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. )
Filed by the
Registrant x Filed by
a Party other than the Registrant ¨
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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x |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
BARNES
GROUP INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
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Proposed maximum aggregate value of transaction:
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing. |
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Form, Schedule or Registration Statement No.:
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2015
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS AND PROXY STATEMENT
MAY 8, 2015 ¿ HARTFORD, CONNECTICUT
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123 Main Street
Bristol, Connecticut 06010
March 26, 2015
NOTICE
OF 2015 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 8, 2015
You are invited to attend Barnes Group Inc.s 2015 Annual Meeting of Stockholders on Friday, May 8, 2015 at the Hartford Marriott Downtown Hotel, 200 Columbus
Boulevard, Hartford, Connecticut 06103, at 11:00 a.m., Eastern Daylight Time, for the following purposes:
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1. |
Election of directors; |
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2. |
Advisory vote to approve the Companys executive compensation; |
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3. |
Ratify PricewaterhouseCoopers LLP as the Companys independent auditor for 2015; and |
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4. |
Transact any other business that may properly come before the meeting. |
Stockholders of record at the close of business
on March 10, 2015 (the Record Date) may vote at the meeting. The Board of Directors recommends a vote FOR all director nominees and FOR Items 2 and 3.
Your
vote is important. Whether or not you plan to attend the meeting, we encourage you to vote as promptly as possible. Stockholders of record on the Record Date are entitled to vote at the meeting or in the following ways:
Thomas O. Barnes
Chairman of the Board
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.
BARNES GROUP INC. 2015 ANNUAL MEETING OF STOCKHOLDERS
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Friday, May 8, 2015 |
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Hartford Marriott Downtown Hotel |
11:00 a.m. Eastern Daylight Time |
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200 Columbus Boulevard |
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Hartford, Connecticut 06103
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Voting. Stockholders as of the record date, March 10, 2015, may vote. Each share of common stock of the Company is entitled
to one vote for each director nominee and one vote for each of the proposals to be voted on.
Each stockholders vote is important. Please complete, sign,
date and return your proxy or voting instruction form, or submit your vote and proxy by telephone, the Internet or by mail.
MEETING
AGENDA AND VOTING RECOMMENDATIONS
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Item |
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Board Vote Recommendation |
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Page Reference |
1 |
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Election of 7 directors |
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For each nominee |
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1 |
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Management Proposals |
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2 |
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Advisory vote to approve the Companys executive compensation |
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For |
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17 |
3 |
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Ratify PricewaterhouseCoopers LLP as the Companys independent auditor for 2015 |
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For |
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66 |
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Transact other business that properly comes before the meeting |
i
PROXY SUMMARY
ITEM 1 -
ELECTION OF DIRECTORS
Each director nominee is elected for a one-year term by a plurality of the votes cast.
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Name and Principal Occupation |
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Age |
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Director Since |
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Independent |
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Committee Memberships |
Thomas O. Barnes Chairman of the Board |
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66 |
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1978 |
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Executive (ex officio, non-voting) |
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Gary G. Benanav Former CEO, New York Life International, LLC and Former Vice
Chairman & Director, New York Life Insurance Company |
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69 |
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1994 |
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X |
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Corporate Governance (Chair)
Compensation and Management Development |
William S. Bristow, Jr. President, W.S. Bristow & Associates, Inc. |
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61 |
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1978 |
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X |
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Audit
Executive (Chair) |
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Patrick J. Dempsey President and CEO, Barnes Group Inc.
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50 |
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2013 |
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Executive (ex officio, non-voting) |
Mylle H. Mangum CEO, IBT Enterprises, LLC |
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66 |
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2002 |
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X |
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Compensation and Management Development (Chair) |
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Hassell H. McClellan Former Associate Professor of Finance and Policy, Boston
Colleges Wallace E. Carroll School of Management |
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69 |
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2010 |
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X |
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Audit
Executive |
JoAnna L. Sohovich Global President, STANLEY Engineered Fastening, Stanley
Black & Decker, Inc. |
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43 |
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2014 |
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X |
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Audit |
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Meeting Attendance
Overall attendance at Board and committee meetings during 2014 averaged 99% for our
current directors as a group |
ii
PROXY SUMMARY
MANAGEMENT PROPOSALS
ITEM 2 - ADVISORY VOTE TO APPROVE THE COMPANYS EXECUTIVE COMPENSATION
We are asking our stockholders to approve on an advisory basis our
named executive officer (NEO) compensation. The Compensation Committee annually considers the results of the most recent advisory vote by stockholders to approve NEO compensation. In the 2014 advisory vote, 81% of the voted shares (70% of shares
outstanding) supported the compensation of the Companys NEOs. The Board recommends a FOR vote because it believes that our compensation policies and practices are effective in achieving the Companys goals of rewarding for financial and
operating performance, and aligning our NEOs interests with those of our stockholders.
ITEM 3 - RATIFY INDEPENDENT AUDITOR FOR 2015
As a matter of good corporate governance, we are asking our stockholders
to ratify PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2015.
EXECUTIVE COMPENSATION HIGHLIGHTS
The following summary of specific features of our executive compensation program highlights our commitment to executive compensation practices that
align the interests of our executive officers and stockholders.
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What We Do |
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What We Dont Do |
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We pay-for-performance - over 80% of CEO total direct compensation (and on average over 75% for other NEOs) is at risk in the form of annual and long-term incentives |
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We dont allow outside board memberships with for-profit entities by executive officers without Corporate Governance Committee approval |
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We consider a relevant peer group in establishing compensation |
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We dont provide any 280G gross-ups for a golden parachute payment |
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We review tally sheets annually |
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We dont have excessive perquisites |
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We have robust stock ownership requirements - 5X base salary for CEO and 3X for other NEOs |
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We dont have individual employment agreements with any executive officer |
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We have a clawback policy incorporated into our incentive compensation plans |
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We dont allow re-pricing of underwater stock options without stockholder approval |
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We have double trigger equity vesting in the event of a change in control for all NEO awards |
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We dont allow hedging of Company stock by directors or executive officers |
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We take into account tax deductibility when structuring and awarding grants |
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We dont have a minimum payout of annual incentive or long term incentive compensation |
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We have an independent compensation consultant that works directly with the Compensation Committee
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iii
PROXY SUMMARY
EXECUTIVE
COMPENSATION KEY ELEMENTS.
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Type |
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Form |
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Terms |
Equity |
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Annual grants in the form of 50% relative measure performance
share awards (Relative Measure PSAs), 30% restricted stock units (RSUs) and 20% stock options |
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Stock options |
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Time-based vesting; 18, 30, and 42 months from the grant date in equal
installments |
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RSUs |
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Time-based vesting; 18, 30, and 42 months from the grant date in equal
installments |
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Relative Measure PSAs |
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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 Companys performance against the performance of Russell 2000 Index companies |
Cash |
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Salary |
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Base salaries are reviewed annually, and are typically increased at periodic intervals, often
at the time of a change in position or assumption of new responsibilities |
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Annual incentive compensation |
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Stockholder-approved program with payouts based on accomplishing targeted financial
performance measures |
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Annual incentive targets for our NEOs range from 45% to 75% of base salary at target level
performance. Actual payouts may range from zero to three times target based on performance compared to our three performance measures |
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For 2014 performance, actual payouts were: |
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265% of target for three of our NEOs based on corporate results; |
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265% of target on corporate results and 125% of target on segment results for one of our NEOs
based on a combination of our corporate and Industrial segment results; and |
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265% of target on corporate results and 167% of target on segment results for one of our NEOs
based on a combination of our corporate and Aerospace segment results. |
Retirement |
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NEOs participate in grandfathered qualified retirement programs generally
available to the Companys US employees. NEOs also participate in a non-qualified retirement program that provides benefits on base salary earnings in excess of Internal Revenue Service (IRS) limit on qualified plans. Mr. Dempsey, Mr. Stephens,
and Ms. Edwards also participate in grandfathered non-qualified executive retirement programs that have been closed to new entrants. |
Change in
control and
severance |
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Severance payable and benefit
continuation upon termination of employment in certain specified circumstances or upon a change in control
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 |
Limited
Perquisites |
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Financial planning and tax preparation
services, annual physicals (for amounts not otherwise covered by health insurance), and executive life insurance (with tax gross-up benefit for grandfathered participants only) |
KEY EXECUTIVE COMPENSATION CHANGES FOR 2015
In response to investor feedback, we made the following two key changes to our annual and long-term compensation performance measures in 2015:
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Annual Incentive Awards: We are including a performance measure with a cash metric to enhance our focus on driving cash flow from operating activities |
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Long-Term Incentive Awards: We are including a return on invested capital performance measure to enhance our focus on executing the Companys strategy and driving long-term value creation |
For more information, see 2015 Key Executive Compensation Changes section on page 21.
iv
PROXY SUMMARY
GOVERNANCE HIGHLIGHTS
As part of our commitment to high ethical standards, our Board follows the following sound governance
practices:
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Independence |
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7 of our 9 directors are independent |
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Our CEO is the only management director |
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Audit, Compensation and
Corporate Governance Committees are composed exclusively of independent directors |
Independent Lead Director |
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Lead independent director with clearly established authority and responsibility over Board governance
and operations |
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Selected by independent directors |
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Serves as a liaison
between the Chairman of the Board and the independent directors |
Executive Sessions |
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Regular executive sessions of Board and committees without management present |
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Lead independent director
presides at executive sessions of the independent directors |
Board Oversight of Risk Management |
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Board risk management oversight with a focus on the most significant risks facing the
Company |
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Committee oversight and
disclosure regarding political activities |
Stock Ownership Requirements |
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Long-standing executive and director stock ownership requirements |
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CEO required to own five times his salary |
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Other executive officers
required to own three times their salary |
Board Practices |
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Annual evaluation processes for the Board and each of the standing committees |
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Directors may not stand for election after age 72 |
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Regular consideration of rotation of committee chairs and members |
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Corporate Governance Guidelines require directors to attend director education programs and briefing
sessions |
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A prohibition on directors
simultaneously serving on more than three public company audit committees, including that of the Company |
Accountability |
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Declassified Board phase-in continues--directors elected in 2015 to serve one-year terms |
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Majority voting policy--directors who receive more withhold than for votes in
uncontested elections must offer to resign |
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Stockholders have right to
hold special meetings |
Other Best Practices |
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A policy that requires Corporate Governance Committee approval before an executive officer accepts
outside board membership with for-profit entities |
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A compliance Alertline through which employees and other interested parties may communicate with the
Board or raise concerns |
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Stockholder engagement and
outreach to allow for management and the Board to understand and consider issues that matter most to stockholders and enable the Company to address them effectively |
v
PROXY SUMMARY
2014 NEO COMPENSATION SUMMARY
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Name and
Principal Position |
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Bonus |
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Stock
Awards |
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Option
Awards |
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Non-Equity
Incentive Plan
Compensation |
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Change in
Pension Value
and Nonqualified Deferred
Compensation
Earnings |
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All Other
Compensation |
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Total |
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Patrick J. Dempsey
President and Chief Executive Officer |
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2014 |
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$ |
768,750 |
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$ |
2,130,065 |
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$ |
443,912 |
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$ |
1,538,220 |
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$ |
1,622,098 |
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$ |
141,129 |
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$ |
6,644,174 |
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2013 |
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700,000 |
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1,588,668 |
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371,030 |
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881,567 |
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253,304 |
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123,261 |
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3,917,830 |
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2012 |
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447,783 |
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565,484 |
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124,787 |
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250,988 |
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364,266 |
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104,764 |
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1,858,072 |
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Christopher J. Stephens, Jr.
Senior Vice President,
Finance and Chief Financial Officer |
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2014 |
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461,000 |
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762,575 |
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159,663 |
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609,995 |
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88,646 |
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362,296 |
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2,444,175 |
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2013 |
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453,585 |
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875,508 |
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135,805 |
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382,238 |
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10,912 |
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165,604 |
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2,023,652 |
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2012 |
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431,000 |
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1,339,261 |
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130,546 |
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240,390 |
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49,038 |
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234,870 |
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2,425,105 |
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Scott A. Mayo
Senior Vice
President, Barnes Group Inc., and President, Barnes Industrial
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2014 |
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336,799 |
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1,069,840 |
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72,978 |
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305,952 |
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138,434 |
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1,924,003 |
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Richard R. Barnhart
Senior Vice President, Barnes Group Inc., and President, Barnes Aerospace
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2014 |
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375,000 |
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426,618 |
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89,508 |
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386,468 |
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207,608 |
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45,471 |
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1,530,673 |
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2013 |
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334,750 |
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419,873 |
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32,401 |
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30,102 |
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817,126 |
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Dawn N. Edwards
Senior Vice President, Human Resources |
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2014 |
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296,000 |
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410,385 |
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83,460 |
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352,500 |
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174,222 |
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96,364 |
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1,412,931 |
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2013 |
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296,000 |
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488,327 |
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64,010 |
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220,886 |
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80,568 |
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1,149,791 |
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2012 |
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296,000 |
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269,177 |
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60,474 |
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148,585 |
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102,683 |
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133,699 |
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1,010,618 |
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2016 ANNUAL MEETING
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Deadline for stockholder proposals for inclusion in the proxy statement for the 2016 Annual Meeting of Stockholders: November 27, 2015 |
vi
PROXY STATEMENT FOR 2015 ANNUAL MEETING OF STOCKHOLDERS
MAY 8, 2015
We
are sending this proxy statement and a proxy or voting instruction form (or Notice of Internet Availability of Proxy Materials, as applicable) in connection with Barnes Group Inc.s solicitation of proxies on behalf of its Board of Directors
(the Board), for the 2015 Annual Meeting of Stockholders (2015 Annual Meeting). Availability of this proxy statement and accompanying materials is scheduled to begin on or about March 26, 2015. Please submit your vote and proxy by telephone,
the internet or, if you received your materials by mail, you can also complete, sign, date and return your proxy or voting instruction form.
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BARNES GROUP INC. 2015 PROXY STATEMENT |
GOVERNANCE
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.
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Governance Materials |
Certificate of Incorporation |
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Corporate Governance Guidelines |
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Code of
Business Ethics and Conduct and Code of Ethics Applicable to Senior Executives |
Bylaws |
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Charters for our Audit, Compensation and Corporate Governance
Committees |
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Political Activity Policy
Corporate Social Responsibility Report |
ITEM 1 - ELECTION OF DIRECTORS
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.
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The Board recommends a vote FOR all nominees.
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BARNES GROUP INC. 2015 PROXY STATEMENT |
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GOVERNANCE
NOMINEES FOR
RE-ELECTION - TERM TO EXPIRE IN 2016
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Age: 66
Director since: 1978
Current term expires: 2015
Committees: Executive (ex officio,
non-voting member) |
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THOMAS O. BARNES
Mr. Barnes is Chairman of the Board and was a non-management employee through December 31,
2014, until his retirement as an employee of the Company. His role is described on page 14. 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 include his experience in the fields of manufacturing, finance and governance with numerous organizations throughout his career, including the
Companys former 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 for over 35 years, has served as Chairman of our Board
since 1995, and has served as chairman, trustee or director for over 20 non-profit organizations. |
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Age: 69
Director since: 1994
Current term expires: 2015
Committees: Compensation and
Management Development
Corporate
Governance (Chair) |
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GARY G. BENANAV
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. Benanavs qualifications to be a member of our Board 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). |
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BARNES GROUP INC. 2015 PROXY STATEMENT |
GOVERNANCE
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Age: 61
Director since: 1978
Current term expires: 2015
Committees: Audit Executive (Chair)
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WILLIAM S. BRISTOW, JR.
Mr. Bristow is President of W.S. Bristow & Associates, Inc., which is engaged in small business
development. Mr. Bristows qualifications to be a member of our Board include his extensive knowledge of our Company with over 35 years of service as a member of our Board, ownership and direct management of W.S. Bristow & Associates and
his expertise in the area of sales. |
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Age: 50
Director since: 2013
Current term expires: 2015
Committees: Executive (ex officio, non-voting member) |
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PATRICK J. DEMPSEY
Mr. Dempsey was appointed the President and Chief Executive Officer of the Company in March 2013.
Prior to this appointment, since February, 2012, he served as the Companys Senior Vice President and Chief Operating Officer, and was responsible for oversight and direction of the Companys global business segments, as well as working
closely on the development and execution of the Companys strategic plan. Mr. Dempsey joined the Company in October 2000 and has held a series of roles of increasing responsibility. He was appointed Vice President, Barnes Group Inc. and
President, Barnes Aerospace in 2004, Vice President, Barnes Group Inc. and President, Barnes Distribution in October 2007, and Vice President, Barnes Group Inc. and President, Logistics and Manufacturing Services in October 2008. Mr. Dempseys
qualifications to be a member of our Board include his extensive knowledge of the Companys business operations and his depth of experience in the fields of business management, enterprise management systems, business development and
international operations. |
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BARNES GROUP INC. 2015 PROXY STATEMENT |
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GOVERNANCE
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Age: 66
Director since: 2002
Current term expires: 2015
Committees: Audit Compensation and Management
Development (Chair) |
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MYLLE H. MANGUM
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 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. Mangums qualifications to be a member of our Board 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. |
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Age: 69
Director since: 2010
Current term expires: 2015
Committees: Audit Executive
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HASSELL H. MCCLELLAN
Dr. McClellan retired in 2013 as an Associate Professor of Finance and Policy at Boston
Colleges Wallace E. Carroll School of Management, where he served as the Associate Dean from 1996 to 2000. Dr. McClellan had been a member of the faculty of Boston College since 1984. He specializes in global competitiveness and strategic
management for boards of directors and financial services, and has both an MBA and a Doctor of Business Administration degree. Dr. McClellan has served as trustee of the Virtus Variable Insurance Trust (formerly Phoenix Edge Series Fund) since
2008, as trustee of both the John Hancock Variable Insurance Trust and John Hancock Funds II since 2005, as trustee of John Hancock Funds and John Hancock Funds III since 2012, and as trustee of Virtus Mutual Funds since January 1, 2015.
Dr. McClellans qualifications to be a member of our Board 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 non-profit and private organizations. |
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BARNES GROUP INC. 2015 PROXY STATEMENT |
GOVERNANCE
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Age: 43
Director since: 2014
Current term expires: 2015
Committees: Audit |
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JOANNA L. SOHOVICH
Ms. Sohovich is Global President, STANLEY Engineered Fastening at Stanley Black & Decker, Inc.
where she leads a global technology and manufactured goods business. Before being appointed to this position in 2015, she served as Global President, Industrial & Automotive Repair since 2012 and, prior to that, Industrial & Automotive
Repair President - North America, Asia and Emerging Regions since 2011, both at Stanley Black & Decker, Inc. From 2002 to 2011, Ms. Sohovich served in several roles of increasing responsibility at Honeywell International, including President,
Security & Communications from 2010 to 2011 emphasizing new product development and innovation, Vice President & General Manager, Commercial Building Controls from 2008 to 2010, leading growth initiatives across a broad commercial building
controls portfolio, and Integration Leader from 2007 to 2008 resulting in Honeywells successful acquisition and integration of Maxon Corporation. Ms. Sohovich served as Vice President, Six Sigma for Honeywell from 2004 to 2005. Her earlier
experience includes Plant Management, Repair and Overhaul Shop Management, Quality Management and service as an officer in the United States Navy. Ms. Sohovichs qualifications to be a member of our Board include her extensive executive
management and leadership experience, broad knowledge of industrial manufacturers, global mindset and direct experience in driving innovation and strategic growth initiatives. |
CONTINUING DIRECTORS
Term Expiring in 2016
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Age: 65
Director since: 2012
Current term expires: 2016
Committees: Compensation and Management Development
Corporate Governance
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FRANCIS J. KRAMER
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 Pittsburghs Swanson School of Engineering. Mr. Kramers qualifications to be a member of our Board 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. |
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BARNES GROUP INC. 2015 PROXY STATEMENT |
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GOVERNANCE
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Age: 68
Director since: 2006
Current term expires: 2016
Committees: Audit (Chair) Corporate
Governance
Executive |
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WILLIAM J. MORGAN
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 KPMGs Leadership Development Group and Dean of KPMGs Chairmans 25 Leadership Development Program. He is the Audit
Committee financial expert of our Board. From 2004 until 2006, Mr. Morgan was the Chairman of KPMGs 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 KPMGs Stamford, Connecticut office. Mr. Morgan is currently a director of PGT, Inc. and The J.G. Wentworth Company. 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. Morgans qualifications to be a member of our Board 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. |
DIRECTOR INDEPENDENCE
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.
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A director will not be independent if (i) the director is, or was within the preceding three years, employed by the Company; (ii) an immediate family member of the director is, or was within the preceding
three years, employed by the Company as an executive officer (as such term is defined by the NYSE) other than on an interim basis; (iii) the director or any immediate family member has received from the Company, during any 12
consecutive months within the preceding three years, more than $120,000 in direct compensation from the Company, other than compensation received by an immediate family member of a director for service as a non-executive employee of the Company and
director and committee fees and deferred compensation for prior service,
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provided, that such deferred compensation is not contingent on continued service; (iv) the director is employed by the Companys independent auditor; (v) an immediate family member
of the director is employed by the Companys independent auditor (I) as a partner or (II) otherwise as an employee who personally works on the Companys audit; (vi) the director or an immediate family member was within the last
three years a partner or employee of the Companys independent auditor and personally worked on the Companys audit within that time; or (vii) a Company executive officer is, or was within the preceding three years, on the board of
directors of a company which, at the same time, employed the Company director or an immediate family member of the director as an executive officer. |
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The following commercial and charitable relationships will not be considered material relationships that would impair a directors independence:
(i) if a Company director is an employee, or an immediate family member is an executive officer, of another company that does business with the Company and, within any of the last three fiscal years, the annual sales to, or purchases from, the
Company are less than 1% of the annual revenues of the other company; (ii) if a Company director is an employee, or an
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BARNES GROUP INC. 2015 PROXY STATEMENT |
GOVERNANCE
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immediate family member is an executive officer, of another company that is indebted to the Company, or to which the Company is indebted, and the total amount of either companys
indebtedness to the other is less than 1% of the total consolidated assets of the other company; and (iii) if a Company director serves as an officer, director or trustee of a charitable organization, and the Companys discretionary
charitable contributions to the organization are less than 1% of such organizations total annual charitable receipts, provided, that the amount of the Companys contributions shall not include the matching of charitable contributions by
Barnes Group Foundation, Inc. pursuant to the Matching Gifts Program. |
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For relationships not covered by b. above, the directors who are independent under the Corporate Governance Guidelines in a. and b. above will determine whether the relationship is material and, therefore, whether the
director is independent. The Company will explain in the next proxy statement the basis of any Board determination that a relationship was immaterial despite the fact that it did not meet the categorical standards of immateriality in b.
