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Exhibit 10.1

BORGWARNER INC.
2018 STOCK INCENTIVE PLAN
Restricted Stock Agreement
For Non-Employee Directors

        THIS Restricted Stock Agreement (the “Agreement”) dated as of April 29, 2020, by and between BORGWARNER INC., a Delaware corporation (the “Company”), and                      (the “Director”) is entered into as follows:

WITNESSETH:

        WHEREAS, the Company has established the BorgWarner Inc. 2018 Stock Incentive Plan (the “Plan”), a copy of which is attached hereto or which has been previously provided to the Director;

        WHEREAS, the Corporate Governance Committee of the Board of Directors of the Company has recommended that the Director be granted shares of Restricted Stock pursuant to the terms of the Plan and the terms of this Agreement, and the Board of Directors of the Company has approved such recommendation.

        NOW, THEREFORE, in consideration of the foregoing and the mutual covenants hereinafter set forth:

1.Award of Restricted Stock.  The Company hereby awards to the Director on this date, 4,382 shares of its common stock, par value $.01 (“Stock”), subject to the terms and conditions set forth in the Plan and this Agreement (the “Award”).

2.Issuance of Share Certificates or Book Entry Record.  The Company shall, as soon as administratively feasible after execution of this Agreement by the Director, either (1) issue one or more certificates in the name of the Director representing the shares of Restricted Stock covered by this Award, or (2) direct the Company’s transfer agent for the Stock to make a book entry record showing ownership for the Restricted Stock in the name of the Director, subject to the terms and conditions of the Plan and this Agreement.

3.Custody of Share Certificates During the Restriction Period.  In the event that the Company issues one or more certificates for the Restricted Stock covered by this Award in lieu of book entry, during the Restriction Period described below:

a.The certificate or certificates shall bear the following legend:

“The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the BorgWarner Inc. 2018 Stock Incentive Plan and a Restricted Stock Agreement.  Copies of such Plan and Restricted Stock Agreement are on file at the headquarters offices of BorgWarner Inc.”

b.The certificates shall be held in custody by the Company until the restrictions set forth herein shall have lapsed; and
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Exhibit 10.1

c.As a condition to receipt of this Award, the Director hereby authorizes the Company to issue such instructions to the transfer agent as the Company may deem necessary or proper to comply with the intent and purposes of this Agreement and the Plan, including provisions regarding forfeiture, and that this paragraph shall be deemed to constitute the stock power, endorsed in blank, contemplated by Section 8.2 of the Plan.

4.Terms of the Plan Shall Govern.  The Award is made pursuant to, and is subject to, the Plan, including, without limitation, its provisions governing a Change in Control and Cancellation and Rescission of Awards.  In the case of any conflict between the Plan and this Agreement, the terms of the Plan shall control.  Unless otherwise indicated, all capitalized terms contained in this Agreement shall have the meaning assigned to them in the Plan.

5.Restriction Period.  The Restriction Period for the Restricted Stock awarded to the Director under this Agreement shall commence with the date of this Agreement set forth above and shall end, for the percentage of the shares indicated below, on the date when the Restricted Stock shall have vested in accordance with the following schedule:

         Date            Vested Percentage

          April 29, 2021        100% of the Awarded Shares
           
        During the Restriction Period, the Director shall not be permitted to sell, assign, transfer, pledge or otherwise encumber the Restricted Stock awarded herein.

6.Shareholder Rights.  Subject to the restrictions imposed by this Agreement and the Plan, the Director shall have, with respect to the Restricted Stock covered by this Award, all of the rights of a stockholder of the Company holding Stock, including the right to vote the shares and the right to receive any cash dividends; provided, however, that cash dividends will be automatically reinvested in additional shares of Restricted Stock, the number of which shall be determined by multiplying (i) the number of shares of Restricted Stock that the Director has been issued under this Agreement as of the dividend record date by (ii) the dividend paid on each share of Stock, and dividing the result by (iii) the Fair Market Value of a share of Stock on the dividend payment date.  Such additional shares of Restricted Stock resulting from the reinvestment of dividends shall be subject to the same restrictions, terms and conditions, including the Restriction Period, contained herein.  For the avoidance of doubt, if the Restricted Stock is forfeited, then any dividends paid thereon and treated in accordance with this paragraph shall also be forfeited.

