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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 18, 2022
BARNES GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
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| 1-4801 | | 06-0247840 |
| (Commission File Number) | | (I.R.S. Employer Identification No.) |
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| 123 Main Street | | |
| Bristol | | |
| Connecticut | | 06010 |
| (Address of principal executive offices) | | (Zip Code) |
(860) 583-7070
Registrant's telephone number, including area code
Not Applicable
(Former name or former address, if changed since last report)
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| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
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| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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| Title of Each Class | | Trading Symbol | | Name of Each Exchange on Which Registered |
| Common Stock, par value $0.01 per share | | B | | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The Board of Directors (the “Board”) of Barnes Group Inc. (the “Company”) has named Thomas J. Hook as President and Chief Executive Officer, effective as of July 14, 2022. Mr. Hook succeeds Patrick J. Dempsey, who began a temporary leave of absence from his role as President and Chief Executive Officer on March 8, 2022 to address health matters affecting a family member and who has decided to retire. The Board has appointed Mr. Dempsey as Executive Vice Chairman of the Company, effective as of July 14, 2022, to assist with transitioning his duties and other transition matters until his expected retirement on December 31, 2022. Mr. Dempsey is expected to continue to serve as a member of the Board following his retirement as Executive Vice Chairman of the Company. Julie K. Streich, the Company’s Senior Vice President, Finance and Chief Financial Officer, and who has been serving as Interim Chief Executive Officer (principal executive officer) of the Company during Mr. Dempsey’s leave of absence, will remain Interim Chief Executive Officer through July 13, 2022 and will continue to serve as Senior Vice President, Finance and Chief Financial Officer thereafter.
Mr. Hook, 59, has served as a member of the Board since 2016. He has served as the Chief Executive Officer of SaniSure, Inc. since February 2021 and a director of SaniSure, Inc. since December 2019. He has been a director of Q Holding Company since September 2017, where he served as Chief Executive Officer from September 2017 to January 2021. Mr. Hook also serves as a director of NeuroNexus Inc. Mr. Hook was the President and Chief Executive Officer of Integer (formerly Greatbatch) from August 2006 to May 2017. Prior to this, he was Chief Operating Officer of Integer (formerly Greatbatch), a position he held from September 2004 to August 2006. From August 2002 until September 2004, Mr. Hook was employed by CTI Molecular Imaging where he served as President, CTI Solutions Group. From March 2000 to July 2002, he was General Manager, Functional and Molecular Imaging for General Electric Medical Systems. From 1997 to 2000, Mr. Hook worked for the Van Owen Group Acquisition Company and prior to that, Duracell, Inc. Until March 1, 2021, Mr. Hook also previously served as Chairman of the Board and member of the Executive Committee of HealthNow New York, Inc., a leading health care company in Western New York, and he is also former director of Tactiva Therapeutics, Inc. Mr. Hook’s qualifications include his leadership experience, particularly in the high-tech medical manufacturing industry, together with his substantial knowledge of finance and accounting by virtue of his educational background and multiple executive management positions.
In connection with Mr. Hook’s appointment as President and Chief Executive Officer, the Company and Mr. Hook entered into an offer letter providing for the following: (a) an annual base salary of $1,000,000; (b) in lieu of forfeited accrued bonus and carried profits interests from his prior employer, a special one-time cash award of $2,000,000, which is subject to full reimbursement to the Company in the event of his voluntary termination within 12 months of payment or termination “for cause”; (c) an award of performance stock options to be granted as of his start date with a grant date fair value of $10,000,000 and a ten-year term that cliff-vest in five years based on continued service and the achievement of compound annual growth rates (“CAGRs”) in the price of the Company’s common shares above the option exercise price (with 33% vesting at a CAGR of 5%, 66.6% vesting at a CAGR of 7% and 100% vesting at a CAGR of 9%, with linear interpolation between such CAGR levels); (d) beginning with the 2023 grant cycle, annual long-term incentive awards valued at $4,750,000; (e) target incentive and maximum incentive opportunities under the Company’s Management Incentive Compensation Program (MICP) for 2022 and, beginning on January 1, 2023, the Company’s Performance Linked Bonus Plan for Selected Executive Officers, of 100% of annual base salary at target and 200% of annual base salary at maximum (pro-rated for 2022 based on the number of days he is employed as President and Chief Executive Officer of the Company in 2022), based on 60% diluted earnings per share, 20% revenue and 20% days working capital; (f) relocation assistance, financial planning assistance and other programs as available to other senior executive officers pursuant to the Company’s plans and programs for such benefits; and (g) welfare and other employee benefits as specified in the offer letter.
In addition, the Company and Mr. Hook entered into an Employee Non-Disclosure, Non-Competition, Non-Solicitation and Non-Disparagement Agreement, which provides for (a) a perpetual nondisclosure covenant, (b) a noncompetition covenant that applies during employment and for two years thereafter, (c) a customer nonsolicitation covenant that applies during employment and for two years thereafter, (d) an employee nonsolicitation covenant that applies during employment and for two years thereafter and (e) a perpetual nondisparagement covenant.
The foregoing summary of the offer letter and Employee Non-Disclosure, Non-Competition, Non-Solicitation and Non-Disparagement Agreement with Mr. Hook does not purport to be complete and is qualified in its entirety by reference to such documents, which are filed as Exhibits 10.1 and 10.2 hereto, respectively, and are incorporated herein by reference.
