Exhibit 10.21

Dated as of May 30, 2008

Mr. William C. Denninger

231 Roxbury Road

Stamford, CT 06902

Dear Bill:

This letter sets forth the arrangements relating to the termination of your
employment with Barnes Group Inc. (the “Company”). To signify that you
understand and agree to these arrangements, kindly sign this letter where
indicated on the last page and return it to me on or before July 21, 2008,
whereupon it will become an agreement binding upon the Company and you. This
letter will be void and of no force or effect if you do not sign and return it
to me on or before that date.

 

1. Resignation. You hereby resign as Senior Vice President, Finance and Chief
Financial Officer of the Company effective as of 12:01 AM on June 2, 2008.
Effective as of that time and date, you also hereby resign from the Board of
Directors of the Company (the “Board”), from any committee of the Board of which
you are a member, and as an officer, director and fiduciary of, and any other
position you may hold with, any of the Company’s employee benefit plans.
However, as provided in paragraph 2 below, if the conditions set forth in
clauses 2(a), 2(b), 2(c) and 2(d) below are satisfied, you will remain an
employee of the Company until August 31, 2008. If the conditions set forth in
clauses 2(a), 2(b), 2(c) and 2(d) below are not satisfied, your last day of
employment by the Company will be May 31, 2008. However, you hereby agree that,
in the event that your last day of employment by the Company is May 31, 2008 in
accordance with the preceding sentence, your status as an officer or director of
(or any similar position in) any subsidiary or affiliate of the Company of which
you are an officer or director (or in which you hold any similar position) on
May 31, 2008, other than your status (if any) as an employee of any such entity,
will continue until such time (in no event to exceed three months) after May 31,
2008 as the Company or its designee replaces you as such an officer or director
(or similar position) or, if sooner, until such time as the Company or its
designee requests your resignation as such, which you agree to give promptly.

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Dated as of May 30, 2008

Mr. William C. Denninger

 

2. Conditions. If you (a) sign the Release of Claims which is Attachment A to
this letter (the “Release”) on or after June 1, 2008 and on or before July 21,
2008 (the “First Release”), and you (b) deliver the signed First Release to me
within 7 days after you sign it, and you (c) do not exercise your right to
revoke the First Release within 7 days after you sign it, and you (d) sign and
deliver to me the Covenant Agreement which is Attachment B to this letter (the
“Covenant Agreement”) on or before July 21, 2008, then in that event your
employment by the Company will not terminate until 11:59 PM on August 31, 2008,
and the provisions of this letter (except paragraphs 6, 8, 9(b) and 15(b)) will
apply. If you do not sign and deliver the First Release within the periods
indicated in clauses (a) and (b) of the preceding sentence, or if you exercise
your right to revoke the First Release within 7 days after you sign it, or if
you do not sign and deliver to me the Covenant Agreement on or before July 21,
2008, then your employment by the Company will terminate effective as of 11:59
PM on May 31, 2008, the first two and last two sentences of paragraph 1 above
will continue to apply, and none of the provisions of paragraphs 3 through 17
below (except paragraphs 12, 13(b), 14, 15(c) and 16(b)) will apply.
Furthermore, by signing this letter, you agree that, if you do not sign and
deliver the First Release within the periods indicated in clauses (a) and
(b) above of this paragraph 2 or if you exercise your right to revoke the First
Release within 7 days after you sign it, or if you do not sign and deliver to me
the Covenant Agreement on or before July 21, 2008, then effective as of June 1,
2008 you will (and hereby do) relinquish any rights you or your contingent
annuitant or other beneficiary may then have to any present or future payments
under the Company’s Supplemental Senior Officer Retirement Plan as amended (the
“SSORP”). If you sign and deliver the First Release within the periods indicated
in clauses (a) and (b) above of this paragraph 2 and you do not exercise your
right to revoke the First Release within 7 days after you sign it, but you do
not sign the Covenant Agreement and deliver it to me on or before July 21, 2008,
then, in addition to the consequences set forth in the two preceding sentences,
you will be entitled to 12 months of severance pay under Section 4.1 of the
Company’s Executive Separation Pay Plan as amended (the “Separation Pay Plan”)
and you will be eligible to continue participation in certain Company benefit
plans for 12 months under Section 6.1 of the Separation Pay Plan, on the terms
and subject to the conditions of that Plan.

The provisions of paragraphs 6, 8, 9(b) and 15(b) of this letter will apply only
if you (i) sign another facsimile of the Release on or after September 1, 2008
and on or before September 22, 2008 (the “Second Release”), and you (ii) deliver
the signed Second Release to me within 7 days after you sign it, and you
(iii) do not exercise your right to revoke the Second Release within 7 days
after you sign it, and you (iv) signed the Covenant Agreement and delivered it
to me on or before July 21, 2008. If you do not sign and deliver the Second
Release within the periods indicated in clauses (i) and (ii) of the preceding
sentence, or if you exercise your right to revoke the Second

 

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Dated as of May 30, 2008

Mr. William C. Denninger

 

Release within 7 days after you sign it, or if you did not sign the Covenant
Agreement and deliver it to me on or before July 21, 2008, none of the
provisions of paragraphs 6, 8, 9(b) and 15(b) of this letter will apply.
However, for the avoidance of doubt, paragraph 1 of this letter will continue to
apply, as will the next sentence (if applicable). By signing this letter, you
agree that, if you satisfy the conditions set forth in clauses 2(a), 2(b), 2(c)
and 2(d) above but you do not sign and deliver the Second Release within the
periods indicated in clauses (i) and (ii) above of this paragraph 2 or you
exercise your right to revoke the Second Release within 7 days after you sign
it, then, any provision of this letter, the Separation Pay Plan or the SSORP to
the contrary notwithstanding, effective as of September 1, 2008 you will (and
hereby do) relinquish any rights you may then have to severance pay under
Section 4.1 of the Separation Pay Plan, any rights you may then have to continue
participation in Company benefit plans under Section 6.1 of the Separation Pay
Plan, and any rights you or your contingent annuitant or other beneficiary may
then have to any present or future payments under the SSORP.

By signing this letter, you acknowledge and agree that this letter provides
valuable benefits to which you are not entitled if you do not sign the First
Release, and valuable additional benefits to which you are not entitled if you
do not sign the Second Release. You also acknowledge and agree that the Company
is providing the valuable benefits described in this letter in exchange for your
signing the First and Second Releases, your not revoking them, your signing the
Covenant Agreement, and your compliance with the terms of this letter and the
terms of the Covenant Agreement. YOU ARE HEREBY ADVISED TO CONSULT AN ATTORNEY
BEFORE SIGNING THIS LETTER, THE RELEASE OR THE COVENANT AGREEMENT.