7.Forfeiture of Shares.  Upon the Director’s Termination of Employment during the Restriction Period, all shares of Stock covered by this Award that remain subject to restriction shall be forfeited by the Director; provided, however, that in the event of the Director’s Retirement during the Restriction Period, the Compensation Committee shall 
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Exhibit 10.1

have the discretion to waive, in whole or in part, any or all remaining restrictions with respect to any or all of the Restricted Stock covered by this Award.

8.Change in Control.  In the event of a Change in Control, this Award shall be treated in accordance with Section 15 of the Plan.

9.Delivery of Shares.  At the Director’s request, if and when the Restriction Period expires for a share or shares of Restricted Stock without a prior forfeiture, the Company will deliver certificate(s) for such share(s) to the Director.

10.Acquisition of Shares For Investment Purposes Only.  By his or her signature hereto, the Director hereby agrees with the Company as follows:

a.The Director is acquiring the shares of Stock covered by this Award for investment purposes only and not with a view to resale or other distribution thereof to the public in violation of the Securities Act of 1933, as amended (the “1933 Act”), and shall not dispose of any of the shares of the Stock in transactions which, in the opinion of counsel to the Company, violate the 1933 Act, or the rules and regulations thereunder, or any applicable state securities or “blue sky” laws;

b.If any of the shares of Stock covered by this Award shall be registered under the 1933 Act, no public offering (otherwise than on a national securities exchange, as defined in the Exchange Act) of any such shares shall be made by the Director (or any other person) under such circumstances that he or she (or any other such person) may be deemed an underwriter, as defined in the 1933 Act; and

c.The Company shall have the authority to endorse upon the certificate or certificates representing the Stock covered by this Agreement such legends referring to the foregoing restrictions.

11.No Right to Continued Service.  Nothing contained in the Plan or this Agreement shall confer upon the Director any right to continue as a director of the Company.

12.Withholding of Taxes.  If applicable, no later than the date as of which an amount first becomes includible in the Director’s gross income for Federal income tax purposes, the Director shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any Federal, state, local, or foreign taxes of any kind required by law to be withheld.

13.Governing Law.  The Award made and actions taken under the Plan and this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without taking into account its conflict of laws provisions.

14.Acceptance of Award.  By the Director’s signature below, the Director accepts the terms of the Award, as set forth in this Agreement and in the Plan.  Unless the Company otherwise agrees in writing, this Agreement shall not be effective as a Restricted Stock Award if a copy of this Agreement is not signed and returned to the Company.

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15.Binding Effect.  Subject to the limitations stated above, this Agreement shall be binding upon and inure to the benefit of the parties’ respective heirs, legal representatives, successors, and assigns.

* * * * *
        

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Exhibit 10.1

IN WITNESS WHEREOF, BORGWARNER INC. and the Director have executed this Agreement to be effective as of the date first written above.

             

            BORGWARNER INC.
             
            
          By:   /s/ Felecia J. Pryor   
            Name: Felecia J. Pryor 
                                                            Title:   Executive Vice President, Chief 
                        Human Resources Officer

I acknowledge receipt of a copy of the Plan (either as an attachment hereto or that has been previously received by me) and that I have carefully read this Agreement and the Plan.  I agree to be bound by all of the provisions set forth in this Agreement and the Plan.

                   
Date      
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					Exhibit 10.2
	BorgWarner Inc.

