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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

~~SCHEDULE 14A~~

Proxy Statement Pursuant to Section 14(a) of the ~~Securities~~

Securities

Exchange Act of 1934 (Amendment No. )


	Filed by the Registrant þ 
	Filed by a Party other than the Registrant o 

	Check the appropriate box:


	o Preliminary Proxy Statement
	o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
	þX Definitive Proxy Statement
	o Definitive Additional Materials
	o Soliciting Material Pursuant to §240.14a-12

BORGWARNER INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):


	þ No fee required.
	o 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 price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth 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:

o  Fee paid previously with preliminary materials.

o  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

4) Date Filed:


~~SEC 1913 (02-02)~~	Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

BORGWARNER INC.

___________________

~~BORGWARNER INC.~~

~~_______________~~

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Auburn Hills, Michigan

March ~~23, 2007~~17, 2008

Dear Stockholder:

BorgWarner Inc. will hold its Annual Meeting of Stockholders at the Company’s headquarters located at 3850 Hamlin Road, Auburn Hills, Michigan, 48326, on April ~~25, 2007,~~30, 2008, at 9:00 a.m., local time, for the following purposes:


	1.	To elect the nominees for Class IIIII Directors to serve for the next three years;

	2.	To vote upon a ~~stockholder~~ proposal ~~concerning director elections;~~to approve an amendment to the Company’s Restated Certificate of Incorporation to increase the authorized common stock of the Company from 150,000,000 shares to 390,000,000 shares;

	3.	To ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for the Company for ~~2007; and~~2008;

	4.	To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

Only stockholders at the close of business on March ~~2, 2007~~3, 2008 are entitled to vote at the meeting or any adjournment or postponement thereof.

Your vote is important! Whether or not you intend to be present at the meeting, and in order to assure that your shares are represented at the meeting, please mark, sign and date the enclosed proxy card and return it in the enclosed prepaid envelope. If you prefer, you can submit your proxy by telephone or the internet. If you attend the meeting, you may vote in person if you wish to do so, even if you have previously submitted your proxy.

Please read the attached proxy statement carefully as it describes in greater detail the matters to be acted upon and your voting rights with respect to those matters.

Along with the attached proxy statement, we are sending you our 2007 summary annual report, which includes our financial statements. Most of you can elect to view future proxy statements and annual reports over the internet instead of receiving paper copies in the mail. Please refer to page 2 of the proxy statement and your proxy card for further information.

By Order of the Board of Directors

/s/ John J. Gasparovic

John J. Gasparovic

Secretary

YOUR VOTE IS IMPORTANT!

YOU MAY VOTE BY:

•	Signing and returning the accompanying proxy ~~card~~ card;
OR
•	Voting by telephone or by the ~~Internet. See~~Internet (See proxy card for ~~instructions~~ instructions.);

•	Voting in person at the meeting (if you are a stockholder of record) .

~~TABLE OF CONTENTS~~

~~PROPOSAL 1 - ELECTION OF DIRECTORS~~

~~REPORT OF THE AUDIT COMMITTEE~~

~~COMPENSATION DISCUSSION AND ANALYSIS~~
~~COMPENSATION COMMITTEE REPORT~~

~~EXECUTIVE COMPENSATION~~

~~PROPOSAL 2 - STOCKHOLDER PROPOSAL CONCERNING DIRECTOR ELECTIONS~~

~~PROPOSAL 3 - RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~

~~OTHER INFORMATION~~

TABLE OF CONTENTS

PROPOSAL 1 - - ELECTION OF DIRECTORS

REPORT OF THE AUDIT COMMITTEE

COMPENSATION DISCUSSION AND ANALYSIS

COMPENSATION COMMITTEE REPORT

EXECUTIVE COMPENSATION

PROPOSAL 2 - - PROPOSAL CONCERNING AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION

PROPOSAL 3 – RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

OTHER INFORMATION

ANNEX A

ANNEX B

BORGWARNER INC.

3850 Hamlin Road

Auburn Hills, Michigan 48326

PROXY STATEMENT

March ~~23, 2007~~17, 2008

This ~~Proxy Statement~~proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors of BorgWarner Inc. (the “Company”) for the Company’s ~~2007~~2008 Annual Meeting of Stockholders to be held at the Company’s headquarters at 3850 Hamlin Road, Auburn Hills, Michigan 48326 on April ~~25, 2007~~30, 2008 at 9:00 a.m., local time, or at any adjournments thereof. This ~~Proxy Statement~~proxy statement and the accompanying form of proxy and our 2007 summary annual report are being mailed to stockholders beginning on or about March ~~23, 2007.~~20, 2008. The Company’s Summary Annual Report to Stockholders for the year ended December 31, ~~2006~~2007 is enclosed.

Record Date and Voting at the Annual Meeting

Only stockholders of record at the close of business on March ~~2, 2007~~3, 2008 will be entitled to vote at the meeting. As of such date, there were ~~57,019,153~~117,393,116 issued and ~~57,015,169~~116,412,639 outstanding shares of common stock. Each share of common stock entitles the holder to one vote.

If you return your signed proxy card or vote by telephone or by the Internet before the Annual Meeting, we will vote your shares as you direct. Any proxy returned without specification as to any matter will be voted as to each proposal in accordance with the recommendation of the Board of Directors. You may revoke your proxy at any time before the vote is taken by delivering to the Secretary of the Company written revocation or a proxy bearing a later date, or by attending and voting at the Annual Meeting.

The election inspectors will tabulate the votes cast prior to the meeting and at the meeting to determine whether a quorum is present. The presence in person or by proxy of the holders of a majority of common stock will constitute a quorum. A quorum is necessary to transact business at the Annual Meeting. Shares of common stock represented by proxies that reflect abstentions or “broker non-votes” (i.e., shares held by a broker or nominee which are represented at the Annual Meeting, but with respect to which such broker or nominee is not empowered to vote on a particular proposal) will be counted as present and entitled to vote for purposes of determining the presence of a quorum.

With respect to Proposal 1 and the election of Directors, stockholders may (a) vote in favor of all nominees, (b) withhold votes as to all nominees, or (c) withhold votes as to specific nominees. ~~Directors~~In an uncontested director election, such as this year’s election, a director nominee may serve on the board only if the nominee receives the favorable vote of more than 50% of the shares voted. In a contested election, directors are elected by a plurality ~~vote so that the three directors receiving the greatest number of votes will be elected.~~vote. Withheld votes and broker non-votes will not affect the outcome of the election of directors.

~~For each other proposal,~~With respect to Proposal 2 and the proposed amendment to our certificate of incorporation: the approval and adoption of that amendment requires the affirmative vote of a majority of the outstanding shares of the Company’s common stock. An abstention or a broker nonvote is the functional equivalent of a “no” vote on this proposal.

With respect to Proposal 3: the affirmative vote of a majority of the votes cast with respect to a particular proposal is required for ~~approval. Accordingly, an~~approval and adoption of that proposal. An abstention on this proposal will ~~have~~be the ~~effect~~functional equivalent of a ~~negative~~“no” vote on ~~Proposals 2 and 3. Broker non-votes, however,~~that proposal. However, a broker nonvote on any one of those proposals will not be counted for purposes of determining the number of votes cast on that proposal and thus will not affect the outcome of ~~Proposals 2~~the vote on that proposal.

Electronic Delivery of Proxy Statement and 3.Annual Report

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON APRIL 30, 2008. THE PROXY STATEMENT AND ANNUAL REPORT TO SECURITY HOLDERS ARE AVAILABLE ON THE INTERNET SITE AT http://ww3.ics.adp.com/streetlink/BWA.

Beneficial Stockholders

Most stockholders can elect to view future proxy statements and annual reports over the internet instead of receiving paper copies in the mail.

You can choose this option and save the Company the cost of producing and mailing these documents by:

• Following the instructions provided on your voter instruction form;

• Following the instructions provided when you vote over the Internet; or

• Going to www.proxyvote.com and following the instructions provided.

If you choose to view future proxy statements and annual reports over the Internet, you will receive an e-mail message next year containing the Internet address to access the Company’s proxy statement and annual report. The e-mail message also will include instructions for voting over the Internet. You will have the opportunity to opt out at any time by following the instructions on www.proxyvote.com You do not have to re-elect Internet access each year.

Registered Stockholders

For internet access to your future proxy materials and more, simply logon to BNY Mellon Shareowner Services Investor ServiceDirect® at www.bnymellon.com/shareowner/isd where step-by-step instructions will prompt you through enrollment.

Householding Information

The Company has adopted a procedure called “householding,” which has been approved by the SEC. Under this procedure, a single copy of the summary annual report, proxy statement or Notice of Internet Availability of Proxy materials, as applicable, will be sent to any household at which two or more stockholders reside, unless one of the stockholders at that address notifies the Company that they wish to receive individual copies. This procedure reduces our printing costs and fees. Stockholders who participate in householding will continue to receive separate proxy cards.

Householding will not affect dividend check mailings in any way.

The Company will deliver promptly upon written or oral request a separate copy of the summary annual report, the proxy statement or Notice of Internet Availability of Proxy Materials, as applicable to any stockholder at a shared address to which a single copy of those documents was delivered. If you share an address with another stockholder and you wish to receive a separate copy of any of those documents you may inform the Company of your wish by contacting Mary Brevard, Vice President, Investor Relations, 3850 Hamlin Road, Auburn Hills, Michigan 48326 (tel: 248-754-9200). Similarly, if you share an address with another stockholder that is receiving multiple copies and wish to request that the number of copies of those documents being delivered to that address be reduced to a single copy, you may inform the Company of your wish by contacting Mary Brevard, Vice President, Investor Relations at the above address and telephone number.

