Document:

WWW - Exhibit 10.2 to Form 10-Q - 05-01-08

EXHIBIT 10.2

WOLVERINE WORLD WIDE, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AND

409A SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

PARTICIPATION AGREEMENT

          BLAKE W. KRUEGER ("Employee") previously has been designated by WOLVERINE WORLD WIDE, INC. ("Employer") as a Participant in the Wolverine World Wide, Inc. Supplemental Executive Retirement Plan ("SERP Plan") and in the Wolverine World Wide, Inc. 409A Supplemental Executive Retirement Plan ("409A SERP Plan").  Employer and Employee have signed this Agreement to amend Employee's Participant status.  Therefore, Employer and Employee agree as follows:

          1.          Participation Date.  Employee became a Participant in the 409A SERP Plan effective January 1, 2005, and became a participant in the SERP Plan effective January 1, 1996.  Employee has been and agrees to continue to be bound by the provisions of the SERP Plan and the 409A Plan. Employee and Employer agree it is a material condition of this Participation Agreement that the Employer adopt a plan document for the 409A SERP no later than December 31, 2008, that provides the Employee with at least the benefits he would receive under the SERP, except to the extent such benefits must be reduced as required by Internal Revenue Code Section 409A and any other applicable laws and regulations. Effective January 1, 2005, and continuing until the adoption of a plan document for the 409A SERP, the terms of the 409A SERP shall be the terms of the SERP, modified as required by Internal Revenue Code Section 409A or as approved by the Board of Directors.

          2.          Years of Service.  Employee's commencement date for purposes of computing Years of Service under the SERP Plan and the 409A SERP Plan is April 27, 1993.  Employee also has been credited previously with an additional three (3) deemed Years of Service.  Effective April 19, 2007, and continuing thereafter while the Employee remains a Participant in the SERP Plan and 409A SERP Plan, the Employee will be credited with one (1) additional deemed Year of Service on the same date that the Employee is credited with each Year of Service as a Participant in each Plan.  By way of example only, in March 2007, when the Employee was credited with one Year of Service under the Plans the Employee received one additional deemed Year of Service under the Plans.  As of the date hereof, Employee has 16 Years of Service.

          3.          Designated Percentage.  The Designated Percentage under the SERP Plan Section 5.1(a) and 409A SERP Plan is 2.4%.

          4.          Designated Period.  The Designated Period under the SERP Plan Section 10.1 and the 409A SERP Plan is three (3) years.

          5.          Deferred Compensation Agreement.  Employer and Employee agree that:

[Check one of the following]

	 	
  X  
	 	
There is no deferred compensation agreement in effect as described in 409A Plan Section 5.4(a).

	 	 	 	 
	 	
     
	 	
There is a Deferred Compensation Agreement dated _______________ in effect as described in Section 5.4(a) of the 409A Plan and attached.  Employee hereby relinquishes all rights under such Deferred Compensation Agreement, and agrees to look solely to the terms of the 409A Plan with regard to any computation of a Minimum Benefit as provided in the 409A Plan.

          6.          Employment Relationship.  Employee agrees that the SERP Plan and 409A Plan shall not be construed to create a contract of employment between the Employer and the Employee or to otherwise confer upon the Employee or other person a legal right to continuation of employment or any rights other than those specified herein.  These Plans shall not limit or affect the right of the Employer to discharge or retire the Employee.

          These Plans do not constitute a contract on the part of the Employer to employ Employee until age 65 or to continue his employment for any given period of time, either fixed or contingent.  Moreover, Employee does not by this writing agree to continue in the employment of the Employer for any specified interval of time.   The employment relationship, therefore, shall continue for so long as, but only for so long as, such employment is mutually satisfactory to both parties.  The Employer does not promise that Employee's employment will be continued for such interval as to enable Employee to obtain all or any part of the benefits under this Agreement.

          7.          Confidentiality and Relationship.  Employee agrees to refrain from divulging any information of a confidential nature including, but not restricted to, trade secrets, operating methods, the names of the Employer's customers and suppliers and the relations of the Employer with such customers and suppliers, or other confidential information; and to refrain from using or permitting the use of such information or confidences by any interests competitive with the Employer; irrespective of whether or not Employee is then employed by the Employer, and to refrain from including, and from causing inducements to be made to, the Employer's employees to terminate employment with the Employer or undertake employment with its competitors.  The obligations herein assumed by Participant shall endure whether or not the remaining promises by either party remain to be performed or shall be only partially performed.

          8.          Acknowledgments.  Employee acknowledges the Employer's rights to:

          (a)          Amend or terminate the SERP Plan or 409A Plan at any time, subject to Section 11.1 of the SERP Plan and the applicable provisions of the 409A Plan; and

2

          (b)          To designate the Employee as an Inactive Participant at any time, as provided in Section 3.2 of the SERP Plan and the applicable provisions of the 409A Plan; and

          (c)          To make final decisions on any claim or dispute related to the SERP Plan, as provided in Section 8.5 of the SERP Plan, or the 409A Plan, under the applicable provisions of the 409A Plan; and

          (d)          To exercise any and all other rights of the Employer under the SERP Plan and the 409A Plan, in the Employer's sole discretion, without any limitation other than as expressly set forth in the SERP Plan or the 409A Plan.

          Employee agrees that any amendment or termination of the SERP Plan or the 409A Plan shall automatically amend or terminate this Agreement, to the extent permitted by the Plans.

          9.          Amendments.  Employee agrees that this Agreement may not be amended orally, but only in a written amendment authorized by the Company's Board of Directors and signed by the applicable Plan Administrators.

                    IN WITNESS WHEREOF, the parties have signed this Agreement.

	 	 	
WOLVERINE WORLD WIDE, INC.

	 	 	 
	 	 	 
	
Dated as of March 11, 2008
	 	
By:
	/s/ Stephen L. Gulis, Jr.

	 	 	 	
Stephen L. Gulis, Jr.

	 	 	 	
Its:
	
Executive Vice President,

	 	 	 	 	
CFO and Treasurer

	 	 	 	
"Employer"

	 	 	 	 
	 	 	 	 
	
Dated as of March 11, 2008
	 	
By:
	/s/ Blake W. Krueger

	 	 	 	
Blake W. Krueger

	 	 	 	
"Employee"

3empplan.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    BORGWARNER
EMPLOYEES

    RETIREMENT
SAVINGS PLAN

    

    (As
Amended and Restated Effective as of January 1, 2006)

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

        
          TABLE
OF CONTENTS

          

          Page

           

          

           

        

      

    

    
      	
               
      

            	
              ARTICLE
      1    INTRODUCTION       1

            

    

     

    
      	
               
      

            	
              Section
      1.01Establishment, Effective Date and Title of
  Plan1

            

    

     

    
      	
               
      

            	
              Section
      1.02Purpose of Plan

            

    

     

    
      	
               
      

            	
              Section
      1.03Intent of Plan 1

            

    

     

    
      	
               
      

            	
              Section
      1.04Appendices and
Supplements 1

            

    

     

    
      	
               
      

            	
              ARTICLE
      2    DEFINITIONS 2

            

    

     

    
      	
               
      

            	
              Section
      2.01Actual Contribution Percentage  2

            

    

     

    
      	
               
      

            	
              Section
      2.02Actual Deferral Percentage  2

            

    

     

    
      	
               
      

            	
              Section
      2.03Administrative Services Provider  3

            

    

     

    
      	
               
      

            	
              Section
      2.04After-Tax Contributions  3

            

    

     

    
      	
               
      

            	
              Section
      2.05Authorized Leave of Absence  3

            

    

     

    
      	
               
      

            	
              Section
      2.06Before-Tax Contributions  3

            

    

     

    
      	
               
      

            	
              Section
      2.07Beneficiary  3

            

    

     

    
      	
               
      

            	
              Section
      2.08Code  3

            

    

     

    
      	
               
      

            	
              Section
      2.09Committee  3

            

    

     

    
      	
               
      

            	
              Section
      2.10Common Stock  3

            

    

     

    
      	
               
      

            	
              Section
      2.11Company  3

            

    

     

    
      	
               
      

            	
              Section
      2.12Company Matching Contributions  4

            

    

     

    
      	
               
      

            	
              Section
      2.13Company Retirement Account  4

            

    

     

    
      	
               
      

            	
              Section
      2.14Company Retirement
Contributions4

            

    

     

    
      	
               
      

            	
              Section
      2.15Compensation4

            

    

     

    
      	
               
      

            	
              Section
      2.16Effective Date4

            

    

     

    
      	
               
      

            	
              Section
      2.17Eligible Employee4

            

    

     

    
      	
               
      

            	
              Section
      2.18Employee5

            

    

     

    
      	
               
      

            	
              Section
      2.19Employment Commencement Date5

            

    

     

    
      	
               
      

            	
              Section
      2.20ERISA5

            

    

     

    
      	
               
      

            	
              Section
      2.21Forfeiture5

            

    

     

    
      	
               
      

            	
              Section
      2.22Highly Compensated Employee6

            

    

     

    
      	
               
      

            	
              Section
      2.23Hour of Service6

            

    

     

    
      	
               
      

            	
              Section
      2.24Investment Funds or Funds6

            

    

     

    
      	
               
      

            	
              Section
      2.25One Year Period of Severance6

            

    

     

    
      	
               
      

            	
              Section
      2.26Participant6

            

    

     

    
      	
               
      

            	
              Section
      2.27Payroll Period6

            

    

     

    
      	
               
      

            	
              Section
      2.28Permanent Disability6

            

    

     

    
      	
               
      

            	
              Section
      2.29Plan6

            

    

     

    
      	
               
      

            	
              Section
      2.30Plan Administrator7

            

    

     

    
      	
               
      

            	
              Section
      2.31Plan Sponsor7

            

    

     

    
      	
               
      

            	
              Section
      2.32Plan Year7

            

    

     

    
      	
               
      

            	
              Section
      2.33Reemployment Commencement Date7

            

    

     

    
      	
               
      

            	
              Section
      2.34Related Employer7

            

    

     

    
      	
               
      

            	
              Section
      2.35Retiree Health Account7

            

    

     

    
      	
               
      

            	
              Section
      2.36Rollover Contributions7

            

    

     

    
      	
               
      

            	
              Section
      2.37RSP Account7

            

    

     

    
      	
               
      

            	
              Section
      2.38Savings Account7

            

    

     

    
      	
               
      

            	
              Section
      2.39Severance from Service Date8

            

    

     

    
      	
               
      

            	
              Section
      2.40Trust8

            

    

     

    
      	
               
      

            	
              Section
      2.41Trustee8

            

    

     

    
      	
               
      

            	
              Section
      2.42Unvested Portion8

            

    

     

    
      	
               
      

            	
              Section
      2.43Valuation Date8

            

    

     

    
      	
               
      

            	
              Section
      2.44Vested Portion9

            

    

     

    
      	
               
      

            	
              Section
      2.45Year of Vested Service9

            

    

     

    
      	
               
      

            	
              ARTICLE
      3PARTICIPATION10

            

    

     

    
      	
               
      

            	
              Section
      3.01Commencement of Participation in Company Retirement Account and
      Savings Account10

            

    

     

    
      	
               
      

            	
              Section
      3.02Commencement of Participation in the Retiree Health
      Account10

            

    

     

    
      	
               
      

            	
              Section
      3.03Participation After One Year Period of
  Severance10

            

    

     

    
      	
               
      

            	
              Section
      3.04Participation Upon Return from Authorized Leave of Absence (Including
      Layoff Status with Recall Rights)11

            

    

     

    
      	
               
      

            	
              Section
      3.05Designation of Beneficiary11

            

    

     

    
      	
               
      

            	
              Section
      3.06Transfer from and to a Tax-Qualified Defined Benefit Pension Plan or
      Tax-Qualified Defined Contribution Plan of a Related
      Employer.11

            

    

     

    
      	
               
      

            	
              ARTICLE
      4CONTRIBUTIONS TO COMPANY RETIREMENT
ACCOUNT12

            

    

     

    
      	
               
      

            	
              Section
      4.01Company Retirement
Contributions12

            

    

     

    
      	
               
      

            	
              ARTICLE
      5CONTRIBUTIONS TO SAVINGS ACCOUNT13

            

    

     

    
      	
               
      

            	
              Section
      5.01Authorization of Before-Tax
Contributions.13

            

    

     

    
      	
               
      

            	
              Section
      5.02Authorization of After-Tax
Contributions14

            

    

     

    
      	
               
      

            	
              Section
      5.03Before-Tax Contribution and After-Tax Contribution
      Deductions14

            

    

     

    
      	
               
      

            	
              Section
      5.04Change in Rate of Before-Tax Contributions and After-Tax
      Contributions15

            

    

     

    
      	
               
      

            	
              Section
      5.05Suspension/Resumption of Before-Tax Contributions and After-Tax
      Contributions15

            

    

     

    
      	
               
      

            	
              Section
      5.06Company Matching Contributions to Savings
  Account15

            

    

     

    
      	
               
      

            	
              ARTICLE
      6CONTRIBUTIONS TO RETIREE HEALTH
ACCOUNT15

            

    

     

    
      	
               
      

            	
              Section
      6.01Authorization of Before-Tax
Contributions15

            

    

     

    
      	
               
      

            	
              Section
      6.02Amount of Company Matching Contributions to a Participant’s Retiree
      Health Account16

            

    

     

    
      	
               
      

            	
              ARTICLE
      7LIMITATIONS ON CONTRIBUTIONS TO THE
PLAN17

            

    

     

    
      	
               
      

            	
              Section
      7.01Limitation on Amount of Company Retirement Contributions and Company
      Matching Contributions17

            

    

     

    
      	
               
      

            	
              Section
      7.02Yearly Limitations on Before-Tax
  Contributions17

            

    

     

    
      	
               
      

            	
              Section
      7.03Maximum Annual Additions to RSP
Account18

            

    

     

    
      	
               
      

            	
              Section
      7.04Prior Year ADP Testing19

            

    

     

    
      	
               
      

            	
              Section
      7.05Prior Year ACP Testing20

            

    

     

    
      	
               
      

            	
              ARTICLE
      8ROLLOVER AND TRANSFER
CONTRIBUTIONS21

            

    

     

    
      	
               
      

            	
              Section
      8.01Transfer of Assets21

            

    

     

    
      	
               
      

            	
              Section
      8.02Rollover and Direct Transfer
Contributions21

            

    

     

    
      	
               
      

            	
              Section
      8.03Transfer of Employment Within the
Company21

            

    

     

    
      	
               
      

            	
              ARTICLE
      9INVESTMENT OF ACCOUNTS22

            

    

     

    
      	
               
      

            	
              Section
      9.01Establishment of Funds22

            

    

     

    
      	
               
      

            	
              Section
      9.02Investment in Funds22

            

    

     

    
      	
               
      

            	
              Section
      9.03Investment of RSP Account23

            

    

     

    
      	
               
      

            	
              Section
      9.04Investment of Company Matching Contributions Made in Common
      Stock23

            

    

     

    
      	
               
      

            	
              Section
      9.05Change in Participant’s Investment Election of Future
      Contributions23

            

    

     

    
      	
               
      

            	
              Section
      9.06Change in Participant’s Investment Election on the Balance of the
      Participant’s Account23

            

    

     

    
      	
               
      

            	
              Section
      9.07Voting of the BorgWarner Inc. Stock
Fund24

            

    

     

    
      	
               
      

            	
              Section
      9.08Tender Offers for Common
Stock24

            

    

     

    
      	
               
      

            	
              Section
      9.09Other Rights in the BorgWarner Inc. Stock
  Fund25

            

    

     

    
      	
               
      

            	
              Section
      9.10Limitation of Liability of
Fiduciaries25

            

    

     

    
      	
               
      

            	
              Section
      9.11Method of Valuation of RSP
Account26

            

    

     

    
      	
               
      

            	
              Section
      9.12Forfeitures26

            

    

     

    
      	
               
      

            	
              Section
      9.13Date of Adjustments26

            

    

     

    
      	
               
      

            	
              ARTICLE
      10LOANS AND IN-SERVICE
WITHDRAWALS27

            

    

     

    
      	
               
      

            	
              Section
      10.01Loans to Participants27

            

    

     

    
      	
               
      

            	
              Section
      10.02Withdrawals from Balance in the Participant’s Savings Account
      Attributable to After-Tax Contributions, Rollover Contributions, and
      Amounts Transferred to the Savings Account Pursuant to Section
      8.0129

            

    

     

    
      	
               
      

            	
              Section
      10.03Withdrawals from Balance in the Participant’s Savings Account
      Attributable to Before-Tax Contributions—Participants Over Age
      591⁄229

            

    

     

    
      	
               
      

            	
              Section
      10.04Withdrawals from Balance in the Participant’s Savings Account
      Attributable to Before-Tax Contributions—Hardship Withdrawals For
      Participants Under Age 591⁄230

            

    

     

    
      	
               
      

            	
              Section
      10.05General In-Service Withdrawal
Rules31

            

    

     

    
      	
               
      

            	
              ARTICLE
      11ELIGIBILITY FOR BENEFITS32

            

    

     

    
      	
               
      

            	
              Section
      11.01Benefits Upon Severance from Employment (Except by Reason of
      Death)32

            

    

     

    
      	
               
      

            	
              Section
      11.02Benefits Upon Death of Participant (Prior to Commencement of
      Installment Distributions)32

            

    

     

    
      	
               
      

            	
              Section
      11.03Determination of Retiree Health Account
  Benefits33

            

    

     

    
      	
               
      

            	
              Section
      11.04Amendment to Vesting
Schedule33

            

    

     

    
      	
               
      

            	
              Section
      11.05Period of Severance34

            

    

     

    
      	
               
      

            	
              ARTICLE
      12DISTRIBUTION OF BENEFITS34

            

    

     

    
      	
               
      

            	
              Section
      12.01Request for Distribution34

            

    

     

    
      	
               
      

            	
              Section
      12.02Methods of Distribution35

            

    

     

    
      	
               
      

            	
              Section
      12.03Treatment of Company Retirement Account and Savings Account in
      Installment Distributions37

            

    

     

    
      	
               
      

            	
              Section
      12.04Commencement of Distribution37

            

    

     

    
      	
               
      

            	
              Section
      12.05Deferral of Distribution – Minimum Required
      Distributions38

            

    

     

    
      	
               
      

            	
              Section
      12.06Distribution to Alternate Payee Pursuant to Qualified Domestic
      Relations Order43

            

    

     

    
      	
               
      

            	
              Section
      12.07Direct Rollovers43

            

    

     

    
      	
               
      

            	
              Section
      12.08Suspension of Benefits Upon Reemployment of
    Participant45

            

    

     

    
      	
               
      

            	
              Section
      12.09Payment of Benefits from Retiree Health
  Account45

            

    

     

    
      	
               
      

            	
              ARTICLE 13THE
      TRUST46

            

    

     

    
      	
               
      

            	
              Section
      13.01Establishment of Trust46

            

    

     

    
      	
               
      

            	
              Section
      13.02Appointment of Trustee46

            

    

     

    
      	
               
      

            	
              Section
      13.03Interest in Fund Governed by Terms of the
  Plan46

            

    

     

    
      	
               
      

            	
              ARTICLE
      14ADMINISTRATION47

            

    

     

    
      	
               
      

            	
              Section
      14.01Allocation of Fiduciary
Duties47

            

    

     

    
      	
               
      

            	
              Section
      14.02Establishment of the
Committee47

            

    

     

    
      	
               
      

            	
              Section
      14.03Appointment and Duties of Plan
  Administrator47

            

    

     

    
      	
               
      

            	
              Section
      14.04Powers and Duties of the
Committee47

            

    

     

    
      	
               
      

            	
              Section
      14.05The Committee Direction on
Payments49

            

    

     

    
      	
               
      

            	
              Section
      14.06Actions by the Committee49

            

    

     

    
      	
               
      

            	
              Section
      14.07No Compensation49

            

    

     

    
      	
               
      

            	
              Section
      14.08Records of the Committee49

            

    

     

    
      	
               
      

            	
              Section
      14.09Information from Participant49

            

    

     

    
      	
               
      

            	
              Section
      14.10Notification of Participant’s
Address49

            

    

     

    
      	
               
      

            	
              Section
      14.11Claims Procedure49

            

    

     

    
      	
               
      

            	
              Section
      14.12Qualified Domestic Relations Order
  Procedure51

            

    

     

    
      	
               
      

            	
              Section
      14.13Expenses52

            

    

     

    
      	
               
      

            	
              ARTICLE
      15GENERAL PROVISIONS52

            

    

     

    
      	
               
      

            	
              Section
      15.01Nonalienation of Benefits52

            

    

     

    
      	
               
      

            	
              Section
      15.02Payment to Incapacitated Participant or
  Beneficiary53

            

    

     

    
      	
               
      

            	
              Section
      15.03Payment Because of Inability to Locate Participant or
      Beneficiary53

            

    

     

    
      	
               
      

            	
              Section
      15.04Actions by the Committee54

            

    

     

    
      	
               
      

            	
              Section
      15.05Plan for Exclusive Benefit of Participant and
      Beneficiary54

            

    

     

    
      	
               
      

            	
              Section
      15.06No Contract of Employment54

            

    

     

    
      	
               
      

            	
              Section
      15.07Indemnification of the Committee and Plan
    Administrator54

            

    

     

    
      	
               
      

            	
              Section
      15.08Change in Business54

            

    

     

    
      	
               
      

            	
              Section
      15.09USERRA54

            

    

     

    
      	
               
      

            	
              Section
      15.10Plan Administered According to
Law55

            

    

     

    
      	
               
      

            	
              Section
      15.11Gender, Number and Context55

            

    

     

    
      	
               
      

            	
              Section
      15.12Qualification Intended55

            

    

     

    
      	
               
      

            	
              Section
      15.13Amendment and Restatement of the Plan Conditioned Upon
      Qualification55

            

    

     

    
      	
               
      

            	
              Section
      15.14Top Heavy Plan Provisions55

            

    

     

    
      	
               
      

            	
              ARTICLE
      16AMENDMENTS AND TERMINATION59

            

    

     

    
      	
               
      

            	
              Section
      16.01Plan Sponsor’s Right to Amend
Plan59

            

    

     

    
      	
               
      

            	
              Section
      16.02Termination of Plan or Discontinuance of
    Contributions59

            

    

     

    
      	
               
      

            	
              Section
      16.03Distribution on Termination of
Plan60

            

    

     

    
      	
               
      

            	
              ARTICLE
      17SUCCESSOR, PLAN MERGER, CONSOLIDATION OR TRANSFER OF
      ASSETS60

            

    

     

    
      	
               
      

            	
              Section
      17.01Successor60

            

    

     

    
      	
               
      

            	
              Section
      17.02Plan Merger, Consolidation or Transfer of Assets to Other Qualified
      Plans60

            

    

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    APPENDIX
A                                BORGWARNER
THERMAL SYSTEMS INC.

     

    A-1           FLETCHER,
NORTH CAROLINA PLANT

     

    A-2           CADILLAC,
MICHIGAN PLANT

     

    A-3           GAINESVILLE,
GEORGIA PLANT

     

    APPENDIX
B                                BORGWARNER
TURBO SYSTEMS INC.

     

    
      	
               
      

            	
              B-1

            	
              ASHEVILLE,
      NORTH CAROLINA PLANT & PFPD
PARTICIPANTS

            

    

     

    
      	
               
      

            	
              B-2

            	
              COLDWATER,
      MICHIGAN PLANT

            

    

    (TRANSMISSION
SYSTEMS)

     

    APPENDIX
C                                BORGWARNER
TORQTRANSFER SYSTEMS INC.

     

    C-1           SENECA,
SOUTH CAROLINA PLANT

     

    C-2           LONGVIEW,
TEXAS PLANT

     

    C-3           CARY,
NORTH CAROLINA PLANT

     

    APPENDIX
D                                BORGWARNER
EMISSIONS SYSTEMS INC.

     

    D-1           DIXON,
ILLINOIS PLANT

     

    D-2           BLYTHEVILLE,
ARKANSAS PLANT

     

    
      	
               
      

            	
              D-3

            	
              SALLISAW,
      OKLAHOMA (MORSE TEC) & WATER VALLEY, MISSISSIPPI
  PLANTS

            

    

     

    
      	
               
      

            	
              D-4

            	
              CHARLOTTE,
      NORTH CAROLINA PLANT (FUEL SYSTEMS)

            

    

     

    
      	
               
      

            	
              D-5

            	
              GRAND RAPIDS,
      MICHIGAN PLANT (FUEL SYSTEMS)

            

    

     

    
      	
              APPENDIX
      E

            	
              BORGWARNER
      INSTRUMENTATION – A BUSINESS UNIT OF BORGWARNER AIR/FLUID SYSTEMS OF
      MICHIGAN INC.

            

    

     

    

     

    SUPPLEMENT
I                                           INVESTMENT
FUNDS

     

    SUPPLEMENT
II                                           ELIGIBILITY
FOR RETIREE HEALTH ACCOUNT

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    BORGWARNER
EMPLOYEES

    RETIREMENT
SAVINGS PLAN

    (As
Amended and Restated Effective as of January 1, 2006)

    

    ARTICLE
1 INTRODUCTION

     

    Section
1.01 Establishment, Effective
Date and Title of Plan.  Effective after the close of business
on November 28, 2003, the sponsorship of the BorgWarner Air/Fluid Systems Inc.
Retirement Savings Plan (the “A/FS Plan”) was assigned and transferred, with all
of its associated obligations and liabilities, to BorgWarner
Inc.  Immediately upon such transfer, BorgWarner Inc. (a) assumed
sponsorship of the A/FS Plan, (b) changed the name of the A/FS Plan to the
BorgWarner Employees Retirement Savings Plan (the “Plan”), and (c) merged into
the Plan the following defined contributions plans:

     

    
      	
              ·  

            	
              the
      BorgWarner TorqTransfer Systems Inc. Retirement Savings
    Plan;

            

    

    
      	
              ·  

            	
              the
      BorgWarner Cooling Systems Inc. Retirement Savings
  Plan;

            

    

    
      	
              ·  

            	
              the
      BorgWarner Turbo Systems Inc. Retirement Savings Plan;
  and

            

    

    
      	
              ·  

            	
              the
      BorgWarner Medallion Retirement Savings
Plan.

            

    

    

    Upon such merger,
the Plan was amended and restated effective as of December 1,
2003.  The Plan is hereby further amended and restated effective as of
January 1, 2006 (the “Effective Date”) to reflect various amendments to the Plan
since December 1, 2003, and to implement various amendments that are effective
January 1, 2006.  Participation in the Plan is limited to those
Employees and former Employees who qualify for participation under an applicable
Appendix as described in Section 1.04.

    

    Section
1.02 Purpose of
Plan.  The purpose of the Plan is to provide retirement
benefits and a method of long-term savings for Eligible Employees.

     

    Section
1.03 Intent of
Plan.  The Plan Sponsor intends that the Plan, as the same may
be amended from time to time, shall constitute a qualified plan under the
provisions of Section 401(a) of the Code with a cash or deferred arrangement
under Section 401(k) of the Code and related or successor provisions of the Code
and shall be in full compliance with ERISA.

     

    Section
1.04 Appendices and
Supplements.  Certain plants, business units, divisions,
subsidiaries, joint ventures and affiliates of the Plan Sponsor’s subsidiaries
may participate in the Plan in accordance with the appendices attached to the
Plan (the “Appendices”).  The provisions of each Appendix amend
certain provisions of the Plan with respect to “Employees” (and certain former
“Employees”), as such term is defined in the applicable Appendix, and will take
precedence over the provisions of the Plan for the Participants described in the
applicable Appendix.  All other provisions of the Plan will
apply.  In addition, the Plan may be amended by one or more
supplements to the Plan (the “Supplements”), the provisions of which shall apply
to all Participants unless otherwise provided in the applicable Supplement or
Appendix. 

     

    ARTICLE
2 DEFINITIONS

     

    The terms set forth
in this Article 2, when used in the Plan, shall have the following meanings,
unless the context clearly requires a different meaning.

    

    Section
2.01 Actual Contribution
Percentage.  The term “Actual Contribution Percentage” means,
for purposes of Section 7.05, a percentage calculated using the prior year
testing method in accordance with Treasury Regulation Sections 1.401(m)-2(a)(2)
and (3) for:  (a) the group of Eligible Employees who are Highly
Compensated Employees, or (b) the group of all other Eligible
Employees.  For each group being tested, the Actual Contribution
Percentage shall be the average of the following actual contribution ratios,
which shall be calculated separately for each member of the
group:  the sum of the Company Matching Contributions (to the extent
required to be taken into account under Treasury Regulation Sections
1.401(m)-2(a)(4) and (5)) under Section 5.06, and if applicable, Section 6.02,
and the After-Tax Contributions (to the extent required to be taken into account
under Treasury Regulation Sections 1.401(m)-2(a)(4) and (5)) under Section 5.02
on behalf of each group member, divided by the Compensation of each group
member.  The applicable year for determining the Actual Contribution
Percentage for Eligible Employees who are non-Highly Compensated Employees shall
be the Plan Year immediately preceding the Plan Year for which the ACP test is
being performed and shall be determined using the actual deferral ratios
described above for the Eligible Employees who were non-Highly Compensated
Employees in that preceding Plan Year, regardless of whether those non-Highly
Compensated Employees are Eligible Employees or non-Highly Compensated Employees
in the Plan Year for which the ACP test is being calculated.  The
Actual Contribution Percentage for Highly Compensated Employees is the average
of the actual deferral ratios described above of the Eligible Employees who are
Highly Compensated Employees for the Plan Year for which the ACP test is being
calculated.

