Exhibit 10.26

Form of

AMENDED AND RESTATED RESTRICTED STOCK UNIT AWARD AGREEMENT

For CEO

PURSUANT TO THE

BARNES GROUP INC.

STOCK AND INCENTIVE AWARD PLAN

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING

SECURITIES THAT HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933.

RESTRICTED STOCK UNIT AWARD AGREEMENT executed in duplicate as of February 13,
2008 (the “Grant Date”), between Barnes Group Inc., a Delaware corporation (the
“Company”), and             , a person regularly employed by or providing
services to the Company or one of its Subsidiaries (the “Holder”)(the “RSU
Agreement”), as amended and restated on December 31, 2008, effective January 1,
2009 (the RSU Agreement as so amended and restated being hereafter referred to
as “the Agreement” or “this Agreement”).

The terms and conditions of the Agreement are set forth herein and shall apply
on and after January 1, 2009. For the avoidance of doubt, and any provision of
this Agreement to the contrary notwithstanding, if any provision of this
Agreement (including in particular but without limitation any provision of
Section 6 below) would change the time or form of payment of any amount that is
payable under the RSU Agreement, such provision shall “apply only to amounts
that would not otherwise be payable in 2008” within the meaning of paragraph .02
of §3 of Notice 2006-79 as modified by Section 3.01(B)(1) of Notice 2007-86, and
shall be administered, interpreted and construed accordingly.

In accordance with the provisions of the Barnes Group Inc. Stock and Incentive
Award Plan as amended and in effect from time to time on and after the Grant
Date (the “Plan”), and in fulfillment of the Company’s obligations under
Section 6.2(v), Section 6.3 and Section 6.4 of the Employment Agreement dated
October 19, 2006 between the Company and the Holder(the “Employment Agreement”)
as in effect on the Grant Date, the Compensation and Management Development
Committee of the Company’s Board of Directors (the “Committee”) has authorized
the execution of this Agreement and issuance of shares pursuant thereto.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth
and for other good and valuable consideration, the parties hereto agree as
follows:

 

1.

GRANT OF RESTRICTED STOCK UNIT AWARD. Subject to the terms, conditions and
restrictions set forth in this Agreement and the Plan, the Company hereby grants
to the

 

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Holder an award of             restricted stock units (each a “Restricted Stock
Unit” and, collectively, the “Award”). The Award entitles the Holder to receive,
without payment to the Company and at the applicable time or times provided by
Section 6 hereof (if any), a number of shares of common stock, par value $.01
per share, of the Company (“Common Stock”), equal to the number of the
Restricted Stock Units (if any) that become non-forfeitable pursuant to
Section 4 hereof, subject, however, to Section 5 and the other provisions of
this Agreement. The Award also entitles the Holder to be paid Dividend
Equivalents on the terms and subject to the conditions set forth in Section 2.
In no event shall the Holder acquire any rights under this Agreement unless the
Holder executes and delivers to the Company, no later than 60 days after the
Grant Date, a counterpart of the RSU Agreement duly countersigned by the Holder.

 

2. DIVIDEND EQUIVALENTS. On each date on which a dividend (other than a Common
Stock dividend) is paid to the holders of Common Stock the record date of which
falls during the period commencing on the Grant Date and ending on the first
date on which all of the Restricted Stock Units have either been forfeited
pursuant to Section 5 or paid pursuant to Section 6 of the RSU Agreement as in
effect from time to time on or after the Grant Date (a “Dividend Payment Date”),
the Company shall pay the Holder an amount of money (“Dividend Equivalents”)
determined by multiplying (a) the number of the Restricted Stock Units (if any)
that were neither forfeited nor paid on or before such dividend record date,
times (b) the dividend per share paid on such Dividend Payment Date. However, if
the dividend is paid in property other than cash or Common Stock, the amount of
money to be paid to the Holder in respect of such dividend shall be determined
by multiplying (i) the number of the Restricted Stock Units (if any) that were
neither forfeited nor paid on or before such dividend record date, times
(ii) the fair market value on the Dividend Payment Date of the property that was
paid per share of Common Stock as a dividend on such Dividend Payment Date. For
the avoidance of doubt, the Holder’s entitlement to be paid Dividend Equivalents
pursuant to the first or second sentence of this Section 2 is contingent on the
Holder’s not having a “Separation from Service” (as hereafter defined) on or
before the record date of such Dividend Equivalents, except that if a dividend
record date occurs on or after the date on which Restricted Stock Units become
non-forfeitable within the meaning of Section 4 and before such Restricted Stock
Units are paid pursuant to Section 6, the Holder’s entitlement to be paid
Dividend Equivalents for such record date pursuant to the first or second
sentence of this Section 2 in respect of the Restricted Stock Units that became
non-forfeitable within the meaning of Section 4 is contingent on the Holder’s
not having a Separation from Service before the date on which such Restricted
Stock Units became non-forfeitable within the meaning of Section 4. For purposes
of this Agreement, a “Separation from Service” means a “separation from service
with the employer” within the meaning of Treasury Regulation
Section 1.409A-1(h), where the “employer” means the Company and all corporations
and trades or businesses with which the Company would be considered a single
employer under Section 414(b) or Section 414(c) of the Internal Revenue Code of
1986, as amended (as determined in accordance with the first sentence of
Treasury Regulation section 1.409A-1(h)(3)).