In addition, in connection with Mr. Dempsey’s transition to the role of Executive Vice Chairman and retirement on December 31, 2022, the Company and Mr. Dempsey entered into a Transition and Retirement Agreement. The Transition and Retirement Agreement provides that, in consideration for Mr. Dempsey’s performance of the transition services, he will receive base salary at the annual rate of $450,000 and continue to participate in the Company’s benefit plans until his
retirement. In addition, he will be eligible for an annual bonus for 2022, with the opportunity prorated based on his annual base salary before and after his transition to Executive Vice Chairman. Mr. Dempsey will not be eligible for future equity award grants in respect of his service as an employee. His equity awards that are currently outstanding will continue vesting until December 31, 2022, at which time he will be treated as having terminated employment due to retirement in accordance with the applicable award agreements. The Transition and Retirement Agreement reaffirms the restrictive covenants applicable to Mr. Dempsey and includes a covenant that Mr. Dempsey will fully cooperate with the Company concerning business, operational, regulatory or other matters that may arise following his execution of the agreement.
The foregoing summary of the Transition and Retirement Agreement with Mr. Dempsey does not purport to be complete and is qualified in its entirety by reference to such agreement, which is filed as Exhibit 10.3 hereto and is incorporated herein by reference.
A copy of the press release issued by the Company on June 21, 2022 announcing the management transition is attached as Exhibit 99.1 hereto.
Item 9.01. Financial Statements and Exhibits.
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| (d) Exhibits. The following Exhibits are filed herewith as part of this report: |
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| Exhibit No. | | Description of Exhibit |
| | | Offer Letter, dated as of June 18, 2022, by and between Barnes Group Inc. and Thomas J. Hook. |
| | | Employee Non-Disclosure, Non-Competition, Non-Solicitation and Non-Disparagement Agreement, dated as of June 18, 2022, by and between Barnes Group Inc. and Thomas J. Hook. |
| | | Transition and Retirement Agreement, dated as of June 18, 2022, by and between Barnes Group Inc. and Patrick J. Dempsey. |
| | | Press Release of Barnes Group Inc., dated as of June 21, 2022. |
| 104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
SIGNATURES
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| Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. |
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Dated: June 21, 2022 | BARNES GROUP INC. |
| (Registrant) |
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| By | /s/ DAWN N. EDWARDS |
| | Dawn N. Edwards
Senior Vice President, Human Resources |
June 18, 2022
Mr. Thomas J. Hook
2917 Belclaire Drive
Frisco, Texas 75034
Dear Tom:
We are pleased to offer to you the position of President and Chief Executive Officer, Barnes Group Inc. (“Barnes” or the “Company”), at an annual salary of $1,000,000 (paid monthly in advance), effective July 14, 2022. In this position you will report directly to the Board of Directors (“Board”). You will remain a member of the Board, transitioning to a Management Director effective July 14, 2022. Any successive terms of the Board will be subject to stockholder approval at subsequent Annual Meetings, commencing with the Annual Meeting in May 2023.
Effective July 14, 2022, you will participate in the annual Management Incentive Compensation Plan (on a prorated basis for 2022) and the Performance-Linked Bonus Plan for Select Executive Officers (beginning in 2023). Your target incentive under this plan is 100% of base salary with a maximum payout of 200% of base salary, and a performance schedule proportional to other members of the senior leadership team. Your incentive payout will be based on 60% Diluted Earnings Per Share (EPS), 20% Revenue and 20% Days Working Capital. Your total cash compensation package is $2,000,000 at target and $3,000,000 at maximum on an annualized basis. Annual incentive payouts are subject to the provisions of the plan and are normally paid in late February of the year immediately following the plan year (i.e., payouts for the 2022 plan year are expected to be paid in late February 2023). You must be employed on the date bonuses are paid to be eligible for a payout.
You will receive a special one-time cash award, payable within 30 days from your date of employment, in the amount of
$2,000,000 (less applicable withholdings) in lieu of forfeited accrued bonus and carried profits interests from your prior employer. The cash award is subject to full reimbursement to Barnes should you voluntarily terminate your employment within twelve-months of payment, or you are terminated “for cause” by the Board.
You also will receive a one-time, new-hire equity award in the amount of $10,000,000 on the date that your employment commences in alignment with our equity granting practice. Key provisions are summarized below:
▪$10,000,000 of performance stock options with a ten-year term that cliff-vest in five years based on continued service plus achieving the following compound annual growth rates (CAGRs) in the price of our common shares above the option exercise price (with linear interpolation between points): 33.3% @ 5% CAGR; 66.6% @ 7% CAGR; and 100% @ 9% CAGR.
▪Stock option exercise price equal to the closing price of our common shares on the grant date.
▪Number of stock option shares to be granted determined based on the grant date value per share under generally accepted accounting principles (GAAP), which is currently estimated to be 27.87% of the closing price of our common shares on the grant date, subject to confirmation by PricewaterhouseCoopers LLP.
▪Stock price for determining performance vesting CAGRs based on the volume-weighted average closing price for 30 consecutive trading days on the five-year anniversary date of the grant (or next subsequent trading date) as compared to the grant date closing price.
▪Service-based vesting as specified in our regular stock option agreement for senior leadership team members in the event of employment termination during the ten-year option term.
Beginning with the 2023 grant cycle, you will be awarded annual long-term incentives at the same time and with the same provisions as other members of our senior leadership team for a market-based grant value commensurate with your position. The total grant value for 2023 would be $4,750,000. We currently expect these awards to be in the form
Thomas J. Hook
June 18, 2022
Page 2
of stock options, restricted stock units (RSUs), and performance share awards (PSAs), subject to the discretion of the Compensation and Management Development Committee.
You will be expected to sign an agreement that provides that, in certain circumstances, you may be subject to a “claw back” of any cash or equity awards earned if the Company restates its financial results lower than those upon which awards were calculated (with the exception of restatements not caused by misconduct or error) to comply with generally accepted accounting principles.
