Edgar Filing: BARNES GROUP INC

B 2013 Proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

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BARNES GROUP INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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123 Main Street

Bristol, Connecticut 06010

March 21, 2013

NOTICE OF 2013 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD MAY 3, 2013

You are invited to attend the 2013 Annual Meeting of Stockholders of Barnes Group Inc. (the “Company”) which will be held at the Hartford Marriott Downtown Hotel, 200 Columbus Boulevard, Hartford, Connecticut 06103, at 11:00 a.m., Eastern Daylight Time, on Friday, May 3, 2013, for the following purposes:


1.	Election of directors;


2.	Ratify the selection of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for 2013;


3.	Vote on an advisory (non-binding) resolution to approve the Company's executive compensation;


4.	Amend the Company’s Amended and Restated By-Laws ("By-Laws") to provide for the annual election of all directors;


5.	Amend the Company's Restated Certificate of Incorporation ("Charter") to eliminate certain supermajority voting requirements; and


6.	Transact any other business that may properly come before the meeting or any adjournment thereof.

Stockholders of record at the close of business on March 5, 2013 will be entitled to vote at the meeting. The Board of Directors recommends a vote FOR all director nominees and FOR Items 2, 3, 4 and 5.

Your vote is important. Whether or not you plan to attend the meeting, we encourage you to vote as promptly as possible by internet, telephone or mail.

Thomas O. Barnes

Chairman of the Board

2013 Proxy Summary

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all information that you should consider, and you should read the entire proxy statement carefully before voting.

Annual Meeting of Stockholders



• Time and Date	11:00 a.m., Friday, May 3, 2013
• Place	Hartford Marriott Downtown Hotel
	200 Columbus Boulevard, Hartford, Connecticut 06103
• Record Date	March 5, 2013
• Voting	Stockholders as of the record date are entitled to vote. Each share of Common Stock is entitled to one vote for each director nominee and one vote for each of the proposals to be voted on.

Voting Matters



Item No.		Board Vote Recommendation	Page Reference
1	Election of Directors	FOR EACH DIRECTOR NOMINEE	3
	Management Proposals
2	Ratify the selection of PricewaterhouseCoopers as the Company's independent registered public accounting firm for 2013	FOR	8
3	Advisory resolution to approve the Company's executive compensation	FOR	8
4	Amend the Company’s By-Laws to provide for the annual election of all directors	FOR	9
5	Amend the Company's Charter to eliminate certain supermajority voting requirements	FOR	10

Board Nominees


•	The following table provides summary information about each director nominee. Each director nominee is elected for a three-year term, expiring at the Annual Meeting of Stockholders in 2016. Each director is elected by a plurality of the votes cast.

Name

Age

Director Since

Independent

Committee Memberships

Audit

Compensation and Management Development

Corporate Governance

Executive

Finance

John W. Alden

2000

Chair

Francis J. Kramer

2012

William J. Morgan

2006

Chair


•	All of our director nominees are current directors and attended no fewer than 75% of the Board meetings and committee meetings on which he served during 2012 for the period he served as director.

Management Proposals


•	Ratify Auditors (Item 2). As a matter of good corporate governance, we are asking our stockholders to ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2013. Below is summary information with respect to PricewaterhouseCoopers LLP's fees for services provided in 2012 and 2011.



Type of Fees	2012		2011
Audit Fees	$	2,035,782	$	2,112,675
Audit-Related Fees	$	691,549	$	607,265
Tax Fees	$	1,312,159	$	1,543,357
All Other Fees	$	3,636	$	3,636

Total Fees	$	4,043,126	$	4,266,933

•

Advisory Resolution to Approve Executive Compensation (Item 3). For the third year, we are asking our stockholders to approve on an advisory basis our named executive officer ("NEO") compensation. Consistent with stockholders' vote on "say on frequency" in 2011, the Board approved that stockholders vote on the compensation of our NEOs every year so that they may annually express their views on our executive compensation program. We were gratified that last year, 98.52% of the votes cast (81.07% of shares outstanding) supported our executive compensation program. The Board recommends a FOR vote because it believes that our compensation policies and practices are effective in achieving the Company's goals of rewarding for financial and operating performance, and aligning our NEOs’ interests with those of our stockholders.

•

Board Declassification Proposal (Item 4). The Company's By-Laws currently provide that the Board is divided into three classes, with each class elected every three years. After careful consideration, the Board has determined that it would be in the best interests of the Company and its stockholders to declassify the Board to allow stockholders to vote on the election of the entire Board each year, rather than on a staggered basis. As part of this proposal, and consistent with Delaware law for declassified boards, the Company is proposing to amend the By-Laws to eliminate the provision that allows stockholders to remove directors only for cause and reduce the vote for removal to the affirmative vote of holders of a majority of the outstanding shares of stock of the Company entitled to vote in elections of directors. Please see page 9 for more information on this proposal.


•	Amend the Charter to Eliminate Certain Supermajority Voting Requirements (Item 5). After careful consideration, the Board is also asking stockholders to approve eliminating supermajority voting requirements in our Charter in order to amend certain By-Laws provisions. Please see page 10 for more information on this proposal.

Corporate Governance Practices

Governance is a continuing focus at the Company. We solicit feedback from stockholders on governance and executive compensation practices. Several of our key governance changes for 2012 – some resulting from this outreach – are summarized below.

Summary of Corporate Governance Changes



•	Amended our Corporate Governance Guidelines to include a majority voting policy under which any director who receives more "withhold" than "for" votes in an uncontested election must tender to the Board, for its consideration, an offer to resign
•	Amended our Corporate Governance Guidelines to disclose in detail the responsibilities of the Lead Independent Director when the Chairman of the Board is not an independent director
•	Amended our By-Laws to give stockholders holding at least 40% of the outstanding Common Stock the right to call special meetings
•	Adopted a Political Activities Statement under which the Company compiles information that we make available on our website, and periodically reports on these activities to the Corporate Governance Committee



•	Amended our Securities Law Compliance Policy to (i) prohibit certain members of Company leadership, including all directors and executive officers, from pledging or margin call arrangements involving Company securities that are held to meet the Company's stock ownership requirements, and (ii) place other restrictions on any other pledging or margin call arrangements involving Company stock by these individuals
•	In addition, in 2012 our Board decided to recommend that stockholders declassify the Board and eliminate certain supermajority voting standards

Executive Compensation

Key Elements



Type		Form		Terms
Equity	•	Stock options	•	Time-based vesting; 18, 30, and 42 months from the grant date in equal installments
	•	Restricted stock units ("RSUs")	•	Time-based vesting; 18, 30, and 42 months from the grant date in equal installments
	•	Relative measure performance share awards ("Relative Measure PSAs")	•	Performance-based vesting at the end of a 3-year cycle; based on three equally weighted measures separately evaluated based on a comparison of the Company's relative performance against the performance of Russell 2000 Index companies
Cash	•	Salary	•	Generally eligible for annual salary increase consideration
Cash	•	Annual incentive compensation	•	Stockholder-approved program with payouts based on accomplishment of targeted financial performance measures
Retirement	•	Defined benefit plans	•	Qualified defined benefit plan with terms the same as other eligible U.S. based employees; vesting upon attaining 5 years of service
Retirement			•	Non-qualified defined benefit plan that provides supplemental benefits on earnings in excess of IRS limit on qualified plans to certain eligible salaried employees; vesting upon attaining 5 years of service
			•	Non-qualified defined benefit plan that provides supplemental benefits if executive attains both 10 or more years of service and age 55 while an active employee; benefits are in lieu of benefits under the non-qualified defined benefit plan above the IRS limit that applies to other U.S. based employees; applies only to Messrs. Milzcik and Dempsey; plan was closed to new participants in December 2008
	•	Deferred compensation plan	•	Mr. Stephens and Ms. Edwards participate in a non-qualified deferred compensation program that provides for a deferred employer contribution as a % of base salary and annual incentive amounts earned in excess of the IRS limit for qualified plans
Change in control and severance	•	Severance benefits	•	Severance payable and benefit continuation upon termination of employment in certain specified circumstances or upon a change in control
Change in control and severance			•	Severance ranges from a multiple of one times base salary plus pro rata bonus for certain non-change in control events under certain circumstances, to two times base salary plus pro rata bonus and additional benefits for certain change in control events
			•	“Double trigger” for accelerated vesting of all equity awards made after 2010 upon a change in control (except for Mr. Milzcik based on the terms of his employment agreement)
			•	No 280G gross-ups for a “golden parachute payment”
Perquisites			•	Financial planning and tax preparation services, annual physicals (for amounts not otherwise covered by health insurance), executive life insurance with tax gross-up benefit (for current participants only), limited personal use of Company-leased aircraft (Mr. Milzcik only)
Other			•	Policy that prohibits hedging transactions involving the Company's securities for any of our directors or executive officers
			•	Executive stock ownership requirements
			•	Clawback of incentive compensation under certain circumstances for all NEOs

iii

Summary of Key Executive Compensation Changes for 2012



Program Component		Summary of Changes

Long-term incentive awards	•	Increased weighting of Relative Measure program PSAs from 33^1/3% to 50% of long-term incentive compensation. Reduced weighting of RSUs to 30% and stock options to 20% of long-term incentive compensation.

	•	Added a condition to Relative Measure PSAs that a participant terminated by the Company "not for cause" before one year from the grant date will fully forfeit any awards.

Retirement programs	•	Discontinued the Supplemental Executive Retirement Program ("SERP") except for participants who were retirement eligible or were in payment status. We also closed the Nonqualified Deferred Compensation Plan ("DC Plan") to any new or rehired otherwise eligible executives.

Executive life insurance programs	•	Implemented the Executive Group Term Life Insurance Program ("EGTLIP") for employees newly hired or promoted into an eligible position. This program provides premium payments for a term life insurance benefit of up to four times base salary during employment. No tax gross up is provided on this benefit. (This program replaced the Senior Executive Enhanced Life Insurance Program ("SEELIP") which was closed to new participants effective April 1, 2011. Under the SEELIP, the Company pays the premiums for a life insurance policy owned by the participating NEO and pays the participating NEO's income tax liability arising from its payment of the premiums and taxes.) The Company does not provide any premium payments during retirement.

Stock ownership requirements	•	Implemented changes to the Company's stock ownership requirements permitting 2/3 of the value of unvested RSUs to count toward achieving ownership requirements. Eliminated the five and/or six year deadline to achieve ownership in favor of a requirement that all net after tax proceeds of Company equity grants, including stock option exercises, be retained until ownership levels are met. Once ownership levels are met, the requirement is converted to a fixed number of shares.

2012 NEO Compensation Summary



Name and Principal Position	Year	Salary		Bonus		Stock Awards		Option Awards		Non-Equity Incentive Plan Compensation		Change in Pension Value and Nonqualified Deferred Compensation Earnings		All Other Compensation		Total
Gregory F. Milzcik President and Chief Executive Officer	2012	$	890,000	$	—	$	2,699,218	$	599,937	$	744,596	$	1,729,195	$	260,844	$	6,923,790
	2011	886,250		—		2,040,788		904,792		2,002,500		1,802,030		204,408		7,840,768
	2010	856,250		—		2,376,761		929,770		1,619,723		1,185,353		335,628		7,303,485
Christopher J. Stephens, Jr. Senior Vice President, Finance and Chief Financial Officer	2012	431,000		—		1,339,261		130,546		240,390		49,038		234,870		2,425,105
	2011	427,250		—		340,131		150,549		646,500		36,337		218,575		1,819,342
	2010	413,250		124,000		370,940		122,080		513,375		27,478		135,112		1,706,235

Patrick J. Dempsey Senior Vice President and Chief Operating Officer	2012	447,783		—		565,484		124,787		250,988		364,266		104,764		1,858,072
	2011	427,250		—		274,901		122,836		646,500		378,554		74,451		1,924,492
	2010	413,250		—		407,576		134,070		213,668		225,597		98,904		1,493,065
Claudia S. Toussaint Senior Vice President, General Counsel and Secretary	2012	289,270		—		830,098		72,734		146,265		81,302		88,214		1,507,883
	2011	356,250		—		270,241		119,840		486,000		33,721		158,106		1,424,158
	2010	236,635		—		407,355		284,906		262,823		17,273		199,363		1,408,355
Dawn N. Edwards Senior Vice President, Human Resources	2012	296,000		—		269,177		60,474		148,585		102,683		133,699		1,010,618
	2011	292,250		—		223,648		101,115		399,600		73,928		117,334		1,207,875

2014 Annual Meeting


•	Deadline for stockholder proposals for inclusion in the proxy statement for the 2014 Annual Meeting: November 21, 2013

PROXY STATEMENT FOR 2013 ANNUAL MEETING OF STOCKHOLDERS

TABLE OF CONTENTS



	Page
INTERNET AVAILABILITY OF PROXY MATERIALS	1

INFORMATION ABOUT VOTING	1

PROXY PROPOSALS	3
Election of Directors (Item 1 on proxy card)	3
Ratify the Selection of PricewaterhouseCoopers LLP as the Company's Independent Registered Public Accounting Firm (Item 2 on proxy card)	8
Advisory (Non-Binding) Resolution to Approve the Company's Executive Compensation (Item 3 on proxy card)	8
Amend the Company’s By-Laws to Provide for the Annual Election of All Directors (Item 4 on proxy card)	9
Amend the Company's Charter to Eliminate Certain Supermajority Voting Requirements (Item 5 on proxy card)	10

EXECUTIVE AND DIRECTOR COMPENSATION	12
Compensation Discussion and Analysis	12
Compensation Committee Report	27
Risk Oversight and Assessment Policies and Practices	27
Summary Compensation Table for 2012, 2011 and 2010	28
Grants of Plan-Based Awards in 2012	32
Outstanding Equity Awards at Fiscal Year End	33
Option Exercises and Stock Vested	34
Pension Benefits	35
Nonqualified Deferred Compensation	38
Termination Provisions of Employment and Severance Arrangements	39
Potential Payments Upon Termination or Change in Control	45
Director Compensation in 2012	47

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS	50

RELATED PERSON TRANSACTIONS	50

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	51

CORPORATE GOVERNANCE	52
Director Independence	54
Board Meetings and Committees; Director Attendance	55
Board Leadership	55
Board Role in Risk Oversight	56
Process for Selecting Directors; Stockholder Recommended Director Candidates	56
Stockholder and Interested Parties Communications	57
The Compensation and Management Development Committee	57
The Corporate Governance Committee	58
The Audit Committee	58
Audit Committee Report	58

PRINCIPAL ACCOUNTANT FEES AND SERVICES	59

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE	60

STOCKHOLDER PROPOSALS FOR 2014 ANNUAL MEETING	60

ADDITIONAL INFORMATION	61

ANNEXES	i

PROXY STATEMENT FOR 2013 ANNUAL MEETING OF STOCKHOLDERS

MAY 3, 2013

This proxy statement is being used in connection with the solicitation of proxies by Barnes Group Inc., which is referred to in this proxy statement as the “Company”, on behalf of the Board of Directors for the 2013 Annual Meeting of Stockholders (“2013 Annual Meeting”) to be held on May 3, 2013 and at any adjournment thereof. Availability of this proxy statement and accompanying materials to stockholders is scheduled to begin on or about March 21, 2013.

