EX-10.14






Exhibit 10.14




BORGWARNER INC.




BOARD OF DIRECTORS DEFERRED COMPENSATION PLAN




(As Amended and Restated Effective January 1, 2009)




November 26, 2008




 









 





BORGWARNER INC.




BOARD OF DIRECTORS DEFERRED COMPENSATION PLAN




As Amended and Restated Effective January 1, 2009




I. PURPOSE



The purpose of the BorgWarner Inc. Board of Directors Deferred Compensation Plan (the “Plan”) is to
enhance the Company’s ability to attract and retain qualified non-employee Directors. The Plan was
originally established effective January 1, 1995 as the Borg-Warner Automotive, Inc. Board of
Directors Deferred Compensation Plan. The Plan has subsequently been amended to permit allocation
of deferred amounts to Borg-Warner Automotive (now BorgWarner) Stock Units Accounts and has been
renamed the BorgWarner Inc. Board of Directors Deferred Compensation Plan. Except where otherwise
specified, this amendment and restatement of the Plan is effective January 1, 2009.




II. DEFINITIONS



Where appropriate, references in this Plan to the singular shall include the plural.





	 	2.1	 	“Beneficiary” shall mean the person or persons or entity designated by the
Participant to receive the balance of the Participant’s Account in the event of the
Participant’s death. The designation may be in favor of one or more Beneficiaries,
may include contingent as well as primary designations and named or unnamed trustees
under any will or trust agreement, may apportion the benefits payable in any manner
among the Beneficiaries. A Participant’s designation of one or more Beneficiaries
shall be made in writing in a manner designated by the Committee and shall not be
effective until received by the Committee. If a Participant’s designated
beneficiaries shall have predeceased the Participant, the Participant’s estate shall
be the Beneficiary. A Participant may change his or her Beneficiary without the
consent of any Beneficiary by similar instrument in accordance with rules and
procedures established by the Committee. The beneficiary designation form received
and acknowledged most recently by the Committee shall control as of any date. If
concurrent Beneficiaries are named without specifying the proportion of benefits due
each, distribution shall be made in equal shares to those Beneficiaries.
	 
	 	2.2	 	“Board of Directors” means the Board of Directors of BorgWarner Inc.
	 
	 	2.3	 	“Business Day” means a day on which the New York Stock Exchange is open for
trading.





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	 	2.4	 	“BW Stock Unit” means a measure of participation under the Plan which has a
value based on the Market Value of Common Stock. In the event of any Company stock
split, stock dividend, recapitalization, reorganization, merger, consolidation,
combination, exchange of shares, liquidation, spin-off or other similar change in
capitalization or event, or any distribution to holders of Common Stock other than a
regular cash dividend, the number of BW Stock Units credited to Participants’ BW Stock
Units Accounts under the Plan shall be appropriately adjusted by the Board of
Directors. The decision of the Board of Directors regarding any adjustment shall be
final, binding, and conclusive.
	 
	 	2.5	 	“BW Stock Units Account” means the subaccount of each Participant Account
that is established to reflect the Participant’s selection of BW Stock Units as an
Investment Option and to record the Company’s liability therefor, and which has a
value based on the Market Value of Common Stock.
	 
	 	2.6	 	“Committee” means the committee of the Company appointed by the Board of
Directors to manage and administer the Plan. This Committee shall consist of all or a
portion of those members of the Board of Directors who are employees of the Company.
	 
	 	2.7	 	“Common Stock” means the common stock, $0.01 par value, of BorgWarner Inc.
	 
	 	2.8	 	“Company” means BorgWarner Inc. (formerly, Borg-Warner Automotive, Inc.).
	 
	 	2.9	 	“Deferral Election” means the election agreement filed with the Committee by
a Participant for a Plan Year pursuant to the requirements of Article IV. The
Deferral Election shall indicate the percentage of the annual Retainer Fee that a
Participant is deferring, an allocation of the annual Retainer Fee deferral among the
Plan’s notional investment funds, and an election as to the time and form of payment
of the amounts deferred and associated earnings or losses.
	 
	 	2.10	 	“Deferral Year” means any calendar year with respect to which a Participant
files a Deferral Election, beginning as of January 1, 1995, and continuing until this
Plan is terminated.
	 
	 	2.11	 	“Deferred Benefit Account” means the account maintained on the books of the
Company for each Deferral Election of a Participant pursuant to Article IV.
	 
	 	2.12	 	“Disability” or “Disabled” means that a Participant is unable to engage in
any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months.





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For purposes of this Plan, a Participant shall also be deemed Disabled if
determined to be totally disabled by the Social Security Administration.




	 	2.13	 	“Effective Date” means January 1, 1995. The Effective Date with respect to
the addition of the BW Stock Unit Accounts and related amendments to the Plan is April
18, 1995. The Effective Date of this amendment and restatement of the Plan is January
1, 2009 unless otherwise provided.
	 