Stock ownership guidelines have been established for our leadership team to ensure that management’s interests are aligned with our stockholders’ interests. The guideline for your position is five times (5x) your base salary. Ownership includes directly and beneficially owned shares, stock retained following the distribution of vested restricted stock units and earned performance share awards, and exercises of stock options, stock unit holdings under the Barnes Retirement Savings Plan (RSP) as referenced below, and stock owned through the Barnes Employee Stock Purchase Plan (ESPP) as referenced below. In addition, two-thirds of the value of unvested RSUs will be credited toward ownership guidelines. Shares granted by the Company (100% of the after-tax value of equity grants vesting, or options exercised) must be retained until you have met your ownership guidelines. Once met, your multiple of salary requirement converts into a “fixed” number of shares needed to meet that requirement. Going forward, participants must maintain, at minimum, their “fixed” number of shares while employed with the Company in an ownership designated position. While there is no specific timeframe requirement for achieving the ownership requirement, participants are expected to make steady progress and maintain ownership of any shares realized through vesting of RSUs, PSAs, and stock option exercises.
In addition to your annual salary and incentive compensation, Barnes offers a comprehensive employee benefits package, including:
▪Medical and Prescription Drug Insurance (contributory on a pre-tax cost-sharing basis).
▪Dental Insurance (contributory on a pre-tax cost-sharing basis).
▪Vision Insurance (contributory).
▪ESPP featuring a 5% discount off fair market value of Barnes stock, subject to statutory limits.
▪RSP 401(k) with a Company matching contribution of 50% on the first 6% of your pre-tax contributions. The Plan offers a wide range of investment funds to choose from.
▪4% Retirement Contribution (Company funded based on eligible earnings) deposited annually into your RSP 401(k) Account.
▪4% Retirement Contribution to the Defined Contribution Retirement Benefit Equalization Plan (DC RBEP) for eligible compensation in excess of annual IRS limits, deposited annually into your RSP 401(k) Account.
▪Participation in the Company's Executive Group Term Life Insurance Plan (EGTLIP), effective on your date of employment. EGTLIP provides a death benefit equal to four times salary up to a max of $3,000,000 (additional amounts may be available subject to medical underwriting). EGTLIP is an individual policy that you own and, as such, the policy is portable. Barnes pays the premium for as long as you remain with the Company.
▪Accidental Death and Dismemberment Insurance up to $100,000 (non-contributory).
▪Optional Employee Term Life Insurance of 1 to 6 times annual salary (contributory).
▪Optional Dependent Term Life Insurance of up to $250,000 for a spouse and up to $10,000 for each dependent child, as applicable (contributory).
▪Short-term Disability coverage, with a benefit of up to 26 weeks’ salary continuation (non-contributory).
▪Long-term Disability coverage with a benefit of 50% of covered earnings (non-contributory).
Thomas J. Hook
June 18, 2022
Page 3
▪Supplemental Long-term Disability coverage available in increments of 10% and 16 2/3% (contributory and subject to plan limits).
▪Business Travel Accident Insurance.
▪Education Assistance Program.
You will receive additional information regarding our benefit programs as part of our Onboarding process or by accessing the Benefits 360 website. Most coverage, subject to your enrollment, will become effective the first day of the month following your date of hire. Coverage under the Company’s Short-term and Long-term Disability plans begin on the first day of the calendar month following the completion of 90 days’ continuous service.
As an Officer of the Company, you are entitled to coverage for an annual executive physical and financial planning assistance. The executive physical benefit provides reimbursement for expenses associated with an annual physical examination with a provider of your choice. The financial planning benefit provides reimbursement for professional financial planning assistance, tax planning, and/or tax preparation services, up to a maximum of $8,000 (for the first year) and a maximum of $5,000 per year thereafter. There is no tax gross up associated with these benefits.
The Company provides a competitive relocation assistance program, including an allowance for incidental moving expenses of $10,000, grossed up for applicable withholding taxes, payable on your employment date. This benefit will be available to you for one year after your hire date and repayable to the Company should you voluntarily terminate your employment within one (1) year of actual relocation commencement.
You will be entitled to four (4) weeks of vacation annually and annual floating holidays in accordance with plan (pro-rated for 2022).
All prospective Barnes employees are required to pass a drug screening for the presence of illegal or unauthorized drugs. In addition, if we determine that your position may involve access to export-controlled technology (including but not limited to, positions at Barnes Aerospace facilities in the United States), for the sole purpose of complying with U.S. law regarding such technology, you may be required to provide documentary evidence that you are a “U.S. person” for purposes of U.S. export control laws, i.e., a U.S. citizen, a U.S. lawful permanent resident (green card holder), or have been and certain persons granted asylum or refugee status under 8 U.S.C. 1324b(a)(3). Acceptable forms of evidence of
U.S. person status are: (1) a United States Passport (unexpired); (2) a United States Passport Card (unexpired); (3) a Lawful Permanent Resident Card (unexpired); (4) an original or certified copy of a birth certificate issued by a U.S. government agency and bearing a seal or watermark; (5) a certificate of birth abroad or report of birth abroad; or (6) an original certificate of naturalization. If you are not a U.S. person, it will be necessary to obtain U.S. government export licenses before you can begin work, and you may be asked to provide detailed information regarding all existing and prior citizenships and countries of lawful permanent residency and other personal information necessary to support the license application process.
This offer of employment is contingent upon your drug test yielding satisfactory results as well as successful completion of reference and background checks, and, where we deem it necessary to comply with U.S. export laws, documentary evidence of U.S. person status or, if you are not a U.S. person, U.S. government approval of export licenses necessary to authorize your access to export-controlled technology. Additionally, this offer is contingent on you completing the Officer Questionnaire that Barnes requires to comply with federal securities laws.
You will be covered by the Barnes Executive Separation Pay Plan, which will provide that in the event of your covered termination of employment, not in connection with a change in control of the Company, you will receive two times your base salary and a pro-rata actual bonus, based on the number of days in which you were employed in the calendar year in which the covered termination occurs.