     

    Section
2.02 Actual Deferral
Percentage.  The term “Actual Deferral Percentage” means, for
purposes of Section 7.04, a percentage calculated using the prior year testing
method in accordance with Treasury Regulation Sections 1.401(k)-2(a)(2) and (3)
for:  (a) the group of Eligible Employees who are Highly Compensated
Employees, or (b) the group of all other Eligible Employees.  For each
group being tested, the Actual Deferral Percentage shall be the average of the
following actual deferral ratios, which shall be calculated separately for each
member of the group:  the sum of the Before-Tax Contributions (to the
extent required to be taken into account under Treasury Regulation Sections
1.401(k)-2(a)(4) and (5)) under Section 5.01 and, if applicable, Section 6.01,
on behalf of each group member, divided by the Compensation of each group
member.  The applicable year for determining the Actual Deferral
Percentage for Eligible Employees who are non-Highly Compensated Employees shall
be the Plan Year immediately preceding the Plan Year for which the ADP test is
being performed and shall be determined using the actual deferral ratios
described above for the Eligible Employees who were non-Highly Compensated
Employees in that preceding Plan Year, regardless of whether those non-Highly
Compensated Employees are Eligible Employees or non-Highly Compensated Employees
in the Plan Year for which the ADP test is being calculated.  The
Actual Deferral Percentage for Highly Compensated Employees is the average of
the actual deferral ratios described above of the Eligible Employees who are
Highly Compensated Employees for the Plan Year for which the ADP test is being
calculated.

     

    Section
2.03 Administrative Services
Provider.  The term “Administrative Services Provider” means
the person or entity appointed by the Committee to provide administrative
services to the Plan.

     

    Section
2.04 After-Tax
Contributions.  The term “After-Tax Contributions” means the
contributions made by a Participant pursuant to Section
5.02.  After-Tax Contributions are not intended to qualify as salary
reduction contributions under Section 401(k) of the Code.

     

    Section
2.05 Authorized Leave of
Absence.  The term “Authorized Leave of Absence” means any
absence of an Employee on account of time during which no duties are performed
due to vacation, holiday, illness, incapacity, layoff of less than one (1) year,
jury duty, bereavement, military duty or other leave of absence authorized by
the Company under its applicable personnel practices administered in a uniform
and nondiscriminatory manner.  During an Authorized Leave of Absence,
a Participant shall be given credit for Years of Vested Service, provided that
the Participant retires or returns to employment with the Company within the
period specified in the Authorized Leave of Absence.

     

    Section
2.06 Before-Tax
Contributions.  The term “Before-Tax Contributions” means the
contributions made by a Participant pursuant to Section 5.01 and, if applicable,
Section 6.01  Before-Tax Contributions are intended to qualify as
salary reduction contributions under Section 401(k) of the Code.

     

    Section
2.07 Beneficiary.  The
term “Beneficiary” means the person, persons or trust designated under Section
3.05 or Section 11.02, as applicable, to receive a benefit under the Plan after
the death of a Participant.

     

    Section
2.08 Code.  The
term “Code” means the Internal Revenue Code of 1986, as amended from time to
time.

     

    Section
2.09 Committee.  The
term “Committee” means the committee set forth in Section 14.02.

     

    Section
2.10 Common
Stock.  The term “Common Stock” means the common stock, par
value $0.01 per share, of BorgWarner Inc.

     

    Section
2.11 Company.  The
term “Company” means a subsidiary of the Plan Sponsor participating in the Plan
under an Appendix to the Plan (and identified in such Appendix as the “Company”)
and, where the context requires, the various such subsidiaries
collectively.  Subsidiaries, and any plants, business units,
divisions, joint ventures and affiliates of any subsidiaries, of the Plan
Sponsor shall participate in the Plan under an Appendix as determined from time
to time by the Committee and by the applicable subsidiary, or joint venture or
affiliate of such subsidiary, of the Plan Sponsor taking the appropriate
corporate action with the consent of the Committee.  

     

    Section
2.12 Company Matching
Contributions.  The term “Company Matching Contributions” means
those contributions made by the Company on behalf of Participants pursuant to
Section 5.06 and, if applicable, Section 6.02.

     

    Section
2.13 Company Retirement
Account.  The term “Company Retirement Account” means the
account maintained for each Participant showing the aggregate of the Company
Retirement Contributions made on such Participant’s behalf pursuant to Section
4.01 and certain amounts transferred to the Plan pursuant to Section 8.01, after
adjustment for earnings, changes in market valuation, Forfeitures or
distributions, if any.  Vesting of a Participant’s Company Retirement
Account shall be determined pursuant to the definition of the term Vested
Portion.

     

    Section
2.14 Company Retirement
Contributions.  The term “Company Retirement Contributions”
means those contributions made by the Company on behalf of Participants pursuant
to Section 4.01.

     

    Section
2.15 Compensation.  The
term “Compensation” means direct compensation in the form of wages paid by the
Company to an Eligible Employee on an hourly basis for services performed during
a Plan Year, including straight-time pay, overtime premium, shift premium,
vacation pay, holiday pay, bereavement pay, short-term military duty pay, jury
duty pay, and profit sharing, but excluding accident and sickness pay,
reimbursement for education expenses, supplemental unemployment benefits,
severance pay, bonuses paid after severance of employment, and other taxable
fringe benefits provided by the Company.  Compensation shall also
include Before-Tax Contributions under this Plan and any other elective
deferrals made by the Eligible Employee which are excluded from the Employee’s
gross income by reason of Code Sections 125 or
132(f)(4).  Compensation shall be limited for all Plan purposes to
$200,000 per Participant, as adjusted for cost-of-living increases in accordance
with Section 401(a)(17)(B) of the Code.

     

    For purposes of
determining the Actual Contribution Percentage and Actual Deferral Percentage
the term “Compensation” shall have a meaning permitted under Section 414(s) of
the Code and the regulations thereunder, with any such definitions to be
consistently applied for each testing year.  For purposes of
determining who is a Highly Compensated Employee, Section 7.03, and Section
15.14, the term “Compensation” shall have the meaning set forth in Section
415(c)(3) of the Code.

    

    Section
2.16 Effective
Date.  The term “Effective Date” means, except as otherwise
provided herein, January 1, 2006, the effective date of the Plan as amended and
restated herein.

     

    Section
2.17 Eligible
Employee.  Except as otherwise provided in the applicable
Appendix, the term “Eligible Employee” means:

     

    
      	
              (a)  

            	
              For purposes
      of eligibility for Company Retirement Contributions in accordance with
      Section 4.01, an Employee shall be an “Eligible Employee” as of the date
      such Employee has completed sixty (60) days of employment with the Company
      or a Related Employer;

            

    

     

    
      	
              (b)  

            	
              For purposes
      of eligibility to authorize Before-Tax Contributions and After-Tax
      Contributions in accordance with Article 5, and, if applicable, Before-Tax
      Contributions pursuant to Section 6.01, and for purposes of eligibility
      for Company Matching Contributions in accordance with Section 5.06, and,
      if applicable, Section 6.02, an Employee shall be an “Eligible Employee”
      as of the Employee’s Employment Commencement
  Date.

            

    

     

    Section
2.18 Employee.  The
term “Employee” shall have the meaning given in each applicable Appendix,
provided, however, that the term “Employee” excludes:  (a) any
non-U.S. citizen who is employed by the Company outside the United States,
unless approved by the Committee to be an Employee; (b) any leased employee who
performs services for the Company, except to the extent required by Section
414(n) of the Code (Any employer contributions to a tax-qualified retirement
plan provided on behalf of such leased employee by the leasing organization for
service provided to the Company shall for all purposes of the Plan be treated as
contributions by the Company.); (c) any non-U.S. citizen who is temporarily
transferred to the Company, (d) all agents, consultants, independent contractors
and self-employed individuals (whether or not such an individual is reclassified
as a common law employee for wage and hour purposes); and (e) any Highly
Compensated Employee who has an employment agreement with the Company and who is
provided retirement benefits by the Company, its subsidiaries, joint ventures or
affiliates under any other plan or program.  Further, an employee who
is employed within a collective bargaining unit recognized as such by the
Company shall not become or remain a Participant who is eligible for
contributions under Articles 4, 5, or 6 unless and until mutually satisfactory
agreements have been reached with the union bargaining agent for coverage of the
employees in the bargaining unit represented by the union under the terms of the
Plan, together with such other waivers as the Company may deem necessary in
light of local contractual situations.

     

    Section
2.19 Employment Commencement
Date.  The term “Employment Commencement Date” means the date
on which an Employee first performs an Hour of Service for the
Company.

     

    Section
2.20 ERISA.  The
term “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

     

    Section
2.21 Forfeiture.  The
term “Forfeiture” means the Unvested Portion of a Participant’s RSP Account that
will be forfeited by a Participant upon severance from employment as provided in
Sections 11.01 and 11.05.  Each Forfeiture shall be applied solely to
reduce the amount of Company Retirement Contributions and Company Matching
Contributions otherwise payable by the Company.  No part of any
Forfeiture may be applied to increase the benefits any Participant otherwise
would receive under the Plan.

     

    Section
2.22 Highly Compensated
Employee.  The term “Highly Compensated Employee” means each
Employee of the Company or a Related Employer who:  

     

    
      	
              (a)  

            	
              was a five
      percent (5%) owner (as defined in Section 416(i)(1)(B)(i) of the Code) of
      the Company or a Related Employer at any time during the Plan Year or the
      preceding Plan Year; or

            

    

     

    
      	
              (b)  

            	
              received
      Compensation from the Company or a Related Employer in excess of $80,000
      during the preceding Plan Year.  The $80,000 limit shall be
      adjusted for inflation pursuant to Sections 414(q) and 415(d) of the
      Code.

            

    

     

    A
former employee shall be treated as a Highly Compensated Employee if such
individual was a Highly Compensated Employee when he separated from service, or
if such individual was a Highly Compensated Employee at any time after attaining
age fifty-five (55).  The determination of Highly Compensated
Employees shall be made in accordance with Section 414(q) of the Code and
applicable Treasury Regulations.

    

    Section
2.23 Hour of
Service.  The term “Hour of Service” means each hour for which
an Employee is directly or indirectly paid or entitled to payment by the Company
for the performance of services.

     

    Section
2.24 Investment Funds or
Funds.  The term “Investment Funds” or “Funds” means, as the
context requires, any one or all of the funds provided for in Article 9 and as
set forth in Supplement I.

     

    Section
2.25 One Year Period of
Severance.  The term “One Year Period of Severance” means the
twelve (12) month period beginning on a Participant’s Severance from Service
Date and each successive twelve (12) month period during which the Participant
does not perform an Hour of Service.

     

    Section
2.26 Participant.  The
term “Participant” means any Eligible Employee or former Eligible Employee for
whom an RSP Account is maintained under the Plan.

     

    Section
2.27 Payroll
Period.  The term “Payroll Period” means the period for which
the Participant is directly or indirectly paid or entitled to payment by the
Company for the performance of services.

     

    Section
2.28 Permanent
Disability.  The term “Permanent Disability” means that the
Eligible Employee has been determined to be disabled under the applicable long
term disability plan of the Company in which the Eligible Employee
participates.

     

    Section
2.29 Plan.  The
term “Plan” means the BorgWarner Employees Retirement Savings Plan, including
any Appendices or Supplements, as set forth herein and as from time to time
amended and in effect.

     

    Section
2.30 Plan
Administrator.  The term “Plan Administrator” means the person
or persons appointed to administer the Plan pursuant to Section
14.03.

     

    Section
2.31 Plan
Sponsor.  The term “Plan Sponsor” means BorgWarner Inc.
(formerly called Borg-Warner Automotive Inc.).

     

    Section
2.32 Plan
Year.  The term “Plan Year” means the administrative year of
the Plan and Trust, which is maintained on a January 1 through December 31
basis.

     

    Section
2.33 Reemployment Commencement
Date.  The term “Reemployment Commencement Date” means the date
on which an Employee first performs an Hour of Service for the Company after a
One Year Period of Severance.

     

    Section
2.34 Related
Employer.  The term “Related Employer” means (a) any
corporation that is a member of a controlled group of corporations (as defined
in Section 414(b) of the Code) that includes the Company, (b) any trade or
business (whether or not incorporated) that is under common control (as defined
in Section 414(c) of the Code) with the Company, (c) any member of an affiliated
service group (as defined in Section 414(m) of the Code) of which the Company is
also a member, and/or (d) any entity required to be aggregated with the Company
pursuant to Section 414(o) of the Code.

     

    Section
2.35 Retiree Health
Account.  The term “Retiree Health Account” means the account
maintained for each Participant showing the aggregate of the Before-Tax
Contributions made on such Participant’s behalf pursuant to Section 6.01 and
Company Matching Contributions made on such Participant’s behalf pursuant to
Section 6.02 after adjustment for earnings, changes in market valuation,
Forfeitures or distributions, if any.  A Participant shall at all
times have a fully vested, nonforfeitable interest in the balance in his Retiree
Health Account attributable to Before-Tax Contributions.  Vesting of
the balance in a Participant’s Retiree Health Account attributable to Company
Matching Contributions shall be determined pursuant to the definition of Vested
Portion.

     

    Section
2.36 Rollover
Contributions.  The term “Rollover Contributions” means the
elective contributions made to the Plan by a Participant pursuant to Section
8.02.

     

    Section
2.37 RSP
Account.  The term “RSP Account” means the account maintained
for each Participant consisting of a Company Retirement Account, a Savings
Account, and, if applicable, a Retiree Health Account.

     

    Section
2.38 Savings
Account.  The term “Savings Account” means the account
maintained for each Participant showing the aggregate of Before-Tax
Contributions, After-Tax Contributions, Company Matching Contributions, and
Rollover Contributions made by or on behalf of a Participant pursuant to Article
5, as well as amounts transferred to the Plan pursuant to Section 8.01, after
adjustment for earnings, changes in market valuation, Forfeitures, or
distributions, if any.  A Participant shall at all times have a fully
vested and nonforfeitable interest in the balance of his Savings Account;
provided, however, that vesting in the balance of his Savings Account
attributable to Company Matching Contributions shall be determined pursuant to
the definition of Vested Portion.  The Plan Administrator may
establish such sub-accounts as it deems necessary to separately record the
amounts of Before-Tax Contributions, After-Tax Contributions, Company Matching
Contributions, Rollover Contributions, and transferred balances in a
Participant’s Savings Account.  

     

    Section
2.39 Severance from Service
Date.  Except as otherwise provided in the applicable Appendix,
the term “Severance from Service Date” means the date on which an Employee’s
employment with the Company is severed, which shall occur on the earlier
of:  (a) the date on which the Employee quits, is discharged, retires
or dies, or (b) the first day immediately following a one (1) year period during
which the Employee remains absent from employment for any reason other than
those specified in (a) above; provided, however, that if the Employee is on an
Authorized Leave of Absence (including layoff status with recall rights) at the
end of such one (1) year period, his Severance from Service Date shall occur on
the expiration date of such Authorized Leave of Absence (including the
expiration date of his recall rights) unless he returns to active employment
with the Company prior to that date.  If an Employee is on a layoff
with recall rights, the Plan Administrator prior to the expiration of the
Employee’s recall rights, may, upon a request from the Employee, approve a
Severance from Service Date which shall be considered to be the last day worked
by the Employee.  Notwithstanding the foregoing, a Severance from
Service Date shall not be deemed to have occurred until the second anniversary
of the first day of an absence from work due to (w) the pregnancy of the
Employee, (x) the birth of a child of the Employee, (y) the placement of a child
in connection with the adoption of the child by the Employee, or (z) the caring
for the child by the Employee during the period immediately following the
child’s birth or placement for adoption.

     

    Section
2.40 Trust.  The
term “Trust” means the trust or trusts established pursuant to Section
13.01.

     

    Section
2.41 Trustee.  The
term “Trustee” means the trustee or trustees appointed by the Committee pursuant
to Section 13.02, and any successor trustee or trustees.

     

    Section
2.42 Unvested
Portion.  The term “Unvested Portion” means (a) that portion of
the balance in a Participant’s Company Retirement Account attributable to
Company Retirement Contributions which is not the Vested Portion, (b) that
portion of the balance in a Participant’s Savings Account attributable to
Company Matching Contributions which is not the Vested Portion, and (c) if
applicable, that portion of the balance in a Participant’s Retiree Health
Account attributable to Company Matching Contributions which is not the Vested
Portion.

     

    Section
2.43 Valuation
Date.  The term “Valuation Date” means a date as of which each
Investment Fund is valued and the RSP Accounts are adjusted as provided in
Article 9.  Valuation Dates shall be each business day (any day on
which the New York Stock Exchange is open for trading and on which the principal
office of the Administrative Services Provider is open) during the Plan Year.

     

    Section
2.44 Vested
Portion.  Except as otherwise provided in the applicable
Appendix, the term “Vested Portion” means (a) that portion of the balance in a
Participant’s Company Retirement Account attributable to Company Retirement
Contributions which results from the application of the following schedule, (b)
that portion of the balance in a Participant’s Savings Account attributable to
Company Matching Contributions which results from the application of the
following schedule, and (c) if applicable, that portion of the balance in a
Participant’s Retiree Health Account attributable to Company Matching
Contributions which results from the application of the following
schedule:

     

    
      	
              Years of Vested Service

            	
              Vested Portion

            
	
              Less than
      Three (3)

            	
              0%

            
	
              Three (3) or
      more

            	
              100%

            

    

    

    provided, however,
that (i) the balance in a Participant’s Company Retirement Account attributable
to Company Retirement Contributions, (ii) the balance in a Participant’s Savings
Account attributable to Company Matching Contributions, and (iii) if applicable,
the balance in a Participant’s Retiree Health Account attributable to Company
Matching Contributions shall become fully vested and nonforfeitable on the date
on which the Participant suffers a Permanent Disability, the date on which he
attains age sixty-five (65), provided he is employed by the Company on that
date, or the date of his death, provided he is employed by the Company on that
date, whichever occurs first.

    

    A
Participant shall at all times have a fully vested and nonforfeitable interest
in the balance, if any, in:  (x) if applicable, his Company Retirement
Account attributable to amounts rolled over from the BorgWarner Inc. Retirement
Plan or transferred pursuant to Section 8.01; (y) his Savings Account
attributable to Before-Tax Contributions, After-Tax Contributions, and Rollover
Contributions, and attributable to amounts transferred pursuant to Section 8.01;
and (z) if applicable, his Retiree Health Account attributable to Before-Tax
Contributions.

    

    Section
2.45 Year of Vested
Service.  Except as otherwise provided in the applicable
Appendix, the term “Year of Vested Service” means each twelve (12) month period
of employment with the Company.  An Employee shall be credited with
Years of Vested Service based on the time elapsed between the Employee’s
Employment Commencement Date and his Severance from Service Date. However, if an
Employee who is absent from service with the Company is rehired before incurring
a One Year Period of Severance, the Employee’s period of absence from service
shall be included in his Years of Vested Service. Any period during which an
Employee is on an Authorized Leave of Absence (including layoff status with
recall rights) shall be considered as service for purposes of determining Years
of Vested Service and shall not result in a One-Year Period of
Severance.  Further, any period during which an Employee is on an
Authorized Leave of Absence (including layoff status with recall rights) or
employed with a Related Employer shall be included in determining an Employee’s
Years of Vested Service. 

     

    ARTICLE
3 PARTICIPATION

     

    Section
3.01 Commencement of
Participation in Company Retirement Account and Savings
Account.  Employees of the Company who are participating in the
Company Retirement Account and Savings Account as of the Effective Date, shall
continue to participate in the Company Retirement Account and Savings Account as
of the Effective Date under the applicable Appendix.  Beginning on the
Effective Date, except as otherwise provided in subsection 5.01(a) and the
applicable Appendix, an Employee shall commence participation in the Company
Retirement Account on the first day of the first Payroll Period immediately
following the date the Employee first becomes an Eligible Employee, and an
Employee may commence participation in the Savings Account on the first day of
the first Payroll Period immediately following the date the Employee first
becomes an Eligible Employee or as soon as practicable thereafter; provided that
such Eligible Employee has filed a proper election with the Administrative
Services Provider.  If an Eligible Employee does not elect to
participate in the Savings Account when he is first eligible to do so, such
Eligible Employee may commence participation as of the first day of the first
Payroll Period immediately following the date he elects to commence
participation under Section 5.01, or soon as administratively feasible
thereafter.  The Trustee shall establish and maintain for each
Participant a Company Retirement Account and Savings Account, each of which
shall be invested as provided in Article 9.

     

    Section
3.02 Commencement of
Participation in the Retiree Health Account.  Employees of the
Company who are participating in the Retiree Health Account, as of the Effective
Date, shall continue to participate in the Retiree Health Account under the Plan
as of the Effective Date.  Beginning on the Effective Date, except as
otherwise provided in Supplement II, an Employee may commence participation in
the Retiree Health Account on the first day of the first Payroll Period
immediately following the date the Employee first becomes an Eligible Employee
and meets the requirements of Section 6.01.  If an Eligible Employee,
who is hired on (or rehired on or after) the Effective Date or the date
specified in the applicable Appendix, does not elect to participate in the
Retiree Health Account pursuant to Section 6.01 when he is first eligible to do
so, such Eligible Employee may commence participation as of the first day of the
first Payroll Period immediately following the date he elects to commence
participation under Section 6.01, or soon as administratively feasible
thereafter.  The Trustee shall establish and maintain a Retiree Health
Account for each Eligible Employee who has filed a proper election with the
Administrative Services Provider.  The Company intends that the
Retiree Health Account shall constitute an “accident or health plan” under
Sections 105 and 106 of the Code and, to the extent permitted under the Code,
payments made from the Retiree Health Account shall not be taxable.

     

    Section
3.03 Participation After One Year
Period of Severance.  If a Participant incurs a severance from
employment with the Company for any reason and he subsequently is reemployed by
the Company after incurring a One Year Period of Severance, he shall be eligible
to become a Participant again on his Reemployment Commencement Date, provided
his prior Years of Vested Service are not disregarded under subsection
11.05(c).  The participation of any Employee whose prior Years of
Vested Service are disregarded under subsection 11.05(c) and who is so
reemployed shall commence when he satisfies the requirements of Section 3.01
and, if applicable, Section 3.02 after his Reemployment Commencement
Date.

     

    Section
3.04 Participation Upon Return
from Authorized Leave of Absence (Including Layoff Status with Recall
Rights).  A Participant who returns from an Authorized Leave of
Absence (including layoff status with recall rights) shall resume participation
in the Plan as of the first day of the first Payroll Period immediately
following the date such Participant returns to active employment with the
Company or as soon as practicable thereafter.

     

    Section
3.05 Designation of
Beneficiary.  A Participant, by instrument executed and
delivered to the Administrative Service Provider during his lifetime, shall
designate a Beneficiary to whom distribution shall be made in the event of his
death prior to the full receipt of his interest under the Plan.  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 and shall include the full name and post office address of each
Beneficiary; provided, however, that a married Participant’s primary Beneficiary
shall be, at all times while the Participant is married, his current spouse only
(unless the spouse consents in writing, properly notarized, to the naming by the
Participant of someone other than the spouse as a primary Beneficiary and the
consent acknowledges the financial effect of the waiver and further acknowledges
the nonspouse beneficiary(ies), class of beneficiaries or contingent
beneficiary(ies) and the specific form of payment, if any, chosen by the
Participant).

     

    Any designation
pursuant to this Section 3.05 may be changed or revoked by the Participant at
any time and from time to time by similar instrument delivered to the
Administrative Service Provider in a manner approved by the Plan
Administrator.  The most recent designation form on file shall control
as of any date.  Subject to the provisions of Section 9.11, a
Beneficiary with rights under the Plan which will or may survive such
Beneficiary’s death may designate a Beneficiary of those rights in the same
manner and subject to the same limitations applicable to a Participant, except
that the spousal consent requirement shall not apply.  Distribution of
any benefits with respect to which a Participant (or a Beneficiary so entitled)
fails effectively to designate a Beneficiary or successor Beneficiary shall be
made as provided in Section 11.02.  If concurrent Beneficiaries are
named without specifying the proportion of benefits due to each, distribution
shall be made in equal shares to those Beneficiaries.  Any
distribution other than to the estate of the person entitled to make the
designation shall not be subject to the claims of creditors of that
person.

    

    Section
3.06 Transfer from and to a
Tax-Qualified Defined Benefit Pension Plan or Tax-Qualified Defined Contribution
Plan of a Related Employer. 

     

    
      	
              (a)  

            	
              If an
      Eligible Employee who participates in a tax qualified defined benefit
      pension plan to which the Company or a Related Employer contributes
      becomes a Participant eligible to receive a Company Retirement
      Contribution pursuant to Section 4.01, then such Participant shall not
      accrue any benefit under such tax qualified defined benefit pension plan
      for service with respect to which he is eligible to receive a Company
      Retirement Contribution.

            

    

     

    
      	
              (b)  

            	
              If an
      Eligible Employee who participates in a tax qualified defined contribution
      plan to which the Company or a Related Employer contributes becomes a
      Participant eligible to receive a Company Retirement Contribution pursuant
      to Section 4.01, then such Participant shall not accrue any further
      benefit under the former tax qualified defined contribution plan for
      service with respect to which he is eligible to receive a Company
      Retirement Contribution.  If an Eligible Employee who is a
      Participant in the Plan under an Appendix becomes a Participant in the
      Plan under a different Appendix, then such Participant shall not accrue
      any further benefit under the former Appendix for service with respect to
      which he is eligible to receive a Company Retirement
      Contribution.

            

    

     

    
      	
              (c)  

            	
              If a
      Participant ceases to be eligible to receive a Company Retirement
      Contribution pursuant to Section 4.01 and participates in any tax
      qualified defined benefit pension plan of the Company or a Related
      Employer, the provisions of which would grant the Participant credit for
      service for the period during which he was eligible to receive a Company
      Retirement Contribution, the Participant may upon retirement elect under
      the tax-qualified defined benefit pension plan to:  (i) receive
      his vested accrued benefit under the terms of the tax-qualified defined
      benefit pension plan and forfeit the Vested Portion of his Company
      Retirement Account, or (ii) receive his vested accrued benefit under the
      tax-qualified defined benefit pension plan, reduced by the actuarially
      equivalent benefit amount of the Vested Portion of the balance in his
      Company Retirement Account (as determined by an actuary selected by the
      Plan Administrator), and receive the Vested Portion of the balance in his
      Company Retirement Account.

            

    

     

    ARTICLE
4 CONTRIBUTIONS TO COMPANY
RETIREMENT ACCOUNT

     

    Section
4.01 Company Retirement
Contributions.  

     

    
      	
              (a)  

            	
              Regular
      Contributions.  Subject to the provisions of Article 7,
      the Company shall, in accordance with the provisions of this Section 4.01
      as modified by the applicable Appendix and commencing with the first
      Payroll Period following eligibility, make a Company Retirement
      Contribution to the Participant’s Company Retirement Account for each
      Payroll Period on behalf of each Participant who is an Eligible Employee
      at any time during such Payroll Period.  The amount of such
      Company Retirement Contribution for each Payroll Period shall be computed
      as described in the applicable Appendix.  The Company shall also
      make an additional Company Retirement Contribution if required by the
      applicable Appendix, which shall be computed as described in the
      applicable Appendix.

            

    

     

    
      	
              (b)  

            	
              Contributions During
      Military Leave.  If a Participant is on an Authorized
      Leave of Absence for active military duty as a result of the deployment of
      the United States Armed Services to foreign nations, the Company will make
      a Company Retirement Contribution on behalf of such Participant in
      accordance with the Company’s applicable personnel practices regarding
      such deployments; provided, however, that such contributions shall be made
      in accordance with Section 414(u) of the
Code.

            

    

     

    ARTICLE
5 CONTRIBUTIONS TO SAVINGS
ACCOUNT

     

    Section
5.01 Authorization of Before-Tax
Contributions. 

     

    
      	
              (a)  

            	
              Regular
      Election.  At the time an Eligible Employee becomes a
      Participant, he may file an initial election with the Administrative
      Service Provider authorizing the Company to make before-tax deductions for
      each Payroll Period from his Compensation for deposit with the Trustee in
      the Participant’s Savings Account, subject to the limitations of Article
      7, in an amount not less than one percent (1%) nor more than twenty-eight
      percent (28%) of his Compensation for such Payroll Period, in whole
      multiples of one percent (1%), which amount shall be characterized as
      Before-Tax Contributions.  The first three percent (3%) of such
      Before-Tax Contributions shall be eligible for Company Matching
      Contributions as described in Section 5.06.  With respect to any
      Eligible Employee whose Employment Commencement Date is on or after June
      1, 2003 and who fails to file an initial election during his first sixty
      (60) days of employment with the Company, and with respect to any Eligible
      Employee who is employed by the Company on January 21, 2006 and who has
      not filed an initial election as of that date, such Eligible Employee
      shall automatically become a Participant in the Savings Account beginning
      with the next following Payroll Period, or as soon as practicable
      thereafter, and shall be deemed to have authorized the Company to make
      deductions for each Payroll Period from his Compensation for deposit with
      the Trustee in the Participant’s Savings Account in an amount equal to
      three percent (3%) of his Compensation for such Payroll Period, which
      amount shall be characterized as Before-Tax Contributions and shall be
      eligible for Company Matching Contributions as described in Section
      5.06.

