Restrictions on Stock Consideration for Spectrum Product Warranties The sole shareholder of Spectrum received 119,048 shares of the Company’s common stock as partial consideration for Spectrum. For the one-year period following the required holding period under the federal securities laws, the sole shareholder has agreed not to sell the Company shares received in the acquisition at a price below $25.20 per share without the consent of the Company.  In the event he sells any of the shares during that period with the consent of the Company or during the one month following that period, the Company will pay to him an amount equal to the difference between $25.20 per share and a lesser price at which he sells such shares.  The Company provides product warranties in connection with the sale of products. Product warranty liabilities were not significant as of December 31, 2002 and 2001. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS PAGE 39 Back to Table of Contents BARNES GROUP INC.