	 	2.14	 	“Investment Option” shall mean a security, mutual fund, common or collective
trust, insurance company pooled separate account, or other notional benchmark for
measuring the income, gain or loss recorded for all or a portion of a Participant
Account.
	 
	 	2.15	 	“Market Value” means, with respect to a share of Common Stock, the closing
price of such share on the New York Stock Exchange on the day in question, or the day
of the last previous sale if there is not any sales on the day in question.
	 
	 	2.16	 	“Participant” means a member of the Board of Directors of the Company who
(a) is not an employee of the Company, (b) is designated to be eligible to participate
in the Plan pursuant to Article III, and (c) has made an initial Deferral Election
pursuant to Article IV. A director who has deferred a percentage of his or her
Retainer Fee under the Plan shall continue as a Participant until he or she has
received payment of all amounts deferred by him or her pursuant to his or her Deferral
Elections under the Plan.
	 
	 	2.17	 	“Participant Account” means the account established for each Participant to
reflect the total liability of the Company to him or her for all Deferred Benefit
Accounts, as provided in Section 5.1.
	 
	 	2.18	 	“Plan” means this BorgWarner Inc. Amended and Restated Board of Directors
Deferred Compensation Plan, as amended from time to time.
	 
	 	2.19	 	“Retainer Fee” means the annual Retainer Fee payable during the relevant
Deferral Year to a Participant for services rendered as a member of the Board of
Directors of the Company. The Retainer Fee does not include payment of any specific
service fees (such as meeting fees, chairperson fees, etc.) to members of the Board of
Directors.
	 
	 	2.20	 	“Termination of Service” means the Participant’s cessation of service with
the Board of Directors for any reason whatsoever, whether voluntary or involuntary,
including by reason of death or Disability. In addition, for purposes of distributing
the portion of a Participant Account attributable to Retainer Fees earned on or after
January 1, 2005, a “Termination of Service” must also constitute a “Separation of
Service” from BorgWarner and all of its affiliates, as such term is defined in the
regulations for Section 409A of the Internal Revenue Code.





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	 	2.21	 	“Unforeseeable Emergency” means a severe financial hardship of the
Participant or the Participant’s beneficiary resulting from an illness or accident of
the Participant or the Participant’s Beneficiary, the Participant’s or beneficiary’s
spouse, or the Participant’s or beneficiary’s dependent (as defined in
section 152(a)); loss of the Participant’s or beneficiary’s property due to casualty;
or other similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant or beneficiary. An event shall not
qualify as an unforeseeable emergency to the extent that such emergency is or may be
relieved through reimbursement or compensation from insurance or otherwise, by
liquidation of the Participant’s assets, to the extent the liquidation of such assets
would not cause severe financial hardship, or by cessation of deferrals under the
Plan. The purchase of a home and the payment of college tuition are not Unforeseeable
Emergencies.
	 
	 	2.22	 	“Unscheduled Withdrawal” is defined in Section 6.7.
	 
	 	2.23	 	“Valuation Date” means the date on which the value of a Participant Account
or any portion thereof is determined, as provided in Article V hereof. The first day
of each Deferral Year shall be a Valuation Date. Additional Valuation Dates may be
established by the Committee, including any other dates specifically mentioned in the
Plan; the Committee may provide for “daily valuation” of Participant Accounts.





III. ELIGIBILITY AND PARTICIPATION



Participation in the Plan shall be limited to all non-employee members of the Board of Directors
who elect to participate in the Plan by filing a Deferral Election with the Committee pursuant to
Article IV. A Participant who has made a Deferral Election for one or more Deferral Years but does
not make a Deferral Election (or elects not to defer a percentage of his or her annual Retainer
Fee) in a subsequent Deferral Year shall continue as a Participant until all benefits under the
Plan have been distributed to him or her.




IV. DEFERRAL ELECTIONS





	 	4.1	 	Time of Election. Deferral Elections made for a Deferral Year shall
be made no later than December 31 of the year prior to the Deferral Year for which the
Deferral Election is made. A new non-employee member of the Board of Directors shall
be eligible to participate in the Plan for a Deferral Year if he or she files a
Deferral Election with the Committee within 30 days of his or her commencement of
service as a member of the Board of Directors; such Deferral Election shall apply only
to Retainer Fees that have not been earned as of the date of the filing of the
Deferral Election.





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	 	4.2	 	Minimum and Maximum Deferral and Form of Election.






	 	a.	 	Prior to the beginning of each Deferral Year, each
Participant may elect to defer up to 100% of his or her Retainer Fee for such
Deferral Year, in increments of 5%. The Participant may also elect not to
defer any portion of his or her Retainer Fee in a Deferral Year. The
Participant shall also select one or more times and forms of distribution, as
specified in Section 6.1. A Participant’s Deferral Election shall become
effective in the year prior to the Deferral Year upon the Committee reviewing
it and deeming it complete. A Participant’s Deferral Election shall be
irrevocable after December 31 of the year prior to the year for which the
Deferral Election is made.
	 
	 	b.	 	A Participant shall complete a separate Deferral Election for
each Deferral Year; no Deferral Election shall continue in effect after the
Deferral Year for which it has been made. The amount of any Retainer Fee
deferred pursuant to each Deferral Election must remain in the Plan until the
Participant’s sixty-fifth birthday or his or her Termination of Service (as
elected by the Participant, subject to the provisions of Section 6.1) unless
the Committee elects to distribute such amounts due to an Unforeseeable
Financial Emergency (pursuant to Section 6.6).
	 
	 	c.	 	At the time of the Participant’s initial Deferral Election,
he or she shall also elect a Beneficiary and form of payment to such
Beneficiary, on a Beneficiary designation form provided by the Committee, as
provided in Section 6.3.