		World Headquarters	3850 Hamlin Road
Auburn Hills
Michigan 48326, USA
	Tel: +1 248-754-9200

Revised Offer June 7, 2020 

Daniel Etue

Dear Dan:

I am pleased to confirm our offer to you to join BorgWarner Inc. effective July 20, 2020 or such earlier date as you and we may agree (“Start Date”). The details regarding the position, compensation and other support that will be provided are included below. 

1.Position:  The position being offered is Vice President and Controller. In this position, you will be based out of the BorgWarner World Headquarters in Auburn Hills, Michigan, reporting directly to the Chief Financial Officer, Kevin Nowlan. 

2.Base Salary & Management Incentive Plan:  The annualized target cash compensation will be $502,500, less applicable taxes and withholdings. This represents an annual base salary of $335,000 ($27,916.67 per month) and an annual 2020 Management Incentive Plan (“MIP”) target bonus opportunity of 50% of your base salary or $167,500. As the Company has implemented a temporary 10% pay reduction for executives in response to the business challenges during the COVID-19 crisis, your base salary will be reduced to $301,500 ($25,125 per month) until at least October 1, 2020 at which time the Company plans to review the situation for possible reinstatement of the salary reductions. The MIP does not constitute a promise of payment. Your actual MIP payout will depend on the Company’s financial performance and it is subject to, and governed by, the terms and requirements of the MIP. The actual bonus payout for 2020 will be based on company performance results and will be prorated from your Start Date. Bonus payments are typically made in February each year. 

3.Long-Term Incentive Plan:  In this position, you will also be eligible to participate in the BorgWarner Inc. 2018 Stock Incentive Plan (“SIP”). Awards under the SIP are currently made in Performance Shares and Restricted Stock, subject to Board of Directors approval and according to the SIP provisions. Awards are typically made in February of each year. It is expected that you will be eligible for annual awards starting in 2021 equivalent to 85% of your base salary, a value of $285,000 in total based on your initial base salary. Based on the current plan design, two-thirds of this total value will be delivered in Performance Shares (for the period that begins in 2021 and ends December 31, 2023 in the case of the initial grant), and one-third will be delivered in Restricted Stock. Also based on the current plan design, the actual number of Performance Shares paid out is dependent (a) on Total Shareholder Return versus our peer group over the performance period for one-third of the Performance Shares, (b) on the Company’s revenue growth versus the growth in vehicle production over the performance period for one-third of the Performance Shares, and (c) on the Company’s adjusted earnings per share in the third year of the performance period for the remaining one-third of the Performance Shares. There is a maximum potential payout of 200% associated with the Performance Shares. Regarding the Restricted Stock, fifty 

						
		

percent will vest on February 28 following the second anniversary of the grant; the remainder will vest on February 28 following the third anniversary of the grant. 

4.Perquisite Allowance:  With your position, you will also be eligible to receive a perquisite allowance in the amount of $25,000 per year, paid semi-monthly. This is intended to cover costs associated with lease/purchase of a vehicle along with the associated maintenance costs, financial planning and tax preparation advice. 

5.Sign-On Awards:  To compensate you for certain forfeitures upon leaving your previous employer and as an inducement to join the Company, you will be granted the following awards:

(a)Prorated participation in the 2020-2022 long term incentive program including: (1) an award of 4,300 Performance Shares under the 2020-2022 performance period and (2) 2,500 restricted shares vesting as to 50% of the shares on February 28, 2022 and 50% of the shares on February 28, 2023 provided that you are still employed on the respective vesting dates. The performance share award will be formally approved by the Compensation Committee of the Board of Directors at its July 2020 meeting. 

(b)An award of 7,000 restricted shares vesting as to 4,000 of the shares on the first anniversary of the grant date and 3,000 of the shares on the second anniversary of the grant date provided that you are still employed on the respective vesting dates. 

(c)A cash bonus of $67,000 payable on the first regular pay date following the three-month anniversary of your hire date. 