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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 Companys 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.
BOARD LEADERSHIP
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 Companys 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 Companys 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.
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BARNES GROUP INC. 2015 PROXY STATEMENT |
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GOVERNANCE
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Responsibilities of the Lead Independent Director |
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Preside at all meetings of the Board at which
the Chairman of the Board is not present |
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Preside at executive sessions of the
independent directors |
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Serve as a liaison between the Chairman of the
Board and the independent directors |
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Together with the Chairman of the Board,
determine the nature and scope of the information sent to the Board |
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Approve the final meeting agendas for the
Board following review by the Chairman of the Board |
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Approve meeting schedules to assure that there
is sufficient time for discussion of all agenda items |
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Has the authority to call meetings of the
independent directors |
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If requested by major stockholders, ensure
that he is available for consultation and direct communication |
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Perform such
other duties as requested by the independent directors |
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 Boards Audit, Compensation and Corporate Governance Committees are comprised entirely of independent directors. Further, the Companys non-management directors meet in regularly scheduled executive sessions,
and the independent directors also periodically meet in executive sessions.
BOARD ROLE IN RISK OVERSIGHT
While risk management is the responsibility of the Companys management team, the Board is responsible for oversight
of the Companys 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
Companys 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 Companys 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 Companys Internal Audit department.
Although the Boards primary risk oversight has been assigned to the Audit Committee, the full
Board also periodically receives information about the Companys 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 Companys overall business strategy and are not reasonably likely to have a material adverse effect on the Company.
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BARNES GROUP INC. 2015 PROXY STATEMENT |
GOVERNANCE
PROCESS FOR SELECTING DIRECTORS; STOCKHOLDER RECOMMENDED DIRECTOR CANDIDATES
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 nominees understanding of our business environment, time commitment, acumen and
ability to act on behalf of the Companys 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:
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Chairperson, Corporate Governance Committee |
c/o Senior Vice President, General Counsel
and Secretary |
Barnes Group Inc. |
123 Main Street |
Bristol, Connecticut 06010
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Stockholder recommendations must comply with the information requirements of the notice provisions contained in the
Companys Bylaws in order to be considered. Letters recommending a director candidate must include, among other things, the stockholders 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 stockholders beneficial ownership must be provided); the stockholders opinion as to whether the recommended candidate meets the
definition of independent under the Companys 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 Companys Bylaws. A summary of these procedures is set
forth below under the caption Stockholder Proposals for 2016 Annual Meeting on page 71.
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BARNES GROUP INC. 2015 PROXY STATEMENT |
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GOVERNANCE
COMMUNICATION WITH THE BOARD
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.
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By telephone: |
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1-800-300-1560 |
By internet: |
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https://www.compliance-helpline.com/welcomepagebarnesgroup.jsp |
By regular mail: |
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Barnes Group Corporate Compliance Alertline |
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P.O. Box PMB 3667 |
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13950 Ballantyne Corporate Place, Ste. 300 Charlotte, NC 28277-2712
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BOARD OF DIRECTORS AND COMMITTEES
DIRECTOR ATTENDANCE
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 72nd 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.
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BARNES GROUP INC. 2015 PROXY STATEMENT |
GOVERNANCE
BOARD COMMITTEES
We have a standing Audit Committee, Compensation Committee
and Corporate Governance Committee. The primary responsibilities for each of these committees are summarized below. The charter for each of these committees is available on the Companys website, www.BGInc.com. We also have an Executive
Committee.
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AUDIT COMMITTEE |
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The Audit Committee is responsible for overseeing accounting policies and practices, financial reporting and the internal controls structure. The Audit Committee also has responsibility for overseeing legal and
regulatory compliance and our independent auditors qualifications, performance and independence, and for risk oversight of the Company generally. The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Exchange
Act. The Board has determined that Mr. Morgan, who qualifies as an independent director under the NYSE listing standards and the Companys Corporate Governance Guidelines, is an audit committee financial expert as defined by the
Securities and Exchange Commission (SEC). For additional information about the Audit Committees oversight of the risks faced by the Company, see Board Role in Risk Oversight above. |
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Number of Meetings in 2014:
8 Committee Members: William J. Morgan, Chair
William S. Bristow, Jr.
Hassell H. McClellan
JoAnna L. Sohovich
Independence: The Board has determined that all
committee members are independent within the meaning of the NYSE listing standards and the Companys standards |
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COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE |
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The Compensation Committee acts on behalf of the Board to establish the compensation of executive officers and other key officers and
provides oversight of the Companys compensation philosophy, and of compensation policies and practices as they relate to risk management. The Compensation Committee also acts as the oversight committee with respect to the Performance-Linked
Bonus Plan, the 2014 Barnes Group Inc. Stock and Incentive Award Plan (the Stock and Incentive Award Plan), and other arrangements covering executive officers and other senior management. The Compensation Committees processes for
establishing and overseeing executive compensation can be found in the Compensation Discussion and Analysis section below. In overseeing those plans and programs, the Compensation Committee may delegate authority for day-to-day administration and
interpretation of the plans, including selection of participants, determination of award levels within plan parameters, and approval of award documents, to officers of the Company or the Companys Benefits Committee. However, the Compensation
Committee may not delegate any authority under those plans for matters affecting the compensation and benefits of the key officers.
The Compensation Committee also oversees management succession planning programs, including succession plans for the Chief Executive Officer, and reports to the Board at
least annually regarding the strengths and weaknesses of the Companys processes for management development and succession planning. Compensation Committee agendas are established in consultation with the Compensation Committee Chair and its
independent compensation consultant. The Compensation Committee has sole authority to retain outside advisors to assist in evaluating executive officer compensation, and approve the terms of engagement including the fees of such advisors. The
Compensation Committee typically meets in executive session without management present during each meeting. |
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Number of Meetings in 2014:
4 Committee Members: Mylle H. Mangum, Chair
Gary G. Benanav
Francis J. Kramer
Independence: The Board has determined that all
committee members are independent within the meaning of the NYSE listing standards and the Companys standards |
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BARNES GROUP INC. 2015 PROXY STATEMENT |
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GOVERNANCE
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CORPORATE GOVERNANCE COMMITTEE |
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The Corporate Governance Committee makes recommendations concerning Board membership, functions and compensation and the Companys overall corporate governance policies and practices. The Corporate
Governance Committee serves as the nominating committee for the Board. The process by which the Corporate Governance Committee considers nominees to the Board is described in Process for Selecting Directors; Stockholder Recommended Director
Candidates above. Additional responsibilities include board succession matters, the annual performance review of the Chairman of the Board, reviewing matters relating to potential director conflicts of interest, overseeing the Companys
practices related to political activities, and administering the Companys related person transactions policy. |
|
|
|
Number of Meetings in 2014: |
|
|
|
3 |
|
|
|
Committee Members: |
|
|
|
Gary G. Benanav, Chair |
|
|
|
Francis J. Kramer |
|
|
|
William J. Morgan |
|
|
|
Independence: |
|
|
|
The Board has determined that all committee members are independent within the meaning of the NYSE listing standards and the Companys standards |
DIRECTOR COMPENSATION IN 2014
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 Companys 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.
|
|
|
12 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
DIRECTOR COMPENSATION
The following table describes the components of our non-employee director compensation program for 2014:
|
|
|
|
|
Compensation Element |
|
Description |
Annual Retainer |
|
$51,000 |
Annual Equity Retainer1 |
|
RSUs valued at approximately $81,000 that vest one year after grant
date |
|
|
Accelerated vesting in the event of a change in control, service terminates as a
result of death or disability, or retirement before the 1st anniversary of the grant date and after attaining age 72 provided the director signs a covenant not to compete and release of claims |
|
|
Dividend equivalents equal to the dividend per share are paid on each RSU on each
dividend payment date |
Annual Chair Retainer |
|
Audit Committee |
|
$12,000 |
|
|
Compensation Committee2 |
|
$12,000 |
|
|
Corporate Governance Committee |
|
$5,000 |
|
|
Finance Committee3 |
|
$5,000 |
|
|
Executive Committee |
|
$2,500 |
|
|
All annual retainers are paid quarterly, other than the Executive Committee Chair retainer, which is payable in full only at the first meeting in any year in which the Executive Committee meets |
Board and Committee Meeting Fees |
|
In-person |
|
$1,500 |
|
|
Telephonic |
|
$1,000 |
Actions in Writing |
|
None |
Other Fees |
|
Eligible to earn fees in similar amounts to meeting fees for: |
|
|
Serving on or chairing ad hoc or special committees of the Board |
|
|
Participating in specific Board projects, such as attending meetings with the
Companys senior management and interviewing prospective director or senior officer candidates |
Other Benefits |
|
Business travel accident insurance |
|
|
Matching charitable gifts under the Barnes Group Foundation, the Companys
charitable foundation |
|
|
Life insurance and accidental death and dismemberment insurance (only
grandfathered for directors who joined before January 1, 2012) |
New Director Award (one-time grant) |
|
RSUs valued at approximately $50,000 that vest three years after grant
date |
Non-Management Director Stock
Ownership Requirements |
|
Ownership of five times the annual cash retainer (see below for more
details) |
|
Each of our non-management directors
met this requirement as of December 31, 2014, with the exception of our newest directors, Mr. Kramer and Ms. Sohovich, who joined the Board in December 2012 and May 2014, respectively |
1 |
As reflected below, our Chairman, Mr. Barnes, who was a non-management employee until his retirement effective December 31, 2014, received the same RSU grant that the non-employee directors received in 2014.
|
2 |
We inadvertently included a retainer amount of $5,000 in the Companys proxy statement last year, instead of $12,000. The retainer for both 2013 and 2014 was $12,000. |
3 |
The Board eliminated the Finance Committee on May 9, 2014. Finance Committee-related matters were integrated into the agendas of the Board and the Audit Committee, as appropriate. |
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
13 |
DIRECTOR COMPENSATION
DEFERRED COMPENSATION
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.
NON-MANAGEMENT DIRECTOR
STOCK OWNERSHIP REQUIREMENTS
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.
CHAIRMAN OF THE BOARD
COMPENSATION IN 2014
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:
|
|
|
Performing his duties as Chairman of the Board |
|
|
|
Working with the executive officers of the Company to develop relationships with possible strategic partners |
|
|
|
Engaging in various operational corporate activities when requested |
|
|
|
Chairing Barnes Group Foundation, Inc.
|
|
|
|
Maintaining an active role in community affairs in the Bristol and Hartford, Connecticut areas |
|
|
|
Performing various other duties as a non-executive employee of the Company |
During 2014, as an employee Mr. Barnes
did not report to any executive officer and was not compensated based on the Companys 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.
|
|
|
14 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION CHANGES EFFECTIVE JANUARY 1, 2015
In 2014, the Corporate Governance Committee reviewed the design and competitive positioning of the Companys director
compensation program with assistance from consulting firm Meridian Compensation Partners, LLC (Meridian). This review included benchmarking the Companys director compensation program structure and pay levels against the Companys
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:
|
|
|
Established an annual retainer for the Chairman of the Board of $100,000; |
|
|
|
Eliminated Board and Committee meeting fees, and increased the annual retainer for non-employee directors from $51,000 to $87,500;
|
|
|
|
Increased the annual equity award for which non-employee directors are eligible from $81,000 of share value in restricted stock units to $87,500 of share value; and |
|
|
|
Increased the annual committee chair retainers as follows: |
|
|
|
Audit Committee Chair: from $12,000 to $17,500; |
|
|
|
Compensation Committee Chair: from $12,000 to $15,000; and |
|
|
|
Corporate Governance Committee Chair: from $5,000 to $10,000. |
This is the first increase in non-management director
compensation since January 1, 2012.
DIRECTOR COMPENSATION TABLE
The following table sets forth the aggregate amounts of compensation information for the year ended December 31, 2014 for non-management directors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
Year |
|
Fees Earned or Paid in Cash |
|
Stock Awards1 |
|
Bonus2 |
|
Changes in Pension Value
and Nonqualified Deferred Compensation Earnings3,4 |
|
|
|
All Other Compensation5 |
|
Total |
Thomas J. Albani |
|
|
|
2014 |
|
|
|
$ |
28,734 |
|
|
|
$ |
77,268 |
|
|
|
$ |
|
|
|
|
$ |
|
|
|
|
|
|
$ |
12,705 |
|
|
|
$ |
118,707 |
|
John W. Alden |
|
|
|
2014 |
|
|
|
|
30,522 |
|
|
|
|
77,268 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,953 |
|
|
|
|
119,743 |
|
Thomas O. Barnes |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
77,268 |
|
|
|
|
50,000 |
|
|
|
|
246,401 |
|
|
|
|
|
|
420,521 |
|
|
|
|
794,190 |
|
Gary G. Benanav |
|
|
|
2014 |
|
|
|
|
80,000 |
|
|
|
|
77,268 |
|
|
|
|
|
|
|
|
|
2,585 |
|
|
|
|
|
|
4,498 |
|
|
|
|
164,351 |
|
William S. Bristow, Jr. |
|
|
|
2014 |
|
|
|
|
67,000 |
|
|
|
|
77,268 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
498 |
|
|
|
|
144,766 |
|
Francis J. Kramer |
|
|
|
2014 |
|
|
|
|
72,000 |
|
|
|
|
77,268 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300 |
|
|
|
|
149,568 |
|
Mylle H. Mangum |
|
|
|
2014 |
|
|
|
|
84,000 |
|
|
|
|
77,268 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
498 |
|
|
|
|
161,766 |
|
Hassell H. McClellan |
|
|
|
2014 |
|
|
|
|
71,000 |
|
|
|
|
77,268 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,498 |
|
|
|
|
152,766 |
|
William J. Morgan |
|
|
|
2014 |
|
|
|
|
91,000 |
|
|
|
|
77,268 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,498 |
|
|
|
|
170,766 |
|
JoAnna L. Sohovich |
|
|
|
2014 |
|
|
|
|
47,903 |
|
|
|
|
47,548 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,300 |
|
|
|
|
99,751 |
|
1 |
Stock Awards represent the aggregate grant date fair value of RSUs granted to directors under the Stock and Incentive Award Plan. |
|
a |
Stock awards outstanding at December 31, 2014 were 14,081 for Messrs. Barnes, Benanav, Bristow and Ms. Mangum; 2,081 for Messrs. McClellan and Morgan; 1,291 for Ms. Sohovich; and 4,446 for Mr. Kramer.
|
2 |
The amount listed for Mr. Barnes for 2014 represents a $50,000 cash bonus 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. |
3 |
At December 31, 2014, the Change in Pension Value and Nonqualified Deferred Compensation Earnings for Mr. Barnes relates to the SRIP, the RBEP, the SERP and the MSSORP (each as defined below). The change in
the pension value was as follows: SRIP: $203,143; RBEP: $20,452; SERP: ($468); and MSSORP: $23,274. |
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
15 |
DIRECTOR COMPENSATION
4 |
Mr. Benanav participates in the Barnes Group Inc. Directors Deferred Compensation Plan, as amended and restated. Interest is credited each quarter, on the amount of deferred director fees and dividends, based
upon the rate of interest for prime commercial loans on the first business day of each quarter. Any preferential amount would be determined by calculating the difference between the actual interest credited to Mr. Benanav and the interest that
would have been earned using 120% of a ten-year Treasury bill rate. During 2014, there was $2,585 of preferential interest earned and the aggregate balance of this deferred compensation at December 31, 2014 was $1,401,484. |
5 |
The compensation represented by the amounts for 2014 set forth in the All Other Compensation column for the directors is detailed in the following table: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
Year |
|
Taxes Paid on All Other Compensationa |
|
Life Insurance Premiumb |
|
All Other Perquisitesc |
|
Salaryd |
|
Othere |
|
Total |
Thomas J. Albani |
|
|
|
2014 |
|
|
|
$ |
|
|
|
|
$ |
|
|
|
|
$ |
|
|
|
|
$ |
|
|
|
|
$ |
12,705 |
|
|
|
$ |
12,705 |
|
John W. Alden |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,953 |
|
|
|
|
11,953 |
|
Thomas O. Barnes |
|
|
|
2014 |
|
|
|
|
52,849 |
|
|
|
|
68,838 |
|
|
|
|
4,000 |
|
|
|
|
280,000 |
|
|
|
|
14,834 |
|
|
|
|
420,521 |
|
Gary G. Benanav |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,498 |
|
|
|
|
4,498 |
|
William S. Bristow, Jr. |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
498 |
|
|
|
|
498 |
|
Francis J. Kramer |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300 |
|
|
|
|
300 |
|
Mylle H. Mangum |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
498 |
|
|
|
|
498 |
|
Hassell H. McClellan |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,498 |
|
|
|
|
4,498 |
|
William J. Morgan |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,498 |
|
|
|
|
2,498 |
|
JoAnna L. Sohovich |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,300 |
|
|
|
|
4,300 |
|
|
a |
Includes taxes paid pursuant to the terms of the SEELIP, under which the Company pays the policy premiums, and pays the income tax liability arising from its payment of the premiums and taxes, and also includes taxes
paid on the reimbursement for spousal travel to a Company event. As previously disclosed, the SEELIP was closed to new participants effective April 1, 2011. The amount reflected is based on the maximum tax rates of the directors jurisdiction.
|
|
b |
At December 31, 2014, the aggregate balance included $50,115 of life insurance premiums paid on behalf of Mr. Barnes under the SEELIP and $18,723 of income related to a split dollar life insurance policy. The
compensation associated with the split dollar life insurance agreement was calculated by determining Mr. Barness current share in the policy and multiplying that by an estimated term life insurance rate based upon certain factors such as
the age of the insured and the amount of the policy. |
|
c |
Included in All Other Perquisites are payments made for financial planning services. |
|
d |
Mr. Barnes received an annual salary of $280,000 as an employee of the Company in 2014. |
|
e |
Included in Other are matching contributions made by the Company under the Barnes Group Inc. Retirement Savings Plan for Mr. Barnes, life and accidental death and dismemberment insurance premiums paid by the
Company for the benefit of Messrs. Albani, Alden, Benanav, Bristow, McClellan and Morgan and Ms. Mangum; matching charitable contributions under the Barnes Group Foundation, Inc. matching gifts program for the benefit of all of the directors;
and spousal travel to a Company event for Mr. Barnes. |
|
|
|
16 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
ITEM 2 - ADVISORY VOTE TO APPROVE THE COMPANYS EXECUTIVE COMPENSATION
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 Companys 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 Companys executive compensation programs are designed to attract, engage and retain highly
qualified executive officers to lead and drive the execution of the Companys strategy and the achievement of the Companys 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 Companys 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 Companys 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.
|
|
The Board recommends a vote FOR the advisory vote to approve the
Companys executive compensation. |
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:
|
|
|
NEO |
|
Title |
Patrick J. Dempsey |
|
President and Chief Executive Officer |
Christopher J. Stephens, Jr. |
|
Senior Vice President, Finance and Chief Financial Officer |
Scott A. Mayo |
|
Senior Vice President, Barnes Group Inc., and President, Barnes Industrial |
Richard R. Barnhart |
|
Senior Vice President, Barnes Group Inc., and President, Barnes Aerospace |
Dawn N. Edwards |
|
Senior Vice President, Human Resources |
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
17 |
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
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 Companys 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.
For Mr. Dempsey, Mr. Stephens, and
Ms. Edwards, we calculated annual incentive compensation using the following corporate measures and weighting, resulting in a payout of 265% of target:
|
|
|
|
|
|
|
|
|
|
|
Corporate Performance Measures |
|
|
|
Weighting (%) |
|
As Certified 2014 Results* |
|
|
|
Comparison to Target |
Diluted EPS |
|
|
|
60% |
|
$2.25 |
|
|
|
$0.21 above target |
Revenue (in millions) |
|
|
|
20% |
|
$1,274 |
|
|
|
$10 above target |
Operating Margin |
|
|
|
20% |
|
14.7% |
|
|
|
80 basis points above target |
Mr. Mayos annual incentive compensation was based 40% on the corporate measures and weighting as shown above (265% of target
payout), and 60% on the following measures and weighting for the Industrial segment (resulting in a payout of 125% of target):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Segment Performance Measures |
|
|
|
Weighting (%) |
|
As Certified 2014 Results* |
|
|
|
Comparison to Target |
Operating Profit (in millions) |
|
|
|
60% |
|
|
|
$119.8 |
|
|
|
|
$2.2 above target |
Revenue (in millions) |
|
|
|
20% |
|
|
|
$834 |
|
|
|
|
$6 above target |
Operating Margin |
|
|
|
20% |
|
|
|
14.4 |
% |
|
|
|
20 basis points above target |
|
|
|
18 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
Mr. Barnharts annual incentive compensation was based 40% on the corporate measures and weighting as shown above (265% of target payout), and 60% on the
following measures and weighting for the Aerospace segment (resulting in a payout of 167% of target):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace Segment Performance Measures |
|
|
|
Weighting (%) |
|
As Certified 2014 Results* |
|
Comparison to Target |
Operating Profit (in millions) |
|
|
|
60% |
|
|
|
$46.3 |
|
|
$2.3 above target |
Revenue (in millions) |
|
|
|
20% |
|
|
|
$403 |
|
|
$6 above target |
Operating Margin |
|
|
|
20% |
|
|
|
11.5 |
% |
|
40 basis points above target |
* |
Detailed descriptions of the measures and process used to determine adjustments can be found below in the Annual Cash Incentive Awards section on page 25. |
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 Companys 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
(50th percentile), based on the following certified performance results:
|
|
|
TSR growth of 85% (the 73rd percentile); |
|
|
|
Operating income before depreciation and amortization (EBITDA) growth of 54% (the 64th percentile); and |
|
|
|
Basic EPS growth of 105% (the 80th percentile). |
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.
