BorgWarner
Inc.
|
(Name
of Registrant as Specified In its Charter)
|
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
|
[x]
|
No
fee required.
|
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
|
||
(1) Title
of each class of securities to which transaction applies:
|
||
(2) Aggregate
number of securities to which transaction applies:
|
||
(3) Per
unit or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth in the amount on which the filing fee is
calculated and state how it was determined):
|
||
(4) Proposed
maximum aggregate value of transaction:
|
||
(5) Total
fee paid:
|
||
(1) Amount
Previously Paid:
|
||
(2) Form,
Schedule or Registration Statement No.:
|
||
(3) Filing
Party:
|
||
(4) Date
Filed:
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||
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1.
|
To
elect four nominees for Class II Directors to serve for the next
three years;
|
|
2.
|
To
ratify the appointment of PricewaterhouseCoopers LLP as the independent
registered public accounting firm for the Company for 2010;
and
|
|
3.
|
To
transact such other business as may properly come before the meeting or
any adjournment or postponement
thereof.
|
By Order of the Board of Directors | ||
|
/s/ John J. Gasparovic | |
John J. Gasparovic | ||
Secretary | ||
·
|
Internet: Access
the internet, go to www.proxyvote.com
and follow the enrollment
instructions.
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·
|
Telephone: Call
us free of charge at 1-800-690-6903 from within the United States or
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|
·
|
E-mail: Send
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|
·
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To
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·
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To
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|
·
|
If
you received a paper copy of a proxy card or voter instruction form, you
can mark, sign and date the proxy card and return it in the envelope that
was provided to you.
|
Class
1 Directors
|
Age
|
Principal
Occupation
and
Directorships
|
Phyllis
O. Bonanno
1999
|
66
|
Ms.
Bonanno retired from International Trade Solutions Inc. on September 1,
2009. She served as President and CEO of International Trade
Solutions, Inc., an international trade consulting firm, since March 2002.
She was the President of TradeBuilders, Inc. from October 2000 until
October 2001. She was President of Columbia College from July 1997 until
March 2000. She is also a director of Adams Express Company, Mohawk
Industries, Inc. and Petroleum & Resources
Corporation.
Ms.
Bonanno brings to the board operational, academic and public policy
knowledge. Ms. Bonanno’s public policy expertise was gained
through 10 years of service as the first director of the U.S. Trade
Representative’s Office of Private Sector Liaison in the Executive Office
of Presidents Carter and Reagan. She developed global business
knowledge and expertise in the manufacturing sector during her employment
as Corporate Vice President of International Trade for Warnaco, Inc., a
worldwide apparel manufacturer. Ms. Bonanno’s experience as
President of Columbia College allowed her to develop deep understanding of
the relationship of higher education to public policy and commercial
reality. Her extensive international trade expertise including
knowledge of trade rules and regulations benefits
BorgWarner. Ms. Bonanno’s experience as a director of other
public companies in varied industries has resulted in her broad and
thorough understanding of board
dynamics.
|
Class
1 Directors
|
Age
|
Principal
Occupation
and
Directorships
|
Alexis
P. Michas
1993
|
52 |
Mr.
Michas has been the Managing Partner of Stonington Partners, Inc., an
investment management firm since 1994. Mr. Michas is the
founder and Managing Partner of Juniper Investment Company, LLC., an
investment management firm since 2008. He is also a director of
AirTran Holdings, Inc., PerkinElmer, Inc., Lincoln Educational Services
Corporation and a number of privately-held companies.
Mr.
Michas’ demonstrated extensive knowledge of complex financial and
operational issues and his hands on knowledge of the history of the
Company from the board level make him a valued member of the
board. Mr. Michas brings 25 years of private equity experience
across a wide range of industries, and a successful record of managing
control investments in public companies. He also brings
extensive transactional expertise including: mergers and acquisitions,
IPOs, debt and equity offerings and bank financings. Mr.
Michas’s experience as a director of other public companies in varied
industries gives him exposure to the corporate governance practices of
others. He has served on the compensation, governance, audit,
finance and executive committees of boards of other public
companies. Mr. Michas has been on BorgWarner’s board of
directors since the Company became a public company in
1993. Mr. Michas’ knowledge of the Company and his thorough
understanding of the role of the board of directors uniquely qualify him
to serve on our board of directors and to serve as Lead
Director.
|
Richard
O. Schaum
2005
|
63 |
Mr.
Schaum has been General Manager, 3rd Horizon Associates LLC, a technology
assessment and development company, since May 2003. He was Vice President
and General Manager of Vehicle Systems for WaveCrest Laboratories, Inc.
from October 2003 until June 2005. Before that, for more than thirty
years he was with DaimlerChrysler Corporation, most recently as Executive
Vice President, Product Development from January 2000 until his
retirement in March 2003. Mr. Schaum is a fellow of the Society
of Automotive Engineers and served as its President in 2007.
Mr.
Schaum's nearly four decades of business experience in program management,
product development and manufacturing in the global auto industry bring
technological understanding, innovation expertise and extensive industry
knowledge to BorgWarner's board. At WaveCrest Laboratories he oversaw
development and commercialization of proprietary transportation systems.
As Executive Vice President of Product Development at Chrysler, Mr. Schaum
led all Powertrain Operations, a business with $7 billion in sales of
systems that use products like those of BorgWarner. He has intimate
knowledge of the kinds of products BorgWarner must develop for the
future of transportation. Mr. Schaum possesses deep
understanding, from inside the product development function, of the
challenges an automotive supplier
faces.
|
Class
1 Directors
|
Age
|
Principal
Occupation
and
Directorships
|
|
Thomas
T. Stallkamp
2006
|
63
|
Mr.