INTERNET AVAILABILITY OF PROXY MATERIALS

In accordance with the rules of the Securities and Exchange Commission (the "SEC"), instead of mailing a printed copy of its proxy materials to each stockholder of record or beneficial owner, the Company is furnishing its proxy materials (proxy statement for the 2013 Annual Meeting, the proxy card and the 2012 Annual Report to Stockholders) by providing access to these materials on the internet. Stockholders will not receive printed copies of the proxy materials unless they request this form of delivery. Printed copies will be provided upon request at no charge.

A Notice of Meeting and Internet Availability of Proxy Materials (the “Notice of Internet Availability”) will be mailed to stockholders on or about March 21, 2013. The Company is providing the Notice of Internet Availability in lieu of mailing the printed proxy materials and is instructing stockholders as to how they may: (1) access and review the Company's proxy materials on the internet; (2) submit their proxy; and (3) receive printed proxy materials. Stockholders may request to receive printed proxy materials by mail or electronically by e-mail on an ongoing basis by following the instructions in the Notice of Internet Availability. A request to receive proxy materials in printed form by mail or by e-mail will remain in effect until such time as the submitting stockholder elects to terminate it.

INFORMATION ABOUT VOTING

Who Can Vote

Only stockholders of record at the close of business on March 5, 2013 (the “Record Date”) will be entitled to vote at the 2013 Annual Meeting. As of March 5, 2013, the Company had ____________ outstanding shares of common stock, par value $.01 per share (the “Common Stock”), each of which is entitled to one vote.

Voting Your Shares

You can vote your shares either by proxy or in person at the 2013 Annual Meeting. If you choose to vote by proxy,

you can do so in one of three ways:


•	By internet. To vote using the internet, go to the website listed on your Notice of Internet Availability or proxy card. You will need to follow these instructions and those on the website.


•	By telephone. To vote by telephone, call the toll free number listed on your Notice of Internet Availability or proxy card. You will need to follow these instructions and the prompts from the telephone voting system.


•	By mail. If you requested printed proxy materials and wish to vote by mail, simply mark, sign and date the proxy card and return it in the postage-paid envelope provided.

If you vote by internet or telephone, you should not return your proxy card.

If you hold your shares through a broker, bank or other nominee, you will receive separate instructions from the nominee describing how to vote your shares.

Revocation of Proxy

A stockholder who executes and delivers a proxy may revoke it at any time before it is exercised by voting in person at the 2013 Annual Meeting, by delivering a subsequent proxy, by notifying the inspectors of the election in person or in writing or, if previous instructions were given through the internet or by telephone, by providing new

instructions by the same means.

Quorum

For the business of the 2013 Annual Meeting to be conducted, a minimum number of shares constituting a quorum must be present. The holders of a majority of the outstanding shares of Common Stock entitled to vote at the 2013 Annual Meeting must be present in person or represented by proxy at the 2013 Annual Meeting to have a quorum. Shares represented at the meeting by proxies including abstentions and broker non-votes are treated as present at the meeting for purposes of determining a quorum.

Broker Non-Votes

A broker non-vote occurs when a stockholder who holds his or her shares through a bank or brokerage firm does not instruct that bank or brokerage firm how to vote the shares and, as a result, the broker is prevented from voting the shares held in the stockholder's account on certain proposals. Under applicable New York Stock Exchange ("NYSE") rules, if you hold your shares through a bank or brokerage firm and your broker delivers the Notice of Internet Availability or the printed proxy materials to you, the broker has discretion to vote on “routine” matters only. The ratification of the selection of the Company's independent registered public accounting firm is considered "routine" and therefore may be voted on by your bank or brokerage firm without instructions from you.

The Effect of Broker Non-Votes and Abstentions

Abstentions and broker non-votes will not have an effect on the outcome of Item 1 (election of directors). In voting on Item 2 (ratifying auditor selection), and Item 3 (approval of executive compensation), abstentions will have the effect of votes against the proposals and broker non-votes will not have an effect on the outcome of the vote. In voting on Item 4 (amending the By-Laws to provide for the annual election of all directors) and Item 5 (amending the Charter to eliminate certain supermajority voting requirements), abstentions and broker non-votes will have the effect of votes against the proposals.

Participants in the Barnes Group Inc. Retirement Savings Plan

You must provide the trustee of the retirement savings plan with your voting instructions in advance of the meeting. You may do so by returning your voting instructions by mail, or submitting them by telephone or electronically, using the internet. You cannot vote your shares in person at the 2013 Annual Meeting; the trustee is the only one who can vote your shares. The trustee will vote your shares as you have instructed. Except as otherwise required by law, if the trustee does not receive your instructions, the trustee will vote your shares in the same proportion on each issue as it votes those shares for which it has received voting instructions. To allow sufficient time for voting by the trustee, your voting instructions must be received by 11:59 p.m. Eastern Daylight Time (EDT) on April 30, 2013.

VOTE REQUIRED AND RECOMMENDATIONS OF THE BOARD FOR EACH PROPOSAL

Item 1, Election of directors.

Vote Required: Directors are elected by a plurality of the votes cast. Proxies may not be voted for more than the number of nominees named by the Board of Directors.

Recommendation: The Board of Directors recommends a vote “FOR” all nominees.

Item 2, Ratify the selection of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for 2013.

Vote Required: Affirmative vote of a majority of shares of Common Stock represented in person or by proxy and entitled to vote on the matter.

Recommendation: The Board of Directors recommends a vote “FOR” this proposal.

Item 3, Advisory (non-binding) resolution to approve the Company's executive compensation.

Vote Required: Affirmative vote of a majority of shares of Common Stock represented in person or by proxy and entitled to vote on the matter. As noted in the discussion of this proposal, the choice receiving a majority

of votes will not be binding on the Board of Directors or its Compensation and Management Development Committee (the “Compensation Committee”) and may neither be construed as overruling a decision by the Board of Directors or the Compensation Committee nor creating or implying any additional fiduciary duty on the Board of Directors. Further, it will not affect any compensation paid or awarded to any named executive officer.

Recommendation: The Board of Directors recommends a vote “FOR” this proposal.

Item 4, Proposal to amend the Company’s By-Laws to provide for the annual election of all directors.

Vote Required: Affirmative vote of not less than two-thirds (2/3) of the shares of Common Stock outstanding as of the Record Date.

Recommendation: The Board of Directors recommends a vote “FOR” this proposal.

Item 5, Proposal to amend the Company’s Charter to eliminate certain supermajority voting requirements.

Vote Required: Affirmative vote of not less than two-thirds (2/3) of the shares of Common Stock outstanding as of the Record Date.

Recommendation: The Board of Directors recommends a vote “FOR” this proposal.

PROXY PROPOSALS

Stockholders who are entitled to vote at the 2013 Annual Meeting are requested to vote on the proposals listed below.

Election of Directors (Item 1)

Three directors are nominated for re-election to the Board of Directors for a three-year term (unless any of them earlier dies, resigns, retires or is removed, as provided in the Company's By-Laws). John W. Alden, Francis J. Kramer and William J. Morgan are nominated for re-election to the Board of Directors for terms expiring at the Annual Meeting of Stockholders in 2016.

Below is pertinent information concerning the nominees for re-election as directors, the seven directors whose terms continue after the meeting, and the one director who will be retiring from the Board as of the date of the 2013 Annual Meeting. Each director has been associated with his or 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.

The Board of Directors recommends a vote “FOR” all nominees.

Nominees for Re-election - Three-Year Term - Term to expire in 2016



	John W. Alden
	Age: 71	Committees:
	Director since: 2000	Compensation and Management Development
	Current term expires: 2013	Corporate Governance
		Finance (Chair)

	Mr. Alden retired in 2000 as Vice Chairman, United Parcel Service of America, Inc. From 1988 until his retirement, he served as a director of United Parcel Service. He is currently, and has been during the past five years, a director of Silgan Holdings Inc., The Dun & Bradstreet Corporation and Arkansas Best Corporation. In addition to his service with United Parcel Service of America, Inc. and on other boards of directors, Mr. Alden's qualifications to be a member of our Board of Directors include his extensive experience as senior manager and vice chairman of a $50 billion company with responsibility for corporate strategic planning, worldwide marketing, sales, communications, public relations and logistics, and a life-long career in industry.


	Francis J. Kramer
	Age: 63	Committees:
	Director since: 2012	None
	Current term expires: 2013

	Mr. Kramer is President and Chief Executive Officer and a member of the Board of Directors of II-VI Incorporated, a publicly traded company that is a global leader in engineered materials and optoelectronic components. He has served as a director of II-VI Incorporated since 1989, has been President since 1985, and was Chief Operating Officer from 1985 to 2007. He is a Board Advisor on the University of Pittsburgh's Swanson School of Engineering. Mr. Kramer's qualifications to be a member of our Board of Directors include his current service as a chief executive officer, and extensive experience in the fields of engineering, manufacturing, domestic and international operations, business development, strategic planning and extensive knowledge both domestically and internationally with acquisitions.


	William J. Morgan
	Age: 66	Committees:
	Director since: 2006	Audit (Chair)
	Current term expires: 2013	Corporate Governance
		Executive

	Mr. Morgan is a retired partner of the accounting firm KPMG LLP ("KPMG") where he served clients in the industrial and consumer market practices. After his retirement in 2006, and until 2010, he was a consultant to KPMG's Leadership Development Group and Dean of KPMG's Chairman's 25 Leadership Development Program. He is the Audit Committee financial expert of our Board of Directors. From 2004 until 2006, Mr. Morgan was the Chairman of KPMG's Audit Quality Council and, from 2002 until 2006, he was a member of its Independence Disciplinary Committee. He previously served as the Managing Partner of KPMG's Stamford, Connecticut office. Mr. Morgan has served as a director of PGT, Inc. since 2007. He previously served as a member of the Boards of Directors for KPMG and KPMG Americas. In addition to his service with KPMG and on other boards of directors, Mr. Morgan's qualifications to be a member of our Board of Directors include his 39 year career and expertise in the accounting and auditing fields as well as his extensive practice as a certified public accountant and experience working with global industrial companies relative to accounting, finance, auditing, controls, risk management, compliance and corporate governance.



Continuing Directors
Term expiring in 2014

	William S. Bristow, Jr.
	Age: 59	Committees:
	Director since: 1978	Executive
	Current term expires: 2014	Finance


	Mr. Bristow is President of W.S. Bristow & Associates, Inc., which is engaged in small business development. Mr. Bristow's qualifications to be a member of our Board of Directors include his extensive knowledge of our Company with over 30 years of service as a member of our Board of Directors, ownership and direct management of W.S. Bristow & Associates and his expertise in the area of sales.


	Hassell H. McClellan
	Age: 67	Committees:
	Director since: 2010	Audit
	Current term expires: 2014	Finance

	Dr. McClellan is an Associate Professor of Finance and Policy at Boston College's Wallace E. Carroll School of Management. Dr. McClellan has been a member of the faculty of Boston College since 1984. He specializes in strategic management, global competitiveness and strategic management for boards of directors and financial services. He served as the Associate Dean of Boston College's Wallace E. Carroll School of Management from 1996 to 2000. Dr. McClellan has both an MBA and a Doctor of Business Administration degree. Dr. McClellan is currently a trustee of the Virtus Variable Insurance Trust (formerly Phoenix Edge Series Fund) where he has served since 2008. He is also a trustee of the John Hancock Variable Insurance Trust (formerly John Hancock Trust) where he has served since 2005, John Hancock Funds II where he has served since 2005, and John Hancock Funds and John Hancock Funds III, both of which he has served since 2012. Dr. McClellan's qualifications to be a member of our Board of Directors include his extensive experience and expertise in global competitiveness, strategic planning and finance. In addition to his academic achievements in these areas, he has served as a board member or trustee of more than ten not-for-profit and private organizations.