Thomas J. Hook
June 18, 2022
Page 4
Due to the nature of the role that is being offered to you, and in exchange for enhanced compensation and severance detailed in this letter, you will need to execute the attached agreement respecting the restrictive covenants to which you will be subject.
This letter sets forth our offer of employment and is not intended to create an expressed or implied contract of any kind, nor shall it be construed to constitute a promise or contract of lifetime or continuing employment. Your employment with Barnes is at will and may be terminated at any time, with or without cause, by either you or the Company. The terms of this offer supersede and take the place of any prior written or oral offers of employment. Barnes also has the right to change, interpret, withdraw, or add to any of the policies, benefits, terms or conditions
of employment at any time. The terms and conditions of this letter may only be amended or modified in writing by me. This offer letter is governed by the internal laws of the state of Connecticut.
If you have any questions with regard to the above, please call Dawn Edwards, Senior Vice President, Human Resources, Barnes, at (860) 324-9664 (mobile).
Tom, I would appreciate your calling me by end of day on Saturday, June 18, 2022, with your decision. In addition, to confirm your agreement with the above, please sign, date, and return the enclosed duplicate copy of this letter to Dawn Edwards by end of the day June 18, 2022, to indicate your acceptance of this offer.
I look forward to you joining the Barnes senior leadership team and contributing to the growth, profitability and overall success of the Company.
Sincerely,
/s/ Thomas O. Barnes
Thomas O. Barnes
Chairman of the Board
Barnes
Agreed to and accepted:
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/s/ Thomas J. Hook Thomas J. Hook | June 18, 2022 Date |
BARNES GROUP INC.
NON-DISCLOSURE, NON-COMPETITION, NON-SOLICITATION AND NON- DISPARAGEMENT AGREEMENT
In consideration of your hire and appointment to President and Chief Executive Officer with Barnes Group Inc. (the "Company"), and the severance and other enhanced compensation and benefits set forth in the Offer Letter between you and the Company, dated June 18, 2022 (the "Offer Letter"), and for other good and valuable consideration, the receipt and sufficiency of which you hereby acknowledge, you agree to this Employee Non-Disclosure, Non-Competition, Non-Solicitation and Non-Disparagement Agreement (this "Agreement").
1.Unauthorized Disclosure. You agree and understand that in your position with the Company, you have been and will be exposed to and receive information relating to the business affairs of the Company, including but not limited to technical information, business and marketing plans, strategies, customer information, other information concerning the Company's products, promotions, development, financing, expansion plans, business policies and practices, and other forms of information considered by the Company to be confidential and in the nature of trade secrets. You agree that during your employment and thereafter, you shall keep such information confidential and not disclose such information, either directly or indirectly, to any third person or entity without the prior written consent of the Company (unless such information is otherwise in the public domain through no fault of yours); provided, however, that nothing in this Section 1 shall prevent you, with or without the Company's consent, from (i) providing truthful testimony or otherwise cooperating in good faith with any investigation related to the business activities and practices of the Company and its officers and agents being conducted by a duly authorized agency of the federal or any state or local government or any duly appointed agent of the Board or any committee thereof or (ii) disclosing documents or information (a) in the performance of your duties hereunder to persons having commercial relationships or dealings with the Company, so long as such disclosure is made by you (or at your direction) in the good faith belief that it is in the best interests of the Company and such disclosure is not contrary to any direction of the Board or any committee thereof or internal or external legal counsel to the Company and (b) in connection with any judicial or administrative investigation, inquiry or proceeding, provided that you are compelled to do so by court order or subpoena and notifies the Company as soon as practicable after the receipt of such court order or subpoena (it being understood and agreed that no such order or subpoena shall be required in connection with an inquiry or proceeding that is described in subclause (i) above). This confidentiality covenant has no temporal, geographical or territorial restriction. Upon termination of your employment, you shall promptly supply to the Company all property, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical data or any other tangible product or document in your actual or constructive possession at the end of your employment.
2.Non-Competition. In consideration of your hire and appointment to President and Chief Executive Officer of the Company and the severance and other enhanced compensation and other benefits set forth in the Offer Letter, and further in consideration of your exposure to the proprietary information of the Company, you agree that you shall not, during your employment and for a period of two (2) years thereafter (the “Restriction Period”), directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of or be connected in any manner, including but not limited to, holding the position of shareholder, director, officer, consultant, independent contractor, employee, partner, or investor, with any Competing Enterprise. For purposes of this Section 2, the term "Competing Enterprise" shall mean any person, corporation, partnership, or other entity engaged in a business which is in direct competition with any business of the Company or any of its affiliates at the relevant time (or during Restriction Period, at the date of termination of employment); provided that, the direct or indirect parent of any entity that is in direct competition with the Company shall be considered to be in direct competition with the Company, but that nothing herein shall preclude you from providing services to an entity affiliated with, but not directly or indirectly controlling or controlled by an entity that is in direct competition with the Company so long as you do not, directly or indirectly, provide any services, advise or other assistance to such competing entity.
3.Non-Solicitation of Customers. You agree that during the Restriction Period, you shall not intentionally or knowingly, directly or indirectly, (i) interfere with the Company's or any of its affiliates' relationship with, or endeavor to entice away from the Company or any of its affiliates, any individual, person, firm, corporation or other business entity who at any time during your employment was a customer of the Company or any of its affiliates or otherwise had a material business relationship with the Company or any of its affiliates, or (ii) discourage, or attempt to discourage, any individual, person, firm, corporation or business entity from doing business with the Company or any of its affiliates.