 

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3. RESTRICTIONS ON AWARD. In no event (a) may the Holder sell, exchange,
transfer, assign, pledge, hypothecate, mortgage or dispose of the Award or any
interest therein, nor (b) shall the Award or any interest therein be subject to
anticipation, attachment, garnishment, levy, encumbrance or charge of any
nature, voluntary or involuntary, by operation of law or otherwise. Any attempt,
whether voluntary or involuntary, to sell, exchange, transfer, assign, pledge,
hypothecate, mortgage, dispose, anticipate, attach, garnish, levy upon, encumber
or charge the Award or any interest therein shall be null and void and the other
party to the transaction shall not obtain any rights to or interest in the
Award. The foregoing provisions of this Section 3 shall not prevent the Award or
any Restricted Stock Unit from being forfeited pursuant to the terms and
conditions of this Agreement, and shall not prevent the Holder from designating
a Beneficiary to receive the Award in the event of his or her death in
accordance with Section 2(d) of the Plan. Any such Beneficiary shall receive the
Award subject to all of the terms, conditions and restrictions set forth in this
Agreement, including but not limited to the forfeiture provisions set forth in
Section 5.

 

4. VESTING OF RESTRICTED STOCK UNITS.

 

  (a) Normal Vesting Dates. Subject to Sections 4(b), (c), (d) and (e) and
Section 5, the Holder must not have a Separation from Service on or before
(i) the third anniversary of the Base Date (as hereafter defined) for 33.4% of
the Restricted Stock Units to become non-forfeitable, (ii) the fourth
anniversary of the Base Date for an additional 33.3% of the Restricted Stock
Units to become non-forfeitable, and (iii) the fifth anniversary of the Base
Date for the balance of the Restricted Stock Units to become non-forfeitable.
The number of Restricted Stock Units that become non-forfeitable on the third
and fourth anniversaries of the Base Date pursuant to the foregoing shall be
rounded to the nearest whole Restricted Stock Unit. For purposes of this
Agreement, the “Base Date” means August 13, 2007.

 

  (b) Acceleration of Vesting in Event of Death or Disability. Notwithstanding
Section 4(a) but subject to Section 5, if the Holder does not have a Separation
from Service before his death or Disability occurs (and irrespective of whether
a Separation from Service occurs at the time of such Disability), then any of
the Restricted Stock Units that did not become non-forfeitable before the date
on which his death or Disability occurs shall become non-forfeitable on that
date. For purposes of this Agreement, “Disability” shall have the meaning set
forth in Treasury Regulation section 1.409A-3(i)(4)(i).

 

  (c)

Acceleration of Vesting in Event of Change of Control. Notwithstanding
Section 4(a) but subject to Section 5 below and Section 7 of the Employment
Agreement as amended and restated as of December 31, 2008, if the Holder does
not have a Separation from Service before the date, if any, on which a “change
in control event” occurs with respect to the Holder (within the meaning of
Treasury Regulation section 1.409A-3(i)(5)(i) & (ii)) on or after the date on
which a Change of Control (as defined in Section 6.4 of the Employment Agreement
as amended and restated as

 

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of December 31, 2008) occurs, any of the Restricted Stock Units that are not
non-forfeitable when such “change in control event” occurs shall immediately
become non-forfeitable. Any such “change in control event” that occurs on or
after the date on which a Change in Control (as defined in Section 6.4 of the
Employment Agreement as amended and restated as of December 31, 2008) occurs is
hereafter referred to as a “409A Change in Control Event”.

