Document:

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                                 EXHIBIT 10.1
                                 ------------

                               BARNES GROUP INC.

                    MANAGEMENT INCENTIVE COMPENSATION PLAN
                    --------------------------------------
             Amended and Restated Effective as of January 1, 2000

SECTION 1.  PURPOSE
-------------------

     The Management Incentive Compensation Plan (the "MICP") is designed to
provide incentive compensation opportunities to persons in key positions who
contribute importantly to the success of Barnes Group Inc. (the "Company").

SECTION 2.  ADMINISTRATION
--------------------------

     The MICP shall be administered by the Compensation Committee of the Board
of Directors of the Company, or its successor (the "Committee").  Amounts paid
or projected to be paid under the MICP are referred to herein as "Awards."

SECTION 3.  DEFINITIONS
-----------------------

3.1  "Award Period" shall mean the period of time within which Performance is
     measured for the purpose of determining whether an Award has been earned.

3.2  "Business Unit" shall mean a cost center, profit center or international
     subsidiary within a Group.

3.3  "Business Unit Fund" shall mean an amount equal to the sum, in the
     aggregate, of the Individual Targets earned by all of the MICP participants
     in a Business Unit.

3.4  "CEO" shall mean the President and Chief Executive Officer of the Company.

3.5  "Company Officer" shall mean an executive officer of the Company elected by
     its Board of Directors.

3.6  "Fund" shall mean an amount equal to the sum, in the aggregate, of the
     Individual Targets earned by all of the MICP participants in a Group.

3.7  "Group" shall mean the Executive Office, Associated Spring, Bowman
     Distribution, or Barnes Aerospace.

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3.8  "Group President" shall mean the president of Associated Spring, Bowman
     Distribution, or Barnes Aerospace.

3.9  "Individual Target" shall mean the percentage of salary for each individual
     participating in the MICP.  The Committee will establish the Individual
     Target for each MICP participant, by position title, salary grade, or other
     category before or during the Award Period.

3.10 "Maximum" shall mean a Performance level at or above which the amount paid
     or projected to be paid for an Award Period is equal to 300% of the Fund
     for the corresponding Group.

3.11 "Performance" shall mean the performance objectives established by the
     Committee in advance, with respect to each Group or Business Unit, as the
     case may be, for an Award Period, for the purpose of determining whether,
     and to what extent, an Award has been earned by the Group or Business Unit
     for an Award Period.  Performance may be adjusted by the Committee to
     include or exclude extraordinary and non-recurring items or other factors.

3.12 "Target" shall mean a Performance level at which the amount paid or
     projected to be paid for an Award Period is equal to 100% of the Fund for
     the corresponding Group.

3.13 "Threshold" shall mean a Performance level at or above which an Award is
     earned for an Award Period.  For Threshold Performance, the amount paid or
     projected to be paid for an Award Period is equal to 25% of the Fund for
     the corresponding Group.

SECTION 4.  GROUP FUNDS
-----------------------

     If an Award Period is a calendar year, prior to March 1, the Committee
shall establish the Threshold, Target and Maximum for each Group.  The Committee
may also designate one or more intermediate levels of Performance between the
Threshold and the Target, and the Target and the Maximum, for a Group, and the
percentage of the corresponding Fund that will be available for payment as an
Award if Performance equals such intermediate level.

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SECTION 5.  BUSINESS UNIT FUNDS
-------------------------------

     If an Award Period is a calendar year, prior to May 1, the CEO shall
designate which Business Units, if any, shall have separate Business Unit Funds.
For each such Business Unit, the CEO shall also determine the threshold, target
and maximum on the same basis as such measures are determined for a Fund.  The
CEO may also designate intermediate levels of Performance between the threshold
and the target, and the target and the maximum, for the Business Unit and the
percentage of the Business Unit Fund that will be available for payment as an
Award if Performance equals such intermediate level.

SECTION 6.  PARTICIPANTS
------------------------

     If an Award Period is a calendar year, prior to May 1, the CEO, upon the
recommendations of the Company Officers, shall designate eligible participants
in the MICP for the current year and the respective Funds or Business Unit
Funds, as the case may be, in which they shall participate.  The CEO shall
participate in the Executive Office Fund.  Except for participants who retire,
die or become permanently disabled during the year, whose Award shall be
prorated to the date of such retirement, death or permanent disability, a person
must be employed by the Company or one of its subsidiaries on December 1 in
order to be eligible to receive an Award, unless the CEO decides otherwise in
individual cases.

SECTION 7.  AWARDS - BUSINESS UNIT FUNDS
----------------------------------------

     After the end of the Award Period and based on the final Performance of
each Business Unit for which a Business Unit Fund has been designated pursuant
to Section 5, the CEO, upon the recommendation of the corresponding Company
Officer, shall determine each participant's share of the Business Unit Fund
(except for any Company Officer who participates in the Business Unit Fund or
the Fund of the corresponding Group, whose Award shall be determined by the
Committee pursuant to Section 8.1).  Without limiting the foregoing, the CEO
shall have the authority, subject to Section 9, to

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make adjustments to the amount of any Business Unit Fund and to adjust or
refrain from making an Award to any participant.

SECTION 8.  AWARDS - GROUP FUNDS
--------------------------------

8.1  After the end of the Award Period and based on the final Performance of
     each Group, the CEO shall determine each participant's share of the
     corresponding Group Fund, upon the recommendations of the Company Officers
     (except for any Company Officer who participates in the Fund).  The CEO
     shall recommend the share of the Executive Office Fund for each Company
     Officer, other than the CEO.  The Committee shall approve the Award to each
     Company Officer other than the CEO, and determine the appropriate Award for
     the CEO, based in all instances on Individual Targets and the Performance
     level achieved.

8.2  Subject to Section 9, the Committee shall have the authority to make
     adjustments to the Funds and to adjust or refrain from making an Award
     including, without limitation, making an Award to any Company Officer in
     excess of his or her calculated Award and recommending to the CEO an Award
     in excess of the calculated Award for any participant who is not a Company
     Officer.

SECTION 9.  AWARDS ABOVE MAXIMUM
--------------------------------

     Notwithstanding anything in the MICP to the contrary, no awards in excess
of the Maximum shall be made to any person without the approval of the
Committee.

SECTION 10. PAYMENT
-------------------

     Awards shall be paid within 60 days after the expiration of the Award
Period, unless otherwise decided by the Committee.

SECTION 11. GENERAL
-------------------

11.1 The interpretation of the MICP by the Committee and its decisions on all
     questions arising under the MICP shall be conclusive and binding on all
     participants and the CEO.

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11.2 The MICP may be amended at any time, including retroactively, by the
     Committee.

11.3 This amendment and restatement of the MICP supersedes all prior MICP and
     similar incentive plans, effective as of January 1, 2000 for the Award
     Period of calendar year 2000 and Award Periods thereafter.

Amended
-------
2/17/95
2/20/96
7/20/98
4/11/00

                                                                               5<PAGE>

                                 EXHIBIT 10.13
                                 -------------

                               BARNES GROUP INC.

                     EMPLOYEE STOCK AND OWNERSHIP PROGRAM
                          EFFECTIVE FEBRUARY 1, 2000

1.   Purpose

     The purpose of the Plan is to provide a means through which the Company may
attract able persons to provide services to or enter and remain in the employ
with the Company and its Subsidiaries and to provide a means whereby they can
acquire and maintain Common Stock ownership, or be paid incentive compensation
measured by reference to the value of Common Stock, thereby strengthening their
commitment to the welfare of the Company and promoting an identity of interest
between stockholders of the Company and these service providers and employees.