            

    

     

    
      	
              (b)  

            	
              Military Leave
      Election.  A Participant returning to active employment
      with the Company from qualified military leave pursuant to the provisions
      of the Uniformed Services Employment and Reemployment Rights Act of 1994,
      may file an election with the Administrative Services Provider authorizing
      the Company to make deductions for each Payroll Period from his
      Compensation for deposit with the Trustee in the Participant’s Savings
      Account in the amount equal to the contribution rate that he could have
      contributed under subsection (a) during the period of military leave had
      the Participant been in active employment during such period; provided,
      however, this amount shall be reduced by any contributions made under
      subsection (a) during such military leave.  To make such
      contributions, a Participant must make this military leave election and
      make the contributions thereunder during the period beginning with the
      Payroll Period occurring on or immediately following his reemployment
      date.  Contributions under this subsection (b) shall be made in
      accordance with Section 414(u) of the Code.  Amounts contributed
      pursuant to this subsection (b) shall be characterized as Before-Tax
      Contributions and shall be eligible for Company Matching Contributions as
      described in Section 5.06.

            

    

     

    
      	
              (c)  

            	
              Catch-Up
      Contributions.  Each Participant who is eligible to make
      Before-Tax Contributions to his Savings Account and who has attained age
      50 before the close of a Plan Year shall be eligible to make additional
      Before-Tax Contributions in the form of “catch-up contributions” for such
      Plan Year in accordance with, and subject to the limitations of, Section
      414(v) of the Code and the Treasury Regulations
      thereunder.  Such catch-up contributions shall not be taken into
      account for purposes of the provisions of the Plan implementing the
      required limitations of Sections 402(g) and 415 of the
      Code.  The Plan shall not be treated as failing to satisfy the
      provisions of the Plan implementing the requirements of Sections
      401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of the Code, as
      applicable, by reason of the making of such catch-up
      contributions.

            

    

     

    Section
5.02 Authorization of After-Tax
Contributions.  At the time an Eligible Employee becomes a
Participant, he may file an initial election with the Administrative Services
Provider authorizing the Company to make after-tax deductions for each Payroll
Period from his Compensation for deposit with the Trustee in the Participant’s
Savings Account in an amount not less than one percent (1%) nor more than
twenty-eight percent (28%) of his Compensation for such Payroll Period, in whole
multiples of one percent (1%), which shall be characterized as After-Tax
Contributions and shall not be eligible for Company Matching Contributions as
described in Section 5.06; provided, however, that the aggregate amount such
Participant may contribute pursuant to Section 5.01 and this Section 5.02 shall
not exceed twenty-eight percent (28%) of his Compensation for each Payroll
Period.  

     

    Section
5.03 Before-Tax Contribution and
After-Tax Contribution Deductions.  The Company shall deduct
the Participant’s Before-Tax Contributions and After-Tax Contributions under
this Article 5 from his Compensation for each Payroll Period and shall transmit
the sums so deducted to the Trustee for investment as provided in Article
9.  Such transmittal shall be made as soon as practicable after the
Administrative Services Provider confirms the information provided by the
Company.  The interest of each Participant in that portion of his
Savings Account attributable to Before-Tax Contributions and After-Tax
Contributions shall be fully vested and nonforfeitable at all
times.

     

    Section
5.04 Change in Rate of Before-Tax
Contributions and After-Tax Contributions.  Within the
limitations provided in Sections 5.01 and 5.02, a Participant may change the
rate of his Before-Tax Contributions and/or After-Tax Contributions attributable
to the elections the Participant made under Sections 5.01 and 5.02 as of the
first day of the Payroll Period immediately following the completion of the
processing of the request.

     

    Section
5.05 Suspension/Resumption of
Before-Tax Contributions and After-Tax Contributions.  A
Participant may elect to suspend or subsequently resume his Before-Tax
Contributions and/or After-Tax Contributions attributable to the elections the
Participant made under Sections 5.01 and 5.02 as of the first day of the Payroll
Period immediately following the completion of the processing of the
request.  

     

    Section
5.06 Company Matching
Contributions to Savings Account.  Except as otherwise provided
in the applicable Appendix and subject to the provisions of Article 7, the
Company shall make a Company Matching Contribution to a Participant’s Savings
Account for each Payroll Period on behalf of each Participant who is an Eligible
Employee at any time during such Payroll Period, provided such Participant makes
a Before-Tax Contribution to his Savings Account during such Payroll
Period.  Except as otherwise provided in the applicable Appendix, the
Company Matching Contribution shall be an amount equal to the Participant’s
Before-Tax Contribution which he made to his Savings Account pursuant to Section
5.01 during such Payroll Period, up to a maximum of three percent
(3%).  Company Matching Contributions may, at the discretion of the
Company, be made in Common Stock.

     

    ARTICLE
6 CONTRIBUTIONS TO RETIREE
HEALTH ACCOUNT

     

    Section
6.01 Authorization of Before-Tax
Contributions.  

     

    
      	
              (a)  

            	
              Regular
      Election.  An Eligible Employee described in Section 3.02
      becomes a Participant in the Retiree Health Account by making an election
      with the Administrative Services Provider authorizing the Company to make
      deductions for each Payroll Period from his Compensation for deposit with
      the Trustee in the Participant’s Retiree Health
      Account.  Subject to the limitations of Article 7, such
      deductions shall be an amount not less than one percent (1%) nor more than
      three percent (3%) of the Participant’s Compensation for such Payroll
      Period, in whole multiples of one percent (1%).  Amounts
      contributed pursuant to this subsection (a) shall be characterized as
      Before-Tax Contributions, provided that such contributions are made in
      accordance with the terms of the Code, and shall be eligible for Company
      Matching Contributions as described in Section 6.02.  A
      Participant may change the rate of his Before-Tax Contributions, or
      suspend or subsequently resume his Before-Tax Contributions, as of the
      first day of the Payroll Period immediately following the completion of
      the processing of the request.

            

    

     

    
      	
              (b)  

            	
              Military Leave
      Election.  A Participant returning to active employment
      with the Company from qualified military leave pursuant to the provisions
      of the Uniformed Services Employment and Reemployment Rights Act of 1994,
      may file an election with the Administrative Services Provider authorizing
      the Company to make deductions for each Payroll Period from his
      Compensation for deposit with the Trustee in the Participant’s Retiree
      Health Account in the amount equal to the contribution rate that he could
      have contributed under subsection (a) during the period of military leave
      had the Participant been in active employment during such period;
      provided, however, this amount shall be reduced by any contributions made
      under subsection (a) during such military leave.  To make such
      contributions, a Participant must make this military leave election and
      make the contributions thereunder during the period beginning with the
      Payroll Period occurring on or immediately following his reemployment
      date.  Contributions under this subsection (b) shall be made in
      accordance with Section 414(u) of the Code.  Amounts contributed
      pursuant to this subsection (b) shall be characterized as Before-Tax
      Contributions and shall be eligible for Company Matching Contributions as
      described in Section 6.02.

            

    

     

    
      	
              (c)  

            	
              Before-Tax
      Contribution Deductions.  The Company shall deduct the
      Participant’s Before-Tax Contributions under this Section 6.01 from his
      Compensation for each Payroll Period and shall transmit the sums so
      deducted to the Trustee for investment as provided in Section
      9.03.  Such transmittal shall be made as soon as practicable
      after the Administrative Services Provider confirms the information
      provided by the Company.  The interest of each Participant in
      that portion of his Retiree Health Account attributable to Before-Tax
      Contributions shall be fully vested and nonforfeitable at all
      times.

            

    

     

    Section
6.02 Amount of Company Matching
Contributions to a Participant’s Retiree Health Account.  For
each Payroll Period, subject to the limitations set forth in Article 7, the
Company shall make a Company Matching Contribution to the Participant’s Retiree
Health Account on behalf of each Participant who is an Eligible Employee at any
time during such Payroll Period, provided such Participant makes Before-Tax
Contributions to his Retiree Health Account during such Payroll
Period.  To the extent permitted under the Code, the Company Matching
Contribution shall be an amount equal to one hundred percent (100%) of the
Participant’s Before-Tax Contributions made to his Retiree Health Account during
such Payroll Period, up to a maximum Company Matching Contribution to the
Participant’s Retiree Health Account of $500 per calendar
year.  Company Matching Contributions to the Participant’s Retiree
Health Account may, at the discretion of the Company, be made in Common
Stock.

     

    ARTICLE
7 LIMITATIONS ON CONTRIBUTIONS
TO THE PLAN

     

    Section
7.01 Limitation on Amount of
Company Retirement Contributions and Company Matching
Contributions.  Company Retirement Contributions and Company
Matching Contributions made by any party to the Plan which, along with the
Company, is a member of an affiliated group within the meaning of Section 1504
of the Code (for purposes of this Section 7.01, a “Member”) shall be made only
on behalf of Participants who are Eligible Employees of the contributing Member,
and Company Retirement Contributions and Company Matching Contributions shall be
made only from current or accumulated earnings or profits of such
Member.

     

    If
any Member is prevented from making a contribution which it otherwise would have
made by reason of having no current or accumulated earnings or profits, or
because such earnings or profits are less than the contribution which it
otherwise would have made, then so much of the contribution which such Member
was so prevented from making may be made for the benefit of the Participants who
are Eligible Employees of such Member by any of the other Members to the extent
of each such other Member’s current or accumulated earnings or
profits.  If the Members do not file a consolidated federal income tax
return, such contribution by each such other Member shall be limited to that
portion of its total current and accumulated earnings or profits remaining after
adjustment for its contributions on behalf of Participants who are its own
Eligible Employees which the total prevented contribution bears to the total
current and accumulated earnings or profits of all such other Members remaining
after adjustment for all contributions on behalf of Participants who are their
own Eligible Employees.

    

    The Company may
waive the earnings and profits limitation under this Section 7.01 for any Plan
Year.  The amount of contributions made by any Member for a Plan Year
shall not exceed the amount deemed to be deductible in computing the taxable
income of such Member (taking into account all contributions under all of such
Member’s tax-qualified plans and all privileges and limitations of carryovers
and carryforwards as established by law) for the purpose of computing taxes on
or measured by income under the provisions of the Code and/or any other laws in
effect from time to time.

    

    A
contribution which was made by a Member upon a mistake of fact, or conditioned
upon initial qualification of the Plan or upon the deductibility of the
contribution under Section 404 of the Code (all contributions to this Plan shall
be made conditioned on the deductibility of such contributions) shall, upon a
contributing Member’s request, be returned to such Member within one (1) year
after the payment of the mistaken contribution, the denial of qualification or
the disallowance of the deduction (to the extent disallowed), whichever is
applicable.

    

    Section
7.02 Yearly Limitations on
Before-Tax Contributions.  No Participant shall be permitted to
have Before-Tax Contributions made under the Plan during any calendar year in
excess of the dollar limitation contained in Section 402(g) of the Code, reduced
by the Participant’s elective deferrals for such year under any other salary
reduction arrangement under Sections 401(k) or 403(b) of the Code, except to the
extent permitted under Section 5.01(c) of the Plan and Section 414(v) of the
Code, if applicable.  Any Before-Tax Contributions made by the Company
on behalf of a Participant in excess of the Code Section 402(g) limit in effect
for the applicable calendar year shall be returned to the Participant (with
earnings attributable thereto) no later than the April 15 following the close of
the calendar year to which such excess relates.

     

    Section
7.03 Maximum Annual Additions to
RSP Account.  Notwithstanding any other provision of the Plan,
except to the extent permitted under Section 5.01(c) of the Plan and Section
414(v) of the Code, if applicable, the “total additions” to a Participant’s RSP
Account for any limitation year shall not exceed an amount equal to the lesser
of:

     

    
      	
              (a)  

            	
              $40,000
      adjusted for each limitation year to take into account any cost-of-living
      increase provided for that limitation year under Section 415(d) of the
      Code; or

            

    

     

    
      	
              (b)  

            	
              One-hundred
      percent (100%) of the Compensation paid to the Participant by the Company
      in the limitation year.

            

    

     

    For purposes of
this Section 7.03, the term “limitation year” shall mean the Plan
Year.  For purposes of this Section 7.03, the term “total additions”
shall mean, with respect to each Participant for each limitation year, the
aggregate of the Company Retirement Contributions, Company Matching
Contributions, Before-Tax Contributions and After-Tax Contributions allocated to
his RSP Account.  In the case of allocations resulting from
contributions made by or on behalf of Participants returning from qualified
military service, adjustments will be made to the limitations described in this
Section 7.03 to the extent permitted under Section 414(u) of the
Code.

    

    If
any Participant’s total additions exceed the applicable maximum limitation set
forth above, contributions shall be returned to the Participant or the
contributing Company pursuant to the requirements of Section 1.415-6(b)(6) of
the Treasury Regulations to the extent necessary and in the following
priority:

    

    
      	
               
      

            	
              (u)

            	
              First,
      After-Tax Contributions to the Participant’s Savings Account shall be
      returned to the Participant with earnings
  thereon;

            

    

    

    
      	
               
      

            	
              (v)

            	
              Second, if
      applicable, Before-Tax Contributions to the Participant’s Retiree Health
      Account shall be placed in a suspense account and reallocated to the
      Participant’s Retiree Health Account, to the extent permitted under the
      Code, in the following year and any earnings on these Before-Tax
      Contributions shall be forfeited;

            

    

    

    
      	
               
      

            	
              (w)

            	
              Third,
      Before-Tax Contributions to the Participant’s Savings Account shall be
      placed in a suspense account and reallocated in the following year to the
      Participant’s Savings Account and any earnings on these Before-Tax
      Contributions shall be forfeited;

            

    

    

    
      	
               
      

            	
               (x)

            	
              Fourth, if
      applicable, Company Matching Contributions to the Participant’s Retiree
      Health Account shall be forfeited;

            

    

    

    
      	
               
      

            	
              (y)

            	
              Fifth,
      Company Matching Contributions to the Participant’s Savings Account shall
      be forfeited; and

            

    

    

    
      	
               
      

            	
              (z)

            	
              Sixth,
      Company Retirement Contributions to the Participant’s Company Retirement
      Account shall be forfeited.

            

    

    

    In
the event that the total additions which otherwise would be credited to a
Participant’s accounts under all tax-qualified defined contribution plans of the
Company or any Related Employer for any limitation year exceed the limitations
set forth in this Section 7.03, the excess total additions shall be returned to
the Participant or the contributing Company to the extent necessary and in the
priority established under subsections (u), (v), (w), (x), (y) and (z)
above.

    

    Section
7.04 Prior Year ADP
Testing.  Utilizing the prior year testing method, the Plan
shall satisfy the ADP test of Treasury Regulation Section 1.401(k)-2(a)
if:

     

    
      	
              (a)  

            	
              The Actual
      Deferral Percentage of Eligible Employees who are Highly Compensated
      Employees for the Plan Year is not more than 1.25 times the Actual
      Deferral Percentage of all other Eligible Employees for the applicable
      Plan Year; or

            

    

     

    
      	
              (b)  

            	
              The excess of
      the Actual Deferral Percentage of Eligible Employees who are Highly
      Compensated Employees for the Plan Year over the Actual Deferral
      Percentage of all other Eligible Employees for the applicable Plan Year is
      not more than two percentage points, and the Actual Deferral Percentage of
      Eligible Employees who are Highly Compensated Employees for the Plan Year
      is not more than two (2) times the Actual Deferral Percentage of all other
      Eligible Employees for the applicable Plan
Year.

            

    

     

    To
the extent required to satisfy the preceding tests, the Committee shall
distribute excess contributions in accordance with Treasury Regulation Section
1.401(k)-2(b)(2) as follows:

    

    (w)           First,
the Committee shall determine, in accordance with Treasury Regulation Section
1.401(k)-2(b)(2)(ii), the total amount of excess contributions that must be
distributed;

    

    (x)           Second,
the Committee shall apportion, in accordance with Treasury Regulation Section
1.401(k)-2(b)(2)(iii), the total amount of excess contributions among Eligible
Employees who are Highly Compensated Employees;

    

    (y)           Third,
the Committee shall determine, in accordance with the safe harbor method under
Treasury Regulation Section 1.401(k)-2(b)(2)(iv)(D), the income allocable to
excess contributions; and

    

    (z)           Fourth,
the Committee shall, in accordance with Treasury Regulation Section
1.401(k)-2(b)(2)(v), distribute the apportioned excess contributions and
allocable income to each applicable Eligible Employee who is a Highly
Compensated Employee.

    

    In
conducting ADP testing, the Committee shall comply with any additional rules set
forth in Treasury Regulation Section 1.401(k)-2 that are applicable to the prior
year testing method.

    

    Section
7.05 Prior Year ACP
Testing.  Utilizing the prior year testing method, the Plan
shall satisfy the ACP test of Treasury Regulation Section 1.401(m)-2(a)
if:

     

    
      	
              (a)  

            	
              The Actual
      Contribution Percentage of Eligible Employees who are Highly Compensated
      Employees for the Plan Year is not more than 1.25 times the Actual
      Contribution Percentage of all other Eligible Employees for the applicable
      Plan Year; or

            

    

     

    
      	
              (b)  

            	
              The excess of
      the Actual Contribution Percentage of Eligible Employees who are Highly
      Compensated Employees for the Plan Year over the Actual Contribution
      Percentage of all other Eligible Employees for the applicable Plan Year is
      not more than two (2) percentage points, and the Actual Contribution
      Percentage of Eligible Employees who are Highly Compensated Employees for
      the Plan Year is not more than two (2) times the Actual Contribution
      Percentage of all other Eligible Employees for the applicable Plan
      Year.

            

    

     

    To
the extent required to satisfy the preceding tests, the Committee shall
distribute excess contributions in accordance with Treasury Regulation Section
1.401(m)-2(b)(2) as follows:

    

    (w)           First,
the Committee shall determine, in accordance with Treasury Regulation Section
1.401(m)-2(b)(2)(ii), the total amount of excess aggregate contributions that
must be distributed;

    

    (x)           Second,
the Committee shall apportion, in accordance with Treasury Regulation Section
1.401(m)-2(b)(2)(iii), the total amount of excess aggregate contributions among
Eligible Employees who are Highly Compensated Employees;

    

    (y)           Third,
the Committee shall determine, in accordance with the safe harbor method under
Treasury Regulation Section 1.401(m)-2(b)(2)(iv)(D), the income allocable to
excess aggregate contributions; and

    

    (z)           Fourth,
the Committee shall, in accordance with Treasury Regulation Section
1.401(m)-2(b)(2)(v), distribute the apportioned contributions and allocable
income to each applicable Eligible Employee who is a Highly Compensated
Employee, or forfeit the apportioned matching contributions, if
forfeitable.

    

    In
conducting ACP testing, the Committee shall comply with any additional rules set
forth in Treasury Regulation Section 1.401(m)-2 that are applicable to the prior
year testing method.

    

    ARTICLE
8 ROLLOVER AND TRANSFER
CONTRIBUTIONS

     

    Section
8.01 Transfer of
Assets.  The Committee may approve the transfer to the Plan of
all or a portion of the assets and liabilities of any other plan of deferred
compensation qualified under Section 401(a) of the Code maintained by the
Company or a Related Employer.  Transfers to the Plan pursuant to this
Section 8.01, except as otherwise authorized by the Committee, shall be in the
form of a direct trustee-to-trustee transfer.  The amounts transferred
pursuant to this Section 8.01 from any tax qualified defined benefit pension
plan maintained by the Company or a Related Employer shall be credited to the
Participant’s Company Retirement Account.  In all other cases, any
amounts transferred pursuant to this Section 8.01, except as otherwise
authorized by the Committee, shall be credited to the Participant’s Savings
Account.  The interest of each Participant in any amounts transferred
pursuant to this Section 8.01 shall be fully vested and nonforfeitable at all
times.  In no event shall the Trustee receive amounts if such receipt
or the subsequent administration of such amounts might subject the Trust assets
to tax liability deriving from an Employee’s terminated participation in any
other tax-qualified plan.

     

    Section
8.02 Rollover and Direct Transfer
Contributions.  An Employee who has received a qualifying
distribution under Sections 402 or 408 of the Code from any other plan qualified
under Section 401(a) of the Code, or from a conduit individual retirement
account under Sections 402 or 408 of the Code, may have all or part of such
distribution (including after-tax contributions from a plan qualified under
Section 401(a) of the Code) contributed to this Plan.  Amounts
contributed pursuant to this Section 8.02 shall be characterized as Rollover
Contributions and shall be credited to the Participant’s Savings Account,
subject to refund if it is determined that such distribution is not eligible for
such rollover treatment under the Code.  The interest of each
Participant in that portion of his Savings Account attributable to amounts
transferred pursuant to this Section 8.02, if any, shall be fully vested and
nonforfeitable at all times.  In no event, however, shall the Plan
accept a direct transfer or rollover under this Section 8.02 that would subject
any portion of the benefit to the qualified joint and survivor annuity or
qualified preretirement survivor annuity requirements of Sections 401(a)(11) and
417 of the Code.  An Employee who makes a Rollover Contribution
pursuant to this Section 8.02 prior to becoming a Participant under Section 3.01
shall be considered a Participant for purposes of the Rollover Contributions in
his Savings Account only.

     

    Section
8.03 Transfer of Employment
Within the Company.  In the case of a Participant who is
transferred to or from a job position, the following applies: 

     

    
      	
              (a)  

            	
              An Employee
      who is a Participant in the Plan and who transfers to the salary payroll,
      will become a participant in the BorgWarner Inc. Retirement Savings Plan
      on the effective date of such transfer.  The Participant’s RSP
      Account under this Plan will be transferred to the BorgWarner Inc.
      Retirement Savings Plan in accordance with the procedure for transfer as
      established by the Committee.  With respect to the preceding
      sentence, a Participant, who is not vested in his RSP Account under this
      Plan at the time of transfer to the BorgWarner Inc. Retirement Savings
      Plan, will become vested in accordance with the terms of the vesting
      schedule as established under the BorgWarner Inc. Retirement Savings
      Plan.  For purposes of this Section 8.03(a), a transfer from the
      Plan to the BorgWarner Inc. Retirement Savings Plan shall not be
      considered a transfer under Section 8.01
above.

            

    

     

    
      	
              (b)  

            	
              An employee,
      who is:  (i) on the salary payroll; and (ii) a participant in
      the BorgWarner Inc. Retirement Savings Plan; and (iii) transfers to the
      hourly payroll and becomes an Employee, will become a Participant in this
      Plan on the effective date of such transfer.  The Participant’s
      RSP Account under the BorgWarner Inc. Retirement Savings Plan will be
      transferred to this Plan in accordance with the procedure for transfer as
      established by the Committee.  With respect to the preceding
      sentence, a Participant, who is not vested in his RSP Account under the
      BorgWarner Inc. Retirement Savings Plan at the time of transfer to this
      Plan, will become vested in accordance with the terms of the vesting
      schedule as established under the definition of Vested
      Portion.  For purposes of this subsection 8.03(b), a transfer
      from the BorgWarner Inc. Retirement Savings Plan shall not be considered a
      transfer under Section 8.01 above.

            

    

     

    ARTICLE
9 INVESTMENT OF
ACCOUNTS

     

    Section
9.01 Establishment of
Funds.  The Committee has caused the Trustee to establish and
maintain one or more Investment Funds according to investment criteria
established by the Committee.  The Committee may cause the Trustee to
merge, modify or terminate any existing Investment Funds, or to establish such
additional Funds as the Committee shall determine in its discretion from time to
time.  The Investment Funds in effect for the Plan shall be set forth
in Supplement I.

     

    Section
9.02 Investment in
Funds.  Each of the Investment Funds shall be invested without
distinction between principal and income within the investment directive for
that Fund.  Pending payment of costs, expenses or anticipated
benefits, or acquisition of investments, the Trustee may hold any portion of the
Investment Funds in obligations issued or fully guaranteed as to payment of
principal or interest by the Federal government or governmental agencies, short
term demand notes, certificates of deposit, commercial paper, collective trust
funds that invest in short term investments or any other interest paying short
term investment products or in cash, and may deposit any uninvested funds with
any bank selected by the Trustee.

     

    Section
9.03 Investment of RSP
Account.  Except as provided in Section 9.04, each Participant
may elect to invest his RSP Account in any one or more of the Investment Funds
by filing an initial investment election with the Administrative Services
Provider directing that contributions to be made on his behalf to his RSP
Account shall be invested in specified multiples of one percent (1%) up to one
hundred percent (100%) thereof, in any one or more of the Investment
Funds.  Each contribution source under a Participant’s RSP Account may
be subject to a different election by the Participant.  Except as
otherwise provided in Section 9.04, in the absence of an effective election with
respect to any RSP Account contribution, one hundred percent (100%) of such
contribution shall be invested in the default Investment Fund designated by the
Committee for such purpose.  The Plan Administrator shall provide each
Participant with a statement of the balance in his RSP Account not less
frequently than once every Plan Year.  

     

    Section
9.04 Investment of Company
Matching Contributions Made in Common Stock.  For any Plan Year
in which the Company elects, pursuant to Sections 5.06 and/or 6.02, to make
Company Matching Contributions in Common Stock, the Company Matching
Contribution made on behalf of a Participant for any Payroll Period shall be (a)
remitted to the Trustee in Common Stock in accordance with procedures
established by the Committee and the Administrative Services Provider, (b)
credited to the Participant’s Savings Account or Retiree Health Account as
applicable, and (c) invested in the BorgWarner Inc. Stock
Fund.  Thereafter, such Participant may elect to change the investment
of the Company Matching Contribution contributed in Common Stock from the
BorgWarner Inc. Stock Fund to another Investment Fund in accordance with Section
9.06.  Investment of Company Matching Contributions shall be governed
solely by Section 9.03, notwithstanding the fact that such contributions may be
made in Common Stock.  

     

    Section
9.05 Change in Participant’s
Investment Election of Future Contributions.  Each Participant
may elect to change the investment of future contributions to be made on his
behalf to his RSP Account in any multiple of one percent (1%) of such
contributions up to one hundred percent (100%) thereof by contacting the
Administrative Services Provider and following procedures agreed to between the
Plan Administrator and the Administrative Services Provider.  Each
contribution source under a Participant’s RSP Account may be subject to a
different election by the Participant.  After the Participant’s
request to change has been processed, future contributions to be made on his
behalf to his RSP Account will be invested according to the Participant’s
investment election except as otherwise provided in Section 9.04.

     

    Section
9.06 Change in Participant’s
Investment Election on the Balance of the Participant’s
Account.  Each Participant may elect to change the investment
(transfer from one Investment Fund to another) of the balance of his RSP Account
in any multiple of one percent (1%) (or such other amount as permitted by the
Administrative Services Provider) up to one hundred percent (100%), in
accordance with procedures agreed to between the Plan Administrator and the
Administrative Services Provider.  Each contribution source under a
Participant’s RSP Account may be subject to a different election by the
Participant.  The Plan Administrator may impose restrictions on
investment directions to prohibit any investment activity that the Plan
Administrator, in its sole discretion, determines to be abusive (including, but
not limited to, market-timing and excessive trading) or any violation of the
rules of a particular Investment Fund or of the Administrative Services
Provider.  Such restrictions may be imposed upon individual
Participants, classes of Participants, or all Participants as determined by the
Plan Administrator.  The Plan Administrator may rely conclusively on a
determination made by the manager (or its agent) of any Investment Fund that a
particular investment activity violates the rules of such Investment
Fund.

     

    Section
9.07 Voting of the BorgWarner
Inc. Stock Fund.  The BorgWarner Inc. will file preliminary
proxy solicitation materials with the Securities and Exchange
Commission.  Following receipt of approval by the Securities and
Exchange Commission, BorgWarner Inc. shall cause a copy of all the materials to
be simultaneously sent to the Trustee and the Committee.  The
Committee or its agent shall then prepare a voting instruction form based upon
these materials.  At the time of mailing of notice of each annual or
special stockholders’ meeting of BorgWarner Inc., the Committee shall send a
copy of the notice and all proxy solicitation materials to the Trustee, and the
Committee or its agent shall promptly send such notice and proxy solicitation
materials to each Participant who participates in the BorgWarner Inc. Stock
Fund, together with the foregoing voting instruction form to be returned to the
Committee’s designee.  The form shall show the number of full and
fractional shares of Common Stock credited to the Participant’s RSP
Account.  The number of shares of Common Stock deemed credited to a
Participant’s RSP Account shall be determined as of the Valuation Date which is
the record date set for voting the Common Stock.

     

    Each Participant
shall have the right to direct the Trustee as to the manner in which to vote
that number of shares of Common Stock credited to his RSP
Account.  Such directions shall be communicated in writing or by
facsimile or similar means and shall be held in confidence by the Trustee and
not divulged to the Company, the Plan Sponsor, or any officer or employee
thereof, or any other person.  Upon its receipt of directions, the
Trustee shall vote the shares of Common Stock credited to the Participant’s RSP
Account as directed by the Participant.

    

    The Trustee shall
vote those shares of Common Stock not credited to Participants’ RSP Accounts in
accordance with the instructions of the Committee, and shall not vote those
shares of Common Stock credited to the RSP Accounts of Participants for which no
voting directions are received.