	 	4.3	 	Timing of Deferral Credits. The percentage amount of a Retainer Fee
that a Participant elects to defer in the Deferral Election shall cause an equivalent
reduction in the amount of the Retainer Fee actually paid in cash to the Participant
for that year. Retainer Fee deferrals shall be credited to each Participant’s
appropriate Deferred Benefit Account as of the first Business Day after the January 1
that immediately follows the relevant Deferral Year. For example, any Retainer Fee
payable to the Participant during 2009 shall be credited to the Participant’s Account
as of the first Business Day after January 1, 2010. Such amounts credited to the
Participant’s Account shall be allocated among the Investment Options elected by the
Participant pursuant to Section 5.1.
	 
	 	4.4	 	Failure to Submit Election Forms. If a Participant fails to submit a
Deferral Election within the relevant time limit under Section 4.1 that is accepted by
the Committee on or before December 31 of the year prior to the Deferral Year, the
Participant will be deemed to have elected to defer 0% of his or her Retainer Fee for
the Deferral Year for which such Deferral Election is required.





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	 	4.5	 	Termination of Deferral Election. The Committee shall terminate a
Participant’s Deferral Election for the remainder of the Deferral Year in which the
Committee grants the Participant’s written request for a distribution by reason of an
Unforeseen Financial Emergency.





V. STATUS OF DEFERRED AMOUNTS





	 	5.1	 	Participant Accounts.






	 	a.	 	Establishment and Crediting of Contributions, Earnings, and
Dividends. The Company shall establish a Participant Account for each
Participant to reflect accurately its total liability to the Participant for
all Deferred Benefit Accounts. The Participant Account shall be credited with
all amounts deferred by a Participant under each Deferral Election, and any
earnings, losses and distributions.
	 
	 	b.	 	Deferred Benefit Accounts. Each Participant Account shall
contain sub-accounts for each Deferred Benefit Account, and shall reflect
amounts in such Deferred Benefit Account that are attributable to the Retainer
Fee deferred under the applicable Deferral Election.
	 
	 	c.	 	Investment Options. The Company shall offer one or more
Investment Options for measuring the income, gain or loss recorded for a
Participant’s Account and may prospectively change Investment Options at any
time upon written notice to Participants. Until the Board of Directors
otherwise provides, the Investment Options under the Plan shall include BW
Stock Units.
	 
	 	d.	 	Investment Options Allocation Elections. A Participant shall
elect on his or her Deferral Election form or on such other form or by such
other means as may be specified by the Committee, one or more Investment
Options to which deferrals to be credited to his or her Participant Account
shall be allocated. A Participant may change the allocation of future
deferrals among the Investment Options and may change the allocation of his or
her Participant Account balance among the Investment Options as frequently as
permitted by the Committee under rules and procedures applicable to all
Participants. The Committee shall establish and may prospectively change its
rules regarding the timing and frequency of Investment Option elections and
may establish and may prospectively change minimum amounts or percentages for
allocating deferrals and transferring Account balances among the Investment
Options.
	 
	 	e.	 	Failure or Refusal to Allocate. In the event a Participant
fails or refuses to make an election allocating Deferrals credited to his or





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her Account among the then available Investment Options, the Committee
shall, in its discretion, either: (i) reject the Participant’s Deferral
Election as incomplete (if such rejection may be made prior to the
Deferral Year for which the Deferral Election is made); or (ii) specify
the Investment Option or Investment Options to which the Participant’s
Account shall be allocated and notify the Participant of its selection,
which notification may be the Participant Account statements provided to
the Participant. If the Committee specifies the Investment Option or
Investment Options to which a Participant’s Account has been allocated
because of the Participant’s failure or refusal to make an election
allocating Deferrals credited to his or her Account, neither the Committee
nor the Company shall have any liability to the Participants therefor.




	 	f.	 	Allocations to BW Stock Units Accounts. Amounts in a
Participant Account that have been allocated to BW Stock Units shall be
converted to BW Stock Units based on the Market Value of Common Stock as of
the date of crediting.
	 
	 	g.	 	Crediting of Dividends on BW Stock Units. Whenever the
Company pays a dividend on its Common Stock, in cash or property, at a time
when a Participant has BW Stock Units credited to his or her Account, the
Participant shall be credited with a number of additional BW Stock Units equal
to the result of multiplying the number of BW Stock Units in the Participant’s
Account on the dividend record date by the dividend paid on each share of
Common Stock, and then dividing this amount by the Market Value of the Common
Stock on the dividend payment date. In the case of any dividend distributable
in property other than Common Stock, the per share value of the dividend shall
be the value determined by the Company for federal income tax reporting
purposes.
	 
	 	h.	 	Transfers From or Into BW Stock Units Accounts.
Notwithstanding anything in this Section to the contrary,






	 	1.	 	Under such procedures as may be established
by the Committee, a Participant may elect to make one transfer per
year, from or into the Participant’s BW Stock Units Account, of
amounts previously credited to the Participant’s Account.
	 
