B Barnes Group Inc

The Company is committed to good corporate governance, which promotes the long-term interests of stockholders. Our Board and senior management devote considerable time and attention to corporate governance matters and we maintain a comprehensive set of policies and procedures to enable effective corporate governance. We regularly review best practices in corporate governance and modify our policies and procedures as warranted. We also solicit feedback from stockholders on governance and executive compensation practices.

You can access governance materials on our website at www.BGInc.com; click on “Investor Relations” and then “Corporate Governance.” These documents will also be provided without charge to any stockholder upon written request to Manager, Stockholder Relations and Corporate Governance Services, Barnes Group Inc., 123 Main Street, Bristol, Connecticut 06010.

At the 2013 annual meeting, our stockholders approved amendments to our Amended and Restated Bylaws (Bylaws) to phase out the classification of the Board and to provide instead for the annual election of directors commencing with those directors up for election at our 2014 annual meeting. Directors previously elected to serve three-year terms will serve the remainder of their terms before standing for re-election.

Upon the recommendation of the Corporate Governance Committee, the Board has nominated Thomas O. Barnes, Gary G. Benanav, William S. Bristow, Jr., Patrick J. Dempsey, Mylle H. Mangum, Hassell H. McClellan and JoAnna Sohovich for election to the Board at the 2015 Annual Meeting. The Board has determined that except for Mr. Barnes and Mr. Dempsey, each nominee is an independent director as discussed below under “Director Independence.” If elected, each nominee will hold

office until the 2016 annual meeting unless any of them earlier dies, resigns, retires or is removed, as provided in the Bylaws.

All nominees currently serve on the Board.

The seven nominees and the two directors continuing in office after the 2015 Annual Meeting are listed below with brief biographies. 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.

If a nominee for director should become unavailable for any reason, it is intended that votes will be cast for a substitute nominee designated by the Board. The Board has no reason to believe the persons nominated will be unable to serve if elected.

Board Independence. The Board has adopted categorical standards to guide it in determining director independence. Under these standards, which are part of our Corporate Governance Guidelines and listed below, an “independent” director must meet the independence requirements in the New York Stock Exchange (NYSE) listing standards, including the requirement that the Board must have affirmatively determined that the director has no material relationships with the Company, either directly or as a partner, stockholder, or officer of an organization that has a relationship with the Company.

The Board has determined that other than Mr. Barnes and Mr. Dempsey, all of our director nominees and our other two directors, Mr. Kramer and Mr. Morgan, are independent under the listing standards of the NYSE and the above categorical standards. Neither Mr. Dempsey, a current employee of the Company, nor Mr. Barnes, who was a Company employee through December 31, 2014, are independent. In the case of Mr. Benanav, the Board considered post-termination payments made in 2014 under a terminated commercial contract between the Company and Express Scripts Holding Company, where Mr. Benanav serves as a director. The contract, which expired on December 31, 2013, was for a pharmacy benefit program for the Company’s employees and was in the ordinary course of business. The Board determined that the relationship is not material.

Committee Independence. All members of the Audit Committee, Compensation and Management Development Committee (“Compensation Committee”) and Corporate Governance Committee are independent within the meaning of the NYSE listing standards and the above categorical standards, and all members of both the Audit Committee and the Compensation Committee meet the additional independence requirements of the NYSE listing standards that are applicable to members of such committees.

The Board recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure so as to provide independent oversight of management and a highly engaged and high-functioning Board. The Company’s Corporate Governance Guidelines provide the Board with flexibility to select the appropriate leadership structure for the Company. In making leadership structure determinations, the Board considers many factors, including the specific needs of the business and what is in the best interests of the Company’s stockholders.

Our Board has determined that if the Chairman is not an independent director, then there should be a Lead Independent Director elected by our independent directors. Currently, Mr. Barnes, who retired as a non-executive employee of the Company on December 31, 2014, serves as Chairman of the Board and Mr. Morgan serves as Lead Independent Director. Mr. Barnes is not considered independent under our categorical standards of director independence because he was within the past three years a non-executive employee of the Company.