	Gregory F. Milzcik
	Age: 53	Committees:
	Director since: 2006	Executive (ex officio, non-voting member)
	Current term expires: 2014

	Mr. Milzcik has been the President and Chief Executive Officer of the Company since October 2006. He joined the Company in June 1999 as Vice President, Barnes Group Inc. and President, Barnes Aerospace. He was appointed President, Barnes Industrial (formerly Associated Spring) in November 2004 and Executive Vice President and Chief Operating Officer of the Company in February 2006. He is currently, and has been since 2008, a director of IDEX Corporation. In addition, Mr. Milzcik has been named a Board Leadership Fellow by the National Association of Corporate Directors. Mr. Milzcik's qualifications to be a member of our Board of Directors include his life-long career and expertise in the aerospace industry as well as his extensive knowledge in the fields of domestic and international operations, engineering, lean management, marketing, and enterprise management systems.



Term expiring in 2015
	Thomas J. Albani
	Age: 70	Committees:
	Director since: 2008	Compensation and Management Development
	Current term expires: 2015	Corporate Governance
		Finance

	Mr. Albani retired in May 1998 from Electrolux Corporation, a North American manufacturer and marketer of premium floor care products, where he served as the Chief Executive Officer for seven years and as a member of the Board of Directors. From 1994 to 2010, Mr. Albani was a director of Select Comfort Corporation. Mr. Albani's qualifications to be a member of our Board of Directors include his experience as the Chief Executive Officer of Electrolux Corporation, as well as his service as the Chief Operating Officer of Allegheny International, a multibillion dollar industrial conglomerate. He also has, through his experience in management consulting and participation in various industrial and consumer associations, strong strategic planning and problem solving skills and knowledge of the financial, environmental, legal and structural issues facing industrial companies.

	Thomas O. Barnes
	Age: 64	Committees:
	Director since: 1978	Executive (ex officio, non-voting member)
	Current term expires: 2015

	Mr. Barnes is Chairman of the Board of Directors and an employee of the Company. His role is described on page 48. From 2007 until 2012 he served as a director of New England Bank Shares, Inc. He served as a director of Valley Bank from 2005 to 2007 when it was merged into New England Bank Shares, Inc. Mr. Barnes' qualifications to be a member of our Board of Directors include his experience in the fields of distribution, manufacturing, finance and governance with numerous organizations throughout his career, including the Company's distribution business. In addition, Mr. Barnes has owned and managed several businesses and has experience in the commercial lending field. He has served on the Board of Directors of the Company for over 30 years, has served as Chairman of our Board since 1995, and has served as chairman, trustee or director for over 20 non-profit organizations.

	Gary G. Benanav
	Age: 67	Committees:
	Director since: 1994	Audit
	Current term expires: 2015	Compensation and Management Development
		Corporate Governance (Chair)

	Mr. Benanav retired in March 2005 from New York Life International, LLC where he was the Chief Executive Officer from December 1997, and the Vice Chairman and a director of New York Life Insurance Company from November 1999. He has served as a director of Express Scripts Holding Company since January 2000, a full-service pharmacy benefit management company. Mr. Benanav's qualifications to be a member of our Board of Directors include having served as the executive officer of two U.S. corporations with assets in excess of $100 billion, extensive international business experience, extensive management responsibility for U.S. and international insurance and financial services companies, experience in dealing with regulators and legislators, extensive knowledge of finance and accounting matters including complex financial statement and accounting issues across various types of businesses, and practice as a business attorney for 15 years including serving as a legal advisor to Boards of Directors for over five years. In addition, Mr. Benanav received a Presidential appointment as U.S. representative to APEC Business Advisory Council (2002 to 2005).




	Mylle H. Mangum
	Age: 64	Committees:
	Director since: 2002	Audit
	Current term expires: 2015	Compensation and Management Development (Chair)
		Finance

	Ms. Mangum has served as Chief Executive Officer of IBT Enterprises, LLC, a leading provider of branch banking solutions, since October 2003. Prior to this, she served as the Chief Executive Officer of True Marketing Services, LLC since July 2002, focusing on consolidating marketing services companies. From 1999 to 2002, she was the Chief Executive Officer of MMS Incentives, Inc., a private equity company involved in developing and implementing marketing and loyalty programs in high-tech environments. She is currently a director of PRGX Global, Inc., Haverty Furniture Companies, Inc., and Express, Inc. She has also served as a director of Collective Brands Inc., and its predecessor PaylessShoeSource, Inc., from 1997 to 2012, Scientific-Atlanta, Inc. from 1993 to 2006, Respironics, Inc. from 2004 to 2008, Matria Healthcare, Inc. from 2006 to 2008, and Emageon Inc. from 2004 to 2009. Ms. Mangum's qualifications to be a member of our Board of Directors include her current service as a chief executive officer, and extensive business and management experience including, in addition to that mentioned above, serving as an executive with General Electric, BellSouth and Holiday Inn Worldwide. She has extensive knowledge of marketing, accounting and finance, as well as compliance and internal controls.

Retiring Director

Mr. George T. Carpenter, who has served as a director since 1985, will be retiring from the Board as of the date of the 2013 Annual Meeting.




	George T. Carpenter
	Age: 72	Committees:
	Director since: 1985	Audit
	Current term expires: 2013	Compensation and Management Development
		Corporate Governance
		Executive (Chair)

	Mr. Carpenter is President and a director of The S. Carpenter Construction Company, which is involved in general contracting, and The Carpenter Realty Company, which is involved in real estate management. For over nine years until mid-2008, Mr. Carpenter served as a director of Webster Financial Corporation. Mr. Carpenter's qualifications to be a member of our Board of Directors include his direct ownership and hands-on management of two Bristol, Connecticut-based businesses and his knowledge of the banking and financial industries and financing arrangements. Mr. Carpenter has served on our Board of Directors for 27 years.

CEO Change and Impact on Board Members

Gregory F. Milzcik announced his retirement and resigned from the position of President and Chief Executive Officer of the Company, effective March 1, 2013. Mr. Milzcik will remain employed by the Company as Executive Vice Chairman, and will continue to serve as a member of the Board of Directors until the 2013 Annual Meeting. Patrick J. Dempsey was appointed to the position of President and Chief Executive Officer of the Company, effective March 1, 2013. It is expected that the Board of Directors will nominate Mr. Dempsey to become a member of the Board of Directors to fulfill the term of Mr. Milzcik's seat, effective immediately following the Company's 2013 Annual Meeting.

Ratify the Selection of PricewaterhouseCoopers LLP as the Company's Independent Registered Public Accounting Firm (Item 2)

The Audit Committee of the Board of Directors has selected PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for the fiscal year ended December 31, 2013. Although not required by the Company's Charter or By-Laws, the Company has determined to ask stockholders to ratify this selection. A representative of PricewaterhouseCoopers LLP is expected to be present at the meeting, have the opportunity to make a statement, if desired, and be available to respond to appropriate questions.

The Board of Directors recommends a vote “FOR” this Proposal.

Advisory (Non-Binding) Resolution to Approve the Company's Executive Compensation (Item 3)

Under SEC rules, we are providing stockholders with an advisory (non-binding) vote to approve the compensation of our named executive officers, which is described in the Compensation Discussion and Analysis ("CD&A"), the compensation tables, and the accompanying required narrative disclosure regarding named executive officer compensation included in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives stockholders the opportunity to vote whether or not to approve the compensation of our named executive officers as described in this proxy statement. At the 2011 Annual Meeting, stockholders voted in favor of holding the advisory vote on an annual basis and, in accordance with stockholder preference, the Board of Directors determined that advisory votes will be held on an annual basis. Stockholders that do not wish to vote may abstain from voting.

The Company's executive compensation programs are designed to attract, engage and retain highly qualified executive officers. The Company has a strong pay-for-performance philosophy and, as a result, the compensation paid to our named executive officers is closely aligned with the Company's performance on both a short-term and a long-term basis. For 2012, our executive compensation program for our named executive officers was designed to reward positive performance with respect to the following financial performance measures: basic earnings per share (EPS), consolidated revenue, and consolidated operating margin, as well as the Company's performance over a three-year period ending December 31, 2014 relative to the performance of companies included in the Russell 2000 Index. These 2012 performance measures were designed to align our executive compensation program with our two key strategic goals for 2012: profitable sales growth and productivity improvements.

Our compensation mix for 2012 continued to provide total target direct compensation for our named executive officers that generally falls at the 50^th percentile of the total direct compensation paid to executives holding equivalent positions in a defined peer group of companies and other external sources used to inform the Compensation Committee generally about the external market value of our executive roles. We believe our compensation mix provides sufficient incentives in the form of annual cash incentive awards and long-term incentive awards to drive the Company's performance and enhance stockholder value. Specifically, if the Company's performance meets or exceeds pre-established performance targets, including achieving performance levels at or above the 50^th percentile on a relative basis compared to the performance of Russell 2000 Index companies, and/or our stock price increases, the named executive officers have an opportunity to realize significant additional compensation in the form of annual cash incentive awards and long-term equity and cash incentive awards. If the Company's performance does not meet pre-established performance targets, including reaching performance levels below the 50^th percentile on a relative basis compared to the performance of Russell 2000 Index companies, and/or our stock price declines, the named executive officers have significant downside financial risk.

We have also implemented certain policies and guidelines regarding our executive compensation program designed to mitigate risk as described in our CD&A and highlighted below:


•	We have stock ownership requirements for our named executive officers set at five times base salary for our Chief Executive Officer and three times base salary for all other named executive officers;


•	All named executive officers are subject to clawback agreements;


•	Our performance targets are tied to multiple financial metrics; and


•	We place caps on payouts under our annual and long-term incentive programs.

We encourage stockholders to review the CD&A starting on page 12 which provides a detailed discussion of the executive compensation program in place for our named executive officers.

Accordingly, stockholders are being asked to approve the following resolution:

“RESOLVED, that the stockholders of the Company approve the compensation paid to the named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis and the tabular disclosures regarding named executive officer compensation, together with the accompanying narrative disclosure, in this proxy statement for its 2013 Annual Meeting.”

This vote will not be binding on the Board of Directors or the Compensation Committee and may not be construed as overruling a decision by the Board of Directors or the Compensation Committee nor create or imply any additional fiduciary duty on the Board of Directors. Further, it will not affect any compensation paid or awarded to any named executive officer. However, the Compensation Committee and the Board of Directors recognize the importance of receiving input from our stockholders on important issues such as executive compensation and expect to continue to take into account the outcome of the “say-on-pay” vote when considering future executive compensation arrangements.

The Board of Directors recommends a vote “FOR” the approval of the advisory resolution to approve the compensation paid to the named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the CD&A and the tabular disclosures regarding named executive officer compensation, together with the accompanying narrative disclosure, in this proxy statement for its 2013 Annual Meeting.

Proposal to Amend the Company's By-Laws to Provide for the Annual Election of All Directors (Item 4)

The Company is submitting to stockholders, for their consideration, an amendment to its By-Laws to provide for the annual election of directors (the “Declassification Amendment”). The By-Laws currently provide that the Board is divided into three classes, with each class elected every three years. If the Declassification Amendment is approved, directors elected before the effectiveness of the Declassification Amendment would continue their three-year terms. When these terms expire at the 2014, 2015 and 2016 Annual Meetings of Stockholders, the directors or their successors would be elected for one-year terms. Beginning with the 2016 Annual Meeting, all directors would be elected for one-year terms at each Annual Meeting. In all cases, each director would hold office until his or her successor has been elected and qualified or until the director's earlier resignation or removal, and vacancies that occur during the year would be appointed by the Board to serve until the next annual meeting. This proposal, even if approved, would not affect the three-year terms of directors elected prior to or at the 2013 Annual Meeting. In addition, this proposal would not change the present number of directors or the Board's authority to change the number of directors or to fill vacancies or newly created directorships.

In addition, because the Board is classified, the By-Laws currently provide that directors may be removed only for cause by the affirmative vote of holders of not less than two-thirds of the outstanding shares. While Delaware corporate law provides that directors of classified boards may be removed only for cause unless otherwise provided in the certificate of incorporation, directors of corporations without classified boards may be removed with or without cause by the affirmative vote of holders of a majority of the outstanding common stock. Accordingly, as part of the Declassification Amendment, the Company is proposing to amend the By-Laws to eliminate the provision that allows stockholders to remove directors only for cause and reduce the vote for removal to the affirmative vote of holders of a majority of the outstanding shares of stock of the Company entitled to vote in elections of directors.

In determining to support the Declassification Amendment, the Board, upon recommendation of the Corporate Governance Committee, considered growing investor sentiment in favor of annual elections and believes that the Board would continue to be effective in protecting stockholders' interests under an annual election system. The Board recognizes that many investors believe that the election of directors is the primary means for stockholders to influence corporate governance policies and hold management accountable for implementing those policies. The Board also considered the benefits of classified boards, such as promoting board continuity and stability, encouraging directors to take a long-term perspective, and providing a measure of protection against hostile acquisitions and proxy contests that may not be in the best interests of stockholders.

The Board considered the arguments in favor of and against continuation of the classified board structure and determined that it would be in the best interests of the Company and its stockholders to declassify the Board.