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
19 |
COMPENSATION DISCUSSION AND ANALYSIS
SAY-ON-PAY VOTE
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.
SUMMARY OF EXECUTIVE CHANGES FOR 2014
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. Mayos 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 Companys headquarters area.
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 Companys performance on both a short and long-term basis. We tie a significant portion of the compensation opportunity for our NEOs directly to the Companys stock performance and other
objectives that we believe affect stockholder value. As a result, if the Companys 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 Companys 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 individuals 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.
|
|
|
20 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
TOTAL DIRECT COMPENSATION IN 2014
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.
1 |
Mr. Mayo was appointed an executive officer of the Company on March 17, 2014. Mr. Mayos compensation from the date of his appointment is annualized for the entire year. |
The Summary Compensation Table on page 40 provides details regarding the compensation for each NEO.
KEY EXECUTIVE COMPENSATION CHANGES FOR 2015
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.
|
|
Annual Incentive Awards: We are replacing Operating Margin as a performance measure with a cash metric. The cash metric will be based on days working capital (DWC). DWC reflects
accounts receivables (what our customers owe) plus inventory (material, labor and overhead costs used to produce products we sell to customers) less accounts payables (what we owe our suppliers for products and services
|
|
|
we purchase). DWC is designed to enhance our focus on driving cash flow from operating activities. |
|
|
Long-Term Incentive Awards: We are replacing diluted EPS growth relative to the Russell 2000 with return on invested capital (ROIC) as a performance measure. ROIC is defined as
net income, adjusted for accounting changes and after-tax interest expense, divided by the sum of the average total debt, stockholders equity, and any non-controlling interest. Using ROIC as a performance measure enhances our focus on executing the
Companys strategy and driving long-term value creation. ROIC performance will be based on pre-established targets to better enable us to track progress during the performance period and effectively balance the long-term incentive program with
both internal and external measures. |
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
21 |
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE COMPENSATION GENERAL OBJECTIVES AND PROCESS
The primary objective of the Companys 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:
|
|
Provide appropriate incentives by linking and balancing significant short- and long-term compensation opportunities to Company performance and TSR; |
|
|
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 depend on achieving the Companys
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. |
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 Companys 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 Committees 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 Companys 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 Meridians 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.
|
|
|
22 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
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 Companys 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:
|
|
Primarily focused on manufacturing |
|
|
Multiple lines of business |
|
|
Involved with specialty products |
|
|
Derives at least 25% of its revenue from outside the United States |
|
|
Included in the Peer Group assigned to the Company by at least one of the major proxy advisory firms |
|
|
Includes the Company in its peer group |
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.
|
|
|
|
|
2014 Peer Group |
Actuant Corporation |
|
|
|
Esterline Technologies Corporation |
Altra Holdings Inc. |
|
|
|
Franklin Electric Company |
B/E Aerospace, Inc. |
|
|
|
Graco Inc. |
Chart Industries |
|
|
|
Hexcel Corp. |
Circor International, Inc. |
|
|
|
IDEX Corporation |
Clarcor, Inc. |
|
|
|
Kennametal Inc. |
Columbus McKinnon
Corporation |
|
|
|
Nordson Corporation |
Crane Company |
|
|
|
Standex International Corp. |
Curtiss-Wright Corporation |
|
|
|
TriMas Corporation |
Donaldson Company, Inc. |
|
|
|
Valmont Industries Inc. |
Enpro Industries Inc. |
|
|
|
Watts Water Technologies, Inc. |
Esco Technologies Inc. |
|
|
|
Woodward, Inc. |
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
23 |
COMPENSATION DISCUSSION AND ANALYSIS
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. Mayos 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.
COMPONENTS OF OUR
EXECUTIVE COMPENSATION PROGRAM
For 2014, the compensation for our NEOs included the following elements:
|
|
Annual cash incentive awards; |
|
|
Long-term incentive awards; |
|
|
Change in control and severance benefits; |
|
|
Defined benefit or defined contribution, retirement and executive life insurance programs; and |
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 NEOs role. The Compensation Committee also uses individual performance as it
considers appropriate to determine whether adjustments should be made to an NEOs 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 1st 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:
|
|
Peer Group data and external market information; |
|
|
Individual performance; |
|
|
The level of responsibility assumed and the nature and complexity of each NEOs 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 Companys ethics policies, and global responsibility; and
|
|
|
The desire to retain NEOs capable of driving achievement of the Companys strategic objectives and the marketability and criticality of retention of NEOs.
|
|
|
|
24 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
In 2014, the Compensation Committee did not increase the base salary of any NEO other than Mr. Dempsey.
Mr. Dempseys 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 $425,000 in connection with his appointment as Senior Vice President, Barnes
Group and President, Barnes Industrial. In determining Mr. Mayos base salary, the Compensation Committee considered Peer Group data and external market information,
Mr. Mayos prior level of compensation, the level of responsibility and the nature and complexity of the position, and the desire to attract a candidate like Mr. Mayo who we believe is capable of driving achievement of the
Companys strategic objectives.
NEO Base Salary Levels 2013 - 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO |
|
Base Salary
Effective
December 31, 2013 |
|
|
|
|
Base Salary Effective December 31, 2014 |
|
|
|
|
Change in
Annual Base Salary ($) |
|
|
|
Change in
Annual Base Salary (%) |
|
P. Dempsey |
|
|
$750,000 |
|
|
|
|
|
$775,000 |
|
|
|
|
$25,000 |
|
|
|
|
3.33 |
% |
C. Stephens, Jr. |
|
|
$461,000 |
|
|
|
|
|
$461,000 |
|
|
|
|
$ 0 |
|
|
|
|
0 |
% |
S. Mayo |
|
|
N/A |
|
|
|
|
|
$425,000 |
|
|
|
|
|
|
|
|
|
|
|
R. Barnhart |
|
|
$375,000 |
|
|
|
|
|
$375,000 |
|
|
|
|
$ 0 |
|
|
|
|
0 |
% |
D. Edwards |
|
|
$296,000 |
|
|
|
|
|
$296,000 |
|
|
|
|
$ 0 |
|
|
|
|
0 |
% |
Annual Cash Incentive Awards
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 1st 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 NEOs role. Each NEOs 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.
|
|
|
|
|
|
|
|
|
% of Salary |
NEO |
|
Threshold Level |
|
Target Level |
|
Maximum Level |
P. Dempsey |
|
18.75% |
|
75% |
|
225% |
C. Stephens, Jr. |
|
12.5% |
|
50% |
|
150% |
S. Mayo1 |
|
12.5% |
|
50% |
|
150% |
R. Barnhart |
|
12.5% |
|
50% |
|
150% |
D. Edwards |
|
11.25% |
|
45% |
|
135% |
1 |
Mr. Mayos payout for 2014 is based on base salary prorated for the number of days he served in his position during 2014. |
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
25 |
COMPENSATION DISCUSSION AND ANALYSIS
The Compensation Committee generally establishes the target for each financial performance measure in December of each
year based on review and approval of the Companys annual business plan and budget. These targets are reviewed again at the Compensation Committees next meeting in February along with the Companys full year financial performance.
The Compensation Committee may establish and approve revised targets to the extent the Companys 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:
1 |
The definitions of the segment measures are included in the footnotes to the Segment Goal tables included below. |
|
|
|
26 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Goal |
|
Threshold |
|
Target |
|
Maximum |
|
As Certified 2014 Results |
|
Comparison to Target as a % |
Diluted EPS |
|
|
$ |
1.88 |
|
|
|
$ |
2.04 |
|
|
|
$ |
2.24 |
|
|
|
$ |
2.25 |
1 |
|
|
|
300.0 |
% |
Revenue (in millions) |
|
|
$ |
1,187 |
|
|
|
$ |
1,264 |
|
|
|
$ |
1,352 |
|
|
|
$ |
1,274 |
2 |
|
|
|
123.2 |
% |
Operating Margin |
|
|
|
13.0% |
|
|
|
|
13.9% |
|
|
|
|
14.5% |
|
|
|
|
14.7% |
3 |
|
|
|
300.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Segment Goal |
|
Threshold |
|
Target |
|
Maximum |
|
As Certified 2014 Results |
|
Comparison to Target as a % |
Operating Profit (in millions) |
|
|
$ |
98.8 |
|
|
|
$ |
117.6 |
|
|
|
$ |
136.4 |
|
|
|
$ |
119.8 |
4 |
|
|
|
123.3 |
% |
Revenue (in millions) |
|
|
$ |
787 |
|
|
|
$ |
828 |
|
|
|
$ |
886 |
|
|
|
$ |
834 |
2 |
|
|
|
121.6 |
% |
Operating Margin |
|
|
|
12.7% |
|
|
|
|
14.2% |
|
|
|
|
15.2% |
|
|
|
|
14.4% |
3 |
|
|
|
131.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace Segment Goal |
|
Threshold |
|
Target |
|
Maximum |
|
As Certified 2014 Results |
|
Comparison to Target as a % |
Operating Profit (in millions) |
|
|
$ |
39.6 |
|
|
|
$ |
44.0 |
|
|
|
$ |
50.6 |
|
|
|
$ |
46.3 |
4 |
|
|
|
171.0 |
% |
Revenue (in millions) |
|
|
$ |
377 |
|
|
|
$ |
397 |
|
|
|
$ |
425 |
|
|
|
$ |
403 |
2 |
|
|
|
141.5 |
% |
Operating Margin |
|
|
|
10.1% |
|
|
|
|
11.1% |
|
|
|
|
12.1% |
|
|
|
|
11.5% |
3 |
|
|
|
181.0 |
% |
1 |
As Certified 2014 Diluted EPS is based on reported diluted EPS, excluding the effects of discontinued operations and adjusted for the impact of restructuring activities, under the terms of the PLBP.
|
2 |
As Certified 2014 Revenue corporate performance measure is based on reported Revenue, adjusted for the impact of restructuring activities, under the terms of the PLBP. As Certified 2014 Revenue
for the business-segment specific portion of Mr. Mayos annual incentive compensation is based on reported revenue for the Industrial segment, adjusted for the impact of restructuring activities, under the terms of the PLBP. As
Certified 2014 Revenue for the business segment-specific portion of Mr. Barnharts annual incentive compensation is based on reported revenue for the Aerospace segment, excluding Barnes Aerospace aftermarket revenue sharing programs
(RSPs). |
3 |
As Certified 2014 Operating Margin corporate performance measure is based on reported Operating Margin, excluding the effects of discontinued operations and adjusted for the impact of restructuring
activities, under the terms of the PLBP. As Certified 2014 Operating Margin for the business segment-specific portion of Mr. Mayos annual incentive compensation is based on operating margin for the Industrial segment, adjusted
for the impact of restructuring activities, under the terms of the PLBP. As Certified 2014 Operating Margin for the business segment-specific portion of Mr. Barnharts annual incentive compensation is based on operating margin
for the Aerospace segment, excluding Barnes Aerospace aftermarket RSPs. |
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
27 |
COMPENSATION DISCUSSION AND ANALYSIS
4 |
As Certified 2014 Operating Profit for the business-segment specific portion of Mr. Mayos incentive compensation is based on operating profit for the Industrial segment, adjusted the impact of
restructuring activities, under the terms of the PLBP. As Certified 2014 Operating Profit for the business-segment specific portion of Mr. Barnharts annual incentive compensation is based on operating profit for the Aerospace
segment, excluding Barnes Aerospace aftermarket RSPs. |
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 2014 performance based on the results certified by the Compensation Committee:
|
|
|
|
|
|
|
|
|
|
|
NEO |
|
Annual Incentive Earned |
|
Annual Incentive as % of Base Salary Earned in 2014 |
P. Dempsey |
|
|
$ |
1,538,220 |
|
|
|
|
198 |
% |
C. Stephens, Jr. |
|
|
$ |
609,995 |
|
|
|
|
132 |
% |
S. Mayo1 |
|
|
$ |
305,952 |
|
|
|
|
91 |
% |
R. Barnhart |
|
|
$ |
386,468 |
|
|
|
|
103 |
% |
D. Edwards |
|
|
$ |
352,500 |
|
|
|
|
119 |
% |
1 |
Mr. Mayos payout is prorated for the number of days he served in his position during 2014 based on his appointment effective March 17, 2014. |
Long-Term Incentive Compensation
Long-term incentive award opportunities are potentially the largest component of our NEOs total annual compensation.
We believe that long-term performance is enhanced through the use of awards denominated in share value. These awards reward our NEOs for maximizing stockholder value over time, 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 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 2014, the Company used a combination of time-based equity awards and performance-based equity awards. Particular
emphasis was placed on the Relative Measure PSAs, which comprise 50% of the value of the equity awards at the time of grant. 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. 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 managements recommendations are reviewed by Meridian.
|
|
|
28 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
The following types of long-term incentive awards are currently used under the terms of the 2014 Barnes Group Inc. Stock and Incentive Award Plan (the Stock and
Incentive Award Plan), which was approved by stockholders in 2014:
|
|
|
|
|
|
|
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 |
|
Provide the opportunity for compensation only if the Companys stock price increases from
the grant date |
|
|
|
|
|
|
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
Pays out
dividend equivalents in cash during vesting periods |
Relative
Measure PSAs |
|
50% |
|
Performance-based vesting at the end of a 3-year cycle |
|
Provide an opportunity to receive Common Stock if pre-defined performance measures are met over
the 3-year performance period |
|
|
|
|
|
|
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 -
TSR, diluted EPS growth (basic EPS growth for grants prior to 2014), and EBITDA growth - with each measure separately evaluated based on a comparison of the Companys performance against that of Russell 2000 Index companies |
1 |
Assumes continued employment by the NEOs. |
These long-term incentive awards were also granted under the prior Barnes Group Inc. Stock and Incentive Award Plan, as
amended in 2010, which has been merged with the new Stock and Incentive Award Plan.
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 have value only if the Common Stock price at the time of exercise exceeds the fair market value on the grant date. This directly correlates to our
stockholders interests, and fosters an environment focused on long-term growth of the Company and stockholder value.
For 2014, the Compensation Committee
continued the Relative Measure component of our long-term incentive program established in 2011. This 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: TSR, diluted EPS growth, and EBITDA growth. For the 2014 grant, diluted EPS
growth replaced basic EPS growth, which was used in prior years. Each measure is compared separately to the Companys relative performance against Russell 2000 Index companies over the three-year term ending December 31, 2016. As discussed
above in 2015 Key Executive Compensation Changes, ROIC, measured on an absolute rather than relative basis, will replace diluted EPS growth for 2015 performance share award grants. Based on performance, following the end of the
three-year cycle, a payout, if any, is 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 performance at the maximum
level or above.
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
29 |
COMPENSATION DISCUSSION AND ANALYSIS
The chart below illustrates potential payouts at various levels of performance:
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Level1,2 |
|
2014 Relative Measure PSA Payout Level |
|
|
|
Category |
Performance below 33rd percentile |
|
|
|
0% |
|
|
|
|
Below Threshold |
Performance at 33rd percentile |
|
|
|
33% |
|
|
|
|
Threshold |
Performance at 50th percentile |
|
|
|
100% |
|
|
|
|
Target |
Performance at 60th percentile |
|
|
|
150% |
|
|
|
|
Above Target - 60th |
Performance at 75th percentile |
|
|
|
200% |
|
|
|
|
Above Target - 75th |
Performance at or above 85th percentile |
|
|
|
250% |
|
|
|
|
Maximum |
1 |
Each of the three performance measures, TSR, diluted EPS growth, and EBITDA growth, is evaluated separately as compared to performance of companies in the Russell 2000 Index. |
2 |
Results between Performance Levels are interpolated. |
Payouts in the Last Year. The first payout under the Relative Measure PSAs occurred in 2014 for the
period ending December 31, 2013. In accordance with the program, the Compensation Committee adjusted the Relative Measure PSA performance results to include
or exclude certain extraordinary, unusual or non-recurring items, and other items. The Relative Measure PSA payout for the period ending December 31, 2013 resulted in a weighted average
payout level of 184.3%, calculated using the following results:
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Measure |
|
As Certified 2010 Results |
|
As Certified 2013 Results |
|
Change |
|
Growth |
|
Relative Performance Level |
|
Payout Level |
TSR1 |
|
$20.64 |
|
$38.27 |
|
$17.63 |
|
85% |
|
73rd %ile |
|
187% |
EBITDA Growth
(in millions) |
|
$136.8 2 |
|
$210.7 3 |
|
$73.8 |
|
54% |
|
64th %ile |
|
143% |
Basic EPS Growth |
|
0.97 2 |
|
1.99 4 |
|
1.02 |
|
105% |
|
80th %ile |
|
223% |
1 |
TSR represents the comparison between the average closing price for the 20 days before the grant and the average closing price for the final 20 days of the performance period, plus cumulative dividends
during the performance period. |
2 |
As Certified 2010 EBITDA Results and As Certified 2010 Basic EPS Results are based on EBITDA derived from reported amounts and reported basic EPS, respectively, excluding the impact of
restructuring activities. |
3 |
As Certified 2013 EBITDA Results is based on EBITDA derived from reported amounts, adjusted for the effects of discontinued operations, charges for CEO transition costs, and the effects of acquisitions and
acquisition expenses. |
4 |
As Certified 2013 Basic EPS Results is based on reported basic EPS adjusted for the effects of discontinued operations, CEO transition costs, an unfavorable U.S. Tax Court decision cost, the effects of
acquisitions and acquisition expenses, and costs related to other strategic initiatives, under the terms of the Stock and Incentive Award Plan. |
Based
on these results, the following payouts were made to NEOs who received a grant of Relative Measure PSAs in 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO |
|
2011 PSAs Granted |
|
|
|
Weighted Average Payout Level |
|
|
|
Payout of Shares |
|
|
|
Payout of Accumulated Dividends |
P. Dempsey |
|
5,900 |
|
|
|
184.3% |
|
|
|
10,874 |
|
|
|
$12,614 |
C. Stephens, Jr. |
|
7,300 |
|
|
|
184.3% |
|
|
|
13,455 |
|
|
|
$15,608 |
D. Edwards |
|
4,800 |
|
|
|
184.3% |
|
|
|
8,848 |
|
|
|
$10,264 |
|
|
|
30 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
Termination Provisions. If the participants employment is involuntarily terminated by the
Company without cause before the first anniversary of the Relative Measure PSA grant date, the award is forfeited. If they are terminated after one year, a pro-rata portion of the award based on the number of days the participant was employed during
the applicable performance period is paid based on the Companys actual performance for that performance period.
Since 2011, long-term incentive awards require
a double trigger for accelerated vesting in the event of a change in control of the Company. In the event of a change in control as defined in the Stock and Incentive Award Plan, stock options, RSUs and Relative Measure PSAs will vest
and accelerate only if an NEOs 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.
Setting Award Levels. Long-term incentive award opportunities are established by the Compensation Committee according to the NEOs position and
responsibilities, and based on a comparison to our Peer Group and competitive compensation data. In 2014, 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 Companys practice is to make all equity awards at the first regularly scheduled
meeting of the Compensation Committee, which typically occurs early in February. The Company makes off-cycle equity grants to NEOs in limited circumstances, generally for newly hired executives, promotions, in recognition of special
events, or as retention incentives.
2014 Awards. As reflected in the above table on page 30, the Compensation Committee established a target
mix for all NEOs that was designed to place more weight on performance-based equity. The same target mix and weighting for equity was used in 2014 as in prior years, with the Relative Measure PSAs at 50%, RSUs at 30% and stock options at 20%. This
target mix does not take into account potential off-cycle grants or supplemental awards, such as those that were made during 2014 which are discussed in more detail below. The target 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.
2014 Long-Term Incentive
Compensation1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO |
|
Target Values |
|
|
|
Stock Option
Grants |
|
|
|
RSU
Grants |
|
|
|
Relative Measure PSAs |
P. Dempsey |
|
$2,100,000 |
|
|
|
30,800 |
|
|
|
16,200 |
|
|
|
27,000 |
C. Stephens, Jr. |
|
$ 640,000 |
|
|
|
9,400 |
|
|
|
4,900 |
|
|
|
8,200 |
S. Mayo |
|
$ 400,000 |
|
|
|
5,750 |
|
|
|
3,100 |
|
|
|
5,150 |
R. Barnhart |
|
$ 400,000 |
|
|
|
5,900 |
|
|
|
3,100 |
|
|
|
5,100 |
D. Edwards |
|
$ 300,000 |
|
|
|
4,300 |
|
|
|
2,300 |
|
|
|
3,900 |
1 |
Annual grants made during February are shown, except for Mr. Mayo, whose grants were made upon his appointment in March 2014. |
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
31 |
COMPENSATION DISCUSSION AND ANALYSIS
During 2014, Mr. Dempsey, Mr. Stephens, Mr. Barnhart, and Ms. Edwards received supplemental grants. In
making these supplemental grants, the Compensation Committee considered retention, as well as the Companys continued successful execution of its corporate strategy and operational plan. Specifically, in 2013, the Company made significant
strides toward transforming the Company with the sale of Barnes Distribution North America and the acquisition of the Männer business, as described in our proxy last year. In
recognition of the value created by the executive team, and to promote retention during this ongoing period of transition, the Compensation Committee approved special supplemental awards using
the same target mix as the regular long-term awards. In addition, an off cycle grant was made to Mr. Mayo in connection with his forfeiture of unvested equity awards as a result of his departure from his prior employer and his
appointment to Senior Vice President, Barnes Group and President, Barnes Industrial.
