Exhbit 10.7
PERFORMANCE SHARE AWARD
AGREEMENT
PURSUANT TO THE BARNES GROUP
INC.
STOCK AND INCENTIVE AWARD
PLAN
THIS DOCUMENT CONSTITUTES PART OF
A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933.
PERFORMANCE SHARE AWARD AGREEMENT
executed in duplicate as of March 7, 2005 (the “
Grant Date ”), between Barnes Group Inc., a Delaware
corporation (the “ Company ”), and [ NAME OF
GRANTEE ], an employee of the Company (the “
Holder ”).
In accordance with the provisions of
the Barnes Group Inc. Stock and Incentive Award Plan (the “
Plan ”), the Compensation and Management Development
Committee of the Company’s Board of Directors (the “
Committee ”) has authorized the execution of this
Agreement. Capitalized terms used in this Agreement and not
otherwise defined herein shall have the same meaning as provided
for in the Plan.
NOW, THEREFORE, in consideration of
the mutual covenants hereinafter set forth and for other good and
valuable consideration, the parties hereto agree as
follows:
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1.
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Grant of
Performance Share Award .
Subject to the terms and conditions of the Plan and this Agreement,
the Company hereby awards to the Holder
performance share awards for the performance period commencing on
January 1, 2005 and ending on December 31, 2006 (the “
Performance Share Awards ” or, collectively, the
“ Award ”). The Award entitles the Holder to
receive, without payment to the Company, shares of Common Stock
equal to the number of Performance Share Awards that are deemed
earned in the future pursuant to Section 2, Section 4(b) or Section
6 hereof, if any; provided, however, that, except as provided
otherwise in Section 4(b), the Holder must be an employee of the
Company on the future date as of which the Performance Share Awards
are deemed earned to receive such shares. Except in the event of a
Change in Control as provided in Section 4(b) and Section 6, no
Performance Share Awards will be deemed earned pursuant to this
Agreement, nor will the Holder be entitled to receive any shares of
Common Stock under this Agreement, unless the applicable Minimum
Performance Goal set forth in Section 2 is attained or exceeded for
one or more of the Performance Years in the Award Period (as such
terms are defined in Section 2). In no event shall the Award
entitle the Holder to receive more than 58,000 shares of Common
Stock, unless the excess is attributable solely to an adjustment
pursuant to Section 7.
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Page 1 of 10
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(a)
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The maximum
number of Performance Share Awards that may be earned pursuant to
this Agreement is
Performance Share Awards for the Company’s 2005 fiscal year,
and
Performance Share Awards for the Company’s 2006 fiscal year
(such two fiscal years being hereafter referred to, collectively,
as the “ Award Period ”, and each, individually,
as a “ Performance Year ”). Subject to the other
provisions of this Section 2 (including but not limited to Section
2(c) below) and this Agreement, (i) no Performance Share Awards may
be earned for a Performance Year unless the Company’s
consolidated basic earnings per share as determined in accordance
with Section 6(b) of the Plan (“ EPS ”) for that
Performance Year equal or exceed $1.57, in the case of Performance
Year 2005, or $1.45, in the case of Performance Year 2006 (the
“ Minimum Performance Goal ”); (ii) all of the
Performance Share Awards that may be earned for a Performance Year
will be earned if the Company’s EPS for that Performance Year
equal or exceed $1.85, in the case of Performance Year 2005, or
$1.70, in the case of each of Performance Year 2006 (the “
Maximum Performance Goal ”); and (iii) the number of
Performance Share Awards that will be earned for a Performance Year
will be calculated by multiplying the maximum number of Performance
Share Awards that may be earned in such Performance Year as stated
above in this Section 2(a) by the performance factor corresponding
to the EPS attained in that Performance Year in the applicable
table below.
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Table for Performance Year 2005:
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EPS
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Performance
Factor
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Performance Factor x 29,000 =
# Performance Share Awards Earned*
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100
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%
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75
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%
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50
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%
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-0-
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Page 2 of 10
Table for Performance Year 2006:
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EPS
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Performance
Factor
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Performance Factor x 29,000 =
# Performance Share Awards Earned
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100
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%
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*
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*
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75
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%
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*
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*
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50
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%
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*
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*
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-0-
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-0-
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Not later than ninety (90) days
after the commencement of the Award Period, and notwithstanding the
foregoing provisions of this Section 2(a), the Committee may change
any or all of the foregoing EPS goals and/or performance factors
and/or the calculation of EPS in its discretion. Any such change
shall be established in writing by the Committee (within the
meaning of Treasury Regulation section
1.162-27(e)(2)(i)).