Text of the Declassification Amendment, including regarding the Removal of Directors

Article II, Section 2, Article II, Section 4 and Article II, Section 8 of the By-Laws contain the provisions that will be affected if the Declassification Amendment is approved by stockholders. The text of Article II, Section 2 and Article II, Section 8, as amended by the Declassification Amendment, is set forth on Annex 1 to this proxy statement. Article II, Section 4 of the By-Laws, which is also set forth on Annex 1, will be deleted in its entirety by the Declassification Amendment.

Required Vote

For the this proposal to be approved by stockholders, this proposal must receive the affirmative vote of at least two-thirds of the outstanding shares of Common Stock. If the proposal is approved, it will be immediately effective. If the proposal does not receive this level of stockholder approval, it will not be implemented and the classification of the Company's Board of Directors and the By-Laws provision regarding removal of directors for cause will remain in place.

The Board of Directors recommends a vote “FOR” this proposal.

Proposal to Amend the Company's Charter to Eliminate Certain Supermajority Voting Requirements (Item 5)

The Company's Charter requires a supermajority vote to amend certain provisions contained in the Charter and the By-Laws. Subject to stockholder approval, our Board has approved an amendment to the Charter that would eliminate supermajority voting requirements for certain corporate actions taken by stockholders, and the Company is submitting this amendment to stockholders for their consideration. The amendment would change the stockholder approval requirement from two-thirds of the outstanding shares of Common Stock to a majority of the outstanding shares of Common Stock for amendments to By-Laws provisions related to the number, term of office and qualifications of directors; plurality voting; the removal of directors; and filling of director vacancies and newly created directorships (the “Voting Amendment”).

At the Company's 2011 Annual Meeting of Stockholders, a stockholder submitted a proposal addressing the same topic. At that meeting, holders of 49% of the outstanding shares of Common Stock (62% of the votes cast) voted in favor of a stockholder proposal requesting that the Board take necessary steps to eliminate the supermajority voting requirements of the Company's Charter and By-Laws. While the stockholder proposal failed to receive approval of a majority of outstanding shares of Common Stock, the Board holds a strong commitment to considering the views of stockholders and recognizes that there are differing perspectives on supermajority voting requirements. The Board continues to support proposals to increase its accountability to stockholders and to strengthen the ability of stockholders to participate in corporate governance.

Accordingly, after careful consideration and based upon the recommendation of the Corporate Governance Committee, the Board has determined that it is in the best interests of the Company and its stockholders to submit to a stockholder vote the proposal to eliminate the supermajority voting requirements for amendments to provisions regarding:


•	The number, term of office and qualifications of directors;


•	Plurality voting;


•	The removal of directors; and


•	Filling of director vacancies and newly created directorships.

These supermajority voting requirements are contained in Article ELEVENTH of the Charter. In addition, the Voting Amendment provides that any amendment to Article ELEVENTH of the Charter will only require the approval of holders of a majority of the outstanding shares of Common Stock.

The Board continues to believe that supermajority voting requirements for certain measures is appropriate to encourage input from stockholders on these measures. Supermajority voting requirements help ensure that extraordinary corporate actions are taken when there is a clear consensus of stockholders rather than just a simple majority. Supermajority voting requirements are intended to preserve and maximize the value of the Company for all

stockholders by protecting against the self-interested actions of a few large stockholders whose goals may conflict with those of other stockholders. Accordingly, the Voting Amendment does not affect certain supermajority voting requirements contained in the Charter that are not included in Article ELEVENTH of the Charter. The following supermajority voting requirements will continue to be in effect even if the Voting Amendment is approved by stockholders:


•	A vote of two-thirds (2/3) of the shares of capital stock then issued and outstanding, or that are required for the election of directors, to approve mortgage, sale, lease or exchange of all of the property and assets of the Company;


•	The affirmative vote of holders of not less than seventy percent (70%) of the Company's voting stock to approve a business combination with any holder of five percent (5%) or more of the Common Stock under certain circumstances; and


•	A vote of two-thirds (2/3) of the shares of capital stock then issued and outstanding to amend the provision in the Charter that prevents stockholder action by written consent.

Text of the Voting Amendment

Article ELEVENTH of the Charter contains the provisions that will be affected if the Voting Amendment is approved by stockholders. The text of Article ELEVENTH, as amended by the Voting Amendment, is set forth on Annex 3 to this proxy statement.

Required Vote

For the Voting Amendment to be approved by stockholders, this proposal must receive the affirmative vote of at least two-thirds of the outstanding shares of Common Stock. If the Voting Amendment is approved, the Board will take the necessary steps to amend the Company's Charter as set forth in Annex 3. If the Voting Amendment does not receive this level of stockholder approval, the Voting Amendment will not be implemented and the Company's current voting requirements will remain in place.

The Board of Directors recommends a vote “FOR” this proposal.

EXECUTIVE AND DIRECTOR COMPENSATION

Compensation Discussion and Analysis

The following is a discussion and analysis of our compensation programs as they apply to our Chief Executive Officer, Chief Financial Officer and the three next most highly compensated executive officers who were serving as executive officers of the Company during 2012 (our “NEOs”). Our NEOs for 2012 were Gregory F. Milzcik, Christopher J. Stephens, Jr., Patrick J. Dempsey, Claudia S. Toussaint, and Dawn N. Edwards. Mr. Milzcik announced his retirement and resigned from the position of President and Chief Executive Officer of the Company, effective March 1, 2013. Mr. Milzcik will remain employed by the Company as Executive Vice Chairman, and will continue to serve as a member of the Board of Directors until the 2013 Annual Meeting. Mr. Dempsey was appointed to the position of President and Chief Executive Officer of the Company, effective March 1, 2013. It is expected that the Board of Directors will nominate Mr. Dempsey to become a member of the Board of Directors to fulfill the term of Mr. Milzcik's seat, effective immediately following the Company's 2013 Annual Meeting.

In this Compensation Discussion and Analysis, we discuss our compensation policies and practices as they relate to our NEOs and explain recent changes we have made to our executive compensation program. We also provide details regarding the individual components of our NEO executive compensation program and explain how and why we make decisions to establish executive compensation at particular levels.

Executive Summary

During 2012, the Company focused its efforts on achieving two key strategic objectives - profitable sales growth and productivity improvements. We made significant investments in our worldwide application of Lean principles, the key to increasing efficiency and responding more adeptly to our customers' needs. During 2012, the Company realigned its business units into three reportable business segments - Aerospace, Industrial and Distribution - to better serve its customers and accelerate growth. In addition, in early 2012 we appointed Mr. Dempsey as Senior Vice President and Chief Operating Officer to assume full responsibility and oversight of these three business segments. In August 2012, we completed the largest acquisition in our history. We acquired Synventive Molding Solutions, an industry leader in the hot runner systems and components business.

To drive our two key strategic objectives, profitable sales growth and productivity improvements, the Company built on executive compensation program changes made in 2011 and took a number of additional actions during 2012 to improve alignment. For our annual incentive compensation, the Company continued the use of basic earnings per share ("EPS"), Company-wide consolidated revenue ("Revenue") and Company-wide consolidated operating margin ("Operating Margin") as performance measures. This combination of performance measures is designed to emphasize profitability and productivity, and drive sales growth.

The Company's success in achieving these three performance measures resulted in payouts under our annual incentive compensation program of 112% of target, as detailed in the below table.



Performance Measure	Weighting (%)	2012 Results¹	Comparison to Target
As Certified Basic EPS²	70%	$1.84	At target
As Certified Revenue (in millions)³	15%	$1,230	$27 below target
As Certified Operating Margin⁴	15%	11.8%	30 basis points above target

________

Results are adjusted in accordance with the Barnes Group Inc. Performance-Linked Bonus Plan for Selected Executive Officers ("Performance-Linked Bonus Plan") and the Management Incentive Compensation Plan ("MICP" and, collectively with the Performance-Linked Bonus Plan, the "Annual Incentive Plans") and certified by the Compensation Committee, as described below in the "Annual Cash Incentive Awards" section.


²	"As Certified Basic EPS" is based on Basic EPS, excluding the effects of discontinued operations, the costs and revenues related to the effects of acquisitions and acquisition expenses and costs related to other strategic initiatives, as directed under the Performance-Linked Bonus Plan.


³	"As Certified Revenue" is our 2012 reported Revenue.


⁴	"As Certified Operating Margin" is based on Operating Margin, excluding costs and revenues related to the effects of acquisitions and acquisition expenses and costs related to other strategic initiatives, as directed under the Performance-Linked Bonus Plan.

Long-term incentive award opportunities are potentially the largest component of our NEOs' annual compensation

depending upon our long-term performance. The program continues to consist of relative measure performance share awards ("Relative Measure PSAs"), restricted stock units ("RSUs"), and stock options. But in 2012, we increased the Relative Measure PSA portion of the program from 33^1/3% to 50%, to enhance the program's focus on performance. Below is a comparison of the weighting of the value of each type of award at the time of grant in 2011 and 2012:

The relative measure program compares the Company's relative performance over a three-year period against the performance of Russell 2000 Index companies, based on three equally-weighted and independently measured performance measures: total shareholder return, basic EPS growth and operating income before depreciation and amortization growth. The grants made in 2012 cover the 2012 to 2014 performance period. Payouts, if any, under this program will be made in 2015.

The Company's success in achieving predetermined EPS goals under the EPS-based Performance Unit Awards ("EPS PUPs") and EPS-based Performance Share Awards ("EPS PSAs") made in 2010 resulted in payouts for the 2012 portion of these grants at the 100% of target level.

The Company also made several changes to its retirement programs in alignment with the external marketplace. In 2012, we discontinued the Supplemental Executive Retirement Program ("SERP"), except for participants who were retirement eligible or in payment status. (This plan provides participants with a subsidized joint and survivor annuity.) None of our NEOs were retirement eligible and therefore none of them will receive SERP benefits upon retirement. We closed the Nonqualified Deferred Compensation Plan ("DC Plan") to any new or rehired otherwise eligible executives. (This plan provides enhanced retirement benefits to executives, replacing the enhanced defined benefit plan that was closed in 2008.) Only two of our NEOs remain eligible for the DC Plan - Mr. Stephens and Ms. Edwards. Going forward, non-grandfathered executives will have the same retirement benefits generally available to the Company's U.S. based employees.

Say on Pay Vote

The Compensation Committee believes that our executive compensation programs are consistent with our pay-for-performance philosophy. As part of our corporate governance system, we evaluate our programs in light of market conditions, stockholder views, and governance considerations, and make changes as appropriate for our business. In May 2012, we held a stockholder advisory vote on the compensation of our NEOs, commonly referred to as a say-on-pay vote. We had strong support from our stockholders with respect to the compensation of our NEOs, with over 98% of stockholder votes cast in favor of our say-on-pay resolution. We continue to evaluate our compensation programs by taking into account the stockholder vote and other feedback from our stockholders. We hold the stockholder advisory votes on executive compensation annually. Under the "Say on Pay" Proposal (Item 3) in this proxy statement, we are recommending that stockholders cast their advisory vote in favor of approving the compensation for our NEOs as disclosed in this proxy statement.

Summary of Key Executive Compensation Changes for 2012



Program Component		Summary of Changes

Long-term incentive awards	•	Increased weighting of Relative Measure program PSAs from 33^1/3% to 50% of long-term incentive compensation. Reduced weighting of RSUs to 30% and stock options to 20% of long-term incentive compensation.

	•	Added a condition to Relative Measure PSAs that a participant terminated by the Company "not for cause" before one year from the grant date will fully forfeit any awards.

Retirement programs	•	Discontinued the SERP except for participants who were retirement eligible or were in payment status. We also closed the DC Plan to any new or rehired otherwise eligible executives.

Executive life insurance programs	•	Implemented the Executive Group Term Life Insurance Program ("EGTLIP") for employees newly hired or promoted into an eligible position. This program provides premium payments for a term life insurance benefit of up to four times base salary during employment. No tax gross up is provided on this benefit. (This program replaced the Senior Executive Enhanced Life Insurance Program ("SEELIP") which was closed to new participants effective April 1, 2011. Under the SEELIP, the Company pays the premiums for a life insurance policy owned by each participating NEO and pays the participating NEO's income tax liability arising from its payment of the premiums and taxes.) The Company does not provide any premium payments during retirement.
Stock ownership requirements	•	Implemented changes to the Company's stock ownership requirements permitting 2/3 of the value of unvested RSUs to count toward achieving ownership requirements. Eliminated the five and/or six year deadline to achieve ownership in favor of a requirement that all net after tax proceeds of Company equity grants, including stock option exercises, be retained until ownership levels are met. Once ownership levels are met, the requirement is converted to a fixed number of shares.

Executive Compensation Philosophy

We believe that executive compensation should support and reinforce a pay-for-performance philosophy. Consequently, our NEO compensation is closely aligned with the Company's performance on both a short-term and a long-term basis by tying a significant portion of the compensation opportunity for our NEOs directly to the Company's stock performance and other objectives that we believe affect stockholder value. As a result, if the Company's performance meets or exceeds pre-established performance targets, including achieving performance levels at or above the 50th percentile on a relative basis compared to the performance of Russell 2000 Index companies, and/or our stock price increases, the NEOs have an opportunity to realize significant additional compensation in the form of annual cash incentive payouts and long-term equity and cash incentive payouts. If the Company's performance does not meet pre-established performance targets, including reaching performance levels below the 50th percentile on a relative basis compared to the performance of Russell 2000 Index companies, and/or our stock price declines, the NEOs have significant downside financial risk.