 

3.

Three Months of Continued Employment. Subject to paragraph 2 above, you will
continue to be employed by the Company during the three month period from
June 1, 2008 through August 31, 2008. During that period, you will report to
work (unless you are notified not to do so) at such reasonable location or
locations as the Company may direct, you will perform those executive duties
that you are assigned to perform, you will render such transition assistance to
other Company personnel (including without limitation your successor as Senior
Vice President, Finance and Chief Financial Officer) and other persons rendering
services on behalf of the Company as the Company may request of you, and you
will continue to be subject to and to abide by the Company’s Code of Business
Ethics and Conduct and all other rules and policies of the Company relating to
the behavior of Company employees. During that three month period, you will
continue to serve as an officer or director of (or in any similar position in)
any subsidiary or affiliate of the Company of which you are an officer or
director (or in which you hold a similar position) on May 31, 2008, until such
time as the Company or its designee replaces you as such an officer or

 

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Dated as of May 30, 2008

Mr. William C. Denninger

 

 

director (or in that similar position) or, if sooner, until such time as the
Company requests your resignation as such, which you agree to give promptly.
During that three month period, however, you will not have any authority to act
on behalf of the Company or any of its subsidiaries or affiliates or any of
their employee benefit plans unless you are notified otherwise in writing by an
officer of the Company or his or her delegate. Any provision above of this
paragraph 3 to the contrary notwithstanding, in no event are you to perform
services pursuant to this paragraph 3 that exceed 20 percent of the average
level of services you performed over the 36-month period preceding June 1, 2008
(within the meaning of Treasury Regulation section 1.409A-1(h)(1)(ii)).

 

4. Three Months of Salary Continuation. Subject to paragraph 2 above, during the
three month period from June 1, 2008 through August 31, 2008 the Company will
continue to pay you salary at the same rate you have been paid heretofore. The
first payment will be made on the next regular pay date after May 31, 2008,
i.e., on June 2, 2008. The second salary payment will be made on the first
regular pay date following the Last Revocation Day, as defined in the First
Release. If the first regular pay date following the Last Revocation Day is
July 1, then the second salary payment will be made on that date and the third
and last salary payment will be made on the next regular pay date, which is
August 1, 2008. If the first regular pay date following the Last Revocation Day
is August 1, then both the second and third salary payments will be made on that
date. For the avoidance of doubt, the regular pay dates during the three month
period from June 1, 2008 through August 31, 2008 are: June 2, July 1 and
August 1, 2008, and the amount of salary you will be paid, before deductions and
withholdings, is $36,666.67 per pay date. For the avoidance of doubt, the
aggregate amount of salary you will be paid during the three month period from
June 1 through August 31, 2008 is $110,000.01.

 

5. Three Months of Salary is Three Months of Severance Pay. By signing this
letter, you agree that your “Separation from Service” within the meaning of
Section 409A of the Internal Revenue Code and the Treasury Regulations
thereunder (“Section 409A”) will take place on June 1, 2008, rather than on
September 1, 2008, and that, therefore, you will be entitled to receive
severance pay and continue participation in certain Company benefit plans under
the Separation Pay Plan, on the terms and subject to the conditions of that
Plan, during the 12 months commencing on June 1, 2008, rather than on
September 1, 2008. However, you also agree that the salary payable to you during
the three month period from June 1, 2008 through August 31, 2008 pursuant to
paragraph 4 of this letter will constitute the first three months of that
severance pay, and that the Company’s performance of its obligations under
paragraph 4 of this letter will fully satisfy and discharge the Company’s
obligation to pay you the first three months of severance pay under the
Separation Pay Plan.

 

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Dated as of May 30, 2008

Mr. William C. Denninger

 

6. Nine Additional Months of Severance Pay. Subject to paragraph 2 above, the
last nine months of severance pay to which you may be entitled under the
Separation Pay Plan will be paid to you during the nine month period from
September 1, 2008 through May 31, 2009. During that nine month period, the
Company will pay you severance pay at a monthly rate equal to what was formerly
your monthly rate of salary. For the avoidance of doubt, the aggregate amount of
severance pay you will be paid during that nine month period, before deductions
and withholdings, is $330,000.03. However, as provided in paragraph 2 above, the
nine months of severance pay will be paid to you only if you sign the Second
Release on or after September 1, 2008 and on or before September 22, 2008, you
deliver the signed Second Release to me within 7 days after you sign it, you do
not exercise your right to revoke the Second Release within 7 days after you
sign it, and you signed the Covenant Agreement and delivered it to me on or
before July 21, 2008. The first installment of this severance pay will be paid
on the first regular pay date following the Last Revocation Day, as defined in
the Second Release, i.e., on October 1, 2008. The first installment will consist
of the severance payment for the September 1 pay date plus the severance payment
for the October 1 pay date. The balance of the severance payments will be paid
on regular pay dates after the October 1 pay date, until May 31, 2009. The
regular pay dates during the nine month period from September 1, 2008 through
May 31, 2009 are:
September 1, October 1, November 3, December 1, January 5, February 2, March 2, April 1
and May 1, 2009. The amount of severance pay you will be paid, before deductions
and withholdings, is $36,666.67 per pay date. By signing this letter agreement,
you acknowledge and agree that (a) the Company’s performance of its obligations
under paragraph 4 above and this paragraph 6 will fully satisfy and discharge
the Company’s obligation to pay you severance pay under Section 4.1 of the
Separation Pay Plan, and that (b) you are not entitled to any severance pay
under any other plan or arrangement of the Company, its subsidiaries or
affiliates.

 

7. Three Months of Employee Benefits and Fringe Benefits.

 

  (a)

Subject to paragraph 2 above, during the three month period from June 1 through
August 31, 2008, inclusive, you will continue to be eligible to participate in
the employee welfare benefit plans and fringe benefit plans of the Company in
which you were eligible to participate immediately prior to the effective time
of your resignation as Senior Vice President, Finance and Chief Financial
Officer, including without limitation the Senior Executive Enhanced Life
Insurance Program as amended (the “SEELIP”), subject in all events to the terms
and conditions of those plans. You are required to continue making any premium
and/or other employee contributions required by those benefit plans in order to
maintain coverage during such period. Fringe benefit plans in which you will
continue to be eligible to participate during this three month period include
the

 

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Dated as of May 30, 2008

Mr. William C. Denninger

 

 

Company policies relating to Company cars, cell phones, club memberships,
executive physicals and financial planning. Any expenses incurred during that
three month period that are reimbursable pursuant to the aforementioned fringe
benefit plans must be submitted to the Company for reimbursement during 2008,
and will be reimbursed no later than March 15, 2009. Directors and officers
liability insurance coverage and indemnification are addressed by paragraph 19
below.