     So that the appropriate incentive can be provided, the Plan provides for
granting Incentive Stock Options, Nonqualified Stock Options, Restricted Stock
Awards, Performance Share or Cash Unit Awards, and SARs or any combination of
the foregoing.

2.   Definitions

     The following definitions shall be applicable throughout the Plan.

     (a)  "Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated
under Section 12 of the Exchange Act.

     (b)  "Award" means, individually or collectively, any Incentive Stock
Option, Nonqualified Stock Option, Restricted Stock Award, Performance Share or
Cash Unit Award, or SAR under the Plan.

     (c)  "Award Agreement" means the agreement between the Company and a
Participant who has been granted an Award which defines the rights and
obligations of the parties with respect to such Award.

     (d)  "Award Period" means a period of time within which performance is
measured for the purpose of determining whether an Award of Performance Share or
Cash Units has been earned.

     (e)  "Beneficial Owner" shall have the meaning set forth in Rule 13d-3
under the Exchange Act.

     (f)  "Board" means the Board of Directors of the Company.

     (g)  "Change in Control" shall have the meaning set forth in Section
          11(p).
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     (h)  "Code" means the Internal Revenue Code of 1986, as amended.  Reference
in the Plan to any section of the Code shall be deemed to include any amendments
or successor provisions to such section and any regulations under such section.

     (i)  "Committee" means the committee appointed by the Board to administer
the Plan as described in Section 4.

     (j)  "Common Stock" means the common stock of the Company.

     (k)  "Company" means Barnes Group Inc.

     (l)  "Date of Grant" means the date on which the granting of an Award is
authorized or such other date as may be specified in such authorization.

     (m)  "Disability" means, with respect to Incentive Stock Options,
"permanent and total disability" as defined in Section 22(e)(3) of the Code,
and, for all other purposes shall have the meaning set forth in the Company's
long-term disability plan.

     (n)  "Eligible Person" means any person regularly employed by or providing
consulting or other services to the Company or a Subsidiary.  An Award other
than an Incentive Stock Option may be granted to an Eligible Person, in
connection with hiring, retention or otherwise, prior to the date the Eligible
Person first performs services for the Company or a Subsidiary, provided that
such Award shall not become vested prior to the date on which the Eligible
Person completes one continuous year of employment/service with the Company
and/or Subsidiaries.

     (o)  "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     (p)  "Fair Market Value" on a given date means (i) if the Stock is listed
on a national securities exchange, the closing sale prices reported as having
occurred on the primary exchange on which the Stock is listed and traded on the
date prior to such date, or, if there is no such sale on that date, then on the
last preceding date on which such a sale was reported; (ii) if the Stock is not
listed on any national securities exchange but is quoted in the National Market
System of The Nasdaq Stock Market on a last sale basis, the average between the
high bid price and low ask price reported on the date prior to such date, or, if
there is no such sale on that date, then on the last preceding date on which a
sale was reported; or (iii) if the Stock is not listed on a national securities
exchange nor quoted in the National Market System of The Nasdaq Stock Market on
a last sale basis, the amount determined by the Committee to be the fair market
value based upon a good faith attempt to value the Stock accurately.

     (q)  "Holder" means a Participant who has been granted an Award, or a
permitted transferee of such a Participant.

     (r)  "Incentive Stock Option" means an Option granted by the Committee to a
Participant under the Plan which is designated by the Committee as an "incentive
stock option" within the meaning of Section 422 of the Code.

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     (s)  "Nonqualified Stock Option" means an Option granted under the Plan
which is not designated as an Incentive Stock Option.

     (t)  "Normal Termination" means termination of employment or service with
the Company or a Subsidiary other than by reason of death or Disability.

     (u)  "Option" means an Award granted under Section 7 of the Plan.

     (v)  "Option Period" means the period described in Section 7(c).

     (w)  "Option Price" means the exercise price set for an Option described in
Section 7(a).

     (x)  "Participant" means an Eligible Person who has been selected by the
Committee to participate in the Plan and to receive an Award pursuant to Section
6.

     (y)  "Performance Goals" means the performance objectives established by
the Committee with respect to an Award Period, Restricted Period, or Option
Period with respect to Performance Share or Cash Units, Restricted Stock,
Options or SARs respectively, established for the purpose of determining
whether, and to what extent, such Awards will be earned for an Award Period,
Restricted Period or Option Period.

     (z)  "Performance Cash Unit" means a hypothetical equivalent to a number of
dollars established by the Committee and granted in connection with an Award
made under Section 8 of the Plan.

     (aa) "Performance Share Unit" means a hypothetical investment equivalent
equal to one share of Stock granted in connection with an Award made under
Section 8 of the Plan.

     (bb) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) any member of the Barnes family (by blood
or marriage) or any entity for the benefit of, or controlled by, a member of the
Barnes family (by blood or marriage), (ii) the Company or a Subsidiary, (iii) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any of its Affiliates, (iv) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (v) a corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.

     (cc) "Plan" means the Company's Employee Stock And Ownership Program, as
amended.

     (dd) "Restricted Period" means, with respect to any share of Restricted
Stock, the period of time determined by the Committee during which such Award is
subject to the restrictions set forth in Section 9 of the Plan.

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     (ee) "Restricted Stock" means shares of Stock issued or transferred to a
Participant subject to forfeiture and the other restrictions set forth in
Section 9 of the Plan.

     (ff) "Restricted Stock Award" means an Award of Restricted Stock granted
under Section 9 of the Plan.

     (gg) "SAR" means a stock appreciation right which entitles a Participant to
receive, in cash or Stock (valued at Fair Market Value), at the discretion of
the Committee, an amount equal to the excess of the Fair Market Value of a
specified number of shares of Stock at the time of exercise over the Option
Price established by the Committee.

     (hh) "Securities Act" means the Securities Act of 1933, as amended.

     (ii) "Stock" means the Common Stock of the Company or such other authorized
shares of stock of the Company as from time to time may be authorized for use
under the Plan.

     (jj) "Subsidiary" means any corporation or other business entity in which
the Company owns a significant equity interest, as determined in the discretion
of the Committee.

3.   Effective Date, Duration and Shareholder Approval

     The Plan is effective as of February 1, 2000.  The validity of any and all
Awards granted pursuant to the Plan is contingent upon approval of the Plan by
the stockholders of the Company in a manner which complies with Section
422(b)(1) of the Code and Section 162(m)(4)(C)(ii) of the Code.

     The expiration date of the Plan, after which no Awards may be granted
hereunder, shall be January 31, 2005; provided, however, that the administration
                                      --------  -------
of the Plan shall continue in effect until all matters relating to the payment
of Awards previously granted have been settled.

4.   Administration

     The Plan shall be administered by the Committee, which shall be composed of
at least two persons, each member of which, at the time he or she takes any
action with respect to an Award under the Plan, shall be a "Non-Employee
Director", as defined in Rule 16b-3 under the Exchange Act, or any successor
rule or regulation, and an "outside director", as defined in Treasury
Regulations (S) 1.162-27(e)(3), or any successor regulation.  The majority of
the members of the Committee shall constitute a quorum.  The acts of a majority
of the members present at any meeting at which a quorum is present or acts
approved in writing by a majority of the Committee shall be deemed the acts of
the Committee.