The Board believes that the current structure is appropriate for the Company and provides for effective independent Board leadership and engagement. Our Chairman, although deemed not to be independent, has never been our chief executive officer and his prior employment as a non-executive, full-time employee was complementary to his regular duties as Chairman, as described on page 14 of this proxy statement. Nonetheless, because a strong, independent oversight function is a critical aspect of effective corporate governance, our Corporate Governance Guidelines

require that the independent directors annually elect an independent director to serve as Lead Independent Director if the Chairman is not an independent director. This oversight function is enhanced by the fact that the Board’s Audit, Compensation and Corporate Governance Committees are comprised entirely of independent directors. Further, the Company’s non-management directors meet in regularly scheduled executive sessions, and the independent directors also periodically meet in executive sessions.

While risk management is the responsibility of the Company’s management team, the Board is responsible for oversight of the Company’s risk management activities. The Audit Committee has been designated by the Board to take the lead in overseeing risk management at the Board level. By its charter, the Audit Committee is required to discuss policies and guidelines that govern the risk assessment and risk management process, including assigning responsibility with respect to particular risks to other committees of the Board, and that it meet periodically with management to review and assess the Company’s major financial risk exposures and the manner in which they are being monitored and controlled. Accordingly, the Audit Committee periodically reviews risk assessment and risk management, including in the areas of legal compliance, internal audit and financial controls, litigation, and environmental, health and safety. In doing so, the Audit Committee considers the nature of the material risks the Company faces and the

adequacy of the Company’s policies and procedures designed to respond to and mitigate these risks, and receives reports from management and other advisors, including periodic risk assessments by the Company’s Internal Audit department.

Although the Board’s primary risk oversight has been assigned to the Audit Committee, the full Board also periodically receives information about the Company’s risk management and the most significant risks that the Company faces. This is principally accomplished through regular attendance at Audit Committee meetings by the other Board members.

Additionally, as described below in “Risk Oversight and Assessment Policies and Practices”, the Compensation Committee oversees our compensation programs so that they 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.

The Corporate Governance Guidelines provide that nominees for directors are to be selected based on, among other things, their character, wisdom, judgment, ability to make independent analytical inquiries, business experiences and skills. In addition, consideration will be given to a nominee’s understanding of our business environment, time commitment, acumen and ability to act on behalf of the Company’s stockholders. Under the Process and Procedure for Identifying Director Candidates adopted by the Corporate Governance Committee (Director Candidates Process), the Corporate Governance Committee considers how a candidate represents, in combination with the other directors, a diversity of viewpoints, backgrounds, experiences and other demographics.

The Corporate Governance Committee will, as stated in the Director Candidates Process, consider director candidates recommended by stockholders of the Company, directors, officers and third-party search firms. When utilizing a third-party search firm, the search firm is instructed to identify candidates based on criteria specified by the Corporate Governance Committee, perform initial screenings of the candidates’ resumes, and conduct initial interviews.

The Corporate Governance Committee evaluates stockholder-recommended candidates in the same manner as all other candidates. Any stockholder wishing to submit a recommendation should do so in writing addressed to:

Stockholder recommendations must comply with the information requirements of the notice provisions contained in the Company’s Bylaws in order to be considered. Letters recommending a director candidate must include, among other things, the stockholder’s name, address, and stock ownership information (if the stockholder is not the registered holder of shares, a written statement from the record holder of shares (e.g., a broker or bank) verifying the stockholder’s beneficial ownership must be provided); the stockholder’s opinion as to whether the recommended candidate meets the definition of “independent” under the Company’s Corporate Governance Guidelines and is “financially literate” as contemplated by the NYSE rules; a description of all agreements, arrangements and understandings between the nominee and any other person regarding the nomination by such stockholder, and any direct or indirect interest of such stockholder in any contract with the Company, any affiliate of the Company or any principal competitor of the Company; and the other disclosure requirements set forth in Section 7 of Article II of the Bylaws. The recommendation letter must also include similar information regarding the director candidate and other information, if any, that would be required to be disclosed with regard to a nominee for director in the solicitation of proxies for election of directors under federal securities laws, and the stockholder must include a completed questionnaire, representation and agreement signed by the candidate (which are provided by the Secretary of the Company upon written request). Stockholder nominations must also comply with the deadlines for submitting director nominations set forth in the Company’s Bylaws. A summary of these procedures is set forth below under the caption “Stockholder Proposals for 2016 Annual Meeting” on page 71.