 

  (b) Notwithstanding paragraph 7(a) above, during the three month period from
June 1 through August 31, 2008 and thereafter, (i) you will not participate in
the Separation Pay Plan or in any other severance pay plan or arrangement of the
Company or any of its subsidiaries or affiliates, including without limitation
the Change in Control Severance Agreement between the Company and you dated
March 31, 2000 (the “CIC Agreement”), which you acknowledge and agree will
become null and void and of no further force or effect upon your Separation from
Service, because it does not apply if a Separation from Service occurs before a
Change in Control (as defined in the CIC Agreement), and (ii) you will not
accrue vacation days. In addition, any provision (other than the next sentence)
of this letter, the SSORP or the Supplemental Executive Retirement Plan as
amended (the “SERP”) to the contrary notwithstanding, during the three month
period from June 1 through August 31, 2008 and thereafter, you will not accrue
any additional benefits or earn any additional service credit under any defined
benefit pension plan, including without limitation the SSORP and the SERP.
However, notwithstanding the preceding sentence, during the three months from
June 1 through August 31, 2008, you will be eligible to accrue additional
benefits under the Barnes Group Inc. Salaried Retirement Income Plan as amended
(the “Qualified Pension Plan”), on the terms and subject to the conditions of
the Qualified Pension Plan. Any additional benefits earned under the Qualified
Pension Plan during that three month period will not be taken into account in
calculating the SSORP benefits that will be payable to you in accordance with
paragraph 11 below.

 

  (c)

Nothing in this letter shall prevent the Company from amending or terminating
any employee benefit plan or fringe benefit plan without your consent, or shall
impose any liability on the Company for doing so. By signing this letter, you
agree that the employee benefits to be provided to you during the three month
period from June 1 through August 31, 2008 pursuant to paragraph 7(a) above will
constitute the first three months of employee benefits to which you are entitled
under Section 6.1 of the Separation Pay Plan, and that the Company’s performance
of its obligations under paragraph 7(a) above will fully

 

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Dated as of May 30, 2008

Mr. William C. Denninger

 

 

satisfy and discharge and exceed the Company’s obligation under Section 6.1 of
the Separation Pay Plan to make employee benefits available to you during the
first three months of the period during which you receive severance payments.

 

8. Nine Additional Months of Certain Employee Benefits.

 

  (a) The last nine months during which you may continue to participate in
employee benefit plans under Section 6.1 of the Separation Pay Plan run from
September 1, 2008 through May 31, 2009. Subject to paragraph 2 above, during
that nine month period you may continue to participate in the Company’s medical,
dental, group life insurance, supplemental life, dependent life, accidental
death and dismemberment insurance, flexible benefit reimbursement accounts and
long-term disability plans, subject in all events to the terms and conditions of
those plans. You are required to continue making any premium and/or other
employee contributions required by these benefit plans in order to maintain
coverage during such period. In accordance with Section 6.1 of the Separation
Pay Plan, you will also receive the same benefits under the SEELIP, at the same
times that you would have received them, if your employment and eligibility to
participate in the SEELIP had continued until June 30, 2009. However, as
provided in paragraph 2 above, you may continue to participate in the
aforementioned employee benefit plans during that nine month period and will
receive the aforementioned SEELIP benefits only if you sign the Second Release
on or after September 1, 2008 and on or before September 22, 2008, you deliver
the signed Second Release to me within 7 days after you sign it, you do not
exercise your right to revoke the Second Release within 7 days after you sign
it, and you signed the Covenant Agreement and delivered it to me on or before
July 21, 2008.

 

  (b) By signing this letter, you acknowledge and agree that (i) the employee
benefits to be provided to you during the nine month period from September 1,
2008 through May 31, 2009 (or 10 month period ending June 30, 2009, in the case
of the SEELIP coverage) pursuant to paragraph 8(a) above will constitute the
last nine months of employee benefits (and last 10 months of SEELIP coverage) to
which you are entitled under Section 6.1 of the Separation Pay Plan, (ii) the
Company’s performance of its obligations under paragraph 7(a) and paragraph 8(a)
above will fully satisfy and discharge the Company’s obligation to make employee
benefits available to you under Section 6.1 of the Separation Pay Plan, and
(iii) you are not entitled to any employee benefits under any other severance
plan or arrangement of the Company, its subsidiaries or affiliates.

 

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Dated as of May 30, 2008

Mr. William C. Denninger

 

  (c) On September 1, 2008 you will cease to be eligible to contribute to the
Retirement Savings Plan or to accrue any additional benefits under the Qualified
Pension Plan. On that date, you will also cease to be eligible to participate in
any of the Company’s other employee benefit plans or fringe benefit plans,
including the Employee Stock Purchase Plan and any profit-sharing plan, unless
stated otherwise in paragraph 8(a) above. You are vested in the Qualified
Pension Plan and will be eligible to receive benefits in accordance with the
provisions of the Qualified Pension Plan. With respect to the Retirement Savings
Plan, you can access the Fidelity Website at www.401k.com or the Retirement
Benefits Line at 1-800-835-5095 for the necessary information to receive a
distribution or rollover of your Savings Plan account to an IRA or another
qualified plan.

 

  (d) After May 31, 2009, COBRA medical and/or dental coverage may be continued
upon payment by you of the full premium for up to eighteen (18) months or the
date on which you become covered for medical and/or dental benefits under
another group health plan, whichever occurs first.

 

  (e) You have the option of continuing the SEELIP policy beyond June 30, 2009
at your own expense. Please note that you must notify Bret Maffett at the C. M.
Smith Agency at (860) 633-3611 to cancel the policy. If you have any additional
questions regarding this benefit, please contact Martin Van Walsum, Director,
Global Compensation and Executive Benefits at (860) 973-2165.