     Subject to the provisions of the Plan, the Committee shall have exclusive
power to:

     (a)  Select the Eligible Persons to participate in the Plan;

     (b)  Determine the nature and extent of the Awards to be made to each
Participant;

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     (c)  Determine the time or times when Awards will be made to Eligible
Persons;

     (d)  Determine the duration of each Award Period and Restricted Period;

     (e)  Determine the conditions to which the payment of Awards may be
subject;

     (f)  Establish the Performance Goals, if any, for each Award Period;

     (g)  Prescribe the form of Award Agreement or other form or forms
evidencing Awards; and

     (h)  Cause records to be established in which there shall be entered, from
time to time as Awards are made to Eligible Persons, the date of each Award, the
number of Incentive Stock Options, Nonqualified Stock Options, Performance Share
or Cash Units, shares of Restricted Stock and SARs awarded by the Committee to
each Eligible Person, and the expiration date and the duration of any applicable
Award Period or Restricted Period.

     The Committee shall have the authority, subject to the provisions of the
Plan, to establish, adopt, or revise such rules and regulations and to make all
such determinations relating to the Plan as it may deem necessary or advisable
for the administration of the Plan.  The Committee's interpretation of the Plan
or any documents evidencing Awards granted pursuant thereto and all decisions
and determinations by the Committee with respect to the Plan shall be final,
binding, and conclusive on all parties unless otherwise determined by the Board.

5.   Grant of Awards; Shares Subject to the Plan

     The Committee may, from time to time, grant Awards of Options, Restricted
Stock, Performance Share or Cash Units and/or SARs to one or more Eligible
Persons; provided, however, that:
         --------  -------

     (a)  The aggregate number of shares of Stock that may be issued or
transferred pursuant to all Awards may not exceed 2,500,000 plus the aggregate
number of shares of Stock available for future awards under the 1991 Barnes
Group Stock Incentive Plan (including any shares of Stock which become available
due to forfeiture, cancellation or expiration of Stock or options under such
plan), subject to Section 12; provided, however, that no more than 25% of the
                              --------  -------
foregoing number of shares of Stock may be available for grant of Restricted
Stock that is not subject to vesting based on the achievement of Performance
Goals, and; provided, further, that the maximum number of shares of Stock with
respect to which Options or SARs or other Awards may be granted during any
calendar year to any Eligible Person is 500,000.

     (b)  In the event any Option, Restricted Stock Award, Performance Share or
Cash Unit or SAR shall be surrendered, terminate, expire, or be forfeited, the
number of shares of Stock no longer subject thereto shall thereupon be released
and shall thereafter be available for new Awards under the Plan. If the person
exercising an Option pays the purchase price of the shares subject to such
Option by delivering shares of Common Stock to the Company (either through
actual delivery or by attestation) in accordance with the provisions of
paragraph 7(b) below, or pays the withholding taxes due in connection with the
grant, exercise, vesting, distribution, or payment of any Award or the shares
subject thereto (including without

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limitation any withholding taxes due as a result of an election made by an
Eligible Person under Section 83(b) of the Internal Revenue Code) by delivering
shares of Common Stock to the Company or having the Company withhold shares of
Common Stock otherwise issuable in connection with the Award in accordance with
the provisions of paragraph 11(d) below, the number of shares so delivered or
withheld shall be added back to the aggregate number of shares available for
issuance or transfer under the Plan so that the aggregate number of shares that
may be issued or transferred under the Plan pursuant to paragraph 5(a) above
shall have been charged only for the net number of shares issued or transferred
by the Company in connection with the Award; provided, however, that none of the
surrendered or withheld shares shall
       --------  -------
be available for issuance under Incentive Stock Options.

     (c)  Stock delivered by the Company in settlement of Awards under the Plan
may be authorized and unissued Stock or Stock held in the treasury of the
Company or may be purchased on the open market or by private purchase.

     (d)  The Committee may, in its sole discretion, require a Participant to
pay consideration for an Award in an amount and in a manner as the Committee
deems appropriate.

     (e)  The Committee may only grant Incentive Stock Options to Eligible
Persons who are employees of the Company or a subsidiary corporation as defined
in Section 424 of the Code.

6.   Eligibility

     Participation shall be limited to Eligible Persons selected by the
Committee.

7.   Stock Options and SARs

     Subject to Section 5(e), the Committee is authorized to grant one or more
Incentive Stock Options, Nonqualified Stock Options or SARs to any Eligible
Person.  Each Option or SAR so granted shall be subject to the following
conditions or to such other conditions as may be reflected in the applicable
Award Agreement.

     (a)  Option Price.  The exercise price ("Option Price") per share of Stock
for each Option or SAR shall be set by the Committee at the time of grant but
shall not be less than the Fair Market Value of a share of Stock at the Date of
Grant or, other than with respect to Incentive Stock Options, at a date
subsequent to the Date of Grant as specified in the Option Award Agreement.

     (b)  Manner of Exercise and Form of Payment.  SARs which have become
exercisable may be exercised by delivery of written notice of exercise to the
Committee.  Options which have become exercisable may be exercised by delivery
of written notice of exercise to the Committee accompanied by payment of the
Option Price. The Option Price shall be payable either (i) by United States
dollars in cash or by check, (ii) at the discretion of the Committee, by either
actual delivery of shares or by attestation, through shares of Stock

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valued at the Fair Market Value at the time the Option is exercised (provided
that such Stock has been held by the Participant for at least six months), or
(iii) at the discretion of the Committee, by any combination of (i) and (ii)
above.

     (c)  Option Period and Expiration.  Options and SARs shall vest and become
exercisable in such manner and on such date or dates determined by the Committee
and shall expire after such period, not to exceed ten years, as may be
determined by the Committee (the "Option Period"); provided, however, that
                                                   --------  -------
notwithstanding any vesting dates set by the Committee, the Committee may, in
its sole discretion, accelerate the exercisability of any Option or SAR, which
acceleration shall not affect the terms and conditions of any such Option or SAR
other than with respect to exercisability.  If an Option or SAR is exercisable
in installments, such installments or portions thereof which become exercisable
shall remain exercisable until the Option or SAR expires.  Unless otherwise
stated in the applicable Option Award Agreement, an Incentive Stock Option shall
expire earlier than the end of the Option Period in the following circumstances:

          (i)  If prior to the end of the Option Period, the Participant shall
               undergo a Normal Termination, the Incentive Stock Option shall
               expire on the earlier of the last day of the Option Period or the
               date that is 90 days three months after the date of such Normal
               Termination. In such event, the Incentive Stock Option shall
               remain exercisable by the Holder until its expiration, only to
               the extent the Option was exercisable at the time of such Normal
               Termination.

          (ii) If the Participant dies prior to the end of the Option Period and
               while still in the employ of the Company or such Participant
               becomes Disabled, the Incentive Stock Option shall expire on the
               earlier of the last day of the Option Period or the date that is
               one year after the first anniversary of such date of death or
               Disability of the Participant. In the event of death or
               Disability, the Incentive Stock Option shall remain exercisable
               by the Participant or the Holder or Holders to whom the
               Participant's rights under the Incentive Stock Option pass by
               will or the applicable laws of descent and distribution until its
               expiration, only to the extent the Incentive Stock Option was
               exercisable by the Participant at the time of death or
               Disability.