    

    Section
9.08 Tender Offers for Common
Stock.  Upon commencement of a tender offer for any Common
Stock, BorgWarner Inc. or its agent shall notify each Participant who has Common
Stock in his RSP Account and in a timely manner shall distribute or cause to be
distributed to Participants the same information that is distributed to the
shareholders of BorgWarner Inc. in connection with the tender
offer.  Participants may direct the Trustee whether or not to tender
the Common Stock credited to the RSP Accounts, whether or not
vested.

     

      Each
Participant shall have the right to direct the Trustee to tender or not to
tender some or all of the shares of Common Stock credited to his RSP
Account.  Directions from a Participant to the Trustee concerning the
tender of Common Stock shall be communicated in writing or by facsimile or such
similar means specified by the Trustee.  A Participant who has
directed the Trustee to tender some or all of the shares of Common Stock
credited to his RSP Account may, at any time before the tender offer withdrawal
date, or such earlier date if necessary for administrative purposes, direct the
Trustee to withdraw some or all of the  tendered shares, and the
Trustee shall withdraw the directed number of shares from the tender offer
before the tender offer withdrawal deadline.  A Participant shall not
be limited as to the number of directions to tender or withdraw that he may give
to the Trustee before such deadline.  The Trustee shall tender or not
tender shares of Common Stock as directed by the Participant.  The
Trustee shall not tender shares of Common Stock credited to a Participant’s RSP
Account for which it has received no directions from the
Participant.

     

    A
direction by a Participant to the Trustee to tender shares of Common Stock
credited to his RSP Account shall not be considered a written election under the
Plan by the Participant to withdraw or to have distributed to him any or all of
such shares from the Plan.  The Trustee shall credit to the RSP
Account of the Participant from which the tendered shares were taken the
proceeds received by the Trustee in exchange for the shares of Common Stock
tendered from the RSP Account.  The Trustee shall invest the proceeds
of the tendered shares as directed by the Committee.

    

    Section
9.09 Other Rights in the
BorgWarner Inc. Stock Fund.  With respect to all rights other
than the right to vote, the right to tender, and the right to withdraw shares
previously tendered, the Trustee shall follow the directions of the Participant
as to Common Stock credited to his RSP Account, and if no such directions are
received, the directions of the Committee.  The Trustee shall have no
duty to solicit directions from Participants.  With respect to all
rights other than the right to vote and the right to tender, in the case of
Common Stock not credited to Participants’ RSP Accounts the Trustee shall follow
the directions of the Committee.

     

    Section
9.10 Limitation of Liability of
Fiduciaries.  The fiduciaries of the Plan shall not be
responsible for any loss, depreciation or diminution in the value of Trust
assets invested in accordance with the direction of a
Participant.  The Plan is intended to constitute a plan described in
Section 404(c) of ERISA and Section 2550.404(c)-1 of the Department of Labor
Regulations.  To the extent of such compliance, the fiduciaries of the
Plan may be relieved of liability with respect to the Participant-directed
investments.  The Committee is the fiduciary responsible for
overseeing investments under the Plan, but has delegated the daily
administrative responsibility for implementing Participant investment
instructions to the Administrative Services Provider.  Also, the
Administrative Services Provider is responsible for providing the following
detailed information about the Investment Funds when requested by a
Participant:

     

    
      	
              (a)  

            	
              Copies of any
      prospectuses and/or brochures for any Investment
  Fund;

            

    

     

    
      	
              (b)  

            	
              Copies of any
      other financial statements and reports provided to the Plan about an
      Investment Fund;

            

    

     

    
      	
              (c)  

            	
              A description
      of the annual operating expenses of any Investment Fund and the aggregate
      annual expenses expressed as a percentage of average net
      assets;

            

    

     

    
      	
              (d)  

            	
              Information
      about the past and current value of shares or units available in the
      Investment Funds; and

            

    

     

    
      	
              (e)  

            	
              The current
      share or unit value of a Participant’s RSP
  Account.

            

    

     

    The Committee has
established procedures to protect the confidentiality of information relating to
Participant investments in all of the Investment Funds.  Information
about any Participant exercise of voting, tender and similar rights is also
subject to these confidentiality procedures.  Investment information
and voting instructions from Participants shall not be divulged to anyone,
including the Company or the Plan Sponsor (or any director, officer, employee or
agent of the Company or the Plan Sponsor).  The intent is to insure
that the Company and the Plan Sponsor (and their directors, officers, employees,
agents) cannot determine the instructions given by any
Participant.  The Committee is the fiduciary responsible for insuring
that these confidentiality procedures are followed.

    

    Section
9.11 Method of Valuation of RSP
Account.  Notwithstanding any other provision of the Plan, to
the extent that a Participant’s RSP Account is invested in mutual funds or other
assets for which daily pricing is available, all amounts contributed to the
Trust Fund will be invested following their actual receipt by the Administrative
Services Provider, and the balance of each Participant’s RSP Account shall
reflect the results of such daily pricing from the time of the actual receipt
until the time of distribution.  Investment elections and changes
pursuant to Sections 9.05 and 9.06 shall be effective upon receipt by the
Administrative Services Provider.  References elsewhere in the Plan to
the investment of contributions “as of” a date other than that described in this
Section 9.11 shall apply only to the extent, if any, that assets of the Trust
are not invested in an asset for which daily pricing is available.

     

    Section
9.12 Forfeitures.  As
of the last Valuation Date of each month, Forfeitures that arose during such
month shall be applied to reduce the total amount the Company otherwise is
required to contribute pursuant to Sections 4.01, 5.06 and, if applicable,
Section 6.02 as of the Valuation Date or subsequent Valuation
Date.  Any amount applied to reduce a Company contribution for any
Valuation Date in accordance with this Section 9.12 shall be considered a part
of the Company’s contribution for such Payroll Period.

     

    Section
9.13 Date of
Adjustments.  Every adjustment made pursuant to Sections 9.11
and 9.12 shall be considered as having been made on the applicable Valuation
Date, regardless of the dates of actual entry or receipt by the Trustee of
contributions, Forfeitures or earnings for that Payroll Period.  The
Committee’s determination of the net value of the assets of the Trust (which
shall be based upon accountings rendered by the Trustee) and charges or credits
to the RSP Accounts shall be conclusive and binding on all parties having or
claiming to have any interest hereunder.

     

    ARTICLE
10 LOANS AND IN-SERVICE
WITHDRAWALS

     

    Section
10.01 Loans to
Participants.  Any Participant (who is a “party in interest” as
defined in Section 3(14) of ERISA) who has not incurred a severance from
employment, may request a loan from the Plan Administrator.  The Plan
Administrator may, in its discretion, grant a loan to such Participant from the
Participant’s Savings Account.  Any loan allowed pursuant to this
Section 10.01 will be effective as of the Valuation Date on which the
Participant requested a loan and distributed as soon as reasonably practicable
thereafter.  Such loans are subject to the following specific
conditions:

     

    
      	
              (a)  

            	
              The loan is
      one which is made available to all Participants who are parties in
      interest on a reasonably equivalent basis and is not made available to
      Participants who are Highly Compensated Employees in an amount
      proportionately greater than the amount available to other
      Participants.

            

    

     

    
      	
              (b)  

            	
              Each loan
      shall bear a reasonable rate of interest commensurate with the prime rate
      quoted in The Wall Street Journal as of the first business day of each
      month plus one percentage (1%)
point.

            

    

     

    
      	
              (c)  

            	
              The loan
      shall be adequately secured by assignment of a portion of the balance in
      the Participant’s Savings Account eligible for loan in an amount equal to
      the principal amount of the loan, but not in excess of fifty percent (50%)
      of the balance in the Participant’s Savings Account determined as of the
      last preceding Valuation Date on which the loan is
    requested.

            

    

     

    
      	
              (d)  

            	
              The minimum
      amount which may be loaned hereunder at any one time to any Participant
      shall be $500.  The maximum amount which may be loaned hereunder
      at any one time to any Participant shall not exceed the lesser of (i)
      $50,000, reduced by the excess (if any) of the highest outstanding balance
      of all loans to the Participant from all tax qualified plans of the
      Company during the one (1) year period ending on the day before the date
      on which such loan is made, over the outstanding balance of all loans to
      the Participant from all tax qualified plans of the Company on the date on
      which such loan is made, or (ii) fifty percent (50%) of the aggregate
      balance in the Participant’s Savings Account eligible for loan determined
      as of the last preceding Valuation Date on which the loan is
      requested.

            

    

     

    
      	
              (e)  

            	
              Refusal of
      the Plan Administrator to grant any loan shall not preclude future
      applications by the same Participant, and application for or acceptance of
      a loan hereunder shall not of itself be construed to constitute
      termination of participation in, or waiver of any rights under, the
      Plan.

            

    

     

    
      	
              (f)  

            	
              All loans
      granted under the Plan shall be repaid, pursuant to a written repayment
      schedule, by payroll deduction (or as otherwise determined by the Plan
      Administrator if not paid by payroll deduction) and shall be evidenced by
      a written promissory note payable to the Trustee.  In no event
      shall (i) loans be extended for a period of less than six (6) months or
      greater than five (5) years, or (ii) more than one (1) loan be extended to
      a Participant hereunder at any one time. Principal and interest payments
      by the Participant shall be at least monthly on a level amortization
      basis.  Any Participant to whom a loan is extended pursuant to
      this Section 10.01 may elect by contacting the Administrative Services
      Provider, or such other person designated by the Plan Administrator, to
      repay the entire outstanding balance of such loan in a single
      payment.

            

    

     

    
      	
              (g)  

            	
              In the event
      of the failure to pay on a timely basis, which includes a ninety (90)-day
      cure period, any amount of either principal or interest which is due under
      the terms of any loan, the Trustee, at the direction of the Plan
      Administrator, shall declare the loan in default and the full amount of
      the loan due and payable.  Upon declaration of default, the Plan
      Administrator shall take whatever action that may be lawful to remedy the
      default.  Such action may include setoff of the remaining
      balance of the loan against the appropriate Participant’s Savings Account,
      provided that setoff may not be made prior to the first date on which any
      such amount could otherwise have been distributed.  The Plan
      Administrator may setoff amounts owed by the Participant as described in
      the preceding sentence without being in violation of Section
      15.01.  No Participant who, while an Eligible Employee, has once
      defaulted on a loan extended hereunder shall be granted any additional
      loan whatsoever.

            

    

     

    
      	
              (h)  

            	
              A separate
      segregated account shall be established for each Participant who is
      granted a loan pursuant to this Section 10.01.  The segregated
      account, which shall be part of the Participant’s Savings Account, shall
      be credited with the amount of the loan.  Segregated accounts
      shall not share in the dividends, earnings, losses and gains of the
      Trust.  Each payment of principal and interest shall be credited
      to the segregated account in the Participant’s Savings Account and shall
      be reinvested in the Investment Funds in the same percentages as the
      contributions to the Participant’s Savings Account are invested at such
      time or, if there are no current contributions to the Participant’s
      Savings Account, in the percentages in which such contributions were
      invested immediately prior to the loan.  In the absence of an
      effective investment election, each payment of principal and interest
      shall be credited to the segregated account in the Participant’s Savings
      Account and shall be reinvested in the default Investment Fund designated
      by the Committee for such purpose.

            

    

     

    
      	
              (i)  

            	
              Loans under
      this Section 10.01 shall not be considered
  distributions.

            

    

     

    
      	
              (j)  

            	
              Each loan
      shall commence following the Valuation Date on which the Participant
      requested a loan or as soon as practicable
  thereafter.

            

    

     

    
      	
              (k)  

            	
              Any
      Participant who incurs a severance from employment with a loan outstanding
      shall continue to be subject to the loan conditions set out in this
      Section 10.01.

            

    

     

    
      	
              (l)  

            	
              The amount
      available for loans from a Participant’s Savings Account shall not include
      Company Matching Contributions other than Company Matching Contributions
      transferred to the Plan from the Borg-Warner Corporation Investment Plan
      pursuant to Section 8.01.

            

    

     

    
      	
              (m)  

            	
              No loans
      shall be permitted from a Participant’s Company Retirement Account or
      Retiree Health Account.

            

    

     

    Section
10.02 Withdrawals from Balance in
the Participant’s Savings Account Attributable to After-Tax Contributions,
Rollover Contributions, and Amounts Transferred to the Savings Account Pursuant
to Section 8.01.  Prior to severance from employment with the
Company, a Participant may withdraw as of any Valuation Date, subject to the
limitations provided in this Section 10.02, all or any portion of the balance in
his Savings Account (including earnings thereon) attributable to (a) his
After-Tax Contributions, (b) his Rollover Contributions, or (c) any vested
amounts transferred to his Savings Account pursuant to Section 8.01 (not
attributable to before-tax contributions), by completing, as required by the
Plan Administrator or the person or persons designated by the Plan
Administrator, the appropriate application procedures and setting forth the
amount he desires to withdraw.  No Participant will be required to
provide evidence of an immediate and heavy financial need to qualify for a
withdrawal pursuant to this Section 10.02.  Any Before-Tax
Contributions which are treated as After-Tax Contributions pursuant to the
definition of Actual Contribution Percentage shall be subject to the withdrawal
rules of Sections 10.03 and 10.04 and not this Section 10.02.

     

    Section
10.03 Withdrawals from Balance in
the Participant’s Savings Account Attributable to Before-Tax
Contributions—Participants Over Age 591⁄2.  Prior to severance
from employment with the Company, if a Participant has attained age 591⁄2 and has
withdrawn the maximum amount permitted by Section 10.02, the Participant may
request a withdrawal as of any Valuation Date, subject to the limitations and
conditions provided in this Section 10.03, of all or any portion of the
“eligible balance” in his Savings Account by making a request to the Plan
Administrator at least thirty (30) days preceding such Valuation
Date.  For purposes of this Section 10.03 and Section 10.04, “eligible
balance” means that portion of a Participant’s Savings Account attributable
to:  (1) Before-Tax Contributions made to his Savings Account
(excluding earnings thereon credited after December 31, 1988); (2) any vested
amounts transferred to his Savings Account pursuant to Section 8.01 attributable
to before-tax contributions (excluding earnings thereon credited after December
31, 1988); and (3) Before-Tax Contributions made to his “Employee Retirement
Account” between April 1, 1994, and December 31, 2005, under the Plan as in
effect prior to the Effective Date and transferred to his Savings Account on the
Effective Date (excluding earnings thereon).  Such Participant’s
Before-Tax Contributions and After-Tax Contributions shall not be suspended as a
result of a withdrawal pursuant to this Section 10.03.

     

    Section
10.04 Withdrawals from Balance in
the Participant’s Savings Account Attributable to Before-Tax
Contributions—Hardship Withdrawals For Participants Under Age
591⁄2.  If a Participant has not attained age 591⁄2, the
Participant may request a hardship withdrawal as of any Valuation Date, subject
to the limitations and conditions provided in this Section 10.04, of all or any
portion of the “eligible balance” (as defined in Section 10.03) in his Savings
Account by making a written request to the Administrative Services
Provider.  The requested hardship withdrawal must be on account of an
immediate and heavy financial need of the Participant as described in subsection
(a) below and must be necessary to satisfy that financial need as described in
subsection (b) below:

     

    
      	
              (a)  

            	
              Withdrawal On Account
      of Immediate and Heavy Financial Need.  A requested
      withdrawal shall be deemed to be on account of an immediate and heavy
      financial need of the Participant if it is
for:

            

    

     

    
      	
              (i)  

            	
              Expenses for
      (or necessary to obtain) medical care that would be deductible under Code
      Section 213(a) (determined without regard to whether the expenses exceed
      7.5% of adjusted gross income);

            

    

     

    
      	
              (ii)  

            	
              Costs
      directly related to the purchase of a principal residence for the
      Participant (excluding mortgage
payments);

            

    

     

    
      	
              (iii)  

            	
              Payment of
      tuition, related educational fees, and room and board expenses, for up to
      the next twelve (12) months of post-secondary education for the
      Participant, or the Participant’s spouse, child, or dependent (as defined
      in Code Section 152 without regard to subsections 152(b)(1), (b)(2), and
      (d)(1)(B));

            

    

     

    
      	
              (iv)  

            	
              Payments
      necessary to prevent the eviction of the Participant from the
      Participant’s principal residence or foreclosure on the mortgage on that
      residence;

            

    

     

    
      	
              (v)  

            	
              Payments for
      burial or funeral expenses for the Participant’s deceased parent, spouse,
      child, or dependent (as defined in Code Section 152 without regard to
      subsection 152(d)(1)(B));

            

    

     

    
      	
              (vi)  

            	
              Expenses for
      the repair of damage to the Participant’s principal residence that would
      qualify for the casualty deduction under Code Section 165 (determined
      without regard to whether the cost exceeds 10% of adjusted gross income);
      or

            

    

     

    
      	
              (vii)  

            	
              Any other
      deemed immediate and heavy financial need prescribed by the Commissioner
      of Internal Revenue in guidance of general
  applicability.

            

    

     

    No
other requested withdrawal shall be considered to be on account of an immediate
and heavy financial need.

    

    
      	
              (b)  

            	
              Withdrawal Necessary
      to Satisfy Immediate and Heavy Financial Need.  A
      withdrawal is necessary to satisfy an immediate and heavy financial need
      described in subsection (a) above if it satisfies each of the following
      conditions:

            

    

     

    
      	
              (i)  

            	
              It is not in
      excess of the amount required to satisfy the financial need, including any
      amounts necessary for the Participant to pay any Federal, state, or local
      income taxes or penalties reasonably anticipated to result from the
      distribution; and

            

    

     

    
      	
              (ii)  

            	
              The
      Participant has obtained all other currently available distributions (but
      not hardship distributions) and nontaxable (at the time of the loan)
      loans, under the Plan and all other plans maintained by the
      Company.

            

    

     

    The Participant
shall be prohibited from making any contributions to the Plan and all other
plans maintained by the Company for six (6) months after receipt of a hardship
withdrawal.  The Plan Administrator may use any additional method
prescribed by the Commissioner of Internal Revenue in guidance of general
applicability for determining that a withdrawal is deemed necessary to satisfy
an immediate and heavy financial need.  No other requested withdrawal
shall be deemed to be “necessary to satisfy an immediate and heavy financial
need.”

    

    Section
10.05 General In-Service
Withdrawal Rules.  

     

    
      	
              (a)  

            	
              Number of
      Withdrawals.  A Participant who has not attained age 591⁄2
      may not in any calendar year make more than a total of two (2) withdrawals
      pursuant to Sections 10.02 and
10.04.

            

    

     

    
      	
              (b)  

            	
              Distributions from
      Investment Funds.  Each withdrawal shall be made pro rata
      from the Investment Funds in which the Participant’s Savings Account is
      invested.

            

    

     

    
      	
              (c)  

            	
              Time of
      Withdrawal.  Withdrawals pursuant to this Article 10
      shall commence no later than sixty (60) days following the Valuation Date
      as of which the withdrawal is effective or as soon as practicable
      thereafter.

            

    

     

    ARTICLE
11 ELIGIBILITY FOR
BENEFITS

     

    Section
11.01 Benefits Upon Severance from
Employment (Except by Reason of Death).  Each Participant who
incurs a severance from employment with the Company (except by reason of death)
shall be entitled to receive a benefit, to be distributed as provided in Article
12, equal to the Vested Portion of the balance in his Company Retirement Account
and Savings Account as of the Valuation Date coinciding with or immediately
preceding the date on which distribution of benefits commences.  The
Unvested Portion of such Participant’s Company Retirement Account and Savings
Account shall be forfeited pursuant to Section 9.12.

     

    Section
11.02 Benefits Upon Death of
Participant (Prior to Commencement of Installment
Distributions).  If a Participant incurs a severance from
employment with the Company by reason of death, or incurs a severance from
employment with the Company under Section 11.01 and then dies prior to
commencement of installment distributions under Article 12, his Beneficiary
shall be entitled to receive a benefit, to be distributed as provided in Article
12, equal to the balance in the Participant’s Company Retirement Account and
Savings Account as of the Valuation Date coinciding with or immediately
preceding the date on which distribution of benefits commences.  In
the event there is no designated Beneficiary living at the death of the
Participant, distribution shall be made to the first of the following as shall
be living on the date the distribution of benefits commences:

     

    
      	
              (a)  

            	
              If the
      Participant is survived by his spouse, the surviving spouse shall be
      treated as the sole designated
Beneficiary;

            

    

     

    
      	
              (b)  

            	
              If the
      Participant is not survived by his spouse, the Participant’s children and
      their descendants per stirpes shall be treated as the designated
      Beneficiaries and shall be entitled to the Participant’s benefit in equal
      shares;

            

    

     

    
      	
              (c)  

            	
              If the
      Participant has no descendants, the Participant’s parents shall be treated
      as the designated Beneficiaries and shall be entitled to the Participant’s
      benefit in equal shares; provided that if one parent is deceased, the
      surviving parent shall be treated as the sole designated
      Beneficiary;

            

    

     

    
      	
              (d)  

            	
              If the
      Participant has no surviving parent, his parents’ descendants (i.e. the
      Participant’s siblings and their descendants) per stirpes shall be treated
      as the designated Beneficiaries and shall be entitled to the Participant’s
      benefit in equal shares;

            

    

     

    
      	
              (e)  

            	
              If the
      Participant’s parents have no descendants, the descendants per stirpes of
      the participant’s grandparents (i.e. the Participant’s aunts, uncles and
      cousins) shall be treated as the designated Beneficiaries with fifty
      percent (50%) of the Participant’s benefit payable to the descendants per
      stirpes of the Participant’s maternal grandparents in equal shares, and
      fifty percent (50%) of the Participant’s benefit payable to the
      descendants per stirpes of the Participant’s paternal grandparents in
      equal shares; and

            

    

     

    
      	
              (f)  

            	
              If the
      Participant’s grandparents have no descendants, the Participant’s benefit
      shall be payable to his estate.

            

    

     

    Section
11.03 Determination of Retiree
Health Account Benefits.  At the time a Participant incurs a
severance from employment with the Company, the Administrative Services Provider
shall, to the extent permitted under the Code, calculate the amount available to
pay benefits from the Vested Portion of the Participant’s Retiree Health Account
in accordance with Section 12.09 by determining the lesser of:

     

    
      	
              (a)  

            	
              twenty-five
      percent (25%) of the Vested Portion of the Participant’s RSP Account,
      valued as of the date the Participant incurs a severance from employment;
      or

            

    

     

    
      	
              (b)  

            	
              one hundred
      percent (100%) of the total balance of the Vested Portion of the
      Participant’s Retiree Health Account, valued as of the date the
      Participant’s incurs a severance from
  employment.

            

    

     

    To
the extent that the amount determined under subsection (b) is greater than the
amount determined under subsection (a), such excess amount shall be forfeited
and an equal amount shall be credited to the Participant’s Savings
Account.  The amount determined as available to pay benefits from the
Participant’s Retiree Health Account pursuant to this Section 11.03 shall be
available in accordance with Section 12.09.  The Unvested Portion of
such Participant’s Retiree Health Account shall be forfeited pursuant to Section
9.12.  Notwithstanding the foregoing, if, in the aggregate, the Vested
Portion in the Participant’s RSP Account does not exceed $1,000, the entire
interest in the Participant’s Retiree Health Account shall be included in the
balance of the Participant’s RSP Account that is cashed out in accordance with
Section 12.02.

    

    Section
11.04 Amendment to Vesting
Schedule.  In the event of an amendment to the vesting schedule
in the definition of Vested Portion, Section 15.14, or in the applicable
Appendix, each Participant with at least three (3) Years of Vested Service may
elect to continue to have his Vested Portion computed without regard to such
amendment.  Such a Participant shall make the foregoing election no
later than the last to occur of the following:

     

    
      	
              (a)  

            	
              The date
      which is sixty (60) days after the date on which the amendment is
      adopted;

            

    

     

    
      	
              (b)  

            	
              The date
      which is sixty (60) days after the date on which the amendment becomes
      effective; or

            

    

     

    
      	
              (c)  

            	
              The date
      which is sixty (60) days after the date on which the Participant receives
      written notice of the amendment.

            

    

     

    Section
11.05 Period of
Severance.  A Participant’s rights and benefits under the Plan
generally shall be determined in accordance with his Years of Vested Service and
the balance in his RSP Account at the time of severance from employment with the
Company, subject to the following:

     

    
      	
              (a)  

            	
              If a
      Participant had a vested interest in his RSP Account when he incurred a
      severance from employment, and such Participant is reemployed by the
      Company, his Years of Vested Service prior to his severance from
      employment shall be reinstated;

            

    

     

    
      	
              (b)  

            	
              If a
      Participant had no vested interest in his RSP Account when he incurred a
      severance from employment, and such Participant is reemployed by the
      Company before incurring five (5) consecutive One Year Periods of
      Severance, the amounts forfeited pursuant to Section 11.01 shall be
      restored to his RSP Account as of his Reemployment Commencement Date and
      his Years of Vested Service prior to that period of severance shall be
      reinstated; and

            

    

     

    
      	
              (c)  

            	
              If a
      Participant had no vested interest in his RSP Account when he incurred a
      severance from employment, then the Years of Vested Service prior to his
      separation of service will be disregarded, but only if the number of
      consecutive One-Year Periods of Severance equals or exceeds the greater of
      his Years of Vested Service prior to his separation of service or five (5)
      years.

            

    

     

    For purposes of
this Section 11.05, an Employee who is on an Authorized Leave of Absence shall
not be treated as incurring a severance from employment, and upon return during
such Authorized Leave of Absence, shall be credited with Years of Vested Service
with respect to the period of such Leave of Absence.  No period of
service prior to such Leave of Absence or after such return shall be disregarded
for purposes of determining the Participant’s Vested Balance in his RSP
Account.  An Employee who is on an Authorized Leave of Absence for
qualified military leave pursuant to the provisions of the Uniformed Services
Employment and Reemployment Rights Act of 1994, shall not be treated as
incurring a severance from employment, and upon return to active employment
shall be credited with Years of Vested Service with respect to the period of
such Leave of Absence in accordance with Section 414(u) of the
Code.

    

    ARTICLE
12 DISTRIBUTION OF
BENEFITS

     

    Section
12.01 Request for
Distribution.  A Participant entitled to a benefit under the
Plan may request that his benefit with respect to his Company Retirement Account
and Savings Account be distributed to him under one (1) or more of the
alternative methods of distribution described in Section 12.02.  In
the event a Participant dies prior to the commencement of benefits under the
Plan, or after the commencement of benefits but before distribution of his
entire interest under the Plan, the Participant’s remaining interest shall be
distributed in such manner as the Participant has elected prior to his death, or
in the absence of such an election, under one (1) or more of the alternative
methods of distribution described in Section 12.02, as the Beneficiary shall
direct.  Notwithstanding the foregoing, the benefit payable to the
Beneficiary of a Beneficiary shall be distributed in a lump sum
payment.

     

    Section
12.02 Methods of
Distribution.  Subject to the provisions of Section 12.02, upon
the severance from employment of a Participant for any reason, distribution of
the Participant’s Company Retirement Account and Savings Account shall be made
as follows: 

     

    
      	
              (a)  

            	
              Amounts not
      invested in the BorgWarner Inc. Stock Fund shall be distributed in cash;
      and

            

    

     

    
      	
              (b)  

            	
              Amounts
      invested in the BorgWarner Inc. Stock Fund shall be distributed in cash
      unless the Participant or Beneficiary elects to receive such amount in
      whole shares of Common Stock (plus cash for any fractional
      shares).

            

    

     

    If
the Vested Portion in the Participant’s RSP Account does not exceed $1,000, the
Plan Administrator shall require the distribution, in one lump-sum payment
without the consent of the Participant or Beneficiary, of the Vested Portion of
the Participant’s RSP Account.  Otherwise, distribution of the Vested
Portion of the Participant’s Company Retirement Account and Savings Account shall be by one (1) of the
following methods, or combination thereof, as the Participant or Beneficiary
shall elect by contacting the Administrative Services Provider or to such other
person designated by the Plan Administrator:

    

    
      	
               
      

            	
              (v)

            	
              Lump Sum
      Distribution.  Distribution may be made by lump sum
      payment.

            

    

    

    
      	
               
      

            	
              (w)

            	
              Installment
      Distribution.  Distribution may be made in approximately
      equal installments not less frequently than annually for any definite
      period which does not exceed (i) the life or life expectancy of the
      Participant or (ii) the joint lives or joint life expectancy of the
      Participant and his Beneficiary.  The present value of benefits
      payable to the Participant during his lifetime shall be more than fifty
      percent (50%) of the present value of the total benefits payable to the
      Participant and his Beneficiary, determined as of the severance from
      employment.  Subject to the provisions of Section 12.05, when a
      Participant’s Company Retirement Account and Savings Account are
      distributable in periodic installments, such Participant shall not
      thereafter be eligible for any Company Retirement Contributions or Company
      Matching Contributions.  In the event distribution of a benefit
      is made, in whole or in part, in installments pursuant to this subsection
      12.02(w), the distributee may elect, in a manner approved by the Plan
      Administrator, to accelerate the payment of all or any portion of any
      unpaid installments; provided, however, that the distributee may not make
      more than two (2) elections to accelerate the payment of any unpaid
      installments in any calendar year.  The life expectancy used in
      this subsection 12.02(w) shall be determined as of the Valuation Date
      immediately preceding the later of the Participant’s (i) severance from
      employment or receipt of benefit, or (ii) death, but in no event later
      than the required minimum distribution date pursuant to Section 401(a)(9)
      of the Code.