Further in line with our pay-for-performance philosophy, the Company aims to provide our NEOs with the opportunity to earn total direct compensation that generally falls in the median range of the total direct compensation paid to executives holding equivalent positions in a defined peer group of companies. This is referred to in this proxy statement as the “Peer Group.” Individual executive compensation may be above or below the target range based on the individual's performance, experience, skill set and range of responsibilities. Other external sources such as survey data are used to inform the Compensation Committee generally about the external market value of our executive roles. We believe that targeting the median range provides an opportunity for appropriate compensation levels that will attract high quality executives, provide the proper incentives to our NEOs for achievement of our strategic objectives and retain our NEOs over the long-term.

Total Direct Compensation in 2012

Total direct compensation includes the following three elements: annual base salary; annual cash incentive awards; and long-term incentive awards. These elements provide the Compensation Committee with a platform to reinforce our pay-for-performance philosophy to address our business needs and goals with appropriate flexibility. The Compensation Committee can vary the performance measures from year to year, consistent with the applicable plans described below. As part of our pay-for-performance philosophy, we increased the portion of certain performance based compensation as a percentage of our total compensation. These changes are noted in the “Summary of Key Executive Compensation Changes for 2012” section in this Compensation Discussion and Analysis. In addition, our NEOs are eligible for change in control and severance benefits; pension, retirement and executive life insurance programs; and certain limited perquisites.

Performance-based compensation in the form of annual and long-term incentives constituted over 80% and over 60% of 2012 total direct compensation for our CEO and other NEOs, respectively. The actual mix of compensation for our CEO and other NEOs is shown below.

________


¹	Information includes compensation for Ms. Toussaint on an annualized basis. Ms. Toussaint resigned from the Company on March 16, 2012 and rejoined the company on June 19, 2012.

The Summary Compensation Table on page 28 provides details regarding the compensation for each NEO.

Executive Compensation General Objectives and Process

Objectives

The primary objective of the Company's executive compensation philosophy is to support the achievement of our long-term strategic business goals of building lasting stockholder value and achieving profitable sales growth and productivity improvements. To support these goals, our compensation program for our NEOs is designed to:


•	Provide appropriate incentives by linking and balancing significant short- and long-term compensation opportunities to Company performance and total shareholder return;


•	Reward NEOs who contribute meaningfully to achieving our strategic objectives;


•	Require NEOs to hold a significant equity investment in our Company so that they manage the business from the perspective of stockholders;


•	Align our compensation polices with stockholders' long-term interests by assigning a significant portion of potential compensation to performance-based pay elements that are dependent upon achieving the Company's goals, but that do not encourage excessive risk-taking;


•	Attract, retain and engage highly qualified individuals by offering competitive, balanced compensation arrangements based upon clear goals that vest on continued employment; and


•	Maximize the tax effectiveness of the total compensation and benefits package, and minimize potentially adverse tax and accounting consequences, in each case to the extent practicable.

Process of Determining NEO Compensation

The Compensation Committee is responsible for determining the types and amounts of compensation paid to our

NEOs. The Compensation Committee uses several tools to make these determinations, including external consultants and peer group analysis.

External Consultants

Company management engages Frederic W. Cook & Co. Inc. (“Cook”) to advise management on executive compensation matters. Cook annually compiles competitive compensation data regarding each element of compensation provided by our Company and other companies, and reviews the Company's compensation practices in terms of competitiveness, appropriateness and alignment with our performance, as well as the proportions the Company allocates to each element.

The Compensation Committee directly retains a consulting firm, Meridian Compensation Partners, LLC ("Meridian"), to assist in the Compensation Committee's oversight of the executive compensation program, which includes reviewing and assessing information provided by Cook. The fees for Meridian are negotiated directly by the Compensation Committee and paid by the Company at the Compensation Committee's request. Cook and Meridian did not provide any services to the Company in 2012 other than advice on executive and director compensation.

Meridian regularly participates in Compensation Committee meetings, both with and without Company management, and advises the Compensation Committee on compensation trends and best practices, plan design, pay and performance alignment and the process used to determine the reasonableness of individual compensation awards. The Compensation Committee believes that the use of a separate consultant reporting directly to it supports the objective that the Company's executive compensation programs are reasonable and consistent with Company goals and evolving governance considerations. In addition, the Compensation Committee from time to time directly retains its own outside legal counsel.

The Compensation Committee believes that there was no conflict of interest between Meridian and the Compensation Committee during 2012. In reaching this conclusion, the Compensation Committee considered the factors set forth in the SEC rule effective July 27, 2012 regarding compensation advisor independence, and believes that the compensation consultant is able to independently represent the Compensation Committee.

Peer Group Analysis

A primary data source used in setting the NEO compensation is the information publicly disclosed by our Peer Group. The Peer Group is reviewed periodically by Cook and updated as appropriate to take into account changes in the size, scope, financial performance, ownership structure and business focus of the Company and the peer institutions. With the assistance of Cook, management recommends to the Compensation Committee a preliminary Peer Group. At the last review, the factors considered by Cook in making its recommendations included: revenue levels within an approximate range of one-half to two times the Company's annual revenue; companies that operated in one of the same industries as the Company; and companies that used the same distribution channels as the Company. We removed from consideration all companies with a significant concentration of ownership by one party. The analysis also included a review of statistical data to support comparability with the prior Peer Group. After considering these recommendations, the Compensation Committee approves the Peer Group, including any changes to the Peer Group as a result of its analysis. In addition, the Compensation Committee periodically requests a separate evaluation of the Peer Group by its own consultant. The Compensation Committee last requested such a separate evaluation in 2009 for the 2010 compensation cycle.

The Peer Group used for 2012 was the same as the one established in late 2009 in accordance with the above described process. Since none of the Peer Group companies had sufficient changes in their businesses and the Company's operations also remained essentially the same, no changes to the Peer Group were proposed.

For 2012, our Peer Group was comprised of the following 17 companies:



Ametek Inc.	Graco Inc.
Applied Industrial Technologies Inc.	Hexcel Corp.
BE Aerospace Inc.	Kaman Corp.
Carpenter Technology Corp.	Kaydon Corp.
Circor International Inc.	Moog Inc.
Crane Co.	Triumph Group Inc.
Curtiss-Wright Inc.	Valmont Industries Inc.
Enpro Industries Inc.	Watsco Inc.
Esterline Technologies Corp.

In addition, in connection with our annual compensation review process, in July 2012 the Compensation Committee reviewed tally sheets for each NEO.

The Role of Executive Officers

Mr. Gregory Milzcik, our President and Chief Executive Officer, provides the Compensation Committee with a performance assessment for each of the other NEOs. The Compensation Committee utilizes these assessments, along with other information, to determine NEO compensation. Mr. Milzcik and Ms. Dawn Edwards, Senior Vice President, Human Resources, regularly attend Compensation Committee meetings at the request of the Compensation Committee but are generally not present for the executive sessions or for any discussion of the individual components of their own compensation. In addition, Mr. Christopher J. Stephens, Jr., Senior Vice President, Finance, and Chief Financial Officer, provides financial information used by the Compensation Committee to make decisions regarding incentive compensation targets and related payouts.

Components of Our Executive Compensation Program

For 2012, the compensation for our NEOs consisted of the following elements:


•	Base salary;


•	Annual cash incentive awards;


•	Long-term incentive awards;


•	Change in control and severance benefits;


•	Pension, retirement and executive life insurance programs; and


•	Limited perquisites.

Only base salary, annual cash incentive awards and long-term incentive awards are taken into account to set the target total direct compensation mix for each NEO. Based on competitive compensation data developed by Cook in December 2011, the 2012 target total direct compensation for all NEOs was at the market median, or approximately the 50^th percentile of comparative executives, including those within our Peer Group and/or based on survey data. For Mr. Milzcik, the 2012 target total direct compensation was also at the market median, or approximately the 50^th percentile of compensation of CEOs within our Peer Group. The Company defines "median" as within ten percent of the benchmark. In setting the target total direct compensation mix for our NEOs, the Compensation Committee may make decisions that vary from the Peer Group data based on NEO experience, retention considerations, range of responsibilities, and the nature and complexity of each NEO's role. The Compensation Committee also uses individual performance as it considers appropriate to determine whether any adjustments should be made to an NEO's total direct compensation, including the targeted long-term incentive grants.

Base Salary

Base salary increases usually take effect on or around April 1^st of each year, but may be made at interim dates within the annual cycle if the Compensation Committee deems it appropriate and necessary based on internal and external considerations. In 2012, the Compensation Committee increased Mr. Dempsey's base salary in connection with his promotion and Ms. Toussaint's base salary in connection with her rehire, as described below. In determining whether to award merit-based salary increases to our NEOs, the Compensation Committee considered a number of factors, including the following:


•	Peer Group data and external market information;


•	Individual performance;


•	The level of responsibility assumed and the nature and complexity of each NEO's role (including the number of years in the position, any recent promotion or change in responsibility or “impact” as a member of management, and the amount, timing and percentage of the last base salary increase);


•	The leadership demonstrated to create and promote a day-to-day working environment of unwavering integrity, compliance with applicable laws and the Company's ethics policies, and global responsibility; and


•	The desire to retain NEOs capable of driving achievement of the Company's strategic objectives and the marketability and criticality of retention of NEOs.

The chart below details annual base salary levels for each NEO as of April 1, 2011 and December 31, 2012, respectively, with the corresponding percentage changes reflecting the increase, if any, in 2012 base salary for the NEOs.



NEO	Base Salary Effective April 1, 2011		Base Salary Effective December 31, 2012		Change in Annual Base Salary ($)		Change in Annual Base Salary (%)
G. Milzcik	$	890,000	$	890,000	$	—	—	%
C. Stephens, Jr.	$	431,000	$	431,000	$	—	—	%
P. Dempsey	$	431,000	$	450,000	$	19,000	4.4	%
C. Toussaint	$	360,000	$	390,000	$	30,000	8.3	%
D. Edwards	$	296,000	$	296,000	$	—	—	%

None of the NEOs received a merit increase in 2012. Mr. Dempsey received a base salary increase effective February 13, 2012 in conjunction with his appointment to the role of Senior Vice President and Chief Operating Officer. The salary shown effective April 1, 2011 for Ms. Toussaint was her base salary at the time that she resigned from her position with the Company on March 16, 2012. Upon her rehire and reappointment to Senior Vice President, General Counsel and Secretary on June 19, 2012, her salary was set at the level indicated in the column "Base Salary Effective December 31, 2012."

Annual Cash Incentive Awards

We pay annual cash incentive awards to reward the performance achievements of our NEOs. Except in circumstances of retirement, death, or disability, or certain instances of involuntary termination by the Company on or after November 1^st of an award period, an NEO generally must be employed by us on the payment date to receive an annual cash incentive award. For 2012, the NEOs, other than Ms. Toussaint, participated in the Performance-Linked Bonus Plan ("PLBP"). Ms. Toussaint was not a PLBP participant in 2012 since she had announced her resignation before the February 2012 Compensation Committee meeting where the Committee determined the participants in the PLBP for 2012.

We refer to the PLBP and MICP plans as our “Annual Incentive Plans.” The MICP is structured to pay annual cash incentive awards on the same terms and conditions as set forth in the PLBP. The difference between the two plans is that the PLBP is structured to pay amounts that meet the qualified performance-based compensation exception for purposes of Section 162(m) of the Internal Revenue Code. The Annual Incentive Plans generally use the same measures, target levels, threshold levels and maximum payout levels.

Under the Annual Incentive Plans, each NEO is assigned an award opportunity expressed as a percentage of his or her base salary, which varies by the NEO's role. Each NEO's annual cash incentive payout is generally determined based on our achievement of Company performance objectives.

The chart below details the cash incentive award opportunities available to each NEO for 2012 under the Annual Incentive Plans expressed as a percentage of base salary. Where performance falls between the threshold, target or maximum performance levels, the cash incentive award opportunity is calculated using straight-line interpolation.



	% of Salary
NEO	Threshold Level	Target Level	Maximum Level
G. Milzcik	18.75%	75%	225%
C. Stephens, Jr.	12.5%	50%	150%
P. Dempsey	12.5%	50%	150%
C. Toussaint	11.3%	45%	135%
D. Edwards	11.3%	45%	135%

The targets for the Annual Incentive Plans are intended to be challenging but attainable. The Compensation Committee generally establishes the target for each financial performance measure in December of each year based on review and approval of the Company's annual business plan and budget. We use financial performance objectives as performance measures under the Annual Incentive Plans because they are consistent with our focus of driving strong business performance and increasing long-term stockholder value. For fiscal year 2012, the performance measures for the Annual Incentive Plans were basic EPS, Revenue and Operating Margin. Basic EPS is used as a measure because we believe it is a principal driver of our stock price. Basic EPS is used rather than diluted EPS to overcome a potentially adverse impact from stock price appreciation that could decrease the earned award. Revenue is used as a measure to drive growth in the size of our business. Operating Margin is used as a measure to drive our sales to meet expected levels of profitability.

For fiscal year 2012, all NEOs were evaluated on corporate measures. We evaluate all of the NEOs 100% on corporate measures in recognition of the key role that each NEO plays in the overall management of the Company and in recognition of the impact of overall corporate strategies on segment results.

The chart below sets forth the Annual Incentive Plans' performance measures and the weighting of each measure for the NEOs for 2012:

Achievement of the financial performance measures under the Annual Incentive Plans are first determined according to GAAP, but then adjusted under the terms of the PLBP and the MICP to include or exclude certain extraordinary, unusual or non-recurring items, discontinued operations and other items, all in accordance with Section 162(m) of the Internal Revenue Code. The Compensation Committee also retains negative discretion in accordance with Section 162(m) of the Internal Revenue Code to further reduce, but not increase, actual awards paid to the NEOs under the Annual Incentive Plans. The adjusted financial performance results certified by the Compensation Committee under the Annual Incentive Plans are non-GAAP financial measures.