Stallkamp has been an Industrial Partner in Ripplewood Holdings LLC, a New
York private equity group, since July 2004. From 2003 to 2004, he served
as Chairman of MSX International, Inc., a global provider of
technology-driven engineering, business and specialized staffing services,
and from 2000 to 2003 he served as its Vice Chairman and Chief Executive
Officer. From 1980 to 1999, Mr. Stallkamp held various positions with
DaimlerChrysler Corporation and its predecessor Chrysler Corporation, the
most recent of which were Vice Chairman and President. Mr. Stallkamp also
serves as a director of Baxter International, Inc., a global diversified
healthcare company, and of Asahi Tec Corporation, an
entity listed on the Tokyo Stock Exchange.
Mr.
Stallkamp’s experience within and outside of the automotive industry, and
his nearly 20 year tenure with DaimlerChrysler and Chrysler Corporation,
important customers of BorgWarner, his international perspective and his
financial acumen make him a valued member of the Company’s board. While at
Chrysler, Mr. Stallkamp became known for developing new business processes
and enhanced partnerships with the automotive supply
community. His service on the boards of Visteon (an automotive
parts supplier) 2002-2005 and Asahi TEC Corporation (a manufacturer of
automotive and other parts) 2008 to present has given him additional
insight into the priorities of and challenges confronting automotive
suppliers. Mr. Stallkamp’s perspective has been broadened by
experience in industries other than the auto industry and through his
private equity financing experience.
|
|
Class II
Directors
|
Age
|
Principal
Occupation
and
Directorships
|
|
Jere
A. Drummond
1996
|
70
|
Mr.
Drummond retired from the BellSouth Corporation on December 31, 2001.
He served as Vice Chairman of the BellSouth Corporation from January 2000
until his retirement. He was President and Chief Executive Officer of
BellSouth Communications Group, a provider of traditional telephone
operations and products, from January 1998 until December 1999. He was
President and Chief Executive Officer of BellSouth Telecommunications,
Inc. from January 1995 until December 1997 and was elected a director
of BellSouth Telecommunications, Inc. in 1993. He is also a director of
AirTran Holdings, Inc. and SAIC, Inc.
Having
served as an officer of a Fortune 500 company, BellSouth Corporation, for
19 years, Mr. Drummond brings extensive management experience and the
perspective of a former CEO to BorgWarner’s board. His
significant marketing experience adds to the board’s range of
knowledge. Mr. Drummond’s service on boards of directors of
other public companies, and specifically on the Compensation Committee of
another public company, adds to his value on BorgWarner’s board and as
Chair of our Compensation Committee. In addition to his current
directorships at AirTran Holdings Inc., an airline and SAIC, Inc., a
scientific, engineering, and technology applications company, Mr. Drummond
was also a director of Centilliam Communications, Inc. until
2009.
|
Class
II Directors
|
Age
|
Principal
Occupation
and
Directorships
|
Timothy
M. Manganello
2002
|
60
|
Mr.
Manganello has been Chairman of the Board since June 2003 and Chief
Executive Officer of the Company since February 2003. He was also
President and Chief Operating Officer from February 2002 until February
2003. He was Executive Vice President from June 2001 until February 2002.
He was Vice President of the Company from February 1999 until June
2001 and President and General Manager of BorgWarner TorqTransfer Systems
Inc. (“TorqTransfer Systems”) from February 1999 until February 2002.
He was appointed a director of the Company in 2002. Mr. Manganello is also
a director of Bemis Company, Inc. and he serves as the Board Chairman of
the Federal Reserve Bank of Chicago, Detroit branch.
Mr.
Manganello began his career in the automotive industry in
1973. He was named to his current position in February 2003,
after having served for one year as president and chief operating
officer. During his career at BorgWarner, he has held senior
management positions in operations, sales, and business
development. Before joining BorgWarner in 1989, Mr. Manganello
held product engineering management positions at Chrysler Corporation from
1973 to 1981, and sales management positions at PT Components-Link Belt
from 1981 to 1988. He is also a member of the University of
Michigan College of Engineering’s National Advisory Committee and
is the chairman of the Executive Committee of the Board of
Trustees for the Manufacturer’s Alliance (MAPI). Mr.
Manganello’s knowledge of all aspects of the Company’s business and of the
automotive industry position him well to serve as our Chairman and Chief
Executive Officer.
|
John
R. McKernan, Jr.
2009
|
61
|
Governor
McKernan has been Chairman of the Board of Education Management
Corporation, a large provider of private post-secondary education in North
America, since December 2008. He was Executive Chairman of
Education Management Corporation from February 2007 to December 2008 and
Chief Executive Officer from September 2003 until February
2007. He previously held the offices of President and Vice
Chairman and was a member of the Board of Directors since June
1999. Mr. McKernan also served as Governor
of the State of Maine from 1987 to 1995.
Governor
McKernan brings to BorgWarner’s board a blend of experience as a former
Governor of Maine, a former US Congressman, a former State Legislator and
former CEO of a public company. His knowledge of the
legislative process combined with his demonstrated leadership capabilities
and CEO’s perspective provide a valuable point of view on the BorgWarner
board. Governor McKernan also has significant experience as a
director. Governor McKernan’s practice of corporate, regulatory
and administrative law enables him to provide a legal perspective on
issues facing the board and the Company in those areas and with respect to
corporate governance.
|
Class II
Directors
|
Age
|
Principal
Occupation
and
Directorships
|
Ernest
J. Novak, Jr.
2003
|
65
|
Mr.
Novak retired as a Managing Partner from Ernst & Young in June
2003. He was a Managing Partner from 1986 until June 2003. Mr. Novak is
also a director of A. Schulman, Inc. and FirstEnergy Corp.
Mr.
Novak's extensive knowledge of accounting and his financial expertise
across a broad range of public companies make him well qualified as a
member of our board and as chairman of the audit committee of our board.
Mr. Novak spent over thirty years performing, reviewing and supervising
audits of diverse public companies' financial statements and overseeing
the filing of them with the Securities and Exchange Commission. He has a
master's degree in accounting, is a Certified Public Accountant and
currently chairs the audit committees of two other public
companies.
|
Class III
Directors
|
Age
|
Principal
Occupation
and
Directorships
|
Robin
J. Adams
2005
|
56
|
Mr.
Adams has been Executive Vice President, Chief Financial Officer and Chief
Administrative Officer since April 2004. He was Executive Vice President —
Finance and Chief Financial Officer of American Axle & Manufacturing
Holdings Inc. (“American Axle”) from July 1999 until April 2004.
Prior to joining American Axle, he was Vice President and Treasurer and
principal financial officer of BorgWarner Inc. from May 1993 until June
1999. Mr. Adams is also a director of Carlisle Companies
Inc.
Mr.
Adams has over 30 years experience in the transportation
industry. Prior to joining BorgWarner in April 2004, he was
Executive Vice President of Finance and Chief Financial Officer at
American Axle and Manufacturing, Inc. He was previously with
BorgWarner for 13 years, a period during which he served as Vice President
and Treasurer and Principal Financial Officer. The functional
areas reporting to Mr. Adams include accounting, audit, finance, treasury,
tax, business development, investor relations and information
technology. He is a Certified Public
Accountant. Mr. Adams’ deep knowledge of the transportation
industry and the Company’s business, his mergers and acquisitions
experience and financial acumen make him a valued member of the Company’s
board.
|
David
T. Brown
2004
|
61
|
Mr.
Brown retired from Owens Corning on December 31, 2007. He was President
and Chief Executive Officer of Owens Corning from April 2002 until his
retirement. He was Executive Vice President and Chief Operating Officer
from January 2001 to March 2002. He was Vice President of Owens Corning
and President, Insulating Systems Business from January 1997 to December
2000. Mr. Brown is also a director of Franklin Electric Co.,
Inc.
|
Class III
Directors
|
Age
|
Principal
Occupation
and
Directorships
|
As
President and Chief Executive Officer of Owens Corning, a global leader in
glass technology and a share leader in many of the markets it serves, Mr.
Brown led an innovative organization, that grew worldwide during a
difficult period in that company’s history associated with its
asbestos-related liability dating back to 1958. He brings
operational experience and the perspective of a former CEO to his service
on BorgWarner’s board. Mr. Brown was a director of Owens
Corning until December 31, 2007. His experience serving on
boards of other public companies in varied industries contributes to his
knowledge of board dynamics.
On
October 5, 2000, Owens Corning and 17 of its United States subsidiaries
filed petitions for reorganization under Chapter 11 of the Bankruptcy Code
in the U.S. Bankruptcy Court in Wilmington, Delaware. Owens
Corning stated that it took the action to address demands on its cash flow
resulting from asbestos-related liability. Mr. Brown was a Vice
President of Owens Corning and President, Insulating Systems Business from
January 1997 to December 2000, Executive Vice President and Chief
Operating Officer of Owens Corning from January 2001 to March 2002, and
President and Chief Executive Officer of Owens Corning from April 2002
through 2007. Mr. Brown was also an executive officer of two of
the 17 Owens Corning subsidiaries at the time of the filing of the
bankruptcy petitions.
|
||
Dennis
C. Cuneo
2009
|
60
|
Mr.
Cuneo has been an attorney with Arent Fox LLP since November
2006. He was Senior Vice President of Toyota North America,
Inc. from 2000 to 2006; Corporate Secretary and Chief Environmental
Officer of Toyota Motor North America Inc. from 2004 to 2006, and Senior
Vice President of Toyota Motor Manufacturing North America from 2001 to
2006. Mr. Cuneo was formerly Board Chairman of the Federal
Reserve Bank of Cleveland, Cincinnati branch and is on the board of the
Center for Automotive Research. Mr. Cuneo is also a director of AK Steel
Holding Corporation.
Mr.
Cuneo brings experience in, and a deep understanding of, the automotive
industry. Mr. Cuneo is a former senior executive and officer at
Toyota Motor North America, Inc. and Toyota Motor Manufacturing North
America. Mr. Cuneo’s Toyota career spanned more then 22 years,
during which he was responsible for legal affairs, administration, public
relations, investor relations, environmental affairs, corporate
advertising, government relations, philanthropy, planning, research and
Toyota’s Latin America Research Group. He brings to the board
his knowledge of the automotive industry and its trends, and he
contributes to its perspective on and experience in a broad range of board
oversight areas. Mr. Cuneo also is a licensed attorney, so he
is able to provide a legal perspective on issues facing the board and the
Company, particularly with respect to corporate governance and regulatory
matters.
|
|
•
|
a
director who is an employee, or whose immediate family member is an
executive officer, of the Company is not “independent” until three years
after the end of such employment
relationship.
|
|
•
|
a
director who receives, or whose immediate family member receives, more
than $120,000 per year in direct compensation from the Company, other than
director and committee fees or other forms of deferred compensation for
prior service (provided such compensation is not contingent in any way on
continued service), is not “independent” until three years after he or she
ceases to receive more than $120,000 per year in such
compensation.
|
|
•
|
a
director who is affiliated with or employed by, or whose immediate family
member is a current partner of the internal or external auditor of the
Company, is a current employee of such a firm and personally works on the
Company’s audit or was within the last three years a partner or employee
of such a firm and personally worked on the Company’s audit at that time,
is not “independent” until three years after the end of the affiliation or
the employment or auditing
relationship.
|
|
•
|
a
director who is employed, or whose immediate family member is employed, as
an executive officer of another company where any of the Company’s present
executives serve on that company’s compensation committee, is not
“independent” until three years after the end of such service or the
employment relationship.
|
|
•
|
a
director who is an executive officer or an employee, or whose immediate
family member is an executive officer, of a company that makes payments
to, or receives payments from, the listed company for property or services
in an amount which, in any single fiscal year, exceeds the greater of
$1 million, or 2% of such other company’s consolidated gross
revenues, is not “independent” until three years after falling below such
threshold.
|
|
•
|
a
director who is not considered independent by relevant statute or
regulation is not “independent.”
|
·
|
the
highest personal and professional ethics, integrity and
values;
|
·
|
demonstrated
business acumen, experience and ability to use sound judgment to
contribute to effective oversight of the business and financial affairs of
the Company;
|
·
|
ability
to evaluate strategic options and risks and form independent opinions,
stated constructively to contribute to guidance and direction of the
Company;
|
·
|
active,
objective and constructive participation at meetings of the Board and its
committees, with flexibility in approaching
problems;
|
·
|
open
mindedness on policy issues and areas of activity affecting overall
interests of the Company and its
stockholders;
|
·
|
stature
to represent the Company before the public, stockholders and various
others who affect the Company;
|
·
|
involvement
only in activities and interests that do not create a conflict with the
director's responsibilities to the Company and its
stockholders;
|
·
|
willingness
to objectively appraise management performance in the interest of the
stockholders;
|
·
|
interest
and availability of time to be involved with the Company and its employees
over a sustained period;
|
·
|
ability
to work well with others, with deep and wide perspective in dealing with
people and situations, respect for the views of
others;
|
·
|
a
reasoned and balanced commitment to the social responsibilities of the
Company;
|
·
|
contribution
to the Board's desired diversity and
balance;
|
·
|
willingness
of independent directors to limit public company board service to 4 or
fewer boards (Any exceptions would require Corporate Governance Committee
approval.);
|
·
|
willingness
to tender, promptly following the annual meeting at which they are elected
or re-elected as Director, an irrevocable resignation that will be
effective upon (i) the failure to receive the required vote at the next
annual meeting at which they face re-election and (ii) Board acceptance of
such resignation; and
|
·
|
willingness
to provide all information, including completion of a questionnaire,
required by the Company’s Amended and Restated
By-Laws.
|
|
BORGWARNER INC. AUDIT COMMITTEE
|
|
||
|
Ernest J. Novak, Jr. Chairman
|
|
||
|
Dennis C. Cuneo
|
John R. McKernan, Jr.
|
Thomas T. Stallkamp
|
|
Name and Address of
Beneficial Owner
|
Number
of
Shares
|
Percent
of
Class
|
FMR
LLC
|
9,946,536(a)
|
8.5%
|
82
Devonshire Street
|
||
Boston,
MA 02109
|
||
BlackRock,
Inc.
|
6,417,867(b)
|
5.5%
|
40
East 52nd
Street
|
||
New
York, NY 10022
|
||
UBS
AG
|
6,311,227(c)
|
5.4%
|
Bahnhofstrasse
|
||
45,
PO Box CH-8021
|
||
Zurich,
Switzerland
|
||
Transamerica
Investment Management, LLC
|
6,041,336(d)
|
5.2%
|
11111
Santa Monica Boulevard
|
||
Suite
820
|
||
Los
Angeles, CA 90025
|
(a)
|
Pursuant
to a Schedule 13G dated February 16, 2010 on behalf of FMR LLC indicating
that it had sole voting power for 1,809,668 shares and sole dispositive
power of 9,946,536 shares.
|
(b)
|
Pursuant
to a Schedule 13G dated January 29, 2010 on behalf of BlackRock, Inc.
indicating that it had sole voting power for 6,417,867 shares
and sole dispositive power for 6,417,867 shares.
|
(c)
|
Pursuant
to a Schedule 13G/A dated February 11, 2010 on behalf of UBS AG indicating
that it had sole voting power for 5,543,888 shares and shared dispositive
power for 6,311,227 shares.
|
(d)
|
Pursuant
to a Schedule 13G/A dated February 12, 2010 on behalf of Transmerica
Investment Management, LLC indicating that it had sole voting power for
5,991,406 shares and sole dispositive power for 6,041,336
shares.
|
Name of Beneficial
Owner(a)
|
Amount
and Nature
of
Stock Ownership(b)(c)
|
Percent
of
Class
|
|
Timothy
M. Manganello
|
1,057,599(d)
|
*
|
|
Robin
J. Adams
|
384,334
|
*
|
|
John
G. Sanderson
|
34,170
|
*
|
|
Thomas
F. Waldhier
|
35,905
|
*
|
|
Roger
J. Wood
|
255,962
|
*
|
|
Phyllis
O. Bonanno
|
41,215
|
*
|
|
David
T. Brown
|
10,956
|
*
|
|
Dennis
C. Cuneo
|
6,193
|
*
|
|
Jere
A. Drummond
|
39,842
|
*
|
|
Alexis
P. Michas
|
168,603
|
*
|
|
John
R. McKernan, Jr. (e).
|
0
|
*
|
|
Ernest
J. Novak, Jr.
|
21,356
|
*
|
|
Richard
O. Schaum
|
17,483
|
*
|
|
Thomas
T. Stallkamp
|
17,089
|
*
|
|
Bernd
W. Matthes (f)
|
55,690
|
*
|
|
All
directors and executive officers of the Company (21 persons)
|
2,524,104
|
2.1%
|
*
|
Represents
less than one percent.
|
(a)
|
For
purposes of the above table, the address for each named person is 3850
Hamlin Road, Auburn Hills, Michigan 48326.
|
(b)
|
Includes
the following number of shares issuable upon the exercise of options
within the next 60 days: 179,386 for Mr. Adams; 20,000 for
Ms. Bonanno; 20,000 for Mr. Drummond; 518,561 for
Mr. Manganello; 53,690 for Dr. Matthes; 20,000 for Mr. Michas;
8,000 for Mr. Novak; 104,478 for Mr. Wood; and 1,120,283 for all
directors and executive officers of the Company.
|
(c)
|
Includes
all shares with respect to which each officer or director directly, or
indirectly, through any contract, arrangement, understanding, relationship
or otherwise, has or shares the power to vote or to direct voting of such
shares or to dispose or to direct the disposition of such
shares.
|
(d)
|
Includes
restricted stock units granted to Mr. Manganello under the August 3, 2007
Recognition and Retention Grant.
|
(e)
|
Governor
McKernan is a recently appointed director and is a nominee for Class II
Director.
|
(f)
|
Dr.
Matthes resigned as an officer of the Company effective August 7,
2009.
|
·
|
attract
and retain the best possible global executive talent,
|
·
|
motivate
our executives to achieve goals that support the Company’s business
strategy (including growth and the creation of long term
value),
|
·
|
link
executives’ and stockholders’ interests through equity-based incentive
plans,
|
·
|
provide
a compensation package that reflects individual performance as well as
overall business results.
|
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|
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|
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|
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|
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|
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|
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|
TRW
Automotive Inc.
|
Daimler
Trucks North America, LLC
|
Kennametal
Inc.
|
Valmont
Industries Inc.
|
Dana
Corporation
|
Metaldyne
Corporation
|
Worthington
Industries Inc.
|
Denso
International America, Inc.
|
Navistar
|
|
Donaldson
Company Inc.
|
PACCAR
Inc.
|
|
Dover
Corporation
|
Parker
Hannifin Corporation
|
|
Eastman
Chemical Co.
|
Polaris
Industries Inc.
|
|
|
2009 Performance
Expectations
|
|
|
|
|
Cash
Flow
|
Relative
Profitability
|
|
|
Threshold
|
($100,000,000)
|
35%
|
|
|
Target
|
($50,000,000)
|
30%
|
|
|
Maximum
|
Positive
|
20%
|
|
BorgWarner
Inc.
Cash
Flow
|
BorgWarner
Inc.
Relative
Profitability
|
Business
Unit
Relative
Profitability
|
|
T.
Manganello, CEO
|
50%
|
50%
|
|
R.
Adams, EVP, CFO and CAO
|
50%
|
50%
|
|
R.
Wood, President,
Turbo
and Emissions Systems
|
50%
|
10%
|
40%
|
J.
Sanderson, President,
Drivetrain
Systems
|
50%
|
10%
|
40%
|
T.
Waldhier, President,
BERU
|
50%
|
10%
|
40%
|
B.
Matthes, Former President,
Transmission
Systems
|
50%
|
10%
|
40%
|
Performance
Share TSR Performance/Payout Table
|
||
Relative
Increase in
BorgWarner
TSR vs. Peer Group
|
BorgWarner’s
Relative Increase
Percentile
Rank
|
Percent
of Target Number of
Performance
Shares Earned
|
<81.3%
|
Below
25th
percentile
|
0.000%
|
81.3%
|
25th
percentile
|
25.000%
|
87.5%
|
35th
percentile
|
43.750%
|
100.0%
|
50th
percentile
|
71.875%
|
112.5%
|
65th
percentile
|
100.000%
|
118.8%
|
75th
percentile
|
140.000%
|
141.1%
|
90th
percentile and above
|
200.000%
|
Position
|
Stock Ownership
Guideline
|
CEO
|
Three
times average salary plus bonus for prior three years
|
CFO
and Presidents
|
Two
times average salary plus bonus for prior three
years
|
Name
and Principal
|
|
Salary
|
Bonus
|
Stock
Awards (1)
|
Option
Awards (1)
|
Non-Equity
Incentive Plan Compensation (2)
|
Change
in Pension Value and Non-Qualified Deferred Compensation
Earnings
|
All
Other Compensation
|
Total
|
||||||||||||||||||||||||
Position | Year |
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
||||||||||||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|||||||||||||||||||||||
Timothy
M. Manganello
|
2009
|
946,458 | - | 4,952,018 | - | 2,997,412 | - | 199,605 | 9,095,493 | ||||||||||||||||||||||||
Chairman
and Chief Executive Officer
|
2008
|
1,100,000 | - | 4,252,938 | - | - | - | 534,372 | 5,887,310 | ||||||||||||||||||||||||
2007
|
900,000 | - | 14,246,851 | 1,208,117 | 2,666,782 | - | 237,695 | 19,259,445 | |||||||||||||||||||||||||
Robin
J. Adams
|
2009
|
486,135 | - | 1,856,972 | - | 1,243,419 | - | 88,759 | 3,675,285 | ||||||||||||||||||||||||
Executive
VP, Chief Financial Officer and Chief Admin Officer
|
2008
|
565,000 | - | 1,379,110 | - | - | - | 241,630 | 2,185,740 | ||||||||||||||||||||||||
2007
|
466,000 | - | 1,169,000 | 457,199 | 1,061,342 | - | 111,776 | 3,265,317 | |||||||||||||||||||||||||
Roger
J. Wood
|
2009
|
437,865 | - | 1,114,224 | - | 641,862 | - | 157,962 | 2,351,913 | ||||||||||||||||||||||||
President,
Turbo & Emissions Systems & Thermal Systems
|
2008
|
480,000 | - | 982,638 | - | 522,447 | - | 200,439 | 2,185,524 | ||||||||||||||||||||||||
2007
|
395,000 | - | 728,000 | 284,671 | 709,924 | - | 158,982 | 2,276,577 | |||||||||||||||||||||||||
Thomas
Waldhier (3)(4)(5)
|
2009
|
429,660 | 279,340 | 1,320,525 | - | 619,524 | 117,519 | 43,956 | 2,810,524 | ||||||||||||||||||||||||
President,
BERU
|
|||||||||||||||||||||||||||||||||
John
G. Sanderson (6)
|
2009
|
322,878 | - | 1,331,652 | - | 338,498 | - | 54,802 | 2,047,830 | ||||||||||||||||||||||||
President,
Drivetrain Systems
|
|||||||||||||||||||||||||||||||||
Bernd
W. Matthes (4)(7)
|
2009
|
211,651 | - | 928,676 | - | 596,983 | - | 669,962 | 2,407,272 | ||||||||||||||||||||||||
Former
President, Transmission Systems
|
2008
|
405,000 | - | 781,324 | - | - | - | 162,825 | 1,349,149 | ||||||||||||||||||||||||
2007
|
365,000 | - | 532,000 | 207,244 | 326,478 | - | 321,672 | 1,752,394 |
(1)
The aggregate values in columns (e) and (f) reported for 2009
represent the grant date fair market value of the awards noted in the
Grants of Plan-Based Awards Table. The Stock and Option awards
for 2008 and 2007 reported in columns (e) and (f) have been recomputed to
reflect the fair market value of the awards as reported in the applicable
year's Grants of Plan-Based Awards Table. The August 7, 2007
Recognition and Retention Grant to Mr. Manganello is included in the
value reported for the 2007 stock award. Details of this grant were
disclosed in a current report on Form 8-K filed on August 7, 2007.
Assuming maximum performance levels are achieved for the 2010-2012
Performance Share Plan, the maximum value of all stock awards granted
would be $8,467,721 for Mr. Manganello, $3,175,097 for Mr. Adams,
$1,905,099 for Mr. Wood, $2,244,819 for Dr. Waldhier, $2,319,662 for Mr.
Sanderson, and $1,588,793 for Dr. Matthes, based on fair market value at
the time of grant.
|
(2)
The values in column (g) reflect payments made under the Management
Incentive Plan (MIP), including Carryover Bonus payments. The 2009 plan
year payout, paid in February 2010, includes a Carryover Bonus payment of
$1,567,412 for Mr. Manganello, $650,169 for Mr. Adams, $191,889 for
Mr. Wood, $283,269 for Dr. Waldhier, and $354,315 for Dr. Matthes.
The 2008 plan year payout includes a Carryover Bonus payment of $32,847
for Mr. Wood. The 2007 plan year payout under the MIP includes Carryover
Bonus payments of $691,606 for Mr. Manganello, $243,180 for Mr. Adams,
$95,801 for Mr. Wood, and $80,424 for Dr. Matthes.
|
(3)
Compensation reported for Dr. Waldhier is converted to US Dollars using an
exchange rate of 1 Euro = 1.3967 USD, which is a periodic average rate for
2009.
|
(4)
The actual change in the present value of the accumulated pension value
increased for Dr. Matthes in 2009 by $85,194 leaving a remaining balance
of ($8,406) when netted against last year’s balance. The change in Pension
Value for 2009 for both Dr. Waldhier and Dr. Matthes was converted from
Euros to US Dollars using an exchange rate of 1 Euro = 1.3967 US Dollar.
The actual change in the present value of the accumulated pension value
increased for Dr. Matthes in 2008 by $5,308 leaving a remaining balance of
($93,600) when netted against last year’s balance. The change in Pension
Value for 2008 was converted from Euros to US Dollars using an exchange
rate of 1 Euro = 1.3969 US Dollar. The actual change in the present value
of the accumulated pension value decreased for Dr. Matthes by $98,908 in
2007 due to an increase in the discount rate used in 2007 compared to the
rate used in 2006. Change in Pension Value for 2007 was converted from
Euros to US Dollars using an exchange rate of 1 Euro = 1.4598 US
Dollar.
|
(5)
The value reported in column (d) represents a special one-time recognition
and retention cash payment.
|
(6)
Mr. Sanderson joined BorgWarner Inc. as an officer on February 23,
2009.
|
(7)
Dr. Matthes resigned as an officer of the Company effective August 7,
2009. As required, Dr. Matthes is reported as a Named Executive
Officer as he would have qualified as one of our top five most highly
compensated executives had he remained with the Company as of December 31,
2009. Stock Awards reported in cloumn (e) granted on February 10, 2009
were forfeited on August 7, 2009 in connection with the resignation of Dr.
Matthes as disclosed in a current report on Form 8-K filed on August 13,
2009.
|
|
Personal
Use of Leased Vehicle
|
Financial
Counseling
|
Personal
Use of Company Aircraft
|
Club
Memberships
|
Tax
Reimbursement
|
Registrant
Contributions to Defined Contribution Plans (1)
|
German
Supplemental Insurance Contributions
|
Separation
Payments
|
TOTAL
of "All Other Compensation"
|
|||||||||||||||||||||||||||
Name |
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||||||||||||||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|||||||||||||||||||||||||||
Timothy
M. Manganello
|
20,863 | 10,820 | 13,086 | 1,228 | 20,361 | 133,247 | - | - | 199,605 | |||||||||||||||||||||||||||
Robin
J. Adams
|
11,920 | 10,820 | - | - | 7,662 | 58,357 | - | - | 88,759 | |||||||||||||||||||||||||||
Roger
J. Wood
|
4,553 | 10,820 | 417 | - | 8,213 | 133,959 | - | - | 157,962 | |||||||||||||||||||||||||||
Thomas
Waldhier (2)
|
27,886 | - | - | - | - | - | 16,070 | - | 43,956 | |||||||||||||||||||||||||||
John
G. Sanderson
|
9,141 | 10,035 | 834 | 905 | 7,788 | 26,099 | - | - | 54,802 | |||||||||||||||||||||||||||
Bernd
W. Matthes (3)
|
6,321 | 7,215 | - | - | 5,837 | 19,510 | - | 631,079 | 669,962 | |||||||||||||||||||||||||||
(1)
Amounts contributed by the Company on behalf of its Named Executive
officers during 2009 pursuant to the provisions of the RSP and the Excess
Plan.
|
||||||||||||||||||||||||||||||||||||
(2)
Reimbursements for Health Insurance of €3,286, Accident Insurance of €180,
and German Old Age and Unemployment Insurance Programs of €8,040 per the
German employment contract of Dr. Waldhier. Compensation reported for Dr.
Waldhier is converted to US Dollar using an exchange rate of 1 Euro =
1.3967 USD, which is a periodic average rate for 2009.
|
||||||||||||||||||||||||||||||||||||
(3)
Payments in connection with the resignation of Dr. Matthes as disclosed in
a current report on Form 8-K filed on August 13, 2009. The amount
includes $304,000 as a Separation Payment, $304,000 as payment for
vacation obligations owed and as partial consideration for his
non-competition agreement, $7,000 in Outplacement Services, and $16,079 in
potential "COBRA" medical insurance premium payments. The medical
insurance payments would cease should Dr. Matthes become eligible for
benefits under another company's plan.
|
The
following table details the tax reimbursement amounts listed in Column
(f) of the above table. These reimbursements will be
eliminated in 2010.
|
||||||||||||||||||||
|
Tax
Reimbursement for Personal Use of Leased Vehicle
|
Tax
Reimbursement for Financial Counseling Services
|
Tax
Reimbursement for Personal Use of Company Aircraft
|
Tax
Reimbursement for Club Memberships
|
Total
Tax Reimbursement
|
|||||||||||||||
Name
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
|||||||||||||||
Timothy
M. Manganello
|
2,846 | 7,457 | 3,894 | 6,164 | 20,361 | |||||||||||||||
Robin
J. Adams
|
2,846 | 4,816 | - | - | 7,662 | |||||||||||||||
Roger
J. Wood
|
1,891 | 6,136 | 186 | - | 8,213 | |||||||||||||||
Thomas
Waldhier
|
- | - | - | - | - | |||||||||||||||
John
G. Sanderson
|
2,846 | 2,408 | 371 | 2,163 | 7,788 | |||||||||||||||
Bernd
W. Matthes
|
2,626 | 3,211 | - | - | 5,837 | |||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||
The following table summarizes the grants of equity and non-equity plan awards to our Named Executive Officers in 2009: | |||||||||||||||||||||||||||||||||||||||||
|
|
|
|
All
Other Stock Awards: Number of Shares or Stock Units
|
All
Other Option Awards: Number of Securities Underlying Option
|
Exercise
or Base Price of Option Awards
|
Grant
Date Fair Value of Stock and Option Awards
|
||||||||||||||||||||||||||||||||||
Estimated
Possible Payout Under Non-Equity
Incentive Plan Awards (1) |
Estimated
Future Payout Under Equity Incentive Plan
Awards |
||||||||||||||||||||||||||||||||||||||||
Threshold
|
Target
|
Maximum
|
Threshold
|
Target
|
Maximum
|
||||||||||||||||||||||||||||||||||||
Name | Grant Date |
($)
|
($)
|
($)
|
(#) | (#) | (#) | (#) | (#) |
($/Share)
|
($)
|
||||||||||||||||||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
(k)
|
(l)
|
||||||||||||||||||||||||||||||
Timothy
M. Manganello
|
715,000 | 1,430,000 | 2,860,000 | ||||||||||||||||||||||||||||||||||||||
3/25/2009
(2)
|
41,675 | 166,700 | 333,400 | 3,515,703 | |||||||||||||||||||||||||||||||||||||
2/10/2009
(3)
|
70,650 | - | - | 1,436,315 | |||||||||||||||||||||||||||||||||||||
Robin
J. Adams
|
296,625 | 593,250 | 1,186,500 | ||||||||||||||||||||||||||||||||||||||
3/25/2009
(2)
|
15,625 | 62,500 | 125,000 | 1,318,125 | |||||||||||||||||||||||||||||||||||||
2/10/2009
(3)
|
26,505 | - | - | 538,847 | |||||||||||||||||||||||||||||||||||||
Roger
J. Wood
|
229,204 | 458,408 | 916,816 | ||||||||||||||||||||||||||||||||||||||
3/25/2009
(2)
|
9,375 | 37,500 | 75,000 | 790,875 | |||||||||||||||||||||||||||||||||||||
2/10/2009
(3)
|
15,905 | - | - | 323,349 | |||||||||||||||||||||||||||||||||||||
Thomas
Waldhier
|
168,129 | 336,256 | 672,511 | ||||||||||||||||||||||||||||||||||||||
3/25/2009
(2)
|
6,250 | 25,000 | 50,000 | 527,250 | |||||||||||||||||||||||||||||||||||||
2/10/2009
(4)
|
2,825 | 11,300 | 19,775 | 222,384 | |||||||||||||||||||||||||||||||||||||
2/10/2009
(4)
|
3,900 | 15,600 | 27,300 | 307,008 | |||||||||||||||||||||||||||||||||||||
2/10/2009
(5)
|
12,980 | - | - | 263,883 | |||||||||||||||||||||||||||||||||||||
John
G. Sanderson
|
169,250 | 338,498 | 676,998 | ||||||||||||||||||||||||||||||||||||||
3/25/2009
(2)
|
7,825 | 31,300 | 62,600 | 660,117 | |||||||||||||||||||||||||||||||||||||
2/25/2009
(6)
|
3,325 | 13,300 | 23,275 | 235,410 | |||||||||||||||||||||||||||||||||||||
2/25/2009
(6)
|
2,850 | 11,400 | 19,950 | 201,780 | |||||||||||||||||||||||||||||||||||||
2/25/2009
(7)
|
13,210 | - | - | 234,345 | |||||||||||||||||||||||||||||||||||||
Bernd
W. Matthes
|
182,250 | 364,500 | 729,000 | ||||||||||||||||||||||||||||||||||||||
3/25/2009
(2)(8)
|
7,825 | 31,300 | 62,600 | 660,117 | |||||||||||||||||||||||||||||||||||||
2/10/2009
(3)(8)
|
13,210 | - | - | 268,559 | |||||||||||||||||||||||||||||||||||||
(1)
2009 bonus opportunity under the MIP. Estimated possible payout levels do
not reflect carryover opportunities for the prior years. Dr. Waldhier's
Non-Equity Incentive Plan threshold, target, and maximum payout values are
converted to US Dollar using an exchange rate of 1 Euro = 1.3967 USD,
which is a periodic average rate for 2009. Dr. Matthes' award levels
reflect the full year opportunity. His actual payout was prorated to
reflect his termination date.
|
|||||||||||||||||||||||||||||||||||||||||
(2)
2009 Performance Share Grant: Value of grant = number of target shares
times the closing stock price on grant date of $21.09.
|
|||||||||||||||||||||||||||||||||||||||||
(3)
2009 Restricted Stock Grant: Granted same day as approved by Compensation
Committee of the Board of Directors.
|
|||||||||||||||||||||||||||||||||||||||||
FMV
at grant date = number of restricted shares times the average of the high
and low stock price on February 10, 2009 of $20.33 in accordance with ASC
Topic 718.
|
|||||||||||||||||||||||||||||||||||||||||
(4)
Pro-rated portion for 2008 and 2007 Performance Share Grant: Value of
grant = number of target shares times the closing stock price on grant
date of $19.68.
|
|||||||||||||||||||||||||||||||||||||||||
(5)
2009 Stock Unit Grant: Granted same day as approved by Compensation
Committee of the Board of Directors. Stock units are granted outside the
U.S. for tax purposes.
|
|||||||||||||||||||||||||||||||||||||||||
FMV
at grant date = number of restricted shares times the average of the high
and low stock price on February 10, 2009 of $20.33 in accordance with ASC
Topic 718.
|
|||||||||||||||||||||||||||||||||||||||||
(6)
Pro-rated portion for 2008 and 2007 Performance Share Grant: Value of
grant = number of target shares times the closing stock price on grant
date of $17.70.
|
|||||||||||||||||||||||||||||||||||||||||
(7)
2009 Restricted Stock Grant: Value of grant = number of target shares
times the average of the high and low stock price on the day of grant of
$17.74.
|
|||||||||||||||||||||||||||||||||||||||||
(8)
Grant forfeited on August 7, 2009 in connection with the resignation of
Dr. Matthes as disclosed in a current report on Form 8-K filed on August
13, 2009.
|
American
Axle
|
Johnson
Controls Inc.
|
Tenneco
Automotive Inc.
|
ArvinMeritor
Inc.
|
Lear
Corporation
|
TRW
Automotive Inc.
|
Autoliv
Inc.
|
Magna
International Inc.
|
Visteon
Corporation
|
Gentex
Corporation
|
Modine
Manufacturing Co.
|
Outstanding
Equity Awards at Fiscal Year-End
|
||||||||||||||||||||||||||||||||||||
Option
Awards
|
Stock
Awards
|
|||||||||||||||||||||||||||||||||||
Number
of Securities Underlying Unexercised Options Exercisable
|
Number
of Securities Underlying Unexercised Options Unexercisable
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
|
Option
Exercise Price
|
Option
Expiration Date (1)
|
Number
of Shares or Units of Stock That Have Not Vested (2)
|
Market
Value of Shares or Units of Stock That Have Not Vested (2)
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
That Have Not Vested (3)
|
Equity
Incentive Plan Awards: Market or Payout of Unearned Shares, Units or Other
Rights That Have Not Vested (3)
|
||||||||||||||||||||||||||||
Name
|
(#) | (#) | (#) | ($) | (#) |
($)
|
(#) |
($)
|
||||||||||||||||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|||||||||||||||||||||||||||
Timothy
M. Manganello
|
57,420 | 57,420 | - |