	 	2.	 	Transfers must be in an amount that equals
or exceeds the lesser of $1,000 (or such other amount as the
Committee may establish) or the entire balance of the account from
which the transfer is made.





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	 	i.	 	Adjustments to Participant Accounts for Investment
Performance. A Participant Account balance shall be adjusted as of each
Valuation Date, based on the performance of the Investment Options selected or
deemed selected by the Participant, as if the portion of the Participant’s
Account allocated to an Investment Option were actually invested in such
Investment Option and adjusted for other amounts as if such other amounts were
actually charged or credited to an actual Account balance of the Participant.
The Committee may also charge as an expense against a Participant’s Account:
(i) amounts customarily charged by the sponsor of one or more Investment Funds
that are charged on a per Participant or per transaction basis and not
otherwise charged as an expense of an Investment Option; and (ii) the
Committee’s and the Company’s own expenses and out-of-pocket fees in
administering the Plan. The Committee’s allocation of charges and expenses
among Participant Accounts shall be final and conclusive against the
Participants and all other parties.






	 	5.2	 	Vesting of Participant Accounts. A Participant shall be 100 percent
vested in all amounts credited to his or her Participant Account at all times.
	 
	 	5.3	 	Effective Date. Article V shall be effective January 1, 2007 except
that Section 5.1(h) shall be effective January 1, 2009.





VI. DISTRIBUTIONS AND WITHDRAWALS OF BENEFITS





	 	6.1	 	Distribution Options. When making a Deferral Election pursuant to
Section 4.2, the Participant must elect one of the following alternative forms of
payment for each related Deferred Benefit Account:






	 	a.	 	Pre-2009 Balances. The following alternative forms of
payment shall apply to the portion of a Participant Account that is
attributable to Retainer Fees earned prior to January 1, 2009:






	 	1.	 	Substantially equal monthly installments
for a period of 5, 10, 15 or 20 years payable on the first day of
each month commencing on the January 1 next following the
Participant’s sixty-fifth (65th) birthday or Termination of Service,
according to the option chosen by the Participant.
	 
	 	2.	 	A lump sum payable on the first Business
Day after the January 1 next following the Participant’s sixty-fifth
(65th) birthday or Termination of Service, according to the option
chosen by the Participant.






	 	b.	 	Post-2008 Deferrals. The following alternative forms of
payment shall apply to the portion of a Participant Account that is
attributable to Retainer Fees earned after December 31, 2008:





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	 	1.	 	Substantially equal annual installments for
a period of 5 years commencing on the January 1 next following the
Participant’s sixty-fifth (65th) birthday or Termination of Service,
according to the option chosen by the Participant.
	 
	 	2.	 	A lump sum payable on the January 1 next
following the Participant’s sixty-fifth (65th) birthday or
Termination of Service, according to the option chosen by the
Participant.






Notwithstanding subsections (a) and (b) above, any Participant who is age
sixty-five (65) or older in the relevant Deferral Year must elect to commence
payment of any Deferred Benefit Account for such Deferral Year on the first
Business Day after the January 1 next following his or her Termination of Service.




	 	6.2	 	Change in Distribution Options.






	 	a.	 	Pre-2005 Balances. At least 24 months (or more) prior to the
expiration of the Participant’s term as a member of the Board of Directors or
the Participant’s sixty-fifth (65th) birthday, whichever occurs first, a
Participant may submit a written election to the Committee to change the
commencement of payment of one or more Deferred Benefit Accounts from
Termination of Service to age 65 or change the form of payment elected for
such Deferred Benefit Account(s) from installment payments to a lump sum
without penalty; provided, however, that if the Participant subsequently
incurs a Termination of Service within the 24 months immediately succeeding
such election change, the election change shall be null and void and the
original election shall be reinstated. However, any other changes elected by
the Participant shall result in a 10% reduction before payment of the relevant
Deferred Benefit Account. This includes, but is not limited to, (a) an
election to change from a lump sum payment to installment payments or (b) an
election to defer commencement of payment that is submitted to the Committee
less than 24 months prior to the expiration of the Participant’s term. The
Participant shall only be subjected to one 10% reduction in each affected
Deferred Benefit Account at one time, regardless of the number of changes in
form of payment that a Participant elects at that time. This Section 6.2(a)
shall only apply to the portion of a Participant’s Account that is
attributable to Retainer Fees earned prior to January 1, 2005.
	 
	 	b.	 	Post-2004 Balances. Prior to January 1, 2009, a change in
the form of payment may only be made in accordance with the Special Transition
Election provided by Section 6.10 hereof. After December 31, 2008, no change
in a Participant’s distribution election shall be permitted. This Section
6.2(b) shall only apply to





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the portion of a Participant Account that is attributable to Retainer Fees
earned on or after January 1, 2005.