Special Off-Cycle and Supplemental
Long-Term Incentive Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO |
|
Purpose of
Grant |
|
FMV at Time of Grant |
|
Supplemental
Stock Option Grants |
|
Supplemental
RSU Grants |
|
Supplemental Relative Measure PSAs |
P. Dempsey1 |
|
Recognition and Retention |
|
|
|
$411,063 |
|
|
|
|
5,900 |
|
|
|
|
3,100 |
|
|
|
|
5,100 |
|
C. Stephens, Jr.1 |
|
Recognition and Retention |
|
|
|
$265,550 |
|
|
|
|
3,800 |
|
|
|
|
2,000 |
|
|
|
|
3,300 |
|
S. Mayo2 |
|
Buy-Out |
|
|
|
$711,117 |
|
|
|
|
|
|
|
|
|
8,350 |
|
|
|
|
8,350 |
|
R. Barnhart1 |
|
Recognition and Retention |
|
|
|
$105,097 |
|
|
|
|
1,500 |
|
|
|
|
800 |
|
|
|
|
1,300 |
|
D. Edwards1 |
|
Recognition and Retention |
|
|
|
$184,719 |
|
|
|
|
2,600 |
|
|
|
|
1,400 |
|
|
|
|
2,300 |
|
1 |
Special retention and recognition grants made concurrently with annual grants at the February 2014 Compensation Committee meeting. |
2 |
Grant made in consideration of the equity awards that Mr. Mayo forfeited upon departing from his prior position and accepting his new role at the Company. |
NEO Stock Ownership Requirements
|
|
|
|
|
|
Position |
|
Multiple of Annual Salary |
President and Chief Executive Officer |
|
|
|
5x |
|
All Other NEOs |
|
|
|
3x |
|
All of our NEOs, as well as certain other members of Company leadership, are subject to stock ownership requirements.
Two-thirds of the value of unvested RSUs count toward achieving ownership requirements. There is no deadline to achieve the ownership levels, but all net
after-tax proceeds from Company equity grants, including stock option exercises, must 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 2014, compliance with the requirements was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO |
|
Compliant with
Hold Requirement |
|
Fully Met Ownership Requirement |
|
In Process Toward Meeting Ownership Requirement |
P. Dempsey |
|
|
|
X |
|
|
|
|
X |
|
|
|
|
|
|
C. Stephens, Jr. |
|
|
|
X |
|
|
|
|
X |
|
|
|
|
|
|
S. Mayo1 |
|
|
|
X |
|
|
|
|
|
|
|
|
|
X |
|
R. Barnhart |
|
|
|
X |
|
|
|
|
X |
|
|
|
|
|
|
D. Edwards |
|
|
|
X |
|
|
|
|
X |
|
|
|
|
|
|
1 |
Mr. Mayo joined the Company on March 17, 2014. |
|
|
|
32 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
Risk Considerations
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, such as diluted 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 PSAs are capped at 2.5 times the target level Relative Measure PSA grant. |
Based on its most recent evaluation, the Compensation Committee concluded that the executive compensation programs are designed with the appropriate balance of risk and
reward in relation to the Companys business strategy and are not reasonably likely to have a material adverse effect on the Company. For further discussion on risk oversight of the compensation programs for Company-wide employees, see the
Risk Oversight and Assessment Policies and Practices section on page 39.
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
33 |
COMPENSATION DISCUSSION AND ANALYSIS
Pension and Other Retirement Programs
Our NEOs have the opportunity to
participate in one or more of the following retirement plans:
|
|
|
Plan |
|
Summary of Features |
Salaried Retirement Income Plan (SRIP) |
|
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 Barnes Group Inc. Retirement Savings
Plan of 4% of eligible earnings. All NEOs except Mr. Mayo participate in the SRIP. |
|
|
Retirement Savings Plan (RSP) |
|
401(k): A broad-based tax qualified defined contribution
savings plan with a 401(k) elective deferral and matching contribution feature for all participants. 100% vesting in matching contributions upon 2 years of service. All NEOs may participate in the 401(k) portion of the RSP.
Retirement
Contribution: New employees who are not eligible to participate in the SRIP also receive an annual Retirement Contribution (RC) of 4% of eligible earnings subject to 5 year graded vesting. Only Mr. Mayo is eligible for the RC component of the
RSP. |
Retirement Benefit Equalization Plan (RBEP) |
|
Provides benefits on base salary earnings in excess of Internal Revenue Service (IRS) limit on
qualified plans that applies to the SRIP or the RC component of the RSP to eligible salaried employees, officers and NEOs who do not meet MSSORP/DC Plan vesting requirements; vesting upon attaining 5 years of service (5 year graded vesting for
benefits based on the RC component of the RSP). All NEOs participate in the RBEP. |
|
|
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
Mr. Dempsey participates in the MSSORP. |
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 2014, the contribution was based on 20% of base salary and annual incentive pay; vesting upon attaining age 55 and 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 grandfathered participants in the DC Plan. |
The SRIP and RSP are broad-based tax-qualified plans. The RBEP provides the benefits of the SRIP and the RC component of
the RSP in excess of IRS limits on broad-based tax-qualified plans. 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 SRIP to certain designated employees and senior level officers, including certain NEOs as reflected in the below table. Both of these plans have been closed to new
participants so that in the future, new executives will receive the same benefit levels as qualified plan participants.
|
|
|
34 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qualified Plans |
|
Non-Qualified Plans |
NEO |
|
SRIP |
|
RSP RC1 |
|
RBEP |
|
MSSORP |
|
DC Plan |
P. Dempsey2 |
|
|
|
X |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
X |
|
|
|
|
|
|
C. Stephens, Jr. |
|
|
|
X |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
X |
|
S. Mayo |
|
|
|
|
|
|
|
|
X |
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
R. Barnhart |
|
|
|
X |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
D. Edwards |
|
|
|
X |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
X |
|
1 |
All NEOs may participate in the RSP on the same terms as all other employees, but Mr. Mayo is the only NEO who is eligible to participate in the RC component of
the RSP. |
2 |
If age and service vesting requirements are not met under the MSSORP, the RBEP benefits apply. |
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 change in control. These benefits are part of a competitive compensation package and keep our executive officers focused
on our business goals and objectives. 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 NEOs employment without cause, or if an NEO terminates employment for good reason, either before or after a change in control.
As discussed in more detail on page 37, 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. In addition, we generally do not provide change in control cash compensation benefits in excess of severance compensation equal to two times the executives 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 executives 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 2014, 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 in the categories of financial planning and tax preparation services and annual executive physical examination.
In addition, Mr. Mayo received a one-time relocation benefit totaling $108,251 in connection with his relocation to Connecticut to join the Company. Eligible
relocation expenses for Mr. Mayo were paid in accordance with Company policy and included the costs of moving himself, his immediate family, and his household goods. In addition, consistent with Company policy and practices,
Mr. Mayos relocation benefit included a miscellaneous allowance for relocation expenses not otherwise specifically covered by another provision of our relocation policy, equal to one months salary, based on the rate of pay, up to
$10,000, that was subject to a tax gross up. Mr. Mayo must repay the entire relocation benefit amount if he voluntarily terminates employment within a year of relocation. Also, in June 2014, Mr. Stephens received the final reimbursement
for a one-time relocation benefit he was furnished in June 2013. In the aggregate, Mr. Stephens received the maximum amount of his relocation benefit, $160,000, inclusive of any tax gross-ups.
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
35 |
COMPENSATION DISCUSSION AND ANALYSIS
Additional Benefits
All
current NEOs other than Mr. Barnhart and Mr. Mayo are eligible to participate in the Companys Senior Executive Enhanced Life Insurance Program (SEELIP), under which the Company pays the premiums for a life insurance policy with a
benefit of four times the employees base salary. While the policy is owned by each NEO, the Company pays the NEOs 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.
Mr. Barnhart is a grandfathered participant in the
Companys Enhanced Life Insurance Program (ELIP) under which the Company pays the premiums for a life insurance policy with a benefit of four times the employees base salary. The policy is owned by the
NEO, but the Company does not pay the NEOs income tax liability arising from payment of the premiums. The ELIP also has been closed to new participants.
When the SEELIP and ELIP were closed to new or rehired executives, the Company established the Executive Group Term Life Insurance Program (EGTLIP) for new NEOs and
other eligible executives who were not already participants in the grandfathered ELIP. The EGTLIP provides premium payments for a term insurance policy with a benefit of four times the employees base salary. The NEO owns the policy and is
responsible for any tax liability (i.e., no tax gross-up) resulting from this program. Mr. Mayo is a participant in the EGTLIP.
Each of our NEOs participates
in other employee benefit plans generally available to all U.S. based employees (e.g., health insurance) on the same terms as all other employees.
ADDITIONAL INFORMATION
Employment Contracts
Generally, we have no employment contracts with our employees, unless required or customary based on local law or practice. None of our NEOs have an employment contract.
Clawback Agreements
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 Companys 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 Companys 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 and Pledging
The Company prohibits certain members of Company
leadership, including all directors and executive officers (which includes NEOs) from engaging in hedging transactions involving the Companys securities.
The
Company prohibits certain members of Company leadership, including all directors and executive officers, from pledging or margin call arrangements involving the Companys securities that are held to meet the Companys stock ownership
requirements. The Company 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.
|
|
|
36 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
COMPENSATION DISCUSSION AND ANALYSIS
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 and Relative Measure PSA awards with a performance condition are estimated based on the fair market value of the Companys 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.
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
37 |
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 that the Compensation Discussion and Analysis be included in this proxy statement.
|
THE COMPENSATION COMMITTEE |
|
Mylle H. Mangum, Chair |
Gary G. Benanav |
Francis J. Kramer |
|
|
|
38 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
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 8. 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 key risk mitigation factors to ensure that our employees, including our NEOs, are not encouraged to take unnecessary risks in managing our business. These factors include:
|
|
Our target total direct compensation mix represents a balance of short-term and long-term incentive based compensation, that focuses on both short- and long-term goals and provides a mixture of cash and equity-based
compensation; |
|
|
Our annual long-term incentive awards vest over three or more years; |
|
|
Our short-term incentive awards are tied to multiple performance-driven financial metrics; |
|
|
Payments under our short-term and long-term incentive programs are capped;
|
|
|
We have stock ownership requirements for our executive officers, as well as certain other members of Company leadership, which ensure alignment with our stockholders interests over the long term;
|
|
|
On an annual basis, our executive officers confirm compliance with both our Code of Business Ethics and Conduct and our Securities Law Compliance Policy; and |
|
|
We have formal clawback agreements with our executive officers. |
The Compensation Committee also consults with and makes
certain recommendations to the Board regarding the Companys 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 Companys overall business strategy and are not reasonably likely to have a material adverse effect on the Company.
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
39 |
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE FOR
2014, 2013 AND 2012
The following table sets forth the compensation earned by our NEOs for the fiscal years ended December 31, 2014, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and
Principal Position |
|
Year |
|
|
Salary |
|
|
Bonus |
|
Stock
Awards1 |
|
|
Option
Awards2 |
|
|
Non-Equity
Incentive Plan
Compensation3 |
|
Change in
Pension Value
and Nonqualified Deferred
Compensation
Earnings4 |
|
All Other
Compensation5 |
|
Total |
|
Patrick J. Dempsey |
|
|
2014 |
|
|
$ |
768,750 |
|
|
|
|
$ |
2,130,065 |
|
|
$ |
443,912 |
|
|
$1,538,220 |
|
$1,622,098 |
|
$141,129 |
|
$ |
6,644,174 |
|
President and Chief |
|
|
2013 |
|
|
|
700,000 |
|
|
|
|
|
1,588,668 |
|
|
|
371,030 |
|
|
881,567 |
|
253,304 |
|
123,261 |
|
|
3,917,830 |
|
Executive Officer
|
|
|
2012 |
|
|
|
447,783 |
|
|
|
|
|
565,484 |
|
|
|
124,787 |
|
|
250,988 |
|
364,266 |
|
104,764 |
|
|
1,858,072 |
|
Christopher J. |
|
|
2014 |
|
|
|
461,000 |
|
|
|
|
|
762,575 |
|
|
|
159,663 |
|
|
609,995 |
|
88,646 |
|
362,296 |
|
|
2,444,175 |
|
Stephens, Jr. |
|
|
2013 |
|
|
|
453,585 |
|
|
|
|
|
875,508 |
|
|
|
135,805 |
|
|
382,238 |
|
10,912 |
|
165,604 |
|
|
2,023,652 |
|
Senior Vice |
|
|
2012 |
|
|
|
431,000 |
|
|
|
|
|
1,339,261 |
|
|
|
130,546 |
|
|
240,390 |
|
49,038 |
|
234,870 |
|
|
2,425,105 |
|
President, Finance
and Chief Financial
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott A. Mayo
Senior Vice President,
Barnes Group Inc.,
and President, Barnes
Industrial
|
|
|
2014 |
|
|
|
336,799 |
|
|
|
|
|
1,069,840 |
|
|
|
72,978 |
|
|
305,952 |
|
|
|
138,434 |
|
|
1,924,003 |
|
Richard R. Barnhart |
|
|
2014 |
|
|
|
375,000 |
|
|
|
|
|
426,618 |
|
|
|
89,508 |
|
|
386,468 |
|
207,608 |
|
45,471 |
|
|
1,530,673 |
|
Senior Vice President, |
|
|
2013 |
|
|
|
334,750 |
|
|
|
|
|
419,873 |
|
|
|
|
|
|
|
|
32,401 |
|
30,102 |
|
|
817,126 |
|
Barnes Group Inc.,
and President, Barnes
Aerospace
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dawn N. Edwards |
|
|
2014 |
|
|
|
296,000 |
|
|
|
|
|
410,385 |
|
|
|
83,460 |
|
|
352,500 |
|
174,222 |
|
96,364 |
|
|
1,412,931 |
|
Senior Vice |
|
|
2013 |
|
|
|
296,000 |
|
|
|
|
|
488,327 |
|
|
|
64,010 |
|
|
220,886 |
|
|
|
80,568 |
|
|
1,149,791 |
|
President, |
|
|
2012 |
|
|
|
296,000 |
|
|
|
|
|
269,177 |
|
|
|
60,474 |
|
|
148,585 |
|
102,683 |
|
133,699 |
|
|
1,010,618 |
|
Human Resources
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
Stock Awards represent the aggregate grant date fair value of RSUs and Relative Measure PSAs granted to NEOs under the Stock and Incentive Award Plan. 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. Dempsey, Stephens, Mayo, and Barnhart and Mses. 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 2014 was $2,605,317 for Mr. Dempsey, $933,369 for Mr. Stephens, $1,149,708 for Mr. Mayo, $519,440 for Mr. Barnhart and $503,208 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 diluted EPS growth and EBITDA 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 Companys consolidated financial statements filed with the Annual Report on Form 10-K for the respective year-end. |
|
|
2 |
Option Awards represent the aggregate grant date fair value of stock options granted to NEOs under the Stock and Incentive Award Plan. The fair value was determined by using the Black-Scholes option pricing model
applied consistently with the Companys practice, as described in the note on Stock-Based Compensation in the notes to the Companys consolidated financial statements filed with the Annual Report on Form 10-K for the respective year-end.
|
|
|
|
|
40 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
EXECUTIVE COMPENSATION
|
3 |
Non-Equity Incentive Plan Compensation, which were paid in February 2015, includes amounts earned under the PLBP for Messrs. Dempsey, Stephens and Barnhart, and Ms. Edwards. Mr. Mayo was a participant of the
MICP in 2014. |
|
|
4 |
The amount listed in Change in Pension Value and Nonqualified Deferred Compensation Earnings represents the annual increase in pension value for all of the Companys defined benefit retirement programs. All
assumptions are as detailed in the notes to the Companys 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, 2014, December 31, 2013 or December 31, 2012, as applicable, and no pre-retirement mortality, disability, or termination is assumed. The
U.S. discount rates of 4.25%, 5.20% and 4.25%, respectively, are detailed in the Managements Discussion & Analysis filed with the Annual Report on Form 10-K for the respective year-end.
Year-over-year changes in pension value generally are driven in large part due to changes in actuarial assumptions underlying the calculations as well as increases in service, age and compensation. In particular, of the increase in
Mr. Dempseys pension value in 2014, $709,671 was due to changes in actuarial assumptions, and $912,427 was due to increases in service, age and compensation. |
|
|
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 |
|
Patrick J. Dempsey
President and Chief Executive Officer |
|
SRIP |
|
|
2014 |
|
|
|
|
$ |
169,813 |
|
|
RBEP |
|
|
2014 |
|
|
|
|
|
N/A |
a |
|
|
MSSORP |
|
|
2014 |
|
|
|
|
|
1,452,285 |
|
|
|
SERP |
|
|
2014 |
|
|
|
|
|
N/A |
|
|
|
TOTAL |
|
|
2014 |
|
|
|
|
|
1,622,098 |
|
|
|
SRIP |
|
|
2013 |
|
|
|
|
$ |
(22,962 |
) |
|
|
RBEP |
|
|
2013 |
|
|
|
|
|
N/A |
a |
|
|
MSSORP |
|
|
2013 |
|
|
|
|
|
276,266 |
|
|
|
SERP |
|
|
2013 |
|
|
|
|
|
N/A |
|
|
|
TOTAL |
|
|
2013 |
|
|
|
|
|
253,304 |
|
|
|
SRIP |
|
|
2012 |
|
|
|
|
$ |
113,309 |
|
|
|
RBEP |
|
|
2012 |
|
|
|
|
|
N/A |
a |
|
|
MSSORP |
|
|
2012 |
|
|
|
|
|
314,096 |
|
|
|
SERP |
|
|
2012 |
|
|
|
|
|
(63,139 |
)b |
|
|
TOTAL |
|
|
2012 |
|
|
|
|
|
364,266 |
|
Christopher J. Stephens, Jr.
Senior Vice President, Finance and Chief Financial Officer |
|
SRIP |
|
|
2014 |
|
|
|
|
$ |
88,646 |
|
|
RBEP |
|
|
2014 |
|
|
|
|
|
N/A |
a |
|
MSSORP |
|
|
2014 |
|
|
|
|
|
N/A |
|
|
|
SERP |
|
|
2014 |
|
|
|
|
|
N/A |
|
|
|
TOTAL |
|
|
2014 |
|
|
|
|
|
88,646 |
|
|
|
SRIP |
|
|
2013 |
|
|
|
|
$ |
10,912 |
|
|
|
RBEP |
|
|
2013 |
|
|
|
|
|
N/A |
a |
|
|
MSSORP |
|
|
2013 |
|
|
|
|
|
N/A |
|
|
|
SERP |
|
|
2013 |
|
|
|
|
|
N/A |
|
|
|
TOTAL |
|
|
2013 |
|
|
|
|
|
10,912 |
|
|
|
SRIP |
|
|
2012 |
|
|
|
|
$ |
53,596 |
|
|
|
RBEP |
|
|
2012 |
|
|
|
|
|
N/A |
a |
|
|
MSSORP |
|
|
2012 |
|
|
|
|
|
N/A |
|
|
|
SERP |
|
|
2012 |
|
|
|
|
|
(4,558 |
)b |
|
|
TOTAL |
|
|
2012 |
|
|
|
|
|
49,038 |
|
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
41 |
EXECUTIVE COMPENSATION
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position |
|
Plan Name |
|
Year |
|
|
|
|
Amounts |
|
Scott A. Mayo
Senior Vice President, Barnes Group Inc., and President, Barnes Industrial |
|
SRIP |
|
|
2014 |
|
|
|
|
|
N/A |
|
|
RBEP |
|
|
2014 |
|
|
|
|
|
N/A |
|
|
MSSORP |
|
|
2014 |
|
|
|
|
|
N/A |
|
|
|
SERP |
|
|
2014 |
|
|
|
|
|
N/A |
|
|
|
TOTAL |
|
|
2014 |
|
|
|
|
|
N/A |
|
|
|
SRIP |
|
|
2013 |
|
|
|
|
|
N/A |
|
|
|
RBEP |
|
|
2013 |
|
|
|
|
|
N/A |
|
|
|
MSSORP |
|
|
2013 |
|
|
|
|
|
N/A |
|
|
|
SERP |
|
|
2013 |
|
|
|
|
|
N/A |
|
|
|
TOTAL |
|
|
2013 |
|
|
|
|
|
N/A |
|
|
|
SRIP |
|
|
2012 |
|
|
|
|
|
N/A |
|
|
|
RBEP |
|
|
2012 |
|
|
|
|
|
N/A |
|
|
|
MSSORP |
|
|
2012 |
|
|
|
|
|
N/A |
|
|
|
SERP |
|
|
2012 |
|
|
|
|
|
N/A |
|
|
|
TOTAL |
|
|
2012 |
|
|
|
|
|
N/A |
|
Richard R. Barnhart
Senior Vice President, Barnes Group Inc., and President, Barnes Aerospace |
|
SRIP |
|
|
2014 |
|
|
|
|
$ |
144,193 |
|
|
RBEP |
|
|
2014 |
|
|
|
|
|
63,415 |
|
|
MSSORP |
|
|
2014 |
|
|
|
|
|
N/A |
|
|
|
SERP |
|
|
2014 |
|
|
|
|
|
N/A |
|
|
|
TOTAL |
|
|
2014 |
|
|
|
|
|
207,608 |
|
|
|
SRIP |
|
|
2013 |
|
|
|
|
$ |
9,002 |
|
|
|
RBEP |
|
|
2013 |
|
|
|
|
|
23,399 |
|
|
|
MSSORP |
|
|
2013 |
|
|
|
|
|
N/A |
|
|
|
SERP |
|
|
2013 |
|
|
|
|
|
N/A |
|
|
|
TOTAL |
|
|
2013 |
|
|
|
|
|
32,401 |
|
|
|
SRIP |
|
|
2012 |
|
|
|
|
|
N/A |
|
|
|
RBEP |
|
|
2012 |
|
|
|
|
|
N/A |
|
|
|
MSSORP |
|
|
2012 |
|
|
|
|
|
N/A |
|
|
|
SERP |
|
|
2012 |
|
|
|
|
|
N/A |
|
|
|
TOTAL |
|
|
2012 |
|
|
|
|
|
N/A |
|
Dawn N. Edwards
Senior Vice President, Human Resources |
|
SRIP |
|
|
2014 |
|
|
|
|
$ |
174,222 |
|
|
RBEP |
|
|
2014 |
|
|
|
|
|
N/A |
a |
|
MSSORP |
|
|
2014 |
|
|
|
|
|
N/A |
|
|
|
SERP |
|
|
2014 |
|
|
|
|
|
N/A |
|
|
|
TOTAL |
|
|
2014 |
|
|
|
|
|
174,222 |
|
|
|
SRIP |
|
|
2013 |
|
|
|
|
$ |
(25,525 |
) |
|
|
RBEP |
|
|
2013 |
|
|
|
|
|
N/A |
a |
|
|
MSSORP |
|
|
2013 |
|
|
|
|
|
N/A |
|
|
|
SERP |
|
|
2013 |
|
|
|
|
|
N/A |
|
|
|
TOTAL |
|
|
2013 |
|
|
|
|
|
(25,525 |
) |
|
|
SRIP |
|
|
2012 |
|
|
|
|
$ |
120,010 |
|
|
|
RBEP |
|
|
2012 |
|
|
|
|
|
N/A |
a |
|
|
MSSORP |
|
|
2012 |
|
|
|
|
|
N/A |
|
|
|
SERP |
|
|
2012 |
|
|
|
|
|
(17,327 |
)b |
|
|
TOTAL |
|
|
2012 |
|
|
|
|
|
102,683 |
|
Consistent with financial calculations in the notes to the Companys consolidated financial statements filed with the Annual Report
on Form 10-K for the fiscal years ending December 31, 2014, December 31, 2013 and December 31, 2012, it is assumed that the form of payment is a life annuity for the SRIP, the RBEP, the Supplemental Executive Retirement Plan
(SERP) and the MSSORP. The 2014, 2013 and 2012 qualified plan limits of $260,000, $255,000 and $250,000, respectively, have been incorporated.
a |
The amounts listed 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 amounts listed for Mr. Dempsey assume that he would vest under the MSSORP and therefore would not be eligible to receive benefits under the RBEP. |
b |
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. The SERP was amended to terminate participation for all individuals who are
not receiving benefits under the SERP or vested thereunder as of April 1, 2012. None of our NEOs were retirement eligible as of April 1, 2012 and therefore none of them will receive SERP benefits upon retirement. |
|
|
|
42 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
EXECUTIVE COMPENSATION
5 |
The compensation represented by the amounts for 2014 set forth in the All Other Compensation column for the NEOs is detailed in the following table: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and
Principal Position |
|
Year |
|
|
Taxes Paid on
All Other Compensationa |
|
Life
Insurance Premiumsb,c,d |
|
Deferred
Compensation Plane |
|
Relocationf |
|
Otherg |
|
All Other
Perquisitesh |
|
Total |
|
Patrick J. Dempsey
President and Chief
Executive Officer |
|
|
2014 |
|
|
$62,826 |
|
$65,653 |
|
$ |
|
$ |
|
$ 7,650 |
|
$5,000 |
|
|
$141,129 |
|
Christopher J.