The chart below details results certified by the Compensation Committee compared to the goals:



Corporate Goal	Threshold			Target			Maximum			2012 Results		Comparison to Target as a %
As Certified Basic EPS¹	$	1.63		$	1.84		$	2.11		$	1.84	100.0%
As Certified Revenue (in millions)²	$	1,169		$	1,257		$	1,304		$	1,230	97.9%
As Certified Operating Margin³	10.9		%	11.5		%	12.1		%	11.8%		102.6%


¹	"As Certified Basic EPS" is based on Basic EPS, excluding the effects of discontinued operations, the costs and revenues related to the effects of acquisitions and acquisition expenses and costs related to other strategic initiatives, as directed under the Performance-Linked Bonus Plan.


²	"As Certified Revenue" is our 2012 reported Revenue.


³	"As Certified Operating Margin" is based on Operating Margin, excluding costs and revenues related to the effects of acquisitions and acquisition expenses and costs related to other strategic initiatives, as directed under the Performance-Linked Bonus Plan.

The annual cash incentive awards are generally paid in February of the following calendar year, after the results are certified by the Compensation Committee. The following cash incentive awards were paid to NEOs for 2012 performance based on the performance results certified by the Compensation Committee:



NEO	Annual Incentive Earned ($)		Annual Incentive Earned as % of Base Salary
G. Milzcik	$	744,596	84%
C. Stephens, Jr.	$	240,390	56%
P. Dempsey	$	250,988	56%
C. Toussaint¹	$	146,265	50%
D. Edwards	$	148,585	50%

________


¹	Ms. Toussaint's cash incentive award and base salary were prorated for the number of days that she was employed by the Company in 2012.

Long-Term Incentive Compensation

Long-term incentive award opportunities are potentially the largest component of our NEOs' annual compensation depending upon our long-term performance. We believe that long-term performance is enhanced through the use of awards denominated in share value that reward our NEOs for maximizing stockholder value over time, thereby aligning the interests of our employees and management with those of our stockholders. When coupled with the ownership requirements described below, our long-term incentive awards help to encourage our NEOs to maintain a continuing stake in our long-term success and provide an effective way to tie a substantial percentage of total direct compensation to any increase or decrease in stockholder value.

In 2012, the Company used a combination of time-based equity awards and performance-based equity awards. The Company revised the mix of the three types of equity awards to place greater emphasis on performance-based equity grants. Particular emphasis was placed on the Relative Measure PSAs, which now comprise 50% of the value of the equity awards at the time of grant. The following types of long-term incentive awards are currently used under the terms of the Barnes Group Inc. Amended Stock and Incentive Award Plan (the “Stock and Incentive Award Plan”), which was approved by stockholders in 2010:



Vehicle	Target Portion of Total Long-Term Incentive Compensation		Vesting¹		Comments
Stock options	20%	•	Time-based vesting; 18, 30, and 42 months from the grant date in equal installments	•	Grants are priced at the fair market value on the grant date
RSUs	30%	•	Time-based vesting; 18, 30, and 42 months from the grant date in equal installments	•	Settled in shares of Common Stock
RSUs	30%			•	Pays out dividend equivalents in cash during vesting periods
Relative Measure PSAs	50%	•	Performance-based vesting at the end of a 3-year cycle	•	Settled in shares of Common Stock
				•	Accrued dividends are paid out in cash at the end of the 3-year cycle, adjusted for the number of shares actually earned
				•	Based on three equally weighted performance measures - total shareholder return, basic EPS growth, and operating income before depreciation and amortization growth - with each measure separately evaluated based on a comparison of the Company's performance against that of Russell 2000 Index companies

________


¹	Assumes continued employment by the NEOs.

Stock options and RSUs are subject to time-based vesting with staggered vesting dates to encourage NEO retention. In addition to the time-vesting requirements, stock options only have value if the Common Stock price at the time of exercise exceeds the fair market value on the grant date.

For 2012, the Compensation Committee continued the relative measure program established in 2011. The relative measure program is designed to increase long-term focus, but also to provide a better link to shareholder returns and reward NEOs based on performance compared to alternative investment opportunities. The program has three equally weighted and independently measured performance measures: total shareholder return, basic EPS growth, and operating income before depreciation and amortization growth. Each measure is compared separately to the Company's relative performance against that of the Russell 2000 Index over the three-year term of the program ending December 31, 2014. Based on the relative performance, following the end of the three-year cycle, a payout, if any, in the form of shares of Common Stock and accrued dividends will be made. A payout may range between zero for performance below the threshold level, to 250% of target for exceptional relative performance at the maximum level or above. The chart below illustrates potential payouts at various levels of performance. The first payout, if any, under this program, for the 2011 grant of Relative Measure PSAs, is scheduled to occur in 2014 for the period ending December 31, 2013. The payout, if any, for the 2012 grant of Relative Measure PSAs, is scheduled to occur in 2015.



Performance Level^1,²	2012 Relative Measure Program Payout Level	Category
Performance below 33^rd percentile	0%	Below Threshold
Performance at 33^rd percentile	33%	Threshold
Performance at 50^th percentile	100%	Target
Performance at 60^th percentile	150%	Above Target - 60^th
Performance at 75^th percentile	200%	Above Target - 75^th
Performance at or above 85^th percentile	250%	Maximum

______________


¹	Each of the three performance measures, total shareholder return, basic EPS growth, and operating income before depreciation and amortization growth, is evaluated separately as compared to performance of companies in the Russell 2000 Index.


²	Results between Performance Levels will result in interpolated payouts.

In 2012, the Company amended the form of PSA agreement for grants under the Stock and Incentive Award Plan to provide for a complete forfeiture of Relative Measure PSAs if the participant's employment is involuntarily terminated by the Company without cause before the first anniversary of the Relative Measure PSA grant date. This change applies to Relative Measure PSA grants made in 2012 and later years. Before this amendment, if a participant's employment was involuntarily terminated by the Company without cause before the first anniversary of the grant date, then a pro-rata portion of the award based on the number of days the participant was employed during the applicable performance period would have been paid based on the Company's actual performance for that performance period.

In addition, the 2012 long-term incentive awards require a “double trigger” for accelerated vesting in the event of a change in control of the Company. Except for Mr. Milzcik who is covered by the terms of his employment agreement (see below section titled "Employment Agreement with Mr. Milzcik" for details), in the event of a change in control as defined in the Stock and Incentive Award Plan, stock options, RSUs and performance vesting stock units under the relative measure program will vest and accelerate only if an NEO's employment is terminated by the Company without cause, or if the NEO resigns for good reason (as defined in the severance agreements) on or within two years following a change in control.

Before the adoption of the Relative Measure PSAs in 2011 and the continued use of these types of PSAs in 2012, the Company granted EPS PSAs and EPS PUPs. The Company last granted EPS PSAs and EPS PUPs in 2010 and the last tranche of the 2010 EPS PSAs and EPS PUPs vested at the end of 2012. EPS PSAs and EPS PUPs are subject to performance-based vesting. EPS PSAs pay out in shares of Common Stock and accrued dividends which are paid at the same time and rate as the underlying shares that are issued based on actual performance. EPS PUPs pay out in cash and do not accrue dividend equivalents. Both EPS PSAs and EPS PUPs vest ratably over a three-year time period based on attainment of three annual basic EPS targets.

The basic EPS target used for our EPS PSAs and EPS PUPs is identical to the basic EPS target used under our Annual Incentive Plans. The performance result also is determined according to our Annual Incentive Plans and is certified by the Compensation Committee. The threshold, below target and maximum levels are derived from the basic EPS target. The 2012 basic EPS target applies to the third and last tranche of the 2010 EPS PUP and EPS PSA awards made to our NEOs. The basic EPS target is designed to be challenging but attainable.

Below are the 2012 target performance levels for EPS PSAs and EPS PUPs. The Compensation Committee certified 2012 basic EPS of $1.84, which resulted in a payout under the applicable EPS PUP and EPS PSA awards at the 100% payout level. "As Certified Basic EPS" is a non-GAAP financial measure because it excludes certain items from net income, including discontinued operations, the effects of acquisitions and acquisition expenses and other costs of strategic initiatives in 2012. Basic EPS from continuing operations as reported in 2012 in accordance with GAAP was $1.74. As a result, the Payout Level would have been 75%.



Basic EPS	Payout Level	Category
Less than $1.63	0%	Below Target
$1.63 to $1.73	50%	Threshold
$1.74 to $1.83	75%	Below Target, but Above Threshold
$1.84 to $2.11	100%	Target
$2.11 or higher	125%	Maximum

Long-term incentive award opportunities are established by the Compensation Committee according to the NEO's position and responsibilities, and based on a comparison to our Peer Group and competitive compensation data. In 2012, the Compensation Committee differentiated target awards based on individual NEO performance, experience and market positioning.

Except with respect to the timeline for vesting, the Compensation Committee does not take into account existing NEO Common Stock holdings because it believes that doing so would have the effect of penalizing success (to the extent that compensation might be reduced based on the appreciation of past awards) or rewarding underperformance (to the extent that compensation might be awarded to make up for lack of appreciation in stock price).

The Company's practice is to make all equity awards at the first regularly scheduled meeting of the Compensation Committee, which is scheduled well in advance, and typically occurs early in February. The Company makes "off-cycle" equity grants to NEOs in limited circumstances, generally for newly hired executives or promotions. During 2012, “off-cycle” equity grants were made to Ms. Toussaint to provide an incentive to her to rejoin the Company and to provide retention incentives tied to her long-term future employment. Ms. Toussaint did not participate in the annual equity award program in February 2012, but did receive grants in conjunction with her rehire as set forth in the below table. All unvested equity awards granted to Ms. Toussaint before her re-employment by the Company were forfeited by Ms. Toussaint in connection with her resignation.

In determining the mix of equity grants (e.g., stock options, RSUs, or Relative Measure PSAs), the Compensation Committee receives and reviews recommendations from management, based on analysis prepared by Cook. Generally, the factors considered support the pay-for-performance philosophy at the Company, aligning the interests of stockholders and NEOs, past practice, changes in business strategy, competitive practice (both generally and within the Peer Group), and the strategic impact of equity-based compensation (i.e., cost effectiveness, stockholder dilution, executive retention, a link to Company performance and total stockholder return). All of management's recommendations are reviewed by Cook and Meridian.

As reflected in the above table on page 20, in 2012 the Compensation Committee established a target mix for all NEOs that was designed to create a weighting on types of equity that were more heavily influenced by performance. The weight of the Relative Measure PSAs was 50%, RSUs was 30% and stock options was 20%. The target mix does not take into potential account "off-cycle" grants or supplemental awards, if any. This mix is intended to provide our NEOs with a strong incentive to continue their successful tenures with the Company and to focus on long-term stockholder value.



	Target Values	Annual Stock Option Grants	Annual RSU Grants	Relative Measure PSAs
G. Milzcik	$3,000,000	62,500	33,800	56,400
C. Stephens, Jr.²	$653,500	13,600	7,400	12,300
P. Dempsey	$625,000	13,000	7,100	11,800
C. Toussaint^{1, 2}	$360,000	8,200	4,400	7,400
D. Edwards	$292,800	6,300	3,400	5,600

_____________


¹	Unvested grants made to Ms. Toussaint before her resignation on March 16, 2012 were forfeited at the time of her resignation. The grants shown in the chart above were made in conjunction with her re-employment on June 19, 2012.


2	In addition to the grants indicated in the table above, Mr. Stephens received a retention grant of 28,200 RSUs and Ms. Toussaint received a retention grant of 20,500 RSUs upon her rehire on June 19, 2012.

NEO Stock Ownership Requirements

All of our NEOs, as well as certain other members of Company leadership, are subject to the following stock ownership requirements:



Position	Multiple of Annual Salary
Chief Executive Officer	5x
All Other NEOs	3x

In July 2012, the Compensation Committee changed the stock ownership requirements so that 2/3 of the value of unvested RSUs count toward achieving ownership requirements. The Compensation Committee also eliminated the five and/or six year deadline to achieve ownership in favor of a requirement that all net after-tax proceeds from Company equity grants, including stock option exercises, be retained until ownership levels are met. Once ownership levels are met, the requirement is converted to a fixed number of shares. As of the end of 2012, Messrs. Milzcik, Dempsey, and Stephens fully met their ownership requirements. All NEOs are in compliance with our new hold requirement.

Clawback Agreements, Hedging and Pledging

•

Clawback Agreements: Beginning in late 2008, we implemented a practice whereby executives hired or promoted into corporate officer positions are required to enter into clawback agreements that permit the Company to recoup or “clawback” certain annual incentive compensation and performance based vesting equity awards paid to those officers in situations where the awards earned by these NEOs are based on the achievement of certain financial performance targets that are later restated and would therefore result in lower awards paid. The Company has entered into agreements with all NEOs, and select other key employees. In addition, all of the Company's equity award agreements provide that awards may be forfeited if an employee engages in activity that is detrimental to the Company, including performing services for a competitor, disclosing confidential information, or otherwise violating the Company's Code of Business Ethics and Conduct. With respect to the NEOs, the Compensation Committee has the discretion to make certain exceptions to the clawback requirements and ultimately determine whether any adjustment will be made.