We have posted our Policy Regarding Reporting of Complaints and Concerns on our website. The policy provides that stockholders and other interested parties may communicate with the Board, a committee of the Board, the independent directors or with an individual director, by any of the methods listed below.

All complaints and concerns reported by the above methods will be received by a third-party provider, who will forward each complaint or concern to the Office of the General Counsel which is responsible for relaying communications for the Board to them. The Audit Committee Chair receives regular monthly summary reports of all complaints and concerns so reported.

Directors are expected to attend our annual meeting of stockholders and all Board meetings and meetings of the committees on which they serve. Our Board held six regular meetings and two special meetings during 2014. Each director attended at least 75% of the meetings of the Board and committees on which the member served while the Director was a member. Overall attendance at Board and committee meetings during 2014 averaged 99% for our current directors as a group. All directors attended the 2014 annual meeting.

Our Corporate Governance Guidelines also provide that the Board should generally have no fewer than six and no more than twelve directors. The Board currently

has nine directors. Following the 2015 Annual Meeting there are still expected to be nine directors. Each director is required to resign from the Board no later than the annual meeting of stockholders following his or her 72^nd birthday. Each director is also required to advise the Chairman of the Board of any change in his or her status, including a change in employment or service on other boards of directors, or retirement from his or her principal occupation or another board of directors. Mr. Barnes, Chairman of the Board, is designated to preside at executive sessions of non-management directors. Mr. Morgan, the Lead Independent Director, is designated to preside at executive sessions of the independent directors.

The Corporate Governance Committee reviews and makes recommendations to the Board regarding the form and amount of compensation for non-employee directors. As part of its review, the Corporate Governance Committee periodically obtains competitive market data. The Company’s director compensation program is designed to attract and retain highly qualified directors and to reward the time, effort, expertise and accountability required of active

Board membership. In general, the Corporate Governance Committee and the Board believe that annual compensation for non-employee directors should consist of both a cash component, designed to compensate members for their service on the Board and its Committees, and an equity component, designed to align the interests of directors and stockholders and, by vesting over time, to create an incentive for continued service on the Board.

Under the Non-Employee Director Deferred Stock Plan, as amended and restated, each non-employee director who joined the Board before December 15, 2005 was granted at the time of joining the right to receive 12,000 shares of Common Stock when his or her membership on the Board terminates or, if sooner, when a change in control occurs. The plan also provides for the payment of dividend equivalents equal to one dividend per share for each dividend payment date. Only Messrs. Barnes, Benanav, and Bristow and Ms. Mangum are eligible for the Non-Employee Director Deferred Stock Plan. Mr. Barnes became a

participant in the plan when it was initially adopted in 1987. He became an employee in 1993 and continues to participate in the plan. The Board froze the plan on December 15, 2005.

Under the Directors’ Deferred Compensation Plan, as amended and restated, each non-employee director may defer all or a portion of his or her Board retainer and meeting fees, and/or the dividend equivalents paid under this plan. Directors may elect to credit such deferred compensation to a cash account, a phantom stock account, or a combination of the two.

As reflected above, under our stock ownership requirements, each of our non-management directors is required to accumulate an ownership position in Company Common Stock equal in value to five times the annual cash retainer. Two-thirds of the value of unvested RSUs count toward achieving ownership

requirements. Directors are required to retain all net after-tax proceeds from Company equity grants until ownership levels are met. Once ownership levels are met, the requirement is converted to a fixed number of shares, subject to increases based on increases to the annual cash retainer.