 

  (d) Acceleration of Vesting in Certain Circumstances. Notwithstanding
Section 4(a), if the Holder has a Separation from Service by the Company without
“Cause” (except by reason of the Holder’s “Death” or “Disability”) or by the
Holder for “Good Reason”, then any Restricted Stock Units that did not become
non-forfeitable before the date on which such Separation from Service occurs
shall become non-forfeitable on that date, but only to the extent that such
Restricted Stock Units would have become non-forfeitable in accordance with
Section 4(a) had the Holder’s employment continued (and no Separation from
Service occurred) through the expiration of the “Severance Period”. Any
capitalized term that appears in quotation marks above in this Section 4(d)
shall have the meaning ascribed thereto in the Employment Agreement as amended
and restated as of December 31, 2008.

 

  (e) Additional Vesting Provisions. Any provision above of this Section 4 to
the contrary notwithstanding, a Restricted Stock Unit shall not become
non-forfeitable pursuant to this Section 4 if, prior to the date (if any) on
which such Restricted Stock Unit would become non-forfeitable pursuant to this
Section 4, such Restricted Stock Unit was forfeited pursuant to Section 5(b) of
the RSU Agreement as in effect from time to time on or after the Grant Date. Any
provision of this Agreement to the contrary notwithstanding, in no event shall
the number of Restricted Stock Units that become non-forfeitable pursuant to
this Agreement or any provision thereof exceed in the aggregate 100% of the
Restricted Stock Units unless the excess is attributable solely to an adjustment
referred to in Section 7 of this Agreement or Section 10 of the Plan.

 

5. FORFEITURE OF RESTRICTED STOCK UNITS.

 

  (a)

Any Restricted Stock Units that have not become non-forfeitable pursuant to
Section 4 above on or before the date on which the Holder has a Separation from
Service shall be forfeited as of that date, and all of the Holder’s rights and
interest in and to such forfeited Restricted Stock Units shall thereupon
terminate without payment of consideration by the Company. No Award or other
amount payable to the Holder shall be reduced by the amount of any Dividend
Equivalents previously paid to the Holder with respect to the forfeited
Restricted Stock Units. For purposes of this Agreement, the Holder will not be
deemed to have a Separation from Service merely by reason of the transfer of the
Holder’s employment from the Company to any Subsidiary or from any Subsidiary to
the Company or another Subsidiary, or by reason of an approved leave of absence.
However, the rules set forth in Treasury Regulation section 1.409A-1(h)(1)(i)
shall apply in determining whether the Holder

 

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has a Separation from Service in connection with a leave of absence, and in that
regard the Holder and the Company hereby elect to substitute a 29-month period
of absence for a six-month period in the circumstances referred to in the last
sentence of that Treasury Regulation.

 

  (b) In the event of any breach by the Holder of the terms of Section 8 of the
Employment Agreement as in effect from time to time, then notwithstanding any
other provision of this Agreement or the Plan, any Restricted Stock Units that
did not become non-forfeitable within the meaning of Section 4 before such
breach shall immediately expire and are forfeited upon such breach. If the
Holder, at any time before all of the Restricted Stock Units become
non-forfeitable within the meaning of Section 4: (i) directly or indirectly,
whether as an owner, partner, shareholder, consultant, agent, employee, investor
or in any other capacity, accepts employment by, renders services for or
otherwise assists any other business which competes with the business conducted
by the Company or any of its Subsidiaries in which the Holder has worked during
the Holder’s last two years with the Company or any of its Subsidiaries;
(ii) directly or indirectly, hires or solicits or arranges for the hiring or
solicitation of any employee of the Company or any of its Subsidiaries on behalf
of any business or enterprise other than the Company or a Subsidiary, or
encourages any such employee to leave such employment; (iii) uses, discloses,
misappropriates or transfers confidential or proprietary information concerning
the Company or any of its Subsidiaries (except as required by the Holder’s work
responsibilities with the Company or any of its Subsidiaries); or (iv) is
convicted of a crime against the Company or any of its Subsidiaries; or
(v) engages in any activity in violation of the policies of the Company or any
of its Subsidiaries, including without limitation the Company’s Code of Business
Ethics and Conduct, or, at any time, engages in conduct adverse to the best
interests of the Company or any of its Subsidiaries; then should any of the
foregoing events occur, any Restricted Stock Units that have not theretofore
become non-forfeitable within the meaning of Section 4 shall be forfeited unless
the Committee, in its sole discretion, elects otherwise. The provisions of this
Section 5(b) are in addition to any other agreements related to non-competition,
non-solicitation and preservation of Company confidential and proprietary
information entered into between the Holder and the Company, and nothing herein
is intended to waive, modify, alter or amend the terms of any such other
agreement.