4.Non-Solicitation of Employees. You agree that during your employment and for a period of two (2) years thereafter, you will not intentionally or knowingly, directly or indirectly, (i) interfere with the Company's or any of its affiliates' relationships with, or endeavor to entice away from the Company or any of its affiliates, (ii) solicit for employment, or (iii) hire any person who is an employee (or, within the immediately preceding 90 days, was an employee) of the Company or any of its affiliates and who was an employee of the Company or any of its affiliates at the date of your termination of employment (or during the 90-day period immediately prior thereto).
5.Non-Disparagement. You agree that you shall not disparage the Company or its affiliates, or its or their current or former officers, directors, and key employees in any way; further, you shall not make or solicit any comments, statements, or the like to the media or to others that would be considered derogatory or detrimental to the good name or business reputation of any of the aforementioned entities or individuals; provided, that this Section 5 shall not prohibit statements which you are required to make under oath or which are otherwise required by law, provided that such statements are truthful and made in a professional manner. The Company agrees that it shall not, and that it will direct its directors and executive officers not to, disparage you in any way, and that the Company shall not, and it will direct its directors and executive
officers not to, make or solicit any comments, statements, or the like to the media or to others that would be considered derogatory or detrimental to your good name or business reputation; provided, that this Section 5 does not prohibit statements which (i) the Company or any of its officers, directors, employees, affiliates or advisors are required to make under oath or are otherwise required by law, (ii) re required to comply with the rules of the New York Stock Exchange or any other similar exchange or automated trading system on which any of the Company's securities are listed, or (iii) are, in the opinion of counsel for the Company, necessary to comply with the Company's disclosure obligations to its stockholders, provided that in any case such statements are truthful and made in a professional manner.
6.Remedies. You agree that (1) any breach of the terms of Sections I, 2, 3, 4, or 5 of this Agreement would result in irreparable injury and damage to the Company for which the Company would have no adequate remedy at law; (ii) in the event of said breach or any threat of breach, the Company shall be entitled to an immediate injunction and restraining order to prevent such breach and/or threatened breach and/or continued breach by you and/or any and all persons and/or entities acting for and/or with you, without having to prove damages, and to all costs and expenses, including reasonable attorneys' fees and costs, in addition to any other remedies to which the Company may be entitled at law or in equity and (iii) notwithstanding any other terms in this Agreement or applicable stock plans, in the event of said breach, all (a) vested and unvested stock options, and (b) restricted shares, restricted stock units and performance share units which have not yet been earned, in each case were granted to you after the Commencement Date (as defined in the Offer Letter), shall immediately expire and shall no longer be exercisable after such breach. The terms of this Section 6 shall not prevent the Company from pursuing any other available remedies for any breach or threatened breach hereof, including but not limited to the recovery of damages from you. You and the Company further agree that the provisions of this Section 6 are reasonable and the Company would not have agreed to provide you with the severance and other enhanced compensation and other benefits set forth in the Offer Letter but for their inclusion herein.
7.Survival; Breach Not a Defense. The provisions of this Agreement shall survive any termination of your employment, and the existence of any claim or cause of action by you against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and agreements of this Agreement.
8.Severability. If any provision of this Agreement is adjudicated to be overbroad, invalid or unenforceable, the court may modify or sever such provision(s), such modification or deletion to apply only with respect to the operation of such provision(s) in the particular jurisdiction in which such adjudication is made. In addition, if any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing it so as to be enforceable to the extent compatible with the applicable law as it shall then appear. The remaining provisions of this Agreement shall remain in full force and effect. You agree that the parties shall request that a court of competent jurisdiction not invalidate or ignore the terms of this Agreement, but instead honor this provision by reforming or modifying any overbroad or otherwise invalid terms
to the extent necessary to render the terms valid and enforceable and then enforcing the Agreement as so reformed or modified.
9.Waiver, Amendment, Assignment, Successors. The terms of this Agreement are to be read consistent with the terms of any other agreements that you have executed with the Company; provided, however, to the extent there is a conflict between such agreements, such agreements shall be construed as providing the broadest possible protections to the Company, even if such construction would require provisions of more than one such agreement to be given effect. No waiver of this Agreement will be effective unless it is in writing and signed by the Company. This Agreement may not be superseded or amended by any other agreement between yourself and the Company unless such agreement specifically and expressly states that it is intended to supersede this Agreement and is signed by both the Company and you. You recognize and agree that your obligations under this Agreement are of a personal nature and are not assignable or delegable in whole or in part by you. The Company may assign this Agreement to any affiliate or to any successor-in-interest (whether by sale of assets, sale of stock, merger or other business combination). All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and permitted assigns of the Company and you.
10.Effectiveness of Agreement. This Agreement becomes effective upon the Commencement Date. The obligations under this Agreement continue throughout the entire period of time you are employed by the Company, and these obligations will continue after, and survive, the termination of your employment with the Company.
11.Arbitration. Any claim, demand or controversy under this Agreement 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 other party within 30 days of the date of the breach. 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) 30 days have passed since the filing of a request to mediate with the AAA. A party who has previously submitted a dispute to mediation, and which dispute has not been resolved, may submit such dispute to binding arbitration pursuant to the rules of the AAA. Any arbitration proceeding for such dispute must be initiated within 14 days from the date that the mediation process has concluded. The prevailing party shall recover its costs and reasonable attorney's fees incurred in such arbitration proceeding. You and the Company specifically understand and agree that the failure of a party to timely initiate a proceeding hereunder shall bar the party from any relief or other proceeding and any such dispute shall be deemed to have been finally and completely resolved. All mediation and arbitration proceedings shall be conducted in Bristol, Connecticut or such other location as the Company may determine and you agree that no objection shall be made to such jurisdiction or venue, as a forum non conveniens or otherwise. The arbitrator's authority shall be limited to resolution of the legal disputes between the parties and the arbitrator shall not have authority to modify or amend this Agreement, or abridge or enlarge rights available under applicable law. Any court with jurisdiction over the parties may enforce any award made hereunder.