Mr. Barnes retired as an employee of the Company on December 31, 2014. During his period of employment, the Corporate Governance Committee periodically reviewed the compensation of the Chairman of the Board. Since April 1, 2011 and continuing through his retirement as an employee of the Company on December 31, 2014, Mr. Barnes received an annual base salary of $280,000. Below is a summary of his principal duties during 2014:

During 2014, as an employee Mr. Barnes did not report to any executive officer and was not compensated based on the Company’s performance as are other executive officers. As noted in the above table, Mr. Barnes received the same RSU grant that the non-employee directors received on February 12, 2014. In addition, as reflected in the below table, in February 2014 the Corporate Governance Committee approved a cash recognition award in the amount of $50,000 for Mr. Barnes, based on the significant guidance given to the Company during 2013 and his contributions to the successful completion of the 2013 acquisition and integration of the Männer business.

In 2014, the Corporate Governance Committee reviewed the design and competitive positioning of the Company’s director compensation program with assistance from consulting firm Meridian Compensation Partners, LLC (Meridian). This review included benchmarking the Company’s director compensation program structure and pay levels against the Company’s 24-company peer group, and a specific review of non-employee Chairman compensation in light of Mr. Barnes’ planned retirement as a Company employee effective December 31, 2014. The review resulted in the following changes, effective January 1, 2015:

This is the first increase in non-management director compensation since January 1, 2012.

We seek our stockholders’ advisory (non-binding) vote to approve the compensation of our named executive officers as described in the Compensation Discussion and Analysis (CD&A), the accompanying executive compensation tables, and the related narrative discussion regarding named executive officer compensation. This advisory proposal, known as a “say-on-pay” vote, gives stockholders the opportunity to vote whether or not to approve the compensation of our named executive officers as described in this proxy statement.

We recognize the interest our stockholders have in the Company’s executive compensation programs. As such, we currently hold an annual say-on-pay vote. Our next say-on-pay vote will occur at our 2016 annual meeting.

The Company’s executive compensation programs are designed to attract, engage and retain highly qualified executive officers to lead and drive the execution of the Company’s strategy and the achievement of the Company’s goals and objectives. 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. We encourage stockholders to review the CD&A for a detailed description of our executive compensation programs.

The Board recommends that stockholders vote FOR the following resolution:

“RESOLVED, that the stockholders approve, on an advisory basis, the compensation paid to the Company’s named executive officers as disclosed in this proxy statement, including the Compensation Discussion and Analysis, the accompanying executive compensation tables and the related narrative discussion.”

This vote is advisory, which means that it is not binding on the Board or the Compensation Committee, nor will it affect any compensation paid or awarded to any named executive officer. However, the Board and the Compensation Committee will review and consider the voting results when evaluating our future executive compensation arrangements.

This Compensation Discussion and Analysis provides a detailed discussion of our executive compensation philosophy and programs, the compensation decisions the Compensation Committee has made under those programs and the factors considered in making those decisions. We also provide details regarding the

individual components of our executive compensation programs and explain how and why the Compensation Committee makes decisions to establish executive compensation at particular levels. Our named executive officers (NEOs) for 2014 were:

During 2014, the Company continued its focus on executing its strategy and driving long-term profitable growth. We built on the momentum of our recent portfolio transformation, including both the divesture of the Barnes Distribution North America business and the acquisition of the Männer business in 2013, by focusing on increasing our presence in end markets with long-term growth, cyclical moderation, and expanding our global footprint. We also continued to focus on driving profitable growth through increased organic sales, as well as productivity improvements through enhancing the Barnes Enterprise System (BES). BES promotes a culture of employee engagement and fosters continuous improvement and innovation in all of our business processes that enables us to respond more adeptly to our customers’ needs and achieve results that drive sustainable profitable growth. These actions culminated in strong performance in 2014, which included revenue growth of 16% from the prior year.

In addition, we continued to build out the executive leadership team in 2014. Mr. Mayo joined the

Company and was appointed on March 17, 2014 to the position of Senior Vice President of Barnes Group and President, Barnes Industrial, having oversight of our Industrial business segment.