 

  (c) By executing the RSU Agreement, the Holder irrevocably consents to any
forfeiture of Restricted Stock Units required or authorized by this Agreement.

 

6.

ISSUANCE OF SHARES. If a Restricted Stock Unit becomes non-forfeitable within
the meaning of Section 4, a share of Common Stock shall be credited to a book
entry account with the Company’s transfer agent in the name of the Holder (or,
in the event of the death of the Holder, in the name of the Holder’s
Beneficiary) in payment of such Restricted Stock Unit on the date on which the
Restricted Stock Unit becomes non-forfeitable within the meaning of Section 4 or
within thirty (30) days thereafter (which date during that 31 day

 

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period shall be determined by the Company). For the avoidance of doubt, a
Restricted Stock Unit becomes non-forfeitable within the meaning of Section 4 on
the earliest of (a) a specified date, as provided in Section 4(a) above, (b) the
date on which the Holder’s death occurs, as provided in Section 4(b) above,
(c) the date on which the Holder’s Disability occurs, as provided in
Section 4(b) above, (d) the date on which a 409A Change in Control Event”
occurs, as provided in Section 4(c) above, or (e) the date on which a Separation
from Service described in Section 4(d) above occurs; provided in the case of
each of the foregoing that the Holder does not have a Separation from Service
before the date in question or, in the case of clause (a) hereof, on the
specified date in question. In lieu of crediting any such share to a book entry
account with the Company’s transfer agent, at the election and expense of the
Holder (or, in the event of the death of the Holder, of the Holder’s
Beneficiary), a stock certificate representing such share shall be delivered to
the Holder (or, in the event of the death of the Holder, to the Holder’s
Beneficiary) as soon as practicable after the Company’s receipt of the Holder’s
(or Beneficiary’s) election; provided that the share is issued to the Holder
(or, in the event of the death of the Holder, to the Beneficiary of the Holder),
either by means of a book entry or stock certificate, on the date on which the
Restricted Stock Unit becomes non-forfeitable within the meaning of Section 4 or
within thirty (30) days thereafter. All shares of Common Stock issued under this
Agreement will be duly authorized, validly issued, fully paid and
non-assessable.

Notwithstanding the preceding provisions of this Section 6 or any other
provision of this Agreement to the contrary, if the Holder is a specified
employee (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the
date of a Separation from Service, any payment to be made pursuant to this
Agreement that constitutes deferred compensation that is subject to Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”) and that is to be
paid due to a Separation from Service during the six month period following a
Separation from Service (a “Delayed Payment”) shall not be paid during that six
month period but shall instead be accumulated and paid on the first day of the
seventh month following the date of the Separation from Service (or, if earlier,
within 14 days after the death of the Holder)(the “Delayed Payment Date”). For
the avoidance of doubt, the preceding sentence shall apply to any payment (and
only to any payment) pursuant to this Agreement to which Code
Section 409A(a)(2)(B)(i) (relating to specified employees) applies, and shall
not apply to any payment that is not subject to Code Section 409A as a result of
Treasury Regulation section 1.409A-1(b)(4) (relating to short-term deferrals) or
otherwise. Also for the avoidance of doubt, any Delayed Payment shall accrue
Dividend Equivalents pursuant to the first or second sentence of Section 2 until
it is paid pursuant to the preceding provisions of this Section 6, which
Dividend Equivalents shall be accumulated and deemed reinvested in additional
Restricted Stock Units at Fair Market Value on the Dividend Payment Date of such
Dividend Equivalents (which additional Restricted Stock Units may also accrue
Dividend Equivalents pursuant to the first or second sentence of Section 2) and
which shall be paid (in money) on the Delayed Payment Date based on the Fair
Market Value of such additional Restricted Stock Units on the Delayed Payment
Date. The Holder’s right to any series of payments of Restricted Stock Units or
Dividend Equivalents pursuant to this Agreement shall be treated as a right to a
series of separate payments within the meaning of Treasury Regulation section
1.409A-2(b)(2)(iii), including without limitation for purposes of the short-term
deferral rule set forth in Treasury Regulation section 1.409A-1(b)(4).