P~~ROPOSAL 1 —~~ PROPOSAL 1— ELECTION OF DIRECTORS

The Company’s Board of Directors currently consists of ten directors and is divided into three classes. ~~Jere A. Drummond, Timothy M. Manganello~~Robin J. Adams and ~~Ernest J. Novak, Jr.~~David T. Brown are the nominees for election as Class IIIII Directors to the Board at this meeting. Mr. Glaske will retire from the Board of Directors at the 2008 Annual Meeting of Stockholders in accordance with retirement guidelines adopted by the Board. Following the election of directors at this Annual Meeting your Board of Directors will have nine members and one vacancy. If elected, each nominee will serve for a term of three years or until his successor is elected and qualified. The Class ~~III~~I Directors have terms expiring at the ~~2008~~2009 Annual Meeting of Stockholders and the Class III Directors have terms expiring at the ~~2009~~2010 Annual Meeting of Stockholders. Each of the nominees for election as a Class IIIII Director has agreed to serve if elected. All of the Class IIIII Directors are presently directors of the Company. In the event that any nominee should become unavailable for election, the Board of Directors may designate a substitute nominee, in which event the shares represented by proxies at the meeting will be voted for such substitute nominee unless an instruction to the contrary is indicated on the proxy card. ~~A plurality of the votes cast is needed for the election of directors.~~

Recommendation

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES FOR CLASS IIIII DIRECTOR ~~— JERE A. DRUMMOND, TIMOTHY M. MANGANELLO~~—ROBIN J. ADAMS AND ~~ERNEST J. NOVAK, JR.~~DAVID T. BROWN

Information on Nominees for Directors and Continuing Directors

The following table sets forth as of March ~~2, 2007,~~3, 2008, with respect to each ~~nominee and each director~~of the Company’s current directors continuing to serve, ~~their~~his or her name, age, principal occupation, the year in which ~~they~~he or she first became a director of the Company and directorships in other ~~corporations:~~ entities:

Class I Directors	Age		Principal Occupation and Directorships

Phyllis O. Bonanno 1999		6364	Ms. Bonanno has been 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.
Alexis P. Michas 1993		4950	Mr. Michas has been the Managing Partner of Stonington Partners, Inc., an investment management firm since 1996. He is also a director of AirTran Airways, Inc., PerkinElmer, Inc., Lincoln Educational Services Corporation and a number of privately-held companies.
Richard O. Schaum 2005		6061	Mr. Schaum ~~serves~~served as the 2007 President of the Society of Automotive Engineers and 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. He was Executive Vice President, Product Development for DaimlerChrysler Corporation from January 2000 until his retirement in March 2003.
Thomas T. Stallkamp 2006		6061	Mr. Stallkamp has been an Industrial Partner in Ripplewood Holdings ~~L.L.C.,~~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.

Class II Directors	Age		Principal Occupation and Directorships

Jere A. Drummond 1996		6768	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. Centillium Communications, Inc. and SAIC, Inc.
Timothy M. Manganello 2002		5758	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 Federal Reserve Bank of Chicago, Detroit branch.
Ernest J. Novak, Jr. 2003		6263	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.

Class III Directors	Age		Principal Occupation and Directorships

Robin J. Adams 2005		5354	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 also is a member of the Supervisory Board of BERU AG.
David T. Brown 2004		5859	Mr. Brown ~~has been~~retired from Owens Corning on December 31, 2007. He was President and Chief Executive Officer of Owens Corning ~~since~~from April ~~2002.~~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 Owens Corning.~~

~~Class III Directors~~	~~Age~~		~~Principal Occupation and Directorships~~

Paul E. Glaske 1994		73	Mr. Glaske was Chairman, President and Chief Executive Officer from April 1992 until his retirement in October 1999 of Blue Bird Corporation, a leading manufacturer of school buses, motor homes and a variety of other vehicles. Mr. Glaske is also a director of Lincoln Educational Services Corporation, Energy Transfer Partners, L.P. and Energy Transfer Equity, L.P.

No director nominee, director or executive officer is related to any other director nominee, director or executive officer (or to any director or executive officer of any of the Company’s subsidiaries) by blood, marriage or adoption. There are no arrangements or understandings between any nominee or any of our directors or executive officers or any other person pursuant to which that nominee or director or executive officer was nominated or elected as a director of the Company or any of its subsidiaries. No director or executive officer of the Company is party to, or has any material interests in, any material legal proceedings that are adverse to the Company or its subsidiaries.

Board of Directors and Its Committees

The Board of Directors held four regular meetings during ~~2006.~~2007. All of the directors attended at least 75% of the meetings of the Board of Directors and each committee on which they served. The Company’s Corporate Governance Guidelines set forth the ~~Company~~Company’s policy that directors should use their best efforts to attend the Company’s annual meeting of stockholders. All directors serving at the time of the ~~2006~~2007 Annual Meeting of Stockholders attended the meeting.

The Board of Directors has a standing Compensation Committee, Audit Committee, Corporate Governance Committee and Executive Committee. The Charters for each of our Board committees can be accessed on the Company’s website at www.borgwarner.com~~www.borgwarner.com~~.

The Board has determined that all Board members meet the independence requirements of the New York Stock Exchange (“NYSE”), with the exception of Mr. Manganello, our Chairman and Chief Executive Officer, and Mr. Adams, our Executive Vice President, Chief Financial Officer and Chief Administrative Officer. Under the Company’s Corporate Governance Guidelines, a director will not be considered independent unless the Board determines that such director has no direct or indirect material relationship with the Company. In addition, the Company’s Corporate Governance Guidelines provide, among other things, that:

	•	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 $100,000 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��~~“independent” until three years after he or she ceases to receive more than $100,000 per year in such compensation.

	•	a director who is affiliated with or employed by, or whose immediate family member is affiliated with or employed in a professional capacity by, a present or former internal or external auditor of the Company, 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.”

Compensation Committee. The ~~present~~current members of the Compensation Committee are Directors Drummond (Chairman), Bonanno, and Brown. The principal functions of the Compensation Committee include reviewing and approving executive appointments, remuneration, and compensation plans and supervising the administration of these plans. The Compensation Committee met ~~five~~six times during ~~2006.~~2007.

Audit Committee. The ~~present~~current members of the Audit Committee are Directors Novak (Chairman), Schaum and Stallkamp. The ~~principal functions~~Audit Committee of the ~~Audit Committee include:~~Board of Directors of BorgWarner Inc. is charged with assisting the ~~engagement~~full Board in fulfilling the Board’s oversight responsibility with respect to the quality and integrity of the ~~Company's~~accounting, auditing and financial reporting practices of the Company. The Committee also has the responsibility for, among other things, selection and compensation of the independent registered public accounting ~~firm; determining~~firm, monitoring the ~~scope of~~independent registered public accounting firm’s qualifications, independence and work (including resolving any disagreements between the Company’s management and the independent registered public accounting firm regarding financial reporting), pre-approving all audit services ~~provided~~to be performed by the independent registered public accounting ~~firm;~~firm, monitoring the performance of the Company’s internal audit function and reviewing on behalf of the ~~methodologies used~~Board the Company’s pension plans and risk management programs. The responsibilities of the Committee are set forth in its charter, which is reviewed at least annually.

Each member of the Committee meets the independence requirements set by the ~~Company in its accounting and financial reporting practices; reviewing the results~~New York Stock Exchange, Section 10A(m)(3) of the ~~annual audit~~Securities Exchange Act of 1934, as amended, and the ~~Company's annual~~rules and regulations of the Securities and Exchange Commission. The Board of Directors has determined that Mr. Novak is a financial ~~statements;~~expert as defined by the rules and ~~overseeing~~regulations of the ~~Company's internal control~~Securities and ~~internal auditing functions.~~Exchange Commission. None of the members of the Committee simultaneously serve on the audit committees of more than two other public companies.

The Audit Committee met seven times during ~~2006.~~2007. The Audit Committee’s charter, which was amended in November 2007, is attached as Annex A.

Corporate Governance Committee. The present members of the Corporate Governance Committee are Directors Glaske (Chairman), Drummond and Michas. The principal functions of the Corporate Governance Committee include making recommendations to the Board of Directors regarding: (i) Board composition and structure, (ii) corporate governance principles, including the nature, duties and powers of Board committees, (iii) term of office for members, (iv) qualified persons to be nominated for election or re-election as directors, (v) stockholders’ suggestions for board nominations, ~~and~~ (vi) the emergency successor to the Chief Executive ~~Officer.~~Officer, and (vii) any requests for waivers of application of the Company’s Code of Ethical Conduct and any related person transactions. The Corporate Governance Committee also establishes criteria for Board and committee membership, ~~and~~ evaluates Company policies relating to the recruitment of directors and oversees the evaluation of the Board, its committees and management. The Corporate Governance Committee met four times during ~~2006.~~2007.

The Corporate Governance Committee will consider nominees for the Board of Directors from a variety of sources, including current directors, management, retained third-party search firms, and stockholders.

Stockholders of record of the Company may recommend director candidates for inclusion by the Board in the slate of nominees which the Board recommends to stockholders for election. Appropriate biographical information and background material must be submitted to the “BorgWarner Inc. Corporate Governance Committee” c/o BorgWarner Inc. General Counsel, 3850 Hamlin Road, Auburn Hills, Michigan 48326 in a timely manner. Assuming that appropriate biographical and background material is provided for candidates recommended by stockholders, the Corporate Governance Committee will evaluate those candidates by following substantially the same process, and applying substantially the same criteria, as for candidates submitted by Board members. The General Counsel will review the information and provide to the Chairman of the Corporate Governance Committee an assessment of the candidate’s independence, freedom from conflicts of interest and general suitability. If the Chairman of the Committee decides to submit the candidate to the entire Committee, each member will receive the candidate’s background information and will be afforded an opportunity to interview the candidate.

In considering whether to recommend to the full Board any candidate for inclusion in the Board’s slate of recommended director nominees, the Corporate Governance Committee will consider, among other things, the following factors:

	•	personal and professional ethics, integrity and values;

	•	the education and breadth of experience necessary to understand business problems and evaluate and postulate solutions;

	•	interest and availability of time to be involved with the Company and its employees over a sustained period;

	•	stature to represent the Company before the public, stockholders and various others who affect the Company;

	•	willingness to objectively appraise management performance in the interest of the stockholders;

	•	open mindedness on policy issues and areas of activity affecting overall interests of the Company and its stockholders;

	•	involvement only in activities and interests that do not create a conflict with the director’s responsibilities to the Company and its stockholders;

	•	ability to evaluate strategic options and risks;

	•	contribution to the Board’s desired diversity and balance; ~~and~~

	•	willingness to limit public company board service to four or fewer boards of public companies, unless the Corporate Governance Committee approves ~~otherwise~~ otherwise; and

	•	agreement to tender promptly following their election an irrevocable resignation effective upon failure to receive the required vote for re-election at the next meeting at which such person would face re-election and upon acceptance of such resignation by the Board of Directors.

The Company believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities. If the Corporate Governance Committee determines that a stockholder-nominated candidate is suitable and that the candidate should be recommended to the full Board, a quorum of the full Board must discuss whether to include the candidate in the slate of nominees which the Board recommends to stockholders for election and, if appropriate, adopt a resolution authorizing the inclusion.

There have been no material changes to the procedures by which security holders may recommend ~~nominees.~~nominees since last year’s annual meeting.

You may send communications to your Board of Directors and to individual directors. Such communications should be submitted in writing addressed to your Board of Directors or to one or more named individual directors in care of BorgWarner Inc., General Counsel, 3850 Hamlin Road, Auburn Hills, Michigan 48326. All such communications will be forwarded promptly to your Board of Directors or such named individual director.

Executive Committee. The present members of the Executive Committee are Directors Drummond, Manganello and Michas. The Executive Committee is empowered to act for the full Board during intervals between Board meetings when telephonic meetings cannot reasonably be arranged, with the exception of certain matters that by law may not be delegated. The Executive Committee ~~did not meet~~met once during ~~2006.~~2007.

Executive Sessions. The non-employee directors meet in executive sessions without the presence of any corporate officer or member of management in conjunction with regular meetings of the Board. Director Glaske is the current presiding director. It is expected that Director Michas will become presiding director upon Mr. Glaske’s retirement. Interested parties can make concerns known directly to the non-management directors on-line at www.mysafeworkplace.com or by toll-free call to 1-800-461-9330.