     In granting any Nonqualified Stock Option or SAR, the Committee may specify
that such Nonqualified Stock Option shall be subject to the restrictions set
forth in Section 7(c)(i) or (ii) with respect to Incentive Stock Options, or
such other termination and cancellation provisions as the Committee may
determine; provided, however, that in the event a Participant terminates service
           --------  -------
or employment due to death, Disability, retirement (as defined in any qualified
retirement plan maintained by the Company), or, in the case of a non-employee
director, after attaining age 55, termination of the Option Period shall occur
no later than the fifth anniversary of such date of termination, and in the
event of any other termination, termination of the Option Period shall occur no
later than the third anniversary of such date of

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termination, and provided further, that the extension of any Option Period
beyond the limits set forth in Section 7(c)(i) or (ii) herein with respect to
Incentive Stock Options shall be conditioned on the Participant executing a
release of claims and/or a covenant not to compete in a form approved by the
Committee.

     (d)  Other Terms and Conditions.   In addition, each Option or SAR granted
under the Plan shall be evidenced by an Award Agreement, which shall contain
such provisions as may be determined by the Committee and, except as may be
specifically stated otherwise in such Award Agreement, which shall be subject to
the following terms and conditions:

          (i)   Each Option or SAR issued pursuant to this Section 7 or portion
                thereof that is exercisable shall be exercisable for the full
                amount or for any part thereof.

          (ii)  Each share of Stock purchased through the exercise of an Option
                issued pursuant to this Section 7 shall be paid for in full at
                the time of the exercise. Each Option shall cease to be
                exercisable, as to any share of Stock, when the Holder purchases
                the share or when the Option expires.

          (iii) Subject to Section 11(k), Options and SARs issued pursuant to
                this Section 7 shall not be transferable by the Holder except by
                will or the laws of descent and distribution and shall be
                exercisable during the Holder's lifetime only by the Holder.

          (iv)  Each Option and SAR issued pursuant to this Section 7 shall vest
                and become exercisable by the Holder in accordance with the
                vesting schedule established by the Committee and set forth in
                the Award Agreement; provided, however, that no Option or SAR
                                     --------  -------
                shall be exercisable prior to the date on which the Participant
                completes one year of continuous service with the Company or a
                Subsidiary, unless termination of service occurs due to death,
                Disability, retirement (as defined in any qualified retirement
                plan maintained by the Company), after a Change-in-Control, or,
                in the case of a non-employee director, after attaining age 55.

          (v)   Each Award Agreement may contain a provision that, upon demand
                by the Committee for such a representation, the Holder shall
                deliver to the Committee at the time of any exercise of an
                Option issued pursuant to this Section 7 a written
                representation that the shares to be acquired upon such exercise
                are to be acquired for investment and not for resale or with a
                view to the distribution thereof. Upon such demand, delivery of
                such representation prior to the delivery of any shares issued
                upon exercise of an Option issued pursuant to this Section 7
                shall be a condition precedent
                to the right of the Holder to purchase any shares. In the event
                certificates for Stock are delivered under the Plan with respect
                to which

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                such investment representation has been obtained, the Committee
                may cause a legend or legends to be placed on such certificates
                to make appropriate reference to such representation and to
                restrict transfer in the absence of compliance with applicable
                federal or state securities laws.

          (vi)  Each Incentive Stock Option Award Agreement shall contain a
                provision requiring the Holder to notify the Company in writing
                immediately after the Holder makes a disqualifying disposition
                of any Stock acquired pursuant to the exercise of such Incentive
                Stock Option. A disqualifying disposition is any disposition
                (including any sale) of such Stock before the later of (a) two
                years after the Date of Grant of the Incentive Stock Option or
                (b) one year after the date the Holder acquired the Stock by
                exercising the Incentive Stock Option.

     (e)  Incentive Stock Option Grants to 10% Stockholders.  Notwithstanding
anything to the contrary in this Section 7, if an Incentive Stock Option is
granted to a Participant who owns stock representing more than ten percent of
the voting power of all classes of stock of the Company or of a Subsidiary, the
Option Period shall not exceed five years from the Date of Grant of such Option
and the Option Price shall be at least 110 percent of the Fair Market Value (on
the Date of Grant) of the Stock subject to the Option.

     (f)  $100,000 Per Year Limitation for Incentive Stock Options.  To the
extent the aggregate Fair Market Value (determined as of the Date of Grant) of
Stock for which Incentive Stock Options are exercisable for the first time by
any Participant during any calendar year (under all plans of the Company and its
Subsidiaries) exceeds $100,000, such excess Incentive Stock Options shall be
treated as Nonqualified Stock Options.

     (g)  Conversion of Incentive Stock Options into Nonqualified Stock Options;
Termination of Incentive Stock Options.  The Committee, at the written request
of any Holder, may in its discretion, take such actions as may be necessary to
convert such Holder's Incentive Stock Options (or any installments or portions
of installments thereof) that have not been exercised on the date of conversion
into Nonqualified Stock Options at any time prior to the expiration of such
Incentive Stock Options, regardless of whether the Holder is an employee of the
Company or a Subsidiary at the time of such conversion.  Such actions may
include, but not be limited to, extending the Option Period or reducing the
exercise price of the appropriate installments of such Incentive Stock Options.
At the time of such conversion, the Committee (with the consent of the Holder)
may impose such conditions on the exercise of the resulting Nonqualified Stock
Options as the Committee in its discretion may determine, provided that such
conditions shall not be inconsistent with the Plan.  Nothing in the Plan shall
be deemed to give any Holder the right to have such Holder's Incentive Stock
Options converted into Nonqualified Stock Options, and no such conversion shall
occur until and unless the Committee takes appropriate action. The Committee,
with the consent of the Holder, may also terminate any portion of any Incentive
Stock Option that has not been exercised at the time of such termination.

                                                                               9
<PAGE>

     (h)  Substitution of Options.  The Committee may grant Options and/or SARs
in substitution for options or stock appreciation rights held for stock in
corporations acquired by the Company with terms in accordance with the terms for
such previous options, but with an appropriate adjustment in the exercise price
and number of shares subject to the options in compliance with the requirements
of Section 424 of the Code.

8.   Performance Share or Cash Units

     (a)  Award Grants.  The Committee is authorized to establish performance
programs to be effective over designated Award Periods determined by the
Committee.  The Committee may grant Awards of Performance Share or Cash Units to
Eligible Persons in accordance with such performance programs.  Before or within
90 days after the beginning of each Award Period, the Committee will establish
written Performance Goals based upon financial objectives for the Company for
such Award Period and a schedule relating the accomplishment of the Performance
Goals to the Awards to be earned by Participants.  Performance Goals may include
absolute or relative growth in earnings per share or rate of return on
stockholders' equity or other measurement of corporate performance and may be
determined on an individual basis or by categories of Participants.  The
Committee shall determine the number of Performance Share or Cash Units to be
awarded, if any, to each Eligible Person who is selected to receive such an
Award.

     (b)  Determination of Award.  At the completion of a Performance Award
Period, or at other times as specified by the Committee, the Committee shall
calculate the number of shares of Stock or amount of cash earned with respect to
each Participant's Performance Share or Cash Unit Award by multiplying the
number of Performance Units granted to the Participant by a performance factor
representing the degree of attainment of the Performance Goals.

     (c)  Payment of Performance Share or Cash Unit Awards. Performance Share or
Cash Unit Awards shall be payable in that number of shares of Stock or that
amount of cash determined in accordance with Section 8(b); provided, however,
                                                           --------  -------
that, at its discretion, the Committee may make payment to any Participant of
Performance Share Units in the form of cash upon the specific request of such
Participant.  The amount of any payment made in cash shall be based upon the
Fair Market Value of the Stock on the business day prior to payment.  Payments
of Performance Unit Awards shall be made as soon as practicable after the
completion of an Award Period; provided, however, that if a Participant makes
                               --------  -------
the election described below, Performance Share or Cash Units (with any Cash
Units being converted into equivalent Performance Share Units) shall instead be
credited to the Participant's Performance Share Account.  Such credit of
Performance Shares to a Participant's Performance Share Account shall be made as
of the same date as payment of the Award would have been made to the Participant
had no prior election been made.

