Document:

BORGWARNER INC.

                             1993 STOCK INCENTIVE PLAN

       (Amended Effective November 8, 1995, April 29, 1997, April 28, 1998,
                        and Further Amended February 7, 2002)

SECTION 1.  Purpose; Definitions.

     The purpose of the Plan is to give the Company a significant advantage in
attracting, retaining and motivating officers, employees and directors and to
provide the Company and its subsidiaries with the ability to provide incentives
more directly linked to the profitability of the Company's businesses and
increases in stockholder value.

     For purposes of the Plan, the following terms are defined as set forth
below:

     a.  "Affiliate" means a corporation or other entity controlled by the
Company and designated by the Committee as such.

     b.  "Award" means a Stock Appreciation Right, Stock Option or Restricted
Stock.

     c.  "Board" means the Board of Directors of the Company.

     d.  "Cause" has the meaning set forth in Section 5(i).

     e.  "Change in Control" and "Change in Control Price" have the meanings set
forth in Sections 8(b) and (c), respectively.

     f.  "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.

     g.  "Commission" means the Securities and Exchange Commission or any
successor agency.

     h.  "Committee" means the Committee referred to in Section 2.

     i.  "Company" means BorgWarner Inc., a Delaware corporation.

     j.  "Disability" means permanent and total disability as determined under
procedures established by the Committee for purposes of the Plan.

     k.  "Disinterested Person" shall mean a member of the Board who qualifies
as a disinterested person as defined in Rule 16b-3(c)(2), as promulgated by the
Commission under the Exchange Act, or any successor definition adopted by the
Commission.

     l.  "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.

     m.  "Fair Market Value" means, except as provided in Sections 5(j) and
6(b)(ii)(2), as of any given date, the mean between the highest and lowest
reported sales prices of the Stock on the New York Stock Exchange Composite Tape
or, if not listed on such exchange, on any other national securities exchange on
which the Stock is listed or on NASDAQ. If there is no regular public trading
market for such Stock, the Fair Market Value of the Stock shall be determined by
the Committee in good faith.

     n.  "Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.

     o.  "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.

     p.  "Plan" means the BorgWarner Inc. 1993 Stock Incentive Plan, as set
forth herein and as hereinafter amended from time to time.

     q.  "Restricted Stock" means an award granted under Section 7.

     r.  "Retirement" means retirement from active employment under a pension
plan of the Company, any subsidiary or Affiliate, or under an employment
contract with any of them, or termination of employment at or after age 55 under
circumstances which the Committee, in its sole discretion, deems equivalent to
retirement.

     s.  "Rule 16b-3" means Rule 16b-3, as promulgated by the Commission under
Section 16(b) of the Exchange Act, as amended from time to time.

     t.  "Stock" means Common Stock, par value $.01 per share, of the Company.

     u.  "Stock Appreciation Right" means a right granted under Section 6.

     v. "Stock Option" means an option granted under Section 5.

     w.  "Termination of Employment" means the termination of the participant's
employment with the Company and any subsidiary or Affiliate. A participant
employed by a subsidiary or an Affiliate shall also be deemed to incur a
Termination of Employment if the subsidiary or Affiliate ceases to be such a
subsidiary or Affiliate, as the case may be, and the participant does not
immediately thereafter become an employee of the Company or another subsidiary
or Affiliate.

     In addition, certain other terms used herein have definitions given to them
in the first place in which they are used.

SECTION 2.  Administration.

     The Plan shall be administered by the Compensation Committee of the Board
or such other committee of the Board, composed of not less than two
Disinterested Persons, each of whom shall be appointed by and serve at the
pleasure of the Board. If at any time no Committee shall be in office, the
functions of the Committee specified in the Plan shall be exercised by the
Board.

     The Committee shall have plenary authority to grant Awards pursuant to the
terms of the Plan to officers, employees and directors of the Company and its
subsidiaries and Affiliates.

     Among other things, the Committee shall have the authority, subject to the
terms of the Plan:

     (a)  to select the officers, employees and directors to whom Awards may
from time to time be granted; provided that awards to non-employee directors may
be made only in accordance with Section 13;

     (b)  to determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights and Restricted Stock or
any combination thereof are to be granted hereunder;

     (c)  to determine the number of shares of Stock to be covered by each Award
granted hereunder;

     (d)  to determine the terms and conditions of any Award granted hereunder
(including, but not limited to, the option price (subject to Section 5(a)), any
vesting restriction or limitation and any vesting acceleration or forfeiture
waiver regarding any Award and the shares of Stock relating thereto, based on
such factors as the Committee shall determine);

     (e)  to modify, amend or adjust the terms and conditions of any Award, at
any time or from time to time, including, but not limited to, with respect to
performance goals and measurements applicable to performance-based Awards
pursuant to the terms of the Plan;

     (f)  to determine to what extent and under what circumstances Stock and
other amounts payable with respect to an Award shall be deferred; and

     (g)  to determine under what circumstances a Stock Option may be settled in
cash or Stock under Section 5(j).

     The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any agreement relating thereto)
and to otherwise supervise the administration of the Plan.

     The Committee may act only by a majority of its members then in office,
except that the members thereof may (i) delegate to an officer of the Company
the authority to make decisions pursuant to paragraphs (c), (f), (g), (h) and
(i) of Section 5 (provided that no such delegation may be made that would cause
Awards or other transactions under the Plan to cease to be exempt from
Section 16(b) of the Exchange Act) and (ii) authorize any one or more of their
number or any officer of the Company to execute and deliver documents on behalf
of the Committee.

     Any determination made by the Committee or pursuant to delegated authority
pursuant to the provisions of the Plan with respect to any Award shall be made
in the sole discretion of the Committee or such delegate at the time of the
grant of the Award or, unless in contravention of any express term of the Plan,
at any time thereafter. All decisions made by the Committee or any appropriately
delegated officer pursuant to the provisions of the Plan shall be final and
binding on all persons, including the Company and Plan participants.