The Company’s executive compensation programs for 2014 remained relatively unchanged from 2013. We continued to use Company-wide consolidated revenue (Revenue) and Company-wide consolidated operating margin (Operating Margin or OM) as annual incentive performance measures. In addition, the Company transitioned to diluted earnings per share (EPS), replacing the basic EPS measure used in the 2013 annual incentive program. These three measures applied to Mr. Dempsey, Mr. Stephens, and Ms. Edwards. Mr. Mayo and Mr. Barnhart were each measured 40% on these corporate measures and 60% on the performance of the Industrial segment and Aerospace segment, respectively. Overall, this combination of performance measures is designed to emphasize profitability and productivity, and drive sales growth.

In 2015, the Company will transition to using days working capital as an annual incentive performance measure, replacing Operating Margin. See further discussion below in “2015 Key Executive Compensation Changes.”

Long-term incentive awards are the largest component of our NEOs’ annual compensation opportunity. The program continues to consist of relative measure performance share awards (Relative Measure PSAs or RM PSAs), restricted stock units (RSUs), and stock options. In 2014, we continued the measures and weightings shown below.

The Relative Measure PSA component of our long-term program for 2014 compares the Company’s performance over a three-year period against the performance of Russell 2000 Index companies. The grants made in 2014 cover the 2014 to 2016 performance period. Payouts, if any, under the 2014

grants will be made in 2017. As discussed below in “2015 Key Executive Compensation Changes,” in 2015 the program will transition to using return on invested capital as a performance measure instead of diluted EPS growth.

In 2014, the 2011 grant of Relative Measure PSAs paid out at 184.3% of target (50^th percentile), based on the following certified performance results:

Detailed descriptions of the certified performance results, including the process used to determine adjustments, can be found in the “Annual Cash Incentive Awards” section on page 25.

The Compensation Committee believes that our executive compensation programs are consistent with our pay-for-performance philosophy. Each year, we evaluate our programs in light of market conditions, stockholder views (including the results of our annual say-on-pay resolution), and governance considerations, and make changes deemed appropriate for our business. At the 2014 annual stockholders meeting, we had relatively strong support from our stockholders

with respect to the compensation of our NEOs, with over 81% of the votes cast in favor of our say-on-pay resolution. We continue to evaluate our compensation programs by taking into account the voting results, other investor feedback through our annual outreach efforts, and other factors used in assessing our executive compensation programs as discussed in this Compensation Discussion and Analysis.

On March 17, 2014, Mr. Mayo joined the Company and was appointed Senior Vice President and President, Barnes Industrial. Mr. Mayo was appointed with an annual base salary of $425,000, a target annual incentive of 50% of base salary and a maximum annual incentive of 150% of base salary (both pro-rated for 2014). Mr. Mayo was also awarded annual long-term incentive compensation grants in 2014 consistent with his annual long-term compensation target of $400,000.

In consideration of Mr. Mayo’s forfeiture of unvested equity awards in connection with his departure from his prior employer, Mr. Mayo was granted a special award of RSUs and Relative Measure PSAs valued at approximately $650,000 (split 50% in RSUs and 50% in Relative Measure PSAs). Mr. Mayo was also provided with a relocation benefit in connection with his move to the Company’s headquarters area.

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 and long-term basis. We tie 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 compared to Russell 2000 Index companies, and/or our stock price increases, the NEOs have an opportunity to realize significant compensation in the form of annual cash incentive payouts and long-term equity payouts. If the Company’s performance does not meet pre-established performance targets, such as performance below the 50th percentile compared to Russell 2000 Index companies, and/or our

stock price declines, the NEOs have significant downside financial risk.

The Company aims to provide our NEOs with the opportunity to earn total direct compensation targeted in a range around the median compared to a defined peer group of companies (the “Peer Group”). Individual executive compensation may be above or below the target range based on the individual’s performance, experience, skill set and responsibilities. We also use survey data to inform the Compensation Committee about the external market value of our executive roles. We believe that targeting the median range for total direct compensation 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 includes the following three elements: annual base salary; annual cash incentive awards; and long-term incentive awards. The Compensation Committee can vary the performance measures from year to year as needed to reinforce strategic priorities. In addition, our NEOs are eligible for change in control and severance benefits; defined benefit or defined contribution program benefits,

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% of 2014 total direct compensation for our CEO and, on average, over 75% of 2014 total direct compensation for our other NEOs. The actual mix of compensation for our CEO and other NEOs is shown below.