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(b)
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More than
ninety (90) days after the commencement of the Award Period, and
notwithstanding the provisions of Section 2(a) above, the Committee
may in its discretion, concurrently with its determination of
Executive Office Group Performance objectives for a Performance
Year under the Company’s Performance-Linked Bonus Plan for
Selected Executive Officers or any successor thereto, reduce the
number of Performance Share Awards that will be earned in the event
the Minimum Performance Goal, the Maximum Performance Goal or any
particular level of EPS between the Minimum Performance Goal and
the Maximum Performance Goal is attained in such Performance Year.
The Committee may effectuate such reduction directly (e.g., by
reducing the performance factor and thus the number of Performance
Share Awards that will be earned at the levels of EPS shown in the
applicable foregoing table) or indirectly (e.g., by increasing the
Maximum Performance Goal, the Minimum Performance Goal and/or any
other level of EPS at which a given number of Performance Share
Awards will be earned in accordance with the applicable foregoing
table). In no event may the Committee, directly or indirectly,
increase the number of Performance Share Awards that will be earned
in the event the Minimum Performance Goal, the Maximum Performance
Goal or any particular level of EPS between the Minimum Performance
Goal and the Maximum Performance Goal is attained.
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(c)
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Any provision
of Section 2(a) or 2(b) to the contrary notwithstanding,
Performance Share Awards that may be earned for any Performance
Year pursuant to this Section 2 shall not be deemed earned (i)
until December 31 of such Performance Year, and (ii) unless the
Holder is employed by the Company on December 31 of such
Performance Year.
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**
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Subject to
reduction in the discretion of the Committee, as provided below in
Section 2(b).
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Page 3 of 10
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3.
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Delivery of
Shares . A share of
Common Stock shall be delivered to the Holder in payment of each
Performance Share Award that is deemed earned pursuant to Section 2
above or Section 4(b) below. Such delivery shall occur as of the
first day of March (and in no event shall occur later than the
15 th day of March) immediately following
the date as of which such Performance Share Award is deemed earned;
provided, however, that if a Change in Control occurs after the
date on which such Performance Share Award is deemed earned and
prior to the first day of March that immediately follows such date,
or if such Performance Share Award is deemed earned at the time of
a Change in Control pursuant to Section 4(b) below, such share
shall be delivered as of the date of such Change in Control. Any
provision of this Agreement to the contrary notwithstanding, in no
event, except a Change in Control as a result of which Performance
Share Awards are deemed earned pursuant to Section 4(b) or Section
6 hereof, shall any shares be delivered in payment of Performance
Share Awards unless and until the Committee certifies in writing
that the performance goals and any other material terms (within the
meaning of Treasury Regulation section 1.162-27(e)(5)) were in fact
satisfied with respect to such Performance Share Awards.
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The shares of Common Stock delivered
under this Agreement will be duly authorized, validly issued, fully
paid and non-assessable. The shares to be delivered shall be
credited to a book entry account with the Company’s transfer
agent in the name of the Holder. At the election of the Holder,
stock certificates representing such shares will be delivered to
the Holder as soon as practicable after the Company’s receipt
of the Holder’s election.
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(a)
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If the
Holder’s employment terminates before December 31 of any
Performance Year other than (i) by the Company without
“Cause”, or (ii) by reason of the Holder’s death
or “Disability”, including without limitation if the
Holder terminates his employment before December 31 of any
Performance Year, whether or not for “Good Reason” (as
such terms are defined in the Employment Agreement dated December
8, 1998 between the Company and the Holder), then the Award shall
terminate with respect to all of the Performance Share Awards that
have not been deemed earned as of the date of such termination, and
the Holder will not be entitled to any payout of shares for such
Performance Share Awards.
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(b)
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If the Holder’s employment
terminates during the Award Period (i) by the Company without
“Cause”, or (ii) by reason of the Holder’s death
or “Disability”, then (A) the same number of
Performance Share Awards will be deemed earned for the Performance
Year in which such employment termin
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