SECTION 3.  Stock Subject to Plan.

     Subject to adjustment as provided herein, the total number of shares of
Stock of the Company available for grant under the Plan shall be 1,500,000;
provided that no "covered employee", as such term is defined in Section 162(m)
of the Code, shall be granted more than 100,000 shares of Stock in any taxable
year. Shares subject to an Award under the Plan may be authorized and unissued
shares or may be treasury shares.

     If any shares of Restricted Stock are forfeited for which the participant
did not receive any benefits of ownership (as such phrase is construed by the
Commission or its Staff), or if any Stock Option (and related Stock Appreciation
Right, if any) terminates without being exercised, or if any Stock Appreciation
Right is exercised for cash, shares subject to such Awards shall again be
available for distribution in connection with Awards under the Plan.

     In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, extraordinary distribution with
respect to the Stock or other change in corporate structure affecting the Stock,
the Committee or Board may make such substitution or adjustments in the
aggregate number and kind of shares reserved for issuance under the Plan, in the
number, kind and option price of shares subject to outstanding Stock Options and
Stock Appreciation Rights, in the number and kind of shares subject to other
outstanding Awards granted under the Plan and/or such other substitution or
adjustments in the consideration receivable upon exercise as it may determine to
be appropriate in its sole discretion; provided, however, that the number of
shares subject to any Award shall always be a whole number. Such adjusted option
price shall also be used to determine the amount payable by the Company upon the
exercise of any Stock Appreciation Right associated with any Stock Option.

SECTION 4.  Eligibility.

     Officers, employees and directors of the Company, its subsidiaries and
Affiliates who are responsible for or contribute to the management, growth and
profitability of the business of the Company, its subsidiaries and Affiliates
are eligible to be granted Awards under the Plan. Except as expressly authorized
by Section 13 of the Plan, however, no grant shall be made to a director who is
not an officer or a salaried employee.

SECTION 5.  Stock Options.

     Stock Options may be granted alone or in addition to other Awards granted
under the Plan and may be of two types: Incentive Stock Options and
Non-Qualified Stock Options. Any Stock Option granted under the Plan shall be in
such form as the Committee may from time to time approve.

     The Committee shall have the authority to grant any optionee Incentive
Stock Options, Non-Qualified Stock Options or both types of Stock Options (in
each case with or without Stock Appreciation Rights). Incentive Stock Options
may be granted only to employees of the Company and its subsidiaries (within the
meaning of Section 424(f) of the Code). To the extent that any Stock Option is
not designated as an Incentive Stock Option or even if so designated does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option.

     The Committee may authorize the Chief Executive Officer of the Corporation,
who need not be a Disinterested Person, to grant in any calendar year a
Non-Qualified Stock Option (with or without Stock Appreciation Rights) for up to
3,000 shares of Stock to any employee of the Company who is not an executive
officer of the Company subject to Section 16 of the Exchange Act. The Committee
may limit or qualify such authorization in any manner it deems appropriate.
Stock Options granted by the Chief Executive Officer shall have the terms and
conditions determined by the Committee and the Committee shall periodically
review such grants.

     Stock Options shall be evidenced by option agreements, the terms and
provisions of which may differ. An option agreement shall indicate on its face
whether it is intended to be an agreement for an Incentive Stock Option or a
NonQualified Stock Option. The grant of a Stock Option shall occur on the date
the Committee by resolution selects an individual to be a participant in any
grant of a Stock Option, determines the number of shares of Stock to be subject
to such Stock Option to be granted to such individual and specifies the terms
and provisions of the Stock Option. The Company shall notify a participant of
any grant of a Stock Option, and a written option agreement or agreements shall
be duly executed and delivered by the Company to the participant. Such agreement
or agreements shall become effective upon execution by the participant.

     Anything in the Plan to the contrary notwithstanding, no term of the Plan
relating to Incentive Stock Options shall be interpreted, amended or altered nor
shall any discretion or authority granted under the Plan be exercised so as to
disqualify the Plan under Section 422 of the Code or, without the consent of the
optionee affected, to disqualify any Incentive Stock Option under such
Section 422.

     Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions as
the Committee shall deem desirable:

     (a)  Option Price.  The option price per share of Stock purchasable under a
Stock Option shall be determined by the Committee and set forth in the option
agreement, and shall not be less than the Fair Market Value of the Stock subject
to the Stock Option on the date of grant, except that any Stock Options granted
on the effective date of the Company's initial public offering of Common Stock
shall have an option price per share equal to the price per share paid by the
public in such offering.

     (b)  Option Term.  The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than 10 years after the
date the Stock Option is granted.

     (c)  Exercisability.  Except as otherwise provided herein, Stock Options
shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee. If the Committee provides
that any Stock Option is exercisable only in installments, the Committee may at
any time waive such installment exercise provisions, in whole or in part, based
on such factors as the Committee may determine. In addition, the Committee may
at any time, in whole or in part, accelerate the exercisability of any Stock
Option.

     (d)  Method of Exercise.  Subject to the provisions of this Section 5,
Stock Options may be exercised, in whole or in part, at any time during the
option term by giving written notice of exercise to the Company specifying the
number of shares of Stock subject to the Stock Option to be purchased.

     The option price of Stock to be purchased upon exercise of any Option shall
be paid in full in cash (by certified or bank check or such other instrument as
the Company may accept) or, if and to the extent set forth in the option
agreement, may also be paid by one or more of the following: (i) in the form of
unrestricted Stock already owned by the optionee (and, in the case of the
exercise of a Non-Qualified Stock Option, Restricted Stock subject to an Award
hereunder) based in any such instance on the Fair Market Value of the Stock on
the date the Stock Option is exercised; provided, however, that, in the case of
an Incentive Stock Option, the right to make a payment in the form of already
owned shares of Stock may be authorized only at the time the Stock Option is
granted; (ii) by requesting the Company to withhold from the number of shares of
Stock otherwise issuable upon exercise of the Stock Option that number of shares
having an aggregate fair market value on the date of exercise equal to the
exercise price for all of the shares of Stock subject to such exercise; or
(iii) by a combination thereof, in each case in the manner provided in the
option agreement.