 

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7. CAPITAL ADJUSTMENTS. In addition to any other adjustments that may be made
pursuant to Section 10 of the Plan, (a) if the number of outstanding shares of
Common Stock of the Company is changed as a result of a stock dividend, stock
split, reverse stock split or the like without additional consideration to the
Company, the number of Restricted Stock Units shall be adjusted to correspond to
the change in the outstanding shares of Common Stock, and (b) in the case of any
reorganization or recapitalization of the Company (by reclassification of its
outstanding Common Stock or otherwise), or its consolidation or merger with or
into another corporation, or the sale, conveyance, lease or other transfer by
the Company of all or substantially all of its property, pursuant to any of
which events the then outstanding shares of Common Stock are combined, or are
changed into or become exchangeable for other shares of stock or property, the
Holder shall be entitled to earn and receive pursuant to the Award, in lieu of
the shares that he would otherwise be entitled to earn and receive pursuant to
the Award (the “Affected Shares”) and without any payment, the shares of stock
or property which the Holder would have received upon such reorganization,
recapitalization, consolidation, merger, sale or other transfer, if immediately
prior thereto he had owned the Affected Shares and had exchanged the Affected
Shares in accordance with the terms of such reorganization, recapitalization,
consolidation, merger, sale or other transfer, and (c) in case of any
distribution by the Company of rights or property to stockholders (including
without limitation a spin-off), the issuance of stock options to persons other
than employees or directors of the Company, the issuance by the Company of
securities convertible into Common Stock or into shares of any stock or security
into which Common Stock shall have been changed or for which it shall have been
exchanged, or any other change in the capital structure of the Company (other
than as specified above in this Section 7) which, in the judgment of the
Committee, would effect a dilution or diminution of the Holder’s rights
hereunder, the Committee shall make equitable adjustments in the number or kind
of shares in respect of this Award, and such adjustments shall be effective and
binding for all purposes of this Award. Any provision of this Section 7 to the
contrary notwithstanding, no adjustments may be made pursuant to this Section 7
or Section 10 of the Plan that would prevent the amounts payable hereunder from
being “objectively determinable” within the meaning of Treasury Regulation
section 1.409A-3(i)(1).

 

8. TAXES AND WITHHOLDING. The Company shall have the right, in its discretion,
to deduct from any Dividend Equivalents payable pursuant to this Agreement, and
from any shares to be issued pursuant to Section 6, cash and/or shares, valued
at Fair Market Value on the date of payment, in an amount necessary to satisfy
all Federal, state and local taxes required by law to be withheld with respect
to such Dividend Equivalents and/or shares, and the Holder may be required to
pay to the Company prior to delivery of certificates representing such shares
and prior to such shares being credited to a book entry account in the Holder’s
name, the amount of any such taxes. The Company shall accept whole shares of
Common Stock of equivalent Fair Market Value in payment of the Company’s minimum
statutory withholding tax obligations if the Holder of the Award elects to make
payment in such manner.

 

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9. COMPLIANCE WITH LAW. The Company will make reasonable efforts to comply with
all applicable federal and state securities laws. However, the Company will not
issue any shares or other securities pursuant to this Agreement if their
issuance would result in a violation of any such law. If at any time the
Committee shall determine, in its discretion, that the listing, registration or
qualification of any shares subject to this Award upon any securities exchange
or under any state or Federal law, or the consent or approval of any government
regulatory body, is necessary or desirable as a condition of, or in connection
with, the granting of this Award or the issue of shares hereunder, no rights
under the Award may be exercised and shares of Common Stock may not be issued
pursuant to the Award, in whole or in part, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee and any delay caused thereby
shall in no way affect the dates of vesting or forfeiture of the Award.

 

10. RELATION TO OTHER BENEFITS. The benefits received by the Holder under this
Agreement will not be taken into account in determining any other benefits to
which the Holder may be entitled under any profit sharing, retirement or other
benefit or compensation plan maintained by the Company, including the amount of
any life insurance coverage available to any beneficiary of the Holder under any
life insurance plan covering employees of the Company.