            

    

    

    
      	
               
      

            	
              (x)

            	
              Death Before
      Commencement of Benefits.  If a Participant dies before
      distribution pursuant to this Section 12.02 has begun, the entire interest
      of the Participant’s RSP Account shall be distributed within five (5)
      years after his death, with the following
  exceptions:

            

    

    

    
      	
               
      

            	
              (i)

            	
              If the
      Participant’s Beneficiary is not his surviving spouse, the entire interest
      of the Participant may be distributed to the Beneficiary over a period not
      exceeding the Beneficiary’s life or life expectancy, provided such
      payments begin within one (1) year after the Participant’s
      death;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              If the
      Beneficiary is the surviving spouse, distribution to the surviving spouse
      shall begin no later than the later of the date on which the Participant
      would have attained age 701⁄2 or the first anniversary of the Participant’s
      death, and shall be made over a period not exceeding the life or life
      expectancy of the surviving spouse;

            

    

    

    
      	
               
      

            	
              (iii)

            	
              Notwithstanding
      the foregoing provisions of this subsection 12.02(x), the Beneficiary may
      elect in writing, on a form approved by the Plan Administrator, to
      accelerate the distribution of all or any portion of the benefits payable
      to him; provided, however, that the Beneficiary may not make more than two
      (2) elections to accelerate the distribution of benefits in any calendar
      year.

            

    

    

    
      	
               
      

            	
              (iv)

            	
              Notwithstanding
      the foregoing provisions of this subsection 12.02(x), this subsection
      12.02(x) shall not apply to a spousal Beneficiary with respect to the
      Retiree Health Account.

            

    

    

    
      	
               
      

            	
              (y)

            	
              Death After
      Commencement of Installment Payments.  If a Participant
      dies after distribution pursuant to subsection 12.02(w) has begun but
      before his entire interest is distributed and such distribution is to be
      for a period certain not exceeding the life or life expectancy of the
      Participant or the joint lives or joint life expectancy of the Participant
      and his Beneficiary, the remaining portion shall continue to be
      distributed according to that schedule.  Notwithstanding the
      preceding sentence, the Beneficiary may elect, in a manner approved by the
      Plan Administrator, to accelerate the payment of all or any portion of any
      unpaid installments; provided, however, that the Beneficiary may not make
      more than two (2) elections to accelerate the payment of any unpaid
      installments in any calendar year.  In the event there is no
      designated Beneficiary living at the death of the Participant, the
      Beneficiary shall be determined under Section
  9.02.

            

    

    

    
      	
               
      

            	
              (z)

            	
              Distribution to Trust
      for Primary Benefit of a Spouse.  In addition to the
      requirements under subsections 12.02(x) and (y), if the Participant’s
      Beneficiary is a trust which qualifies for the Federal estate tax marital
      deduction because it is held for the primary benefit of the Participant’s
      spouse, and if the trustee of that trust elects to receive distributions
      from the Plan in installments, then installment payments for each calendar
      year commencing upon the death of the Participant shall be equal to or
      exceed the greater of (i) the minimum amount necessary to satisfy the
      requirements under Section 401(a)(9) of the Code or (ii) the income earned
      by the Participant’s RSP Account.

            

    

    

    If
a Participant elects to commence distributions from his RSP Account pursuant to
this Section 12.02, such election will be deemed to be consent for purposes of
Section 411(a)(11) of the Code.

    

    Section
12.03 Treatment of Company
Retirement Account and Savings Account in Installment
Distributions.  In the event distribution of a benefit is to be
made in periodic installments pursuant to subsection 12.02(w), (x), (y) or (z),
each installment payment shall be charged to each Investment Fund in the same
ratio as the balance in the Participant’s Company Retirement Account and Savings
Account invested in that Fund bears to the total balance in the Participant’s
Company Retirement Account and Savings Account.  The Participant (or
Beneficiary, if applicable) shall continue to have the right to change the
investment of the balance in his Company Retirement Account and Savings Account
among the Investment Funds pursuant to Section 9.06.  The
Participant’s Company Retirement Account and Savings Account shall share in all
adjustments pursuant to Article 9 until the entire balance in the Participant’s
Company Retirement Account and Savings Account is distributed.

     

    Section
12.04 Commencement of
Distribution.  Subject to the provisions of Section
10.02:

     

    
      	
              (a)  

            	
              After a
      Participant’s severance from employment, distributions shall commence as
      of any Valuation Date coincident with or immediately following the date on
      which the request is received by the Plan Administrator or such other
      person designated by the Plan Administrator, or as soon as practicable
      thereafter; or

            

    

     

    
      	
              (b)  

            	
              A Participant
      who has attained age sixty-five (65) and continues to be employed by the
      Company may request that all or any part of the Vested Portion in his
      Company Retirement Account and Savings Account be distributed to him in a
      lump sum payment as of any Valuation Date coincident with or immediately
      following the date on which such request is received by the Plan
      Administrator or as soon as practicable thereafter.  Such
      Participant shall continue to be an Eligible Employee for all purposes of
      the Plan.

            

    

     

    Section
12.05 Deferral of Distribution –
Minimum Required Distributions.  If the Participant incurs a
severance from employment with the Company and the Vested Portion in the
Participant’s RSP Account is in excess of $1,000, the Participant may defer
commencement of distributions to any subsequent Valuation Date, but in no event
may the Participant defer distribution beyond the April 1 of the calendar year
following the later of (a) the calendar year in which the Participant attains
age 701⁄2, or (b) the calendar year in which the Participant incurs a severance
from employment with the Company or a Related
Employer.  Notwithstanding the foregoing, for a Participant who is a
five percent (5%) owner of BorgWarner Inc. (as determined under Section 416(i)
of the Code) at any time during the Plan Year, distribution of the Participant’s
benefit must begin not later than April 1 of the calendar year following the
calendar year in which the Participant attains age 701⁄2.  Distributions
pursuant to this Section 12.05 shall commence as of the Valuation Date following
the date to which distribution is deferred by the Participant or as soon as
practicable thereafter; provided, however, that the Participant shall request
such distribution from the Plan Administrator or from such other person
designated by the Plan Administrator.  Any Participant who has
deferred receipt of benefits under the Plan may file an election with the
Administrative Services Provider to accelerate the distribution of all or any
portion of the Vested Portion of his Company Retirement Account and Savings
Account; provided, however, that the Participant may not make more than two (2)
elections to accelerate the distribution of benefits in any calendar
year.

     

    If
the Vested Portion of a Participant’s RSP Account does not exceed $1,000 and if
a distribution of such benefit is one to which Sections 401(a)(11) and 417 of
the Code do not apply, such distribution shall commence as soon as is
practicable after the Participant’s severance from employment with the Company,
subject to the notice requirements under Section 12.07.

    

    Any distributions
which are made under the Plan shall satisfy the minimum distribution
requirements of Section 401(a)(9) of the Code, including the incidental death
benefit requirement under Section 401(a)(9)(G) of the Code, in accordance with
the Treasury Regulations thereunder published on April 17, 2002 (the “2002 Final
and Temporary Regulations”), notwithstanding anything in this Plan to the
contrary.  The rules applicable to such minimum required distributions
shall be as follows:

    

    
      	
              (a)  

            	
              Definitions and
      Special Rule for TEFRA
Elections.

            

    

     

    
      	
              (i)  

            	
              Designated
      Beneficiary.  The term “Designated Beneficiary” means the
      individual who is designated as the Beneficiary under Section 3.05 and
      11.02 of the Plan and is the Designated Beneficiary under Code Section
      401(a)(9) and section 1.401(a)(9)-4 of the 2002 Final and Temporary
      Regulations.

            

    

     

    
      	
              (ii)  

            	
              Distribution Calendar
      Year.  The term “Distribution Calendar Year” means a
      calendar year for which a minimum distribution is required. For
      distributions beginning before the Participant's death, the first
      Distribution Calendar Year is the calendar year immediately preceding the
      calendar year which contains the Participant's Required Beginning Date.
      For distributions beginning after the Participant's death, the first
      Distribution Calendar Year is the calendar year in which distributions are
      required to begin under subsection (b)(ii). The minimum required
      distribution for the Participant's first Distribution Calendar Year will
      be made on or before the Participant's Required Beginning Date. The
      minimum required distribution for other Distribution Calendar Years,
      including the minimum required distribution for the Distribution Calendar
      Year in which the Participant's Required Beginning Date occurs, will be
      made on or before December 31 of that Distribution Calendar
      Year.

            

    

     

    
      	
              (iii)  

            	
              Life
      Expectancy.  The term “Life Expectancy” means life
      expectancy as computed by use of the Single Life Table in section
      1.401(a)(9)-9 of the 2002 Final and Temporary
  Regulations.

            

    

     

    
      	
              (iv)  

            	
              Participant's Account
      Balance.  The term “Participant’s Account Balance” means
      the account balance as of the last valuation date in the calendar year
      immediately preceding the Distribution Calendar Year (valuation calendar
      year) increased by the amount of any contributions made and allocated or
      forfeitures allocated to the account balance as of dates in the valuation
      calendar year after the valuation date and decreased by distributions made
      in the valuation calendar year after the valuation date.  The
      account balance for the valuation calendar year includes any amounts
      rolled over or transferred to the Plan either in the valuation calendar
      year or in the Distribution Calendar Year if distributed or transferred in
      the valuation calendar year.

            

    

     

    
      	
              (v)  

            	
              Required Beginning
      Date.  The term “Required Beginning Date” means the date
      specified in the first paragraph of this Section 12.05 upon which a
      Participant must begin receiving distributions under the
    Plan.

            

    

     

    
      	
              (vi)  

            	
              TEFRA Section
      242(b)(2) Elections.  Notwithstanding the other
      provisions of this Section 12.05, distributions may be made under a
      designation made before January 1, 1984, in accordance with section
      242(b)(2) of the Tax Equity and Fiscal Responsibility Act (“TEFRA”) and
      the provisions of the Plan that relate to section 242(b)(2) of
      TEFRA.

            

    

     

    
      	
              (b)  

            	
              Time and Manner of
      Distribution.

            

    

     

    
      	
              (i)  

            	
              Required Beginning
      Date.  The Participant's entire interest will be
      distributed, or begin to be distributed, to the Participant no later than
      the Participant's Required Beginning
Date.

            

    

     

    
      	
              (ii)  

            	
              Death of Participant
      Before Distributions Begin.  If the Participant dies
      before distributions begin, the Participant's entire interest will be
      distributed, or begin to be distributed, no later than as
      follows:

            

    

     

    
      	
              (A)  

            	
              If the
      Participant's surviving spouse is the Participant's sole Designated
      Beneficiary, distributions to the surviving spouse will begin by December
      31 of the calendar year immediately following the calendar year in which
      the Participant died, or by December 31 of the calendar year in which the
      Participant would have attained age 701⁄2, if
  later.

            

    

     

    
      	
              (B)  

            	
              If the
      Participant's surviving spouse is not the Participant's sole Designated
      Beneficiary, distributions to the Designated Beneficiary will begin by
      December 31 of the calendar year immediately following the calendar year
      in which the Participant died.

            

    

     

    
      	
              (C)  

            	
              If there is
      no Designated Beneficiary as of September 30 of the year following the
      year of the Participant's death, the Participant's entire interest will be
      distributed by December 31 of the calendar year containing the fifth
      anniversary of the Participant's
death.

            

    

     

    
      	
              (D)  

            	
              If the
      Participant's surviving spouse is the Participant's sole Designated
      Beneficiary and the surviving spouse dies after the Participant but before
      distributions to the surviving spouse begin, this subsection (b)(ii),
      other than subsection (b)(ii)(A), will apply as if the surviving spouse
      were the Participant.

            

    

     

    For purposes of
this subsection (b)(ii) and subsection (d), unless subsection (b)(ii)(D)
applies, distributions are considered to begin on the Participant's Required
Beginning Date.  If subsection (b)(ii)(D) applies, distributions are
considered to begin on the date distributions are required to begin to the
surviving spouse under subsection (b)(ii)(A).  If distributions under
an annuity purchased from an insurance company (if allowable under the Plan)
irrevocably commence to the Participant before the Participant’s Required
Beginning Date (or to the Participant’s surviving spouse before the date
distributions are required to begin to the surviving spouse under subsection
(b)(ii)(A)), the date distributions are considered to begin is the date
distributions actually commence.

    

    
      	
              (iii)  

            	
              Forms of
      Distribution.  Unless the Participant's interest is
      distributed in the form of an annuity purchased from an insurance company
      or in a single sum on or before the Required Beginning Date, as of the
      first Distribution Calendar Year distributions will be made in accordance
      with subsections (c) and (d).  If the Participant’s interest is
      distributed in the form of an annuity purchased from an insurance company
      (if allowable under the Plan), distributions thereunder will be made in
      accordance with the requirements of Code Section 401(a)(9) and the 2002
      Final and Temporary Regulations.

            

    

     

    
      	
              (c)  

            	
              Minimum Required
      Distributions During Participant's
  Lifetime.

            

    

     

    
      	
              (i)  

            	
              Amount of Minimum
      Required Distribution For Each Distribution Calendar
      Year.  During the Participant's lifetime, the minimum
      amount that will be distributed for each Distribution Calendar Year is the
      lesser of:

            

    

     

    
      	
              (A)  

            	
              the quotient
      obtained by dividing the Participant’s Account Balance by the distribution
      period in the Uniform Lifetime Table set forth in section 1.401(a)(9)-9 of
      the 2002 Final and Temporary Regulations, using the Participant's age as
      of the Participant's birthday in the Distribution Calendar Year;
      or

            

    

     

    
      	
              (B)  

            	
              if the
      Participant's sole Designated Beneficiary for the Distribution Calendar
      Year is the Participant's spouse, the quotient obtained by dividing the
      Participant’s Account Balance by the number in the Joint and Last Survivor
      Table set forth in section 1.401(a)(9)-9 of the 2002 Final and Temporary
      Regulations, using the Participant's and spouse's attained ages as of the
      Participant's and spouse's birthdays in the Distribution Calendar
      Year.

            

    

     

    
      	
              (ii)  

            	
              Lifetime Minimum
      Required Distributions Continue Through Year of Participant's
      Death.  Minimum required distributions will be determined
      under this subsection (c) beginning with the first Distribution Calendar
      Year and up to and including the Distribution Calendar Year that includes
      the Participant's date of death.

            

    

     

    
      	
              (d)  

            	
              Minimum Required
      Distributions After Participant's
Death.

            

    

     

    
      	
              (i)  

            	
              Death On or After Date
      Distributions Begin.

            

    

     

    
      	
              (A)  

            	
              Participant Survived
      by Designated Beneficiary.  If the Participant dies on or
      after the date distributions begin and there is a Designated Beneficiary,
      the minimum amount that will be distributed for each Distribution Calendar
      Year after the year of the Participant's death is the quotient obtained by
      dividing the Participant’s Account Balance by the longer of the remaining
      Life Expectancy of the Participant or the remaining Life Expectancy of the
      Participant's Designated Beneficiary, determined as
    follows:

            

    

     

    
      	
              (1)  

            	
              The
      Participant's remaining Life Expectancy is calculated using the age of the
      Participant in the year of death, reduced by one for each subsequent
      year.

            

    

     

    
      	
              (2)  

            	
              If the
      Participant's surviving spouse is the Participant's sole Designated
      Beneficiary, the remaining Life Expectancy of the surviving spouse is
      calculated for each Distribution Calendar Year after the year of the
      Participant's death using the surviving spouse's age as of the spouse's
      birthday in that year.  For Distribution Calendar Years after
      the year of the surviving spouse's death, the remaining Life Expectancy of
      the surviving spouse is calculated using the age of the surviving spouse
      as of the spouse's birthday in the calendar year of the spouse's death,
      reduced by one for each subsequent calendar
  year.

            

    

     

    
      	
              (3)  

            	
              If the
      Participant's surviving spouse is not the Participant's sole Designated
      Beneficiary, the Designated Beneficiary's remaining Life Expectancy is
      calculated using the age of the beneficiary in the year following the year
      of the Participant's death, reduced by one for each subsequent
      year.

            

    

     

    
      	
              (B)  

            	
              No Designated
      Beneficiary.  If the Participant dies on or after the date
      distributions begin and there is no Designated Beneficiary as of
      September 30 of the year after the year of the Participant's death, the
      minimum amount that will be distributed for each Distribution Calendar
      Year after the year of the Participant's death is the quotient obtained by
      dividing the Participant’s Account Balance by the Participant's remaining
      Life Expectancy calculated using the age of the Participant in the year of
      death, reduced by one for each subsequent
year.

            

    

     

    
      	
              (ii)  

            	
              Death Before Date
      Distributions Begin.

            

    

     

    
      	
              (A)  

            	
              Participant Survived
      by Designated Beneficiary.  If the Participant dies
      before the date distributions begin and there is a Designated Beneficiary,
      the minimum amount that will be distributed for each Distribution Calendar
      Year after the year of the Participant's death is the quotient obtained by
      dividing the Participant’s Account Balance by the remaining Life
      Expectancy of the Participant's Designated Beneficiary, determined as
      provided in subsection (d)(i).

            

    

     

    
      	
              (B)  

            	
              No Designated
      Beneficiary.  If the Participant dies before the date
      distributions begin and there is no Designated Beneficiary as of September
      30 of the year following the year of the Participant's death, distribution
      of the Participant's entire interest will be completed by December 31 of
      the calendar year containing the fifth anniversary of the Participant's
      death.

            

    

     

    
      	
              (C)  

            	
              Death of Surviving
      Spouse Before Distributions to Surviving Spouse Are Required to
      Begin.  If the Participant dies before the date
      distributions begin, the Participant's surviving spouse is the
      Participant's sole Designated Beneficiary, and the surviving spouse dies
      before distributions are required to begin to the surviving spouse under
      subsection (b)(ii)(A), this subsection (d)(ii) will apply as if the
      surviving spouse were the
Participant.

            

    

     

    Section
12.06 Distribution to Alternate
Payee Pursuant to Qualified Domestic Relations Order.  Benefits
payable to an “alternate payee” shall be distributed in a lump sum payment as of
any Valuation Date on which the Plan Administrator receives a certified copy of
a “qualified domestic relations order” requiring such lump sum distribution,
regardless of whether the Participant named in the qualified domestic relations
order is eligible to receive a distribution from the Plan.  For
purposes of this Section 12.06, the terms “alternate payee” and “qualified
domestic relations order” shall have the meanings set forth in Section 414(p) of
the Code.

     

    Section
12.07 Direct
Rollovers.  A Distributee may elect, at the time and in the
manner prescribed by the Committee, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover.  For purposes of this Section 12.07
the following definitions shall apply:

     

    
      	
              (a)  

            	
              Distributee.  The
      term “Distributee” means, where applicable, the Participant, the
      Participant’s surviving spouse, and the Participant’s spouse of former
      spouse who is an alternate payee under a qualified domestic relations
      order, as defined in Section 414(p) of the
Code.

            

    

     

    
      	
              (b)  

            	
              Eligible Rollover
      Distribution.  An Eligible Rollover Distribution is any
      distribution of all or any portion of only the Distributee’s Company
      Retirement Account and Savings Account, except that an Eligible Rollover
      Distribution does not include:  (i) any distribution that is one
      of a series of substantially equal periodic payments (not less frequently
      than annually) made for the life (or life expectancy) of the Distributee
      or the joint lives (or joint life expectancies) of the Distributees and
      the Distributee’s joint annuitant; (ii) any distribution that is one of a
      series of payments made for a specified period of ten (10) years or more;
      (iii) any distribution to the extent such distribution is required under
      Section 401(a)(9) of the Code; and (iv) the portion of any distribution
      that is a hardship distribution.  A portion of a distribution
      shall not fail to be an Eligible Rollover Distribution merely because the
      portion consists of after-tax employee contributions which are not
      includible in gross income.  However, such portion may be
      transferred only to an individual retirement account or annuity described
      in Section 408(a) or (b) of the Code, or to a qualified defined
      contribution plan described in Section 401(a) or 403(b) of the Code that
      agrees to separately account for amounts so transferred, including
      separately accounting for the portion of such distribution which is
      includible in gross income and the portion of such distribution which is
      not so includible.

            

    

     

    
      	
              (c)  

            	
              Eligible Retirement
      Plan.  An Eligible Retirement Plan is an individual
      retirement account described in Section 408(a) of the Code, an individual
      retirement annuity described in Section 408(b) of the Code, an annuity
      plan described in Section 403(a) of the Code, an annuity plan described in
      Section 401(a) of the Code, or any qualified trust described in Section
      401(a) of the Code, that accepts the Distributee’s Eligible Rollover
      Distribution.  An Eligible Retirement Plan shall also mean an
      annuity contract described in Section 403(b) of the Code and an eligible
      plan under Section 457(b) of the Code which is maintained by a state,
      political subdivision of a state, or any agency or instrumentality of a
      state or political subdivision of a state and which agrees to separately
      account for amounts transferred into such plan from this
      Plan.  The definition of Eligible Retirement Plan shall also
      apply in the case of a distribution to a surviving spouse, or to a spouse
      or former spouse who is the alternate payee under a qualified domestic
      relations order, as defined in Section 414(p) of the
  Code.

            

    

     

    
      	
              (d)  

            	
              Direct
      Rollover.  A Direct Rollover is a payment by the Plan to
      the Eligible Retirement Plan specified by the
  Distributee.

            

    

     

    Each Participant
shall be provided with a notice of his or her rights to a direct rollover under
this Section 12.07 no less than thirty (30) days and no more than ninety (90)
days before the date such Participant’s benefit is to be paid.  The
Participant’s consent to the distribution must not be made before the
Participant receives the notice and must not be made more than ninety (90) days
before the date the benefit is to be paid.  Such distribution may
commence less than thirty (30) days after the notice required by Section
1.411(a)-11(c) of the Treasury Regulations is given, provided that:

    

    
      	
               
      

            	
              (y)

            	
              The Plan
      Administrator clearly informs the Participant that the Participant has a
      right to a period of at least thirty (30) days after receiving the notice
      to consider the decision of whether or not to elect a distribution (and,
      if applicable, a particular distribution option);
  and

            

    

    

    
      	
               
      

            	
              (z)

            	
              The
      Participant, after receiving the notice, affirmatively elects a
      distribution.

            

    

    

    Section
12.08 Suspension of Benefits Upon
Reemployment of Participant.  Subject to subsection 12.04(b)
and Section 12.06, if a Participant who is receiving installment payments from
the Plan is reemployed by the Company, his installment payments shall be
suspended as of his reemployment, subject to the following rules:

     

    
      	
              (a)  

            	
              The
      Participant must receive a notice (by personal delivery or first-class
      mail) during the first month for which his installments are suspended,
      with the notice to contain the information required by Section 2530.230
      3(b)(4) of the Department of Labor
Regulations;

            

    

     

    
      	
              (b)  

            	
              No
      installment may be withheld for any month in which the Participant is
      credited with less than forty (40) Hours of Service or receives pay for
      fewer than eight (8) days; and

            

    

     

    
      	
              (c)  

            	
              With his
      first installment after he is again eligible to receive benefits under
      this Article 12, the Participant will receive all of his suspended
      installments.

            

    

     

    Section
12.09 Payment of Benefits from
Retiree Health Account.  The Participant shall receive his
benefit under the Retiree Health Account as follows: 

     

    
      	
              (a)  

            	
              Upon Severance (Except
      by Reason of Death).  At any time following severance of
      employment with the Company or any Related Employer, the Participant
      shall, to the extent permitted under the Code and in accordance with
      procedures established by the Plan Administrator, be entitled to
      reimbursement of health care premiums, health care deductibles, copays,
      health expenses not covered by health insurance, and Medicare
      premiums.  The maximum amount available to pay benefits from the
      Retiree Health Account shall be determined under Section
      11.03.  The maximum number of distributions from the
      Participant’s Retiree Health Account shall be twelve (12) per calendar
      year.  The Company intends that the Retiree Health Account shall
      constitute an “accident or health plan” under the provisions of Sections
      105 and 106 of the Code and, to the extent permitted under the Code,
      payments made from the Retiree Health Account in accordance with this
      subsection (a) shall not be
taxable.

            

    

     

    
      	
              (b)  

            	
              Upon Severance by
      Reason of Death.  If a Participant dies and his
      Beneficiary under the Plan is his spouse, such spouse shall be entitled to
      the benefits described in subsection (a).  If the Participant’s
      Beneficiary is not his spouse, the entire interest in the Participant’s
      Retiree Health Account shall be distributed in accordance with the rules
      applicable to the Participant’s Savings
Account.

            

    

     

    
      	
              (c)  

            	
              Other
      Distributions.  In the event that the Code requires
      distribution of all or a portion of the Participant’s interest in his
      Retiree Health Account in a manner not provided for in this Article 12,
      such interest shall be distributed in accordance with the rules applicable
      to the Participant’s Savings Account.  In the event that no
      benefits are paid from a Participant’s (or Beneficiary’s) Retiree Health
      Account for a period of at least five (5) years at any time after the
      Participant attains age sixty five (65), the entire interest in the
      Participant’s Retiree Health Account shall be distributed in accordance
      with the rules applicable to the Participant’s Savings
      Account.

            

    

     

    
      	
              (d)  

            	
              Rehire.  In
      the event that a Participant incurs a severance from employment with the
      Company and is later rehired, no amounts forfeited from the Participant’s
      Retiree Health Account and credited to his Savings Account shall be
      returned to his Retiree Health
Account.

            

    

     

    ARTICLE
13 THE
TRUST

     

    Section
13.01 Establishment of
Trust.  All of the assets under the Plan shall be held as a
single trust, to be held, invested and distributed in accordance with the
provisions of the Plan providing benefits to Participants and their
Beneficiaries.  The assets of the Trust shall be the sole source of
all benefits provided for in the Plan.  The Plan Sponsor, the Company
and the Committee do not in any way guarantee the assets of the Trust from loss
or depreciation as a result of Participants’ investments in the Investment Funds
of the Plan.

     

    Section
13.02 Appointment of
Trustee.  The Trust shall be held by a Trustee appointed by the
Committee from time to time, under a trust instrument which shall be approved by
the Committee and shall constitute part of the Plan.

     

    Section
13.03 Interest in Fund Governed by
Terms of the Plan.  No Participant, former Participant or
Beneficiary, or any other person, shall have any interest in or right under the
Plan or in any part of the assets or earnings thereof held in the Trust except
as and to the extent provided in the Plan.

     

    ARTICLE
14 ADMINISTRATION

     

    Section
14.01 Allocation of Fiduciary
Duties.  The Committee and the Plan Administrator shall have
only those specific powers, duties, responsibilities and obligations as are
expressly given them under the Plan and the Trust.  Each fiduciary of
the Plan shall warrant that any directions given, information furnished, or
action taken by it shall be in accordance with the provisions of the Plan and
Trust, as the case may be, authorizing or providing for such direction,
information or action.  Furthermore, each fiduciary of the Plan may
rely upon any such direction, information or action of another fiduciary of the
Plan as being proper under this Plan and Trust, and is not required under the
Plan or Trust to inquire into the propriety of any such direction, information
or action, except that a fiduciary of the Plan shall not be relieved from
liability under Section 405(a) of Title I of ERISA for a breach of fiduciary
responsibility by a co-fiduciary.  It is intended under the Plan and
Trust that each fiduciary shall be responsible for the proper exercise of its
own powers, duties, responsibilities and obligations under this
Plan.

     

    Section
14.02 Establishment of the
Committee.  The Committee shall be the Employee Benefits
Committee of BorgWarner Inc., or any successor thereto.  The Committee
shall advise the Trustee in writing of the names of the members of the Committee
and of any changes which may occur in its membership from time to
time.

     

    Section
14.03 Appointment and Duties of
Plan Administrator.  The Plan Administrator shall be appointed
by the Committee to serve at the Committee’s discretion and shall exercise such
authority and responsibility as the Plan Administrator deems appropriate in
order to comply with ERISA and governmental regulations issued thereunder
relating to:

     

    
      	
              (a)  

            	
              The
      administration of the Plan;

            

    

     

    
      	
              (b)  

            	
              Reports and
      notifications to Participants;

            

    

     

    
      	
              (c)  

            	
              Reports to
      and registration with the Internal Revenue
  Service;

            

    

     

    
      	
              (d)  

            	
              Annual
      reports to the Department of Labor;
and

            

    

     

    
      	
              (e)  

            	
              Any other
      actions required by ERISA or the
Plan.