     In the discretion of the Committee, payment for any shares subject to a
Stock Option may also be made by delivering a properly executed exercise notice
to the Company, together with a copy of irrevocable instructions to a broker to
deliver promptly to the Company the amount of sale or loan proceeds to pay the
purchase price. To facilitate the foregoing, the Company may enter into
agreements for coordinated procedures with one or more brokerage firms.

     If payment of the option exercise price of a Non-Qualified Stock Option is
made in whole or in part in the form of Restricted Stock, the number of shares
of Stock to be received upon such exercise equal to the number of shares of
Restricted Stock used for payment of the option exercise price shall be subject
to the same forfeiture restrictions to which such Restricted Stock was subject,
unless otherwise determined by the Committee.

     No shares of Stock shall be issued until full payment therefor has been
made. Subject to any forfeiture restrictions that may apply if a Stock Option is
exercised using Restricted Stock, an optionee shall have all of the rights of a
stockholder of the Company holding the Stock that is subject to such Stock
Option (including, if applicable, the right to vote the shares and the right to
receive dividends), when the optionee has given written notice of exercise, has
paid in full for such shares and, if requested, has given the representation
described in Section 11(a).

     (e)  Non-transferability of Stock Options.  No Stock Option shall be
transferable by the optionee other than (i) by will or by the laws of descent
and distribution or (ii) in the case of a Non-Qualified Stock Option, pursuant
to a qualified domestic relations order (as defined in the Code or Title I of
the Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder). All Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee or by the guardian or legal representative of the
optionee or, in the case of a Non-Qualified Stock Option, its alternate payee
pursuant to such qualified domestic relations order, it being understood that
the terms "holder" and "optionee" include the guardian and legal representative
of the optionee named in the option agreement and any person to whom an option
is transferred by will or the laws of descent and distribution or, in the case
of a Non-Qualified Stock Option, pursuant to a qualified domestic relations
order.

     (f)  Termination by Death.  If an optionee's employment terminates by
reason of death, any Stock Option held by such optionee may thereafter be
exercised, to the extent then exercisable, or on such accelerated basis as the
Committee may determine, for a period of one year (or such other period as the
Committee may specify in the option agreement) from the date of such death or
until the expiration of the stated term of such Stock Option, whichever period
is the shorter. In the event of termination of employment due to death, if an
Incentive Stock Option is exercised after the expiration of the exercise periods
that apply for purposes of Section 422 of the Code, such Stock Option will
thereafter be treated as a Non-Qualified Stock Option.

     (g)  Termination by Reason of Disability.  If an optionee's employment
terminates by reason of Disability, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable at the
time of termination, or on such accelerated basis as the Committee may
determine, for a period of three years (or such shorter period as the Committee
may specify in the option agreement) from the date of such termination of
employment or until the expiration of the stated term of such Stock Option,
whichever period is the shorter; provided, however, that if the optionee dies
within such three-year period (or such shorter period), any unexercised Stock
Option held by such optionee shall, notwithstanding the expiration of such
three-year (or such shorter) period, continue to be exercisable to the extent to
which it was exercisable at the time of death for a period of 12 months from the
date of such death or until the expiration of the stated term of such Stock
Option, whichever period is the shorter. In the event of termination of
employment by reason of Disability, if an Incentive Stock Option is exercised
after the expiration of the exercise periods that apply for purposes of
Section 422 of the Code, such Stock Option will thereafter be treated as a
Non-Qualified Stock Option.

     (h)  Termination by Reason of Retirement.  If an optionee's employment
terminates by reason of Retirement, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable at the
time of such Retirement or on such accelerated basis as the Committee may
determine, for a period of three years (or such shorter period as the Committee
may specify in the option agreement) from the date of such termination of
employment or until the expiration of the stated term of such Stock Option,
whichever period is the shorter; provided, however, that if the optionee dies
within such three-year (or such shorter) period, any unexercised Stock Option
held by such optionee shall, notwithstanding the expiration of such three-year
(or such shorter) period, continue to be exercisable to the extent to which it
was exercisable at the time of death for a period of 12 months from the date of
such death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter. In the event of termination of employment by
reason of Retirement, if an Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of Section 422 of the
Code, such Stock Option will thereafter be treated as a NonQualified Stock
Option.

     (i)  Other Termination.  Unless otherwise determined by the Committee, if
an optionee incurs a Termination of Employment for any reason other than death,
Disability or Retirement, any Stock Option held by such Optionee shall thereupon
terminate, except that such Stock Option, to the extent then exercisable, or on
such accelerated basis as the Committee may determine, may be exercised for the
lesser of one year from the date of such Termination of Employment or the
balance of such Stock Option's term if such Termination of Employment of the
optionee is involuntary and without Cause; provided, however, that if the
optionee dies within such one-year period, any unexercised Stock Option held by
such optionee shall notwithstanding the expiration of such one-year period,
continue to be exercisable to the extent to which it was exercisable at the time
of death for a period of 12 months from the date of such death or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter. In the event of Termination of Employment for any reason other than
death, Disability or Retirement, if an Incentive Stock Option is exercised after
the expiration of the exercise periods that apply for purposes of Section 422 of
the Code, such Stock Option will thereafter be treated as a Non-Qualified Stock
Option. Unless otherwise determined by the Committee, for the purposes of the
Plan "Cause" shall mean (i) the conviction of the optionee for committing a
felony under Federal law or the law of the state in which such action occurred,
(ii) dishonesty in the course of fulfilling the optionee's employment duties or
(iii) willful and deliberate failure on the part of the optionee to perform his
employment duties in any material respect.

