BARNES GROUP INC.
1996 LONG TERM INCENTIVE PLAN
SECTION 1. PURPOSE
The 1996 Long Term Incentive Plan ("LTIP") is designed to provide incentive compensation to key executives of
Barnes Group Inc. (the "Company") and its subsidiaries in a form which relates the financial reward to an increase
in the value of the Company to its shareholders. The plan shall be administered by the Compensation Committee
of the Board of Directors (the "Committee"). This plan shall be effective for awards granted with the 1996-1998
Incentive Award Period.
SECTION 2. DEFINITIONS
2.1 Total Cost of Equity. Total Cost of Equity equals Average Stockholders' Equity, multiplied by a percentage
cost of equity selected by the Committee which shall be held constant throughout the Incentive Award Period.
Average Stockholders' Equity shall be computed by adding stockholders' equity on December 31st of the prior
year to stockholders' equity at the end of each month of the applicable year and dividing the result by 13.
2.2 Economic Return. Economic Return for any year equals Cash Flow From Operations less the Cost of Equity
divided by the average number of common shares outstanding for the year. In computing Economic Return, the
Committee may make adjustments for any extraordinary changes which occur during an Incentive Award Period.
2.3 Cash Flow from Operations. Cash Flow From Operations equals net income, less any dividends on
preferred stock, plus depreciation and amortization, plus any losses, less any gains, on the sale of plant, property
and equipment or other assets where the gain or loss exceeds $500,000 for each individual transaction.
2.4 Performance Unit. A Performance Unit is the form of award under the LTIP. Its value in any year is equal to
the sum of the Economic Returns per share for the current year and preceding four years.
SECTION 3. ADMINISTRATION
The Committee shall designate participants, award a number of Performance Units to each participant, and
perform all other