            

    

     

    Section
14.04 Powers and Duties of the
Committee.  The Committee shall have such powers as may be
necessary to discharge its duties hereunder, including, but not by way of
limitation, the following:

     

    
      	
              (a)  

            	
              To administer
      and enforce the Plan, including the discretionary and exclusive authority
      to interpret the Plan, to make all factual determinations under the Plan,
      and to resolve questions as between the Company (or Plan Sponsor) and
      Participants or Beneficiaries, including questions which relate to
      eligibility and distributions from the Plan, to remedy possible
      ambiguities, inconsistencies or omissions in a manner which does not
      discriminate in favor of Highly Compensated Employees, and decisions on
      claims which shall, subject to the claims procedure of Section 14.11, be
      conclusive and binding upon all persons hereunder, including, without
      limitation, Participants, other employees of the Company, Beneficiaries,
      and former Participants, and their executors, administrators,
      conservators, or heirs;

            

    

     

    
      	
              (b)  

            	
              To prescribe
      procedures to be followed by Participants or Beneficiaries filing
      applications for benefits;

            

    

     

    
      	
              (c)  

            	
              To prepare
      and distribute, in such manner as the Committee determines to be
      appropriate, information explaining the Plan and
  Trust;

            

    

     

    
      	
              (d)  

            	
              To receive
      from the Company, the Plan Sponsor, and Participants such information as
      shall be necessary for the proper administration of the Plan and
      Trust;

            

    

     

    
      	
              (e)  

            	
              To furnish
      the Plan Sponsor and/or the Company, upon request, such annual reports
      with respect to the administration of the Plan as are reasonable and
      appropriate;

            

    

     

    
      	
              (f)  

            	
              To receive,
      review and keep on file (as it deems convenient or proper) reports of the
      financial condition, the receipts and disbursements and the assets of the
      Trust;

            

    

     

    
      	
              (g)  

            	
              To appoint or
      employ individuals to assist in the administration of the Plan and any
      other agents it deems advisable, including legal counsel, and such
      clerical, medical, accounting, auditing, actuarial and other services as
      it may require in carrying out the provisions of the Plan or in connection
      with any legal claim or proceeding involving the Plan, to settle,
      compromise, contest, prosecute or abandon claims in favor of or against
      the Plan, and to pay all costs and expenses related to the above actions
      from the assets of the Trust; and

            

    

     

    
      	
              (h)  

            	
              To discharge
      all other duties set forth herein.

            

    

     

    Except with respect
to actions authorized under Section 16.01, the Committee shall have no power to
add to, subtract from or modify any of the terms of the Plan, or to change or
add to any benefits provided by the Plan, or to waive or fail to apply any
requirements of eligibility under the Plan.  Notwithstanding the
foregoing, with respect to any requirement under the Plan that a Participant or
Beneficiary submit any information in writing or on a form, the Committee or its
delegate may permit submission of such information electronically or by other
suitable means, unless prohibited by law.  No member of the Committee
shall participate in any action on any matters involving solely his own rights
or benefits as a Participant under the Plan, and any such matters shall be
determined by the other members of the Committee.

    

    Section
14.05 The Committee Direction on
Payments.  The Committee, or the person or persons designated
by the Committee pursuant to subsection 14.04(g), shall direct the Trustee
concerning all payments which shall be made out of the Trust pursuant to the
provisions of the Plan.

     

    Section
14.06 Actions by the
Committee.  The Committee may act at a meeting or by writing
without a meeting, by the vote or assent of a majority of its
members.  The Committee may adopt such by laws and regulations as it
deems desirable for the conduct of its affairs and the administration of the
Plan.  A dissenting Committee member who, within a reasonable time
after he has knowledge of any action or failure to act by the majority,
registers his dissent in writing delivered to the other Committee members shall
not be responsible for any such action or failure to act.  The
Committee may authorize one or more members of the Committee to act on behalf of
the Committee.

     

    Section
14.07 No
Compensation.  Members of the Committee shall not receive
compensation from the Plan for those services they perform as the Committee
members while employed by the Plan Sponsor or the
Company.  

     

    Section
14.08 Records of the
Committee.  The Committee shall keep a record of all of its
meetings and shall keep all such books of account, records and other data as may
be necessary or desirable in its judgment for the administration of the
Plan.  The Committee shall keep on file, in such form as it shall deem
convenient and proper, all reports of the Trust received from the
Trustee.

     

    Section
14.09 Information from
Participant.  The Plan Administrator may require a Participant
to complete and file with the Plan Administrator forms approved by the
Committee, and to furnish all pertinent information requested by such
Committee.  The Committee may rely upon all such information so
furnished, including the Participant’s current mailing address.

     

    Section
14.10 Notification of
Participant’s Address.  Each Participant, retired Participant
and Beneficiary entitled to benefits under the Plan must file with the Plan
Administrator or such other person designated by the Plan Administrator his post
office address and each change of post office address.  Any
communication, statement or notice addressed to such a person at this latest
post office address as filed with the Plan Administrator will, on deposit in the
United States mail with postage prepaid, be binding upon such person for all
purposes of the Plan, and, subject to Section 15.03, the Plan Administrator
shall not be obliged to search for, or to ascertain the whereabouts of, any such
person.

     

    Section
14.11 Claims
Procedure.  A claim for benefits shall be made by filing a
written request with the Plan Administrator on a form provided by the Plan
Administrator, which shall be delivered to the Plan Administrator and
accompanied by such substantiation of the claim as the Plan Administrator
considers necessary and reasonable for the type of claim being
filed.  If the claims procedure form made available by the Plan
Administrator does not contain information on where to file the claim, the claim
may be submitted to the Company’s benefits department at the site where the
claimant is employed.  

     

    If
a claim is denied in whole or in part, the claimant shall receive a written or
electronic notice explaining the denial of the claim within ninety (90) days
after the Plan Administrator’s receipt of the claim.   If the
Plan Administrator determines that special circumstances exist requiring a
ninety (90) day extension of time to process the claim, the claimant shall be
notified in writing of the extension and reason for the extension within ninety
(90) days after the Plan Administrator’s receipt of the claim.  The
written extension notification shall also indicate the date by which the Plan
Administrator expects to render a final decision.  A notice of denial
of claim shall contain:  the specific reason or reasons for the
denial; reference to the specific Plan provisions on which the denial is based;
a description of any additional materials or information necessary for such
claimant to perfect the claim and an explanation of why such material or
information is necessary; and a description of the Plan’s review procedures and
the time limits applicable to such procedures, including a statement of the
claimant’s right to bring a civil action under Section 502(a) of ERISA following
an adverse benefit determination on review.

    

    A
claimant may file a written request with the Committee for a review of the
denial of a claim within sixty (60) days after receiving written notice of the
denial.  The claimant may submit written comments, documents, records
and other relevant information in support of the claim.  A claimant
shall be provided, upon request and without charge, reasonable access to, and
copies of, all documents, records, and other information relevant to the
claimant’s claim for benefits.  A document, record, or other
information shall be considered relevant if it:  was relied upon in
denying the claim; was submitted, considered or generated in the course of
processing the claim, regardless of whether it was relied upon; demonstrates
compliance with the claims procedures process; or constitutes a statement of
Plan policy or guidance concerning the denied benefit, regardless of whether it
was relied upon.  In reviewing a denied claim, the Committee shall
take into consideration all comments, documents, records, and other information
submitted by the claimant in support of the claim, without regard to whether
such information was submitted or considered in the initial benefit
determination.  The Committee shall make a benefit determination on
review no later than the date of the Committee meeting next following the Plan’s
receipt of the claimant’s request for review, unless the request for review is
filed within thirty (30) days preceding the date of such meeting, in which case
such determination shall be made no later than the date of the second meeting
next following the Plan’s receipt of the claimant’s request for
review.  If the Committee determines that special circumstances exist
requiring an extension of time to process the claim, the claimant shall be
notified in writing of the extension and reason for the extension prior to the
commencement of the extension.  The written extension notification
shall also indicate the date by which the Committee expects to render a final
decision.

    

    The Committee shall
notify the claimant in writing of its determination on the appeal within five
(5) days after the determination is made.  Such notification shall be
in writing in a form designed to be understood by the claimant.  If
the claim is denied in whole or in part on appeal, the notification will also
contain:  the specific reason or reasons for the denial; reference to
the specific Plan provisions on which the determination is based; a statement
that the claimant is entitled to receive, upon request and free of charge,
reasonable access to, and copies of, all documents, records, and other
information relevant to the claimant’s claim for benefits. A document, record,
or other information shall be considered relevant if it:  was relied
upon in denying the claim; submitted, considered or generated in the course of
processing the claim, regardless of whether it was relied upon; demonstrates
compliance with the claims procedures process; or constitutes a statement of
Plan policy or guidance concerning the denied benefit, regardless of whether it
was relied upon; and a statement that the claimant has a right to bring an
action under Section 502(a) of ERISA following a final determination on
review.

    

    Following the
Committee’s denial of a claim on review, the claimant may file a written request
with the Committee for a hearing and second review of the denied
claim.  The claimant shall have an opportunity at such hearing to
present evidence and appear before the Committee.  The timing for
filing such a request and the timing and other standards for the Committee’s
response to such a request shall be subject to the standards set forth in the
previous two paragraphs of this Section 14.10.  In the event that the
claimant does not timely file a request for a hearing and second appeal, the
Committee’s determination in the first appeal shall be final and
conclusive.  Otherwise, the Committee’s determination in the second
appeal shall be final and conclusive.

    

    Notwithstanding
anything in this Section 14.11 to the contrary, the Plan Administrator and the
Committee shall make all determinations regarding claims for benefits of
Participants in accordance with Section 2560.503-1 of the Department of Labor
Regulations.

    

    Section
14.12 Qualified Domestic Relations
Order Procedure.  In the case of any domestic relations order
received by the Plan Administrator (or its agent), the Plan Administrator (or
its agent) shall promptly notify the Participant and the spouse, former spouse,
child or other alternate payee of the receipt of such order and the Plan’s
procedures for determining the qualified status of domestic relations
orders.  Within a reasonable period after receipt of such order, the
Plan Administrator (or its agent) shall determine whether such order is a
“qualified domestic relations order” within the meaning of Section 414(p) of the
Code.  It shall then notify the Participant and the alternate payee of
such determination.

     

    The Plan
Administrator shall establish reasonable procedures to determine the qualified
status of domestic relations orders and to administer distributions under such
qualified orders.  Such procedures shall be in writing, shall provide
for the notification of each person specified in a domestic relations order as
entitled to payment of benefits under the Plan (at the address included in the
domestic relations order) of such procedures promptly upon receipt by the Plan
Administrator (or its agent) of the domestic relations order and shall permit an
alternate payee to designate a representative for receipt of copies of notices
that are sent to the alternate payee with respect to a domestic relations
order.

    

    During any period
in which the issue of whether a domestic relations order is a qualified domestic
relations order is being determined (by the Plan Administrator, its agent, a
court of competent jurisdiction, or otherwise), the Plan Administrator shall
cause the Trustee to segregate in a separate account in the Trust or in an
escrow account the amounts which would have been payable to the alternate payee
during such period if the order had been determined to be a qualified domestic
relations order.  If within the eighteen (18) month period beginning
on the date on which the first payment would be required to be made under the
domestic relations order it is determined that the order is not a qualified
domestic relations order or the question of whether the order is a qualified
domestic relations order is not resolved, the Plan Administrator shall cause the
Trustee to pay the segregated amounts (plus any interest thereon) to the person
or persons who would have been entitled to such amounts if there had been no
order.

    

    Any determination
that an order is a qualified domestic relations order which is made after the
close of the eighteen (18) month period described in the preceding paragraph
shall be applied prospectively only.

    

    If
the Plan Administrator or any fiduciary of the Plan acts in accordance with this
Section 14.12 in treating a domestic relations order as being (or not being) a
qualified domestic relations order or taking other action under this Section
14.12, and applicable law, the Plan’s obligation to the Participant and each
alternate payee shall be discharged to the extent of any payment
made.  Expenses relating to administration of a qualified domestic
relation orders may be charged to a Participant’s RSP Account in accordance with
Section 14.13.

    

    Section
14.13 Expenses.  All
reasonable expenses that shall arise in connection with the administration of
the Plan, including, but not limited to, the expenses of the Committee incurred
in carrying out its duties and responsibilities under the Plan, the compensation
of the Trustee, administrative expenses and other proper charges and
disbursements of the Trustee or a committee, and compensation and other expenses
and charges of any counsel, accountant, specialist, agent or other person who
shall be employed by the Plan Administrator or a committee in connection with
the administration thereof, may be charged to the Trust and paid by the Trustee
or may be paid by the Company.  Participants’ RSP Accounts may be
charged for part or all of the reasonable expenses of administration of the
Plan, consistent with applicable law.

     

    ARTICLE
15 GENERAL
PROVISIONS

     

    Section
15.01 Nonalienation of
Benefits.  Except for qualified domestic relations orders
pursuant to Section 14.12, and as otherwise required under federal law,
assignment of benefits under the Plan or their pledge or encumbrance in any
manner shall not be permitted or recognized under any circumstance, nor shall
such benefits be subject to attachment or other legal process for the debts of
any Participant, former Participant or Beneficiary.

     

    Section
15.02 Payment to Incapacitated
Participant or Beneficiary.  If the Committee shall find that a
Participant, former Participant or Beneficiary is unable to care for his affairs
because of illness or accident, or is a minor, or has died, the Committee may
direct that any payment due him, unless claim therefor shall have been made by a
duly appointed legal representative, shall be paid to his spouse, a child, a
parent, or other blood relative or to a person with whom he resides, and any
such payment so made shall be in complete discharge of the liabilities of the
Plan therefor.

     

    Section
15.03 Payment Because of Inability
to Locate Participant or Beneficiary.  In the event that the
Plan Administrator is unable to make payment of any benefit that is required to
be paid under the Plan to a Participant or Beneficiary because the identity
and/or the whereabouts of such Participant or Beneficiary cannot be immediately
ascertained by direct correspondence with such Participant or Beneficiary, the
Plan Administrator shall make reasonable efforts to verify the identity and/or
the whereabouts of such Participant or Beneficiary by:

     

    
      	
              (a)  

            	
              contacting
      the individual(s) who would be entitled to payment of such benefit in
      accordance with Sections 3.05 or 11.02 of the Plan if such Participant or
      Beneficiary were deceased; and

            

    

     

    
      	
              (b)  

            	
              following
      current guidance regarding missing participants and beneficiaries of
      qualified pension plans issued by the Internal Revenue Service or the
      Department of Labor.

            

    

     

    In
the event that such Participant or Beneficiary cannot be located within one (1)
year after such benefit is required to be paid under the Plan, the Plan
Administrator may mail a notice by registered mail to the last known address of
such person outlining the action to be taken unless such person makes written
reply to the Plan Administrator within 60 days from the mailing of such
notice.  If such Participant or Beneficiary fails to make written
reply to the Plan Administrator within 60 days from mailing of such notice, the
Plan Administrator may, as appropriate under the circumstances (as determined in
the Plan Administrator’s sole discretion), take one of the following
actions:

    

    
      	
               
      

            	
              (x)

            	
              The Plan
      Administrator may declare the balance in such Participant or Beneficiary’s
      RSP Account to be forfeited.  If the Participant or Beneficiary
      later makes a claim for a benefit under the Plan, and that claim for a
      benefit is granted, the amount in the Participant’s RSP Account that was
      forfeited shall be paid to the Participant or Beneficiary without regard
      to any subsequent gain or loss;

            

    

    

    
      	
               
      

            	
              (y)

            	
              The Plan
      Administrator may, to the extent permitted by the Code, execute a direct
      rollover of the balance of such Participant or Beneficiary’s RSP Account
      to an individual retirement account described in Section 408(a) of the
      Code established on behalf of the Participant or Beneficiary;
      or

            

    

    

    
      	
               
      

            	
              (z)

            	
              In the event
      that the individual(s) identified in subsection (a) above establishes to
      the Plan Administrator’s satisfaction that such Participant or Beneficiary
      is deceased or that payment to such Participant or Beneficiary will be
      indefinitely infeasible, the Plan Administrator may make payment to such
      individual(s) identified in subsection (a) above, subject to repayment to
      the Plan in the event that such Participant or Beneficiary later makes a
      claim for a benefit under the Plan and such claim is granted (without
      regard to any subsequent gain or
loss).

            

    

    

    Section
15.04 Actions by the
Committee.  Whenever in the administration of the Plan, action
by the Committee is required with respect to eligibility or classification of
Employees, contributions or benefits, such action shall be uniform in nature as
applied to all persons similarly situated, and no such action shall be taken
which shall discriminate in favor of Employees who are officers, stockholders or
Highly Compensated Employees.

     

    Section
15.05 Plan for Exclusive Benefit
of Participant and Beneficiary.  No part of any contributions
under the Plan or of any part of the Trust (other than such part as provided for
under the Plan) shall be used for, or diverted to, purposes other than for the
exclusive benefit of the Participants under the Plan or their
Beneficiaries.

     

    Section
15.06 No Contract of
Employment.  Nothing contained in this Plan shall be construed
as a contract of employment between the Company and any Employee, or as a right
of any Employee to be continued in the employment of the Company or as a
limitation of the right of the Company to discharge any Employee at any time
with or without cause.

     

    Section
15.07 Indemnification of the
Committee and Plan Administrator.  Members of the Committee and
the Plan Administrator shall be indemnified by the Plan Sponsor and the Company
against any and all liabilities arising by reason of any act or failure to act
made in good faith pursuant to the provisions of the Plan, including expenses
reasonably incurred in the defense of any claim relating thereto.  If
the Plan Sponsor or the Company takes any action to liquidate under
circumstances which require that the Committee remain in existence, the Plan
Sponsor or the Company shall purchase insurance for each member of the Committee
to cover liability or losses occurring by reason of an act or omission of any
such member, unless the same is determined to be due to acts of gross negligence
or willful misconduct.  The expenses incurred for such insurance or
indemnification shall be paid by the Plan Sponsor or the Company and shall not
be reimbursable under the provisions of the Plan.

     

    Section
15.08 Change in
Business.  In the event of the sale, dissolution, merger,
consolidation, reorganization or discontinuance of all or any part of any trade
or business of the Plan Sponsor or the Company, the Committee, in its sole
discretion, may (a) determine that all or a portion of the affected Employees of
the Company shall no longer be Eligible Employees in the Plan and (b) determine
that the rights of the affected Employees accrued to the date of such sale,
dissolution, merger, consolidation, reorganization or discontinuance shall be
nonforfeitable.

     

    Section
15.09 USERRA.  Notwithstanding
any provisions of the Plan to the contrary, contributions, benefits and service
credit with respect to qualified military service will be provided in accordance
with the Uniformed Services Employment and Reemployment Rights Act of 1994
(“USERRA”) and the special rules relating to veteran’s reemployment rights under
USERRA pursuant to Section 414(u) of the Code.

     

    Section
15.10 Plan Administered According
to Law.  The Plan and the Trust forming part thereof shall be
construed and administered according to the laws of the State of Michigan to the
extent such laws are not preempted by ERISA or subsequent amendments thereto or
any other laws of the United States of America.

     

    Section
15.11 Gender, Number and
Context.  Words used in the Plan in the masculine gender shall
include the feminine gender, the singular shall include the plural and the
plural shall include the singular, all unless the context clearly indicates
otherwise.  The titles of Sections and subsections in this instrument
are included solely for convenience of reference and, if there is any conflict
between the titles and the text, the text shall control.

     

    Section
15.12 Qualification
Intended.  The Plan Sponsor shall submit the Plan as amended
and restated herein to the Internal Revenue Service along with all necessary
supporting documents with a request for a determination letter that the Plan
continues to meet the qualification requirements of Section 401(a) of the Code
and that the Trust continues to be exempt from taxation under Section 501(a) of
the Code.  Any modification or amendment of the Plan may be made
retroactively, if necessary or appropriate, to qualify or maintain the Plan as a
qualified plan meeting the requirements of Sections 401(a) and 501(a) of the
Code, ERISA or any other provisions of federal law.

     

    Section
15.13 Amendment and Restatement of
the Plan Conditioned Upon Qualification.  Any contributions
that the Company shall pay over to the Trustee on or after the Effective Date of
this Plan shall, in the event that the Internal Revenue Service refuses to
approve this Plan as amended and restated as of the Effective Date or any
particular amendment to the Plan, be returned by the Trustee to the Company and
any such amendment shall be inoperative.

     

    Section
15.14 Top Heavy Plan
Provisions.  

     

    
      	
              (a)  

            	
              Top Heavy Plan
      Definitions.  The definitions relating to Top Heavy plan
      provisions are as follows:

            

    

     

    
      	
              (i)  

            	
              The term “Top
      Heavy Plan” or “Top Heavy” means the Plan or refers to the Plan if, as of
      the Determination Date (as defined in subsection (b) below), the aggregate
      balance of the RSP Accounts of Key Employees (as defined in subsection (c)
      below) under the Plan exceeds sixty percent (60%) of the aggregate balance
      of the RSP Accounts of all Employees under the Plan, as determined in
      accordance with the provisions of Section 416(g) of the
      Code.  The determination of whether the Plan is Top-Heavy shall
      be made after aggregating all other tax qualified plans of the Company and
      any Related Employer, if any, which are required to be aggregated pursuant
      to Section 416(g)(2) of the Code and after aggregating any other such plan
      of the Company and any Related Employer which may be taken into account
      under the permissive aggregation rules of Section 416(g)(2)(A)(ii) of the
      Code if such permissive aggregation thereby eliminates the Top Heavy
      status of any plan within such permissive aggregation
      group.  For Plan Years beginning prior to January 1, 2000, the
      Plan is “Super Top Heavy” if, as of the Determination Date, the Plan would
      meet the test specified above for being a Top Heavy Plan if ninety percent
      (90%) were substituted for sixty percent (60%) in each place in which it
      appears in this subsection (a).  The plans which are required to
      be aggregated include (i) all qualified plans of the Company and any
      Related Employer in which at least one Key Employee participates and all
      qualified plans of the Company and any Related Employer in which at least
      one Key Employee participated which were terminated within the one (1)
      year period ending on the Determination Date, and (ii) all other plans of
      the Company and any Related Employer which enable a plan described in (i)
      to meet the requirements of Section 401(a)(4) or Section 410 of the
      Code.  The plans which are permitted to be aggregated include
      the plans which are required to be aggregated plus any plan or plans of
      the Company and any Related Employer which, when considered as a group
      with the required aggregation group, would continue to satisfy the
      requirements of Sections 401(a)(4) and 410 of the Code. The present values
      of accrued benefits and the amounts of account balances of an Employee as
      of the Determination Date shall be increased by the distributions made
      with respect to such Employee under the Plan and any plan aggregated with
      the Plan under Section 416(g)(2) of the Code during the one (1)-year
      period ending on the Determination Date.  The preceding sentence
      shall also apply to distributions under a terminated plan which, had it
      not been terminated, would have been aggregated with the Plan under
      Section 416(g)(2)(A)(i) of the Code.  In the case of a
      distribution made for a reason other than a severance from service, death,
      or disability, this provision shall be applied by substituting “five
      (5)-year period” for “one (1)-year period” in the preceding
      sentence.  For the purposes of these Top-Heavy provisions,
      Employees and Key Employees shall include only such individuals who
      performed any services for the Company and any Related Employer at any
      time during the one (1)-year period ending on the Determination
      Date;

            

    

     

    
      	
              (ii)  

            	
              The term
      “Determination Date,” for purposes of determining whether the Plan is Top
      Heavy for a particular Plan Year, means the last day of the preceding Plan
      Year (or, in the case of the first Plan Year of the Plan, the last day of
      the first Plan Year);

            

    

     

    
      	
              (iii)  

            	
              The term “Key
      Employee” means any Employee or former employee (including any deceased
      employee) who at any time during the Plan Year that includes the
      Determination Date was:

            

    

     

    
      	
              (A)  

            	
              An officer of
      the Company or a Related Employer having annual Compensation greater than
      $130,000 (as adjusted under Section 416(i)(1) of the Code for Plan Years
      beginning after December 31, 2002);

            

    

     

    
      	
              (B)  

            	
              A five
      percent (5%) owner of the Company or a Related Employer;
  or

            

    

     

    
      	
              (C)  

            	
              A one percent
      (1%) owner of the Company or a Related Employer and who has annual
      Compensation of more than $150,000.

            

    

     

    The determination
of who is a “Key Employee” will be made in accordance with Section 416(i)(1) of
the Code and the applicable regulations and other guidance of general
applicability issued thereunder.

    

    
      	
              (iv)  

            	
              The term “Non
      Key Employee” means any Participant in the Plan (including a Beneficiary
      of such Participant) who is not a Key
Employee.

            

    

     

    
      	
              (b)  

            	
              Requirements in Plan
      Years in Which Plan is Top Heavy. Notwithstanding anything herein
      to the contrary, if the Plan is Top Heavy as determined pursuant to
      Section 416 of the Code for any Plan Year, then the Plan shall meet the
      following requirements for any such Plan
Year:

            

    

     

    
      	
              (i)  

            	
              Minimum Vesting
      Requirements.  A Participant’s vested percentage in his
      Company Retirement Contribution Account, that portion of the balance in
      his Savings Account attributable to Company Matching Contributions under
      Section 5.06 and, if applicable, that portion of the balance in his
      Retiree Health Account attributable to Company Matching Contributions
      under Section 6.02 shall be determined in accordance with the following
      schedule and not in accordance with the definition of Vested
      Portion:

            

    

     

    
      	
              Years of Vested Service

            	
              Vested Portion

            
	
              Less than
      Three (3)

            	
              0%

            
	
              Three (3) or
      more

            	
              100%

            

    

    In
the event that the Top Heavy Plan ceases thereafter to be Top Heavy, each
Participant’s vested percentage shall again be determined under the definition
of Vested Portion, provided that a Participant’s vested percentage shall not be
reduced thereby.

    

    
      	
              (ii)  

            	
              Minimum Contribution
      Requirement.  It is intended that the Company and any
      Related Employer will meet the minimum contribution requirements of
      Sections 416(c) and 416(h) of the Code by providing the minimum
      contribution through a combination of Company Retirement Contributions,
      Company Matching Contributions and Before-Tax Contributions for such Plan
      Year for each Participant who is a Non Key Employee, in accordance with
      whichever of the following paragraphs is
  applicable:

            

    

     

    
      	
              (A)  

            	
              If the
      Company or a Related Employer does not maintain a tax qualified defined
      benefit pension plan, or if the Company or a Related Employer maintains
      such a pension plan in which no Participant can participate, the minimum
      contribution per Participant shall be three percent (3%) of the
      Participant’s Compensation for the Plan
Year;

            

    

     

    
      	
              (B)  

            	
              If the
      Company or a Related Employer maintains a tax qualified defined benefit
      pension plan in which one or more Participants may participate, and that
      pension plan is not Top Heavy, the minimum contribution per Participant
      shall be three percent (3%) of a Participant’s Compensation for that Plan
      Year; and

            

    

     

    
      	
              (C)  

            	
              If the
      Company or a Related Employer maintains a tax qualified defined benefit
      pension plan in which one or more Participants may participate, and that
      pension plan is Top Heavy, the minimum contribution per Participant shall
      be five percent (5%) of the Participant’s Compensation for that Plan
      Year.

            

    

     

    The minimum Company
contribution under this subsection (b) shall be allocated to the Participants’
RSP Accounts in the necessary amounts and in such proportions as the Committee
shall determine.

    

    
      	
              (iii)  

            	
              Minimum Contribution
      Requirement Reductions.  The minimum contribution
      requirements set forth herein shall be reduced in the following
      circumstances:

            

    

     

    
      	
              (A)  

            	
              The
      percentage minimum contribution required hereunder shall in no event
      exceed the percentage contribution made for the Key Employee for whom such
      percentage is the highest for the Plan Year after taking into account
      contributions or benefits under other qualified plans in this Plan’s
      aggregate group as provided pursuant to Section 416(c)(2)(B)(ii) of the
      Code; and

            

    

     

    
      	
              (B)  

            	
              No minimum
      contribution will be required (or the minimum contribution will be
      reduced, as the case may be) for a Participant for any Plan Year if the
      Company or a Related Employer maintains another qualified plan under which
      a minimum benefit or contribution is being accrued or made for such Plan
      Year in whole or in part for the Participant in accordance with Section
      416(c) of the Code.

            

    

     

    ARTICLE
16 AMENDMENTS AND
TERMINATION

     

    Section
16.01 Plan Sponsor’s Right to
Amend Plan.  The Plan Sponsor, by action of the Committee,
reserves the right at any time and from time to time to amend or modify the Plan
in whole or in part and either retroactively or prospectively through a written
instrument delivered to the Trustee; provided, however, that:

     

    
      	
              (a)  

            	
              Except as
      expressly provided to the contrary herein, no such amendment or
      modification shall authorize or permit any part of the corpus or income of
      the Trust to be used for or diverted to purposes other than for the
      exclusive benefit of Participants or Beneficiaries, or to deprive any of
      them of funds then held for their
account;

            

    

     

    
      	
              (b)  

            	
              No amendment
      or modification shall increase the duties or liabilities of the Trustee
      without its written consent; and

            

    

     

    
      	
              (c)  

            	
              Notwithstanding
      anything herein to the contrary, the Committee may make any amendment or
      modification to the Plan and the Trust that it deems necessary or
      appropriate to comply with any statute or regulation, including
      requirements for qualification, exempt status and deductibility of
      contributions under the Code, and such amendments or modifications shall
      have retroactive effect if necessary or appropriate for such
      purposes.