R~~EPORT~~REPORT OF THE BORGWARNER INC. AUDIT COMMITTEE

Management of your Company is responsible for the preparation, presentation and integrity of your Company's financial statements and for the effectiveness of internal control over reporting. Management and the Company's internal auditing department are responsible for maintaining its accounting and financial reporting principles and internal controls and procedures designed to maintain compliance with accounting standards and applicable laws and regulations. Deloitte & Touche LLP, the independent registered public accounting firm for the Company is responsible for auditing your Company's financial statements and internal controls over financial reporting, and expressing opinions on (1) the conformity of the financial statements with accounting principles, generally accepted in the United States of America and (2) the effectiveness of internal control over financial reporting. The Audit Committee ofis responsible for the ~~Board of Directors of BorgWarner Inc. is charged with assisting the full Board in fulfilling the Board’s~~appointment, oversight, ~~responsibility with respect to the quality~~compensation and ~~integrity of the accounting, auditing and financial reporting practices of the Company. The Committee also has the responsibility for, among other things, selection and compensation~~retention of the independent registered public accounting firm, monitoring the independent registered public accounting firm’s qualifications, independence and work (including resolving any disagreements between management of BorgWarner Inc. and the independent registered public accounting firm regarding financial reporting), pre-approving all audit services to be performed by the independent registered public accounting firm, monitoringfirm.

In the performance of its oversight function, the ~~Company’s internal audit function~~Audit Committee has reviewed and advising the Board on pension plans and risk management programs. The responsibilities of the Committee are set forth in its charter, which is reviewed at least annually. During 2006, the Committee met seven times, and the Committee discussed ~~the interim financial information contained in each quarterly earnings announcement~~ with ~~the chief financial officer, controller and the independent registered public accounting firm prior to its public release.~~

Each member of the Committee meets the independence requirements set by the New York Stock Exchange, Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission. The Board of Directors has determined that Mr. Novak is a financial expert as defined by the rules and regulations of the Securities and Exchange Commission. None of the members of the Committee simultaneously serve on the audit committees of more than two other public companies.

~~With respect to the 2006 financial statements, the Committee reviewed the 2006 financial results and financial condition with management. The Committee met with selected members of~~ management and Deloitte & Touche LLP, the ~~member firms of~~audited financial statements for the year ended December 31, 2007. The Audit Committee also has discussed with Deloitte & Touche ~~Tohmatsu, and their respective affiliates (collectively, “Deloitte & Touche”),~~LLP, the ~~independent registered public accounting firm appointed~~matters required to be discussed by the Public Company Accounting Oversight Board (“PCAOB”) Interim Auditing Standard AU Section 380, "Communication with Audit Committees." We have received from Deloitte & Touche LLP the written disclosures and the letter required by Independence Standards Board Standard No. 1. ("Independence Discussions with Audit Committees"), and have discussed with Deloitte & Touche LLP their independence. The Audit Committee has concluded that Deloitte & Touche LLP's provision of audit and non-audit services to ~~review~~ the ~~financial statements (including quarterly reports), discussing such matters as~~Company is compatible with their independence.

The Audit Committee discussed with Deloitte & Touche LLP the overall scope and plans for their audit. The Audit Committee meets with Deloitte & Touche LLP, with and without management present to discuss the results of their audits, the evaluations of the Company's internal controls, and the overall quality of ~~earnings; estimates, allowances and accruals; suitability of accounting principles; other judgment areas; and audit adjustments, whether recorded or not.~~the Company's financial reporting. In addition, the Committee considered the quality and adequacy of the Company’s internal controls, taxation issues, pension plans, risk management programs, and other areas as appropriate to its oversight of the financial reporting and audit processes.

~~In discharging its oversight responsibilities as to the audit process, the Committee:~~


	•	satisfied itself as to Deloitte & Touche’s independence through a review of relationships and services that might affect the objectivity of the auditors, a review of the written disclosures and letter from Deloitte & Touche required by Independence Standards Board Standard No. 1 and discussions with Deloitte & Touche concerning their independence;

	•	~~discussed with Deloitte & Touche all matters required to be discussed by Statement of Auditing Standards No. 61, as amended, “Communication with~~ Audit Committees” and PCAOB Auditing Standard, No. 2, “An Audit of Internal Control Over Financial Reporting Performed in Conjunction with an Audit of Financial Statements,” including any difficulties encountered in the course of the audit work, any restrictions on the scope of the activities or access to requested information and any significant disagreements with management of the Company;

	•	~~discussed with the Company’s management and Deloitte & Touche the overall audit process, including audit reports;~~

	•	discussed and reviewed management’s documentation, testing, remediation and evaluation of the Company’s internal control over financial reporting in response to the requirements set forth in Section 404 of the Sarbanes-Oxley Act of 2002 and related regulations;

	•	~~received written materials addressing Deloitte & Touche’s internal quality control procedures and other matters, as required by NYSE listing standards;~~

	•	~~discussed with the Company’s management and Deloitte & Touche significant reporting issues and judgments made in connection with the preparation of the Company’s financial statements;~~

	•	~~reviewed any significant reports to the Company’s management prepared by the Company’s internal auditing department and management’s responses;~~

	•	established procedures for the receipt, retention and treatment of reports received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters;

	•	~~provided Deloitte & Touche full access to the Committee to report on any and all appropriate matters;~~

	•	was informed of and reviewed the oaths and certifications of the Chief Executive Officer and Chief Financial Officer required by the Securities and Exchange Commission General Order 4-460 and by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, and was informed of the processes followed by management in supporting these oaths and certifications; and

	•	recommended to the Board, subject to stockholder ratification, the reappointment of Deloitte & Touche as independent registered public accounting firm for the Company. The Board concurred with this recommendation.

~~The Committee has the authority, to the extent that it deems appropriate, to retain independent legal, accounting or other advisors.~~

~~The~~ Committee provided guidance and oversight to the internal audit function, including the audit plan, and results of internal audit activity. The Director of Internal Audit ~~had routine opportunity~~has direct access to ~~meet with~~ the Committee to discuss any matters desired, and ~~met with~~ the ~~Committee~~Director of Internal Audit presented an update of internal audit activity at each Committee meeting.

~~Based~~The members of the Audit Committee are not full-time employees of your Company and are not performing the functions of auditors or accountants. As such, it is not the duty or responsibility of the Audit Committee or its members to conduct "field work" or other types of auditing or accounting reviews or procedures or to set auditor independence standards. Members of the Audit Committee necessarily rely on the information ~~received as outlined~~provided to them by management and the independent auditors. Accordingly, the Audit Committee's considerations and discussions referred to above do not assure that the audit of the Company's financial statements has been carried out in accordance with generally accepted auditing standards, that the financial statements are presented in accordance with generally accepted accounting principles, or that the Company's auditors are "independent."

Based upon the reports and discussions described in this report, and subject to the limitations on the role and responsibilities of the Audit Committee that are described above and in the Audit Committee's charter, the Audit Committee recommended to the Board of Directors that the ~~Company’s~~ audited financial statements of the Company be included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2006, including~~2007. It also recommended to the ~~disclosures made in management’s discussion and analysis,~~Board that, subject to stockholder ratification, Deloitte & Touche LLP be ~~included in~~appointed as the ~~Annual Report to Stockholders on Form 10-K,~~independent registered public accounting firm for ~~filing with~~ the ~~Securities and Exchange Commission.~~Company.

BORGWARNER INC. AUDIT COMMITTEE

Ernest J. Novak, Chairman

Thomas T. Stallkamp Richard O. Schaum

The Audit Committee Report does not constitute soliciting material. It is not considered filed by us and shall not be incorporated by reference into any of our other filings under the Securities Act or the Exchange Act unless we state otherwise.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, as of February ~~16, 2007,~~29, 2008, certain information regarding beneficial ownership of common stock by ~~all~~those persons and entities that are known to the ~~knowledge of the~~ Company as beneficially ~~owned~~owning more than ~~the~~ five percent of the Company’s common stock.

	Number of			Percent of			Number of			Percent of
Name and Address of Beneficial Owner	Shares			Class			Shares			Class

UBS AG		7,595,342	(a)		13.2	%		16,354,032	(a)		14.1	%
Bahnhofstrasse 45 PO Box CH-8021 Zurich, Switzerland
Bahnhofstrasse 45, PO Box CH-8021 Zurich, Switzerland
AXA Financial, Inc.		7,185,892	(b)		12.8	%		6,014,168	(b)		5.2	%
1290 Avenue of the Americas New York, New York 10104

(a)		Pursuant to a Schedule 13G/A dated February ~~16, 2007~~14, 2008 on behalf of UBS AG indicating that it had sole voting power for ~~6,942,784~~15,036,076 and shared dispositive power for ~~7,595,342.~~16,354,032.
(b)		Pursuant to a Schedule 13G/A dated February ~~14, 2007~~29, 2008 on behalf of AXA Financial, Inc., AXA Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, AXA Courtage Assurance Mutuelle and AXA indicating that it had sole voting power for ~~4,252,441~~3,989,220 shares, shared voting power for ~~913,793~~167,866 shares, and sole dispositive power for ~~7,185,892~~6,014,168 shares.

The following table sets forth, as of March ~~2, 2007,~~3, 2008, certain information regarding the beneficial ownership of common ~~stock by~~stock. Each person who was a director of the ~~Company’s directors and~~Company at December 31, 2007, each nominee for election as a director, each executive ~~officers~~officer named in the Summary Compensation Table, and ~~by all~~such directors and executive officers as a group.

Amount and Nature

of Stock Ownership(b)(c)

Amount and Nature

Percent of

Name of Beneficial Owner

of Stock Ownership(a)(b)

Class

Name of Beneficial Owner (a)

Amount and Nature

of Stock Ownership(b)(c)

Percent of Class

Timothy M. Manganello

104,483

350,598.93

Robin J. Adams

62,764

182,184.36

Bernd Matthes

43,556.00

Cynthia Niekamp

73,246.71

Roger J. Wood

41,365

120,955.38

Alfred Weber

11,831

Cynthia Niekamp

18,513

Phyllis O. Bonanno

16,584

��

33,428.00

Dr. Andrew F. Brimmer (c)

David T. Brown

2,841

5,682.00

Jere A. Drummond

20,694

37,704.00

Paul E. Glaske

37,661

Paul E. Glaske (d)

71,322.00

Alexis P. Michas

91,507

183,014.00

Ernest J. Novak, Jr.

