares available under the Plan and the
maximum number of Options, Stock Appreciation Rights, and Incentive Stock Rights
which can be granted to any individual shall be appropriately adjusted. In the
event of any such change, equitable adjustments shall also be made by the
Committee in its discretion in the terms and conditions of any SAR, Incentive
Stock Right, or Performance Unit Award granted under the Plan.

10. TERM

The Plan, as amended and restated as of February 16, 1996, shall become
effective if and when approved by the Company's stockholders at the 1996 Annual
Meeting. In the absence of such approval, the Plan, as in effect prior to such
amendment and restatement, shall remain in effect. No Incentives shall be
granted under the Plan after April 2, 2006.

11. ADMINISTRATION

(a) The Plan shall be administered by the Committee, to be appointed from time
to time by the Board consisting of not less than three members of the Board. No
member of the Committee shall be eligible to participate in the Plan. Each
member of the Committee shall qualify as an "outside director" within the
meaning of Section 162(m) and as a "disinterested person" within the meaning of
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").

(b) Incentives under the Plan shall be granted in accordance with the
Committee's determinations pursuant to the Plan, by execution and prompt
delivery to the employee of instruments approved by the Committee. Any such
grant shall be effective on the date of such determination or, if after, on the
date specified in the instrument evidencing the grant.

(c) The interpretation and construction by the Committee of any provision of the
Plan and of any Incentive granted thereunder shall, unless otherwise determined
by the Board, be final and conclusive on all persons having any interest
thereunder.

12. GENERAL PROVISIONS

(a) Absence on leave because of military or governmental service, or other
reason, if such absence is approved by the Committee, shall not be considered an
interruption or termination of employment for any purpose of the Plan, or
Incentives granted thereunder, except that no Incentive may be granted to an
employee while he/she is absent on leave.

(b) Nothing in the Plan or in any instrument executed pursuant thereto shall
confer upon any employee any right to continue in the employ of the Company or a
Subsidiary.

A-6
<PAGE> 27

(c) No shares of Common Stock shall be sold, issued, or transferred pursuant to,
or accepted as payment of the Option price of, an Incentive unless and until
there has been compliance, in the opinion of the Company's General Counsel, with
all applicable legal requirements, including without limitation those relating
to securities laws and stock exchange listings.

(d) No employee (individually or as a member of a group), and no beneficiary or
other person claiming under or through him/her, shall have any right, title, or
interest in or to any shares of Common Stock allocated or reserved for the Plan
or subject to any Incentive except as to such shares of Common Stock, if any, as
shall have been sold, issued, or transferred to him/her.

(e) The Company or a Subsidiary may make such provisions as it may deem
appropriate for the withholding of any taxes which the Company or Subsidiary
determines it is required to withhold in connection with any Incentive.

(f) No Incentive and no rights under the Plan, contingent or otherwise, (i)
shall be assignable or subject to any encumbrance, pledge, or charge of any
nature, whether by operation of law or otherwise, (ii) shall be subject to
execution, attachment, or similar process, or (iii) shall be transferable other
than by will or the laws of descent and distribution, and every Incentive and
all rights under the Plan shall be exercisable during the employee's lifetime
only by him/her or by a guardian or legal representative.

(g) Nothing in the Plan is intended to be a substitute for, or shall preclude or
limit the establishment or continuation of, any other plan, practice, or
arrangement for the payment of compensation or fringe benefits to any employee
which the Company or any Subsidiary now has or may hereafter put into effect,
including without limitation any retirement, pension, savings or thrift,
insurance, death benefit, stock purchase, incentive compensation, or bonus plan.

13. AMENDMENT OR DISCONTINUANCE OF PLAN

(a) The Plan may be amended by the Board at any time, provided that, without the
approval of the stockholders of the Company, no amendment shall be made if
stockholder approval is required in order for the Plan to comply with Rule 16b-3
promulgated under the Exchange Act or Section 162(m).

(b) The Board may discontinue the Plan at any time.

(c) No amendment or discontinuance of the Plan shall adversely affect, except
with the consent of the holder, any Incentive theretofore granted.