     (j)  Cashing Out of Stock Option.  On receipt of written notice of
exercise, the Committee may elect to cash out all or part of the portion of the
shares of Stock for which a Stock Option is being exercised by paying the
optionee an amount, in cash or Stock, equal to the excess of the Fair Market
Value of the Stock over the option price times the number of shares of Stock for
which to the Option is being exercised on the effective date of such cash out.

     Cash outs pursuant to this Section 5(j) relating to options held by
optionees who are actually or potentially subject to Section 16(b) of the
Exchange Act shall comply with the "window period" provisions of Rule 16b-3(e),
to the extent applicable, and, in the case of cash outs of Non-Qualified Stock
Options held by such optionees, the Committee may determine Fair Market Value
under the pricing rule set forth in Section 6(b)(ii)(2).

     (k)  Change in Control Cash Out.  Notwithstanding any other provision of
the Plan, during the 60-day period from and after a Change in Control (the
"Exercise Period"), unless the Committee shall determine otherwise at the time
of grant, an optionee shall have the right, whether or not the Stock Option is
fully exercisable and in lieu of the payment of the exercise price for the
shares of Stock being purchased under the Stock Option and by giving notice to
the Company, to elect (within the Exercise Period) to surrender all or part of
the Stock Option to the Company and to receive cash, within 30 days of such
notice, in an amount equal to the amount by which the Change in Control Price
per share of Stock on the date of such election shall exceed the exercise price
per share of Stock under the Stock Option (the "Spread") multiplied by the
number of shares of Stock granted under the Stock Option as to which the right
granted under this Section 5(k) shall have been exercised; provided, however,
that if the Change in Control is within six months of the date of grant of a
particular Stock Option held by an optionee who is an officer or director of the
Company and is subject to Section 16(b) of the Exchange Act no such election
shall be made by such optionee with respect to such Stock Option prior to six
months from the date of grant. Notwithstanding any other provision hereof, if
the end of such 60-day period from and after a Change in Control is within six
months of the date of grant of a Stock Option held by an optionee who is an
officer or director of the Company and is subject to Section 16(b) of the
Exchange Act, such Stock Option shall be cancelled in exchange for a cash
payment to the optionee, effected on the day which is six months and one day
after the date of grant of such Option, equal to the Spread multiplied by the
number of shares of Stock granted under the Stock Option.

SECTION 6.  Stock Appreciation Rights.

     (a)  Grant and Exercise.  Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of grant of such Stock Option. In the case of an Incentive Stock
Option, such rights may be granted only at the time of grant of such Stock
Option. A Stock Appreciation Right shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option.

     A Stock Appreciation Right may be exercised by an optionee in accordance
with Section 6(b) by surrendering the applicable portion of the related Stock
Option in accordance with procedures established by the Committee. Upon such
exercise and surrender, the optionee shall be entitled to receive an amount
determined in the manner prescribed in Section 6(b). Stock Options which have
been so surrendered shall no longer be exercisable to the extent the related
Stock Appreciation Rights have been exercised.

     (b)  Terms and Conditions.  Stock Appreciation Rights shall be subject to
such terms and conditions as shall be determined by the Committee, including the
following:

          (i)  Stock Appreciation Rights shall be exercisable only at such time
     or times and to the extent that the Stock Options to which they relate are
     exercisable in accordance with the provisions of Section 5 and this
     Section 6.

          (ii)  Upon the exercise of a Stock Appreciation Right, an optionee
     shall be entitled to receive an amount in cash, shares of Stock or both
     equal in value to the excess of the Fair Market Value of one share of Stock
     over the option price per share specified in the related Stock Option
     multiplied by the number of shares in respect of which the Stock
     Appreciation Right shall have been exercised, with the Committee having the
     right to determine the form of payment.

          In the case of Stock Appreciation Rights relating to Stock Options
     held by optionees who are actually or potentially subject to Section 16(b)
     of the Exchange Act, the Committee:

               (1)  may require that such Stock Appreciation Rights be exercised
          for cash only in accordance with the applicable "window period"
          provisions of Rule 16b-3; and

               (2)  in the case of Stock Appreciation Rights relating to
          Non-Qualified Stock Options, may provide that any amount to be paid in
          cash upon exercise of such Stock Appreciation Rights during a
          Rule 16b-3 "window period" shall be based on the highest of the daily
          means between the highest and lowest reported sales prices of the
          Stock on the New York Stock Exchange or other national securities
          exchange on which the shares are listed or on NASDAQ, as applicable,
          occurring during such "window period".

          (iii)  Stock Appreciation Rights shall be transferable only to
     permitted transferees of the underlying Stock Option in accordance with
     Section 5(e).

SECTION 7.  Restricted Stock.

     (a)  Administration.  Shares of Restricted Stock may be awarded either
alone or in addition to other Awards granted under the Plan. The Committee shall
determine the officers and employees to whom and the time or times at which
grants of Restricted Stock will be awarded, the number of shares to be awarded
to any participant, the time or times within which such Awards may be subject to
forfeiture and any other terms and conditions of the Awards, in addition to
those contained in Section 7(c).

     The Committee may condition the grant of Restricted Stock upon the
attainment of specified performance goals of the participant or of the Company
or subsidiary, division or department of the Company for or within which the
participant is primarily employed or upon such other factors or criteria as the
Committee shall determine. The provisions of Restricted Stock Awards need not be
the same with respect to each recipient.

     (b)  Awards and Certificates.  Shares of Restricted Stock shall be
evidenced in such manner as the Committee may deem appropriate, including
book-entry registration or issuance of one or more stock certificates. Any
certificate issued in respect of shares of Restricted Stock shall be registered
in the name of such participant and shall bear an appropriate legend referring
to the terms, conditions, and restrictions applicable to such Award,
substantially in the following form:

          "The transferability of this certificate and the shares of stock
          represented hereby are subject to the terms and conditions (including
          forfeiture) of the 1993 Stock Incentive Plan and a Restricted Stock
          Agreement. Copies of such Plan and Agreement are on file at the
          offices of Borg-Warner Automotive, Inc., 200 South Michigan Avenue,
          Chicago, Illinois 60604."