7,894

20,104.00

John Rau(d)

Richard O. Schaum

3,784

7,568.00

Thomas T. Stallkamp

3,337

6,674.00

All directors and executive officers of the Company (25 persons)

683,213

1.2%

All directors and executive officers of the Company (18 persons)

1,737,264.16

1.48%

Generally, our executive compensation program ~~targets~~comprises base salary at the 50th percentile of the Comparator Group, annual target bonus at the 65th percentile of the Comparator Group, and long-term target incentives at the 65th percentile of the Comparator Group. We believe that these percentiles reflect consideration of our stockholders’ interests in paying what is necessary, but not significantly more than necessary, to achieve our corporate goals. We also believe that these percentiles provide for a competitive level of base compensation at the midpoint of the market and place a higher level of compensation potential (65th percentile) on direct performance-based components (bonus and long-term incentives). Further, the achievement of a ~~65th percentile~~target level long-term incentive payout under the ~~2005 and 2006~~ performance share grants is predicated on our total shareholder return over a three year period being at the 65th percentile of our peers.

In addition to the data provided by Hewitt for 2006, our Compensation Committee also considered: (i) the compensation reported for the chief executive officers of the companies we used to compare our stockholder returns for 2005, which is reflected on the stock performance graph in the Proxy statement filed March 2006 as the “Former Peer Group Companies”, namely, ArvinMeritor Inc., Autoliv Inc., Cummins Engine Inc., Dana Corporation, Delphi Corporation, Dura Automotive Systems Inc., Eaton Corporation, Johnson Controls Inc., Lear Corporation, Magna International Inc., Modine Manufacturing Co., Tenneco Automotive Inc., Tower Automotive Inc., and Visteon Corporation, and (ii) the compensation reported for the CEOs and other executives in the 2005 Automotive Industry Executive, Board and Stock-Based Compensation study conducted by the consulting firm of Watson Wyatt Worldwide. For 2006, our Compensation Committee determined there was no significant difference between the compensation data reported in the Comparator Group, the Former Peer Group Companies and the Watson Wyatt Worldwide study.

Components of Compensation

The key elements of our executive compensation program are base salary, short-term (annual) incentives and long-term incentives. In 2007 the long-term incentive vehicles used were performance shares, stock options and stock units. Additionally, a limited number of executive benefits and perquisites are used based on competitive ~~practices.~~practices and to provide a connection to our industry, such as the provision of leased vehicles with BorgWarner component content to our executives.

Base Salary

Base salaries for our executives are established based on the scope of the executive’s responsibilities, taking into account competitive market compensation paid by other companies for similar ~~positions.~~positions and internal equity. Base salaries are reviewed annually, and adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities, individual and business unit performance, and experience. As part of that review, and with respect to its assessment of the individual performance of our Named Executive Officers (other than our Chief Executive Officer), our Compensation Committee may take into account the views of our Chief Executive Officer.

Based on its review of the compensation data described above ~~including~~in October 2006 for the ~~data provided by Hewitt,~~2007 plan year, our Compensation Committee determined that, relative to the Comparator Group, ~~our executive compensation levels were~~the majority of the Named Executive Officers had base salaries below the targets set forth in our executive compensation program. Specifically, our Compensation Committee found that the 2005 base salaries for our Named Executive Officers were significantly below the median of the Comparator Group, with the shortfall ranging from 13% to 30% below the target 50th percentile. Our Compensation Committee determined that Corporate and individual performance was strong for all Named Executive Officers and, given that determination, concluded that base salaries for 2006 should be moved toward the market median in order to recognize past achievements and continue to retain executives. Our Compensation Committee also determined that the base compensation for our business unit Presidents should begin to be distinguished by size of the respective business unit and scope of responsibility, whereas in the previous year, they were maintained on a comparable level. Based on this assessment, and on the competitive data, our Compensation

Committee granted base salary adjustments in 2006 to all of our Named Executive Officers, including a 20% increase in the base compensation for our Chief Executive Officer. These increases generally moved the base compensation of our Named Executive Officers closer to the 50th percentile of the Comparator Group, with our Chief Executive Officer remaining approximately 6% below the 50th percentile of the market.

~~Our Compensation Committee’s review of the 2007 base salaries for our Named Executive Officers occurred in October 2006 as noted above. Due~~Even so, due to the competitive pressures in the North American automotive industry, a recommendation was made by our Chief Executive Officer and accepted by our Compensation Committee to freeze the base salary for our Chief Executive Officer and all but one of the Named Executive Officers in 2007. Dr. Matthes received a base salary increase for internal equity purposes resulting from the growth of the business unit he manages.

Our Compensation Committee’s review of the 2008 base salaries for our Named Executive Officers occurred in October 2007. The freezing of base salaries in 2007 as noted above resulted in salaries significantly below the median of the Comparator Group for all but one of our Named Executive Officers. Base salary increases ranging from 0 – 22% were therefore granted for 2008 in accordance with our stated philosophy to target the median of the competitive market, to reward strong 2007 performance, and to motivate continued strong performance.

Short-Term Incentives

The Management Incentive Plan (“MIP”) is our cash-based, annual incentive plan for executives. The primary purposes of the MIP are: (i) to focus key managers on creating economic value ("EV") for the Company; (ii) to reinforce teamwork and collaboration among key managers of the Company by ~~having~~measuring the management team at each business unit ~~measured~~ by the business results they achieve together; (iii) to deliver competitive awards for key managers when economic value objectives are achieved or surpassed; and (iv) to attract and retain key managers by enabling participants in the MIP to share in the success of the Company. Actual performance under our MIP is measured annually from January 1 to December 31. Our Compensation Committee determines any earned MIP bonuses for any given fiscal year after review of the actual performance in relation to pre-established targets for that fiscal year. Ordinarily, bonuses are paid inAs a single installment in the first quarter following the completion of a given fiscal year. The MIP is designed so that bonus compensation determined thereunder is considered qualified performance-based compensation within the meaning of Internal Revenue Code Section 162(m).

~~The performance measure used in the MIP is EV. We~~result, we have chosen ~~this~~to use EV as our performance measure because we consider EV to be the foundation on which we operate and a very dynamic measure of how well we turn investment into profit. It is based on the concept that a business can be financially strong in the long run only if it consistently earns enough to cover its operating cost and, at the same time, produces enough additional earnings to cover its cost of capital or pay interest on debt and provide the required return to its stockholders. We consider any amount that exceeds these requirements to truly be additional economic value. Although annual bonuses currently depend primarily on the achievement of EV objectives, our Compensation Committee may adjust bonus measures and awards based on other financial or non-financial measures that it believes will benefit long-term stockholder value. No such adjustments were made for the 2006 bonuses paid in the first quarter of 2007.

The formula used in the MIP is as follows: ~~Economic Value~~EV = After-Tax Operating Income -minus (Average Operating Investment x Cost of Capital). We define “After-Tax Operating Income” as income prior to interest and finance charges net of income taxes calculated at a fixed composite statutory rate. We define “Average Operating Investment” for each business unit as the sum of the assets employed in the business less operating liabilities such as accounts payable, accruals, and long-term liabilities other than debt. We define “Average Operating Investment” for the Company to be the sum of debt, minority interest, and stockholders equity less cash and cash equivalents and 1987 leveraged buy-out (“LBO”) related goodwill. We define “Cost of Capital” as the rate of return on capital invested required to compensate debt and equity investors.

Actual performance under our MIP is measured annually from January 1 to December 31. Our Compensation Committee determines any earned MIP bonuses for any given fiscal year after review of the actual performance in relation to pre-established targets for that fiscal year. Ordinarily, bonuses are paid in a single installment in the first quarter following the completion of a given fiscal year. The MIP is designed so that bonus compensation determined thereunder is considered qualified performance-based compensation within the meaning of Internal Revenue Code Section 162(m). Although annual bonuses currently depend primarily on the achievement of EV objectives, our Compensation Committee may adjust bonus measures and awards based on other financial or non-financial measures that it believes will benefit long-term stockholder value. While EV was the sole measure used for the payment of executive bonuses for the 2007 plan payment made in the first quarter of 2008, an adjustment was made to the EV performance improvement goals. See page 14 for an explanation of this adjustment.

We expect each of our business units to increase its economic value each ~~year.~~year in order to receive above threshold levels of payout. Accordingly, a range of performance expectations (Threshold, Target and Maximum) is set by management and approved by our Compensation Committee, three years at a time, for our Company and each of our business units. ~~Generally, the Threshold is set at a level that is greater than or equal to the EV at the end of the prior period.~~ At the time the performance expectations are set, there is substantial uncertainty as to whether they will be met. Generally, the Threshold for each of the three years is set at a level that is greater than or equal to the EV achieved in the last year of the preceding three year period. In each of the second and third years of the three-year cycle, the Threshold value remains constant and the Target and Maximum values are adjusted upward each ~~year by~~year. For the 2005 – 2007 performance cycle, the Target and Maximum values were set at an improvement of 1% and 2%, respectively, of the operating investment (“OI”) at the beginning of the three-year cycle.

Establishment of ~~Three-Year~~2005 - 2007 Cycle EV Levels

	Year 11: 2005	Year 22: 2006	Year 3 3: 2007
Threshold	Base EV	Base EV	Base EV
Target	Base + 1% of OI	Base + 2% of OI	Base + 3% of OI
Maximum	Base + 2% of OI	Base + 4% of OI	Base + 6% of OI

Because the performance objectives under our MIP are determined three years at a time rather than annually, our MIP is a very challenging plan for our executives and forces our key managers to find ways to generate and sustain economic growth over an extended period. Over the last nine years, results at or above target have been achieved just over half of the time.

In order to encourage a longer-term perspective in decision-making while continuing to reward participants for the achievement of annual goals, our MIP includes a “Carryover Bonus” feature that allows participants to earn, over the following two-year period, any MIP bonus opportunity (up to specified maximum limits) that was not attained during the current plan year. Thus, if the Maximum bonus opportunity is not earned in a given year, then the amount of the shortfall can be earned over the next two years (50% each year) by achieving results each year which are higher than the ~~cumulative value targets during those two years.~~prior year. However, no Carryover Bonus from a prior year is earned if the Threshold level of performance for the current year is not achieved. For example, if an individual was part of a unit which achieved results at Threshold in year one, that individual would carryover the lost dollar opportunity between Threshold and Maximum into years two and three. If in year two that individual’s unit achieved Maximum results, he would be paid 50% of that lost opportunity from year one. If in the subsequent year three, his unit’s performance was below Threshold, he would lose the other 50% of the original carryover from year one. Because the carryover opportunity is available in addition to the basic bonus opportunity for the next two years, in a given year, the Carryover Bonus from prior years may increase the annual bonus opportunity of the executive officers above the regular target levels.

Because 2007 was the last year of a 3-year cycle of MIP, our Compensation Committee and management undertook a study in mid-2007 with the assistance of the Compensation Consultant to reassess the MIP design with regard to its relevance to current market practice and projections of the business environment for the 2008 – 2010 cycle. Subsequently, based on typical plan design features as compared with other companies, as well as dramatic shifts in the shrinking North American auto industry, our Compensation Committee determined that for the 2008-2010 cycle the following EV-based performance objectives represent realistic stretch goals that are calibrated to motivate continued excellent performance and delivery of shareholder value. This plan also addresses overall competitiveness critical to attraction and retention of talent.