14. PERFORMANCE GOALS

The Committee may establish performance goals or targets in connection with the
grant of, and as a condition to payment in respect of, Incentive Stock Rights
and shall establish performance goals or targets in connection with the grant
of, and as a condition to payment in respect of Performance Unit Awards. Such
goals or targets shall be expressed in terms of one or more of the following
financial criteria or objectives of the Company: Net Income; Earnings Per Share;
Return on Equity; Return on Invested Capital; or Performance Profit. For
purposes of the Plan:

(a) "Return on Equity" shall mean net income divided by stockholders' equity;

(b) "Return on Invested Capital" shall mean net income before interest and taxes
times one minus the tax rate divided by interest-bearing debt plus equity;

(c) "Performance Profit" shall mean operating income minus the charge for the
capital employed in the unit's basic business that is used in the Company's
current operating plan.

A-7
<PAGE> 28

Barnes Group Inc.
Executive Office
123 Main Street
Post Office Box 489
Bristol, CT 06011-0489 U.S.A.

[logo]
<PAGE> 29

1996 - BARNES GROUP INC. - PROXY
ANNUAL MEETING OF STOCKHOLDERS
APRIL 3, 1996 - 10:30 A.M.
THE TRAVELERS EDUCATION CENTER, 200 CONSTITUTION PLAZA, HARTFORD, CT 06103

THE UNDERSIGNED STOCKHOLDER OF BARNES GROUP INC. HEREBY APPOINTS GARY G. BENANAV
AND K. GRAHAME WALKER, EACH WITH THE POWER TO APPOINT HIS SUBSTITUTE, AS THE
UNDERSIGNED'S ATTORNEYS TO VOTE THE SHARES OF STOCK COVERED BY THIS PROXY AT THE
ANNUAL MEETING OF STOCKHOLDERS ON APRIL 3, 1996, OR AT ANY ADJOURNMENT THEREOF,
UPON THE MATTERS SET FORTH IN THE NOTICE OF SUCH MEETING, WITH ALL THE POWERS
THE UNDERSIGNED WOULD POSSESS IF PERSONALLY PRESENT. SAID PERSONS ARE
INDIVIDUALLY AUTHORIZED TO VOTE AS SPECIFIED ON ITEMS 1, 2, AND 3 AND OTHERWISE
IN THEIR DISCRETION.

(CONTINUED AND TO BE SIGNED, DATED, AND VOTED ON THE REVERSE SIDE)
<PAGE> 30

1996 -- BARNES GROUP INC. -- PROXY

(1) The Board of Directors recommends a vote FOR the following nominees: William
S. Bristow, Jr., Robert J. Callander, and Theodore E. Martin
<TABLE>
<C> <C> <S>
FOR WITHHOLD (INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's
ALL AUTHORITY name on the line provided below.)
NOMINEES FOR ALL NOMINEES
/ / / / ----------------------------------------------------------------------------------------------
</TABLE>

The Board of Directors recommends a
vote FOR the following proposals:

(2) Approval of the selection of Price
Waterhouse as the Company's
independent accountants.

FOR AGAINST ABSTAIN
/ / / / / /

(3) Approval of the proposed amendment
to the 1991 Barnes Group Stock
Incentive Plan.

FOR AGAINST ABSTAIN
/ / / / / /

---------------------------------------------
"PLEASE MARK INSIDE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES"
---------------------------------------------

THIS PROXY IS SOLICITED BY THE BOARD
OF DIRECTORS. UNLESS OTHERWISE
DIRECTED, THIS PROXY SHALL BE VOTED
FOR ITEMS 1, 2, AND 3.
Please sign exactly as name(s) appear
hereon. If the shares are registered
in the names of two or more persons,
each should sign. Executors,
administrators, trustees, guardians,
attorneys-in-fact, general partners
and other persons acting in a
representative capacity should add
their titles. When the proxy is given
by a corporation, it should be signed
by an authorized officer.

-------------------------------------
Signature

-------------------------------------

-------------------------------------
Dated: ________________________, 1996

PLEASE RETURN THIS CARD PROMPTLY
USING THE ENCLOSED POSTAGE-PAID
ENVELOPE.

PLEASE SEE THE REVERSE SIDE.