	 	6.3	 	Designation of Beneficiary and Form of Death Benefit. Each
Participant must designate at least one Beneficiary on a Beneficiary designation form
provided by the Committee in the event of the Participant’s death. The Participant
shall also designate a form of death benefit from among the following: lump sum
payment or equal monthly installments (equal annual installments for installments
payable on or after January 1, 2007) for a period of 5 years. The form of death
benefit elected shall apply to the full amount of the Participant’s Account. All forms
of benefit shall commence as of the first Business Day after the January 1 next
following the Participant’s death.
	 
	 	6.4	 	Death Prior to Termination of Service.






	 	a.	 	Pre-2005 Balances. Upon the death of a Participant prior to
his or her Termination of Service, the Beneficiary of the deceased Participant
shall be entitled to a death benefit equal to the value of the Participant
Account. The form of benefit shall be as provided in Section 6.3. If the
Participant’s Beneficiary is not alive at the time of the Participant’s death,
payment of the Participant Account shall be made to the Participant’s estate
in the form of a lump sum on the first Business Day of the first month
subsequent to the Participant’s death (such day to be a Valuation Date with
respect to the applicable Participant Account) or as soon as otherwise
administratively feasible. This Section 6.4(a) shall only apply to the
portion of a Participant’s Account that is attributable to Retainer Fees
earned prior to January 1, 2005.
	 
	 	b.	 	Post-2004 Balances. Upon the death of a Participant prior to
his or her Termination of Service, the Beneficiary of the deceased Participant
shall be entitled to a death benefit equal to the value of the Participant
Account. The form of benefit shall be as provided in Section 6.3. This
Section 6.4(b) shall only apply to the portion of a Participant’s Account that
is attributable to Retainer Fees earned on or after to January 1, 2005.






	 	6.5	 	Death Following Termination of Service. Upon the death of a
Participant following his or her Termination of Service, the Beneficiary of the
deceased Participant shall continue to receive any of the remaining payments from the
Participant Account in the form of payment elected by the Participant in his or her
Deferral Elections.
	 
	 	6.6	 	Emergency Benefit: Waiver of Deferral. In the event that the
Committee, upon written petition of the Participant or his or her Beneficiary,
determines in its sole discretion that the Participant or his or her





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Beneficiary has suffered an Unforeseeable Financial Emergency, the Company shall
pay to the Participant or his or her Beneficiary on the first Business Day of the
first calendar month following such determination or as soon as practicable (such
date to be a Valuation Date with respect to the applicable Participant Account), an
amount necessary to satisfy the emergency, but not in excess of the Participant
Account balance, provided however, that no payments shall be made from a
Participant’s BW Stock Unit Account pursuant to this Section 6.6.




	 	6.7	 	Unscheduled Withdrawals for Pre-2005 Balances. A Participant may make
an Unscheduled Withdrawal of any amounts in his or her Participant Account that have
been in the Plan for at least five years by filing an election with the Committee. The
Company shall make payment of the requested withdrawal as of the first Business Day
after the January 1 next following the Committee’s receipt and approval of the
withdrawal election. Subject to the remainder of this Section 6.7, a request for an
Unscheduled Withdrawal may be filed at any time prior to December 15th of the year
preceding the year in which unscheduled withdrawal is made. A Participant may take no
less than the lesser of $2,000 or the remaining balance in his or her Participant
Account in the form of an Unscheduled Withdrawal. Amounts taken in the form of an
Unscheduled Withdrawal will be reduced by a 10% penalty at the time of payment. No
Unscheduled Withdrawals shall be made from a Participant’s BW Stock Unit Account.
This Section 6.7 shall only apply to the portion of a Participant Account that is
attributable to Retainer Fees earned prior to January 1, 2005.
	 
	 	6.8	 	Withholding Taxes. To the extent required by law in effect at the
time payments are made, the Company shall withhold any taxes required to be withheld
by any Federal, State, or local government.
	 
	 	6.9	 	Form of Distributions/Withdrawals. All distributions and withdrawals
made under the Plan shall be made in cash and shall be valued as of the Valuation Date
coincident with or immediately preceding the date of the distribution or withdrawal.
Distributions from the BW Stock Account shall be converted to cash, as of such
Valuation Date, in order to effect such distributions.
	 