12.Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Connecticut without regard to its principles of conflicts of law. You hereby consent to personal jurisdiction in the federal and state courts of the State of Connecticut for the resolution of all disputes arising under, or relating to, this Agreement.
Agreed and Acknowledged
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/s/ Thomas J. Hook Name: Thomas J. Hook | June 18, 2022 Date |
Barnes Group Inc.
/s/ Dawn N. Edwards
By: Name: Dawn N. Edwards
Title: Sr. Vice President, Human Resources Date: June 18, 2022
June 18, 2022
Mr. Patrick J. Dempsey
84 Northington Drive
Avon, Connecticut 06001
Re: Transition and Retirement Agreement
Dear Mr. Dempsey:
This letter agreement (this “Agreement”) sets forth the terms of your voluntary resignation from the position of President and Chief Executive Officer, Barnes Group Inc. (the “Company”), effective as of July 14, 2022 at 12:00 a.m. Eastern Daylight Time (the “Transition Date”), and your continued employment as Executive Vice Chairman of the Company to provide transition services from the Transition Date through your retirement at the close of business on December 31, 2022 (the “Retirement Date”). For purposes of this Agreement, the period from the Transition Date through the Retirement Date is the “Transition Period”.
1.Transition and Retirement Date. You hereby voluntarily resign your position as President and Chief Executive Officer of the Company, effective at 12:00 a.m. Eastern Daylight Time on the Transition Date, at which time you shall assume the role of Executive Vice Chairman of the Company. Subject to your satisfaction of the terms and conditions set forth below, you shall remain an employee of the Company until the Retirement Date and a member of the Company’s Board of Directors (the “Board”). Effective as of the Transition Date, you hereby voluntarily resign all officer, director and/or committee member positions you hold with the Company or any of its subsidiaries or affiliates, other than as Executive Vice Chairman of the Company and as a member of the Board. You agree to execute all such documentation as may be required to effectuate such resignations.
2. Transition Duties. During the Transition Period, you shall serve as Executive Vice Chairman of the Company and perform such transition services for the Company as are reasonably requested by the Board from time to time in order to facilitate an orderly transition of your duties. Without limiting the generality of the foregoing, your duties as Executive Vice Chairman shall include consultation and other assistance with respect to matters for which you have had responsibility while President and Chief Executive Officer of the Company.
3. Transition Period Compensation. Subject to your compliance with the terms of this Agreement and in consideration for the transition services, during the Transition Period, you shall (a) receive regular base salary at the rate of $450,000 per year (which shall be pro-rated for the partial year represented by the Transition Period), subject to applicable deductions and (b) continue to be eligible to participate in the Company benefits plans in which you are currently participating. Subject to your compliance with the terms of this Agreement and continued employment through the end of the Transition Period, you shall continue to be
eligible to earn an annual cash incentive for the 2022 Award Period under the terms of the Performance-Linked Bonus Plan for Selected Executive Officers approved by Shareholders on May 6, 2016, provided that, if earned, your annual cash incentive award for the 2022 Award Period shall be prorated as follows: for the period of January 1, 2022 – July 13, 2022, it shall be calculated based on your annual base salary rate in effect during that period, and for the period of July 14, 2022 until your Retirement Date, it shall be calculated based on your annual base salary rate in effect during that period. You shall not receive any additional equity compensation during the Transition Period.
4. COBRA Benefits. As of the Retirement Date, your participation shall cease in all of the Company’s employee benefit and retirement plans. COBRA medical and/or dental coverage may be continued upon payment by you of the full premium until the earlier of the expiration of the applicable COBRA period or the date on which you become covered for medical and/or dental benefits under another group health plan, whichever occurs first.
5. Equity Awards. Your outstanding equity awards are subject to the terms and conditions of the applicable equity plan and award agreements. Without limiting the generality of the foregoing, such equity awards shall remain eligible for continued vesting through the Retirement Date, subject to your continued employment and compliance with the terms of this Agreement, and your termination of employment on the Retirement Date shall be treated as a “Retirement” (as defined in the applicable award agreements) for purposes of such equity awards. If you have any questions regarding your equity awards, please contact Patty Bradley, Legal & Stockholder Relations Senior Specialist, at (860) 973-2106 or pbradley@bginc.com.
6. Retirement Benefits. Following the Retirement Date, you shall receive your vested benefits under the Company’s retirement plans in accordance with the terms of those plans. You can access your Fidelity 401(K) savings account via the Fidelity Website at www.401k.com or the Retirement Benefits Line at 1-800-835-5095 for the necessary information to receive a distribution or rollover of the vested portion of your account to an IRA or another qualified plan. In addition, you may contact Mercer Pension Administration directly at (800) 352-8904 (Select Option #1) from 8:00 a.m. and 5:00 p.m. (EST) weekdays, or via their self-service website at https://barnesgroup.mercerpencentral.com.
Caroline Segar, Director Total Rewards, will meet with you prior to your Retirement Date to review all aspects of your benefits at retirement.
7. Welfare Benefits, SEELIP and Perquisites. During the Transition Period, you shall be entitled to health and welfare benefits, and perquisites, in accordance with the terms and conditions of the applicable plans and programs. As a participant in the Company’s Senior Executive Enhanced Life Insurance Program (“SEELIP”), you own the life insurance policy even though the Company has paid the premiums for the coverage while you were employed. The annual policy premium shall continue to be paid through the Retirement Date, so long as you remain actively employed through that date. You have the option of continuing the policy beyond the Retirement Date at your own expense. Please contact Dan McCarthy at C. M. Smith Agency, LLC an Alera Group Company at (860) 990-6410 regarding your
coverage continuation options. If you have any additional questions regarding this benefit, please contact Caroline Segar, Director, Benefits, at (860) 973-2136. You will continue to be eligible for perquisites during the Transition Period through the Retirement Date, specifically related to financial planning assistance and tax planning and preparation services up to your annual maximum amount, and the executive physical benefit. The value of the financial planning assistance and executive physical benefit remain taxable income to you.