 

  (f) Within the meaning of Treasury Regulation section
1.409A-3(i)(1)(iv)(A)(3), the amount of expenses eligible for reimbursement or
in-kind SEELIP or other benefits provided pursuant to paragraph 7(a) and
paragraph 8(a) above during your taxable year may not affect the expenses
eligible for reimbursement or the in-kind SEELIP or other benefits to be
provided in any other taxable year. In order to satisfy the requirements of
Treasury Regulation section 1.409A-3(i)(1)(v), each tax gross-up payment to be
made pursuant to paragraph 7(a) or paragraph 8(a) above (i.e., in connection
with the SEELIP or financial planning policy) will be made in your taxable year
in which you remit the related taxes.

 

9. Consulting Compensation.

 

  (a)

Subject to paragraph 2 above and the provisions below of this paragraph 9(a) and
paragraph 9(c), in addition to the payments to be made and benefits to be
provided pursuant to paragraphs 4, 7(a) and

 

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Dated as of May 30, 2008

Mr. William C. Denninger

 

 

7(b) above during the three month period from June 1 to August 31, 2008, and in
further consideration of your executing (and not revoking) the First Release and
the Covenant Agreement within the time period provided in paragraph 2 above, the
Company will pay you additional compensation of $35,000 for each of the three
months of June, July and August, 2008 (i.e., $105,000 in the aggregate). The
$35,000 payment for each of such three months shall be paid in advance on the
regular pay date in such month (which regular pay dates are set forth in
paragraph 4 above); provided that any such payment that would otherwise be paid
on or before the Last Revocation Day as defined in the First Release shall be
paid on the first regular pay date that follows such Last Revocation Day.

 

  (b) Subject to paragraph 2 above and the provisions below of this paragraph
9(b) and paragraph 9(c), in addition to the payments to be made and benefits to
be provided pursuant to paragraphs 6 and 8(a) above during the nine month period
from September 1, 2008 to May 31, 2009, and in further consideration of your
executing (and not revoking) the Second Release and the Covenant Agreement
within the applicable time periods provided in paragraph 2 above, the Company
will pay you additional compensation of $35,000 for each of the nine months from
September, 2008 to May, 2009, inclusive (i.e., $315,000 in the aggregate). The
$35,000 payment for each of such nine months shall be paid in advance on the
regular pay date in such month (which regular pay dates are set forth in
paragraph 6 above); provided that the payment that would otherwise be paid on
September 1, 2008 shall be paid on October 1, 2008. For the avoidance of doubt,
as provided in paragraph 2 above the Company will make payments pursuant to this
paragraph 9(b) only if you sign the Second Release on or after September 1, 2008
and on or before September 22, 2008, you deliver the signed Second Release to me
within 7 days after you sign it, you do not exercise your right to revoke the
Second Release within 7 days after you sign it, and you signed the Covenant
Agreement and delivered it to me on or before July 21, 2008.

 

  (c)

Payments pursuant to paragraph 9(a) and paragraph 9(b) above are also contingent
on your making yourself available from time to time during the period from
June 1, 2008 through May 31, 2009 to perform such reasonable consulting services
and special projects (if any) as the Company may specifically request of you
(“Consulting Services”). Any such requests shall make reasonable allowances for
your other business commitments (including employment obligations) at the time,
it being understood, however, that other business commitments (including
employment) shall not excuse you from having to perform Consulting Services for
the payments pursuant to paragraphs 9(a) and

 

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Dated as of May 30, 2008

Mr. William C. Denninger

 

 

9(b) above. In no event are you to perform Consulting Services, or services
pursuant to paragraph 3 above, or any combination of Consulting Services and
services pursuant to paragraph 3 above, that exceed 20 percent of the average
level of services you performed over the 36-month period preceding June 1, 2008
(within the meaning of Treasury Regulation section 1.409A-1(h)(1)(ii)). If you
fail to perform Consulting Services requested of you even after a reasonable
allowance for your other business commitments at the time, or if you become
unable to perform Consulting Services by reason of death or disability, then any
provision of this letter (including without limitation paragraphs 9(a) and 9(b)
above) to the contrary notwithstanding, the Company’s obligation to make any
further payments pursuant to paragraph 9(a) and paragraph 9(b) above shall
terminate forthwith. Notwithstanding the foregoing, in the event of an alleged
failure to perform Consulting Services, the Company’s obligation to make the
payments pursuant to paragraph 9(a) and paragraph 9(b) above shall not cease
unless and until it provides you with written notice of the alleged failure to
perform and ten business days within which to cure the alleged failure, and in
the event that you allegedly become unable to perform Consulting Services by
reason of disability, the Company’s obligation to make the payments pursuant to
paragraph 9(a) and paragraph 9(b) shall not cease unless and until it provides
you with written notice that you are allegedly unable to perform Consulting
Services and ten business days within which to demonstrate to the reasonable
satisfaction of the Company that you have not become unable to perform.

 

  (d) For the avoidance of doubt, no provision of paragraphs 9(a), 9(b) or 9(c)
above shall render you an employee of the Company at any time or for any
purpose, or shall entitle you to participate in or to receive contributions
under any employee benefit plan or employee compensation plan, nor shall any
compensation payable pursuant to paragraph 9(a) or 9(b) above be taken into
account in determining your eligibility for or the amount of (i) any severance
pay pursuant to the Separation Pay Plan, or (ii) any employee benefits or fringe
benefits, whether pursuant to Section 7 or Section 8 above or otherwise. Any
Consulting Services to be provided by you shall be performed in the capacity of
an independent contractor. As such, unless the Consulting Services by their
nature require otherwise, you will be responsible for determining when, where
and how to perform the Consulting Services. You agree to comply with all
federal, state and local laws and regulations that apply to the Consulting
Services and the compensation payable pursuant to paragraphs 9(a) and 9(b)
above, including without limitation Workers Compensation and tax laws and
regulations. You agree to hold the Company harmless against any taxes, interest
and penalties that may be assessed against the Company as a result of any
failure by you to pay income or sales taxes due on the compensation payments
payable pursuant to paragraph 9(a) or 9(b) above.

 

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Dated as of May 30, 2008

Mr. William C. Denninger

 

  (e) By signing this letter, you acknowledge and agree that under Section 1.B.
of the Covenant Agreement you will have the same obligations with respect to
Confidential Information (as such term is defined therein) that you acquire in
connection with the Consulting Services that you will have with respect to
Confidential Information that you acquire during your employment by the Company.

 

10.