          (i)  Elections.

                                                                              10
<PAGE>

          Any election to have an Award or a portion of an Award credited to a
          Performance Share Account shall be made on a written form provided by
          the Company for such purpose and shall only be effective with respect
          to Awards that may be made on and after the January 1 following the
          Company's receipt of such form, provided that such form is received by
          the December 24 prior to the applicable January 1.  Any such election
          shall be made only in increments of ten percent (10%) of the Award
          (rounded to the nearest whole share) and shall be effective only for
          Awards made during the year in which the election becomes effective.

          (ii)  Performance Share Account.

          The Company shall maintain on its books and records a Performance
          Share Account to record its liability for future payments to the
          Participant or his or her beneficiary pursuant to the Plan.  However,
          a Performance Share Account under the Plan shall constitute an
          unfunded arrangement; the Company shall not be required to segregate
          or earmark any of its assets for the benefit of the Participant or
          his or her beneficiary, and the amount reflected in a Performance
          Share Account shall be available for the Company's general corporate
          purposes and shall be available to the Company's general creditors.
          The amount reflected in a Performance Share Account shall not be
          subject in any manner to anticipation, alienation, transfer or
          assignment by the Participant or his or her beneficiary, and any
          attempt to anticipate, alienate, transfer or assign the same shall be
          void.  Neither the Participant nor his or her beneficiary may assert
          any right or claim against any specific assets of the Company in
          respect of a Performance Share Account, and the Participant and his or
          her beneficiary shall have only a contractual right against the
          Company for the amount reflected in a Performance Share Account.

          Notwithstanding the foregoing, in order to pay amounts which may
          become due under the Plan in respect of a Participant's Performance
          Share Account, the Company may establish a grantor trust (hereinafter
          the "Trust") within the meaning of Section 671 of the Code.  Some or
          all of the assets of the Trust may be dedicated to providing benefits
          to the Participants pursuant to the Plan, but, nevertheless, all
          assets of the Trust shall at all times remain subject to the claims of
          the Company's general creditors in the event of the Company's
          bankruptcy or insolvency.

          (iii) Dividend Equivalents.

          On every date on which a dividend or other distribution is paid with
          respect to Common Stock, commencing with the first such payment date
          after the date on which a Performance Share is credited to a
          Participant's Performance Share Account and continuing until such
          Performance Share is either forfeited or paid out, there shall be
          credited to the Participant's Performance Share Account a

                                                                              11
<PAGE>

          Dividend Equivalent in respect of such Performance Share. A Dividend
          Equivalent shall mean, with respect to a whole Performance Share
          credited to a Participant's Performance Share Account, a measure of
          value equal to the fractional share of Common Stock that could be
          purchased with the amount that would have been paid to the Participant
          as a dividend or other distribution if the Participant had owned a
          whole share of Common Stock in lieu of said whole Performance Share,
          the date of such deemed purchase being the dividend payment date.
          Dividend Equivalents are expressed in the form of Performance Shares.
          Notwithstanding the foregoing, the Committee may decide when granting
          a Performance Share that Dividend Equivalents with respect to such
          Performance Share shall be paid to a Participant as accrued, rather
          than credited to the Participant's Performance Share Account.

          (iv) Participant not a Stockholder.

          The Participant shall have no stockholder's rights with respect to any
          shares of Common Stock in respect of which Performance Shares are
          credited to his or her Performance Share Account.

          (v)  Payments in Respect of Performance Shares.

               (1)  Termination of Employment or Provision of Services: In the
                    --------------------------------------------------
event of a Participant's Normal Termination and without a payment date having
been specified as provided below, such Participant shall be entitled to receive
payment in respect of the entire amount then credited to his or her Performance
Share Account. Such payment shall be made in the form of the number of shares of
Common Stock equal to the number of whole Performance Shares then credited to
the Participant's Performance Share Account, with any fractional Performance
Share being paid in cash determined on the basis of the value of a corresponding
fractional share of Common Stock on the business day preceding the date of
payment. Said shares of Common Stock and any cash amount shall be transferred to
the Participant within sixty (60) days after the Participant's Normal
Termination.

               (2)  Election of Participant: Upon prior written election by a
                    -----------------------
Participant, the Participant shall be entitled to receive payment in respect of
an Award of Performance Shares, to the extent then vested, and any Dividend
Equivalents earned on such Award on the date or dates specified in such written
election.  Such election must either be made as part of the election to have
such Award of Performance Shares credited to a Performance Share Account as
provided above, or at any time at least one year prior to the date on which such
payment would otherwise be made.  Such payment shall be made in the form of the
number of shares of Common Stock equal to the number of whole Performance
Shares, including related Dividend Equivalents, then credited to the
Participant's Performance Share Account with respect to such Award, with any
fractional Performance Share being paid in cash determined on the basis of the
value of a corresponding fractional share of Common Stock on the business day
preceding the date of payment.  The Participant's Performance Share

                                                                              12
<PAGE>

Account thereafter shall be reduced to reflect the foregoing payment. Nothing
herein shall preclude separate elections with respect to separate Awards.

               (3)  Disability or Death While Employed by or Providing Services
                    -----------------------------------------------------------
to the Company: Notwithstanding an election made pursuant to the preceding
--------------
section, in the event of a Participant's termination of employment or provision
of services for reasons of Disability or death, the Participant or his or her
beneficiary, as the case may be, shall be entitled to receive payment in respect
of the entire amount then credited to his or her Performance Share Account. Such
payment shall be made in the form of the number of shares of Common Stock equal
to the number of whole Performance Shares then credited to the Participant's
Performance Share Account, with any fractional Performance Share being paid in
cash determined on the basis of the value of a corresponding fractional share of
Common Stock on the business day preceding the date of payment. Said shares of
Common Stock and any cash amount shall be transferred to the Participant or his
or her beneficiary within sixty (60) days after the Company has been notified in
writing of the Disability or death of the Participant and has been provided with
any additional information, forms or other documents it may reasonably request.

               (4)  Hardship Payment: Notwithstanding an election made pursuant
                    ----------------
to the Plan or the Participant's continued employment with or provision of
services to the Company, if the Committee, upon written petition of the
Participant, determines, in the Committee's sole discretion, that the
Participant has suffered an unforeseeable financial emergency, the Participant
shall be entitled to receive, as soon as practicable following such
determination, payment sufficient to meet the cash needs arising from the
unforeseeable financial emergency, not in excess of the number of whole
Performance Shares then credited to the Participant's Performance Share Account.
Such payment shall be made, at the election of the Participant, either (i) in
the form of the number of whole shares of Common Stock, the proceeds from the
sale of which would be sufficient to meet the cash needs arising from the
unforeseeable financial emergency, not in excess of the number of whole
Performance Shares then credited to the Participant's Performance Share Account;
(ii) in cash equal to the value on the business day preceding the date of
payment of the number of whole shares of Common Stock available for payment
under clause (i) of this sentence; or (iii) in any combination of the methods of
payment provided for in clauses (i) and (ii) of this sentence. In the event of a
hardship payment in respect of the Participant's entire Performance Share
Account, any fractional Performance Share shall be paid in cash determined on
the basis of the value of a corresponding fractional share of Common Stock on
the business day preceding the date of payment. For purposes of the foregoing,
an unforeseeable financial emergency is an unexpected need for cash arising from
an illness, casualty loss, sudden financial reversal, or other such
unforeseeable occurrence. Cash needs arising from foreseeable events such as
generally the purchase of a house or educational expenses for children shall not
be considered to be the result of an unforeseeable financial emergency. Said
shares of Common Stock and any cash amount shall be transferred to the
Participant as soon as practicable after the Committee determines that the
Participant has suffered an unforeseeable financial emergency. The Participant's
Performance Share Account thereafter shall be reduced to reflect the foregoing
payment.