 

11. AMENDMENTS; INTEGRATED AGREEMENT. Except as otherwise provided in Section 18
below, this Agreement may only be amended in a writing signed by the Holder and
an officer of the Company (other than the Holder) duly authorized to do so. This
Agreement contains the entire agreement of the parties relating to the subject
matter of this Agreement and supersedes and replaces all prior agreements and
understandings with respect to such subject matter, and the parties have made no
agreements, representations or warranties relating to the subject matter of this
Agreement which are not set forth herein.

 

12. RELATION TO PLAN; INTERPRETATION. The Award is granted under the Plan, and
the Award and this Agreement are each subject to the terms and conditions of the
Plan, which are hereby incorporated in this Agreement by reference. In the event
of any inconsistent provisions between this Agreement and the Plan, the
provisions of the Plan control. Capitalized terms used in this Agreement without
definition have the meanings assigned to them in the Plan. References to
Sections are to Sections of this Agreement unless otherwise noted. The titles to
Sections of this Agreement are intended solely for convenience and no provision
of this Agreement is to be construed by reference to the title of any Section.

 

13.

NO IMPLIED PROMISES. By accepting the Award and executing the RSU Agreement, the
Holder recognizes and agrees that the Company and its Subsidiaries, and each of
their officers, directors, agents and employees, including but not limited to
the Board of Directors

 

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of the Company and the Committee, in their oversight or conduct of the business
and affairs of the Company and its Subsidiaries, may in good faith cause the
Company and/or a Subsidiary to act or omit to act in a manner that will,
directly or indirectly, prevent all or part of the Restricted Stock Units from
becoming non-forfeitable. No provision of this Agreement shall be interpreted or
construed to impose any liability upon the Company, any Subsidiary, or any
officer, director, agent or employee of the Company or any Subsidiary, or the
Board or the Committee, for any forfeiture of Restricted Stock Units that may
result, directly or indirectly, from any such action or omission, or shall be
interpreted or construed to impose any obligation on the part of any such entity
or person to refrain from any such action or omission.

 

14. NOTICES. Any notice hereunder by the Holder shall be given to the Committee
in writing and such notice by the Holder hereunder shall be deemed duly given or
made only upon receipt by the Corporate Secretary at Barnes Group Inc., P. O.
Box 489, 123 Main Street, Bristol, Connecticut 06011-0489, U.S.A., or at such
other address as the Company may designate by notice to the Holder. Any notice
to the Holder shall be in writing and shall be deemed duly given if delivered to
the Holder in person or mailed or otherwise delivered to the Holder at such
address as the Holder may have on file with the Company from time to time.

 

15. INTERPRETATION AND DISPUTES. The Committee shall interpret and construe this
Agreement and make all determinations thereunder, and any such interpretation,
construction or determination by the Committee shall be binding and conclusive
on the Company and the Holder and on any person or entity claiming under or
through either of them.

With respect to any claim, demand, dispute, action or cause of action arising
from such interpretation or construction by the Committee that also arises under
or relates to the Employment Agreement as in effect from time to time, the
provisions of Section 13 of the Employment Agreement as in effect from time to
time (rather than the following provisions of this Section 11) shall apply. Any
other claim, demand or controversy arising from such interpretation,
construction or determination 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 Corporate Secretary of the
Company within thirty (30) days of the date of the Committee’s interpretation or
construction. The mediation process shall conclude upon the earlier of: (a) the
resolution of the dispute; (b) 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 (c) thirty (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 fourteen
(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. The Holder and the Company specifically understand and
agree that the failure of a party to timely initiate a proceeding hereunder

 

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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 the Holder agrees 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 Agreement 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.

 

16. GENERAL.

 

  (a) Nothing in this Agreement shall confer upon the Holder any right to
continue in the employ or other service of the Company or any Subsidiary, or
shall limit in any manner the right of the Company, its stockholders or any
Subsidiary to terminate the employment or other service of the Holder or adjust
the compensation of the Holder.

 

  (b) The Holder shall have no rights as a stockholder with respect to any
shares that may be issued pursuant to this Agreement until the date of issuance
to the Holder of a stock certificate for the shares or the date of entry of a
credit for the shares in a book entry account in the name of the Holder.