8. Final Expenses. Your expense account, if any, and use of any Company credit and telephone cards, shall cease as of the Retirement Date. You shall promptly return any such cards or other similar Company property in your possession and, if applicable, submit your final expense account, including an accounting for any advances, as of the Retirement Date.
9. Return of Company Property. On or before the Retirement Date, you shall return to the Company any and all information relating to the Company and Company property in your possession and you shall not, directly, or indirectly, copy, take, or remove from the Company’s premises, use, or disclose to third parties any such information or property. To enable the provision of the transition services, the Company shall maintain email and voicemail accounts through the Retirement Date.
10. Restrictive Covenants. The terms of the Employee Non-Disclosure, Non-Competition, Non-Solicitation and Non-Disparagement Agreement, signed by you on February 27, 2013 and all covenants, restrictions and provisions contained therein shall survive and continue in full force, and are hereby incorporated by reference into this Agreement. By executing this Agreement, you recognize and affirm that you shall continue to be bound by the terms of Employee Non-Disclosure, Non-Competition, Non-Solicitation and Non-Disparagement Agreement, and all covenants, restrictions and provisions contained therein, which shall survive the termination of the Employment Agreement and continue in full force and effect.
11. Cooperation. You agree to fully cooperate with the Company by responding truthfully to any questions asked of you by the Company concerning its business, or operational or regulatory issues that may arise following the execution of this Agreement. You further agree to cooperate with any investigation conducted by the Company on its own initiative or pursuant to a request by any government agency or department, including, but not limited to, the provision of personal documents and testimony, in connection with any matter arising out of or related to your duties while employed by the Company. You also agree to execute and deliver such instruments, documents, certificates, and affidavits and supply such other information and take such further action as the Company may reasonably require in order to effectuate or document your resignation as an officer of the Company and from all positions with the Company, its subsidiaries and affiliates, and the termination of your employment with the Company.
12. Electronic Media. You agree to leave intact all electronic Company documents, including those that you developed or helped to develop during your employment, and deliver to the Company concurrent with the execution of this Agreement or upon earlier request the computer media on which such documents are stored and all passwords and keys necessary to access such documents.
13. Arbitration; Governing Law. In the event that either party institutes legal proceedings to enforce the terms of this Agreement, it is specifically understood and agreed that such a claim shall be submitted to final and binding arbitration in Hartford County, Connecticut, pursuant to the rules of the American Arbitration Association, and that the prevailing party shall recover its costs and reasonable attorney’s fees incurred in such arbitration proceeding; provided that, in order to comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), the following provisions apply if you are the prevailing party: costs and reasonable attorney’s fees incurred in the arbitration proceeding may be recovered if they are incurred during the three-year period commencing on the Retirement Date; the amount of costs and reasonable attorney’s fees eligible for reimbursement during your taxable year may not affect the amount of costs and reasonable attorney’s fees eligible for reimbursement in any other taxable year; any reimbursement of costs or reasonable attorney’s fees shall be made on or before the last day of your taxable year following the taxable year in which the costs or attorney’s fees were incurred; and the right to reimbursement shall not be subject to liquidation or exchange for another benefit. The parties further agree that this Agreement is governed by the laws of the State of Connecticut.
14. Tax Considerations. The parties agree that this Agreement is to be interpreted and administered in accordance with the requirements of Section 409A, to the extent applicable. The Company is authorized to delay any payment due to you until the first business day following the six-month anniversary of your termination of employment, if such delay is required in order to comply with the requirements of Section 409A (taking into account the severance exception and the short-term deferral rule under Section 409A). The date of your resignation from employment shall be determined in accordance with the separation from service rules under Section 409A. The Company shall be entitled to withhold from any amounts payable under this Agreement all taxes as legally shall be required to be withheld (including, without limitation, any United States federal taxes and any other state, city, or local taxes).
15. Full Settlement. You acknowledge and agree that your resignation as President and Chief Executive Officer on the Transition Date and your retirement on the Retirement Date are voluntary, and that the compensation and benefits contemplated by this Agreement are in full satisfaction of the obligations of the Company and its affiliates to you under any plan, agreement, policy or arrangement of the Company or its affiliates as a result thereof. You further acknowledge and agree that in no event shall you be entitled to compensation or benefits (including severance benefits) beyond those set forth in this Agreement.
16. Entire Agreement. This Agreement constitutes the entire agreement between you and the Company with respect to your resignation as President and Chief Executive Officer, transition services as Executive Vice Chairman of the Company and retirement on the Retirement Date and supersedes all prior agreements, understandings, and representations, written or oral, with respect to those subjects. No provision of this Agreement may be modified or amended except by an instrument in writing duly executed by the parties hereto. No custom, act, payment, favor or indulgence shall grant any additional right to you or be deemed a waiver by the Company of any of your obligations hereunder or release you therefrom or impose any additional obligation upon the Company. No waiver by any party
of any breach by the other party of any term or provision hereof shall be deemed to be an assent or waiver by any party to or of any succeeding breach of the same or any other term or provision.
As a reminder, you are expected to abide by all obligations set forth in this Agreement, including, without limitation, confidentiality. Further, after your retirement, you continue to have obligations to the Company under various other sources, including the Barnes Group Inc. Code of Business Ethics and Conduct, statutes, and common law. Please be mindful of these restrictions and govern your activities accordingly.