                                                                              13
<PAGE>

               (5)  Early Withdrawal: Notwithstanding an election made pursuant
                    ----------------
to the Plan or the Participant's continued employment with or provision of
services to the Company, the Participant, upon written petition to the Committee
at any time, shall be entitled to receive payment in respect of all or any
portion of the amount then credited to his or her Performance Share Account,
subject to a forfeiture penalty of six percent (6%) of the amount of the payment
requested by the Participant. Such payment shall be made, at the election of the
Participant, either (i) in the form of the number of shares of Common Stock
equal to the number of whole Performance Shares requested by the Participant in
the written petition and then credited to the Participant's Performance Share
Account; (ii) in cash equal to the value on the business day preceding the date
of payment of the number of whole shares of Common Stock available for payment
under clause (i) of this sentence; or (iii) in any combination of the methods of
payment provided for in clauses (i) and (ii) of this sentence. In the event of
an early withdrawal in respect of the Participant's entire Performance Share
Account, any fractional Performance Share shall be paid in cash determined on
the basis of the value of a corresponding fractional share of Common Stock on
the business day preceding the date of payment. Said shares of Common Stock and
any cash amount shall be transferred to the Participant within sixty (60) days
after the Company has received the Participant's written petition. The
Participant's Performance Share Account thereafter shall be reduced to reflect
the foregoing payment and the six percent (6%) forfeiture penalty.

     (d)  Adjustment of Performance Goals.  The Committee may, during the Award
Period, make such adjustments to Performance Goals as it may deem appropriate,
to compensate for, or reflect, (i) extraordinary or non-recurring events
experienced during an Award Period by the Company or by any other corporation
whose performance is relevant to the determination of whether Performance Goals
have been attained; (ii) any significant changes that may have occurred during
such Award Period in applicable accounting rules or principles or changes in the
Company's method of accounting or in that of any other corporation whose
performance is relevant to the determination of whether an Award has been
earned; (iii) any significant changes that may have occurred during such Award
Period in tax laws or other laws or regulations that alter or affect the
computation of the measures of Performance Goals used for the calculation of
Awards; or (iv) any other factors which the Committee deems appropriate. The
Committee may exercise only negative discretion with respect to awards that are
intended to qualify as performance-based compensation under Internal Revenue
Code Section 162(m) of the Code. Unless the Committee determines otherwise at
any time prior to payment of a Participant's award under the Plan for any year,
extraordinary or non-recurring events pursuant to  paragraph Section 8(d)(i)
above, significant changes in accounting rules or changes in the Company's
method of accounting pursuant to paragraph Section 8(d)(ii) above, and changes
in tax law or other laws or regulations pursuant to paragraph Section 8(d)(iii)
above shall be automatically excluded or included in determining the extent to
which the Performance Goal has been achieved, whichever will produce the
higher award.

9.   Restricted Stock Awards

     (a)  Award of Restricted Stock.

                                                                              14
<PAGE>

          (i)   The Committee shall have the authority (1) to grant Restricted
                Stock Awards, (2) to issue or transfer Restricted Stock to
                Eligible Persons, and (3) to establish terms, conditions and
                restrictions applicable to such Restricted Stock, including the
                Restricted Period, which may differ with respect to each
                grantee, the time or times at which Restricted Stock shall be
                granted or become vested and the number of shares to be covered
                by each grant.

          (ii)  The Holder of a Restricted Stock Award shall execute and deliver
                to the Company an Award Agreement with respect to the Restricted
                Stock setting forth the restrictions applicable to such
                Restricted Stock. If the Committee determines that the
                Restricted Stock shall be held in escrow rather than delivered
                to the Holder pending the release of the applicable
                restrictions, the Holder additionally shall execute and deliver
                to the Company (1) an escrow agreement satisfactory to the
                Committee and (2) the appropriate blank stock powers with
                respect to the Restricted Stock covered by such agreements. If a
                Holder shall fail to execute a Restricted Stock Award Agreement
                and, if applicable, an escrow agreement and stock powers, the
                Award shall be null and void. Subject to the restrictions set
                forth in Section 9(b), the Holder shall generally have the
                rights and privileges of a stockholder as to such Restricted
                Stock, including the right to vote such Restricted Stock, and to
                receive dividends paid thereon.

          (iii) Upon the Award of Restricted Stock, the Committee shall cause a
                Stock certificate registered in the name of the Holder to be
                issued and, if it so determines, deposited together with the
                Stock powers with an escrow agent designated by the Committee.
                If an escrow arrangement is used, the Committee shall cause the
                escrow agent to issue to the Holder a receipt evidencing any
                Stock certificate held by it registered in the name of the
                Holder.

     (b)  Restrictions.

          (i)   Restricted Stock awarded to a Participant shall be subject to
                the following restrictions until the expiration of the
                Restricted Period, and to such other terms and conditions as may
                be set forth in the applicable Award Agreement: (1) if an escrow
                arrangement is used, the Holder shall not be entitled to
                delivery of the Stock certificate; (2) the shares shall be
                subject to the restrictions on transferability set forth in the
                Award Agreement; and (3) the shares shall be subject to
                forfeiture to the extent provided in subparagraph Section 9(d)
                and the Award Agreement and, to the extent such shares are
                forfeited, the Stock certificates shall be returned to the
                Company, and all rights of the Holder to such shares and as a

                                                                              15
<PAGE>

               stockholder shall terminate without further obligation on the
               part of the Company.

          (ii) The Committee shall have the authority to remove any or all of
               the restrictions on the Restricted Stock whenever it may
               determine that, by reason of changes in applicable laws or other
               changes in circumstances arising after the date of the Restricted
               Stock Award, such action is appropriate.

     (c)  Restricted Period.  The Restricted Period of Restricted Stock shall
commence on the Date of Grant and shall expire from time to time as to that part
of the Restricted Stock Award indicated in a schedule established by the
Committee and set forth in the written Award Agreement.  The Restricted Period
shall be at least three years; provided, however, that it may be as short as
                                --------  -------
one year if vesting is based on achievement of Performance Goals.

     (d)  Forfeiture Provisions.  Except to the extent determined by the
Committee and reflected in the underlying Award Agreement, in the event a
Participant terminates employment with or ceases to provide services to the
Company during a Restricted Period for any reason, that portion of the Award
with respect to which restrictions have not expired shall be completely
forfeited to the Company.  Except as otherwise determined by the Committee, in
the event of such a forfeiture, the amount of an Award that would otherwise be
payable shall be reduced, but not below zero, by the amount of any dividends
previously paid to the Holder with respect to the forfeited Restricted Stock.