Section 409A. For purposes of Section 409A, including without limitation
Treasury Regulation sections 1.409A-2(b)(2), 1.409A-2(b)(2)(iii) and
1.409A-1(b)(4), your right to the series of installment payments of salary
during the three months commencing June 1, 2008 and severance pay during the
nine months commencing September 1, 2008, and your right to the series of
taxable benefits provided under this letter during the period commencing on
June 1, 2008 and ending on May 31, 2009 or, in the case of the SEELIP payments,
ending on June 30, 2009, and your right to the monthly payments pursuant to
paragraphs 9(a) and 9(b) above, are each to be treated as a right to a series of
separate payments, so that those installments that are paid within the
“applicable 2 1/2 month period” as defined in Treasury Regulation
1.409A-1(b)(4)(i)(A) may be treated as short-term deferrals within the meaning
of Treasury Regulation section 1.409A-1(b)(4).

Notwithstanding any provision of this letter to the contrary, no “distributions”
(within the meaning of Treasury Regulation section 1.409A-1(c)(3)(v)) pursuant
to this letter (including without limitation any installment of salary or
severance pay or taxable benefits) or pursuant to any other deferred
compensation plan that is subject to Section 409A in which you participate, may
be made before the date that is six months after the date of your Separation
from Service as defined in Treasury Regulation section 1.409A-1(h) (“Separation
from Service”) (or, if earlier than the end of the six month period, the date of
your death); provided, however, that the preceding provisions of this sentence
shall not apply to any amount or benefit to be paid or provided pursuant to this
letter or otherwise if and to the extent that such amount or benefit (a) is paid
under a separation pay plan that does not provide for a deferral of compensation
by reason of the application of Treasury Regulation section 1.409A-1(b)(9)(iii)
(relating to separation pay due to involuntary separation from service) or
another Treasury Regulation, or (b) is paid under a welfare benefit plan that is
not a nonqualified deferred compensation plan pursuant to Treasury Regulation
section 1.409A-1(a)(5) or another Treasury Regulation, or (c) is otherwise not
subject to the requirement set forth in section 409A(a)(2)(B)(i) of the Internal
Revenue Code (relating to specified employees), whether because such amount or
benefit is “grandfathered” from Section 409A, or is treated as a “short-term
deferral”, or is not subject to that requirement for any other reason. The
parties hereby characterize your Separation from Service as involuntary within
the meaning of Treasury Regulation section 1.409A-1(n).

 

Page -11-

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Dated as of May 30, 2008

Mr. William C. Denninger

 

11. Supplemental Senior Officer Retirement Plan. Subject to paragraph 2 above,
you will be paid an Early Retirement Benefit under the SSORP. Subject to
paragraph 7(b) above, the amount of the Early Retirement Benefit will be
determined in accordance with the terms of the SSORP. However, any provision of
the SSORP or this letter to the contrary notwithstanding, you will not accrue
additional benefits under the SSORP after May 31, 2008. In order to comply with
Section 409A, any payment of your Early Retirement Benefit that would otherwise
be paid on or before December 1, 2008 shall not be paid until December 2, 2008
or, if earlier, the date of your death. For the avoidance of doubt, as provided
in the SSORP the Early Retirement Benefit will be paid in the form of a 50%
joint and contingent annuity. Any provision of this letter (including the
preceding provisions of this paragraph 11) to the contrary notwithstanding, as
provided in paragraph 2 above, the Early Retirement Benefits under the SSORP
will be paid only if you sign the First Release on or after June 1, 2008 and on
or before July 21, 2008, you deliver the signed First Release to me within 7
days after you sign it, you do not exercise your right to revoke the First
Release within 7 days after you sign it, and you sign the Covenant Agreement and
deliver it to me on or before July 21, 2008. Furthermore, as further provided in
paragraph 2 above, you hereby agree that if you do not sign and deliver the
Second Release within the periods indicated in clauses (i) and (ii) of paragraph
2 above, or if you exercise your right to revoke the Second Release within 7
days after you sign it, then effective as of September 1, 2008 you will (and
hereby do) relinquish any rights you or your contingent annuitant or other
beneficiary may then have to any present and future payments under the SSORP.

 

12. Annual Incentive.

You recognize and agree that, because your employment will be terminating during
the 2008 Award Year under the Performance-Linked Bonus Plan for Selected
Executive Officers (the “PLBP”), you will not be eligible to receive an award
under the PLBP for that Award Year, nor will you be eligible to participate in
the PLBP or any other incentive or bonus plan or arrangement for any later year.

 

13. Stock Options.

 

  (a)

Subject to paragraph 2 above, your last day of employment will be August 31,
2008 for purposes of determining your rights with respect to any stock options
heretofore granted to you that are now outstanding (“Outstanding Options”).
Accordingly, pursuant to the terms of the Outstanding Options, Outstanding
Options that do not become exercisable on or before August 31, 2008 will be
forfeited at the time your employment terminates. The number of Outstanding
Options that will be forfeited consist of 22,500 that were granted on
February 13, 2008; 16,666 that were granted on February 14, 2007;

 

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Dated as of May 30, 2008

Mr. William C. Denninger

 

 

and 7,998 that were granted on February 15, 2006. Outstanding Options that
become exercisable on or after June 1, 2008 and on or before August 31, 2008
will be exercisable until August 31, 2009 but not thereafter. The number of
Outstanding Options that will become exercisable on or after June 1, 2008 and on
or before August 31, 2008 consist of 8,334 that were granted on February 14,
2007 at an option price of $22.335; 8,000 that were granted on February 15, 2006
at an option price of $19.6275; 7,998 that were granted on February 16, 2005 at
an option price of $12.615; and 8,666 that were granted on February 11, 2004 at
an option price of $14.77. (The foregoing numbers of Outstanding Options and
option prices have been adjusted for stock splits since the respective dates of
grant). However, in the event of your death before August 31, 2008, all of the
Outstanding Options will become exercisable in full and will expire one year
after the date of death. The preceding provisions of this paragraph 13(a) are
subject to the terms and conditions of the award agreements that document the
Outstanding Options, which are unaffected hereby and which will govern in the
event of any conflict or inconsistency with this letter.

 

  (b) For the avoidance of doubt, you will not be granted any stock options
after May 31, 2008.