We made two key changes to our annual and long-term compensation performance measures in 2015. Both of these changes are consistent with our growth strategy which requires focus in the management of capital. In addition, both changes are based generally on our review of prevalence of these measures among our Peer Group, and in response to investor feedback.

The primary objective of the Company’s executive compensation program is to support our long-term strategic business goals of building lasting stockholder value and achieving sustainable profitable growth. To support these goals, our compensation programs for our NEOs are designed to:

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

In 2014, Company management outsourced certain executive compensation analysis services to Frederic W. Cook & Co., Inc. (Cook) and Mercer, a wholly-owned subsidiary of Marsh & McLennan Companies, Inc. (Mercer). As part of these services in 2014, Mercer compiled annual competitive compensation data and reviewed the Company’s compensation practices in terms of competitiveness, appropriateness and

alignment with our performance, as well as the mix of pay.

The Compensation Committee directly retains a consulting firm, Meridian Compensation Partners, LLC (Meridian), to assist in its oversight of the executive compensation program, which includes reviewing and assessing information provided by management, including the analysis furnished by Cook and Mercer. The fees for Meridian are negotiated directly by the Compensation Committee and paid by the Company at the Compensation Committee’s request. Meridian did not provide any services to the Company in 2014 other than advice on executive 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 helps ensure that the Company’s executive compensation program is 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.

Before retaining a compensation consultant or any other external advisor, the Compensation Committee evaluates the independence of such advisors. In 2014, the Compensation Committee assessed Meridian’s independence, taking into account SEC Rule 10C-1(b)(4) and the corresponding NYSE independence factors regarding compensation advisor independence. Based on this assessment, the Compensation Committee believes that there is no conflict of interest and that its advisors are able to independently advise the Compensation Committee.

Peer Group Analysis

A primary data source used in setting NEO compensation is the information publicly disclosed by our Peer Group. The Peer Group is reviewed periodically 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.

In 2013, the Compensation Committee requested a complete review of the Peer Group given the changes to our business with the sale of the Barnes Distribution North America business in 2013 and the acquisition of the Synventive Molding Solutions business in 2012. With the assistance of Cook, management recommended a preliminary Peer Group. In developing this Peer Group, Cook considered companies: with revenue ranging from about one-half to two times the Company’s revenue; that operated in one of the same industries as the Company; and that used the same distribution channels as the Company. Companies with a significant concentration of ownership by one party were removed from consideration. In addition to the factors described above, Cook reviewed the following additional criteria to evaluate potential peer companies:

Based on this review, the Compensation Committee approved a new Peer Group in October 2013 which was used in evaluating 2014 NEO compensation. When establishing the Peer Group, the Compensation Committee reviewed the rankings of the Company compared to the Peer Group in a variety of categories, including Revenue Growth, EBITDA Growth, Net Income Growth, Basic EPS Growth, Return on Average Invested Capital, and TSR.

Our Peer Group is composed of the following 24 companies shown below. In addition, in connection with our annual compensation review process, in July 2014 the Compensation Committee reviewed tally sheets for each NEO that provided total compensation information, including direct compensation and benefits, as well as possible payments under various termination scenarios.

The Role of Executive Officers

Our President and Chief Executive Officer provides the Compensation Committee with a performance assessment for each of the other NEOs. Mr. Dempsey provided the Compensation Committee with his assessments of NEO performance and recommendations on salary changes, annual equity grants, and special equity grants. Mr. Dempsey also provided the Compensation Committee with a recommendation on Mr. Mayo’s compensation package. The Compensation Committee uses these assessments, along with other information, to

determine NEO compensation. Mr. Dempsey and Ms. Edwards, Senior Vice President, Human Resources, regularly attend Compensation Committee meetings at the request of the Compensation Committee, but are not present for any discussion of the individual components of their own compensation. In addition, Mr. Stephens, 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.