            

    

     

    Section
16.02 Termination of Plan or
Discontinuance of Contributions.  It is the intention of the
Plan Sponsor to continue the Plan and for contributions on behalf of Participant
to be made thereto, but the Plan Sponsor, by action of its board of directors or
by persons designated by its board of directors, reserves the right to suspend
or terminate the Plan at any time and for any reason.  In the event of
termination, dissolution, merger, consolidation or reorganization of the Plan
Sponsor, where the successor does not continue the Plan in accordance with
Section 17.01, upon partial termination of the Plan with respect to a group of
Participants, upon complete discontinuance of Company contributions under the
Plan or any other termination of the Plan, the interests of the affected
Participants shall become fully vested and their interests shall be
nonforfeitable.  There shall be no contributions of any kind under the
Plan after the date that the Plan terminates.  However, the Committee
and the Trust shall remain in existence, and all of the provisions of the Plan
(other than the provisions relating to contributions and Forfeitures), which in
the sole opinion of the Committee are necessary, shall remain in full force and
effect until all benefits due to Participants and Beneficiaries have been
distributed.

     

    Section
16.03 Distribution on Termination
of Plan.  In the event of the termination or partial
termination of the Plan, after payment of all expenses (including Trustee fees),
there shall be distributed to each affected Participant, or to his Beneficiary
in the case of a deceased Participant, in such manner as the Committee shall
direct, a benefit equal to the balance in the Participant’s RSP Account, such
balance to be adjusted as provided in Article 9 as of the later of the Valuation
Date on which termination or partial termination occurs or the Valuation Date
coinciding with or immediately preceding the date of distribution; provided,
however, that the Committee and the Trustee shall not be required to effect such
distribution until written evidence of approval of such termination and
distribution has been received from the Internal Revenue Service.  If
such benefits shall not exhaust the assets of the Trust, any remaining assets
shall be allocated among the RSP Accounts of continuing Participants in the same
proportion that the balance in each continuing Participant’s account bears to
the aggregate balance in all continuing Participants’ RSP Accounts, and in no
event shall such assets revert or inure to the benefit of the Plan Sponsor or
the Company.  Upon termination, the Committee may authorize the
payment to Participants or Beneficiaries of such amounts in cash or in kind,
with all such assets being measured at their fair market value.  The
Trustee shall continue to hold, invest, administer and distribute the assets of
the Trust pursuant to the terms of the Plan until no Trust assets remain in its
hands.  If a Participant dies after termination of the Plan and before
all of his interest in the Trust has been paid, the undistributed portion shall
be distributed to his Beneficiary in a lump sum.

     

    ARTICLE
17 SUCCESSOR, PLAN MERGER,
CONSOLIDATION OR TRANSFER OF ASSETS

     

    Section
17.01 Successor.  In
the event of the sale, dissolution, merger, consolidation or reorganization of
the Plan Sponsor, provision may be made by which the Plan will be continued by
the successor; and in that event, such successor shall be substituted for the
Plan Sponsor under the Plan.  In the event of the sale, dissolution,
merger, consolidation or reorganization of the Company, provision may be made by
which the successor may continue to participate in the Plan under the applicable
Appendix; and in that event, such successor shall be substituted for the Company
under the applicable Appendix of the Plan.  In either case, the
substitution of the successor shall constitute an assumption of the Plan
liabilities of the Plan Sponsor or Company, as applicable, by the successor, and
the successor shall have all of the powers, duties and responsibilities of the
Plan Sponsor or Company, as applicable, under the Plan and applicable
Appendix.

     

    Section
17.02 Plan Merger, Consolidation
or Transfer of Assets to Other Qualified Plans.  In the event
of any merger or consolidation of the Plan with, or transfer in whole or in part
of the assets and liabilities of the Trust to, any other plan of deferred
compensation maintained or to be established for the benefit of all or some of
the Participants of this Plan, the assets of the Trust applicable to such
Participants shall be transferred to the other trust only if:

     

    
      	
              (a)  

            	
              Each
      Participant would (if the other plan then terminated) receive a benefit
      immediately after the merger, consolidation or transfer which is equal to
      or greater than the benefit he would have been entitled to receive
      immediately before the merger, consolidation or transfer (if the Plan had
      then terminated);

            

    

     

    
      	
              (b)  

            	
              Resolutions
      of the Plan Sponsor’s board of directors, and of the board of directors of
      any new successor employer of the affected Participants, shall authorize
      such transfer of assets; and in the case of the new successor employer of
      the affected Participants, its resolutions shall include an assumption of
      liabilities with respect to such Participants’ inclusion in the new
      employer’s plan; and

            

    

     

    
      	
              (c)  

            	
              Such other
      plan is qualified under Sections 401(a) and 501(a) of the
      Code.

            

    

     

    

    

    *           *           *           *           *           *

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
A

     

    BORGWARNER
THERMAL SYSTEMS INC.

     

    Background – Former Cooling
Plan.

     

    Effective as of
October 1, 1999, Borg-Warner Automotive Cooling Systems Corporation (“Cooling
Systems”) established the Borg-Warner Automotive Cooling Systems Retirement
Savings Plan (the “Cooling Plan”) for the benefit of hourly employees at its
Fletcher, North Carolina Plant, including certain former employees of the
Fletcher, North Carolina Plant of Eaton Corporation who became employed by
Cooling Systems on October 1, 1999.

     

    In
2000, the Cooling Plan was amended to reflect that the name of Cooling Systems
was changed from Borg-Warner Automotive Cooling Systems Corporation to
BorgWarner Cooling Systems Inc. and that the name of the Cooling Plan was
changed from the Borg-Warner Automotive Cooling Systems Retirement Savings Plan
to the BorgWarner Cooling Systems Inc. Retirement Savings Plan.  The
amendment also provided for participation in the Cooling Plan of employees of
the Cadillac, Michigan Plant of Cooling Systems (Appendix A of the Cooling Plan)
and the Gainesville, Georgia Plant of Cooling Systems (Appendix B of the Cooling
Plan), effective March 8, 2000.

     

    In
2001, the Cooling Plan was amended to reflect new Investment Funds and certain
other changes to the Cooling Plan.  In 2002, the Cooling Plan was
amended, retroactively to October 1, 1999, to reflect certain changes requested
by the Internal Revenue Service as part of the determination letter
process.  The Cooling Plan was also amended in 2002 to reflect changes
required by the Economic Growth and Tax Reconciliation Act of 2001 as well as
certain other changes to the minimum required distribution provisions, the
benefit claims provisions, the disability provisions, and certain other
provisions.  Effective August 22, 2003, the name of BorgWarner Cooling
Systems Inc. was changed to BorgWarner Thermal Systems Inc.

     

    On December 1, 2003, the Cooling Plan was
merged into this Plan.  At that time, Appendices A and B of the
Cooling Plan became Appendices A-2 and A-3 of this Plan.  Appendix A-1
of this Plan covers Employees of the Fletcher, North Carolina Plant of
BorgWarner Cooling Systems Inc. originally covered by the core plan document of
the Cooling Plan.

     

    

     

    

     

    

     

    

     

    
      
        
          A-i

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
A-1

     

    FOR
THE FLETCHER, NORTH CAROLINA PLANT OF

    BORGWARNER
THERMAL SYSTEMS INC.

     

    The Plan is amended
by this Appendix A-1, as of the Effective Date, to allow for the participation
of certain hourly employees of the Fletcher, North Carolina Plant of BorgWarner
Thermal Systems Inc. (the “Company”), formerly called BorgWarner Cooling Systems
Inc.  The Plan, as amended by this Appendix A-1, shall be applicable
only to those persons determined to be an “Employee” hereunder.

     

    The amendments to
the Plan, as made by this Appendix A-1, are as follows:

     

    1.           Section
2.17 of the Plan is amended by adding the following to the end
thereof:

     

    “For purposes of
determining whether an Employee is an Eligible Employee, an Employee’s service
with Eaton Corporation at the Fletcher, North Carolina Plant prior to his
employment with the Company effective October 1, 1999, shall be
counted.”

     

    2.           The
first sentence of Section 2.18 of the Plan is amended in its entirety to read as
follows:

     

    “The term
“Employee” means a common law employee of the Fletcher, North Carolina Plant of
the Company who is compensated on an hourly basis for services performed and as
to whom no contributions under a funded plan of deferred compensation are being
made by the Company or any other entity.”

     

    3.           Section
2.45 of the Plan is amended by adding the following to the end
thereof:

     

    “For purposes of
determining an Employee’s Years of Vested Service (except under Section 4.01),
an Employee’s service with the Eaton Corporation shall be counted for
individuals who began employment with the Company (whether on an active or
inactive basis) on October 1, 1999.”

     

    4.           Section
3.02 of the Plan is amended by adding the following to the end
thereof:

     

    “Notwithstanding
the foregoing, an employee of the Fletcher, North Carolina Plant of Eaton
Corporation who became an Employee of the Company (whether on an active or
inactive basis) prior to October 1, 1999, shall not be eligible to participate
in the Retiree Health Account.”

     

    5.           Section
4.01(a) of the Plan is amended by adding the following to the end
thereof:

     

    “The Company shall
make a Company Retirement Contribution to the Trustee on behalf of each
Participant as follows:

     

    
      	
              Years of
      Vested

              Service as
      of

                each January
      1  

            	
              Company
      Retirement Contribution on % of Compensation

              under
      Social

              Security Wage Base

            	
              Company
      Retirement Contribution on % of Compensation

              over
      Social

              Security Wage Base

            
	
              Less than or
      equal to ten (10)

            	
                         2%

            	
                              4%

            
	
              Greater than
      ten (10) but less than or equal to twenty (20)

            	
                         3%

            	
                              6%

            
	
              Greater than
      twenty (20)

               

            	
                         4%

            	
                              8%”

            

    

    Notwithstanding any
provision of the Plan to the contrary, Years of Vested Service for purposes of
this subsection (a) shall be calculated based on the Participant’s employment
with the Company commencing on the later of October 1, 1999 or the Participant’s
Employment Commencement Date.  Notwithstanding the foregoing, an
employee of the Fletcher, North Carolina Plant of Eaton Corporation who became
an Employee of the Company (whether on an active or inactive basis) effective
October 1, 1999, and who was age 55 or older on that date, shall not be eligible
for Company Retirement Contributions.”

     

    6.           Section
10.01 of the Plan is amended by adding a new subsection (n) to read as
follows:

     

    “Notwithstanding
any provision of this Section 10.01 to the contrary, any outstanding loan which
was transferred to the BorgWarner Cooling Systems Inc. Retirement Savings Plan
from the Eaton Corporation Share Purchase and Investment Plan (the “Eaton Plan”)
as of the close of business on September 30, 1999, shall remain subject to the
repayment provisions of the Eaton Plan as in effect on September 30,
1999.”

     

    

     

    
      
        
          (A-1:
Fletcher)-

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
A-2

     

    FOR
THE CADILLAC, MICHIGAN PLANT OF

    BORGWARNER
THERMAL SYSTEMS INC.

     

    The Plan is amended by this Appendix A-2, as of
the Effective Date, to allow for the participation of certain hourly employees
of the Cadillac, Michigan Plant of BorgWarner Thermal Systems Inc. (the
“Company”), formerly called BorgWarner Cooling Systems Inc.  The Plan,
as amended by this Appendix A-2, shall be applicable only to those persons
determined to be an “Employee” hereunder.

     

    The amendments to the Plan, as made by this
Appendix A-2, are as follows:

     

    1.           The
first sentence of Section 2.18 of the Plan is amended in its entirety to read as
follows:

     

    “The term
“Employee” means a common law employee of the Company at the Cadillac, Michigan
Plant of the Company who is compensated on an hourly basis for services
performed and as to whom no contributions under a funded plan of deferred
compensation are being made by the Company or any other entity.”

     

    2.           Section
2.44 of the Plan is amended by adding the following to the end
thereof:

     

    “Notwithstanding
the foregoing, for an Employee who as of September 1, 1999 was a participant in
the Schwitzer Group Tax Reduction Investment Plan for Non-Union Hourly
Employees, as in effect on the last day of the Company’s last Payroll Period
ending in August 1999 (the “Schwitzer Plan”), the term “Vested Portion” means
the entire balance of his RSP Account.”

     

    3.           Section
2.45 of the Plan is amended by adding the following to the end
thereof:

     

    “For purposes of
determining an Employee’s Years of Vested Service (except under Section 4.01 of
the Plan), an Employee’s service with Schwitzer U.S. Inc., including any member
of the same controlled group of corporations as Schwitzer U.S. Inc. as
determined under Code Sections 414(b), (c), (m) and (o), prior to its
acquisition by Borg-Warner Automotive, Inc. shall be counted for individuals who
became Employees of Borg-Warner Automotive Turbo Systems Corporation on March 1,
1999.  Notwithstanding the foregoing:  (a) any Employee of
the Company hired prior to September 1, 1999, shall have a fully vested and
nonforfeitable interest in the entire balance of his RSP Account effective as of
January 1, 2002.”

     

    4.           Section
3.02 of the Plan is amended by adding the following to the end
thereof:

     

    “Notwithstanding
the foregoing, an Employee who was employed by the Company prior to September 1,
1999 shall not be eligible to participate in the Retiree Health
Account.”

     

    5.           Section
4.01(a) of the Plan is amended by adding the following to the end
thereof:

     

    “The amount of such
Company Retirement Contribution shall be computed on the following
basis:

     

    
      	
               
      

            	
              (i)

            	
              The Company
      shall make a Company Retirement Contribution to the Trustee on behalf of
      each Participant as follows:

            

    

     

    
      	
              Years of
      Vested Service

                   as of January
      1     

            	
              Company
      Retirement

              Contribution
      on

              % of
      Compensation

              under Social
      Security

                   Wage
      Base     

            	 
    
	
              Less than or
      equal to ten (10)

            	
              2%

            	 
    
	
              Greater than
      ten (10), but less than or equal to twenty (20)

            	
              3%

            	 
    
	
              Greater than
      twenty (20)

               

            	
              4%

            	 
    

    

    Notwithstanding any
provision of the Plan to the contrary, Years of Vested Service for purposes of
this subsection (a) shall be calculated based on the Participant’s period of
employment with the Company commencing on the later of September 1, 1999 or the
Participant’s Employment Commencement Date.

     

    
      	
               
      

            	
              (ii)

            	
              The Company
      shall make an additional Company Retirement Contribution to the Trustee on
      behalf of each Participant who (1) was an Employee on September 1, 1999,
      and (2) attained age forty-five (45) as of September 1, 1999, as
      follows:

            

    

     

    
      	
              Attained
      Age

              as of September 1, 1999

            	
              Additional
      Company

              Retirement Contribution

            
	
              Forty-five
      (45) to forty-nine (49)

            	
              0.5% of
      Compensation

            
	
              Fifty (50) to
      fifty-four (54)

            	
              1.5% of
      Compensation

            
	
              Fifty-five
      (55) or older

               

            	
              2.5% of
      Compensation

            

    

     

    Notwithstanding any
provision of the Plan to the contrary, a Participant shall not be entitled to
Company Retirement Contributions if he was age fifty-five (55) or older and
elected on or before August 13, 1999, to remain a participant in the Schwitzer
Group Pension Plan for Non-Union Hourly Employees Located at Cadillac (the
“Schwitzer Plan”).”

     

    

     

    
      
        
          (A-2:
Cadillac)-

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
A-3

     

    FOR
THE GAINESVILLE, GEORGIA PLANT OF

    BORGWARNER
COOLING SYSTEMS INC.

     

    The Plan is amended
by this Appendix A-3, as of the Effective Date, to allow for the limited
participation of certain former employees of the Gainesville, Georgia Plant (the
“Gainesville Plant”) of BorgWarner Cooling Systems Inc. (the
“Company”).  The Gainesville Plant was closed prior to December 1,
2003.  As a result, there are no Eligible Employees under this
Appendix A-3, and no Participant who has an RSP Account as a result of his prior
employment at the Gainesville Plant is eligible to receive Company Retirement
Contributions or Company Matching Contributions or to make any contributions to
the Plan.  Any such Participant’s benefits shall be governed by the
terms of the BorgWarner Cooling Systems Inc. Retirement Savings Plan as in
effect at the time of his severance from employment with the
Company.

     

    

     

    

     

    

     

    
      
        
          (A-3:
Gainesville)-

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
B

     

    BORGWARNER
TURBO SYSTEMS INC.

     

    Background – Former Turbo
Plan.

     

    The Borg-Warner
Automotive Automatic Transmission Systems Corporation, Romulus Plant Retirement
Savings Plan (the “Romulus Plan”), established for the benefit of certain
employees of the Romulus Plant of Borg-Warner Automotive Automatic Transmission
Systems Corporation (the “Romulus Plant”), was originally effective as of April
27, 1995.  Effective as of September 21, 1998, the assets of the
Romulus Plant were sold, and all the participants employed at the Romulus Plant
ceased active participation in the Romulus Plan and were fully
vested.

     

    Effective as of
March 1, 1999, Borg-Warner Automotive, Inc. acquired Kuhlman Corporation and its
divisions, subsidiaries and affiliates, including Schwitzer U.S. Inc., a wholly
owned indirect subsidiary of Kuhlman Corporation
(“Schwitzer”).  Effective as of March 2, 1999, Schwitzer changed its
name to Borg-Warner Automotive Turbo Systems Corporation (“Turbo
Systems”).  Effective as of September 1, 1999, the Romulus Plan was
further amended and renamed as the Borg-Warner Automotive Turbo Systems
Corporation Retirement Saving Plan (the “Turbo Plan”) to reflect the
commencement of participation of certain employees of Turbo Systems effective as
of the first day of the first payroll period ending in September 1999, and to
reflect the merger into the Turbo Plan, effective as of October 1, 1999, of the
Schwitzer Group Tax Reduction Investment Plan for Non-Union Hourly Employees
(“Schwitzer Plan”) as applicable to employees of the Gainesville, Georgia;
Asheville, North Carolina; and Cadillac, Michigan Plants.  Effective
as of March 8, 2000, employees of the Gainesville, Georgia Plant and the
Cadillac, Michigan Plant ceased to be employees under this Plan, and instead
became eligible employees under the Borg-Warner Automotive Cooling Systems
Corporation Retirement Savings Plan.

     

    Borg-Warner
Automotive Turbo Systems Corporation changed its name to BorgWarner Turbo
Systems Inc. on January 17, 2000 and the Turbo Plan was renamed the BorgWarner
Turbo Systems Inc. Retirement Savings Plan effective May 22,
2000.  The Turbo Plan was most recently amended and restated effective
as of January 1, 1997, to comply with the requirements of the Small Business Job
Protection Act of 1996, the Taxpayer Relief Act of 1997, and other recent
legislation and rulings.  The Turbo Plan was amended in 2001 to
reflect certain changes to the Investment Funds and certain other
changes.  The Turbo Plan was amended in 2002 to reflect the merger
into the Turbo Plan of the BorgWarner Transmission Systems Inc., Coldwater Plant
Retirement Savings Plan effective December 31, 2001, and to reflect changes
required by the Economic Growth and Tax Reconciliation Act of 2001 as well as
certain other changes to the minimum required distribution provisions, the
benefit claims provisions, the disability provisions, and certain other
provisions.  On  December 1, 2003, the Turbo Plan was merged
into this Plan.  At that time, Appendix A of the Turbo Plan became
Appendix B-2 of this Plan.  Appendix B-1 of this Plan covers Employees
of the Asheville, North Carolina Plant of BorgWarner Turbo Systems Inc.
originally covered by the core plan document of the Turbo Plan.

     

    
      
        
          B-i

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
B-1

     

    FOR
THE ASHEVILLE, NORTH CAROLINA PLANT

    AND
PFPD PARTICIPANTS OF

    BORGWARNER
TURBO SYSTEMS INC.

     

    The Plan is amended
by this Appendix B-1, as of the Effective Date, to allow for the participation
of certain hourly employees of the Asheville, North Carolina Plant of BorgWarner
Turbo Systems Inc. (the “Company”).  The Plan, as amended by this
Appendix B-1, shall be applicable only to those persons determined to be an
“Employee” hereunder.

     

    The amendments to the Plan, as made by this
Appendix B-1, are as follows:

     

    1.           The
first sentence of Section 2.18 of the Plan is amended in its entirety to read as
follows:

     

    “The term
“Employee” means a common law employee of the Company who is compensated on an
hourly basis for services performed and as to whom no contributions under a
funded plan of deferred compensation are being made by the Company or any other
entity.”

     

    
      	
              2.

            	
              Section 2.45
      of the Plan is amended by adding the following to the end
      thereof:

            

    

     

    “For purposes of
determining an Employee’s Years of Vested Service (except under Section 4.01 of
the Plan), an Employee’s service with Schwitzer U.S. Inc., including any member
of the same controlled group of corporations as Schwitzer U.S. Inc. as
determined under Code Sections 414(b), (c), (m) and (o), prior to its
acquisition by Borg-Warner Automotive, Inc. shall be counted for individuals who
became Employees of Borg-Warner Automotive Turbo Systems Corporation on March 1,
1999.  Notwithstanding the foregoing:  (a) any Employee of
the Company hired prior to September 1, 1999, shall have a fully vested and
nonforfeitable interest in the entire balance of his RSP Account effective as of
January 1, 2002; and (b) any Participant who was actively employed at the
Romulus Plant of Borg-Warner Automotive Transmission Systems Corporation
immediately prior to September 21, 1998, shall have a fully vested and
nonforfeitable interest in the entire balance of his RSP Account on September
21, 1998.”

     

    3.           Section
4.01(a) of the Plan is amended by adding the following to the end
thereof:

     

    “The Company shall
make a Company Retirement Contribution to the Trustee on behalf of each
Participant as follows:

     

    Company RetirementCompany
Retirement

    Contribution
on                                       Contribution
on

    % of Compensation% of
Compensation

    Years of Vested Serviceunder Social
Securityover Social Security

      as of each
January
1                                                            Wage
Base                                     Wage
Base       

    

    Less than or equal to ten
(10)                                                      2%                                       4%

    

    Greater than ten (10), but

    lesser than or equal to twenty
(20)                                               3%                           6%

    

    Greater than twenty
(20)                                                              
4%                                       8%

    

    Notwithstanding any
provision of the Plan to the contrary, Years of Vested Service for purposes of
this subsection (a) shall be calculated based on the Participant’s employment
with the Company commencing on the later of September 1, 1999 or the
Participant’s Employment Commencement Date.

     

    Notwithstanding any
provision of the Plan to the contrary, a Participant shall not be entitled to
Company Retirement Contributions if he was age fifty-five (55) or older and
elected on or before August 13, 1999, to remain a participant in the Schwitzer
Group Pension Plan for Non-Union Hourly Employees Located at Asheville and
Gainesville (the “Schwitzer Plan”).”

     

    

     

    

     

    
      
        
          

           

          (B-1: Asheville and
PFPD)-

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
B-2

     

    FOR
THE COLDWATER, MICHIGAN PLANT OF

    BORGWARNER
TRANSMISSION SYSTEMS INC.

     

    The Plan is amended
by this Appendix B-2, as of the Effective Date, to allow for the limited
participation of certain former employees of the Coldwater, Michigan Plant (the
“Coldwater Plant”) of BorgWarner Transmission Systems Inc. (the
“Company”).  The Coldwater Plant was closed prior to December 1,
2003.  As a result, there are no Eligible Employees under this
Appendix B-2, and no Participant who has an RSP Account as a result of his prior
employment at the Coldwater Plant is eligible to receive Company Retirement
Contributions or Company Matching Contributions or to make any contributions to
the Plan.  Any such Participant’s benefits shall be governed by the
terms of the BorgWarner Transmission Systems Inc., Coldwater Plant Retirement
Savings Plan as in effect at the time of his severance from employment with the
Company.

     

    

     

    
      
        
          (B-2:
Coldwater)-

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
C

     

    BORGWARNER
TORQTRANSFER SYSTEMS INC.

     

    Background – Former
TorqTransfer Plan.

     

    The BorgWarner
TorqTransfer Systems Inc. Retirement Savings Plan (the “TorqTransfer Plan”) was
originally named the Borg-Warner Automotive Powertrain Systems
Corporation,  Seneca Plant Retirement Savings Plan and was established
by Borg-Warner Automotive Powertrain Systems Corporation, effective as of April
1, 1996, for the benefit of certain employees of the Seneca Plant of Borg-Warner
Automotive Powertrain Systems Corporation.

     

    Effective as of
January 1, 1997, the TorqTransfer Plan was amended to change its name to the
Borg-Warner Automotive Powertrain Systems Corporation Retirement Savings Plan
and to include as Participants certain employees of the Longview Plant of
Borg-Warner Automotive Powertrain Systems Corporation (formerly the Longview
Plant of Borg-Warner Automotive Air/Fluid Systems
Corporation).  Effective as of January 1, 1998, the TorqTransfer Plan
was further amended to include as Participants certain employees of the Cary
Plant of Borg-Warner Automotive Powertrain Systems Corporation (formerly the
Cary Plant of Borg-Warner Automotive Air/Fluid Systems
Corporation).

     

    The TorqTransfer
Plan was amended and restated, effective as of January 1, 2000, to comply with
the requirements of the Small Business Job Protection Act of 1996, the Taxpayer
Relief Act of 1997, and other legislation and rulings.  The
TorqTransfer Plan was amended in 2001 to reflect certain changes to the
Investment Funds, and certain other changes, including changing the name of the
TorqTransfer Plan to the BorgWarner TorqTransfer Systems Inc. Retirement Savings
Plan.  Effective as of December 31, 2000, the Cary, North Carolina
Plant was closed and Participants in the TorqTransfer Plan who were employed at
the Cary, North Carolina Plant ceased to be “Employees” under the TorqTransfer
Plan and were fully vested.  The TorqTransfer Plan was amended in 2002
to reflect amendments to the Appendices for the Longview Plant and the Cary
Plant and to reflect changes required by the Economic Growth and Tax
Reconciliation Act of 2001 as well as certain other changes to the minimum
required distribution provisions, the benefit claims provisions, the disability
provisions, and certain other provisions.

     

    On
December 1, 2003, the TorqTransfer Plan was merged into this Plan.  At
that time, Appendix A of the TorqTransfer Plan became Appendix C-2 of this Plan
and Appendix B of the TorqTransfer Plan became Appendix C-3 of this
Plan.  Appendix C-1 of this Plan covers Employees of the Seneca, South
Carolina Plant of BorgWarner TorqTransfer Systems Inc.

     

    

     

    
      
        
          C-i

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
C-1

     

    FOR
THE

    SENECA,
SOUTH CAROLINA PLANT OF

    BORGWARNER
TORQTRANSFER SYSTEMS INC.

     

    The Plan is amended
by this Appendix C-1, as of the Effective Date, to allow for the participation
of certain hourly employees of the Seneca, South Carolina Plant of BorgWarner
TorqTransfer Systems Inc. (the “Company”).  The Plan, as amended by
this Appendix C-1, shall be applicable only to those persons determined to be an
“Employee” hereunder.

     

    The amendments to the Plan, as made by this
Appendix C-1, are as follows:

     

    1.           The
first sentence of Section 2.18 of the Plan is amended in its entirety to read as
follows:

     

    “The term
“Employee” means a common law employee at the Seneca, South Carolina Plant of
the Company who is compensated on an hourly basis for services performed and as
to whom no contributions under a funded plan of deferred compensation are being
made by the Company or any other entity.”

     

    2.           Section
4.01(a) of the Plan is amended in its entirety to read as follows:

     

    “Subject to the
provisions of Article 7, the Company shall make a Company Retirement
Contribution to the Participant’s Company Retirement Account for each Payroll
Period on behalf of each Participant who is an Employee at any time during such
Payroll Period.  The amount of such Company Retirement Contribution
for each Payroll Period shall be an amount equal to two percent (2%) of such
Participant’s Compensation.”

     

    
      
        
          (C-1:
Seneca)-

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
C-2

     

    FOR
THE

    LONGVIEW,
TEXAS PLANT OF

    BORGWARNER
TORQTRANSFER SYSTEMS INC.

     

    The Plan is amended
by this Appendix C-2, as of the Effective Date, to allow for the participation
of certain hourly employees of the Longview, Texas Plant of BorgWarner
TorqTransfer Systems Inc. (the “Company”).  The Plan, as amended by
this Appendix C-2, shall be applicable only to those persons determined to be an
“Employee” hereunder.

     

    The amendments to the Plan, as made by this
Appendix C-2, are as follows:

     

    1.           The
first sentence of Section 2.18 of the Plan is amended in its entirety to read as
follows:

     

    “The term
“Employee” means a common law employee of the Longview, Texas Plant of the
Company who is compensated on an hourly basis for services performed and as to
whom no contributions under a funded plan of deferred compensation are being
made by the Company or any other entity.”