 

14. Performance Share Awards.

 

  (a) You recognize and agree that, because your employment will be terminating
before December 31, 2008, you will not be eligible to earn any performance share
awards heretofore granted to you that relate to the 2008 Performance Year or any
later Performance Year (“Performance Share Awards”), and that all such awards
will terminate upon termination of your employment. The preceding provisions of
this paragraph 14 are subject to the terms and conditions of the award
agreements that document the Performance Share Awards, which are unaffected
hereby and which will govern in the event of any conflict or inconsistency with
this letter.

 

  (b) For the avoidance of doubt, you will not be granted any performance share
awards after May 31, 2008.

 

15. Performance-Accelerated Restricted Stock Unit Awards.

 

  (a) Subject to paragraph 2 above, your last day of employment will be
August 31, 2008 for purposes of determining your rights under your
Performance-Accelerated Restricted Stock Unit Award Agreement dated April 14,
2004 (the “2004 PARSU Agreement”). Accordingly, pursuant to Section 4(b)(ii) of
the 2004 PARSU Agreement, the 12,000 Restricted Stock Units granted to you on
April 14, 2004 that have not heretofore become non-forfeitable will become
non-forfeitable on June 20, 2008.

 

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Dated as of May 30, 2008

Mr. William C. Denninger

 

 

(b)

Pursuant to Section 6(b) of your Performance-Accelerated Restricted Stock Unit
Award Agreement dated February 12, 2003 (the “2003 PARSU Agreement”;
collectively, with the 2004 PARSU Agreement, the “PARSU Agreements”), 12,881
“Transfer-Restricted Shares” were issued to you on May 9, 2007. Pursuant to
Section 6(b) of the 2004 PARSU Agreement, 7,026 “Transfer-Restricted Shares”
were issued to you on June 20, 2007, and a number of the shares that will be
issued to you on June 20, 2008 in payment of the 12,000 Restricted Stock Units
that will become non-forfeitable on that date in accordance with paragraph 15(a)
above will be issued as “Transfer-Restricted Shares”. Subject to paragraph 2
above, all of the aforementioned Transfer-Restricted Shares will become
transferable by you and free of the restrictions set forth in Section 3(b) of
the PARSU Agreements as of the 8th day after you sign the Second Release. The
provisions of this paragraph 15(b) and paragraph 15(a) above are subject to the
terms and conditions of the PARSU Agreements, which are unaffected by such
provisions and which will govern in the event of any conflict or inconsistency
with this letter.

 

  (c) For the avoidance of doubt, you will not be granted any
Performance-Accelerated Restricted Stock Unit Awards after May 31, 2008.

 

16. Other Restricted Stock Unit Awards.

 

  (a) Subject to paragraph 2 above, your last day of employment will be
August 31, 2008 for purposes of determining your rights with respect to any
Restricted Stock Units heretofore granted to you other than those documented by
the PARSU Agreements (“Other RSUs”). Accordingly, pursuant to the terms of the
Other RSUs, Other RSUs that are not scheduled to become non-forfeitable on or
before August 31, 2008 will be forfeited at the time your employment terminates.
The number of Other RSUs that will be forfeited consist of 5,000 that were
granted on February 13, 2008; 6,000 that were granted on February 14, 2007;
7,198 that were granted on February 15, 2006; and 4,500 that were granted on
February 16, 2005. Other RSUs that by their terms are scheduled to become
non-forfeitable during the period from June 1, 2008 to August 31, 2008 will
become non-forfeitable as scheduled. The number of Other RSUs that are scheduled
to become non-forfeitable during that period consist of 3,602 that were granted
on February 15, 2006 and 4,500 that were granted on February 16, 2005. (The
foregoing numbers of Other RSUs have been adjusted for stock splits since the
respective dates of grant). The preceding provisions of this paragraph 16(a) are
subject to the terms and conditions of the award agreements that document the
Other RSUs, which are unaffected hereby and which will govern in the event of
any conflict or inconsistency with this letter.

 

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Dated as of May 30, 2008

Mr. William C. Denninger

 

  (b) For the avoidance of doubt, you will not be granted any Restricted Stock
Unit Awards after May 31, 2008.

 

17. Final Expenses. Your expense account, and Company credit card and telephone
card privileges, will cease as of August 31, 2008. On or before that date, you
are to return any such cards or other similar Company property in your
possession and submit your final expense account, including an accounting for
any advances.

 

18. Vacation. Within 30 days after the termination of your employment
(determined in accordance with paragraph 1 above), you will be paid at your
present rate for your ten (10) unused vacation days. You will not accrue any
further vacation benefits after May 31, 2008.

 

19. Indemnification. The Company’s directors’& officers’ liability insurance
policy (the “D&O Policy”) covers only the acts and omissions of officers and
directors of the Company, its subsidiaries and affiliates. After June 1, 2008 it
will thus only cover your acts and omissions that pre-date June 2, 2008 and your
acts and omissions during the three month period from June 1 to August 31, 2008
in your capacity as an officer or director of any subsidiary or affiliate of the
Company. Nothing in this letter (including the preceding sentence) is intended
to enlarge, diminish or otherwise affect any rights you may have to
indemnification or advancement of expenses under the Company’s bylaws or
certificate of incorporation, the laws of the State of Delaware, the D&O Policy,
or the indemnification agreement between you and the Company dated March 31,
2000 (the “Indemnification Agreement”).

 

20. Return of Company Property. By signing this letter, you agree that you will
make arrangements with me, not later than August 21, 2008, to return by
August 31, 2008 the Company-leased automobile and any property of the Company
which is in your custody, including the laptop computer but excluding the cell
phone, and to provide the Company by August 31, 2008 with any passwords and
codes within your knowledge or control that are necessary to provide the Company
with full access to the laptop and the data, documents, software and programming
stored therein. You also agree that, if your employment terminates effective as
of May 31, 2008 pursuant to paragraph 2 above, you will make arrangements with
me as soon as possible after that date to promptly return the automobile and any
other Company property in your custody, including the laptop computer and the
cell phone, and to promptly provide the Company with any passwords and codes
within your knowledge or control that are necessary to provide the Company with
full access to the laptop and the data, documents, software and programming
stored therein.