The Committee may require that the certificates evidencing such shares be held
in custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any Award of Restricted Stock, the participant shall
have delivered a stock power, endorsed in blank, relating to the Stock covered
by such Award.

     (c)  Terms and Conditions.  Shares of Restricted Stock shall be subject to
the following terms and conditions:

          (i)  Subject to the provisions of the Plan and the Restricted Stock
     Agreement referred to in Section 7(c)(vi), during a period set by the
     Committee, commencing with the date of such Award (the "Restriction
     Period"), the participant shall not be permitted to sell, assign, transfer,
     pledge or otherwise encumber shares of Restricted Stock. The Committee may
     provide for the lapse of such restrictions in installments or otherwise and
     may accelerate or waive such restrictions, in whole or in part, in each
     case based on period of service, performance of the participant or of the
     Company or the subsidiary, division or department for which the participant
     is employed or such other factors or criteria as the Committee may
     determine.

          (ii)  Except as provided in this paragraph (ii) and Section 7(c)(i)
     and the Restricted Stock Agreement, the participant shall have, with
     respect to the shares of Restricted Stock, all of the rights of a
     stockholder of the Company holding the class or series of Stock that is the
     subject of the Restricted Stock, including, if applicable, the right to
     vote the shares and the right to receive any cash dividends. If so
     determined by the Committee in the applicable Restricted Stock Agreement
     and subject to Section 11(f) of the Plan, (1) cash dividends on the shares
     of Stock that are the subject of the Restricted Stock Award shall be
     automatically deferred and reinvested in additional Restricted Stock, and
     (2) dividends payable in Stock shall be paid in the form of Restricted
     Stock.

          (iii)  Except to the extent otherwise provided in the applicable
     Restricted Stock Agreement and Sections 7(c)(i), 7(c)(iv) and 8(a)(ii),
     upon a participant's Termination of Employment for any reason during the
     Restriction Period, all shares still subject to restriction shall be
     forfeited by the participant.

          (iv)  Except to the extent otherwise provided in Section 8(a)(ii), in
     the event of an involuntary Termination of Employment of a participant for
     any reason (other than for Cause), the Committee shall have the discretion
     to waive in whole or in part any or all remaining restrictions with respect
     to any or all of such participant's shares of Restricted Stock.

          (v)  If and when the Restriction Period expires without a prior
     forfeiture of the Restricted Stock subject to such Restriction Period,
     unlegended certificates for such shares shall be delivered to the
     participant.

          (vi)  Each Award shall be confirmed by, and be subject to the terms
     of, a Restricted Stock Agreement.

SECTION 8.  Change In Control Provisions.

     (a)  Impact of Event.  Notwithstanding any other provision of the Plan to
the contrary, in the event of a Change in Control:

          (i)  Any Stock Options and Stock Appreciation Rights outstanding as of
     the date such Change in Control is determined to have occurred and not then
     exercisable and vested shall become fully exercisable and vested to the
     full extent of the original grant.

          (ii)  The restrictions applicable to any Restricted Stock shall lapse,
     and such Restricted Stock shall become free of all restrictions and become
     fully vested and transferable to the full extent of the original grant.

     (b)  Definition of Change in Control.  For purposes of the Plan, a "Change
in Control" shall mean the happening of any of the following events:

          (i)  The acquisition by any individual, entity or group (within
     the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act )(a
     "Person ") of beneficial ownership (within the meaning of Rule 13d-3
     promulgated under the Exchange Act) of 20% or more of either (A) the
     then outstanding shares of common stock of the Company (the
     "Outstanding Company Common Stock") or (B) the combined voting power
     of the then outstanding voting securities of the Company entitled to
     vote generally in the election of directors (the "Outstanding Company
     Voting Securities"); provided, however, that for purposes of this
     subsection (b), the following acquisitions shall not constitute a
     Change in Control: (W) any acquisition directly from the Company, (X)
     any acquisition by the Company, (Y) any acquisition by any employee
     benefit plan (or related trust) sponsored or maintained by the Company
     or any corporation controlled by the Company, or (Z) any acquisition
     by any corporation pursuant to a transaction which complies with
     clauses (A), (B) and (C) of subsection (iii) of this Section 8(b); or

          (ii) Individuals who, as of the date hereof, constitute the Board
     (the "Incumbent Board") cease for any reason to constitute at least a
     majority of the Board; provided, however, that any individual becoming
     a director subsequent to the date hereof whose election, or nomination
     for election by the Company's shareholders, was approved by a vote of
     at least a majority of the directors then comprising the Incumbent
     Board shall be considered as though such individual were a member of
     the Incumbent Board, but excluding, for this purpose, any such
     individual whose initial assumption of office occurs as a result of an
     actual or threatened election contest with respect to the election or
     removal of directors or other actual or threatened solicitation of
     proxies or consents by or on behalf of a Person other than the Board;
     or

          (iii)     Consummation by the Company of a reorganization, merger
     or consolidation or sale or other disposition of all or substantially
     all of the assets of the Company or the acquisition of assets of
     another corporation (each of the foregoing, a "Business Combination"),
     in each case, unless, following such Business Combination, (A) all or
     substantially all of the individuals and entities who were the
     beneficial owners, respectively, of the Outstanding Company Common
     Stock and Outstanding Company Voting Securities immediately prior to
     such Business Combination beneficially own, directly or indirectly,
     more than 60% of, respectively, the then outstanding shares of common
     stock and the combined voting power of the then outstanding voting
     securities entitled to vote generally in the election of directors, as
     the case may be, of the corporation resulting from such Business
     Combination (including, without limitation, a corporation which as a
     result of such transaction owns the Company or all or substantially
     all of the Company's assets either directly or through one or more
     subsidiaries) in substantially the same proportions as their
     ownership, immediately prior to such Business Combination of the
     Outstanding Company Common Stock and Outstanding Company Voting
     Securities, as the case may be, (B) no Person (excluding any employee
     benefit plan (or related trust) of the Company or such corporation
     resulting from such Business Combination) beneficially owns, directly
     or indirectly, 20% or more of, respectively, the then outstanding
     shares of common stock of the corporation resulting from such Business
     Combination or the combined voting power of the then outstanding
     voting securities of such corporation except to the extent that such
     ownership existed prior to the Business Combination and (C) at least a
     majority of the members of the board of directors of the corporation
     resulting from such Business Combination were members of the Incumbent
     Board at the time of the execution of the initial agreement, or of the
     action of the Board, providing for such Business Combination; or

          (iv)      Approval by the shareholders of the Company of a complete
     liquidation or dissolution of the Company.