6.Severance:  In the event that your employment is involuntarily terminated without Cause at any time prior to the eighteen (18) month anniversary of your Start Date you will be entitled to a lump sum cash severance payment of twelve (12) months of your then-prevailing annual base salary. In the event that your employment is involuntarily terminated without Cause at any time prior to the one-year anniversary of your Start Date you will be entitled to a cash payment equal to the closing share price on your termination date multiplied by the number of shares resulting from the multiplication of 4,000 restricted shares scheduled to vest on that anniversary by percentage of the one-year that has elapsed through the termination date. The severance payment and restricted stock-vesting in this Paragraph 6 is subject to your (i) entering into a release of claims in a form acceptable to the Company within 30 days following your termination of employment and (ii) your compliance with your BorgWarner Non-Compete and Confidentiality Agreement (Enclosure). The severance payment will be made on the first regular payroll date following the date that the release of claims becomes irrevocable. 

7.BorgWarner Retirement Savings Plan:  You will be eligible to participate in the BorgWarner Retirement Savings Plan (RSP) which has three components (Enclosure):

•After sixty (60) days of employment, you will be eligible to participate in the Company Retirement Account (CRA), in which the Company will contribute 4% 
          

						
		

of your annual earnings plus 4% of your annual earnings in excess of the social security taxable wage base ($137,700 in 2020).

•You may immediately participate in the second account, the Employee Savings Account (SA), which allows you to contribute from 1% to 70% of your earnings and the Company will match 100% up to 3% of your contributions into this account. 

•Finally, the Retiree Health Account (RHA), in which you may contribute 1% to 3% of your earnings and the Company will match 100% of your contributions up to $500 per year. 

8.BorgWarner Retirement Savings Excess Plan:  You will be eligible to participate in BorgWarner’s Retirement Savings Excess Plan in accordance with terms and conditions (Enclosure).

9.Benefits:  As a regular full-time employee of BorgWarner, you will also be eligible to participate in the following benefit programs upon your start date:

•Medical and prescription drug insurance;
•Dental and vision insurance;
•Life insurance in the amount of two times your annual base salary up to a maximum of $1,000,000 (you may purchase additional life insurance for yourself, your spouse, and/or your dependents);
•Accidental Death & Dismemberment Insurance in the amount of one times your base annual salary up to a maximum of $1,000,000;
•Travel accident insurance in the amount of five times your annual base salary up to a maximum of $500,000;
•Short-term and long-term disability insurance;
•Health care and dependent care flexible spending accounts (FSA);
•Nine (9) Company paid holidays for the balance of 2020 (Enclosure);
•Ten (10) paid vacation days in 2020 and twenty (20) paid vacation days in 2021.

Your eligibility to participate in the above benefits, including the Retirement Savings Plan and Retirement Savings Excess Plan, is governed by applicable law and the benefit plan documents, both of which can change at any time. 

This offer of employment is contingent upon successful completion of pre-employment hair drug testing, background verification including education, SSN Verification, criminal background check, verification of your legal right to work for BorgWarner in the United States and the signing of the BorgWarner Non-Compete and Confidentiality Agreement (Enclosure). The employment resulting from your acceptance is at-will of either party, and therefore, terminable by you or BorgWarner Inc. at any time. 

Additionally, by signing this offer letter, you represent that your employment with BorgWarner shall not breach any agreement you have with any third party, including your previous employer. 
          

						
		

Dan, we are confident that you will find this position both challenging and rewarding, and I look forward to the opportunity to working with you in the future. 

Please indicate your acceptance of this offer by signing below on or before June 10, 2020 and returning a copy of this letter to me. 

Sincerely, 

/s/ Richard D. Greb

Richard D. Greb
Vice President, Corporate Human Resources

Enclosures:
1.Retirement Savings Plan
2.BorgWarner Excess Plan
3.Holiday Schedule 2020
4.BorgWarner Employee Non-Compete and Confidentiality Agreement

I understand and accept this offer and the compensation and other support provided as detailed above. 

Acceptance:        /s/ Daniel R. Etue                 Date:       6/9/2020

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