 

Page -15-

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Dated as of May 30, 2008

Mr. William C. Denninger

 

If and when all of the conditions set forth in clauses (a), (b), (c), (d), (i),
(ii) and (iii) of paragraph 2 above (relating to the First and Second Releases
and the Covenant Agreement) are satisfied, (a) the laptop computer that is now
in your custody will be returned to you cleansed of any software that is
licensed to the Company and of any data, documents and programming that are the
property of the Company, (b) you will be entitled to keep the laptop computer
(i.e., you will be the owner of the laptop) as so cleansed, and (c) you will be
entitled to keep the cell phone (i.e., you will be the owner of the cell phone).
For the avoidance of doubt, nothing herein is intended to give you permission to
access, whether through the laptop or otherwise, any computer system of the
Company or utilize any software licensed to the Company after the date on which
your employment terminates pursuant to paragraph 2 above, nor is anything herein
intended to give you permission to access, whether through the laptop or
otherwise, any data, documents or programming of the Company after the date on
which your employment so terminates. Furthermore, for the avoidance of doubt,
the Company is not agreeing to provide or pay for cellular service to the cell
phone after August 31, 2008. If you become entitled to keep the cell phone
pursuant to the preceding provisions of this paragraph, the Company will make
arrangements to terminate cellular service to the cell phone on August 31, 2008,
and, you will be solely responsible for arranging and paying for cellular
service to the cell phone after August 31, 2008. If your last day of employment
is August 31, 2008 pursuant to paragraph 2 but you fail to satisfy all of the
conditions set forth in clauses (i), (ii) and (iii) of paragraph 2 above
(relating to the Second Release), then you agree to return the cell phone to the
Company no later than October 1, 2008.

You further agree that on August 28, 2008, or upon earlier request by the
Company, you will promptly return to the Company any and all information
relating to the Company in your possession or control. You also agree that you
will not, directly or indirectly, copy, take, or remove from the Company’s
premises, use or disclose to third parties any such information. You also agree
to leave intact all electronic Company documents, including those that you
developed or helped to develop during your employment, and that you will deliver
to the Company on August 28, 2008 or upon earlier request the computer media on
which such documents are stored and all passwords and keys necessary to access
such documents.

 

21. Cooperation in Litigation; Further Assurances.

 

  (a)

By signing this letter, you agree to cooperate fully with the Company, if
requested by the Company or its counsel to do so, in the defense or prosecution
of any claims or actions now in existence or which may be brought in the future
against or on behalf of the Company. Your full cooperation in connection with
such claims or actions shall include, but not be limited to, your being
available to meet with Company counsel to prepare for trial or discovery or any

 

Page -16-

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Dated as of May 30, 2008

Mr. William C. Denninger

 

 

administrative hearing or mediation or other alternative dispute resolution
mechanism, and to act as a witness when requested by the Company at reasonable
times designated by the Company. The Company and you agree to work in good faith
to resolve any scheduling or other issues that arise in connection with such
cooperation. The Company will reimburse you for travel, food, and lodging
expenses in connection with the aforementioned cooperation, in accordance with
the Company’s travel expense policy.

 

  (b) You further agree to execute and deliver such instruments, documents,
certificates, and affidavits and supply such other information and take such
further action as the Company may reasonably require in order to effectuate or
further document your resignation as an officer and director of the Company and
your resignation from all other offices, titles and positions with the Company,
its subsidiaries and affiliates and their employee benefit plans, and the
termination of your employment with the Company, on the applicable dates
provided in paragraphs 1, 2 and 3 above.

 

22. Intention as to Tax Consequences; No Warranties. Any payments and benefits
that may be paid or provided pursuant to this letter are intended to qualify for
an exclusion from Section 409A or to comply with Section 409A, so that none of
such payments and benefits will be includible in your federal gross income
pursuant to section 409A(a)(1)(A) of the Internal Revenue Code as amended from
time to time (the “Code”). The provisions of this letter shall be administered,
interpreted and construed to carry out such intention, and any provision of this
letter that cannot be so administered, interpreted and construed shall to that
extent be disregarded. However, the Company does not represent, warrant or
guarantee that the payments and benefits that may be paid or provided pursuant
to this letter will not be includible in your federal gross income pursuant to
section 409A(a)(1)(A) of the Code, nor does the Company make any other
representation, warranty or guaranty to you as to the tax consequences of this
letter or any provision of this letter.

 

23. Consent to Certain Amendments.

 

  (a)

By signing this letter, you hereby irrevocably (i) authorize the Compensation
and Management Development Committee (the “Compensation Committee”) and the
Board and their respective delegates, and any of them, on or before December 31,
2008 or such later date(s), if any, to which the December 31, 2008 documentary
compliance deadline referred to in paragraph .01 of section 3 of IRS Notice
2006-79 as modified by section 3.01(B)(1) of IRS Notice

 

Page -17-

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Dated as of May 30, 2008

Mr. William C. Denninger

 

 

2007-86 is hereafter extended (the “409A Documentary Compliance Date”), to amend
this letter and any “Prior Non-Grandfathered Compensation Arrangement” as
defined in paragraph 23(b) below, in any respect that the Compensation
Committee, the Board or their respective delegates determine to be necessary,
advisable or expedient to plan for, respond to, comply with or reflect
Section 409A, and (ii) consent in advance to any and all such amendments of this
letter and any Prior Non-Grandfathered Compensation Arrangement that the
Compensation Committee, the Board or their respective delegates may adopt on or
before the 409A Documentary Compliance Date, and (iii) agree that your consent
to any such amendments of this letter or any Prior Non-Grandfathered
Compensation Arrangement shall be as effective as if such amendments were fully
set forth herein, and (iv) waive any right you may have to consent to the
amendment in question if for any reason your consent to any of the
aforementioned amendments is not legally effective, and (v) recognize and agree
that the Company does not represent, warrant or guarantee that any amendment of
this letter or any Prior Non-Grandfathered Compensation Arrangement that is
adopted pursuant to this paragraph 23(a) will have its intended tax effect or
will enable compensation to be exempt from or comply with Section 409A, and that
the Company does not make any other representation, warranty or guaranty to you
as to the tax consequences of any such amendment.

 

  (b) For purposes of paragraph 23(a) above, a “Prior Non-Grandfathered
Compensation Arrangement” means any compensation arrangement between the Company
and you that was entered into effective on or before May 30, 2008 (whether or
not paid in full before that date) except to the extent that the compensation
payable (or paid) under such arrangement is “grandfathered” from Section 409A
(i.e., is compensation to which Section 409A does not apply, according to
Treasury Regulation section 1.409A-6 or any other applicable Treasury Department
guidance).

 

24. Withholding. Any provision of this letter (including without limitation
paragraph 9(d) above) to the contrary notwithstanding, all payments and benefits
pursuant to this letter are subject to the withholding of such amounts as the
Company may determine it is required to withhold by law, and are subject to such
other deductions as may be authorized by you.