     (c)  Change in Control Price. For purposes of the Plan, "Change in Control
Price" means the higher of (i) the highest reported sales price, regular way, of
a share of Common Stock in any transaction reported on the New York Stock
Exchange Composite Tape or other national exchange on which such shares are
listed or on NASDAQ during the 60-day period prior to and including the date of
a Change in Control or (ii) if the Change in Control is the result of a tender
or exchange offer or a Business Combination, the highest price per share of
Common Stock paid in such tender or exchange offer or Business Combination;
provided, however, that (X) in the case of a Stock Option which (I) is held by
an optionee who is an officer or director of the Company and is subject to
Section 16(b) of the Exchange Act and (II) was granted within 240 days of the
Change in Control, then the Change in Control Price for such Stock Option shall
be the Fair Market Value of the Stock on the date such Stock Option is exercised
or cancelled and (Y) in the case of Incentive Stock Options and Stock
Appreciation Rights relating to Incentive Stock Options, the Change in Control
Price shall be in all cases the Fair Market Value of the Stock on the date such
Incentive Stock Option or Stock Appreciation Right is exercised. To the extent
that the consideration paid in any such transaction described above consists all
or in part of securities or other non-cash consideration, the value of such
securities or other non-cash consideration shall be determined in the sole
discretion of the Board.

SECTION 9.  Term, Amendment and Termination.

     The Plan will terminate on December 31, 2003. Under the Plan, Awards
outstanding as of December 31, 2003 shall not be affected or impaired by the
termination of the Plan.

     The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would (i) impair the rights of
an optionee under a Stock Option or a recipient of a Stock Appreciation Right or
Restricted Stock Award theretofore granted without the optionee's or recipient's
consent, except such an amendment made to cause the Plan to qualify for the
exemption provided by Rule 16b-3, or (ii) disqualify the Plan from the exemption
provided by Rule 16b-3. In addition, no such amendment shall be made without the
approval of the Company's stockholders to the extent such approval is required
by law or agreement.

     The Committee may amend the terms of any Stock Option or other Award
theretofore granted, prospectively or retroactively, but no such amendment shall
impair the rights of any holder without the holder's consent except such an
amendment made to cause the Plan or Award to qualify for the exemption provided
by Rule 16b-3. The Committee may also substitute new Stock Options for
previously granted Stock Options, including previously granted Stock Options
having higher option prices.

     Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in law and tax and accounting rules, as
well as other developments and to grant Awards which qualify for beneficial
treatment under such rules without stockholder approval.

SECTION 10.  Unfunded Status of Plan.

     It is presently intended that the Plan constitute an "unfunded" plan for
incentive and deferred compensation. The Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Stock or make payments; provided, however, that, unless the Committee
otherwise determines, the existence of such trusts or other arrangements is
consistent with the "unfunded" status of the Plan.

SECTION 11.  General Provisions.

     (a)  The Committee may require each person purchasing or receiving shares
pursuant to an Award to represent to and agree with the Company in writing that
such person is acquiring the shares without a view to the distribution thereof.
The certificates for such shares may include any legend which the Committee
deems appropriate to reflect any restrictions on transfer.

     All certificates for shares of Stock or other securities delivered under
the Plan shall be subject to such stock transfer orders and other restrictions
as the Committee may deem advisable under the rules, regulations and other
requirements of the Commission, any stock exchange upon which the Stock is then
listed and any applicable Federal or state securities law, and the Committee may
cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

     (b)  Nothing contained in the Plan shall prevent the Company or any
subsidiary or Affiliate from adopting other or additional compensation
arrangements for its employees.

     (c)  The adoption of the Plan shall not confer upon any employee any right
to continued employment nor shall it interfere in any way with the right of the
Company or any subsidiary or Affiliate to terminate the employment of any
employee at any time.

     (d)  No later than the date as of which an amount first becomes includible
in the gross income of the participant for Federal income tax purposes with
respect to any Award under the Plan, the participant shall pay to the Company,
or make arrangements satisfactory to the Company regarding the payment of, any
Federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount. Unless otherwise determined by the
Committee, withholding obligations may be settled with Stock, including Stock
that is part of the Award that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditional on such payment
or arrangements, and the Company, its Subsidiaries and its Affiliates shall, to
the extent permitted by law, have the right to deduct any such taxes from any
payment otherwise due to the participant. The Committee may establish such
procedures as it deems appropriate, including the making of irrevocable
elections, for the settlement of withholding obligations with Stock.

     (e)  At the time of grant, the Committee may provide in connection with any
grant made under the Plan that the shares of Stock received as a result of such
grant shall be subject to a right of first refusal pursuant to which the
participant shall be required to offer to the Company any shares that the
participant wishes to sell at the then Fair Market Value of the Stock, subject
to such other terms and conditions as the Committee may specify at the time of
grant.

     (f)  The reinvestment of dividends in additional Restricted Stock at the
time of any dividend payment shall only be permissible if sufficient shares of
Stock are available under Section 3 for such reinvestment (taking into account
then outstanding Stock Options and other Awards).