 

  (c) This Agreement shall be binding upon the successors and assigns of the
Company and upon the Beneficiary, estate, legal representatives, legatees and
heirs of the Holder.

 

  (d) Any waiver by a party of another party’s performance of, or compliance
with, a term or condition of this Agreement shall not operate, or be construed,
as a waiver of any subsequent failure by such other party to perform or comply.

 

  (e) Any term or provision of this Agreement 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.

 

  (f) This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, without regard to the principles of conflicts of
laws thereof.

 

  (g) By signing this Agreement, the Holder (i) agrees that the provisions of
this Agreement, including in particular but not limited to the provisions of
Section 4(b), 4(c), 4(d) and Section 6, shall be deemed to satisfy the Company’s
obligations with respect to the Restricted Stock Units under the Employment
Agreement as in effect from time to time on and after the Grant Date, including
in particular but not limited to the provisions of Section 4.3, 6.2(v), 6.3 and
6.4 of the Employment Agreement as in effect as of the Grant Date, and
(ii) waives any claim that the provisions of this Agreement fail to satisfy any
provision of the Employment Agreement as in effect at any time on or after the
Grant Date.

 

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17. CODE SECTION 409A. Any Dividend Equivalents and shares that may be earned
pursuant to this Agreement are intended to qualify as short-term deferrals under
Treasury Regulation section 1.409A-1(b)(4), or are intended to meet the
requirements of Section 409A(a)(2), (3) and (4) of the Code, so that none of the
Dividend Equivalents and shares that may be earned pursuant to this Agreement
will be includible in the Holder’s federal gross income pursuant to
Section 409A(a)(1)(A) of the Code. The Award and this Agreement shall be
administered, interpreted and construed to carry out such intention, and any
provision of this Agreement that cannot be so administered, interpreted and
construed shall to that extent be disregarded. However, the Company does not
represent, warrant or guarantee that any Dividend Equivalents or shares that may
be earned pursuant to this Agreement will not be includible in the Holder’s
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 the Holder as to
the tax consequences of the Award or this Agreement.

 

18. CONSENT TO CERTAIN AMENDMENTS AND PROVISIONS.

 

  (a)

By executing the RSU Agreement, the Holder hereby irrevocably (i) authorizes the
Committee or the Board of Directors of the Company (the “Board”), on or before
December 31, 2008 or such later date(s), if any, to which the December 31, 2008
documentary compliance date set forth in paragraph .01 of section 3 of IRS
Notice 2006-79 as modified by section 3.01(B)(1) of IRS Notice 2007-86 is
hereafter extended (the “409A Documentary Compliance Date”), to amend the RSU
Agreement and any “Prior Non-Grandfathered Compensation Arrangement” as defined
in Section 18(b) below, in any respect that the Committee or the Board
determines to be necessary, advisable or expedient to plan for, respond to,
comply with or reflect Section 409A of the Code, and (ii) consents in advance to
any and all such amendments of the RSU Agreement and any Prior Non-Grandfathered
Compensation Arrangement, and (iii) consents in advance to any amendment of the
Plan that the Board hereafter adopts on or before the 409A Documentary
Compliance Date to plan for, respond to, comply with or reflect Section 409A of
the Code, and (iv) agrees that the Holder’s consent to any such amendments of
the RSU Agreement, any Prior Non-Grandfathered Compensation Arrangement and the
Plan shall be as effective as if such amendments were fully set forth herein,
and (v) waives any right he may have to consent to the amendment in question if
for any reason the Holder’s consent to any of the aforementioned amendments is
not legally effective, and (vi) recognizes and agrees that the Company does not
represent, warrant or guarantee that any amendment of the RSU Agreement or any
Prior Non-Grandfathered Compensation Arrangement or the Plan that is made
pursuant to this Section 18(a) , or any Different Identification Method that the
Board or Committee may prescribe or Different Election that the Board or
Committee may make in accordance with Section 18(c) below, will have its
intended tax effect or will enable compensation to be exempt from or comply with
Section 409A of the Code, and that

 

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the Company does not make any other representation, warranty or guaranty to the
Holder as to the tax consequences of any such amendment, Different
Identification Method or Different Election. For the avoidance of doubt, nothing
in this Section 18(a) is intended to authorize or constitute the Holder’s
consent to any amendment that would constitute a modification or extension of a
stock option within the meaning of Treasury Regulation section
1.409A-1(b)(5)(v). If and to the extent that, notwithstanding the foregoing,
anything herein would be interpreted or construed to authorize or constitute the
Holder’s consent to any such amendment, then to that extent the authorization or
consent is hereby rescinded.