Stephens, Jr.
Senior Vice President,
Finance and Chief
Financial Officer |
|
|
2014 |
|
|
57,981 |
|
38,812 |
|
116,648 |
|
139,161 |
|
7,650 |
|
2,044 |
|
|
362,296 |
|
Scott A. Mayo
Senior Vice President,
Barnes Group Inc.,
and President, Barnes
Industrial |
|
|
2014 |
|
|
24,451 |
|
1,179 |
|
|
|
87,497 |
|
19,143 |
|
6,163 |
|
|
138,434 |
|
Richard R. Barnhart
Senior Vice President,
Barnes Group Inc.,
and President, Barnes
Aerospace |
|
|
2014 |
|
|
|
|
37,821 |
|
|
|
|
|
7,650 |
|
|
|
|
45,471 |
|
Dawn N. Edwards
Senior Vice President,
Human Resources |
|
|
2014 |
|
|
15,662 |
|
20,015 |
|
51,337 |
|
|
|
7,650 |
|
1,700 |
|
|
96,364 |
|
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 Companys policies and practices. For Messrs. Dempsey
and Stephens and Ms. Edwards, includes taxes paid pursuant to the terms of the SEELIP, under which the Company pays the policy premiums, and pays the income tax liability arising from its payment of the premiums and taxes. As previously disclosed,
the SEELIP was closed to new participants effective April 1, 2011. For Mr. Stephens, amount also includes taxes paid associated with his relocation benefit. For Mr. Mayo, includes taxes paid associated with his relocation benefit and taxes paid on
the reimbursement for spousal travel to Company events. |
b |
Payments made under the SEELIP for Messrs. Dempsey, Stephens, and Ms. Edwards. 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 NEOs 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. |
c |
Payments made under the EGTLIP for Mr. Mayo. 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. |
d |
Payments made under the ELIP for Mr. Barnhart. Under the ELIP, 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. |
e |
The amount listed as deferred compensation for Mr. Stephens and Ms. Edwards includes employer contributions to the Barnes Group 2009 Deferred Compensation Plan. |
f |
Messrs. Mayo and Stephens 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 their
residences, and costs for the moving of household goods. In addition, both Messrs. Mayo and Stephens 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 RSP which is a plan generally available to most U.S. based employees, including the NEOs. For Mr. Mayo, who was not eligible to participate in the
SRIP, this also includes a retirement contribution of 4% of eligible earnings under the RC component of the RSP. Contributions made by the Company under its health savings account plan which is also a plan generally available to most U.S. based
employees, including the NEOs, are not included; the maximum allowable Company contributions under this plan were $1,000 in 2014. |
h |
Included in All Other Perquisites are payments made for financial planning and tax preparation services for Messrs. Dempsey and Stephens, and Ms. Edwards and travel to Company events for Mr. Mayos
spouse. |
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
43 |
EXECUTIVE COMPENSATION
GRANTS OF PLAN-BASED AWARDS IN 2014
For a discussion regarding the PLBP and the Stock and Incentive Award Plan, please see the CD&A. The vesting schedule for
outstanding Relative Measure PSAs, RSUs and stock option awards are set forth in the footnotes to the Outstanding Equity Awards at Fiscal Year End table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards |
|
|
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards |
|
|
All Other Stock Awards: Number of Shares of Stock or Units (#) |
|
|
All Other Option Awards: Number of Securities Underlying Options (#)4 |
|
|
Exercise or Base Price
of Option Awards ($/Sh)5 |
|
|
Grant Date Fair Value of Stock and Option Awards ($) |
|
Name |
|
Grant Date |
|
|
Threshold ($) |
|
|
Target ($) |
|
|
Maximum ($) |
|
|
|
|
Threshold (#) |
|
|
Target (#) |
|
|
Maximum (#) |
|
|
|
|
|
P. Dempsey |
|
|
2/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,900 |
|
|
|
37.13000 |
|
|
|
71,390 |
|
|
|
|
2/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,800 |
|
|
|
37.13000 |
|
|
|
372,680 |
|
|
|
|
2/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,200 |
|
|
|
|
|
|
|
|
|
|
|
601,506 |
|
|
|
|
2/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,100 |
|
|
|
|
|
|
|
|
|
|
|
115,103 |
|
|
|
|
2/12/20142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,683 |
|
|
|
5,100 |
|
|
|
12,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
224,570 |
|
|
|
|
2/12/20142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,910 |
|
|
|
27,000 |
|
|
|
67,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,188,900 |
|
|
|
|
1 |
|
|
|
145,313 |
|
|
|
581,250 |
|
|
|
1,743,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C. Stephens, Jr. |
|
|
2/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,800 |
|
|
|
37.13000 |
|
|
|
45,980 |
|
|
|
|
2/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,400 |
|
|
|
37.13000 |
|
|
|
113,740 |
|
|
|
|
2/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000 |
|
|
|
|
|
|
|
|
|
|
|
74,260 |
|
|
|
|
2/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,900 |
|
|
|
|
|
|
|
|
|
|
|
181,937 |
|
|
|
|
2/12/20142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,089 |
|
|
|
3,300 |
|
|
|
8,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
145,310 |
|
|
|
|
2/12/20142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,706 |
|
|
|
8,200 |
|
|
|
20,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
361,073 |
|
|
|
|
1 |
|
|
|
57,625 |
|
|
|
230,500 |
|
|
|
691,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S. Mayo3 |
|
|
3/17/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,750 |
|
|
|
38.96000 |
|
|
|
72,968 |
|
|
|
|
3/17/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,100 |
|
|
|
|
|
|
|
|
|
|
|
120,776 |
|
|
|
|
3/17/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,350 |
|
|
|
|
|
|
|
|
|
|
|
325,316 |
|
|
|
|
3/17/20142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,700 |
|
|
|
5,150 |
|
|
|
12,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
237,949 |
|
|
|
|
3/17/20142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,756 |
|
|
|
8,350 |
|
|
|
20,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
385,801 |
|
|
|
|
1 |
|
|
|
42,337 |
|
|
|
169,349 |
|
|
|
508,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Barnhart |
|
|
2/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,500 |
|
|
|
37.13000 |
|
|
|
18,150 |
|
|
|
|
2/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,900 |
|
|
|
37.13000 |
|
|
|
71,390 |
|
|
|
|
2/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
800 |
|
|
|
|
|
|
|
|
|
|
|
29,704 |
|
|
|
|
2/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,100 |
|
|
|
|
|
|
|
|
|
|
|
115,103 |
|
|
|
|
2/12/20142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
429 |
|
|
|
1,300 |
|
|
|
3,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
57,243 |
|
|
|
|
2/12/20142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,683 |
|
|
|
5,100 |
|
|
|
12,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
224,570 |
|
|
|
|
1 |
|
|
|
46,875 |
|
|
|
187,500 |
|
|
|
562,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. Edwards |
|
|
2/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,600 |
|
|
|
37.13000 |
|
|
|
31,460 |
|
|
|
|
2/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,300 |
|
|
|
37.13000 |
|
|
|
52,030 |
|
|
|
|
2/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,400 |
|
|
|
|
|
|
|
|
|
|
|
51,982 |
|
|
|
|
2/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,300 |
|
|
|
|
|
|
|
|
|
|
|
85,399 |
|
|
|
|
2/12/20142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
759 |
|
|
|
2,300 |
|
|
|
5,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101,277 |
|
|
|
|
2/12/20142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,287 |
|
|
|
3,900 |
|
|
|
9,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
171,730 |
|
|
|
|
1 |
|
|
|
33,300 |
|
|
|
133,200 |
|
|
|
399,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
This row sets forth the range of the potential amounts payable under the PLBP for all NEOs except for Mr. Mayo, who was a participant of the MICP in 2014. |
|
|
2 |
This row sets forth the range of the number of shares of Common Stock that could be issued under Relative Measure PSAs granted in 2014 under the Stock and Incentive Award Plan. |
|
|
3 |
Mr. Mayo was appointed Senior Vice President, Barnes Group Inc. and President, Barnes Industrial on March 17, 2014 and received stock options, Relative Measure PSAs and RSUs at that time. |
|
|
4 |
Stock options granted under the Stock and Incentive Award Plan are described in the Outstanding Equity Awards at Fiscal-Year End table. |
|
|
5 |
Each option has an exercise price equal to the fair market value of Common Stock at the time of grant, as determined by the last trading price per share of Common Stock during regular trading hours on the grant date of
the option. |
|
|
|
|
44 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
EXECUTIVE COMPENSATION
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
The following table summarizes equity awards granted to the Companys NEOs that remain outstanding as of December 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
|
Stock Awards |
|
Name |
|
Notes |
|
|
Grant
Date |
|
|
Number of Securities Underlying Unexercised Options
(#) Exercisable |
|
Number of Securities Underlying Options
(#) Unexercisable |
|
Option Exercise Price
($)1 |
|
|
Option Expiration Date2 |
|
|
Number of Shares or Units of Stock That Have Not Vested (#) |
|
|
Market Value of Shares or Units
of Stock That Have Not Vested ($)3 |
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That
Have Not Vested (#) |
|
|
Equity Incentive Plan Awards: Market
or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)3 |
|
P. Dempsey |
|
|
4 |
|
|
|
02/12/2014 |
|
|
|
|
30,800 |
|
|
$37.13000 |
|
|
|
02/12/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/12/2014 |
|
|
|
|
5,900 |
|
|
$37.13000 |
|
|
|
02/12/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
03/01/2013 |
|
|
8,434 |
|
16,866 |
|
|
$26.32000 |
|
|
|
03/01/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/12/2013 |
|
|
5,134 |
|
10,266 |
|
|
$24.24000 |
|
|
|
02/12/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/08/2012 |
|
|
8,667 |
|
4,333 |
|
|
$26.59000 |
|
|
|
02/08/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/09/2011 |
|
|
16,400 |
|
|
|
|
$20.69000 |
|
|
|
02/09/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/08/2010 |
|
|
24,600 |
|
|
|
|
$15.26500 |
|
|
|
02/08/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/10/2009 |
|
|
28,466 |
|
|
|
|
$11.45000 |
|
|
|
02/10/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/14/2007 |
|
|
25,000 |
|
|
|
|
$22.33500 |
|
|
|
02/14/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
02/14/2007 |
|
|
73,000 |
|
|
|
|
$22.33500 |
|
|
|
02/14/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11 |
|
|
|
02/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,100 |
|
|
|
$114,731 |
|
|
|
|
|
|
|
|
|
|
|
|
11 |
|
|
|
02/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,200 |
|
|
|
$599,562 |
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
02/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,000 |
|
|
|
$ 999,270 |
|
|
|
|
6 |
|
|
|
02/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,100 |
|
|
|
$ 188,751 |
|
|
|
|
7 |
|
|
|
03/01/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,066 |
|
|
|
$335,533 |
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
03/01/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,600 |
|
|
|
$ 836,426 |
|
|
|
|
8 |
|
|
|
02/12/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,466 |
|
|
|
$202,297 |
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
02/12/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,700 |
|
|
|
$ 507,037 |
|
|
|
|
9 |
|
|
|
02/08/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,366 |
|
|
|
$ 87,566 |
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
02/08/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,800 |
|
|
|
$ 436,718 |
|
|
|
|
10 |
|
|
|
02/09/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,964 |
|
|
|
$ 72,688 |
|
|
|
|
|
|
|
|
|
C. Stephens, Jr. |
|
|
4 |
|
|
|
02/12/2014 |
|
|
|
|
9,400 |
|
|
$37.13000 |
|
|
|
02/12/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/12/2014 |
|
|
|
|
3,800 |
|
|
$37.13000 |
|
|
|
02/12/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/12/2013 |
|
|
5,234 |
|
10,466 |
|
|
$24.24000 |
|
|
|
02/12/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/08/2012 |
|
|
9,067 |
|
4,533 |
|
|
$26.59000 |
|
|
|
02/08/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/09/2011 |
|
|
10,000 |
|
|
|
|
$20.69000 |
|
|
|
02/09/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11 |
|
|
|
02/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000 |
|
|
|
$ 74,020 |
|
|
|
|
|
|
|
|
|
|
|
|
11 |
|
|
|
02/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,900 |
|
|
|
$181,349 |
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
02/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,300 |
|
|
|
$ 122,133 |
|
|
|
|
6 |
|
|
|
02/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,200 |
|
|
|
$ 303,482 |
|
|
|
|
12 |
|
|
|
05/02/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,800 |
|
|
|
$177,648 |
|
|
|
|
|
|
|
|
|
|
|
|
8 |
|
|
|
02/12/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,599 |
|
|
|
$207,219 |
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
02/12/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,000 |
|
|
|
$ 518,140 |
|
|
|
|
9 |
|
|
|
02/08/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,466 |
|
|
|
$ 91,267 |
|
|
|
|
|
|
|
|
|
|
|
|
13 |
|
|
|
02/08/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,800 |
|
|
|
$695,788 |
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
02/08/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,300 |
|
|
|
$ 455,223 |
|
|
|
|
10 |
|
|
|
02/09/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,430 |
|
|
|
$ 89,934 |
|
|
|
|
|
|
|
|
|
S. Mayo |
|
|
4 |
|
|
|
03/17/2014 |
|
|
|
|
5,750 |
|
|
$38.96000 |
|
|
|
03/17/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14 |
|
|
|
03/17/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,350 |
|
|
|
$309,034 |
|
|
|
|
|
|
|
|
|
|
|
|
15 |
|
|
|
03/17/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,100 |
|
|
|
$114,731 |
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
03/17/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,150 |
|
|
|
$ 190,602 |
|
|
|
|
6 |
|
|
|
03/17/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,350 |
|
|
|
$ 309,034 |
|
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
45 |
EXECUTIVE COMPENSATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
|
Stock Awards |
|
Name |
|
Notes |
|
|
Grant
Date |
|
|
Number of Securities Underlying Unexercised Options
(#) Exercisable |
|
Number of Securities Underlying Options
(#) Unexercisable |
|
Option Exercise Price
($)1 |
|
|
Option Expiration Date2 |
|
|
Number of Shares or Units of Stock That Have Not Vested (#) |
|
|
Market Value of Shares or Units
of Stock That Have Not Vested ($)3 |
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That
Have Not Vested (#) |
|
|
Equity Incentive Plan Awards: Market
or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)3 |
|
R. Barnhart |
|
|
4 |
|
|
|
02/12/2014 |
|
|
|
|
5,900 |
|
|
$37.13000 |
|
|
|
02/12/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/12/2014 |
|
|
|
|
1,500 |
|
|
$37.13000 |
|
|
|
02/12/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11 |
|
|
|
02/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
800 |
|
|
|
$ 29,608 |
|
|
|
|
|
|
|
|
|
|
|
|
11 |
|
|
|
02/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,100 |
|
|
|
$114,731 |
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
02/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,300 |
|
|
|
$ 48,113 |
|
|
|
|
6 |
|
|
|
02/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,100 |
|
|
|
$ 188,751 |
|
|
|
|
16 |
|
|
|
08/01/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,100 |
|
|
|
$336,791 |
|
|
|
|
|
|
|
|
|
|
|
|
8 |
|
|
|
02/12/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,463 |
|
|
|
$ 54,146 |
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
02/12/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,195 |
|
|
|
$ 81,237 |
|
|
|
|
9 |
|
|
|
02/08/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
488 |
|
|
|
$ 18,061 |
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
02/08/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,465 |
|
|
|
$ 54,220 |
|
D. Edwards |
|
|
4 |
|
|
|
02/12/2014 |
|
|
|
|
4,300 |
|
|
$37.13000 |
|
|
|
02/12/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/12/2014 |
|
|
|
|
2,600 |
|
|
$37.13000 |
|
|
|
02/12/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/12/2013 |
|
|
2,467 |
|
4,933 |
|
|
$24.24000 |
|
|
|
02/12/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/08/2012 |
|
|
4,201 |
|
2,099 |
|
|
$26.59000 |
|
|
|
02/08/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/09/2011 |
|
|
13,500 |
|
|
|
|
$20.69000 |
|
|
|
02/09/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/08/2010 |
|
|
10,833 |
|
|
|
|
$15.26500 |
|
|
|
02/08/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/13/2008 |
|
|
6,150 |
|
|
|
|
$26.38005 |
|
|
|
02/13/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
02/14/2007 |
|
|
5,700 |
|
|
|
|
$22.33500 |
|
|
|
02/14/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11 |
|
|
|
02/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,300 |
|
|
|
$ 85,123 |
|
|
|
|
|
|
|
|
|
|
|
|
11 |
|
|
|
02/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,400 |
|
|
|
$ 51,814 |
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
02/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,300 |
|
|
|
$ 85,123 |
|
|
|
|
6 |
|
|
|
02/12/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,900 |
|
|
|
$ 144,339 |
|
|
|
|
12 |
|
|
|
05/02/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,650 |
|
|
|
$135,087 |
|
|
|
|
|
|
|
|
|
|
|
|
8 |
|
|
|
02/12/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,599 |
|
|
|
$ 96,189 |
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
02/12/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,600 |
|
|
|
$ 244,266 |
|
|
|
|
9 |
|
|
|
02/08/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,133 |
|
|
|
$ 41,932 |
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
02/08/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,600 |
|
|
|
$ 207,256 |
|
|
|
|
10 |
|
|
|
02/09/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,598 |
|
|
|
$ 59,142 |
|
|
|
|
|
|
|
|
|
1 |
Stock option grants awarded from 2007 to 2010 represents the mean between the highest and the lowest stock price of a share of Common Stock on the grant date of the option. Stock option grants awarded from 2011 to 2014
represents the last trading price during regular trading hours per share of Common Stock on the grant date. |
2 |
The options terminate 10 years after the grant date. |
3 |
On December 31, 2014, the last trading day of the fiscal year, the closing market value of the Common Stock was $37.01. |
4 |
The option vests at 33.34% on the eighteenth month and 33.33% on each of the thirtieth and forty-second month anniversaries of the grant date. |
5 |
The option vests at 33.334% on August 14, 2009 and 33.333% on August 14, 2010 and August 14, 2011. |
6 |
The Relative Measure PSA vests on the third anniversary of the grant date subject to the achievement of performance goals. |
7 |
The RSU award vests one-third on September 1, 2014, September 1, 2015 and September 1, 2016. |
8 |
The RSU award vests one-third on August 12, 2014, August 12, 2015 and August 12, 2016. |
9 |
The RSU award vests one-third on August 8, 2013, August 8, 2014 and August 8, 2015. |
10 |
The RSU award vests one-third on August 9, 2013, August 9, 2014 and August 9, 2015. |
11 |
The RSU award vests one-third on August 12, 2015, August 12, 2016 and August 12, 2017. |
|
|
|
46 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
EXECUTIVE COMPENSATION
12 |
The RSU award vests 50% on May 2, 2014 and 50% on May 2, 2015. |
13 |
The RSU award vests one-third on February 8, 2014, February 8, 2015 and February 8, 2016. |
14 |
The RSU award vests 50% on March 17, 2015 and 50% on March 17, 2016. |
15 |
The RSU award vests one-third on September 17, 2015, September 17, 2016 and September 17, 2017. |
16 |
The RSU award vests one-third on February 1, 2015, February 1, 2016 and February 1, 2017. |
OPTION EXERCISES AND STOCK VESTED
The following table provides information on the value realized by each
of the NEOs as a result of the exercise of stock options and stock awards that vested during fiscal year 2014:
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
Stock Awards |
Name |
|
Number of
Shares Acquired on Exercise
(#) |
|
Value Realized
on Exercise ($)1 |
|
Number of
Shares Acquired on Vesting
(#) |
|
Value Realized
on Vesting ($)2 |
P. Dempsey |
|
15,000 |
|
$279,286 |
|
35,554 |
|
$1,279,957 |
C. Stephens, Jr. |
|
10,100 |
|
166,448 |
|
35,354 |
|
1,296,653 |
S. Mayo |
|
|
|
|
|
|
|
|
R. Barnhart |
|
24,600 |
|
511,885 |
|
2,785 |
|
96,437 |
D. Edwards |
|
20,300 |
|
475,398 |
|
16,530 |
|
611,254 |
1 |
Amount reflects the difference between the exercise price of the option and the market value at the time of exercise. |
2 |
Amount reflects the market value of the stock on the day the stock vested. |
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
47 |
EXECUTIVE COMPENSATION
PENSION BENEFITS
The following table sets forth pension or other benefits providing for payment at,
following, or in connection with retirement granted or accrued to the Companys NEOs in 2014:
|
|
|
|
|
|
|
|
|
Name and Principal Position |
|
Plan Name |
|
Number of
Years of Credited
Service (12/31/2014) |
|
Present Value of
Accumulated Benefit
($) |
|
Payments During
Last Fiscal Year |
Patrick J. Dempsey |
|
SRIP |
|
14.167 |
|
$ 556,969 |
|
$ |
President and Chief Executive Officer |
|
RBEP |
|
14.167 |
|
N/A |
|
$ |
|
MSSORP |
|
14.167 |
|
2,816,051 |
|
$ |
|
|
|
|
|
|
|
|
|
Christopher J. Stephens, Jr. |
|
SRIP |
|
5.917 |
|
$ 230,419 |
|
$ |
Senior Vice President, Finance and
Chief Financial Officer |
|
RBEP |
|
5.917 |
|
N/A |
|
$ |
|
MSSORP |
|
5.917 |
|
N/A |
|
$ |
|
|
|
|
|
|
|
|
|
Scott A. Mayo |
|
SRIP |
|
N/A |
|
N/A |
|
$ |
Senior Vice President, Barnes Group Inc. and
President, Barnes Industrial |
|
RBEP |
|
N/A |
|
N/A |
|
$ |
|
MSSORP |
|
N/A |
|
N/A |
|
$ |
|
|
|
|
|
|
|
|
|
Dawn N. Edwards |
|
SRIP |
|
16.250 |
|
$ 516,204 |
|
$ |
Senior Vice President,
Human Resources |
|
RBEP |
|
16.250 |
|
N/A |
|
$ |
|
MSSORP |
|
16.250 |
|
N/A |
|
$ |
|
|
|
|
|
|
|
|
|
Richard R. Barnhart |
|
SRIP |
|
9.667 |
|
$ 468,294 |
|
$ |
Senior Vice President, Barnes Group Inc. and
President, Barnes Aerospace |
|
RBEP |
|
9.667 |
|
100,189 |
|
$ |
|
MSSORP |
|
9.667 |
|
N/A |
|
$ |
|
|
|
|
|
|
|
|
|
1 |
All assumptions are as detailed in the notes to the consolidated financial statements for the fiscal year ended December 31, 2014, including a discount rate of 4.25% with the exception of the following:
|
|
|
|
Retirement age for all plans is assumed to be the later of unreduced retirement age, as defined by each plan, or age as of December 31, 2014. |
|
|
|
No pre-retirement mortality, disability, or termination is assumed. |
2 |
Consistent with financial disclosure calculations, it is assumed that the form of payment is a life annuity for the SRIP, the RBEP, the SERP and the MSSORP.