•	Hedging: The Company prohibits hedging transactions involving the Company's securities for certain members of Company leadership, including all directors and executive officers (which includes our NEOs).

•

Pledging and Margin Accounts: In 2013, the Corporate Governance Committee adopted a new policy that prohibits certain members of Company leadership, including all directors and executive officers, from pledging or margin call arrangements involving the Company's securities that are held to meet the Company's stock ownership requirements. The new policy also places other restrictions on any other pledging or margin call arrangements involving Company securities by such individuals. In addition, the ability of these individuals to engage in such transactions requires pre-approval from the Corporate Governance Committee, and an annual certification to the Corporate Governance Committee that the individual is in compliance with the policy. None of our NEOs have pledged Company securities or have Company securities subject to a margin call arrangement.

Risk

We believe our executive compensation program is designed to motivate and reward our NEOs for their performance during the fiscal year and over the long-term and for taking appropriate business risks consistent with our strategic objectives. The following characteristics of our executive compensation program are designed to mitigate the likelihood that our NEOs would make business decisions that present undue risk:


•	The stock options and RSU components of our long-term incentive award program vest ratably over three or more years. Our Relative Measure PSAs vest based on performance at the end of the three-year performance period.


•	Performance targets are tied to several financial metrics, including basic EPS, Revenue and Operating Margin, that are quantitative and measurable.


•	The performance periods and vesting schedules for long-term incentives overlap and, therefore, reduce the motivation to maximize performance in any one period.


•	Our stock ownership requirements require our NEOs to own equity representing a significant multiple of their base salary, and to retain this equity throughout their tenures.


•	All NEOs have entered into clawback agreements that allow us to recoup incentive compensation in situations where the awards earned by NEOs are based on the achievement of certain financial performance targets that are later restated and would therefore result in lower awards paid.

•

Payouts under our annual and long-term incentive programs are subject to a cap. Specifically, under our current practices for NEOs, our annual cash incentive award payments are capped (at not greater than 2.25 times base salary for the Chief Executive Officer and less for other NEOs). Performance based payouts under the relative measure program are capped at 2.5 times the target level Relative Measure PSA grant.

Pension and Other Retirement Programs

In addition to our 401(k) plan, our NEOs have the opportunity to participate in one or more of the following additional retirement plans:



Plan		Summary of Features

Salaried Retirement Income Plan ("Qualified Plan")	•	A broad-based tax-qualified defined benefit pension plan; vesting upon attaining 5 years of service. Effective December 31, 2012, this plan was closed to employees hired on or after January 1, 2013. In lieu of this benefit, eligible new employees will receive an annual retirement contribution under the 401(k) Plan of 4% of actual eligible earnings.

Retirement Benefit Equalization Plan ("RBEP")	•	Provides benefits on base salary earnings in excess of Internal Revenue Service ("IRS") limit on qualified plans to eligible salaried employees, officers and NEOs who do not meet MSSORP/DC Plan vesting requirements; vesting upon attaining 5 years of service.
Modified Supplemental Senior Officer Retirement Plan ("MSSORP")	•	Provides a 55% average final pay benefit (base salary and annual incentive); benefit is reduced for offsets from prior employer retirement benefits and other Company retirement benefits; vesting upon attaining age 55 and 10 years of service. This program was closed to new or rehired entrants in 2008. Only Messrs. Milzcik and Dempsey participate in the MSSORP.



Plan		Summary of Features

Nonqualified Deferred Compensation Plan ("DC Plan")	•	Provides an annual Company contribution based on a percent of base salary and annual incentive in excess of IRS limit on qualified plans; for 2012, the contribution was based on 20% of base salary and annual incentive pay; vesting upon attaining 10 years of service. The Company modified the DC Plan to close participation to any employee hired, rehired or promoted into an eligible position on or after April 1, 2012. Mr. Stephens and Ms. Edwards are the only NEOs that participate in the DC Plan.

The Qualified Plan is a broad-based tax-qualified defined benefit pension plan. The RBEP, the MSSORP and the DC Plan are non-tax-qualified supplemental executive retirement plans that provide a higher level of benefits than are available under the Qualified Plan to certain designated employees and senior level officers, including all NEOs. We believe these more generous benefits are an important part of the overall compensation provided to our NEOs and serve as a strong retention incentive.

The chart below summarizes which NEOs participate in each of the qualified and non-qualified pension and retirement plans. A more detailed discussion of the pension benefits payable to our NEOs is described in the “Pension Benefits Table” and the narrative following the table.



NEO	Qualified Plan	RBEP	MSSORP	DC Plan
G. Milzcik	X	X	X
C. Stephens, Jr.	X	X		X
P. Dempsey	X	X	X
C. Toussaint	X	X		¹
D. Edwards	X	X		X

_____________

Prior to her resignation of employment, Ms. Toussaint had been a participant in the DC Plan. She forfeited all Company contributions to this program upon her resignation. Since the Company modified the DC Plan to close participation to any employee hired, rehired or promoted into an eligible position on or after April 1, 2012, Ms. Toussaint was not permitted to re-enter this program upon her rehire by the Company.

Change in Control and Employment Termination Benefits

The Company provides change in control benefits specifically to retain key executives, including NEOs, during a potential change in control, to provide continuity of management and to provide income continuation for NEOs who are particularly at risk of involuntary termination in the event of a restructuring in connection with a change in control. These benefits were designed to be part of a competitive compensation package and keep our executive officers focused on our business goals and objectives and we believe that these benefits are a necessary part of any total compensation package to attract and retain key executives. In some instances these agreements provide for payments and other benefits if we terminate an NEO's employment without “cause,” or if an NEO terminates employment for “good reason,” either before or after a change in control.

None of the agreements for our NEOs include a gross-up for any taxes as a result of golden parachute payments under Section 280G of the Internal Revenue Code. For more detail on Section 280G of the Internal Revenue Code see the discussion below under “Tax and Accounting Considerations.” In addition, we generally do not provide change in control cash compensation benefits in excess of severance compensation equal to two times the executive's base salary plus payments under the annual cash incentive program. Our agreements with our NEOs also provide for continuation of group health, life insurance and other benefits for twenty-four months following the executive's termination and for certain other benefits. The terms of the change in control and incremental termination benefits payable to our NEOs are described in more detail below under “Potential Payments Upon Termination or Change in Control.”

Perquisites

In 2012, the Company provided certain limited perquisites to our NEOs. The perquisites are fully described in the footnotes to the Summary Compensation Table and generally fall into the following categories: financial planning

assistance, annual physical examination, and personal use of the company-leased aircraft (for the Chief Executive Officer only and capped at $100,000). None of these perquisites are grossed up for taxes.

Additional Benefits

All current NEOs other than Ms. Toussaint are eligible to participate in the Company's Senior Executive Enhanced Life Insurance Program ("SEELIP"), under which the Company pays the premiums for a life insurance policy owned by each NEO and pays the NEO's income tax liability arising from its payment of the premiums and taxes. As previously disclosed, the Company closed participation to any employee hired or promoted into an eligible position after April 1, 2011 and eliminated the Company-paid premium and related tax gross-up payments following retirement after April 1, 2011, except that the current program would be maintained during retirement for current employees who have attained or will attain age 62 with 10 years of service on or before December 31, 2011. None of our NEOs meet this criteria.

When the SEELIP was closed to new or rehired executives, the Company established the EGTLIP for new NEOs and other eligible executives. The EGTLIP provides premium payments for a term insurance policy with a benefit of four times the employee's base salary. The NEO owns the policy and is responsible for any tax liability (no tax gross-up) resulting from this program. The Company does not provide any premium payment during retirement.

Each of our NEOs participates in other employee benefit plans generally available to all U.S. based employees (e.g., health insurance, 401(k) Plan) on the same terms as all other employees.

Summary of Executive Changes for 2012

On February 13, 2012, Mr. Dempsey was promoted to Senior Vice President and Chief Operating Officer. Concurrent with his promotion, his base salary was increased from $431,000 to $450,000 and his annual incentive target remained at 50% of base salary. Mr. Dempsey's long-term compensation target was increased from $367,200 to $625,000, and he was awarded long-term incentive compensation grants in February 2012, at the same time as other NEOs that were consistent with this target level.

On March 16, 2012, Ms. Toussaint resigned from her position with the Company. Concurrent with her resignation, she forfeited all unvested stock options, RSUs, and Relative Measure PSAs. In addition, she forfeited Company-provided contributions to the DC Plan and the 401(k) Plan. Upon her rehire on June 19, 2012, Ms. Toussaint was granted Relative Measure PSAs, stock options, and RSUs as indicated in the table on page 23, as well as a cash signing bonus in the amount of $100,000. None of her prior grants were reinstated and she was precluded from re-entry into the DC Plan and the SEELIP. Ms. Toussaint participates in the EGTLIP. Ms. Toussaint resumed participation in the Company's Qualified Plan that is generally provided to other U.S.-based employees as well as the RBEP that is provided to employees with eligible compensation above the IRS qualified levels. For 2012, Ms. Toussaint participated in the MICP, prorated for the time when she was an active employee during 2012.

Tax and Accounting Considerations

Internal Revenue Code Section 162(m)

As discussed above, our Compensation Committee considers the tax and accounting treatment associated with cash and equity awards it makes, although these considerations are not the overriding factor that the Compensation Committee uses in making its decisions. Section 162(m) of the Internal Revenue Code places a limit of $1 million on the compensation that the Company may deduct in any one year with respect to each of its most highly compensated executive officers, unless certain conditions are met. There is an exception to the $1 million limitation for performance-based compensation meeting certain requirements. The Company currently grants awards intended to meet this exception including annual cash incentive awards, stock option awards, and PSAs. Grants of restricted stock or stock units that vest solely on the basis of service do not qualify for the exception. To maintain flexibility in compensating NEOs in a manner designed to promote varying Company goals, our Compensation Committee has not adopted a policy requiring all compensation to be deductible. Our Compensation Committee may approve compensation or changes to plans, programs or awards that may cause the compensation or awards to exceed the limitation under Section 162(m) if it determines that action is appropriate and in our best interests.

Internal Revenue Code Section 280G

The Company also periodically reviews the severance agreements entered into between the Company and the

NEOs to assess the impact of Section 280G of the Internal Revenue Code. Currently, the severance agreements do not provide for any gross-up to compensate our NEOs for taxes incurred under Section 4999 of the Internal Revenue Code as a consequence of “golden parachute” payments upon a change-in-control. Nor do they preclude the possibility that, in certain circumstances, the compensation payable in the event of a change in control under the agreements or other plans and arrangements may be non-deductible by the Company under Section 280G of the Internal Revenue Code.

Accounting for Equity Compensation

The Company accounts for its stock-based employee compensation plans at fair value on the grant date and recognizes the related cost in its consolidated statement of income in accordance with accounting standards related to share-based payments. The fair values of stock options are estimated using the Black-Scholes option-pricing model based on certain assumptions. The fair values of RSU awards, EPS PSA awards and Relative Measure PSA awards with a performance condition are estimated based on the fair market value of the Company's stock price on the grant date. The fair values of Relative Measure PSA awards with a market condition are estimated using a Monte Carlo valuation model based on certain assumptions.

Compensation Committee Report

To Our Fellow Stockholders at Barnes Group Inc.

We, the Compensation and Management Development Committee of the Board of Directors of Barnes Group Inc., have reviewed and discussed with management the Compensation Discussion and Analysis contained in this proxy statement and, based on such review and discussion, have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

The Compensation Committee

Mylle H. Mangum, Chair

Thomas J. Albani

John W. Alden

Gary G. Benanav

George T. Carpenter

Risk Oversight and Assessment Policies and Practices

Our Audit Committee is ultimately responsible for overall risk oversight for the Company generally. See “Board Role in Risk Oversight” on page 56. The Compensation Committee evaluates and reviews our incentive compensation arrangements annually based on an inventory of all relevant compensation programs prepared by the Human Resources department which includes details of the principal features of the programs, including any key risk mitigation factors such as (i) the mix of equity award instruments used under our long-term incentive program; (ii) the multi-year vesting of our equity awards; (iii) our stock ownership requirements; and (iv) the clawback agreements in place for certain executives. These findings are discussed with the Company's Enterprise Risk Management steering committee. The Compensation Committee also consults with, and makes certain recommendations to, the Board of Directors regarding the Company's compensation programs as necessary. Based on its evaluation, the Compensation Committee has concluded that the overall structure of the compensation programs for NEOs and company-wide employees are designed with the appropriate balance of risk and reward in relation to the Company's overall business strategy and are not reasonably likely to have a material adverse effect on the Company.