	 	6.10	 	Code Section 409A Special Transition Rules Elections for Post-2004
Deferrals. Notwithstanding the required deadline for the submission of an initial
distribution election described in this Article 6, the Committee may, as permitted by
Code Section 409A and related Treasury guidance or Regulations, provide a limited
period beginning January 1, 2008, in which Participants may make new distribution
elections (from among those offered by the Plan except that the only the form of
installment payments available is the 5-year annual installments form described by
Section 6.1(b)(1)), by submitting a distribution election form, as prescribed by the
Committee, on or before the deadline established by the Committee, which





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in no event shall be later than December 31, 2008; provided, however, no such
change in election shall defer any payment which would otherwise have been made in
2008 nor accelerate any payment that is payable in 2009 or later into 2008. Any
distribution election made in accordance with the requirements established by the
Committee, pursuant to this section, shall not be treated as a change in the form
or timing of a Participant’s benefit payment for purposes of Code Section 409A or
the Plan. The Committee shall interpret all provisions relating to an election
submitted in accordance with this section in a manner that is consistent with Code
Section 409A and related Treasury guidance or Regulations. If any distribution
election submitted in accordance with this section either (i) relates to payments
that a Participant would otherwise receive in 2008, or (ii) would cause payments to
be made in 2008, such election shall not be effective. This Section 6.10(a) shall
only apply to the portion of a Participant Account that is attributable to Retainer
Fees earned after December 31, 2004 and shall be effective October 31, 2008.



VII. CLAIMS FOR BENEFITS PROCEDURE





	 	7.1	 	Claim for Benefits. Any claim for benefits under the Plan shall be
made in writing to any member of the Committee. If such claim is wholly or partially
denied by the Committee, the Committee shall, within a reasonable period of time, but
not later than 60 days after receipt of the claim, notify the claimant of the denial
of the claim.
	 
	 	7.2	 	Request for Review of a Denial of a Claim for Benefits. Upon the
receipt by the claimant of written notice of denial of the claim, the claimant may
within 90 days file a written request to the Committee, requesting a review of the
denial of the claim, which review shall include a hearing if deemed necessary by the
Committee in its sole discretion. In connection with the claimant’s appeal of the
denial of his or her claim, he or she may review relevant documents and may submit
issues and comments in writing.
	 
	 	7.3	 	Decision upon Review of Denial of Claim for Benefits. The Committee
shall render a decision on the claim review promptly, but no more than 60 days after
the receipt of the claimant’s request for review, unless special circumstances (such
as the need to hold a hearing) require an extension of time, in which case the 60 day
period shall be extended to 120 days. The decision of the Committee shall be final and
binding in all respects on both the Company and the claimant.





VIII. ADMINISTRATION





	 	8.1	 	Committee. The Plan shall be administered by the Committee. No member
of the Committee may be a Participant under the Plan. The Committee may designate
another administrative committee comprised of Company employees to oversee the day to
day administration of the Plan, including,





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without limitation, the solicitation, review and approval of Participant election
forms.




	 	8.2	 	General Rights, Powers, and Duties of Committee. The Committee shall
be the Plan Administrator and it shall be responsible for the management, operation,
and administration of the Plan. In addition to any powers, rights and duties set forth
elsewhere in the Plan, it shall have the following powers and duties:






	 	a.	 	To adopt such rules and regulations consistent with the
provisions of the Plan as it deems necessary for the proper and efficient
administration of the Plan;
	 
	 	b.	 	To administer the Plan in accordance with its terms and any
rules and regulations it establishes;
	 
	 	c.	 	To maintain records concerning the Plan sufficient to prepare
reports, returns and other information required by the Plan or by law;
	 
	 	d.	 	To construe and interpret the Plan and resolve all questions
arising under the Plan;
	 
	 	e.	 	To direct the payment of benefits under the Plan, and to give
such other directions and instructions as may be necessary for the proper
administration of the Plan; and
	 
	 	f.	 	To be responsible for the preparation, filing and disclosure
on behalf of the Plan of such documents and reports as are required by any
applicable Federal or State law.






	 	8.3	 	Information to be Furnished to Committee. The Company shall furnish
the Committee such data and information as it may require. The records of the Company
shall be determinative of each Participant’s period of service as a member of the
Board of Directors, personal data and Retainer Fee deferrals. Participants and their
Beneficiaries shall furnish to the Committee such evidence, data or information, and
shall execute such documents, as the Committee requests.
	 
	 	8.4	 	Responsibility. No member of the Committee or of the Board of
Directors shall be liable to any person for any action taken or omitted in connection
with the administration of this Plan unless attributable to his or her own fraud or
willful misconduct; nor shall the Company be liable to any person for any such action
unless attributable to fraud or willful misconduct on the part of a director, officer
or employee of the Company within the scope of his or her Company duties. Each member
of the Committee shall be indemnified and held harmless by the Company for any
liability arising





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out of the administration of the Plan, to the maximum extent permitted by law.



IX. AMENDMENT AND TERMINATION





	 	9.1	 	Amendment. The Plan may be amended in whole or in part by the
Committee at any time. No amendment shall effectively decrease the value of a
Participant Account. The Committee reserves the unilateral right to change any rule
under the Plan if it deems such a change necessary to avoid constructive receipt, to
comply with the requirements of Code Section 409A, or to avoid the application of the
Employee Retirement Income Security Act of 1974, as amended, to the Plan.
	 