     (e)  Delivery of Restricted Stock.  Upon the expiration of the Restricted
Period with respect to any shares of Stock covered by a Restricted Stock Award,
the restrictions set forth in Section 9(b) and the Award Agreement shall be of
no further force or effect with respect to shares of Restricted Stock which have
not then been forfeited.  If an escrow arrangement is used, upon such
expiration, the Company shall deliver to the Holder, or his or her beneficiary,
without charge, the Stock certificate evidencing the shares of Restricted Stock
which have not then been forfeited and with respect to which the Restricted
Period has expired (to the nearest full share) and any cash dividends or Stock
dividends credited to the Holder's account with respect to such Restricted Stock
and the interest thereon, if any.

     (f)  Stock Restrictions.  Each certificate representing Restricted Stock
awarded under the Plan shall bear the following legend until the end of the
Restricted Period with respect to such Stock:

     "Transfer of this certificate and the shares represented hereby is
     restricted pursuant to the terms of a Restricted Stock Agreement, dated as
     of ______, between Barnes Group Inc. and ___________.  A copy of such
     Agreement is on file at the offices of the Company."

Stop transfer orders shall be entered with the Company's transfer agent and
registrar against the transfer of legended securities.

                                                                              16
<PAGE>

     (g)  Deferral.  Upon election by a Participant, a whole share of Restricted
Stock that would otherwise have been granted to the Participant shall instead be
made in the form of Performance Shares, and such Performance Shares shall be
credited to the Participant's Performance Share Account, subject to the
provisions of Section 8.  Such credit of Performance Shares shall be made as of
the same date as Restricted Stock would have been awarded to the Participant had
no prior election been made.  Any such election shall be made by December 24
prior to the year in which the Award for which the election is made will be
made, and shall otherwise comply with the requirements for elections in Section
8(c).  If an event occurs which would have caused forfeiture of the Restricted
Stock for which an election pursuant to this paragraph is made, then the
equivalent Performance Shares, along with any related Dividend Equivalents,
shall be forfeited.

10.  Non-Competition Provisions

In addition to such other conditions as may be established by the Committee, in
consideration of the granting of Awards under the terms of the Plan, the
Committee, in its discretion, may include non-competition provisions in the
applicable Award Agreement.

11.  General

     (a)  Additional Provisions of an Award.  Awards under the Plan also may be
subject to such other provisions (whether or not applicable to the benefit
awarded to any other Participant) as the Committee determines appropriate
including, without limitation, provisions to assist the Participant in financing
the purchase of Stock upon the exercise of Options, provisions for the
forfeiture of or restrictions on resale or other disposition of shares of Stock
acquired under any Award, provisions giving the Company the right to repurchase
shares of Stock acquired under any Award in the event the Participant elects to
dispose of such shares, and provisions to comply with Federal and state
securities laws and Federal and state tax withholding requirements.  Any such
provisions shall be reflected in the applicable Award Agreement.

     (b)  Privileges of Stock Ownership.  Except as otherwise specifically
provided in the Plan, no person shall be entitled to the privileges of stock
ownership in respect of shares of Stock which are subject to Awards hereunder
until such shares have been issued to that person.

     (c)  Government and Other Regulations.  The obligation of the Company to
make payment of Awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by governmental agencies as
may be required.  Notwithstanding any terms or conditions of any Award to the
contrary, the Company shall be under no obligation to offer to sell or to sell
and shall be prohibited from offering to sell or selling any shares of Stock
pursuant to an Award unless such shares have been properly registered for sale
pursuant to the Securities Act with the Securities and Exchange Commission or
unless the Company has received an opinion of counsel, satisfactory to the
Company, that such shares may be offered or sold without such registration
pursuant to an available exemption therefrom and the terms and conditions of
such exemption have been fully complied
                                                                              17
<PAGE>

with. The Company shall be under no obligation to register for sale under the
Securities Act any of the shares of Stock to be offered or sold under the Plan.
If the shares of Stock offered for sale or sold under the Plan are offered or
sold pursuant to an exemption from registration under the Securities Act, the
Company may restrict the transfer of such shares and may legend the Stock
certificates representing such shares in such manner as it deems advisable to
ensure the availability of any such exemption.

     (d)  Tax Withholding.  Notwithstanding any other provision of the Plan, the
Company or a Subsidiary, as appropriate, shall have the right to deduct from all
Awards cash and/or Stock, valued at Fair Market Value on the date of payment, in
an amount necessary to satisfy all Federal, state or local taxes as required by
law to be withheld with respect to such Awards and, in the case of Awards paid
in Stock, the Holder may be required to pay to the Company prior to delivery of
such Stock, the amount of any such taxes which the Company is required to
withhold, if any, with respect to such Stock.  The Company shall accept shares
of Stock of equivalent Fair Market Value in payment of such withholding tax
obligations if the Holder of the Award elects to make payment in such manner.

     (e)  Claim to Awards and Employment or Service Rights. No employee or other
person shall have any claim or right to be granted an Award under the Plan or,
having been selected for the grant of an Award, to be selected for a grant of
any other Award. Neither the Plan nor any action taken hereunder shall be
construed as giving any Participant any right to be retained in the employ or
service of the Company or any Subsidiary.

     (f)  Designation and Change of Beneficiary.  Each Participant may file with
the Committee a written designation of one or more persons as the beneficiary
who shall be entitled to receive the rights or amounts payable with respect to
an Award due under the Plan upon his or her death.  A Participant may, from time
to time, revoke or change his or her beneficiary designation without the consent
of any prior beneficiary by filing a new designation with the Committee.  The
last such designation received by the Committee shall be controlling; provided,
                                                                      --------
however, that no designation, or change or revocation thereof, shall be
-------
effective unless received by the Committee prior to the Participant's death, and
in no event shall it be effective as of a date prior to such receipt.  If no
beneficiary designation is filed by the Participant, the beneficiary shall be
deemed to be his or her spouse or, if the Participant is unmarried at the time
of death, his or her estate.

     (g)  Payments to Persons Other Than Participants.  If the Committee shall
find that any person to whom any amount is payable under the Plan is unable to
care for his or her affairs because of illness or accident, or is a minor, or
has died, then any payment due to such person or his or her estate (unless a
prior claim therefor has been made by a duly appointed legal representative)
may, if the Committee so directs the Company, be paid to his or her spouse,
child, relative, an institution maintaining or having custody of such person, or
any other person deemed by the Committee to be a proper recipient on behalf of
such person otherwise entitled to payment.  Any such payment shall be a complete
discharge of the liability of the Committee and the Company therefor.

                                                                              18
<PAGE>

     (h)  No Liability of Committee Members. No member of the Committee shall be
personally liable by reason of any contract or other instrument executed by such
member or on such member's behalf in such member's capacity as a member of the
Committee nor for any mistake of judgment made in good faith, and the Company
shall indemnify and hold harmless each member of the Committee and each other
employee, officer or director of the Company to whom any duty or power relating
to the administration or interpretation of the Plan may be allocated or
delegated, against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim) arising out of any act or
omission to act in connection with the Plan unless arising out of such person's
own fraud or willful bad faith; provided, however, that approval of the Board
                                --------  -------
shall be required for the payment of any amount in settlement of a claim against
any such person.  The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
under the Company's Certificate of Incorporation or By-Laws, as a matter of law,
or otherwise, or any power that the Company may have to indemnify them or hold
them harmless.

     (i)  Governing Law.  The Plan shall be governed by and construed in
accordance with the internal laws of the State of Connecticut without regard to
the principles of conflicts of law thereof.