Establishment of 2008 – 2010 Cycle EV Levels

	2008	2009	2010
Threshold	Base EV	Base EV	Base EV
Target	Base + 0.5% of OI	Base + 1% of OI	Base + 1.5% of OI
Maximum	Base + 1% of OI	Base + 2% of OI	Base + 3% of OI

The results of this study completed in mid-2007 caused our Compensation Committee to also reassess the applicability of the 2007 MIP performance improvement factors established 3 years earlier. Our Compensation Committee therefore determined in November 2007 that the new EV performance improvement formula outlined above for the third year of the cycle should also be applied to the 2007 results (including the carryover calculation) to better reflect competitive market practices and to be more realistic in view of shifts in the automotive industry that have already occurred. This action supports a critical goal of the program to motivate employees to desired performance in a year where the Company’s stock price and total shareholder return increased significantly.

Based on our compensation philosophy, ~~competitive market data and internal equity considerations,~~ in November ~~2005,~~2006, for the ~~2006~~2007 plan year, our Compensation Committee approved target bonus opportunities ranging from ~~70%~~85% to ~~120%~~125% of base salary for our Named Executive Officers. (See Grants of Plan-Based Awards table on page 22). Our Named Executive Officers receive 50% of the Target opportunity for achieving Threshold performance and 200% of the Target opportunity for achieving Maximum performance or above. Results in between these levels are interpolated. In November 2007, our Compensation Committee approved the target bonus opportunities for our executive officers for 2008. These target bonus opportunities range from 85% to 130% of base salary for our Named Executive Officers. The target bonus opportunities reflect the approximated 65th percentile of annual bonus levels for similar positions in the Comparator Group. The final bonus amounts paid, if any, are determined by our Compensation Committee based on achievement of the performance measures.

The bonus opportunity for each officer is further defined by ~~the portion of the business~~ unit, ~~he or she has direct accountability for, as well as the~~ group and corporate ~~results.~~results as applicable. The Compensation Committee’s objective for the Presidents is to assign the largest percentage of the bonus opportunity to the individual business unit for which the executive has responsibility, while also promoting collaboration within and between business groups.

For our Named Executive Officers, ~~with corporate-wide responsibility, including~~ the ~~BERU acquisition, 90% of the~~2007 bonus opportunity is based on the increase in EV of the Company and 10% is based on the increase of EV of BERU (not currently included with corporate earnings for purposes of calculating incentive compensation).opportunities were allocated as follows:

	BorgWarner Inc.	BERU*	Business Group	Business Unit
T. Manganello, CEO	90%	10%
R. Adams, CFO	90%	10%
R. Wood, President, Turbo/Emissions	20%	10%	15%	55%
C. Niekamp, President, TorqTransfer Systems	30%		15%	55%
B. Matthes, President, Transmission Systems	30%		15%	55%

* In January 2005, BorgWarner acquired a majority stake in BERU, a leading global supplier of diesel cold starting technology, gasoline ignition technology, and electronic control units and sensor technology. For 2007, BERU was not included in “BorgWarner Inc.” for purposes of calculating incentive compensation, consistent with the MIP’s treatment for acquisitions. Beginning in 2008 BERU will be included in "BorgWarner Inc." for incentive compensation purposes.

~~For those Named Executive Officers responsible~~

In November 2007, our Compensation Committee revised these percentages for the three Presidents mentioned in the table above to reflect a split of 60% based on business unit, 15% ~~of the~~based on business group and 25% based on BorgWarner Inc. corporate results for 2008 to further align their bonus opportunity ~~is based on~~to the ~~increase in EV~~results of the business group (Engine or Drivetrain) and 55% is based on the increase in EV of the assigned business unit. For those Named Executive Officers in the Drivetrain Group, the remaining 30% of the bonus opportunity is based on the increase in EV of the Company. Of the remaining 30% of the bonus opportunity for those Named Executive Officers in the Engine Group, 20% is based on the increase in EV of the Company and 10% is based on the increase in EV of BERU, whose operating results are reported within the Engine Group.their individual units, consistent with market practices.

In February ~~2007,~~2008, our Compensation Committee determined that, for purposes of our MIP, during ~~2006~~ the 2007 plan year, the Company created economic value of ~~our Company~~$49.3 million, which resulted in ~~total increased by $5.4 million. However, certain business units had decreases in EV, which were offset by increases in others. After reviewing~~a payout under the new performance of the individual business units for which each of our Named Executive Officers were individually responsible, it was determined that Ms. Niekamp’s business unit achieved below the Threshold EV level, Mr. Weber’s business unit achieved between the Threshold and Target EV levels, and Mr. Wood’s business unit achievedimprovement formula indicated above between the Target and Maximum EV levels ~~set for 2006 in February 2005~~ for the ~~three year performance cycle of 2005 to 2007. Based on all of these determinations, cash MIP bonuses were paid to all of our Named Executive Officers for 2006.~~BorgWarner Inc. component. A portion of the bonus payments for ~~Messrs.~~Mr. Manganello, Mr. Adams, Mr. Wood, Ms. Niekamp and ~~Weber~~Dr. Matthes included carryover from the previous year. For details of these amounts, as well as further information regarding the ~~2006~~2007 MIP bonuses paid to our Named Executive Officers, see the Summary Compensation Table on page 20.

Consistent with our objectives and compensation programs, in October 2006, our Compensation Committee approved the target bonus opportunities for our executive officers for 2007. These target bonus opportunities range

from 85% to 125% of base salary for our Named Executive Officers. The target bonus opportunities reflect the approximated 65th percentile of annual bonus levels for similar positions in the Comparator Group. The specific bonus opportunities depend on the position of the Named Executive Officer, taking into consideration any variations from the external position benchmarking and the ability of each Named Executive Officer to significantly affect our operations and performance beyond the role normally associated with his or her position. The final bonus amounts paid, if any, will be determined by our Compensation Committee based on achievement of the performance measures.

Long-Term Incentives

We believe that long-term performance is achieved through an ownership culture that ~~focuses~~rewards our executives onfor the maximization of long-term stockholder value. Our long-term incentive plans have been established and operated to provide certain of our employees, including our executive officers, with appropriate incentives to help align their interests with the interests of our stockholders. Furthermore, our stock compensation plans have provided a method for our executive officers to acquire equity interests in our Company and comply with our stock ownership guidelines.

~~ESPP~~ESPP. . The Executive Stock Performance Plan (“ESPP”) was approved by our stockholders and became effective on April 18, 1995. Under the terms of the ESPP, the final award of units was made in February 2004 for the three-year performance period beginning January 1, 2004 and ending on December 31, 2006. Therefore the final payment under the ESPP was made in February 2007 for the 2004 to 2006 performance period.

The ESPP was designed to provide competitive payouts at the end of a three-year period relative to how well we perform against our peer group, defined as publicly traded companies in the automotive supplier industry with at least $1 billion in sales that we believe compete with us for stockholder investment dollars, in terms of total shareholder return (“TSR”). For the final 2004 grant, the Former Peer Group Companies (as defined on page 11 above) were used. The performance objective of this plan is to make our common stock among the most attractive stocks to those who invest in automotive supplier companies. Therefore, in order for participants to earn a target award, the performance of our common stock must be at the 65th percentile of the TSR performance over a three-year period when compared to the peer group companies.SIP.

TSR is determined by the change in the value of our common stock (including dividends) over its starting value. The cumulative, compounded TSR over a three-year performance period is determined using the following formula:

~~Share price at end of period - Share price at start of period + Dividends per share during period~~

~~Share price at start of period~~

~~The resultant percentage would then be ranked against the TSRs of our peer group companies for the same period.~~

The target award under this plan is determined at the beginning of the performance period. The award is expressed in terms of performance units, each having an initial value of $1,000 per unit. The final value of each performance unit will be determined only after the close of the performance period. There is no annual vesting of the target awards under this plan.

The actual value of each unit at the time of payout can range from $0 to a maximum of $1,750, depending on our TSR performance at the end of the three-year period relative to the percentile distribution of TSR performance for the peer group companies.

~~ESPP Performance/Payout Table~~

~~BW Common Stock Percentile to Peer Group~~	~~Payout Per Performance Unit~~
~~Below 25~~^th ~~percentile~~	~~$ 0~~
25^th ~~percentile~~	~~$ 250~~
35^th ~~percentile~~	~~$ 475~~
45^th ~~percentile~~	~~$ 700~~
55^th ~~percentile~~	~~$ 850~~
65^th ~~percentile~~	~~$1,000~~
75^th ~~percentile~~	~~$1,150~~
90^th ~~percentile~~	~~$1,750~~

~~Interpolation is used to calculate the value of each unit when our TSR performance, relative to the peer group, is in between the percentiles shown above.~~

In order to facilitate ownership of our common stock by our executives and better align our executives' interests with our stockholders’ interests, 60% of the total award is paid in the form of our common stock. The shares are issued during the first quarter after the three-year cycle has ended. The number of shares paid is determined by the following formula:

~~Total Award X 60%~~

~~Average closing price of our common stock on the last five trading days of the three-year performance period~~

~~Forty percent of the ESPP award is paid in cash since the full amount of the ESPP award is subject to income tax in the year in which it is received.~~

~~SIP~~. All long-term incentive grants awarded in ~~2006~~2007 (performance shares, stock options and stock ~~options)~~units) were awarded under ~~the BorgWarner Inc. 2004 Stock Incentive Plan or~~ the BorgWarner Inc. Amended and Restated 2004 Stock Incentive Plan ~~(collectively the~~(the “SIP”). Although the SIP provides for the ~~award~~use of ~~stock options, stock appreciation rights, restricted stock, stock units, performance shares and performance units,~~a variety of equity-related vehicles, our Compensation Committee ~~has~~ determined in 2007 to rely primarily on grants of stock options and performance ~~shares. By utilizing these two vehicles,~~shares in order to motivate and reward executives ~~are motivated by both~~for growth in ~~the Company’s stock price and by~~ total shareholder return as compared to our ~~industry.~~industry (in the case of performance shares) and growth in the Company’s stock price (in the case of stock options and performance shares).

As discussed above, the target awards (in dollars) for our executives are based on the 65th percentile market value that reflects the responsibility of each Named Executive Officer, with grant sizes (in shares) based on a valuation methodology calculated by ~~Hewitt.~~the Compensation Consultant. This methodology is the same one used by ~~Hewitt~~the Compensation Consultant in ~~their~~its market study to value equity compensation consistently between companies. Based on its review of the market data described above, our Compensation Committee determined that, relative to the Comparator Group, our long term incentive levels were significantly below the 65th percentile targets set forth in our executive compensation program. Based on this and our need to meet our objectives to retain and motivate these executives, our Compensation Committee elected to make appreciable movement toward the 65th percentile target for the Named Executive Officers in 2006 with the intention of reaching the 65th percentile in 2007. The resultingapproved grants in ~~2006 moved~~2007 that were substantially at this target market value for our Named Executive ~~Officers to between the approximated 50th and 64th percentile of the market.~~Officers.