|
3 |
The 2014 qualified plan compensation limit of $260,000 has been incorporated. |
4 |
The terms of (i) the RBEP plan document, as amended and restated effective January 1, 2013, and as further amended on December 12, 2014, and (ii) the terms of the MSSORP plan document, as amended and
restated effective January 1, 2009 have been reflected in the December 31, 2014 SEC disclosure tables. Subsequent amendments as of December 30, 2009 and December 14, 2014 to the MSSORP plan document are likewise reflected in the
December 31, 2014 SEC disclosure tables. |
5 |
Internal Revenue Code Section 415 limits are not reflected for these calculations. Note that the limits would only affect the distribution of amounts between the qualified and non-qualified plans.
|
|
|
|
48 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
EXECUTIVE COMPENSATION
DISCUSSION CONCERNING PENSION BENEFITS TABLE
We provide benefits to our NEOs under the following three pension plans:
|
|
Salaried Retirement Income Plan (SRIP); |
|
|
Retirement Benefit Equalization Plan (RBEP); and |
|
|
Modified Supplemental Senior Officer Retirement Plan (MSSORP).
|
The SRIP is a broad-based tax-qualified defined benefit pension plan. The RBEP and the MSSORP are non-tax-qualified
supplemental executive retirement plans that provide more generous benefits than are available under the SRIP to certain designated employees and senior level officers, including certain of our NEOs as described below.
SALARIED RETIREMENT INCOME PLAN
The SRIP is a defined benefit pension plan designed to provide income after retirement to eligible employees and their
beneficiaries. All NEOs other than Mr. Mayo participate in the SRIP Plan. As described below, given the closure of the SRIP to employees hired on or after January 1, 2013, Mr. Mayo will receive an annual retirement contribution under the RSP of
4% of eligible earnings subject to 5 year graded vesting.
Under the SRIP each eligible employee receives credit for benefit accrual and vesting purposes equal to
the number of full months elapsed from the date the employee becomes a participant until the date the participant is no longer employed by the Company. The formula for benefit purposes ranges from 0.5% to 2.5% of a participants highest five
consecutive years of covered compensation (which generally includes base salary). A participant is 100% vested after five years of service. Benefits are generally structured to be paid upon retirement.
The normal retirement date under the SRIP is the first day of the month following (1) a participants 65th birthday or (2) if hired after age 60, the month the participant achieves five years of service. Participants are eligible for early retirement if they have completed 10 years of vesting
service and have reached age 55. A participant whose employment terminates before he or she is eligible to retire on account of normal or early retirement but who has otherwise met the vesting requirements of the SRIP is entitled to a deferred
vested retirement benefit.
In 2006, the benefit formula for calculating benefits under the SRIP was changed for credited service earned on and after January 1,
2007. The following table shows the calculation of the basic retirement benefit for credited service earned as of December 31, 2006 under the prior formula, and for credited service earned on and after January 1, 2007:
|
|
|
|
|
|
|
Benefit Accrual Rate |
|
|
For Credited
Service Earned
as of 12/31/2006 |
|
For Credited
Service Earned on and after
1/1/2007 |
Final Average Earnings up to Covered Compensation times Credited Service up to
25 years times |
|
1.85% |
|
1.5% |
Plus |
|
|
|
|
Final Average Earnings above Covered Compensation times Credited Service up to
25 years times |
|
2.45%
|
|
2.0%
|
Plus |
|
|
|
|
Final Average Earnings times Credited Service over 25 years times |
|
0.5% |
|
0.5% |
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
49 |
EXECUTIVE COMPENSATION
Final Average Earnings is the average of a participants highest 5 consecutive years compensation
within the 10 years before retirement or termination of employment with the Company. Compensation includes all earnings paid to the participant as reported to the IRS on the participants Form W-2, but excludes overtime pay, bonuses,
directors fees, reimbursed expenses and any other additional form of earnings, including contributions made to or under any other form of benefit plan (e.g., a 401(k) or profit sharing plan). The 2014 qualified plan compensation limit is
$260,000.
Covered Compensation is the average annual earnings used to calculate a participants Social Security benefit. Covered Compensation is
based on the year in which a participant reaches his or her Social Security retirement age. It assumes that the participant will earn the maximum amount taxable by Social Security up to that time. Covered Compensation for a participant who reached
age 65 and retired in 2014 was $72,000.
Credited Service is the total time a participant spends working at the Company that counts toward his or her
pension benefit. Credited Service most often is the number of months the participant works for the Company.
The basic retirement benefit is reduced by the monthly amount of income payable to the participant attributable to
employer contributions under any other tax-qualified defined benefit pension plan under which the participant receives credit for service which also constitutes credited service under the SRIP.
The normal retirement benefit of a participant will be his or her basic retirement benefit as determined above multiplied by 100% (minus any percentage attributable to
the cost of a pre-retirement survivor annuity, if applicable) and multiplied by (a) the actuarial equivalent factor of the normal form of benefit for the participant or (b) the actuarial equivalent factor of any optional form of retirement
benefit provided for under the SRIP that the participant elects to receive instead of the normal form. Optional forms of benefit include Contingent Annuity of 25%, 50%, 75% or 100%, 120 Months Certain and Life Option, Level Income Option, and Level
Income and Contingent Annuity Option. As noted above, all NEOs participate in the SRIP other than Mr. Mayo, who joined the Company on March 17, 2014. The SRIP was closed to employees hired on or after January 1, 2013, with no impact
to the benefits of existing participants. Certain salaried employees hired on or after January 1, 2013, including Mr. Mayo, receive an annual retirement contribution of 4% of eligible earnings through the Barnes Group Inc. Retirement
Savings Plan.
RETIREMENT BENEFIT EQUALIZATION PLAN
The RBEP provides supplemental benefits for participants in the SRIP whose benefits are limited by statute or the Internal
Revenue Code. For example, the Internal Revenue Code Section 415 limit (i.e. the annual contribution limit to a defined contribution plan ($52,000 through December 31, 2014) and the annual benefits payable from defined benefit plans
($210,000 through December 31, 2014)) and the Internal Revenue Code Section 401(a)(17) limit (i.e., earnings taken into account for tax-qualified plan purposes ($260,000 through December 31, 2014)). All NEOs are eligible to
participate in the RBEP.
Generally, the RBEP is structured to pay the participants the difference between the benefits paid under the SRIP and what the participant would have received but for the statutory limitations
described in the SRIP. The RBEP takes into account base salary for purposes of determining the benefits accrued under the plan. All NEOs participate in the RBEP. The defined benefit RBEP was closed to new participants effective December 31,
2012, with no impact to the benefits of existing participants, and replaced with the defined contribution RBEP effective January 1, 2013.
|
|
|
50 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
EXECUTIVE COMPENSATION
MODIFIED SUPPLEMENTAL SENIOR OFFICER RETIREMENT PLAN
The MSSORP provides supplemental retirement benefits to selected employees of the Company including Mr. Dempsey. The
MSSORP was closed to new participants on December 31, 2008 and replaced by the 2009 Deferred Compensation Plan.
The MSSORP provides certain early or normal
retirement benefits to participants as follows. The normal retirement benefits under the MSSORP are equal to (a) minus the sum of (b), (c) and (d), where:
(a) |
equals 55% of the participants final average compensation multiplied by the ratio (not to exceed 1.0) of his or her credited service to 15; |
(b) |
equals the participants SRIP benefit; |
(c) |
equals the participants Social Security benefit; and |
(d) |
equals the participants prior employer benefit. |
The early retirement benefits under the MSSORP are equal to
(a) minus the sum of (b), (c) and (d), where:
(a) |
equals 55% of the participants final average compensation (which generally includes base salary and annual incentive compensation) multiplied by the ratio (not to exceed 1.0) of his or her credited service to the
greater of 15 years or the credited service the participant would have completed had credited service continued to age 62 multiplied by a percentage factor (less than 100%) based on the participants age at the time that benefits commence;
|
(b) |
equals the participants SRIP benefit as of such date; |
(c) |
equals the participants Social Security benefit; and
|
(d) |
equals the participants prior employer benefit multiplied by the same percentage factor based on the participants age used in the calculation of (a). |
The MSSORP is structured to cover any gaps of coverage under the SRIP, and RBEP up to 55% of a participants final average compensation. This is because when an
individual becomes eligible for the MSSORP, a portion of the benefits are based on amounts earned and vested under the SRIP, and RBEP, which all vest prior to the MSSORP benefits.
Final average compensation has the same meaning as Final Average Earnings under the SRIP except that final average compensation is not subject to
the IRS qualified plan compensation limits. In addition, final average compensation includes annual cash incentive awards. The Qualified Plan benefit is the annual pension benefit payable as a single life annuity upon the
participants actual retirement date, excluding any portion of such annual pension benefit attributable to any period after, or any compensation earned after, the participant has a separation from service within the meaning of
Internal Revenue Code Section 409A. Social Security benefit means the participants annual Social Security benefit. Prior employer benefit means any benefit paid or payable by any prior employer of the participant.
For participants who had attained age 55 as of January 1, 2009, distributions are made in the form of an annuity. For participants who had not attained age 55
as of January 1, 2009 (currently, all NEOs that participate in the plan), distributions generally are made in 5 installments over a 4-year period following retirement; provided, however, that if the participant terminates employment before
attaining age 55, the participant is instead entitled to benefits under the RBEP.
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
51 |
EXECUTIVE COMPENSATION
NONQUALIFIED DEFERRED COMPENSATION
The following table sets forth information with regard to defined
contribution or other plans that provide for the deferral of compensation on a basis that is not tax qualified by the Companys NEOs in 2014:
NONQUALIFIED
DEFERRED COMPENSATION TABLE FOR 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
Aggregate Beginning Balance in Last Fiscal Year |
|
Executive
Contributions in
Last Fiscal Year |
|
Registrant
Contributions in
Last Fiscal Year |
|
Aggregate
Earnings in Last Fiscal
Year |
|
Aggregate
Withdrawals /
Distributions |
|
Aggregate
Balance at Last Fiscal
Year-End |
Patrick J. Dempsey President and
Chief Executive Officer |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
Christopher J. Stephens, Jr.
Senior Vice President, Finance and Chief
Financial Officer |
|
557,432 |
|
|
|
116,648 |
|
16,047 |
|
|
|
690,127 |
Scott A. Mayo Senior Vice
President, Barnes Group Inc., and President, Barnes
Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
Richard R. Barnhart Senior Vice
President, Barnes Group Inc., and President, Barnes
Aerospace |
|
|
|
|
|
|
|
|
|
|
|
|
Dawn N. Edwards
Senior Vice President, Human Resources |
|
258,757 |
|
|
|
51,377 |
|
16,463 |
|
|
|
326,597 |
The Barnes Group 2009 Deferred Compensation Plan (DC Plan) was authorized by the Board in July 2009 effective
September 1, 2009. Officers of the Company who were elected or appointed on or after January 1, 2009 until April 1, 2012 when the DC Plan was closed to any new or rehired otherwise eligible executive, were eligible to participate in
the DC Plan at the Boards discretion. The DC Plan replaced the MSSORP which was closed to new participants as of December 31, 2008. Mr. Stephens and Ms. Edwards are the only NEOs that participate in the DC Plan.
There are no participant contributions to the DC Plan; rather, for each DC Plan participant, the Company credits an annual hypothetical contribution equal to 20% of the
compensation above the Internal Revenue Code Section 401(a)(17) limit (i.e., earnings taken into account for tax-qualified plan purposes, currently $260,000) or such other amount determined by the Compensation Committee. The hypothetical
contributions credited are adjusted according to the performance of investment options provided under the DC Plan. Each participant in the DC Plan determines from the investment options available how his or her fund will be invested. The DC Plan
provides most of the same investment options as the Barnes Group Inc.
Retirement Savings Plan. Subject to the Companys amendment and termination rights and other DC Plan and trust provisions, participants generally vest upon attaining the age of 55 and 10
years of service; provided that the Board may reduce the required years of service to five years for any given participant; and provided further that, for death and defined disabilities, vesting occurs if a participant is at least 55 with five years
of service. Distributions under the DC Plan generally are made in five installments over a four-year period. If, at separation from service or death, a participant has satisfied the age and service conditions for the payment of a benefit under the
DC Plan, a benefit under the RBEP will not be paid to the participant.
As of December 31, 2014 if Mr. Stephens was not a participant in the DC Plan, the
present value of his accumulated benefit under the RBEP would be $190,905. As of December 31, 2014 if Ms. Edwards was not a participant in the DC Plan, the present value of her accumulated benefit under the RBEP would be $93,654. The
amount that the Company contributes under the DC Plan is also included in the All Other Compensation column of the Summary Compensation Table for Mr. Stephens and Ms. Edwards.
|
|
|
52 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
EXECUTIVE COMPENSATION
POST TERMINATION AND CHANGE IN CONTROL BENEFITS
The Company has entered into certain agreements and maintains certain plans that will require the Company to provide
compensation to the NEOs in the event of a termination of employment or a change in control of the Company. The key provisions of those
arrangements are described below, and then the values of potential payments that would be due if termination of employment or a change in control occurred on December 31, 2014 are set forth
in the tables following the description.
SEVERANCE AGREEMENT
All of our NEOs are eligible for certain severance benefits in connection with a change in control or a separation from
service following a change in control under the terms of a severance agreement. Generally, our severance agreements are based on the same form agreement. The term of each severance agreement is one year with an automatic annual extension commencing
on each January 1, unless the Company or the NEO provides written notice not later than September 30 of the preceding year of a determination not to extend the severance agreement. However, if a change in control occurs during the term of
the severance agreement, the term will expire no earlier than 24 months after the month in which the change in control occurs. The Compensation Committee believes that the Companys severance agreements for its NEOs help assure that the NEOs
will act in the best interest of the stockholders in any proposed merger or acquisition transaction, even if they might face possible termination of employment as a result of such a transaction.
The severance agreements provide, among other things, that upon the occurrence of a change in control, NEOs are entitled to a cash payment equal to a prorated target
annual bonus for the year in which the change in control occurs which will be credited against any annual bonus or incentive award that each NEO is otherwise entitled to receive with respect to such year.
In addition, if, following a change in control and during the applicable term of the severance agreement, an NEOs employment is involuntarily terminated other than
for cause or if the NEO voluntarily terminates employment for good reason, then each NEO is entitled to certain severance payments and benefits
conditioned upon executing a release. These payments and benefits generally consist of the following:
|
|
An amount equal to two times the most recent base salary and two times the highest of (i) the annualized average bonus for up to three years prior (or such annualized year if applicable) to the (a) separation
from service; or (b) change in control; or (ii) the target bonus for the year in which the separation from service occurs; |
|
|
Cash payment equal to a prorated target bonus for the year in which the separation from service occurs (less any pro rata bonus previously paid for the same period); |
|
|
Twenty-four months of additional age credit, benefit accruals and vesting credit under the Companys non-qualified and qualified retirement plans, with the resulting benefits payable either at the times provided by
such plans or in an actuarially equivalent lump sum on March 1 of the year following the year in which the date of termination occurs; |
|
|
Twenty-four months of continued financial planning assistance at the Companys expense; |
|
|
Twenty-four months continued participation in any welfare plans of the Company (including medical, dental, death, disability, and the Companys SEELIP, if applicable) in which the NEO was participating at the time
of termination of employment or change in control; and |
|
|
An additional payment each month during the 24 month period to gross-up the NEO for all taxes due on the medical and dental benefits payable under the severance agreement.
|
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
53 |
EXECUTIVE COMPENSATION
For purposes of the severance agreements, good reason generally includes a termination by an NEO, subject to
an applicable cure period, for: (i) the assignment of any duties materially inconsistent with the NEOs status as an executive officer or a material adverse alteration in the nature or status of the NEOs responsibilities from such
responsibilities in effect prior to the change in control, (ii) a reduction in the annual base salary of more than 5% or $20,000, (iii) greater than a 50-mile change in the location of Company executive offices, and (iv) the failure
to follow procedures in the event of a termination for cause.
If, during the term of the severance agreement following a change in control, the Company
disputes that an NEOs employment has been involuntarily terminated other than for cause or that the NEO terminated employment for good reason, the Company may be obligated under the severance agreement to continue to pay the executive salary,
bonus, benefits and perquisites as described above for the balance of the term of the severance agreement, in addition to the payments and benefits described above.
If an NEO becomes entitled to health, welfare, pension and other benefits of the same type as referred to
above during the 24-month period following employment termination, the Company will stop providing these benefits and the NEO may be obligated to repay a portion of any benefits that were
previously paid as described above in a lump sum.
The severance agreement also provides that, if any payment or benefit would be subject to the excise tax imposed
under Section 4999 of the Internal Revenue Code, the severance payments and benefits to the executive will be reduced if and to the extent that reducing the payments and benefits would result in the executive retaining a larger amount, on an
after-tax basis, than if he or she received the entire amount of such payments and benefits and paid the applicable excise tax (i.e. the Company does not provide a tax gross-up for any excise taxes as a result of change in control benefits).
The severance (change in control) agreement supersedes any other agreements and plans that apply in the event that the executives employment with us is terminated
following a change in control without cause or by the executive for good reason. The superseded agreements include the Barnes Group Inc. Executive Separation Pay Plan described below.
BARNES GROUP INC. EXECUTIVE SEPARATION PAY PLAN
During 2014, each of our NEOs was covered by the Executive Separation Pay Plan. The Executive Separation Pay Plan provides
for severance payments and benefits to an eligible executive who experiences an involuntary separation from service without cause provided that, after December 31, 2008, such separation is not covered by a severance agreement. No payments or
benefits are made to an executive whose employment is terminated due to misconduct of any type, including, but not limited to, violation of Company rules or policies or any activity which results in conviction of a felony or if the employment
termination is a result of the sale of a business unit of the Company and the employee is offered employment by the purchaser within 30 days after the closing of the sale, in a comparable position and for substantially equivalent compensation and
benefits as before the sale.
Under the Executive Separation Pay Plan, a terminated eligible NEO is entitled to minimum severance of one months
base salary or the amount of accrued vacation pay, whichever is greater. In order to receive the higher severance benefit of 12 months salary continuation (or, 24 months salary and pro rata actual bonus in the case of Mr. Dempsey)
plus accrued vacation pay, the eligible NEO must execute a release of claims acceptable to us. The salary portion is to be paid on regular payroll dates but payments may be delayed until six months after separation from service if necessary to
comply with Internal Revenue Code Section 409A. The vacation pay portion is to be paid in a lump sum. The pro rata actual bonus to be paid to Mr. Dempsey would be paid in a lump sum. During the severance period, benefits will continue to
be provided pursuant to medical, dental, flexible benefit and premium payments and benefits under the SEELIP, ELIP or EGTLIP will be continued for NEOs.
|
|
|
54 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
EXECUTIVE COMPENSATION
RETIREMENT PLANS
The amount and form of pension benefits that would be paid upon a qualifying retirement under our SRIP, the RBEP and the
MSSORP are disclosed in the Pension Table on page 48 and the accompanying discussion. Any additional retirement benefits that
would be payable in the event of termination of employment or a change in control are shown in the Potential Payments Upon Termination or Change in Control tables below.