     

    2.           Section
4.01(a) of the Plan is amended by adding the following to the end
thereof:

     

    “The Company shall
make a Company Retirement Contribution to the Trustee on behalf of each
Participant as follows:

     

    (i)           for
each Employee hired on or after June 17, 1996, as follows:

     

    
      	
               

              Years of
      Vested

              Service as
      of

                each January
      1  

            	
              Company
      Retirement Contribution on % of Compensation

              under
      Social

              Security Wage Base

            	
              Company
      Retirement Contribution on % of Compensation

              over
      Social

              Security Wage Base

            
	
              Less than or
      equal to ten (10)

            	
              1.5%

            	
              3%

            
	
              Greater than
      ten (10) but less than or equal to twenty (20)

            	
              2.5%

            	
              5%

            
	
              Greater than
      twenty (20)

            	
              3.5%

            	
              7%

            

    

    

     

    
      	
               
      

            	
              (ii)

            	
              for each
      Employee who (1) was a Coltec Employee on June 16, 1996, and (2) became an
      Employee of the Company on June 17, 1996 and is continuously employed by
      the Company thereafter, as follows:

            

    

     

    
      	
              Attained Age
      as of

                  June 17,
      1996      

            	
               

              Company
      Retirement

                  Contribution     

            	
              Additional

              Company
      Retirement

                  Contribution     

            
	
              Less than age
      thirty (30)

            	
              1.5%

            	
              1.0% after
      ten (10) years from date of hire as a Coltec Employee;

               

              and an
      additional 1.0% after twenty (20) years from date of hire as a Coltec
      Employee

               

            
	
              At least age
      thirty (30) but less than age forty (40)

            	
              2.5%

            	
              1.0% after
      twenty (20) years from date of hire as a Coltec Employee

               

            
	
              At least age
      forty (40) but less than age fifty (50)

               

            	
              4%

            	
              None

            
	
              At least age
      fifty (50) but less than age fifty-five (55)

               

            	
              5%

            	
              None

            
	
              Greater than
      or equal to age fifty-five (55)

            	
              6%

            	
              None”

            

    

    

    
      
        
          (C-2:
Longview)-

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
C-3

     

    FOR
THE

    CARY,
NORTH CAROLINA PLANT OF

    BORGWARNER
TORQTRANSFER SYSTEMS INC.

     

    The Plan is amended
by this Appendix C-3, as of the Effective Date, to allow for the limited
participation of certain former employees of the Cary, North Carolina Plant (the
“Cary Plant”) of BorgWarner TorqTransfer Systems Inc. (the
“Company”).  The Cary Plant was closed prior to December 1,
2003.  As a result, there are no Eligible Employees under this
Appendix C-3, and no Participant who has an RSP Account as a result of his prior
employment at the Cary Plant is eligible to receive Company Retirement
Contributions or Company Matching Contributions or to make any contributions to
the Plan.  Any such Participant’s benefits shall be governed by the
terms of the BorgWarner TorqTransfer Systems Inc. Retirement Savings Plan as in
effect at the time of his severance from employment with the
Company.

     

    

     

    
      
        
          (C-3:
Cary)-

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
D

     

    BORGWARNER
EMISSIONS SYSTEMS INC.

     

    Background – Former
Air/Fluid Plan.

     

    Effective as of May
21, 1996, Borg-Warner Automotive Control Systems Corporation, the sponsor of the
Borg-Warner Retirement Savings Plan, Dixon Plant (the “Prior Dixon Plan”) and
the Borg-Warner Retirement Savings Plan, Blytheville Plant (the “Prior
Blytheville Plan”), changed its name to Borg-Warner Automotive Air/Fluid Systems
Corporation (“Air/Fluid Systems”).

    

    Effective as of
June 17, 1996, the Prior Dixon Plan was renamed as the Borg-Warner Automotive
Air/Fluid Systems Corporation Retirement Savings Plan (the “Air/Fluid Plan”),
and the Prior Blytheville Plan was merged with and into the Air/Fluid Plan and
the Air/Fluid Plan was amended and restated.  The Prior Dixon Plan was
originally established for the benefit of certain employees of the Dixon,
Illinois Plant of Borg-Warner Automotive Electronic & Mechanical Systems
Corporation as of July 1, 1989, and the Prior Blytheville Plan was originally
established for the benefit of certain employees of the Blytheville, Arkansas
Plant of Borg-Warner Automotive Electronic & Mechanical Systems Corporation
as of July 1, 1989.  Certain employees of the Cary, North Carolina
Plant of Borg-Warner Automotive Electronic & Mechanical Systems Corporation
became covered under the Prior Dixon Plan as of January 1,
1992.  Borg-Warner Automotive Electronic & Mechanical Systems
Corporation was renamed Borg-Warner Automotive Control Systems Corporation on
December 9, 1994.

    

    As
of June 17, 1996, the Air/Fluid Plan was also amended to benefit all employees
of Air/Fluid Systems who were participants in the Air/Fluid Plan as of June 17,
1996 and certain employees of Air/Fluid Systems who became Eligible Employees
under the Air/Fluid Plan on or after June 17, 1996, including certain employees
of the Longview, Texas, Sallisaw, Oklahoma and Water Valley, Mississippi
Plants.  The Air/Fluid Plan was further amended (a) as of January 1,
1997 to provide that employees of the Longview, Texas Plant would no longer be
Eligible Employees under the Air/Fluid Plan but instead would become “eligible
employees” as of January 1, 1997 under the Borg-Warner Automotive Powertrain
Systems Corporation Retirement Savings Plan (formerly the Borg-Warner Automotive
Powertrain Systems Corporation, Seneca Plant Retirement Savings Plan), as such
term is defined therein; and, (b) effective as of January 1, 1998, to provide
that employees of the Cary, North Carolina Plant would no longer be Eligible
Employees under the Air/Fluid Plan effective as of January 1, 1998, but instead
would become “eligible employees” as of January 1, 1998 under the Borg-Warner
Automotive Powertrain Systems Corporation Retirement Savings Plan, as such term
is defined therein.

    

    The Air/Fluid Plan
was amended and restated effective as of September 1, 1999, except as otherwise
provided therein, to reflect the commencement of participation of employees of
the Charlotte, North Carolina Plant of BorgWarner Fuel Systems Inc. (prior to
January 17, 2000, known as Borg-Warner Automotive Fuel Systems Corporation and
referred to hereinafter as “Fuel Systems”), a subsidiary of Air/Fluid Systems,
effective as of the first day of the first Payroll Period ending in September
1999, the merger into the Air/Fluid Plan of the Schwitzer Group Tax Reduction
Investment Plan for Non-Union Hourly Employees (“Schwitzer Plan”) as applicable
to the Employees of the Charlotte, North Carolina Plant of Fuel Systems
effective as of October 1, 1999, and to comply with the requirements of the
Small Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997, and
other legislation and rulings.

    

    The Air/Fluid Plan,
as amended and restated, included amendments through January 1, 2000, to provide
for participation of employees of the Grand Rapids, Michigan Plant of Fuel
Systems, to reflect the change in the name of Air/Fluid Systems from Borg-Warner
Automotive Air/Fluid Systems Corporation to BorgWarner Air/Fluid Systems Inc.
effective as of January 17, 2000, to reflect the change in the name of the
Air/Fluid Plan from Borg-Warner Automotive Air/Fluid Systems Corporation
Retirement Savings Plan to BorgWarner Air/Fluid Systems Inc. Retirement Savings
Plan effective May 22, 2000, and to reflect the shutdown of the Blytheville
Plant effective December 31, 2000.

    

    The Air/Fluid Plan
was subsequently amended in 2001 to reflect certain changes to the Air/Fluid
Plan and again in 2002 to reflect changes required by the Economic Growth and
Tax Reconciliation Act of 2001 as well as certain other changes to the minimum
required distribution provisions, the benefit claims provisions, the disability
provisions, and certain other provisions.

    

    The Air/Fluid Plan was further amended and
restated generally effective as of December 1, 2003, as the BorgWarner Employees
Retirement Savings Plan as further described in Section
1.01.  Participants who were covered under the Air/Fluid Plan are
covered under the Plan solely as described in this Appendix
D.  Appendices A – E of the Air/Fluid Plan became Appendices D-1
through D-5 of this Plan.

    

     

    
      
        
          D-

           

          

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
D-1

     

    FOR
THE

    DIXON,
ILLINOIS PLANT OF

    BORGWARNER
EMISSIONS SYSTEMS INC.

     

    The Plan is amended
by this Appendix D-1, as of the Effective Date, to allow for the participation
of certain hourly employees of the Dixon Plant of BorgWarner Emissions Systems
Inc. (the “Company”), formerly called BorgWarner Air/Fluid Systems
Inc.  The Plan, as amended by this Appendix D-1, shall be applicable
only to those persons determined to be an “Employee” hereunder.

     

    The amendments to
the Plan, as made by this Appendix D-1, are as follows:

     

    1.           The
first sentence of Section 2.18 of the Plan is amended in its entirety to read as
follows:

     

     “The term
“Employee” means a common law employee of the Dixon Plant of the Company who is
compensated on an hourly basis for services performed and as to whom no
contributions under a funded plan of deferred compensation are being made by the
Company or any other entity.”

     

    2.           Section
4.01(a) of the Plan is amended by adding the following to the end
thereof:

     

    
      	
               
      

            	
              “(i)

            	
              The Company
      shall make a Company Retirement Contribution to the Trustee on behalf of
      each Participant as follows:

            

    

     

    
      	
               

              Years of
      Vested

              Service as
      of

                each January
      1  

            	
              Company
      Retirement Contribution on % of Compensation

              under
      Social

              Security Wage Base

            	
              Company
      Retirement Contribution on % of Compensation

              over
      Social

              Security Wage Base

            
	
              Less than or
      equal to ten (10)

            	
                         1.5%

            	
                              3%

            
	
              Greater than
      ten (10) but less than or equal to twenty (20)

            	
                         2.5%

            	
                              5%

            
	
              Greater than
      twenty (20)

               

            	
                         3.5%

            	
                              7%

            

    

    
      	
               
      

            	
               (ii)

            	
              The Company
      shall make an additional Company Retirement Contribution to the
      Participant’s Company Retirement Account for each Payroll Period on behalf
      of each Participant who is an Eligible Employee at any time during such
      Payroll Period and who (1) participated in the Dixon Plant, Borg-Warner
      Automotive, Inc., Dixon, Illinois Employees’ Pension Plan on
      June 30,1989, (2) attained age 35 as of June 30, 1989, and
      (3) was eligible to receive a Company Retirement Contribution under
      subsection 4.01(a) of the Borg-Warner Retirement Savings Plan, Dixon Plant
      as of July 1, 1989.  The amount of such additional Company
      Retirement Contribution shall be computed on the following
      basis:

            

    

     

    
      	
              Attained Age as of June 30,
      1989

            	
              Additional
      Company

              Retirement Contribution

            
	
              At least age
      thirty-five (35) but less than age forty (40)

            	
              0.5% of
      Compensation

            
	
              At least age
      forty (40) but less than age forty-five (45)

               

            	
              1.0% of
      Compensation

            
	
              At least age
      forty-five (45) but less than age fifty (50)

               

            	
              1.5% of
      Compensation

            
	
              Greater than
      or equal to age fifty (50)

               

            	
              2.5% of
      Compensation

            

    

    
      	
               
      

            	
              (iii)

            	
              Notwithstanding
      the foregoing, the Company will not make any Company Retirement
      Contributions on behalf of a Participant who (1) participated in the Dixon
      Plant, Borg-Warner Automotive, Inc., Dixon, Illinois Employees’ Pension
      Plan on June 30,1989, (2) attained age 55 as of June 30, 1989,
      and (3) elected on or before June 9, 1989 to continue participation
      in the Dixon Plant, Borg-Warner Automotive, Inc., Dixon, Illinois
      Employees’ Pension Plan.”

            

    

     

    
      
        
          (D-1:
Dixon)-

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
D-2

     

    FOR
THE

    BLYTHEVILLE,
ARKANSAS PLANT OF

    BORGWARNER
AIR/FLUID SYSTEMS INC.

     

    The Plan is amended
by this Appendix D-2, as of the Effective Date, to allow for the limited
participation of certain former employees of the Blytheville, Arkansas Plant
(the “Blytheville Plant”) of BorgWarner Air/Fluid Systems Inc. (the
“Company”).  The Blytheville Plant was closed prior to December 1,
2003.  As a result, there are no Eligible Employees under this
Appendix D-2, and no Participant who has an RSP Account as a result of his prior
employment at the Blytheville Plant is eligible to receive Company Retirement
Contributions or Company Matching Contributions or to make any contributions to
the Plan.  Any such Participant’s benefits shall be governed by the
terms of the BorgWarner Air/Fluid Systems Inc. Retirement Savings Plan as in
effect at the time of his severance from employment with the
Company.

     

    

     

    
      
        
          

           

          (D-2:
Blytheville)-

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
D-3

     

    FOR
THE SALLISAW, OKLAHOMA PLANT OF

    BORGWARNER
MORSE TEC INC. AND

    WATER
VALLEY, MISSISSIPPI PLANT OF

    BORGWARNER
EMISSIONS SYSTEMS INC.

     

    The Plan is amended
by this Appendix D-3, as of the Effective Date, to allow for the participation
of certain hourly employees of the Sallisaw, Oklahoma Plant of BorgWarner Morse
TEC Inc. and Water Valley, Mississippi Plants of BorgWarner Emissions Systems
Inc. (collectively the “Company”).  BorgWarner Emissions Systems Inc.
was formerly called BorgWarner Air/Fluid Systems Inc.  Prior to
January 1, 2003, the Sallisaw Plant was part of BorgWarner Air/Fluid Systems
Inc.  The Plan, as amended by this Appendix D-3, shall be applicable
only to those persons determined to be an “Employee” hereunder.

     

    The amendments to
the Plan, as made by this Appendix D-3, are as follows:

     

    1.           Section
2.17 of the Plan is amended by adding the following to the end
thereof:

     

    “Notwithstanding
the foregoing, respect to Employees who were employees employed by the Sallisaw
Plant or Water Valley Plant on June 16, 1996 (“Coltec Employees”), the term
“Eligible Employee” means:

     

    
      	
              (i)  

            	
              For purposes
      of participation in the Savings Account and Retiree Health Account, such
      Coltec Employees may participate if they are employed by the Company as of
      June 17, 1996;

            

    

     

    
      	
              (ii)  

            	
              For purposes
      of participation in the Company Retirement Account, such Coltec Employees
      may participate upon completing six months of continuous service (1) as a
      Coltec Employee immediately prior to becoming an Employee of the Company
      on June 17, 1996, or (2) as a Coltec Employee and Employee of the Company
      combined.”

            

    

     

    2.           The
first sentence of Section 2.18 of the Plan is amended in its entirety to read as
follows:

     

    “The term
“Employee” means a common law employee of the Sallisaw, Oklahoma Plant and Water
Valley, Mississippi Plant of the Company who is compensated on an hourly basis
for services performed and as to whom no contributions under a funded plan of
deferred compensation are being made by the Company or any other
entity.”

     

    3.           Section
4.01(a) of the Plan is amended by adding the following to the end
thereof:

     

    
      	
               
      

            	
               (i)

            	
              The Company
      shall make a Company Retirement Contribution to the Trustee for each
      Employee hired on or after June 17, 1996, as
  follows:

            

    

     

    
      	
               

              Years of
      Vested

              Service as
      of

              each January 1

            	
              Company
      Retirement Contribution on % of Compensation

              under
      Social

              Security Wage Base

            	
              Company
      Retirement Contribution on % of Compensation

              over
      Social

              Security Wage Base

               

            
	
              Less than or
      equal to ten (10)

            	
              1.5%

            	
              3%

            
	
              Greater than
      ten (10) but less than or equal to twenty (20)

            	
              2.5%

            	
              5%

            
	
              Greater than
      twenty (20)

               

            	
              3.5%

            	
              7%

            

    

    
      	
               
      

            	
              (ii)

            	
              and for each
      Employee who (1) was a Coltec Employee on June 16, 1996, and (2) became an
      Employee of the Company on June 17, 1996 and is continuously employed by
      the Company thereafter, as follows:

            

    

     

    
      	
               

              Attained Age
      as of

                  June 17,
      1996

            	
               

              Company
      Retirement

                  Contribution

            	
              Additional

              Company
      Retirement

                  Contribution

            
	
              Less than age
      thirty (30)

            	
              1.5%

            	
              1.0% after
      ten (10) years of Plan participation from June 17, 1996; and an additional
      1.0% after twenty (20) years of Plan participation from June 17,
      1996

            
	
              At least age
      thirty (30) but less than age forty (40)

            	
              2.5%

            	
              1.0% after
      twenty (20) years of Plan participation from June 17,
  1996

            
	
              At least age
      forty (40) but less than age forty five (45)

            	
              3.5%

            	
              None

            
	
              At least age
      forty five (45) but less than age fifty (50)

            	
              4%

            	
              None

            
	
              At least age
      fifty (50) but less than age fifty-five (55)

            	
              5%

            	
              None

            
	
              Greater than
      or equal to age fifty-five (55)

            	
              6%

            	
              None”

            

    

    

     

    4.           The
last sentence of Section 4.02 is amended as follows:

     

    “The Company
Matching Contribution shall be an amount equal to fifty percent (50%) (one
hundred percent (100%) effective as of January 1, 2000 for employees of the
Sallisaw Plant and one hundred percent (100%) effective as of July 1, 2000 for
employees of the Water Valley Plant) of the Participant’s Before-Tax
Contribution which he made to his Savings Account pursuant to Section 5.01
during such Payroll Period.”

     

    

     

    
      
        
          (D-3:
Sallisaw/Water Valley)-

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
D-4

     

    FOR
THE CHARLOTTE, NORTH CAROLINA PLANT OF

    BORGWARNER
FUEL SYSTEMS INC.

     

    The Plan is amended
by this Appendix D-4, as of the Effective Date, to allow for the limited
participation of certain former employees of the Charlotte, North Carolina Plant
(the “Charlotte Plant”) of BorgWarner Fuel Systems Inc. (the
“Company”).  The Charlotte Plant was sold prior to December 1,
2003.  As a result, there are no Eligible Employees under this
Appendix D-4, and no Participant who has an RSP Account as a result of his prior
employment at the Charlotte Plant is eligible to receive Company Retirement
Contributions or Company Matching Contributions or to make any contributions to
the Plan.  Any such Participant’s benefits shall be governed by the
terms of the BorgWarner Air/Fluid Systems Inc. Retirement Savings Plan as in
effect at the time of his severance from employment with the
Company.

     

    

     

    

     

    

     

    

     

    

     

    
      
        
          (D-4:
Charlotte)-

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
D-5

     

    FOR
THE GRAND RAPIDS, MICHIGAN PLANT OF

    BORGWARNER
FUEL SYSTEMS INC.

     

    The Plan is amended
by this Appendix D-5, as of the Effective Date, to allow for the limited
participation of certain former employees of the Grand Rapids, Michigan Plant
(the “Grand Rapids Plant”) of BorgWarner Fuel Systems Inc. (the
“Company”).  The Grand Rapids Plant was sold prior to December 1,
2003.  As a result, there are no Eligible Employees under this
Appendix D-5, and no Participant who has an RSP Account as a result of his prior
employment at the Grand Rapids Plant is eligible to receive Company Retirement
Contributions or Company Matching Contributions or to make any contributions to
the Plan.  Any such Participant’s benefits shall be governed by the
terms of the BorgWarner Air/Fluid Systems Inc. Retirement Savings Plan as in
effect at the time of his severance from employment with the
Company.

     

    

     

    
      
        
          

          (D-5: Grand
Rapids)-

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
E

     

    BORGWARNER
INSTRUMENTATION –

     

    A
BUSINESS UNIT OF BORGWARNER

     

    AIR/FLUID
SYSTEMS OF MICHIGAN INC.

     

    Background – Former
Medallion Plan.

     

    Effective as of
September 1, 1999, Borg-Warner Automotive Turbo Systems Corporation (“Turbo
Systems”) established the Borg-Warner Automotive Medallion Retirement Savings
Plan (the “Medallion Plan”) for the benefit of hourly employees located at the
Spring Lake and Rothbury, Michigan Plants of Turbo Systems and operated under
the business unit name of Borg-Warner Automotive Medallion (the
“Company”).  The Medallion Plan reflected the merger into the
Medallion Plan of the Schwitzer Group Tax Reduction Investment Plan for
Non-Union Hourly Employees (“Schwitzer Plan”) as applicable to Employees of the
Spring Lake Michigan and Rothbury Michigan Plants, effective as of October 1,
1999.

     

    Effective as of
February 2, 2000, the assets of the Medallion business unit were transferred to
BorgWarner Air/Fluid Systems of Michigan Inc., the name of the Medallion
business unit was changed to BorgWarner Instrumentation, and BorgWarner
Air/Fluid Systems of Michigan Inc. became the sponsor of the Medallion
Plan.  Effective May 22, 2000, the Medallion Plan was renamed the
BorgWarner Medallion Retirement Savings Plan.

     

    The Medallion Plan
was subsequently amended in 2001 and 2002 to reflect certain changes to the
Medallion Plan and again in 2002 to reflect changes required by the Economic
Growth and Tax Reconciliation Act of 2001 as well as certain other changes to
the minimum required distribution provisions, the benefit claims provisions, the
disability provisions, and certain other provisions.

     

    Prior to December
1, 2003, BorgWarner sold the Spring Lake and Rothbury, Michigan Plants (i.e.,
the assets of the BorgWarner Instrumentation business unit) in two separate
transactions and fully vested affected participants.  On December 1,
2003, the Medallion Plan was merged into this Plan.  However, as a
result of the prior sale of the Spring Lake and Rothbury, Michigan Plants, there
are no Eligible Employees under this Appendix E, and no Participant who has an
RSP Account as a result of his prior employment at the Spring Lake or Rothbury
Michigan Plant is eligible to receive Company Retirement Contributions or
Company Matching Contributions or to make any contributions to the
Plan.  Any such Participant’s benefits shall be governed by the terms
of the BorgWarner Medallion Retirement Savings Plan as in effect at the time of
his severance from employment with the Company.

     

    

     

    
      
        
          E-

           

          

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    SUPPLEMENT
I

     

    BORGWARNER
EMPLOYEES

    RETIREMENT
SAVINGS PLAN

     

    INVESTMENT
FUNDS

     

    

     

    (a)           BGI LifePath Portfolios,
Class S.

     

    Each BGI LifePath
Portfolio is a “life-cycle” or “lifestyle” fund which is diversified among broad
types of asset classes (including large-, mid- and small-capitalization
equities, international equities, fixed income, and cash) and is adjusted over
time to gradually become more conservative as the year approaches when the
Participant expects to begin taking distributions. As this year approaches, the
investment mix is gradually shifted from a greater concentration of higher-risk
investments (namely stock funds) to a greater concentration of lower-risk
investments (bond funds and money market/stable value instruments). Each BGI
LifePath Portfolio seeks to maximize returns while maintaining an appropriate
level of risk based on the Participant’s investment time horizon.  The
BGI LifePath Portfolios are arranged in five-year increments (currently 2010,
2015, 2020, 2025, 2030, 2035, 2040, and 2045).  The BGI LifePath
Retirement Portfolio is designed for Participants already in
retirement.

     

    (b)           BGI Equity Index Fund, Class
S.

     

    The BGI Equity
Index Fund is designed to match the performance of the S&P 500 Index by
investing in stocks that make up the index. This fund is intended for long-term
investors seeking to capture the earnings and growth potential of large U.S.
companies.

     

    (c)           BorgWarner Inc. Stock
Fund.

     

    This fund invests
exclusively in the common stock of BorgWarner, Inc.

     

    (d)           Buffalo Small Cap
Fund.

     

    This fund seeks
long-term growth of capital by investing at least 80% of its net assets in
domestic common stocks and other equity securities of small capitalization
(“small-cap”) companies.

     

    (e)           Harbor International Fund,
Class Instl.

     

    Harbor
International Fund seeks long-term growth of capital. The fund primarily invests
in equity securities issued by emerging market companies that have market
capitalizations in excess of $1 billion, typically from at least three
countries. It focuses on companies located in Europe, the Pacific Basin, and
emerging industrialized countries whose economies and political regimes appear
more stable. The fund charges a 2% redemption fee on shares held 59 days or
less.

     

    (f)           Vanguard Mid-Cap Index Fund,
Class Instl.

     

    Vanguard
Mid-Capitalization Index Fund seeks to parallel the performance of the MSCI U.S.
Mid Cap 450 Index.  The fund invests substantially all assets in each
stock found in the index, in approximately the same proportion as represented in
the index. Management uses a passive approach when selecting securities and
seeks to create a mix of securities that will match the performance of the
index. The fund may also invest in stock futures and options contracts,
warrants, convertible securities, and swaps.

     

    (g)           BGI U.S. Debt Index Fund,
Class D.

     

    The BGI U.S. Debt
Index Fund is designed to match the performance of the Lehman Brothers Aggregate
Bond Index by investing in a diversified sample of the bonds that make up the
index. The index is the broadest measure of the U.S. investment-grade bond
market and is comprised of U.S. Treasury and federal agency bonds, corporate
bonds, residential and commercial mortgage-backed securities, and asset-backed
securities. This fund is intended for intermediate-term investors seeking
moderate returns by investing in a diversified portfolio of high-quality fixed
income securities.

     

    (h)           Investment Contracts
Fund.

     

    The Investment
Contracts Fund seeks to preserve principal while offering competitive income
consistent with the preservation of principal. It invests in investment
contracts issued by high-quality insurance companies and banks.  As of
the Effective Date, the Investment Contracts Fund is a blended fund (separately
managed account) consisting of the T. Rowe Price Stable Value Fund, the Putnam
Stable Value Fund, and other investment contracts. Upon the transfer of the
assets of the Putnam Stable Value Fund and the expiration of the investment
contracts, the Investment Contracts Fund will be invested 100% in the T. Rowe
Price Stable Value Fund.  All new contributions to the Investment
Contracts Fund will be invested 100% in the T. Rowe Price Stable Value Fund
portion of the blended fund.

     

    

     

    

     

    

     

    

     

    
      
        
          (S-I)

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    SUPPLEMENT
II

     

    BORGWARNER
EMPLOYEES

    RETIREMENT
SAVINGS PLAN

     

    ELIGIBILITY
FOR RETIREE HEALTH ACCOUNT

     

    Regardless of the
location at which an Employee works for the Company, his eligibility to
participate in the Retiree Health Account is dependent upon the location at
which he was originally hired.  If an Employee was originally hired at
a location listed below on or after the date listed below, he is eligible to
participate in the Retiree Health Account.  If an Employee was hired
prior to the applicable date listed below, he is not eligible to participate in
the Retiree Health Account.

     

    

     

    
      	
              Location

            	
              Hire
      Date

            
	
              Asheville,
      North Carolina

            	
              September 1,
      1999

            
	
              Auburn Hills,
      Michigan (Corp. Headquarters)

            	
              January 1,
      2003

            
	
              Auburn Hills,
      Michigan (PTC)

            	
              July 1,
      2002

            
	
              Bellwood,
      Illinois

            	
              January 1,
      1994

            
	
              Blytheville,
      Arkansas

            	
              January 1,
      1995

            
	
              Buffalo, New
      York

            	
              September 1,
      1999

            
	
              Byron,
      Illinois

            	
              September 1,
      1999

            
	
              Cadillac,
      Michigan

            	
              September 1,
      1999

            
	
              Cary,
      Illinois

            	
              January 1,
      1995

            
	
              Charlotte,
      North Carolina

            	
              September 1,
      1999

            
	
              Chester,
      South Carolina

            	
              September 1,
      1999

            
	
              Chicago,
      Illinois

            	
              January 1,
      1995

            
	
              Coldwater,
      Michigan

            	
              January 1,
      1994

            
	
              Dixon,
      Illinois

            	
              January 1,
      1995

            
	
              Fletcher,
      North Carolina

            	
              October 1,
      1999

            
	
              Frankfort,
      Illinois

            	
              January 1,
      1994

            
	
              Gainesville,
      Georgia

            	
              September 1,
      1999

            
	
              Gallipolis,
      Ohio

            	
              April 28,
      1995

            
	
              Grand Rapids,
      Michigan

            	
              September 1,
      1999

            
	
              Indianapolis,
      Indiana

            	
              September 1,
      1999

            
	
              Ithaca, New
      York (hourly)

            	
              October 4,
      1998

            
	
              Ithaca, New
      York (salaried)

            	
              January 1,
      1996

            
	
              Livonia,
      Michigan

            	
              July 1,
      1995

            
	
              Lombard/Addison,
      Illinois

            	
              January 1,
      1994

            
	
              Longview,
      Texas

            	
              Any
      date

            
	
              Marshall,
      Michigan

            	
              October 1,
      1999

            
	
              Muncie,
      Indiana (hourly)

            	
              January 1,
      1993

            
	
              Muncie,
      Indiana (salaried/guards)

            	
              January 1,
      1994

            
	
              Plymouth,
      Michigan

            	
              April 28,
      1995

            
	
              Romulus,
      Michigan

            	
              April 28,
      1995

            
	
              Sallisaw,
      Oklahoma

            	
              Any
      date

            
	
              Seneca, South
      Carolina

            	
              Any
      date

            
	
              Southfield,
      Michigan

            	
              October 1,
      1999

            
	
              Springfield,
      Ohio

            	
              September 1,
      1999

            
	
              Spring
      Lake/Rothbury, Michigan

            	
              September 1,
      1999

            
	
              Sterling
      Heights, Michigan (Plant)

            	
              April 1,
      1995

            
	
              Sterling
      Heights, Michigan (Corp. Headquarters)

            	
              August 1,
      1995

            
	
              Sterling
      Heights, Michigan (Tech Center)

            	
              August 1,
      1995

            
	
              Sterling
      Heights, Michigan (Powertrain Assemblies)

            	
              August 1,
      1995

            
	
              Warren,
      Michigan

            	
              Any
      date

            
	
              Water Valley,
      Mississippi

            	
              Any
      date

            
	
              White Pigeon,
      Michigan

            	
              September 1,
      1999

            

    

    

     

    

     

    

     

    

     

    

    

    

    

    
      
        
          (S-II)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}]]