~~Within the long-term incentive opportunity,~~In 2007, two-thirds of total value isof the target long-term incentive opportunity was delivered through performance shares and one-third of total value iswas delivered through stock options. Due to the significant challenges in the automotive industry, our Compensation Committee ~~has~~ determined to place the greater emphasis on performance shares because of its belief that this long-term incentive vehicle provides a more direct comparison of our performance to the performance of our peers within our industry while firmly aligning our executives’ interests with the interests of our stockholders. See further discussion of the performance shares below.

In ~~2006,~~February 2007, performance shares were granted to our Named Executive Officers ~~in February~~ to coincide with the beginning of the three-year performance ~~period and stock~~period. Stock options were also granted ~~to our Named Executive Officers in July,~~ at the same time as grants have historically been made to our other executives and employees. As discussed earlier, our Compensation Committee reviews officers' total compensation in October and approves compensation

for the coming year in November. In order to better align all of the components of executive compensation, our Compensation Committee has determined to move the annual granting of all stock options to the February following such November approval beginning in 2007. So in February 2007, the number of performance shares and options granted to each officer was determined by dividing the total compensation for such officer that ~~was approved in November 2006, by the average closing price of our common stock for the last five trading days in 2006.~~time. In accordance with the SIP, the exercise price for the stock options was set at the average of the high and low price of our common stock on the date of grant.

At its November 2007 meeting, our Compensation Committee decided that restricted stock would be used for a portion of the ~~options were actually~~2008 long-term incentive award grants (replacing one-third of the value that would otherwise have been granted in ~~February 2007.~~

stock options). This change, which will also be made for non-officer participants, is viewed as a more effective retention tool and reflects the increasing use of restricted stock in the competitive market. It also better aligns the officers’ equity compensation with that of the members of the Board of Directors, who receive their equity compensation through restricted stock.

Performance Shares. ~~The issuance~~Annual grants of performance shares under the SIP was intended to replace the ESPP, which ended on December 31, 2004. The awarding of performance shares has many of the same characteristics as the ESPP. Like the ESPP, the granting of performance shares isare designed to provide competitive payouts at the end of a three-year period relative to how well we perform against a peer group of companies (the “Peer Group Companies”) in terms of Total Shareholder Return (“TSR”). A listing of the Peer Group Companies (for the 2006 and 2007 grants) can be found on page 22 and the Former Peer Group Companies (for the 2005 grant) can be found on page 25. Our Board of Directors reserves the right to modify the list at any time in order to ensure that the peer group ~~companies in terms~~remains relevant as a measure for TSR performance. When granted, each performance share represents one share of ~~TSR.~~common stock. In order for participants to earn a target award, the performance of our common stock must be at the 65th percentile of the TSR performance over a three-year period when compared to the ~~peer group companies. However, the key difference in the granting~~Peer Group Companies. The value of ~~performance shares is that~~ the payout at the end of the three-year performance period is based on both the TSR performance and the stock price at the end of the ~~period, whereas the ESPP only relied on TSR performance.~~period. This provides an additional link to stockholder value.

A new performance period begins each January 1 and ends three years later on December 31. As a result, up to three performance periods may overlap in a given year.

For the 2005 performance share award, the Former Peer Group Companies were designated as the comparator group. In 2006, the Compensation Committee approved a new set of Peer Group Companies based on the following criteria: auto industry exposure, sales over the last 12 months (by geography), market capitalization, and existing company analyst coverage of peer groups. A listing of the Peer Group Companies can be found on page 22. This revision was prompted by the significant change in companies in the automotive sector due to bankruptcies and mergers. Our Board of Directors reserves the right to modify the list at any time in order to ensure that the peer group remains relevant as a measure for TSR performance.

The target award is determined at the beginning of the performance period. The award is expressed in terms of performance shares. Our Compensation Committee established a convention in February 2007 for determining the stock price to be used for converting the target dollar amount to a specific number of shares. This was established in order to provide consistency in the method of determining the stock price to be used from year to year. The convention uses the average closing price of the Company’s common stock for the last five (5) trading days of the year preceding the date of grant, which coincides with the end of the prior performance period. The actual shares awarded for ~~2006~~2007 are detailed on page 22 in the Grants of Plan-Based Awards table. The final value of each performance share will be determined only after the close of the performance period. There is no annual vesting of the target awards under this plan.

The actual number of performance shares ~~issued~~earned at the time of payout will range from 0% to a maximum of 175% of target, depending on our TSR performance at the end of the three-year period relative to the percentile distribution of TSR performance for the other companies in the peer group.

Performance Share TSR Performance/Payout Table

BorgWarner TSR Percentile to Peer Group	Percent of Target Number of Performance Shares Earned
Below 25th^th percentile	0.000%
25th^th percentile	25.000%
35th^th percentile	43.750%
50th^th percentile	71.875%
65th^th percentile	100.000%
75th^th percentile	130.000%
90th^th percentile	175.000%

Interpolation is used to determine the percent of performance shares when our percentile rank does not fall directly on one of the ranks listed in the above. ~~The actual value of each performance share is based on the average price of our common stock on the last five trading days of the performance period.~~

Payment of earned performance shares is made in a combination of stock and cash in order to facilitate ownership of our common stock by our executives. ~~Sixty~~Under current practice, sixty percent of the ~~total award is paid in the form of~~earned performance shares are converted to our

common stock. The shares of stock ~~is issued~~are typically delivered shortly after our Compensation Committee certifies the results, which occurs during the first quarter after the three-year cycle has ended. ~~The number of shares of common stock paid is determined by the following formula:~~

~~Total Award X 60%~~

~~Average closing price of our common stock on the last five business days of the three-year performance period~~

~~Forty~~Also under current practice, forty percent of the award is paid in cash since the full amount of the award is subject to income tax in the year in which it is received.

~~Stock Options~~. Our stock options are rights to purchase (“exercise”) shares of our common stock at a specified price (“exercise price”) after fulfilling certain conditions during a specified period of time (“option term”). The ~~value of a stock option changes as the share price of our common stock increases or decreases in relation to the exercise price. The exercise price per share of stock purchasable under a stock option~~cash portion is ~~determined by~~based on the fair market value (average of the high and low sales price) of our stock on the ~~day~~date of ~~grant.~~delivery.

Stock Options. The ~~fair market~~role of stock options in the overall executive compensation package has been as a retention tool and as an incentive to and reward for improving the long term stock value to stockholders. In 2007, the stock options were granted in February at the same time as the performance shares. The exercise price is the average of the highest and lowest reported sales price of our common stock on the New York Stock ~~Exchange.~~Exchange on the day of the award. This method is used to mitigate any major fluctuations in the stock price that could occur during a typical day of trading in the stock market.

The option term is ten years from the date of grant and each stock option grant is subject to a two-step vesting period. One-half of the stock option grant will become available for exercise on the second anniversary of the grant and the remainder of the grant will become available for exercise on the third anniversary of the grant if the option-holder is still employed by the Company.

Executive Benefits and Perquisites

General. Our Named Executive Officers are eligible to participate in all of our employee benefit plans (such as medical, dental and vision care plans; flexible spending accounts for healthcare; life, accidental death and dismemberment and disability insurance; employee assistance programs (confidential counseling); a defined contribution retirement plan including a 401(k) feature; and paid time off), in each case on the same basis as our other employees. The retirement plans described below are provided to executives in order to permit them to accumulate funds for retirement and to provide a competitive retirement package as compared to other companies. Additionally, as described below, a limited number of executive perquisites are used, also based on competitive practices. Our Compensation Committee in its discretion may revise, amend or add to an officer’s executive benefits and perquisites if it deems it advisable. We believe that the benefits and perquisites we provide our executives are currently at or below median competitive levels for comparable companies.

The additional executive perquisites available to our Named Executive Officers include a company-leased vehicle, financial counseling, and limited personal use of corporate ~~aircraft.~~aircraft (we do not encourage personal use but recognize that at times it is appropriate). Each of our Named Executive Officers is eligible for a new vehicle ~~every~~at the earlier of 60,000 miles or three years. In addition to the cost of the lease, we pay for the cost of insurance, vehicle license, taxes, and maintenance. Financial counseling and annual income tax preparation services are provided to our Named Executive Officers through a third-party ~~service. We do not encourage~~service to allow Named Executive Officers to better focus on meeting the ~~personal use~~considerable demands of ~~our corporate aircraft. Personal use of our corporate aircraft was less than 1% of the total corporate aircraft flight time in 2006.~~their positions.

Other executive benefits available to our Named Executive Officers include the BorgWarner ~~Automotive,~~ Inc. Retirement Savings Excess Benefit Plan (“Excess Plan”) and the BorgWarner Inc. 2004 Deferred Compensation Plan (“Deferred Compensation Plan”)~~, which are~~. All of our Named Executive Officers received Company contributions under the Excess Plan in 2007. None of our Named Executive Officers made deferrals into the Deferred Compensation Plan in 2007. Mr. Wood has an account balance in the Deferred Compensation Plan from deferrals made prior to his appointment as an officer of the Company. See further ~~described below. See “Non-Qualified Retirement Plan” and “Non-Qualified~~descriptions of these plans on pages 27 - 28 under the Non-Qualified Deferred ~~Compensation” below and on page 26.~~Compensation section.

~~Qualified Retirement Plan~~. Our Named Executive Officers are eligible to participate in the BorgWarner Inc. Retirement Savings Plan (“RSP”), which is available to all U.S. salaried and certain hourly employees. The RSP is comprised of two components: a Company Retirement Account and a Savings Account with a match feature. In the Company Retirement Account, the Company makes a contribution to the employee’s account each pay period based on years of service and eligible pay ranging from 4% to 6% of compensation up to the Social Security wage base and from 8% to 11.5% of compensation above the Social Security wage base. In the Savings Account, participants may make contributions to the plan of 1% to 28% of their eligible earnings on a before-tax and/or after-tax basis (up to the statutorily prescribed annual limit on pre-tax contributions under the Internal Revenue Code). The Company will match 100% of the first 3% of the employee’s pre-tax contributions. Participants who are 50 years of age or

older may contribute additional amounts based on the statutory limits for catch-up contributions. Pre-tax contributions by participants to the plan and the income earned on those contributions are generally not taxable to participants until withdrawn. Participant contributions are held in trust as required by law. All employee contributions are 100% vested when contributed, and any employer contributions vest 100% after three years of service.

Pension Benefits. Except as described below on page ~~25,~~26, none of our Named Executive Officers participate in or have account balances in any of the qualified or non-qualified defined benefit pension plans sponsored by us.

~~Non-Qualified Retirement Plan.~~ The Excess Plan is an unfunded, non-qualified plan, which keeps certain highly compensated employees whole (on a non-qualified basis) in terms of the Company Retirement Account contribution and matching contribution described above, which are otherwise limited under the RSP by Internal Revenue Code provisions. Participation is automatic once these limits are reached in a plan year. All of our Named Executive Officers received Company contributions under the Excess Plan in 2006.