	 	9.2	 	Company’s Right to Terminate. The Committee reserves the sole right
to terminate the Plan at any time after the Effective Date. In the event of any such
termination, the Participant shall be entitled to the accrued amount of his or her
Participant Account. In the event of the Plan’s termination, the portion of the
Participant’s Accounts that is attributable to Retainer Fees earned on or after
January 1, 2005, shall be paid to the Participant in as early as possible consistent
with the requirements for payments of deferred compensation under Subsections (a)(2) –
(a)(4), inclusive of Code Section 409A and the regulations thereunder.





X. MISCELLANEOUS





	 	10.1	 	No Implied Rights: Rights on Termination of Service. Neither the
establishment of the Plan nor any amendment thereof shall be construed as giving any
Participant, Beneficiary, or any other person any legal or equitable right unless such
right shall be specifically provided for in the Plan or conferred by specific action
of the Committee in accordance with the terms and provisions of the Plan. Except as
expressly provided in this Plan, the Company shall not be required or be liable to
make any payment under the Plan.
	 
	 	10.2	 	No Right to Company Assets. Neither the Participant nor any other
person shall acquire by reason of the Plan any right in or title to any assets, funds
or property of the Company whatsoever including, without limiting the generality of
the foregoing, any specific funds, assets, or other property which the Company, in its
sole discretion, may set aside in anticipation of a liability hereunder. Any benefits
which become payable hereunder shall be paid from the general assets of the Company.
The Participant shall have only a contractual right to the amounts, if any, payable
hereunder, unsecured by any asset of the Company. Nothing contained in the Plan
constitutes a guarantee by the Company that the assets of the Company shall be
sufficient to pay any benefit to any person.





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	 	10.3	 	No Service Rights. Nothing herein shall constitute a contract of
continuing service or in any manner obligate the Company to continue the services of
the Participant or obligate the Participant to continue in the service of the Company.
Nothing herein shall be construed as fixing or regulating the Retainer Fee or any
other amount payable to any Participant.
	 
	 	10.4	 	Offset. If, at the time payments or installments of payments are to
be made hereunder, the Participant or the Beneficiary or both are indebted or
obligated to the Company, then the payments under the Plan remaining to be made to the
Participant or the Beneficiary or both may, at the discretion of the Company, be
reduced by the amount of such indebtedness or obligation, provided, however, that an
election by the Company not to reduce any such payment or payments shall not
constitute a waiver of its claim for such indebtedness or obligation. This Section
10.4 shall only apply to the portion of the Participant Account that is attributable
to Retainer Fees earned prior to January 1, 2005.
	 
	 	10.5	 	Non-assignability. Neither the Participant nor any other person shall
have any voluntary or involuntary right to commute, sell, assign, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual
receipt the amounts, if any, payable hereunder, or any part thereof; which are
expressly declared to be unassignable and non-transferable. No part of the amounts
payable prior to actual payment shall be subject to seizure or sequestration for the
payment of any debts, judgments, alimony or separate maintenance owed by the
Participant or any other person, or be transferable by operation of law in the event
of the Participant’s or any other person’s bankruptcy or insolvency.
	 
	 	10.6	 	Notice. Any notice required or permitted to be given under the Plan
shall be sufficient if in writing and hand delivered, or sent by registered or
certified mail, and if given to the Company, delivered to the principal office of the
Company, directed to the attention of the Committee. Such notice shall be deemed given
as of the date of delivery or, if delivery is made by mail, as of the date shown on
the postmark or the receipt for registration or certification.
	 
	 	10.7	 	Governing Laws. The Plan shall be construed and administered
according to the laws of the State of Michigan.
	 
	 	10.8	 	Status of Investment Options. The Investment Options offered under
the Plan are for the sole purpose of providing a performance measurement for adjusting
Participant Accounts for income, gain or loss. Notwithstanding anything in this Plan
to the contrary, the Company shall not be required to actually invest monies in any
fund designated as an Investment Option, any decision to so invest shall remain within
the complete discretion of the Company, and any amounts so invested shall remain the
property of the





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Company. A Participant whose Participant Account consists in whole or in part of
BW Stock Units shall have no rights of a shareholder of Common Stock. Neither the
Participant nor his or her Beneficiary shall have any right, other than the right
of an unsecured general creditor, against the Company or in respect to the benefits
payable, or which may be payable, to the Participant or Beneficiary under the Plan.