     (g)  The Committee shall establish such procedures as it deems appropriate
for a participant to designate a beneficiary to whom any amounts payable in the
event of the participant's death are to be paid.

     (h)  The Plan and all Awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Delaware.

SECTION 12.  Effective Date of Plan.

     The Plan shall be effective on the date it is approved by the shareholders
of the Company.

SECTION 13.  Director Stock Options.

     (a)  Each director of the Company who is not otherwise an employee of the
Company or any Affiliate from and after August 1, 1993 shall, on the third
Tuesday of each year during such director's term, automatically be granted
Non-Qualified Stock Options to purchase 2,000 shares of Stock having an exercise
price per share equal to 100% of the Fair Market Value of the Stock at the date
of grant of such Non-Qualified Stock Option. Each such director, upon joining
the Board, shall also be awarded an initial grant of Non-Qualified Stock Options
to purchase 2,000 shares of Stock having an exercise price equal to 100% of the
Fair Market Value of the Stock as of such date.

     (b)  An automatic director Stock Option shall be granted hereunder only if
as of each date of grant (or, in the case of any initial grant, from and after
the effective date of the Plan) the director (i) is not otherwise an employee of
the Company, any Affiliate or Merrill Lynch Capital Partners, Inc., (ii) has not
been an employee of the Company or any subsidiary for any part of the preceding
fiscal year, and (iii) has served on the Board continuously since the
commencement of his term.

     (c)  Each holder of a Stock Option granted pursuant to this Section 13
shall also have the rights specified in Section 5(k).

     (d)  In the event that the number of shares of Stock available for future
grant under the Plan is insufficient to make all automatic grants required to be
made on such date, then all non-employee directors entitled to a grant on such
date shall share ratably in the number of options on shares available for grant
under the Plan.

     (e)  The provisions of paragraph (a) of this Section 13 may not be amended
more often than once every six months. Except as expressly provided in this
Section 13, any Stock Option granted hereunder shall be subject to the terms and
conditions of the Plan as if the grant were made pursuant to Section 5 hereof.FOURTH AMENDMENT
                             Dated as of April 13, 2001
                                         to
                  Amended and Restated Receivables Loan Agreement
                Amended and Restated Receivables Purchase Agreement
                    Amended and Restated Subordination Agreement
                       Amended and Restated Limited Guaranty
                         each Dated as of December 23, 1998

THIS AMENDMENT (the "Amendment"), dated as of April 13, 2001, is entered into
among BWA Receivables Corporation (the "Borrower"), BorgWarner Inc. ( "BWI" and
in its capacity as Collection Agent, the "Collection Agent"), BorgWarner
Diversified Transmission Products Inc. ("DTP"), BorgWarner Air/Fluid Systems
Inc. ("AFS"), BorgWarner Morse TEC Inc. ("TEC"), BorgWarner Transmission Systems
Inc. ("TS"), BorgWarner TorqTransfer Systems Inc. ("TTS"), BorgWarner Turbo
Systems Inc. ("Turbo"), BorgWarner Fuel Systems Inc. ("Fuel"), and BorgWarner
Cooling Systems Inc. ("CSC"), Windmill Funding Corporation, a Delaware
corporation ("Windmill"), ABN AMRO Bank N.V., as Windmill's program letter of
credit provider (the "Program LOC Provider"), the Bank listed on the signature
page hereof (the "Bank") and ABN AMRO Bank N.V., as agent for Windmill, the
Program LOC Provider and the Banks (the "Agent").

Reference is hereby made to (i) that certain Amended and Restated Receivables
Loan Agreement, dated as of December 23, 1998 (as amended, supplemented or
otherwise modified through the date hereof, the  "Loan Agreement"), among the
Borrower, the Collection Agent, Windmill, the Program LOC Provider, the Bank and
the Agent, (ii) that certain Amended and Restated Receivables Purchase
Agreement, dated as of December 23, 1998 (as amended, supplemented or otherwise
modified through the date hereof, the  "Purchase Agreement"), among DTP, AFS,
TEC, TS, TTS, Turbo, Fuel, Cooling and the Borrower, (iii) that certain Amended
and Restated Limited Guaranty, dated as of December 23, 1998 (as amended,
supplemented or otherwise modified through the date hereof, the  "guaranty"), by
BWI, DTP, AFS, TEC, TS, TTS, Turbo, Fuel and Cooling in favor of the Borrower
and (iv) that certain Amended and Restated Subordination Agreement, dated as of
December 23, 1998 (as amended, supplemented or otherwise modified through the
date hereof, the "Subordination Agreement"), among DTP, AFS, TEC, TS, TTS,
Turbo, Fuel Cooling, the Borrower and Agent (each of the Loan Agreement,
Purchase Agreement, Guaranty and Subordination Agreement being referred to
herein individually as an  "Amended Agreement" and collectively as the "Amended
Agreements").  Terms used herein and not otherwise defined herein which are
defined in each Amended Agreement or the other Transaction Documents (as defined
in the Loan Agreement) shall have the same meaning herein as defined therein.

     For good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:

     SECTION 1. AMENDMENTS TO LOAN AGREEMENT.  Subject to the following terms
and conditions, including without limitation the conditions precedent set forth
in Section 5, upon execution by the parties hereto in the space provided for
that purpose below, the Loan Agreement shall be, and it hereby is, amended as
follows:

     (a) The defined term  ""Originator "" appearing in Section 1.1 of the Loan
Agreement is amended in its entirety to be and to read as follows:

     " "Originator "" shall mean each of the following Delaware corporations:
BorgWarner Diversified Transmission Products Inc.; BorgWarner Air/Fluid Systems
Inc.; BorgWarner Morse TEC Inc.; BorgWarner Transmission Systems Inc.;
BorgWarner TorqTransfer Systems Inc.; BorgWarner Turbo Systems Inc. And
BorgWarner Cooling Systems Inc.

     (b) Exhibit C, Exhibit G and Exhibit H to the Loan Agreement are each
amended in their entirety to be and to read as set forth on Annex I hereto.