Summary Compensation Table for 2012, 2011 and 2010

The following table sets forth the compensation earned by our NEOs for the fiscal years ended December 31, 2012, 2011 and 2010:



Name and Principal Position	Year	Salary		Bonus¹		Stock Awards²		Option Awards³		Non-Equity Incentive Plan Compensation⁴		Change in Pension Value and Nonqualified Deferred Compensation Earnings^5,6		All Other Compensation⁷		Total
Gregory F. Milzcik President and Chief Executive Officer	2012	$	890,000	$	—	$	2,699,218	$	599,937	$	744,596	$	1,729,195	$	260,844	$	6,923,790
	2011	886,250		—		2,040,788		904,792		2,002,500		1,802,030		204,408		7,840,768
	2010	856,250		—		2,376,761		929,770		1,619,723		1,185,353		335,628		7,303,485
Christopher J. Stephens, Jr. Senior Vice President, Finance and Chief Financial Officer	2012	431,000		—		1,339,261		130,546		240,390		49,038		234,870		2,425,105
	2011	427,250		—		340,131		150,549		646,500		36,337		218,575		1,819,342
	2010	413,250		124,000		370,940		122,080		513,375		27,478		135,112		1,706,235

Patrick J. Dempsey Senior Vice President and Chief Operating Officer	2012	447,783		—		565,484		124,787		250,988		364,266		104,764		1,858,072
	2011	427,250		—		274,901		122,836		646,500		378,554		74,451		1,924,492
	2010	413,250		—		407,576		134,070		213,668		225,597		98,904		1,493,065
Claudia S. Toussaint Senior Vice President, General Counsel and Secretary	2012	289,270		—		830,098		72,734		146,265		81,302		88,214		1,507,883
	2011	356,250		—		270,241		119,840		486,000		33,721		158,106		1,424,158
	2010	236,635		—		407,355		284,906		262,823		17,273		199,363		1,408,355
Dawn N. Edwards Senior Vice President, Human Resources	2012	296,000		—		269,177		60,474		148,585		102,683		133,699		1,010,618
	2011	292,250		—		223,648		101,115		399,600		73,928		117,334		1,207,875

________

The amount listed for Mr. Stephens for 2010 represents a $124,000 cash bonus payable upon his completion of one year of satisfactory service with the Company. As noted in the CD&A, upon her rehire on June 19, 2012, Ms. Toussaint received a cash signing bonus in the amount of $100,000. Because this amount is fully reimbursable if Ms. Toussaint voluntarily terminates employment with the Company within twelve months of the signing bonus payment date, it is not considered earned in 2012.

Stock Awards represent the aggregate grant date fair value of RSUs, Relative Measure PSAs, EPS PSAs and EPS PUPs granted to NEOs under the Barnes Group Inc. Stock and Incentive Award Plan. EPS PUP awards are denominated in units with each unit being equivalent in value to one share of Common Stock and are payable in cash. Both EPS PUP awards and EPS PSA awards vest upon satisfying established performance goals. Relative Measure PSA awards vest upon satisfying established performance and market goals. In addition to the RSU value, the value disclosed in this column for the Relative Measure PSA awards for Messrs. Milzcik, Stephens, and Dempsey and Mses. Toussaint and Edwards represents the amount of compensation if target goals are met. The maximum grant date fair value of the Relative Measure PSA awards granted in 2012 was $3,300,152 for Mr. Milzcik, $719,714 for Mr. Stephens, $690,457 for Mr. Dempsey, $400,147 for Ms. Toussaint and $327,675 for Ms. Edwards. All three measures of the Relative Measure PSA awards allow an NEO to receive up to 250% of the target amount, however, only the basic EPS growth and operating income before depreciation and amortization growth measures would increase the compensation awarded under ASC 718 if the award paid out at maximum. The fair value of the performance based portion of the awards was determined based on the market value of Common Stock on the date of grant and the fair value of the market based portion of awards was determined based on a Monte Carlo valuation method; as described in the note on Stock-Based Compensation in the notes to the Company's consolidated financial statements filed with the Annual Report on Form 10-K for the respective year-end.

Option Awards represent the aggregate grant date fair value of stock options granted to NEOs under the Barnes Group Inc. Stock and Incentive Award Plan. The fair value was determined by using the Black-Scholes option pricing model applied consistently with the Company's practice, as described in the note on Stock-Based Compensation in the notes to the Company's consolidated financial statements filed with the Annual Report on Form 10-K for the respective year-end.


⁴	Non-Equity Incentive Plan Compensation includes amounts earned under the Performance-Linked Bonus Plan for Messrs. Milzcik, Stephens, Dempsey, and Mses. Toussaint (in 2011) and Edwards, and the amounts earned in 2012 and 2010 under the MICP for Ms. Toussaint.

⁵

The amount listed in Change in Pension Value and Nonqualified Deferred Compensation Earnings represents the annual increase in pension value for all of the Company's defined benefit retirement programs. All assumptions are as detailed in the notes to the Company's consolidated financial statements filed with the Annual Report on Form 10-K for the respective year-end, with the exception of the following: retirement age for all plans is assumed to be the older of the unreduced retirement age, as defined by each plan, or age as of December 31, 2012, December 31, 2011 or December 31, 2010, as applicable, and no pre-retirement mortality, disability, or termination is assumed. The U.S. discount rates of 4.25%, 5.05% and 5.65%, respectively, are detailed in the Management's Discussion & Analysis filed with the Annual Report on Form 10-K for the respective year-end.


⁶	The Change in Pension Value and Nonqualified Deferred Compensation Earnings is segregated by plan in the following table:



Name and Principal Position	Plan Name	Year	Amounts

Gregory F. Milzcik President and Chief Executive Officer	Qualified	2012	$	152,862
	RBEP	2012	N/A
	MSSORP	2012	1,852,268
	SERP	2012	(275,935		)
	TOTAL	2012	1,729,195

	Qualified	2011	$	113,672
	RBEP	2011	N/A
	MSSORP	2011	1,692,920
	SERP	2011	(4,562		)
	TOTAL	2011	1,802,030

	Qualified	2010	$	85,922
	RBEP	2010	N/A
	MSSORP	2010	982,928
	SERP	2010	116,503
	TOTAL	2010	1,185,353

Christopher J. Stephens, Jr. Senior Vice President, Finance and Chief Financial Officer
	Qualified	2012	$	53,596
	RBEP	2012	N/A
	MSSORP	2012	N/A
	SERP	2012	(4,558		)
	TOTAL	2012	49,038

	Qualified	2011	$	36,069
	RBEP	2011	N/A
	MSSORP	2011	N/A
	SERP	2011	268
	TOTAL	2011	36,337

	Qualified	2010	$	24,883
	RBEP	2010	N/A
	MSSORP	2010	N/A
	SERP	2010	2,595
	TOTAL	2010	27,478


Patrick J. Dempsey Senior Vice President and Chief Operating Officer	Qualified	2012	$	113,309
	RBEP	2012	N/A
	MSSORP	2012	314,096
	SERP	2012	(63,139		)
	TOTAL	2012	364,266

	Qualified	2011	$	79,898
	RBEP	2011	N/A
	MSSORP	2011	306,626
	SERP	2011	(7,970		)
	TOTAL	2011	378,554

	Qualified	2010	$	58,092
	RBEP	2010	N/A
	MSSORP	2010	146,244
	SERP	2010	21,261
	TOTAL	2010	225,597



Name and Principal Position	Plan Name	Year	Amounts

Claudia S. Toussaint Senior Vice President, General Counsel and Secretary	Qualified	2012	$	37,743
	RBEP	2012	44,951
	MSSORP	2012	N/A
	SERP	2012	(1,392		)
	TOTAL	2012	81,302

	Qualified	2011	$	33,243
	RBEP	2011	N/A
	MSSORP	2011	N/A
	SERP	2011	478
	TOTAL	2011	33,721

	Qualified	2010	$	16,359
	RBEP	2010	N/A
	MSSORP	2010	N/A
	SERP	2010	914
	TOTAL	2010	17,273

Dawn N. Edwards Senior Vice President, Human Resources	Qualified	2012	$	120,010
	RBEP	2012	N/A
	MSSORP	2012	N/A
	SERP	2012	(17,327		)
	TOTAL	2012	102,683

	Qualified	2011	$	77,050
	RBEP	2011	N/A
	MSSORP	2011	N/A
	SERP	2011	(3,122		)
	TOTAL	2011	$	73,928

________

Consistent with financial calculations in the notes to the Company's consolidated financial statements filed with the Annual Report on Form 10-K for the fiscal years ending December 31, 2012, December 31, 2011 and December 31, 2010, it is assumed that the form of payment is a life annuity for the Salaried Retirement Income Plan (Qualified), the RBEP, and the SERP. It is assumed that the form of payment as of December 31, 2012 is 5 year installments (which are actuarially equivalent to the life annuity) for the NEO MSSORP participants. The 2012, 2011 and 2010 qualified plan limits of $250,000, $245,000 and $245,000, respectively, have been incorporated.

The amount listed in this column for Mr. Stephens and Ms. Edwards assumes that they will vest under the Barnes Group 2009 Deferred Compensation Plan and therefore would not be eligible to receive benefits under the RBEP. The amount listed in this column for Messrs. Milzcik and Dempsey assumes that they will vest under the MSSORP and therefore would not be eligible to receive benefits under the RBEP.

The net reduction in value for the SERP plan benefits in 2011 is a result of changes in qualified plan provisions that updated adjustment factors used to determine optional forms of payment. The optional form factors used now provide a lesser reduction. The overall value to the participant remains unchanged should the participant elect the 50% joint and survivor optional form of payment. The decrease in SERP is directly offset by the increase in the Qualified Plan. The net reduction in value for the SERP plan benefits in 2012 is a result of the elimination of plan eligibility for all participants not age 55 with 10 years of service as of April 1, 2012.


⁷	The compensation represented by the amounts for 2012 set forth in the All Other Compensation column for the NEOs is detailed in the following table:



Name andPrincipal Position	Year	Taxes Paid on All Other Compensation^a		Personal Usage of Company Aircraft^b		Life Insurance Premiums^c,d		Deferred Compensation Plan^e		Relocation^f		Other^g		All Other Perquisites^h		Total

Gregory F. Milzcik President and Chief Executive Officer	2012	$	64,090	$	100,000	$	84,957	$	—	$	—	$	7,350	$	4,447	$	260,844
Christopher J. Stephens, Jr. Senior Vice President, Finance and Chief Financial Officer	2012	25,731		—		34,109		165,500		—		7,350		2,180		234,870
Patrick J. Dempsey Senior Vice President and Chief Operating Officer	2012	30,626		—		29,276		—		31,157		7,350		6,355		104,764
Claudia S. Toussaint Senior Vice President, General Counsel and Secretary	2012	6,524		—		9,317		62,523		—		7,350		2,500		88,214
Dawn N. Edwards Senior Vice President, Human Resources	2012	13,757		—		18,236		89,120		—		7,350		5,236		133,699

________


^a	This column represents the reimbursement of taxes paid on eligible compensation included in the All Other Compensation table for the NEOs in accordance with the Company's policies and practices.


^b	The value of the personal usage of the Company leased aircraft is based on the aggregate incremental cost to the Company which is based on actual payments made by the Company for the use of the aircraft for Mr. Milzcik.

Payments made under the SEELIP for Messrs. Milzcik, Dempsey, Stephens and Mses. Toussaint and Edwards. Upon Ms. Toussaint's rehire on June 19, 2012, she was precluded from re-entry into the SEELIP, and now participates in the EGTLIP. Under the SEELIP, the Company pays the premiums for the individual life insurance policies that are owned by the participants, with the life insurance coverage equal to four times base salary, and the Company pays the participating NEO's income tax liability arising from its payment of the premiums and taxes, therefore, incurring no out-of-pocket expense for the policies. The Company generally ceases to pay policy premiums on termination of employment, unless the NEO has attained age 62 and 10 years of service, in which case the Company continues to pay premiums and tax gross-ups in retirement.

Payments made under the EGTLIP for Ms. Toussaint. The SEELIP was closed to new or rehired executives effective April 1, 2011, and the Company established the EGTLIP for new NEOs and other eligible executives. Under the EGTLIP, the Company pays the premiums for individual life insurance policies that are owned by the participants, with the life insurance coverage equal to four times base salary. The employee owns the policy and is responsible for any tax liability (no tax gross-up) resulting from this program. The Company ceases to pay policy premiums on termination of employment.

The amount listed as deferred compensation for Mr. Stephens and Mses. Toussaint and Edwards includes employer contributions to the Barnes Group 2009 Deferred Compensation Plan. Ms. Toussaint forfeited her nonqualified deferred compensation balance on March 16, 2012 upon her resignation in accordance with the plan. Refer to the "Nonqualified Deferred Compensation Table" for further details of the plan.

Mr. Dempsey received relocation benefits consistent with Company policy and practices. The relocation costs included an allowance for incidentals, certain costs for the sale and purchase of his residences, and costs for the moving of household goods. In addition, Mr. Dempsey received a tax gross-up on all items considered to be taxable, which are reflected in the Taxes Paid on All Other Compensation column.


^g	Consists of matching contributions made by the Company under the Retirement Savings Plan which is a plan generally available to most U.S. based employees, including the NEOs.


^h	Included in All Other Perquisites are payments made for financial planning and tax preparation services for Messrs. Milzcik, Stephens, and Dempsey, and Ms. Toussaint; executive physical examinations for Messrs. Milzcik and Dempsey, and Ms. Edwards; spousal travel to a Company event for Mr. Stephens; and Company-paid office parking for Mr. Dempsey.

Grants of Plan-Based Awards in 2012

Estimated Future Payouts Under Non-Equity Incentive Plan Awards

Estimated Future Payouts Under Equity Incentive Plan Awards

All Other Stock Awards: Number of Shares of Stock or Units (#)

All Other Option Awards: Number of Securities Underlying Options (#) ³

Exercise or Base Price of Option Awards ($/Sh)⁴

Grant Date Fair Value of Stock and Option Awards ($)

Name

Grant Date

Threshold ($)

Target ($)

Maximum ($)

Threshold (#)

Target (#)

Maximum (#)

G. Milzcik

2/8/2012

62,500

26.59000

599,937

2/8/2012

33,800

898,742

2/8/2012²

18,612

56,400

141,000