	 	10.9	 	Compliance With Court Orders. The Committee is authorized to comply
with any court order in any action in which the Plan or the Committee has been named
as a party, including any action involving a determination of the rights or interests
in a Participant’s benefits under the Plan. Notwithstanding the foregoing, the
Committee shall interpret this provision in a manner that is consistent with Code
Section 409A and other applicable tax law. In addition, if necessary to comply with a
qualified domestic relations order, as defined in Code Section 414(p)(1)(B), pursuant
to which a court has determined that a spouse or former spouse of a Participant has an
interest in the Participant’s benefits under the Plan, the Committee, in its sole
discretion, shall have the right to immediately distribute the spouse’s or former
spouse’s interest in the Participant’s benefits under the Plan to such spouse or
former spouse.
	 
	 	10.10	 	Distributions For the Payment of Taxes. If any portion of a
Participant Account under this Plan is required to be included in income by the
Participant prior to receipt due to a failure of this Plan to meet the requirements of
Code Section 409A and related Treasury guidance or Regulations, the Participant may
petition the Committee or Administrator, as applicable, for a distribution of that
portion of his or her Participant Account Balance that is required to be included in
his or her income. Upon the grant of such a petition, which grant shall not be
unreasonably withheld, the Company shall distribute to the Participant immediately
available funds in an amount equal to the portion of his or her Participant Account
required to be included in income as a result of the failure of the Plan to meet the
requirements of Code Section 409A and related Treasury guidance or Regulations, which
amount shall not exceed the Participant’s unpaid vested Participant Account balance
under the Plan. If the petition is granted, such distribution shall be made within
ninety (90) days of the date when the Participant’s petition is granted. Such a
distribution shall affect and reduce the Participant’s benefits to be paid under this
Plan.
	 
	 	10.11	 	Special Transition Rule for the Crediting of Participant Accounts.
Prior to January 2, 2007, the Plan’s Investment Options consisted of (1) the Moody’s
Money Market Credit Investment Option, (2) the Prime Rate Money Credit Option, and (3)
BWA Stock Units.






	 	a.	 	The opening balances of Participant Accounts on January 1,
2007 (if any) shall be based upon the value of Participant Accounts as of
December 31, 2006 as determined under the provisions of the Plan





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for crediting and valuing Participant Accounts as in effect prior to its
amendment and restatement effective January 1, 2005, and based on
Participants’ Investment Options allocations as in effect on December 31,
2006.




	 	b.	 	On January 2, 2007, Participant Accounts shall be credited
with amounts deferred by the Participants for the 2006 Deferral Year in
accordance with their 2006 Deferral Elections, which deferrals shall be
allocated to the Participants’ Moody’s Money Market Credit Account, Prime Rate
Money Credit Account, and/or BW Stock Units Account, as previously elected by
the Participant.
	 
	 	c.	 	Following the crediting to Participant Accounts as provided
by Section 10.11 (a) and (b), each Participant Account shall be subsequently
reallocated on January 2, 2007 among the Investment Options as elected by the
Participant under rules and procedures established by the Committee.






	 	10.12	 	Code Section 409A.. It is intended that the provisions of the Plan
comply with Section 409A of the Code and the regulations and guidance promulgated
thereunder (collectively, “Code Section 409A”), and all provisions of the Plan shall
be construed in a manner consistent with the requirements for avoiding taxes or
penalties under Code Section 409A.






	 	a.	 	If under the Plan, an amount is to be paid in two or more
installments, for purposes of Code Section 409A, each installment shall be
treated as a separate payment.
	 
	 	b.	 	A Termination of Service shall not be deemed to have occurred
for purposes of any provision of the Plan providing for the payment of amounts
upon or following a Termination of Service unless such termination is also a
“Separation from Service” within the meaning of Code Section 409A and, for
purposes of any such provision of the Plan, references to a “resignation,”
“termination,” “termination of service” or like terms shall mean Separation
from Service.
	 
	 	c.	 	Participation in this Plan is limited to non-employee
directors of the Company. Accordingly, it is unlikely that any Participant
will subsequently become a “specified employee” of the Company within the
meaning of that term under Section 409A(2)(A) of the Code. If, however, a
Participant is deemed on the date of termination of his/her service to be a
“specified employee”, within the meaning of that term under the Code and using
the identification methodology selected by the Company from time to time, or
if none, the default methodology, then:





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	 	1.	 	With regard to any payment under the Plan
to the Participant that is payable on account of separation from
service, such payment shall not be made or provided prior to the
earlier of (i) the expiration of the six-month period measured from
the date of the Participant’s Separation from Service or (ii) the
date of the Participant’s death; and
	 
	 	2.	 	On the first day of the seventh month
following the date of the Participant’s Separation from Service or,
if earlier, on the date of his/her death, (x) all payments delayed
pursuant to this section (whether they would otherwise have been
payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to the Participant in a lump sum,
and any remaining payments and benefits due under this Plan shall be
paid or provided in accordance with the normal dates specified from
them herein and (y) all distributions of equity delayed pursuant to
this section shall be made to the Participant.






	 	d.	 	No payment or distribution under the Plan shall be
accelerated or delayed, except as permitted under Code Section 409A.
	 
	 	e.	 	This Section 10.12 shall only apply to the portion of a
Participant Account that is attributable to Retainer Fees earned on or after
January 1, 2005.





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