 

  (b) For purposes of Section 18(a) above, a “Prior Non-Grandfathered
Compensation Arrangement” means any compensation arrangement between the Company
and the Holder that was entered into before the Grant Date (whether or not paid
in full before the Grant Date) except to the extent that the compensation
payable (or paid) under such arrangement is “grandfathered” from Section 409A of
the Code (i.e., is compensation to which Section 409A of the Code does not
apply, according to Treasury Regulation section 1.409A-6 or any other applicable
Treasury Department guidance). In no event shall an arrangement that is
grandfathered from Section 409A in the absence of this Section 18 be deemed to
be a Prior Non-Grandfathered Compensation Arrangement within the meaning of
Section 18(a). The Holder recognizes and agrees that Prior Non-Grandfathered
Compensation Arrangements include, but may not be limited to, the Employment
Agreement and (i) any stock option, restricted stock unit, performance share,
performance unit or contingent dividend equivalent award that the Company
granted to the Holder after December 31, 2004 under the Plan, (ii) any
restricted stock unit, performance-accelerated restricted stock unit,
performance share, performance unit or contingent dividend equivalent award that
the Company granted to the Holder before December 31, 2004 (whether under the
Plan or otherwise) that was outstanding and unvested on that date, and (iii) any
non-qualified deferred compensation plan, such as the Company’s Retirement
Benefit Equalization Plan, Supplemental Executive Retirement Plan and
Supplemental Senior Officer Retirement Plan, if and to the extent that the
Holder accrued benefits or vested in benefits under such plan after that date.

 

  (c)

The Holder agrees that, if at any time during the 12-month period ending on any
“specified employee identification date”, which shall be December 31, the Holder
is in Salary Grade 20 or above or meets the requirements of Code section
416(i)(1)(A)(ii) or (iii) (applied in accordance with the Treasury Regulations
thereunder and disregarding Code section 416(i)(5)), the Holder shall be treated
as a “Specified Employee” within the meaning of Code Section 409A and Treasury
Regulation section 1.409A-1(i) (or other similar or successor
provisions)(“Specified Employee”) for purposes of this Agreement and any Prior
Non-Grandfathered Compensation Arrangement and any compensation arrangement that
may hereafter be adopted by the Company in which the Holder may participate
(“Future Compensation Arrangement”) for the entire 12-month period beginning on
the “specified employee effective date”, which shall be the January 1 that
immediately

 

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follows such specified employee identification date, unless the Board or
Committee hereafter prescribes a different method of identifying service
providers who will be subject to the six month delay required by
Section 409A(a)(2)(B)(i) of the Code (the “Six Month Delay”)(a “Different
Identification Method”) or elects a different specified employee identification
date or specified employee effective date or makes any other election that may
be made in accordance with Treasury Regulation section 1.409A-1(i) and the
transition rules and official guidance under Code Section 409A (a “Different
Election”), in which case whether the Holder shall be treated as a Specified
Employee shall be determined in accordance with any such Different
Identification Method so prescribed and any such Different Election so made by
the Board or Committee. The Holder hereby irrevocably (i) consents to any such
Different Identification Method that the Committee or Board may hereafter
prescribe and any such Different Election that the Committee or Board may
hereafter make in accordance with that Treasury Regulation or otherwise in
accordance with Code Section 409A and the transition rules and official guidance
thereunder, for purposes of identifying the service providers who will be
subject to the Six Month Delay with respect to payments under this Agreement,
any Prior Non-Grandfathered Compensation Arrangement and any Future Compensation
Arrangement, and (ii) agrees that the Holder’s consent to any such Different
Identification Method or Different Election shall be as effective as if such
Different Identification Method or Different Election were fully set forth
herein, and (iii) waives any right he may have to consent to the Different
Identification Method or Different Election in question if for any reason the
Holder’s consent to such Different Identification Method or Different Election
is not legally effective.

IN WITNESS WHEREOF, the Company, with the consent of the Holder, has amended and
restated the RSU Agreement on the date in 2008 indicated in the first paragraph
hereof, effective January 1, 2009.

 

BARNES GROUP INC. BY:  

 

  Senior Vice President – Human Resources

 

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