~~Non-Qualified Deferred Compensation~~. The Deferred Compensation Plan is a non-qualified plan, which allows executives to defer from 1% to 20% of their salary and up to 100% of their bonus, thus realizing current year tax savings. None of our Named Executive Officers made deferrals into the Deferred Compensation Plan in 2006. Mr. Wood has an account balance in the Deferred Compensation Plan from deferrals made prior to his appointment as an officer of the Company.

Potential Payments Upon Termination or Change of Control

Change of Control Employment Agreements. We have entered into Change of Control Employment Agreements (the “Change of Control Agreements”) with each of our Named Executive Officers. In establishing the Change of Control Agreements, our Board of Directors determined that it is in the best interests of the Company and its stockholders (i) to assure that we will have the continued dedication of our Named Executive Officers in the event of the threat or occurrence of a Change of Control, and (ii) to diminish the inevitable distraction of our Named Executive Officers by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control by agreeing to provide two to three years of compensation (depending on position) if the executive’s employment is terminated as a result of a Change of Control. ~~The terms~~See pages 29 - 30 for further details of the ~~existing~~ Change of Control Agreements ~~were established several years ago~~ for ~~the foregoing reasons. A recent study has been completed by~~ our Human Resources Department in conjunction with Hewitt Associates at the request of our Compensation Committee to assess competitive market practices of companies in the Comparator Group, in the industry and in Fortune 500 companies. As a result of that study, our Compensation Committee approved revisions with respect to future Change of Control Agreements. These changes do not impact our current Named Executive Officers. ~~See pages 27 and 28 for further details of our current Change of Control Agreements.~~

Severance Benefits. Each of our Named Executive Officers is eligible for severance benefits under the BorgWarner Inc. Transitional Income Plan (“TIP”). The TIP was established to provide some financial protection to all U.S. salaried employees in the event that their employment is terminated for reasons beyond their control. The TIP benefit includes a lump sum payment that is based on salary level and length of service with us (with a maximum benefit of twenty-six weeks of base salary, adjusted for unemployment benefits) and medical coverage.

Stock Ownership Guidelines

In order to promote equity ownership and further align the interests of our management and our stockholders, we have established stock ownership guidelines that request our executives to hold a significant and sustained long-term personal financial interest in the Company. Our stock ownership guidelines, which apply to all of our officers including our Named Executive Officers, request that our officers own and continuously hold a minimum level of stock as long as we employ them. The levels of requested stock ownership for our Named Executive Officers are as follows:

•~~Chief Executive Officer: an amount of stock with a market value equal to three times the average of the annualized salary plus target bonus (as of December 31) for the prior three years.~~

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

•Chief Financial Officer and Business Unit Presidents: an amount of stock with a market value equal to two times the average of the annualized salary plus target bonus (as of December 31) for the prior three years.

Each of our Named Executive Officers is expected to fulfill this goal within five years of his or her appointment as an officer. Moreover, enough stock must be secured during each of the first five years to demonstrate progress toward fulfilling the goal by year five.

Our Insider Trading and Confidentiality Policy prohibits our directors and employees from engaging in any transaction involving a put, call or other option on BorgWarner Securities or from selling any BorgWarner Securities he or she does not own; i.e., “selling short.”

Our Compensation Committee reviews the ownership level for our Chief Executive Officer and all other persons covered under this guideline each year. Our Board of Directors reserves the right to determine what action will be taken if a covered individual does not meet the requested ownership guidelines. All of our Named Executive Officers met the requested stock ownership guidelines in ~~2006.~~2007.

Deductibility of Compensation

Section 162(m) of the U.S. Internal Revenue Code places a limit on the deduction as a business expense of compensation in excess of $1 million paid to certain “covered employees” of a publicly held corporation (generally, our Chief Executive Officer, Chief Financial Officer and our next ~~four~~three most highly compensated executive officers in the year that the compensation is paid). Compensation that is “performance-based compensation” generally does not count toward Section 162(m)’s $1 million limit.

Our compensation plans are designed so that bonus compensation determined ~~there under~~thereunder qualifies as performance-based compensation within the meaning of Section 162(m). Our Compensation Committee is comprised solely of “outside directors” for purposes of Section 162(m) of the Internal Revenue Code. It is believed that all compensation earned by the named executive officers in 2007 was fully deductible for Federal income tax puroses.

CO~~MPENSATION~~COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

THE COMPENSATION COMMITTEE

Jere A. Drummond, Chairman

Phyllis O. Bonanno

David T. Brown

The Compensation Committee Report does not constitute soliciting material. It is not considered filed by us and shall not be incorporated by reference into any of our other filings under the Securities Act or the Exchange Act unless we state otherwise.

Compensation Committee Interlocks and Insider Participation

During our last completed fiscal year, the voting members of our Compensation Committee were Jere A. Drummond, Chairman, Phyllis O. Bonanno and David T. Brown. None of these persons was an officer or employee of the Company or any of its subsidiaries, or was formerly an officer of the Company or of any of its subsidiaries during such fiscal year. None of these persons has any relationship requiring disclosure by the Company under Item 404 of Regulation S-K.

No executive officer of the Company served as a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on the Company’s Compensation Committee or the Company’s Board of Directors. No executive officer of the Company served as a director of another entity, or as a member of the compensation committee (or other board committee performing equivalent functions or, in the

absence of any such committee, the entire board of directors) of such other entity, one of whose executive officers served on the Compensation Committee or the Board of Directors of the Company.

EEXECUTIVE COMPENSATION~~XECUTIVE COMPENSATION~~

Summary Compensation Table

The following table sets forth information regarding compensation earned by our Named Executive Officers during ~~2006:~~

2007:

Name and Principle Position	Year	Salary		Bonus (1)		Stock Awards (2)		Option Awards (3)		Non-Equity Incentive Plan Compensation (4)		Change in Pension Value and Non-Qualified Deferred Compensation Earnings (5)		All Other Compensation		Total
		($)		($)		($)		($)		($)		($)		($)		($)
(a)	(b)	(c)		(d)		(e)		(f)		(g)		(h)		(i)		(j)
Timothy M. Manganello	2007		900,000		-		6,296,024		1,030,051		2,666,782		-		237,695		11,130,552
Chairman and CEO	2006		900,000		-		315,529		494,516		624,118		-		293,431		2,627,594

Robin J. Adams	2007		466,000		-		1,644,501		445,985		1,061,342		-		111,776		3,729,604
EVP, CFO and CAO	2006		466,000		-		167,811		295,042		215,686		-		150,336		1,294,875

Roger J. Wood	2007		395,000		-		1,271,210		254,809		709,924		-		158,982		2,789,925
President and GM, Turbo / Emission Systems	2006		395,000		-		117,169		123,333		329,835		-		249,738		1,215,075

Cynthia A. Niekamp	2007		365,000		-		1,032,589		213,575		875,385		-		58,724		2,545,274
President and GM, TorqTransfer Systems	2006		365,000		85,000		117,169		119,341		43,448		-		90,256		820,214

Bernd W. Matthes(6)	2007		365,000		-		1,032,589		198,144		326,478		-		321,672		2,243,883
President and GM, Transmission Systems	2006		-		-		-		-		-		-		-		-


(1) $85,000 sign-on bonus paid in 2006 per 2004 employment offer.
(2) 2007 compensation expense of the 2005, 2006, and 2007 performance share awards. Assumptions used in the
calculations of these amounts are included in the Company’s audited financial statements for the fiscal year ended December 31, 2007,
included in the Company’s Summary Annual Report for 2008 filed with the Securities and Exchange Commission (See Note 12 on pages 49-52).
This also includes the 2007 compensation expense of the August 3, 2007 Recognition and Retention Grant to Mr. Manganello.
Details of this grant were disclosed in an 8-K filing on August 7, 2007. The compensation expense reported for 2006 included the
2004 ESPP award and the 2005 and 2006 performance share awards. Assumptions used in the 2006 calculations were included in
the Company’s 2006 Annual Report filed with the Securities and Exchange Commission (See Note 13 on pages 55-58).
(3) 2007 compensation expense of aggregate grant date fair value of the 2004, 2005, 2006, 2007 Stock Option awards, excluding forfeitures.
Assumptions used in the calculations of these amounts are included in the Company’s audited financial statements for the fiscal year ended
December 31, 2007, included in the Company’s Summary Annual Report for 2008 filed with the Securities and Exchange Commission (See Note 12 on pages 49-52).
The compensation expense reported for 2006 included the aggregate grant date fair values of the 2004, 2005, 2006 Stock Option awards, excluding
forfeitures. Assumptions used in the 2006 calculations were included in the Company’s 2006 Annual Report filed with the Securities and Exchange
Commission (See Note 13 on pages 55-58).
(4) Reflects the 2007 plan year payout, paid in February 2008, under the Management Incentive Plan (MIP), including Carryover Bonus payments of
$691,606 for Mr. Manganello, $243,180 for Mr. Adams, $95,801 for Mr. Wood, $80,424 for Dr. Matthes, and $288,055 for Ms. Niekamp.
The 2006 plan year payout under the MIP included Carryover Bonus payments of $2,582 for Mr. Manganello, $1,141 for
Mr. Adams, $713 for Mr. Wood. No Carryover Bonus was paid to Ms. Niekamp for the 2006 plan year.
(5) 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 Euro to US Dollar using
an exchange rate of 1 Euro = 1.4598 US Dollar.
(6) Compensation is not reported for Dr. Matthes for 2006 as he was not a Named Executive Officer.

Name and Principle Position Year Salary Bonus (1) Stock Awards (2) Option Awards (3) Non-Equity Incentive Plan Compensation (4) Change in Pension Value and Non-Qualified Deferred Compensation Earnings (5) All Other Compensation Total
($) ($) ($) ($) ($) ($) ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
Timothy M. Manganello 2006 900,000 - 315,529 494,516 624,118 - 293,431 2,627,594
Chairman and CEO

Robin J. Adams 2006 466,000 - 167,811 295,042 215,686 - 150,336 1,294,875
VP, CFO, and CAO

Roger J. Wood 2006 395,000 - 117,169 123,333 329,835 - 249,738 1,215,075
President and GM, Turbo / Emission Systems

Alfred Weber 2006 375,000 - 117,169 66,278 202,655 3,598 276,508 1,041,208
President and GM, MT / Thermal Systems

Cynthia A. Niekamp 2006 365,000 85,000 117,169 119,341 43,448 - 90,256 820,214
President and GM, TorqTransfer Systems

(1) $85,000 sign-on bonus paid in 2006 per 2004 employment offer.
(2) 2006 compensation expense of the 2004 ESPP, 2005 performance share, and 2006 performance share awards. Assumptions used in the calculations of these amounts are included in the Company’s audited financial statements for the fiscal year ended December 31, 2006, included in the Company’s Annual Report filed with the Securities and Exchange Commission (See Note 13 on pages 55-58).
(3) 2006 compensation expense of aggregate grant date fair value of the 2004, 2005, 2006 Stock Option awards, excluding forfeitures. Assumptions used in the calculations of these amounts are included in the Company’s audited financial statements for the fiscal year ended December 31, 2006, included in the Company’s Annual Report filed with the Securities and Exchange Commission (See Note 13 on pages 55-58).
(4) Reflects the 2006 plan year payout under the MIP, including Carryover Bonus payments of $2,582 for Mr. Manganello, $1,141 for Mr. Adams, $713 for Mr. Wood and $22,190 for Mr. Weber.
(5) Converted from Euro to US Dollar using an exchange rate of 1 Euro = 1.2564 US Dollar.