STOCK OPTIONS
The following is a discussion of the standard terms of stock options with respect to various types of termination of
employment and in the event of a change in control, although these terms do vary by agreement and by person.
If the holders employment terminates other than
by reason of death, disability or retirement or for cause, (i) the portion of the stock options that are exercisable as of the termination date will terminate; provided, however, if the employee is terminated by the Company without cause, the
stock options that were exercisable as of the termination date will remain exercisable for one year from the date of termination and (ii) the portion of the stock options that have not become exercisable will be forfeited. If the holders
employment terminates due to death or disability, the portion of the stock options that are not exercisable will immediately become exercisable and the stock
options will be exercisable for a year after the termination date. If the holders employment terminates by reason of retirement at the age of 62 or later with a minimum of five years of
service and at least one year after the grant date, the portion of the stock options that are not yet exercisable will immediately become exercisable and the stock options will be exercisable for five years after the termination date. If the
holders employment is terminated for cause, all outstanding stock options will terminate. If a change in control occurs and, in addition, within two years following the change of control there is a termination of employment by the Company
without cause, termination by the employee with good reason, or termination on account of death, disability or retirement, the portion of the stock options that are not exercisable will immediately become exercisable and the stock options will be
exercisable for two years after the termination date.
RESTRICTED STOCK UNIT AWARDS
The following is a discussion of the standard terms of RSUs with respect to various types of termination of employment and
in the event of a change in control, although these terms do vary by agreement and by person.
If the holders employment terminates, other than due to death or
disability or retirement, the unvested portion of the award terminates. If the holders employment is terminated due to death or disability, the unvested portion of the award vests in full. If the holders employment terminates by reason
of retirement (so long as there is no cause), and if at least
two years have passed since the grant date, then the portion of any RSUs that did not become non-forfeitable before the date of separation from service by retirement will become non-forfeitable
on that date. If the holders employment is terminated for cause, the unvested portion of the award terminates. If a change in control occurs and, in addition, within two years following a change of control there is a termination of employment
by the Company without cause, termination by the employee with good reason, or termination on account of death, disability or retirement, then any unvested RSUs will become vested on the date of the termination.
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
55 |
EXECUTIVE COMPENSATION
PERFORMANCE SHARE AWARDS
The following is a discussion of the standard terms of Relative Measure PSA awards with respect to the various types of
termination of employment and in the event of a change in control, although these terms may vary by agreement and by person.
If a holders employment
terminates due to death or disability before the completion of a three-year performance cycle, a prorated payout will be made at the target level as soon as administratively feasible. In the event of involuntary termination not for cause, a prorated
number of shares will be earned on the basis of plan performance and will be paid at the end of the three-year cycle only if at least one-year of employment has occurred from the grant date until the termination date. If the holders employment
terminates by reason of retirement (so long as there is no cause), and if at least two years have passed since the grant date, then a prorated number of shares earned on the basis of
plan performance will be paid at the end of the three-year cycle. If the holders employment terminates by reason of retirement (so long as there is no cause), and if less than two years
have passed since the grant date, then a prorated number of shares will be earned based on the lesser of plan performance or target level and will be paid at the end of the three-year cycle. If a holders employment terminates for any other
reason, then all Relative Measure PSAs not earned as of the termination date terminate.
If there is a change in control during the three year performance cycle, and
the holders employment is terminated by the Company without cause or by the employee for good reason within two years following the change of control, vesting of Relative Measure PSAs based on actual performance will occur for full years that
have been completed and based on target for any remaining period.
ANNUAL INCENTIVE PLANS
Participants in the PLBP for any year whose employment is involuntarily terminated by the Company other than for cause on
or after November 1 and before awards are paid for such year are eligible to receive prorated awards for such year based on actual performance, as are participants who retire, die or
become permanently disabled before awards are paid for such year. A participant whose employment terminates for any other reason before awards are paid for a year is not eligible to receive an
award. The MICP is structured on the same terms and conditions as set forth in the PLBP.
|
|
|
56 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
EXECUTIVE COMPENSATION
POTENTIAL PAYMENTS UPON TERMINATION OR
CHANGE IN
CONTROL1
The amount of compensation payable to each NEO if termination of employment or a
change in control occurs, assuming a December 31, 2014 triggering event, is listed in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P. Dempsey |
|
Voluntary Termination ($)7 |
|
For Cause Termination ($)8 |
|
Without Cause/Good Reason Termination ($)9 |
|
Death ($)10 |
|
Disability ($)10, 11 |
|
Change in Control ($)12 |
|
Change in Control With Termination ($)12 |
|
Retirement ($)13 |
Cash Compensation/ Severance |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,313,220 |
|
|
|
$ |
1,528,220 |
|
|
|
$ |
1,528,220 |
|
|
|
|
|
|
|
|
$ |
4,274,257 |
|
|
|
|
|
|
Additional Retirement Benefits2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
362,009 |
|
|
|
|
|
|
Continuation of Other Benefits3 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
153,165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
291,331 |
|
|
|
|
|
|
Stock Options4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
356,544 |
|
|
|
$ |
356,544 |
|
|
|
|
|
|
|
|
$ |
356,544 |
|
|
|
|
|
|
Restricted Stock Units5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,412,376 |
|
|
|
$ |
1,412,376 |
|
|
|
|
|
|
|
|
$ |
1,412,376 |
|
|
|
|
|
|
Performance Share Awards6 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,332,359 |
|
|
|
$ |
1,728,366 |
|
|
|
$ |
1,728,366 |
|
|
|
|
|
|
|
|
$ |
2,968,202 |
|
|
|
|
|
|
TOTAL |
|
|
$ |
|
|
|
|
$ |
|
|
|
|
$ |
3,798,744 |
|
|
|
$ |
5,035,506 |
|
|
|
$ |
5,035,506 |
|
|
|
$ |
|
|
|
|
$ |
9,664,719 |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
C. Stephens, Jr. |
|
Voluntary Termination ($)7 |
|
For Cause Termination ($)8 |
|
Without Cause/Good Reason Termination ($)9 |
|
Death
($)10 |
|
Disability ($)10, 11 |
|
Change in Control ($)12 |
|
Change in Control With Termination ($)12 |
|
Retirement
($)13 |
Cash Compensation/ Severance |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,070,995 |
|
|
|
$ |
609,995 |
|
|
|
$ |
609,995 |
|
|
|
|
|
|
|
|
$ |
1,659,544 |
|
|
|
|
|
|
Additional Retirement Benefits2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
106,070 |
|
|
|
|
|
|
Continuation of Other Benefits3 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
97,718 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
180,434 |
|
|
|
|
|
|
Stock Options4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
180,885 |
|
|
|
$ |
180,885 |
|
|
|
|
|
|
|
|
$ |
180,885 |
|
|
|
|
|
|
Restricted Stock Units5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,517,225 |
|
|
|
$ |
1,517,225 |
|
|
|
|
|
|
|
|
$ |
1,517,225 |
|
|
|
|
|
|
Performance Share Awards6 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
800,649 |
|
|
|
$ |
942,521 |
|
|
|
$ |
942,521 |
|
|
|
|
|
|
|
|
$ |
1,398,978 |
|
|
|
|
|
|
TOTAL |
|
|
$ |
|
|
|
|
$ |
|
|
|
|
$ |
1,969,362 |
|
|
|
$ |
3,250,626 |
|
|
|
$ |
3,250,626 |
|
|
|
$ |
|
|
|
|
$ |
5,043,136 |
|
|
|
$ |
|
|
S. Mayo |
|
Voluntary Termination ($)7 |
|
For Cause Termination ($)8 |
|
Without Cause/Good Reason Termination ($)9 |
|
Death ($)10 |
|
Disability ($)10, 11 |
|
Change in Control ($)12 |
|
Change in Control With Termination ($)12 |
|
Retirement ($)13 |
Cash Compensation/ Severance |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
730,952 |
|
|
|
$ |
305,952 |
|
|
|
$ |
305,952 |
|
|
|
|
|
|
|
|
$ |
1,009,056 |
|
|
|
|
|
|
Additional Retirement Benefits2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuation of Other Benefits3 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
28,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
41,361 |
|
|
|
|
|
|
Stock Options4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock Units5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
423,765 |
|
|
|
$ |
423,765 |
|
|
|
|
|
|
|
|
$ |
423,765 |
|
|
|
|
|
|
Performance Share Awards6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
166,545 |
|
|
|
$ |
166,545 |
|
|
|
|
|
|
|
|
$ |
499,635 |
|
|
|
|
|
|
TOTAL |
|
|
$ |
|
|
|
|
$ |
|
|
|
|
$ |
759,132 |
|
|
|
$ |
896,262 |
|
|
|
$ |
896,262 |
|
|
|
$ |
|
|
|
|
$ |
1,973,817 |
|
|
|
$ |
|
|
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
57 |
EXECUTIVE COMPENSATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Barnhart |
|
Voluntary Termination ($)7 |
|
For Cause Termination ($)8 |
|
Without Cause/Good Reason Termination ($)9 |
|
Death
($)10 |
|
Disability ($)10, 11 |
|
Change in Control ($)12 |
|
Change in Control With Termination ($)12 |
|
Retirement ($)13 |
Cash Compensation/ Severance |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
761,468 |
|
|
|
$ |
386,468 |
|
|
|
$ |
386,468 |
|
|
|
|
|
|
|
|
$ |
934,294 |
|
|
|
|
|
|
Additional Retirement Benefits2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
156,752 |
|
|
|
|
|
|
Continuation of Other Benefits3 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
31,545 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
48,090 |
|
|
|
|
|
|
Stock Options4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock Units5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
553,337 |
|
|
|
$ |
553,337 |
|
|
|
|
|
|
|
|
$ |
553,337 |
|
|
|
|
|
|
Performance Share Awards6 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
108,378 |
|
|
|
$ |
187,332 |
|
|
|
$ |
187,332 |
|
|
|
|
|
|
|
|
$ |
372,321 |
|
|
|
|
|
|
TOTAL |
|
|
$ |
|
|
|
|
$ |
|
|
|
|
$ |
901,391 |
|
|
|
$ |
1,127,137 |
|
|
|
$ |
1,127,137 |
|
|
|
$ |
|
|
|
|
$ |
2,064,793 |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
D. Edwards |
|
Voluntary Termination ($)7 |
|
For Cause Termination ($)8 |
|
Without Cause/Good Reason Termination ($)9 |
|
Death
($)10 |
|
Disability ($)10, 11 |
|
Change in Control
($)12 |
|
Change in Control With Termination ($)12 |
|
Retirement ($)13 |
Cash Compensation/ Severance |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
648,500 |
|
|
|
$ |
352,500 |
|
|
|
$ |
352,500 |
|
|
|
|
|
|
|
|
$ |
1,031,492 |
|
|
|
|
|
|
Additional Retirement Benefits2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
49,926 |
|
|
|
|
|
|
Continuation of Other Benefits3 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
57,643 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
100,287 |
|
|
|
|
|
|
Stock Options4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
84,866 |
|
|
|
$ |
84,866 |
|
|
|
|
|
|
|
|
$ |
84,866 |
|
|
|
|
|
|
Restricted Stock Units 5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
469,287 |
|
|
|
$ |
469,287 |
|
|
|
|
|
|
|
|
$ |
469,287 |
|
|
|
|
|
|
Performance Share Awards6 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
370,100 |
|
|
|
$ |
446,587 |
|
|
|
$ |
446,587 |
|
|
|
|
|
|
|
|
$ |
680,984 |
|
|
|
|
|
|
TOTAL |
|
|
$ |
|
|
|
|
$ |
|
|
|
|
$ |
1,076,243 |
|
|
|
$ |
1,353,240 |
|
|
|
$ |
1,353,240 |
|
|
|
$ |
|
|
|
|
$ |
2,416,842 |
|
|
|
$ |
|
|
1 |
The value of equity awards vesting upon a change in control, death or disability are equal to the grants intrinsic value as of December 31, 2014 based on the closing market price of $37.01. Equity awards and
non-equity incentive plan compensation that were fully vested by their terms as of December 31, 2014 are not included in the numbers shown above. For information on any outstanding fully-vested awards, see the Outstanding Equity Awards at
Fiscal Year End Table. |
2 |
The value of these benefits is based upon provisions of the change in control severance agreements with our NEOs whereby the executives are entitled to the value of additional retirement benefits that would have been
earned had they continued employment for two additional years after employment termination. |
3 |
The value of these benefits is based upon the Executive Separation Pay Plan and the change in control severance agreements with our NEOs whereby the executives are entitled to continued participation in the
Companys welfare and fringe benefit plans for 12 or 24 months upon covered terminations of employment, and continuation of premium payments and benefits under the SEELIP, ELIP, or EGTLIP as applicable. Although continued participation may
cease to the extent the NEO subsequently has coverage elsewhere, the numbers set forth in the table above reflect an estimate of coverage for the maximum applicable time period. |
4 |
Amounts reflect the difference between the exercise price of the option and the closing market price of $37.01 as of December 31, 2014. Options with a strike price greater than $37.01 are shown as $0. Equity awards
that were fully vested by their terms as of December 31, 2014 are not included in the numbers shown above. For information on any outstanding fully-vested awards, see the Outstanding Equity Awards at Fiscal Year End Table.
|
5 |
Amounts reflect the market value of the shares underlying the awards as of December 31, 2014 at the closing market price of $37.01 and do not include any value for that portion of the award with respect to which
the participants accrued a vested interest by or on December 31, 2014. For information on any outstanding fully-vested awards, see the Outstanding Equity Awards at Fiscal Year End Table. |
6 |
Amounts reflect the market value of the shares underlying the awards as of December 31, 2014 at the closing market price of $37.01 and assume target level performance and do not include any value for that portion
of the award with respect to which the participants accrued a vested interest by or on December 31, 2014. No value is included in the Change in Control column because performance is unknown at December 31, 2014. For Without Cause/Good
Reason Termination, performance shares granted over a year prior to the termination date are pro-rated at target. |
7 |
Relative to the Cash Compensation/Severance row of the table, no additional payment is due under the Annual Incentive Plans; participants must be employed on the date of payment to receive an award, so no award is
payable. |
|
|
|
58 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
EXECUTIVE COMPENSATION
8 |
Relative to the Cash Compensation/Severance row of the table, the Executive Separation Pay Plan stipulates no separation benefits are due if the executive is terminated for misconduct. Under the Annual Incentive Plans,
the officer generally must be employed on the date of payment to receive an award. A retirement-eligible officer also gets no bonus under the Annual Incentive Plans if terminated for Cause. |
9 |
The amount in the Cash Compensation/Severance row of the table equals one years salary and includes a pro-rated award under the Annual Incentive Plans for all executives. Under the Annual Incentive Plans, an
executive terminated other than for cause after October 31, 2014 is entitled to a pro-rated award. The amounts shown in the table assume performance at target levels for 2014 and future years. |
10 |
Relative to the Cash Compensation/Severance row of the table, no additional salary is due upon death or disability, but, under the Annual Incentive Plans, the participant would be entitled to a pro-rated award for a
death or disability on December 31, 2014. Participants beneficiaries would also be entitled to life insurance benefits as well as certain pension plan death benefits not shown in this table. Equity awards (other than performance shares)
vest at date of death. No incremental value is shown for death because the table assumes death occurred on the last day of the year; the awards would then have already been earned. |
11 |
Participants would be able to receive short-term disability and long-term disability payments available to all salaried employees which amounts are not shown in the table above. Participants would also accrue service
under some of the pension plans during a period of disability. Equity awards (other than performance shares) vest upon the occurrence of a qualifying disability event. No incremental value is shown for disability because the table assumes disability
occurred on the last day of the year; the awards would then have already been earned. |
12 |
Executives are entitled to a pro-rated target bonus upon a change in control. This is netted against the amount paid for termination following a change in control when such termination occurs in the same year. The table
reflects a December 31, 2014 event. Since a portion of the 2014 bonus is earned as of December 31, 2014, the Cash Compensation/Severance row includes the excess (if any) of the full-year target bonus over the amount actually awarded for
the year. Pro-rated bonus is based on target for all NEOs. Agreements separately provide for a bonus component of the severance benefit. For all NEOs, this is based on 3-year average bonus for post-change in control termination, rather than the
target bonus if this is more favorable. The severance benefits shown for Messrs. Stephens, Mayo, Barnhart and Ms. Edwards for a post-change in control termination have been reduced by $531,584, $478,444, $378,206 and $329,579, respectively, to
the largest after-tax payment. |
13 |
Equity awards only allow for retirement treatment if an executive retires at or after attaining age 62 with at least five years of service. No amounts are shown in this column as none of the NEOs was eligible to retire
on December 31, 2014. |
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
59 |
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table sets forth information regarding securities authorized for issuance under the Companys equity compensation plans as of
December 31, 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan category |
|
Number of
securities to be issued
upon exercise of
outstanding options, warrants
and rights |
|
Weighted-average
exercise price of outstanding
options, warrants and rights |
|
Number of securities
remaining available for future
issuance under equity compensation
plans (excluding
securities reflected in column
(a)) |
|
|
(a) |
|
(b) |
|
(c) |
|
|
|
|
Equity compensation plans approved by security holders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barnes Group Inc. Stock and Incentive Award Plan (2014 Plan) |
|
|
|
1,812,815 |
1 |
|
|
|
22.72 |
2 |
|
|
|
7,371,279 |
3 |
|
|
|
|
Employee Stock Purchase Plan (ESPP) |
|
|
|
|
|
|
|
|
|
|
|
|
|
308,455 |
|
|
|
|
|
Non-Employee Director Deferred Stock Plan, As Further Amended |
|
|
|
55,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
1,868,015 |
|
|
|
|
|
|
|
|
|
7,679,734 |
|
1 |
Included in this amount are 374,005 shares reserved for RSU awards, 340,596 shares reserved for Relative Measure PSAs assuming target performance, and 84,990 shares reserved for Relative Measure PSAs assuming above
target performance. |
2 |
Weighted-average exercise price excludes 714,601 shares for restricted stock awards with a zero exercise price. |
3 |
The 2014 Plan allows for stock options and stock appreciation rights to be issued at a ratio of 1:1 and other types of incentive awards at a ratio of 2.84:1. |
|
|
|
60 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
STOCK OWNERSHIP
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of February 13, 2015, the individuals and institutions set forth below are the only persons known by us to be beneficial owners of more than 5% of the
outstanding shares of Common Stock:
|
|
|
|
|
|
|
|
|
|
|
Name and Address of Beneficial Owner |
|
Amount and Nature
of Beneficial Ownership |
|
Percent of
Common Stock |
Bank of America Corporation and Affiliates1
100 N. Tryon Street Bank of America Corporate Center
Charlotte, NC 28255 |
|
|
|
5,505,268 |
|
|
|
|
10.1% |
|
|
|
|
BlackRock, Inc.2
55 East 52nd Street
New York, NY 10022 |
|
|
|
4,768,636 |
|
|
|
|
8.8% |
|
|
|
|
Vanguard Group Inc.3
100 Vanguard Boulevard Malvern, PA 19355 |
|
|
|
3,178,409 |
|
|
|
|
5.8% |
|
|
|
|
Mr. Thomas O. Barnes4
123 Main Street Bristol, CT 06010 |
|
|
|
3,145,384 |
|
|
|
|
5.8% |
|
1 |
This information is based on a Schedule 13G/A filed by Bank of America Corporation (BoA) on February 13, 2015 with the SEC. As of December 31, 2014, BoA had shared voting power with respect to 5,420,633 shares
and shared investment power with respect to 5,503,228 shares. |
2 |
This information is based on a Schedule 13G/A filed by BlackRock, Inc. on January 22, 2015 with the SEC. As of December 31, 2014, BlackRock, Inc., together with affiliates identified in the Schedule 13G/A, had
sole voting power with respect to 4,637,391 shares and sole investment power with respect to an aggregate of 4,768,636 shares. |
3 |
This information is based on a Schedule 13G/A filed by Vanguard Group Inc. on February 10, 2015 with the SEC. As of December 31, 2014, Vanguard Group Inc., together with affiliates identified in the Schedule
13G, had sole voting power with respect to 72,706 shares, sole investment power with respect to 3,109,003 shares and shared investment power with respect to 69,406 shares. |
4 |
As of February 1, 2015, based on Company records, Mr. Barnes had sole voting and sole investment power with respect to 614,347 shares and sole voting and shared investment power with respect to 2,112,604
shares. |
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
61 |
STOCK OWNERSHIP
SECURITY OWNERSHIP OF DIRECTORS AND
EXECUTIVE OFFICERS
As of February 1, 2015, each of our directors and NEOs, and all directors and executive officers as a group beneficially owned the number of shares of Common Stock
shown below. The number of shares reported as beneficially owned has been determined in accordance with Rule 13d-3 under the Exchange Act.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Person or Group |
|
|
|
Amount and Nature
of Beneficial Ownership1 |
|
|
|
Percent of
Common Stock |
Thomas J. Albani |
|
|
|
|
|
27,031 |
|
|
|
|
|
|
* |
|
John W. Alden |
|
|
|
|
|
50,958 |
|
|
|
|
|
|
* |
|
Thomas O. Barnes |
|
|
|
|
|
3,145,384 |
|
|
|
|
|
|
5.8 |
% |
Richard R. Barnhart |
|
|
|
|
|
22,494 |
|
|
|
|
|
|
* |
|
Gary G. Benanav |
|
|
|
|
|
75,611 |
|
|
|
|
|
|
* |
|
William S. Bristow, Jr. |
|
|
|
|
|
437,344 |
|
|
|
|
|
|
* |
|
Patrick J. Dempsey |
|
|
|
|
|
313,687 |
|
|
|
|
|
|
* |
|
Dawn N. Edwards |
|
|
|
|
|
85,970 |
|
|
|
|
|
|
* |
|
Francis J. Kramer |
|
|
|
|
|
3,553 |
|
|
|
|
|
|
* |
|
Mylle H. Mangum |
|
|
|
|
|
21,258 |
|
|
|
|
|
|
* |
|
Scott A. Mayo |
|
|
|
|
|
0 |
|
|
|
|
|
|
* |
|
Hassell H. McClellan |
|
|
|
|
|
13,894 |
|
|
|
|
|
|
* |
|
William J. Morgan |
|
|
|
|
|
31,287 |
|
|
|
|
|
|
* |
|
JoAnna L. Sohovich |
|
|
|
|
|
0 |
|
|
|
|
|
|
* |
|
Christopher J. Stephens, Jr. |
|
|
|
|
|
77,923 |
|
|
|
|
|
|
* |
|
Current directors & executive officers as a group (17 persons) |
|
|
|
|
|
4,361,983 |
|
|
|
|
|
|
8 |
% |
* |
Less than 1% of Common Stock beneficially owned. |
1 |
The named person or group has sole voting and investment power with respect to the shares listed in this column, except as set forth in this note. |
As discussed above, Messrs. Albani and Alden both retired as a director on May 9, 2014. Mr. Barnes has sole
voting and sole investment power with respect to 614,347 shares and sole voting and shared investment power with respect to 2,112,604 shares. Of the shares of Common Stock owned by Mr. Barnes, 100,000 shares are pledged. Mr. Bristow has
shared voting and shared investment power with respect to 30,418 shares which are held in an irrevocable trust. Of the shares of Common Stock owned by Mr. Bristow, 363,849 shares are held in a margin account and may be pledged from time to time
in this account.