For 2014, the compensation for our NEOs included the following elements:

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 2013, the 2014 target total direct compensation for Mr. Dempsey and Mr. Barnhart was below market median range compared to our Peer Group, reflecting their appointments to new roles within the Company in 2013. Target total direct compensation for Mr. Stephens and Ms. Edwards was above market median range compared, respectively, to our Peer Group and available survey data. Annualized total direct compensation for Mr. Mayo was also above market median compared to our Peer Group. In setting the target total direct compensation 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 adjustments should be made to an NEO’s total direct compensation.

Base Salary

Base salaries for executive officers are determined by the Compensation Committee and reviewed annually. They are typically increased at periodic intervals, often at the time of a change in position or assumption of new responsibilities. Base salary increases usually take effect on or around April 1^st of each year, but may be made at other times if the Compensation Committee deems it appropriate and necessary based on internal and external considerations.

In determining whether to award merit-based salary increases to our NEOs, the Compensation Committee considered a number of factors, including:

In 2014, the Compensation Committee did not increase the base salary of any NEO other than Mr. Dempsey. Mr. Dempsey’s base salary was increased effective April 1, 2014 by $25,000, from $750,000 to $775,000, a 3.33% increase, reflecting competitive market information and growth in his role as CEO.

In 2014, the Compensation Committee also set the base salary of Mr. Mayo at $425,000 in connection with his appointment as Senior Vice President, Barnes

Group and President, Barnes Industrial. In determining Mr. Mayo’s base salary, the Compensation Committee considered Peer Group data and external market information, Mr. Mayo’s prior level of compensation, the level of responsibility and the nature and complexity of the position, and the desire to attract a candidate like Mr. Mayo who we believe is capable of driving achievement of the Company’s strategic objectives.

We pay annual cash incentive awards to reward the performance 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. In 2014, all NEOs participated in the Performance-Linked Bonus Plan (PLBP), except for Mr. Mayo who participated in the Management Incentive Compensation Plan. Mr. Mayo was not a PLBP participant in 2014 since he joined the Company after the February 2014 Compensation Committee meeting at which the Compensation Committee determined the participants in the PLBP for 2014.

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 may be structured to pay amounts that meet the qualified performance-based compensation exception under Section 162(m) of the Internal Revenue Code.

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 2014 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.

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. These targets are reviewed again at the Compensation Committee’s next meeting in February along with the Company’s full year financial performance. The Compensation Committee may establish and approve revised targets to the extent the Company’s annual business plan and budget are modified based on the full year performance. We use financial performance objectives 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 2014, the corporate performance measures for the Annual Incentive Plans were Diluted EPS, Revenue and Operating Margin. Diluted EPS is used because we believe it is a principal driver of our stock price. Revenue is used to drive growth in the size of our business. Operating Margin is used to drive our

sales to meet expected levels of profitability. In fiscal year 2015, Operating Margin will be replaced by DWC as a measure, as discussed in “2015 Key Executive Compensation Changes,” on page 21.

For fiscal year 2014, all NEOs were evaluated at least in part on corporate measures. We evaluated NEOs, other than Mr. Barnhart and Mr. Mayo, based 100% on the corporate measures in recognition of the key role that each plays in the overall management of the Company and in recognition of the impact of overall corporate strategies on segment results. For Mr. Barnhart and Mr. Mayo, 40% of the determination was based on corporate measures and 60% of the determination was based on measures tied to the performance of their respective business segments, reflecting their specific responsibilities for segment performance.

The charts below set forth the Annual Incentive Plans’ performance measures and the weighting of each measure for the NEOs for 2014:

Achievement of the financial performance measures under the Annual Incentive Plans is first determined according to GAAP, but then adjusted under the terms of the Annual Incentive Plans to include or exclude certain extraordinary, unusual or non-recurring items, 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 charts below detail results certified by the Compensation Committee compared to the goals: