BORGWARNER INC. BOARD OF DIRECTORS DEFERRED COMPENSATION PLAN

2.1

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

2.2

“Board of Directors” means the Board of Directors of BorgWarner Inc.

2.3

“Business Day” means a day on which the New York Stock Exchange is open for trading.

2.4

“BW Stock Unit” means a measure of participation under the Plan which has a value based on the Market Value of Common Stock. In the event of any Company stock split, stock dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off or other similar change in capitalization or event, or any distribution to holders of Common Stock other than a regular cash dividend, the number of BW Stock Units credited to Participants’ BW Stock Units Accounts under the Plan shall be appropriately adjusted by the Board of Directors. The decision of the Board of Directors regarding any adjustment shall be final, binding, and conclusive.

2.5

“BW Stock Units Account” means the subaccount of each Participant Account that is established to reflect the Participant’s selection of BW Stock Units as an Investment Option and to record the Company’s liability therefor, and which has a value based on the Market Value of Common Stock.

2.6

“Committee” means the committee of the Company appointed by the Board of Directors to manage and administer the Plan. This Committee shall consist of all or a portion of those members of the Board of Directors who are employees of the Company.

2.7

“Common Stock” means the common stock, $0.01 par value, of BorgWarner Inc.

2.8

“Company” means BorgWarner Inc. (formerly, Borg-Warner Automotive, Inc.).

2.9

“Deferral Election” means the election agreement filed with the Committee by a Participant for a Plan Year pursuant to the requirements of Article IV. The Deferral Election shall indicate the percentage of the annual Retainer Fee that a Participant is deferring, an allocation of the annual Retainer Fee deferral among the Plan’s notional investment funds, and an election as to the time and form of payment of the amounts deferred and associated earnings or losses.

2.10

“Deferral Year” means any calendar year with respect to which a Participant files a Deferral Election, beginning as of January 1, 1995, and continuing until this Plan is terminated.

2.11

“Deferred Benefit Account” means the account maintained on the books of the Company for each Deferral Election of a Participant pursuant to Article IV.

2.12

“Disability” or “Disabled” means that a Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.

2.13

“Effective Date” means January 1, 1995. The Effective Date with respect to the addition of the BW Stock Unit Accounts and related amendments to the Plan is April 18, 1995. The Effective Date of this amendment and restatement of the Plan is January 1, 2009 unless otherwise provided.

2.14

“Investment Option” shall mean a security, mutual fund, common or collective trust, insurance company pooled separate account, or other notional benchmark for measuring the income, gain or loss recorded for all or a portion of a Participant Account.

2.15

“Market Value” means, with respect to a share of Common Stock, the closing price of such share on the New York Stock Exchange on the day in question, or the day of the last previous sale if there is not any sales on the day in question.

2.16

“Participant” means a member of the Board of Directors of the Company who (a) is not an employee of the Company, (b) is designated to be eligible to participate in the Plan pursuant to Article III, and (c) has made an initial Deferral Election pursuant to Article IV. A director who has deferred a percentage of his or her Retainer Fee under the Plan shall continue as a Participant until he or she has received payment of all amounts deferred by him or her pursuant to his or her Deferral Elections under the Plan.

2.17

“Participant Account” means the account established for each Participant to reflect the total liability of the Company to him or her for all Deferred Benefit Accounts, as provided in Section 5.1.

2.18

“Plan” means this BorgWarner Inc. Amended and Restated Board of Directors Deferred Compensation Plan, as amended from time to time.

2.19

“Retainer Fee” means the annual Retainer Fee payable during the relevant Deferral Year to a Participant for services rendered as a member of the Board of Directors of the Company. The Retainer Fee does not include payment of any specific service fees (such as meeting fees, chairperson fees, etc.) to members of the Board of Directors.

2.20

“Termination of Service” means the Participant’s cessation of service with the Board of Directors for any reason whatsoever, whether voluntary or involuntary, including by reason of death or Disability. In addition, for purposes of distributing the portion of a Participant Account attributable to Retainer Fees earned on or after January 1, 2005, a “Termination of Service” must also constitute a “Separation of Service” from BorgWarner and all of its affiliates, as such term is defined in the regulations for Section 409A of the Internal Revenue Code.

2.21

“Unforeseeable Emergency” means a severe financial hardship of the Participant or the Participant’s beneficiary resulting from an illness or accident of the Participant or the Participant’s Beneficiary, the Participant’s or beneficiary’s spouse, or the Participant’s or beneficiary’s dependent (as defined in section 152(a)); loss of the Participant’s or beneficiary’s property due to casualty; or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant or beneficiary. An event shall not qualify as an unforeseeable emergency to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not cause severe financial hardship, or by cessation of deferrals under the Plan. The purchase of a home and the payment of college tuition are not Unforeseeable Emergencies.

2.22

“Unscheduled Withdrawal” is defined in Section 6.7.

2.23

“Valuation Date” means the date on which the value of a Participant Account or any portion thereof is determined, as provided in Article V hereof. The first day of each Deferral Year shall be a Valuation Date. Additional Valuation Dates may be established by the Committee, including any other dates specifically mentioned in the Plan; the Committee may provide for “daily valuation” of Participant Accounts.

4.1

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

4.2

Minimum and Maximum Deferral and Form of Election .

4.3

Timing of Deferral Credits . The percentage amount of a Retainer Fee that a Participant elects to defer in the Deferral Election shall cause an equivalent reduction in the amount of the Retainer Fee actually paid in cash to the Participant for that year. Retainer Fee deferrals shall be credited to each Participant’s appropriate Deferred Benefit Account as of the first Business Day after the January 1 that immediately follows the relevant Deferral Year. For example, any Retainer Fee payable to the Participant during 2009 shall be credited to the Participant’s Account as of the first Business Day after January 1, 2010. Such amounts credited to the Participant’s Account shall be allocated among the Investment Options elected by the Participant pursuant to Section 5.1.

4.4

Failure to Submit Election Forms . If a Participant fails to submit a Deferral Election within the relevant time limit under Section 4.1 that is accepted by the Committee on or before December 31 of the year prior to the Deferral Year, the Participant will be deemed to have elected to defer 0% of his or her Retainer Fee for the Deferral Year for which such Deferral Election is required.

4.5

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

5.1

Participant Accounts .

f.

Allocations to BW Stock Units Accounts. Amounts in a Participant Account that have been allocated to BW Stock Units shall be converted to BW Stock Units based on the Market Value of Common Stock as of the date of crediting.

g.

Crediting of Dividends on BW Stock Units. Whenever the Company pays a dividend on its Common Stock, in cash or property, at a time when a Participant has BW Stock Units credited to his or her Account, the Participant shall be credited with a number of additional BW Stock Units equal to the result of multiplying the number of BW Stock Units in the Participant’s Account on the dividend record date by the dividend paid on each share of Common Stock, and then dividing this amount by the Market Value of the Common Stock on the dividend payment date. In the case of any dividend distributable in property other than Common Stock, the per share value of the dividend shall be the value determined by the Company for federal income tax reporting purposes.

h.

Transfers From or Into BW Stock Units Accounts. Notwithstanding anything in this Section to the contrary,