The shares listed for Messrs. Albani, Alden, Barnes, Barnhart, Benanav, Bristow, Dempsey, Kramer, Mayo, McClellan, Morgan and Stephens,
Mses. Edwards, Mangum and Sohovich, and all directors and executive officers as a group include 0; 0; 0; 0; 0; 0;189,701; 0; 0; 0; 0; 24,301; 42,851; 0; 0; and 265,787 shares, respectively, which they have the right to acquire within 60 days
after February 1, 2015. The shares listed for Messrs. Barnes, Barnhart, Dempsey and Stephens, Ms. Edwards, and all directors and executive officers as
a group include 35,138; 2,442; 4,129; 1,556; 13,320 and 56,589 shares, respectively, over which they have shared investment power. These shares are held under the Companys Retirement
Savings Plan. The shares listed for Messrs. Barnes, Benanav and Bristow and Ms. Mangum include 12,000 shares that each of them has the right to receive under the Non-Employee Director Deferred Stock Plan described above under the heading
Director Compensation in 2014.
The shares listed for Messrs. Barnhart, Dempsey, Mayo and Stephens, Ms. Edwards, and all directors and executive
officers as a group do not include 20,512; 106,562; 20,775; 57,095; 25,480 and 246,761 shares of Common Stock, respectively, that the holders may have the right to receive on a future date (beyond 60 days from February 1, 2015) pursuant to RSU
and performance share awards. The shares listed also do not include 2,365 and 1,291 shares of Common Stock that Mr. Kramer and Ms. Sohovich may have the right to receive on a future date (beyond February 1, 2015) pursuant to an RSU
award.
|
|
|
62 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
STOCK OWNERSHIP
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that our directors, executive officers and beneficial
owners of 10% or more of our Common Stock file reports with the SEC concerning their ownership, and changes in their ownership, of our
Common Stock. Based on our review of reports filed with the SEC and written representations from our directors and executive officers, we believe that these filing requirements were met during
2014.
RELATED PERSON TRANSACTIONS
POLICIES AND PROCEDURES FOR RELATED PERSON TRANSACTIONS
We have a written policy regarding related person transactions. The policy covers all related person transactions or
series of similar transactions. All related person transactions are to be in the best interests of the Company and its stockholders and, unless different terms are specifically approved or ratified by the Corporate Governance Committee, must be on
terms that are no less favorable to us than would be obtained in a similar transaction with an unaffiliated third party under the same or similar circumstances. The Corporate Governance Committee may consider the following:
|
|
|
the extent of the related persons interest in the transaction; |
|
|
|
whether the transaction would create an actual or apparent conflict of interest; |
|
|
|
the availability of other sources or comparable products or services, if applicable; |
|
|
|
whether the item is generally available to substantially all employees, if applicable; |
|
|
|
the benefit to the Company; and |
|
|
|
the aggregate value of the transaction.
|
Our General Counsel is responsible for reviewing all related person transactions and taking all reasonable steps to ensure
that all material related person transactions (those required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC) are presented to the Corporate Governance Committee for pre-approval or ratification in its
discretion. Each director and executive officer is responsible for promptly notifying our General Counsel of any related person transaction in which such director or executive officer may be directly or indirectly involved as soon he or she becomes
aware of a possible transaction.
For related person transactions that are not material, our General Counsel is to determine whether the transaction is in compliance
with the policy. If a non-material related person transaction involves the General Counsel, the Chief Financial Officer assumes the responsibilities of the General Counsel with respect to the policy.
|
|
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
|
63 |
RELATED PERSON TRANSACTIONS
RELATED PERSON TRANSACTIONS FOR 2014
In 1999, the Company entered into collateral assignment split dollar life insurance agreements (Agreements), which
replaced similar agreements that had been entered into in 1985, with our current Chairman of the Board and his sister. The insured under the policies is the father of our current Chairman of the Board. The current beneficiaries under the policies
are our current Chairman and his sister. The Agreements were originally entered into when our current Chairmans father was the Companys chief executive officer and chairman of the board, and such agreements were customary at the time.
Both the Company and the insured chief executive officer
expected the agreements to continue into the insured chief executive officers retirement. Since 1985, the Company has paid an annual premium of $49,500 for each policy as required under the
Agreements. Upon termination of the Agreements or death of the insured or prior to policy maturation, the Company is entitled to the greater of the cumulative premiums paid or the cash value of the policies. As of December 31, 2014, the death
benefit of each policy was $3,168,496, the cumulative premiums contributed by the Company for each policy was $1,616,344, and the cash value of each policy was $1,834,249.
AUDIT MATTERS
AUDIT COMMITTEE REPORT
The Audit Committee has reviewed and discussed with management and the Companys independent registered public
accounting firm the Companys audited financial statements included in the Companys Annual Report on Form 10-K for the year ended December 31, 2014. The Audit Committee has discussed with the Companys independent
registered public accounting firm the matters required to be discussed by Public Company Accounting Oversight Board (PCAOB) Auditing Standard (AS) No. 16, Communications with Audit Committees. The Audit Committee has received from the
independent registered public accounting firm written disclosures and the letter required by the PCAOBs Rule 3526, Communication with Audit Committees Concerning Independence, and has discussed with the independent registered public accounting
firm its independence.
Based on the review and discussions described above, the Audit Committee recommended to the Board that the year-end audited financial
statements be included in the Companys Annual Report on Form 10-K for the year ended December 31, 2014 for filing with the SEC.
As specified in the Audit Committee Charter, it is not the duty of the Audit Committee to determine that the
Companys financial statements are complete and accurate and in accordance with generally accepted accounting principles or to plan or conduct an audit in accordance with the standards of the PCAOB. That is the responsibility of management and
the Companys independent registered public accounting firm, respectively. In giving our recommendation to the Board, we have relied on (i) managements representation that such financial statements have been prepared with integrity
and objectivity and in conformity with generally accepted accounting principles, and (ii) the report of the Companys independent registered public accounting firm with respect to such financial statements.
|
THE AUDIT COMMITTEE |
|
William J. Morgan, Chair |
William S. Bristow, Jr. |
Hassell H. McClellan |
JoAnna L. Sohovich |
|
|
|
64 |
|
BARNES GROUP INC. 2015 PROXY STATEMENT |
AUDIT MATTERS
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Fees paid to PricewaterhouseCoopers LLP for 2014 and 2013 are set forth below:
|
|
|
|
|
|
|
|
|
Type of Fees |
|
2014 |
|
|
2013 |
|
Audit Fees1 |
|
|
$2,156,285 |
|
|
|
$3,411,000 |
|
Audit-Related Fees2 |
|
|
21,516 |
|
|
|
600,725 |
|
Tax Fees3 |
|
|
1,104,599 |
|
|
|
1,385,150 |
|
All Other Fees4 |
|
|
104,168 |
|
|
|
1,818 |
|
Total Fees |
|
|
$3,386,568 |
|
|
|
$5,398,693 |
|
1 |
Fees for professional services provided in connection with the integrated audit of the Companys financial statements and internal controls over financial reporting for the respective years, and review of financial
statements included in Forms 10-Q, and includes statutory audits, attest services, consents and assistance with and review of documents filed with the SEC. Fees included in these balances for 2013 related to the acquisition of the Männer
business, which was integrated into the Companys Industrial segment in 2013, were $170,000. Also included in 2013 were fees related to the divestiture of the BDNA business of $949,704. |
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Fees primarily for transactional and due diligence reviews and benefit plan audits. Due diligence fees included in these balances for 2013 related to the acquisition of the Männer business in 2013 were $398,000.
Due diligence fees included in these balances for 2013 related to the divestiture of the BDNA business were $137,500. |
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Fees for tax compliance, tax consulting and expatriate tax services. Tax consulting fees and compliance fees included in these balances for 2013 related to the acquisition of the Männer business and the divestiture
of the BDNA business in 2013 were $446,475 and $144,934, respectively. |
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Other professional fees of $102,350 related to a market research study and license fees for PricewaterhouseCoopers LLPs publication Comperio. |
PRE-APPROVAL POLICY AND PROCEDURES
The Audit Committee has adopted policies and procedures for the pre-approval of audit and non-audit services for the
purpose of maintaining the independence of independent registered public accounting firms that we engage. The policy applies to all external auditors, other than external auditors that have not prepared or issued, and are not reasonably expected in
the foreseeable future to prepare or issue, any audit report or perform other audit, review or attestation services for the Company or any of its subsidiaries. The Audit Committee does not delegate its responsibilities to pre-approve services
performed by an external auditor to management.
All services by external auditors covered by the policy must be pre-approved in accordance with the following
procedures:
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Annually, management shall present to the Audit Committee its best estimate of the particular services for audit, audit-related, tax and other non-audit services, and the estimated fees therefor, to be performed by an
external auditor during the audit engagement period for the then-current fiscal year. The external auditor shall provide such back-up documentation for each such service in
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accordance with the standards of the Public Company Accounting Oversight Board (PCAOB) and as the Audit Committee deems necessary or desirable to assess the impact of such service on
the external auditors independence. Prior to the engagement of an external auditor for such services and except as provided by the following described procedure, the Audit Committee shall, by resolution, pre-approve each such service to a
maximum amount of estimated fees therefor. |
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For any audit, audit-related, tax or other non-audit service to be obtained by the Company from an external auditor and not pre-approved in accordance with the above described procedure, the Audit Committee Chairperson
is authorized to approve prior to the engagement of the external auditor for such service, any such service and expenditures therefor to a maximum of $100,000; provided, that said Chairperson has been determined to be an independent director by the
Board. The Chief Financial Officer shall obtain written confirmation of any such pre-approval by the delegatee and each such pre-approval by the Chairperson shall be reported to the Audit Committee at its next meeting.
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BARNES GROUP INC. 2015 PROXY STATEMENT |
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AUDIT MATTERS
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All audit, audit related, tax or other non-audit services to be obtained from an external auditor that are not pre-approved by the Audit Committee pursuant to the procedures described above shall be pre-approved by
resolution of the Audit Committee prior to the engagement of the external auditor for such services. Further, any engagement for tax and other non-audit services that qualify for the SEC regulations de minimis exception (i.e., they
were not recognized as being non-audit services at the time of the engagement and in the aggregate do not exceed the amount specified in SEC rules) to the pre-approval requirement of the procedures described above, shall be promptly brought to the
attention of the Audit Committee and approved by the Audit Committee or its Chairperson prior to the completion of the annual audit of the Companys consolidated financial statements.
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The Chief Financial Officer will provide a quarterly report of external auditor services, by category, to the Audit Committee. |
The policy provides that it shall be reviewed by the Audit Committee periodically and updated when required and to assure its continued suitability to the needs of the
Company. The policy also sets forth services our independent registered public accounting firm is explicitly prohibited from providing under SEC regulations and the Sarbanes-Oxley Act. The policy provides that prior to the engagement of any external
auditor covered by the policy, the external auditor will confirm that the services it proposes to provide are not prohibited by such law or regulations.
ITEM 3 - RATIFY PRICEWATERHOUSECOOPERS LLP AS THE COMPANYS INDEPENDENT AUDITOR FOR 2015
The Audit Committee of the Board has selected PricewaterhouseCoopers LLP as the Companys independent registered
public accounting firm for the fiscal year ended December 31, 2015. Although not required by the Companys Charter or Bylaws, the Company has determined to ask stockholders to ratify
this selection as a matter of good corporate practice. 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.
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The Board recommends a vote FOR this proposal.
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BARNES GROUP INC. 2015 PROXY STATEMENT |
VOTING INFORMATION
WHO CAN VOTE
Only stockholders of record at the close of business on March 10, 2015 (the Record Date) will be entitled to vote at
the 2015 Annual Meeting. As of March 10, 2015,
the Company had 54,779,903 outstanding shares of common stock, par value $.01 per share (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 2015 Annual Meeting. If you choose to vote by proxy, you can do so in one of four ways:
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 2015 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 2015 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 2015 Annual Meeting must be present in
person or represented by proxy at the 2015 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.
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BARNES GROUP INC. 2015 PROXY STATEMENT |
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VOTING INFORMATION
VOTING STANDARDS AND BOARD RECOMMENDATIONS
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Voting Item |
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Voting Standard |
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Board Recommendation |
1 Election of directors |
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Plurality of votes cast. Proxies may not be voted for more than the number of nominees named by the Board |
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2 Advisory vote to approve the Companys executive compensation |
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Affirmative vote of a majority of shares of Common Stock represented in person or by proxy and entitled to vote on the matter |
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3 Auditor ratification |
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Affirmative vote of a majority of shares of Common Stock represented in person or by proxy and entitled to vote on the matter |
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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 stockholders account on certain proposals. Under applicable 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. Of the matters to be voted on as described in this
proxy statement, only the ratification of the selection of our independent registered public accounting firm is considered routine and therefore eligible to be voted on by your bank or brokerage firm without instructions from you.
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 (approval of executive compensation) and Item 3 (auditor ratification),
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.
PARTICIPANTS IN THE BARNES
GROUP INC. RETIREMENT SAVINGS PLAN
You must provide the trustee of the Barnes Group Inc. 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 2015 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 May 5, 2015.
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BARNES GROUP INC. 2015 PROXY STATEMENT |
PROXY SOLICITATION AND DOCUMENT REQUEST INFORMATION
SOLICITATION OF PROXIES
Proxies will be solicited on behalf of the Board by mail, telephone, internet or other electronic means, and may also be
made by the Companys officers and employees personally without additional compensation. The Company bears all solicitation costs. The Company may also reimburse brokers, dealers, banks, voting trustees or their nominees for
their reasonable expenses in forwarding proxy materials to beneficial owners. The Company has retained Morrow & Co., LLC to aid in the solicitation of proxies for a fee of approximately
$7,500 plus the cost of telephone solicitation, if applicable, and out-of-pocket expenses.
E-PROXY PROCESS
According to the rules of the Securities and Exchange Commission (the SEC), instead of mailing a printed copy of our proxy
materials to each stockholder of record or beneficial owner, we are furnishing our proxy materials (proxy statement for the 2015 Annual Meeting, the proxy card and the 2014 Annual Report to Stockholders) by providing access to these materials on the
internet.
A Notice of Meeting and Internet Availability of Proxy Materials will be mailed to stockholders on or about March 26, 2015. We are providing this
notice in lieu of
mailing the printed proxy materials and instructing stockholders as to how they may: (1) access and review the 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 at no
charge by following the instructions in the notice. 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.
STOCKHOLDERS REQUESTING
COPIES OF 2014 ANNUAL REPORT
Stockholders may request and we will promptly mail without charge a copy of the 2014 Annual Report by writing to: Manager,
Stockholder Relations &
Corporate Governance Services, Barnes Group Inc., 123 Main Street, Bristol, Connecticut 06010.
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BARNES GROUP INC. 2015 PROXY STATEMENT |
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PROXY SOLICITATION AND DOCUMENT REQUEST INFORMATION
HOUSEHOLDING OF ANNUAL MEETING MATERIALS
Some banks, brokers, broker-dealers and other similar organizations acting as nominee record holders may be participating
in the practice of householding proxy statements and annual reports. This means that only one copy of this proxy statement and the 2014 Annual Report may have been sent to multiple stockholders in your household. If you would prefer to
receive separate copies of a proxy statement or annual report for other stockholders in your household, either now or in the future, please contact your bank, broker, broker-dealer or other similar organization serving as your nominee.
Upon written or oral request to Manager, Stockholder Relations & Corporate Governance Services, Barnes
Group Inc., 123 Main Street, Bristol, Connecticut 06010, or via telephone to the Investor Relations department at (800) 877-8803, we will promptly provide separate copies of the 2014 Annual
Report and/or this proxy statement. Stockholders sharing an address who are receiving multiple copies of this proxy statement and/or the 2014 Annual Report and who wish to receive a single copy of these materials in the future will need to contact
their bank, broker, broker-dealer or other similar organization serving as their nominee to request that only a single copy of each document be mailed to all stockholders at the shared address in the future.
OTHER MATTERS
The Board does not know of any matters to be presented for consideration at the meeting other than the matters described
in Items 1, 2 and 3 of the Notice of 2015 Annual Meeting. However, if other matters are presented, it is the intention of the persons named in
the accompanying proxy to vote on such matters in accordance with their judgment. All shares represented by the accompanying proxy, if the proxy is given before the meeting, will be voted in the
manner specified therein.
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BARNES GROUP INC. 2015 PROXY STATEMENT |
STOCKHOLDER PROPOSALS FOR
2016 ANNUAL MEETING
A proposal for action to be presented by any stockholder at the 2016 Annual Meeting of Stockholders will be acted upon
only:
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If the proposal is to be included in the proxy statement and form of proxy, the proposal is received at the Companys Office of the Secretary at the address below on or before November 27, 2015; or
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If the proposal is not to be included in the proxy statement, or to nominate candidates for election as directors, it must be in accordance with our Bylaws, which provide that they may be made only by a stockholder of
record as of the date such notice is given and as of the date for determination of stockholders entitled to vote at such meeting, who shall have given notice of the proposed business or nomination which is received by us between January 9, 2016
and February 8, 2016. The notice must contain,
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among other things, the name and address of the stockholder, a brief description of the business desired to be brought before the Annual Meeting, the reasons for conducting the business at the
Annual Meeting, and the stockholders ownership of the Companys capital stock. The requirements for the notice are set forth in the Bylaws, which are available on the Companys website, www.BGInc.com. Stockholders may also
obtain a copy by writing to the Company at: |
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Manager, Stockholder Relations & Corporate Governance Services |
Barnes Group Inc. |
123 Main Street |
Bristol, Connecticut 06010
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March 26, 2015
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BARNES GROUP INC. 2015 PROXY STATEMENT |
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BGI INVESTOR
RELATIONS |
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123 MAIN STREET
BRISTOL, CT 06010 |
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VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day prior to the meeting
date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. |
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ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials,
you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when
prompted, indicate that you agree to receive or access proxy materials electronically in future years. |
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VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M.
Eastern Time the day prior to the meeting date. Have your proxy card in hand when you call and then follow the instructions. |
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VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have
provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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M40972-P18306-Z56770 |
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KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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BARNES GROUP INC. |
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For
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Withhold All |
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For All Except |
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To withhold authority to vote for any individual nominee(s), mark For All Except and write the number(s) of the nominee(s) on the line
below. |
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The Board of Directors
recommends you vote FOR all of the following: |
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Vote on Directors |
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1. |
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Election of directors: |
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Nominees |
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01) Thomas O. Barnes |
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05) Mylle H. Mangum |
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02) Gary G. Benanav |
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06) Hassell H. McClellan |
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03) William S. Bristow, Jr. |
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07) JoAnna L. Sohovich |
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04) Patrick J. Dempsey |
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Vote on Proposals |
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For |
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Abstain |
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The Board of Directors recommends you
vote FOR proposals 2 and 3: |
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Advisory (non-binding) resolution to approve the
Companys executive compensation. |
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3. |
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Ratify the selection of PricewaterhouseCoopers LLP as the Companys independent registered public accounting firm for 2015. |
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NOTE: To conduct such other
business that may properly come before the meeting or any adjournment thereof. |
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For address changes and/or comments,
please check this box and write them on the back where indicated. |
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Please indicate if you plan
to attend this meeting. |
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Yes |
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Please sign exactly as your name(s)
appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate
or partnership name, by authorized officer. |
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Signature [PLEASE SIGN WITHIN BOX]
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Signature (Joint Owners) |
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and 2014 Annual Report are available at www.proxyvote.com.
M40973-P18306-Z56770
BARNES GROUP INC.
Annual Meeting of Stockholders
May 8, 2015 11:00 AM
This proxy is solicited by the Board of Directors
The stockholders hereby appoint(s) Thomas O. Barnes and Patrick J. Dempsey, or either of them, as proxies, each with the
power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of BARNES GROUP INC. that the stockholders are entitled to vote at the Annual
Meeting of Stockholders to be held at 11:00 AM, Eastern Daylight Time (EDT) on May 8, 2015, at the Hartford Marriott Downtown Hotel in Hartford, CT 06103, and any adjournment or postponement thereof. The shares represented by this proxy will be
voted as directed by the undersigned stockholder(s). If no direction is given when this proxy is returned, such shares will be voted FOR all of the director nominees listed in proposal 1, and FOR proposals 2 and 3. In their
discretion, the proxies are authorized to vote upon any other matter that may properly come before the meeting. This card also provides confidential voting instructions to the Trustee for shares held in the Barnes Group Inc. Retirement Savings Plan.
If you are a participant and have shares of Barnes Group Inc. common stock allocated to the account under this plan, please read the following as to the voting of such shares: if you do not provide voting instructions to the Trustee by 11:59 PM EDT
on May 5, 2015, your shares will be voted in the same manner and proportion as shares for which instructions are timely received from other plan participants.
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Address Changes/Comments: |
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(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side
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