Sincerely,
/s/ Dawn N. Edwards
Dawn N. Edwards
Senior Vice President, Human Resources
Barnes
Agreed and accepted:
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/s/ Patrick J. Dempsey | June 18, 2022 |
Patrick J. Dempsey | Date |
| | | | | | | | | | | | | | |
| | | | Exhibit 99.1
Barnes
860.583.7070 | info@bginc.com barnesgroupinc.com |
BARNES ANNOUNCES APPOINTMENT OF THOMAS J. HOOK AS PRESIDENT AND CHIEF EXECUTIVE OFFICER; CEO PATRICK DEMPSEY TO BECOME EXECUTIVE VICE CHAIRMAN OF BARNES
Board Names Medical Technology CEO and Barnes Director as Company’s New Leader After Dempsey’s Nearly 10 Years as Barnes’ CEO
June 21, 2022
Bristol, Conn. — Barnes Group Inc. (NYSE: B), a global provider of highly engineered products, differentiated industrial technologies, and innovative solutions, today announced that its Board of Directors has appointed Thomas J. Hook, (59), as President and Chief Executive Officer, effective as of July 14, 2022.
Patrick J. Dempsey, who began a leave of absence on March 8, 2022 from his position as President & CEO of the Company to address health matters affecting an immediate family member, will transition to the newly created role of Executive Vice Chairman of the Company until his retirement on December 31, 2022, to help effect a smooth leadership transition. Dempsey is expected to continue serving as a member of the Company’s Board of Directors following his retirement as Executive Vice Chairman of the Company.
Julie K. Streich, whom the Company appointed on March 8, 2022 as Interim Chief Executive Officer during Dempsey’s leave of absence, will remain in that position through July 13, 2022, and will continue to serve as the Company’s Senior Vice President, Finance and Chief Financial Officer thereafter.
“Tom has over 25 years of senior leadership experience, including more than a decade as a public company CEO, and we are delighted that he will be leading Barnes into the future. He has extensive experience in the medical technology and healthcare automation sectors and proven success at the helm of companies that focus on manufacturing highly engineered, precision products and innovative technology solutions. This, combined with his in-depth understanding of our strategy and business operations, make him well-prepared and ideal to advance the Company forward. This includes seeking out new opportunities that push the boundaries of what’s possible at Barnes and position the Company for long-term profitable growth. We are thrilled to have Tom Hook leading this mission,” said Thomas O. Barnes, Chairman of the Board.
“I am excited to have the opportunity to accelerate the transformation that Patrick successfully initiated as President and CEO, and lead Barnes in pioneering a new generation of technologies that help change the world,” said Hook. “It has been inspiring to work with Patrick during my tenure as a Barnes Director for the past six years. I am honored by the confidence he and my fellow directors have expressed in me. I look forward to working closely with Patrick, the board, and our leadership team during the upcoming transition.”
123 Main Street, Bristol, CT 06010-6376 
"Although we are saddened that Patrick will be retiring at the end of the year, we understand, respect and support Patrick’s decision," said Barnes. “The Board expresses its deep appreciation for Patrick’s leadership and contributions to the Company’s success for nearly the past 10 years. Thanks to Patrick’s vision, the Company embarked upon a strategy to transform our business portfolio, focusing on end markets driven by strong growth and innovation, and supporting customers in those markets with highly differentiated, next-generation products and innovative solutions.
“On behalf of the Board, I also extend my sincere thanks to Julie Streich for serving as Interim Chief Executive Officer for the past four months,” said Barnes. “We look forward to benefiting from Julie’s ongoing leadership and expertise as she continues in her role as Senior Vice President, Finance and Chief Financial Officer.”
“It truly has been a privilege to work with Tom Barnes and the other members of our Board, as well as the Senior Leadership Team and the entire Barnes team this past decade, and I am grateful for the opportunity to contribute to the Company’s future achievements in my continuing role as a director,” said Dempsey. “I am delighted to be extending my long and productive partnership with Tom Hook during the upcoming transition and upon my retirement.”
Named a Barnes Group Director in 2016, Thomas Hook serves on the Audit Committee and Corporate Governance Committee. He will step down from his current position as Chief Executive Officer and director of SaniSure, Inc., a global leader in the design and manufacturing of single-use systems and components for drug and vaccine manufacturing and other biotech applications, in July 2022. Hook also serves as a director of Q Holding Company (where he previously served as Chief Executive Officer) and NeuroNexus, Inc. He formerly served as the President and Chief Executive Officer and Chief Operating Officer of Integer (formerly Greatbatch), and previously held leadership positions at CTI Molecular Imaging and General Electric Medical Systems. His prior experience also includes service as Chairman of the Board and member of the Executive Committee of HealthNow New York, Inc., and as a director of Tactiva Therapeutics, Inc.
About Barnes
Barnes Group Inc. (NYSE: B) pioneers technologies to help change the world. Leveraging world-class manufacturing capabilities and market-leading engineering, we develop advanced processes, automation solutions and applied technologies for industries ranging from medical and personal care to mobility, packaging and aerospace. Customers benefit from our integrated hardware and software capabilities focused on improving the processing, control, service and sustainability of engineered plastics, factory automation technologies and precision components. For more information, please visit www.barnesgroupinc.com.
Forward-Looking Statements
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address our expected future operating and financial performance and financial condition, and often contain words such as "anticipate," "believe," "expect," "plan," "estimate," "project," “continue,” “will,” “should,” and similar terms. These forward-looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements. These risks include uncertainties relating to conditions in financial markets; future financial performance of the industries or customers that we serve; risks associated with international sales and operations; the ability to maintain adequate liquidity and financing sources; and general economic conditions affecting the industries we serve. A detailed discussion of these and other factors that may affect our future results is contained in Barnes Group Inc.’s filings with the U.S. Securities and Exchange Commission, including its most recent reports on Form 10-K, 10-Q, and 8-K. The Company assumes no obligation to update our forward-looking statements.
Category: General
Investors:
Barnes Group Inc.
William Pitts
Vice President, Investor Relations
860.583.7070