 

25.

No Admission of Liability. This letter is not an admission by the Company of any
liability or wrongdoing, or an admission by the Company that any of its actions
or inactions are unjustified, unwarranted, discriminatory, wrongful, or in
violation of any federal, state, or local law, and this letter shall not be
interpreted as such. The Company disclaims any liability to you or any other
person on the part of itself and/or its current or former

 

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Dated as of May 30, 2008

Mr. William C. Denninger

 

 

directors, officers, employees, representatives, and agents. By signing this
letter, you agree and acknowledge that this letter shall not be interpreted to
render you to be a prevailing party for any purpose including, but not limited
to, an award of attorneys’ fees under any statute or otherwise. This letter is
not an admission by you of any liability or wrongdoing, or an admission by you
that any of your actions or inactions are unjustified, unwarranted,
discriminatory, wrongful, or in violation of any federal, state, or local law,
and this letter shall not be interpreted as such. You disclaim any liability to
the Company or any other person on the part of yourself, your representatives,
and your agents. By signing this letter, the Company agrees and acknowledges
that this letter shall not be interpreted to render the Company to be a
prevailing party for any purpose including, but not limited to, an award of
attorneys’ fees under any statute or otherwise.

 

26. Consequences of Breach. If you breach any of your obligations under this
letter, the provisions of Section 1.A. and Section 2 of the Covenant Agreement
will apply.

 

27. Advice of Counsel. By signing this letter, you acknowledge and agree that
the Company has advised you in writing to consult an attorney before signing
this letter, the Covenant Agreement or the Release. You further acknowledge and
agree that you are responsible for payment of all of your own legal fees and
expenses incurred in connection with the review of this letter, the Covenant
Agreement and the Release and the resolution of any and all claims you may have
against the Company.

 

28. Interpretation and Disputes. This letter shall be interpreted and construed
by the Benefits Committee appointed by the Company’s Board of Directors (the
“Committee”), and any such interpretation or construction shall be binding and
conclusive on the Company and you.

Any claim, demand or controversy arising from such interpretation or
construction by the Committee shall be submitted first to a mediator in
accordance with the rules of the American Arbitration Association (“AAA”) by
submitting a mediation request to the Chairman of the Committee within 30 days
of the date of the Committee’s interpretation or construction. The mediation
process shall conclude upon the earlier of: (i) the resolution of the dispute;
(ii) a determination by either the mediator or one or more of the parties that
all settlement possibilities have been exhausted and there is no possibility of
resolution; or (iii) 30 days have passed since the filing of a request to
mediate with the AAA. A party who has previously submitted a dispute to
mediation, and which dispute has not been resolved, may submit such dispute to
binding arbitration pursuant to the rules of the AAA. Any arbitration proceeding
for such dispute must be initiated within 14 days from the date that the
mediation process has concluded. The prevailing party shall recover its costs
and reasonable attorney’s fees incurred in such arbitration proceeding. You and
the Company specifically understand and agree that the

 

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Dated as of May 30, 2008

Mr. William C. Denninger

 

failure of a party to timely initiate a proceeding hereunder shall bar the party
from any relief or other proceeding and any such dispute shall be deemed to have
been finally and completely resolved. All mediation and arbitration proceedings
shall be conducted in Bristol, Connecticut or such other location as the Company
may determine and you agree that no objection shall be made to such jurisdiction
or venue, as a forum non conveniens or otherwise. The arbitrator’s authority
shall be limited to resolution of the legal disputes between the parties and the
arbitrator shall not have authority to modify or amend this letter or the
Committee’s interpretation or construction thereof, or abridge or enlarge rights
available under applicable law. Any court with jurisdiction over the parties may
enforce any award made hereunder.

 

29. General.

 

  (a) This letter shall be binding upon the successors, assigns, estate, legal
representatives, heirs and distributees, as the case may be, of the Company and
you. Notwithstanding the preceding sentence, you may not assign any of your
rights or obligations under this letter. Your rights to payments and benefits
under this letter are not subject to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by your creditors or
any of your beneficiaries, and any attempt to effectuate any of the foregoing
with respect to any of your aforementioned rights shall be null and void and of
no force or effect to the fullest extent permitted by law.

 

  (b) Any waiver by a party hereto of the other party’s performance of, or
compliance with, the obligations under this letter shall not operate, or be
construed, as a waiver of any subsequent failure by such other party to perform
or comply.

 

  (c) Any term or provision of this letter that is invalid or unenforceable in
any situation in any jurisdiction shall not affect the validity or
enforceability of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other situation or in
any other jurisdiction.

 

  (d) This letter shall be governed by and construed in accordance with the laws
of the State of Connecticut, without regard to its conflict of laws provisions.

 

  (e)

If this letter is signed by you and delivered to me on or before July 21, 2008,
it will not be revocable by unilateral action of either you or the Company, and
it may only be amended in a writing signed by you and an officer of the Company
authorized to do so. This letter contains the entire agreement of the parties
relating to the subject matter of this letter and supersedes and replaces all
prior agreements and understandings with respect to such subject matter, and the
parties

 

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Dated as of May 30, 2008

Mr. William C. Denninger

 

 

have made no agreements, representations or warranties relating to the subject
matter of this letter which are not set forth herein. This letter supersedes and
replaces the letter from me to you dated as of May 30, 2008 that I sent you on
June 27, 2008, which shall be null and void and of no force or effect ab initio.
For the avoidance of doubt, this letter does not supersede or replace any
Release, the Covenant Agreement, the Separation Pay Plan, the SERP, the SSORP,
the SEELIP, the PLBP, any stock option agreement, any Performance Share Award
agreement, the PARSU Agreements, any Other RSU agreement, the D&O Policy, the
Indemnification Agreement, any agreement related to non-competition,
non-solicitation and preservation of Company confidential and proprietary
information that was entered into between you and the Company before May 30,
2008, or the Barnes Group Inc. Code of Business Ethics and Conduct.

[This space left blank intentionally]

If you understand and agree to all of the provisions of this letter, please sign
it where indicated below and return it to me on or before July 21, 2008,
whereupon it will become an agreement binding upon the Company and you effective
as of May 30, 2008.

 

Very truly yours, /s/ John R. Arrington John R. Arrington Senior Vice President,
Human Resources

I understand and agree to all of the foregoing:

 

W. C. Denninger William C. Denninger

 

Page -21-