     SECTION 2. AMENDMENTS TO PURCHASE AGREEMENT. Subject to the following terms
and conditions, including without limitation the conditions precedent set forth
in Section 5, upon execution by the parties hereto in the space provided for
that purpose below, the Purchase Agreement shall be, and it hereby is, amended
as follows:

     (a)  The first paragraph of the Purchase Agreement is amended in its
entirety to be and to read as follows:

          " "Amended and Restated Receivables Purchase Agreement (this "
"Agreement ""), dated as of December 23, 1998, by and among BorgWarner
Diversified Transmission Products Inc. (" "DTP ""), BorgWarner Air/Fluid Systems
Inc. (" "AFS ""), BorgWarner Morse TEC Inc. (" "TEC ""), BorgWarner Transmission
Systems Inc. (" "TS ""), BorgWarner TorqTransfer Systems Inc. (" "TTS ""),
BorgWarner Turbo Systems Inc. (" "Turbo "") and BorgWarner Cooling Systems Inc.
(" "CSC "" and collectively with DTP, AFS, TEC,
TTS, TS and Turbo, the " "Sellers
"") and BWA Receivables Corporation (the " "Purchaser "")."

     (b)  Exhibit D and Exhibit E to the Purchase Agreement are each amended in
their entirety to be and to read as set forth on Annex II hereto.

     SECTION 3. AMENDMENT TO GUARANTY. Subject to the following terms and
conditions, including without limitation the conditions precedent set forth in
Section 5, upon execution of the parties hereto in the space provided for that
purpose below, the Guaranty shall be, and it hereby is, amended by amending in
its entirety the first paragraph of the Guaranty to be and to read as follows:

      "Amended and Restated Limited Guaranty (this  "Guaranty), dated as of
December 23, 1998, made by BorgWarner Inc. ("BWI"), BorgWarner Diversified
Transmission Products Inc. ("DTP"), BorgWarner Air/Fluid Systems Inc. ("AFS"),
BorgWarner Morse TEC Inc. ("TEC"), BorgWarner Transmission Systems Inc. ("TS"),
BorgWarner TorqTransfer Systems Inc. ("TTS"), BorgWarner Turbo Systems Inc. (
"Turbo") and BorgWarner Cooling Systems Inc. ("CSC" and collectively with DTP,
AFS, TEC, TS, Turbo, and Fuel the "Originators" and collectively with BWI, DTP,
AFS, TEC, TTS, TS and Turbo the "Guarantors"), in favor of BWA Receivables
Corporation (the "Beneficiary")."

     SECTION 4.  AMENDMENT TO SUBORDINATION AGREEMENT.  Subject to the following
terms and conditions, including without limitation the conditions precedent set
forth in Section 5, upon execution by the parties hereto in the space provided
for that purpose below, the Subordination Agreement shall be, and it hereby is,
amended by amending in its entirety the first paragraph of the Subordination
Agreement to be and to read as follows:

     "Amended and Restated Subordination Agreement (this "Subordination
Agreement"), dated as of December 23, 1998, by and among BorgWarner Inc.
("BWC"), BorgWarner Diversified Transmission Products Inc. ("DTP"), BorgWarner
Air/Fluid Systems Inc. ("AFS"), BorgWarner Morse TEC Inc. ("TEC "), BorgWarner
Transmission Systems Inc. ("TS"), BorgWarner TorqTransfer Systems Inc. ("TTS"),
BorgWarner Turbo Systems Inc. ("Turbo") and BorgWarner Cooling Systems Inc.
("CSC" and collectively with DTP, AFS, TEC, TS, TTS and Turbo the  "Subordinated
Creditors "), BWA Receivables Corporation (the "Borrower"), and ABN AMRO Bank
N.V., as agent for the Lenders (as defined below) (in such capacity, the  "Agent
"), for the benefit of the Agent and the Lenders (the Agent and the Lenders
being collectively referred to herein as the  "Senior Creditors "). "

     SECTION 5.     The effectiveness of this Amendment is subject to the
satisfaction of all of the following conditions precedent:

     (a)  Each of the parties hereto shall have accepted this Amendment in the
spaces provided for that purpose below.

     (b)  All other legal matters incident to the execution and delivery hereof
and to the transactions contemplated hereby shall be satisfactory to the Agent.

     SECTION 6.     Each Amended Agreement, as amended and supplemented hereby
or as contemplated herein, and all rights and powers created thereby and
thereunder or under the other Transaction Documents and all other documents
executed in connection therewith, are in all respects ratified and confirmed.
From and after the date hereof, each Amended Agreement shall be amended and
supplemented as herein provided, and, except as so amended and supplemented,
each Amended Agreement, each of the other Transaction Documents and all other
documents executed in connection therewith shall remain in full force and
effect.

     SECTION 7.     This Amendment may be executed in two or more counterparts,
each of which shall constitute an original but both or all of which, when taken
together, shall constitute but one instrument.

     SECTION 8.     This Amendment shall be governed and construed in accordance
with the internal laws of the State of Illinois.

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and
delivered by their duly authorized officers as of the date first above written.

                         ABN AMRO BANK N.V. as the Agent, as a
                         Bank and as the Program LOC Provider

                         By:
                         Title:

                         WINDMILL FUNDING CORPORATION

                         BWA RECEIVABLES CORPORATION

                         BORGWARNER INC.

                         BORGWARNER DIVERSIFIED TRANSMISSION PRODUCTS INC.

                         BORGWARNER AIR/FLUID SYSTEMS INC.

                         BORGWARNER MORSE TEC INC.

                         BORGWARNER TRANSMISSION SYSTEMS INC.

                         BORGWARNER TORQTRANSFER SYSTEMS INC.

                         BORGWARNER TURBO SYSTEMS INC.

                         BORGWARNER FUEL SYSTEMS INC.
                         BORGWARNER COOLING SYSTEMS INC.

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