     (j)  Funding.  No provision of the Plan shall require the Company, for the
purpose of satisfying any obligations under the Plan, to purchase assets or
place any assets in a trust or other entity to which contributions are made or
otherwise to segregate any assets, nor shall the Company maintain separate bank
accounts, books, records or other evidence of the existence of a segregated or
separately maintained or administered fund for such purposes.  Holders shall
have no rights under the Plan other than as unsecured general creditors of the
Company, except that insofar as they may have become entitled to payment of
additional compensation by performance of services, they shall have the same
rights as other employees under general law.

     (k)  Nontransferability.  A person's rights and interest under the Plan,
including amounts payable, may not be sold, assigned, donated, or transferred or
otherwise disposed of, mortgaged, pledged or encumbered except, in the event of
a Holder's death, to a designated beneficiary to the extent permitted by the
Plan, or in the absence of such designation, by will or the laws of descent and
distribution; provided, however, the Committee may, in its sole discretion,
              --------  -------
allow in an Award Agreement for transfer of Awards other than Incentive Stock
Options to other persons or entities.

     (l)  Reliance on Reports.  Each member of the Committee and each member of
the Board shall be fully justified in relying, acting or failing to act, and
shall not be liable for having so relied, acted or failed to act in good faith,
upon any report made by the independent public accountants of the Company and
its Subsidiaries and upon any other information furnished in connection with the
Plan by any person or persons other than such member.

     (m)  Relationship to Other Benefits.  No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
profit sharing, group

                                                                              19
<PAGE>

insurance or other benefit plan of the Company except as otherwise specifically
provided in such other plan.

     (n)  Expenses. The expenses of administering the Plan shall be borne by the
Company.

     (o)  Titles and Headings.  The titles and headings of the sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.

     (p)  Change-in-Control.  Notwithstanding anything in the Plan to the
contrary, in the event of a "Change-in-Control", as defined below, all Awards
made pursuant to the Plan shall become fully vested immediately, and all Options
shall be immediately exercisable (provided that if the "Change-in-Control"
occurs with respect to a Subsidiary, only Awards and Options granted to
employees of such Subsidiary shall be affected), if the Committee so provides in
an Award Agreement, or if so provided in an employment, severance or other
agreement of an employee granted an Award.  A "Change-in-Control" shall be
deemed to have occurred if the event set forth in any one of the following
paragraphs shall have occurred:

          (i)   any Person is or becomes the Beneficial Owner, directly or
                indirectly, of securities of the Company (not including in the
                securities beneficially owned by such Person any such securities
                acquired directly from the Company or its Affiliates))
                representing 25% or more of the combined voting power of the
                Company's then outstanding securities, excluding any Person who
                becomes such a Beneficial Owner in connection with a transaction
                described in clause (1) of paragraph (iii) below; or

          (ii)  the following individuals cease for any reason to constitute a
                majority of the number of directors then serving: individuals
                who, on the date hereof, constitute the Board and any new
                director (other than a director whose initial assumption of
                office is in connection with an actual or threatened election
                contest, including but not limited to a consent solicitation,
                relating to the election of directors of the Company) whose
                appointment or election by the Board or nomination for election
                by the Company's stockholders was approved or recommended by a
                vote of at least two-thirds (2/3) of the directors then still in
                office who either were directors on the date hereof or whose
                appointment, election or nomination for election was previously
                so approved or recommended; or

          (iii) there is consummated a merger or consolidation of the Company or
                any direct or indirect subsidiary of the Company with any other
                corporation, other than (1) a merger or consolidation which
                would result in the voting securities of the Company outstanding
                immediately prior to such merger or consolidation continuing to
                represent (either by remaining outstanding or by being converted
                into voting securities of the surviving entity or any

                                                                              20
<PAGE>

               parent thereof), in combination with the ownership of any trustee
               or other fiduciary holding securities under an employee benefit
               plan of the Company or a ny Subsidiary of the Company, at least
               60% of the combined voting power of the securities of the Company
               or such surviving entity or any parent thereof outstanding
               immediately after such merger or consolidation, or (2) a merger
               or consolidation effected to implement a recapitalization of the
               Company (or similar transaction) in which no Person is or becomes
               the Beneficial Owner, directly or indirectly, of securities of
               the Company (not including in the securities beneficially owned
               by such Person any securities acquired directly from the Company
               or its Affiliates) representing 25% or more of the combined
               voting power of the Company's then outstanding securities; or

          (iv) the stockholders of the Company approve a plan of complete
               liquidation or dissolution of the Company or there is consummated
               an agreement for the sale or disposition by the Company of all or
               substantially all of the Company's assets, other than a sale or
               disposition by the Company of all or substantially all of the
               Company's assets to an entity, at least 60% of the combined
               voting power of the voting securities of which are owned by
               stockholders of the Company in substantially the same proportions
               as their ownership of the Company immediately prior to such sale.

12.  Changes in Capital Structure

     Awards granted under the Plan and any Award Agreements shall be subject to
equitable adjustment or substitution, as determined by the Committee in its sole
discretion, as to the number, price or kind of a share of Stock or other
consideration subject to such Awards (i) in the event of changes in the
outstanding Common Stock or in the capital structure of the Company by reason of
stock dividends, stock splits, reverse stock splits, recapitalizations,
reorganizations, mergers, consolidations, combinations, exchanges, or other
relevant changes in capitalization occurring after the Date of Grant of any such
Award, (ii) in the event of any change in applicable laws or any change in
circumstances which results in or would result in any substantial dilution or
enlargement of the rights granted to, or available for, Participants in the
Plan, or (iii) upon the occurrence of any other event which otherwise warrants
equitable adjustment because it interferes with the intended operation of the
Plan.  In addition, in the event of any such corporate or other event, the
aggregate number of shares of Stock available under the Plan and the maximum
number of shares of Stock with respect to which any one person may be granted in
connection with Awards shall be appropriately adjusted by the Committee, whose
determination shall be conclusive.

     Notwithstanding the above, in the event of any of the following:

          (1)  The Company is merged or consolidated with another corporation
or entity and, in connection therewith, consideration is received by

                                                                              21
<PAGE>

               stockholders of the Company in a form other than stock or other
               equity interests of the surviving entity;

          (2)  All or substantially all of the assets of the Company are
               acquired by another person;

          (3)  The reorganization or liquidation of the Company; or

          (4)  The Company shall enter into a written agreement to undergo an
               event described in clauses (1), (2) or (3) above,

then the Committee may, in its sole discretion and upon at least 10 days advance
notice to the affected persons, cancel any outstanding Awards and pay to the
Holders thereof, in cash, the value of such Awards based upon the price per
share of Stock received or to be received by other stockholders of the Company
in the event.  The terms of this Section 12 may be varied by the Committee in
any particular Award Agreement.

13.  Nonexclusivity of the Plan

     Neither the adoption of the Plan by the Board nor the submission of the
Plan to the stockholders of the Company for approval shall be construed as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under the Plan, and such arrangements
may be either applicable generally or only in specific cases.

14.  Amendment and Termination

     The Board may at any time terminate the Plan. The Committee may, at any
time, or from time to time, amend or suspend and, if suspended, reinstate, the
Plan in whole or in part; provided, that any such amendment of the Plan shall be
contingent on obtaining the approval of the stockholders of the Company if such
amendment would materially increase benefits available to Participants or the
Committee determines that such approval is necessary to comply with any
requirement of law, including the requirements for qualification of Incentive
Stock Options or the rules of any stock exchange, stock market or automated
quotation system on which the Company's equity securities are traded or quoted.

Approved:  April 12, 2000

                                                                              22

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