All Other Compensation Table

The following table details, by category, the amounts reported above in the “All Other Compensation” column of the Summary Compensation Table for each of our Named Executive Officers. All of our Named Executive Officers exceeded the aggregate threshold of $10,000 for perquisites and personal benefits. The chart below indicates the amount in each category for each of our Named Executive Officers:

Name	Personal Use of Leased Vehicle ($)	Financial Counseling ($)	Personal Use of Company Aircraft ($)	Relocation Costs ($) (1)	Tax Reimbursement ($)	Registrant Contributions to Defined Contribution Plans ($) (2)	TOTAL of "All Other Compensation" ($)		Personal Use of Leased Vehicle		Financial Counseling		Personal Use of Company Aircraft		Relocation Costs (1)		Life Insurance Premiums Paid by Company		Tax Reimbursement		Registrant Contributions to Defined Contribution Plans (2)		TOTAL of "All Other Compensation"
									($)		($)		($)		($)		($)		($)		($)		($)
(a)	(b)	(c)	(d)	(e)	(g)	(h)	(i)		(b)		(c)		(d)		(e)		(f)		(g)		(h)		(i)
Timothy M. Manganello	6,031	10,000	680	-	9,688	267,032	293,431			17,071		10,000		6,363		-		900		10,101		193,260		237,695
CEO
Robin J. Adams	10,280	10,000	-	-	7,155	122,901	150,336			9,943		10,000		-		-		839		7,250		83,744		111,776
CFO
Roger J. Wood	8,654	10,000	2,726	88,213	41,972	98,173	249,738			9,674		10,000		997		28,917		711		8,944		99,739		158,982
President, TBS/E
Alfred Weber	10,837	10,000	-	94,294	65,980	95,397	276,508
President, MT/T
Cynthia A. Niekamp	5,333	10,000	-	-	6,535	68,388	90,256			-		10,000		1,477		-		657		5,061		41,529		58,724
President, TTS
(1) Amounts relating to relocation from Michigan to New York for Mr. Weber; from New York to North Carolina and North Carolina to Michigan for Mr. Wood.
(2) Amounts contributed by the Company on behalf of its Named Executive officers during 2006 pursuant to the provisions of the RSP and the Excess Plan.
Bernd W. Matthes										9,084		10,000		606		173,905		657		85,791		41,629		321,672
President, TS

(1) Amounts relating to relocation from New York to North Carolina and North Carolina to Michigan for Mr. Wood, and from Germany to Michigan for Dr. Matthes.								(1) Amounts relating to relocation from New York to North Carolina and North Carolina to Michigan for Mr. Wood, and from Germany to Michigan for Dr. Matthes.
(2) Amounts contributed by the Company on behalf of its Named Executive officers during 2007 pursuant to the provisions of the RSP and the Excess Plan.								(2) Amounts contributed by the Company on behalf of its Named Executive officers during 2007 pursuant to the provisions of the RSP and the Excess Plan.

The following table details the tax reimbursement amounts listed in Column (g) of the above table:

Name
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 Relocation Costs
($)

Total Tax
Reimbursement
($)
(a) (b) (c) (d) (e) (g)
Timothy M. Manganello 2,464 6,764 460 - 9,688
CEO
Robin J. Adams 2,798 4,357 - - 7,155
CFO
Roger J. Wood 2,798 4,357 1,188 33,629 41,972
President, TBS/E
Alfred Weber 2,784 5,106 - 58,090 65,980
President, MT/T
Cynthia A. Niekamp 2,178 4,357 - - 6,535
President, TTS

Name	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 Relocation Costs		Total Tax Reimbursement
	($)		($)		($)		($)		($)
(a)	(b)		(c)		(d)		(e)		(f)
Timothy M. Manganello		2,846		6,828		427		-		10,101
CEO
Robin J. Adams		2,846		4,404		-		-		7,250
CFO
Roger J. Wood		2,846		4,404		444		1,250		8,944
President, TBS/E
Cynthia A. Niekamp		-		4,404		657		-		5,061
President, TTS
Bernd W. Matthes		2,798		4,404		270		78,319		85,791
President, TS

Grants of Plan Based Awards

Name	Fees Earned or Paid in Cash		Stock Awards (1)		Option Awards		Aggregate Number of Outstanding Stock and Option Awards (2)			Non-Equity Incentive Plan Compensation		Changes in Pension Value and Nonqualified Deferred Compensation Earnings		All Other Compensation		Total
	($)		($)		($)			(#	)	($)		($)		($)		($)

(a)	(b)		(c)		(d)		(e)			(f)		(g)		(h)		(i)
Phyllis O. Bonanno		55,000		80,284		-		27,782			-		-		-		135,284

David T. Brown		55,000		55,002		-		1,894			-		-		-		110,002

Jere A. Drummond		73,000		80,276		-		32,316			-		-		-		153,276

Paul E. Glaske		58,000		61,933		-		29,894			-		-		-		119,933

Alexis P. Michas		53,500		80,284		-		27,782			-		-		-		133,784

Ernest J. Novak, Jr.		85,000		80,276		-		12,316			-		-		-		165,276

Richard O. Schaum		57,000		73,353		-		3,782			-		-		-		130,353

Thomas T. Stallkamp		56,500		55,019		-		3,782			-		-		-		111,519


(1) 2007 compensation expense of aggregate grant date fair value of the 2005, 2006, 2007 Restricted Stock Awards, excluding forfeitures, in accordance with FAS 123R.
(2) Aggregate number of outstanding shares of restricted stock and outstanding vested and unvested stock options at fiscal year-end. Values reflect 12/17/2007 stock split.

Name

Fees Earned or Paid in Cash
($)

Stock Awards (1)
($)

Option Awards
($)

Aggregate Number of Outstanding Stock and Option Awards (2)
(#)

Non-Equity Incentive Plan Compensation
($)
Changes in Pension Value and Nonqualified Deferred Compensation Earnings
($)

All Other Compensation
($)

Total
($)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Phyllis O. Bonanno 53,500 53,246 - 19,109 - - - 106,746

Dr. Andrew F. Brimmer 19,333 66,177 - - - - - 85,510

David T. Brown 53,500 55,002 - 1,894 - - - 108,502

Jere A. Drummond 65,500 48,654 - 17,219 - - - 114,154

Paul E. Glaske 59,500 66,988 - 18,166 - - - 126,488

Alexis P. Michas 53,500 53,246 - 19,109 - - - 106,746

Ernest J. Novak, Jr. 88,500 48,654 - 5,219 - - - 137,154

John Rau 9,667 66,177 - - - - - 75,844

Richard O. Schaum 58,000 41,260 - 2,837 - - - 99,260

Thomas T. Stallkamp 55,667 22,926 - 2,837 - - - 78,593

(1) 2006 compensation expense of aggregate grant date fair value of the 2004, 2005, 2006 Restricted Stock Awards, excluding forfeitures, in accordance with FAS 123R.
(2) Aggregate number of outstanding shares of restricted stock and outstanding vested and unvested stock options at fiscal year-end.

Annual compensation for our non-employee directors for ~~2006~~2007 was comprised of the following components: annual retainer, Board meeting fees, Committee meeting fees, and equity compensation, consisting of restricted stock. Our non-employee directors were not granted any Stock Option Awards and did not receive any Non-Equity Incentive Plan Compensation for ~~2006.~~2007. After review of non-employee director compensation paid by peer and other corporations, the Board approved an increase in non-employee director compensation to be effective January 1, 2008, the first increase since 2005.

As allowed under the BorgWarner Inc. Amended and Restated 2004 Stock Incentive Plan, each non-employee director ~~receives~~received $165,000 worth of restricted stock in the initial year of each three-year term. In April ~~2006, four~~2007, two non-employee directors ~~(Bonanno, Michas, Schaum,~~(Drummond and ~~Stallkamp)~~Novak) were elected for a three-year term. ~~In July 2006, these four~~These two directors were each awarded ~~2,837~~2,158 shares of restricted common stock, determined by dividing the total value of $165,000 by the average of the high and low of the Company’s stock price at the time of the grant. The restrictions on the shares of stock will expire over the three-year term, one third in each ~~year. However,~~year and the Compensation Committee has the authority to accelerate vesting in the event of retirement. During the period that the restrictions are in place, directors have all of the rights of a stockholder of the Company holding the same class or series of stock as the restricted stock, including the right to vote the shares and the right to receive any cash dividends. Non-employee directors elected to new terms in 2008 will receive $258,000 worth of restricted stock in the initial year of each three-year term. Non-employee directors continuing to serve without re-election will receive pro-rated increases in equity compensation to equalize the equity compensation increase.

The annual retainer for non-employee directors isin 2007 was $40,000 for service on the Board of Directors. Beginning January 1, 2008 the annual retainer for non-employee directors was increased to $55,000. The annual retainer is prorated when a new member joins or a current member leaves our Board. Mr. Glaske will retire from the Board at the 2008 Annual Meeting in accordance with retirement guidelines adopted by the Board. When a qualified candidate is identified, a new director will be appointed to Class III by the Board of Directors.

Each non-employee director ~~receives~~received $1,500 for each Board meeting attended. Each Committee member also ~~receives~~received $1,500 ($3,000 if he or she iswas the Chairman of the committee) for each committee meeting attended. In recognition of increased time commitments, the Chairman of the Audit Committee received $5,000 for each committee meeting attended since January 1, 2005. Meeting and attendance fees were not changed for 2008. The Company pays for the expenses associated with attendance at Board and Committee meetings and other functions attended at the request of the Company. The Company maintains a directors’ deferred compensation plan under which directors may defer receipt of retainer fees only. Four directors deferred fees under the plan in 2007.

~~The annual retainer~~

PROPOSAL 2 – TO VOTE TO APPROVE AN AMENDMENT TO THE COMPANY’S RESTATED CERTIFICATE OF

INCORPORATION TO INCREASE THE AUTHORIZED COMMON STOCK OF THE COMPANY

FROM 150,000,000 SHARES TO 390,000,000 SHARES

On February 7, 2008, your Board of Directors unanimously approved a proposal to increase the authorized capital stock of the Company. If approved by our stockholders, the proposed increase in our authorized capital stock will be accomplished through an amendment to the Company’s restated certificate of incorporation that will increase the total authorized common stock of the Company from 150,000,000 shares to 390,000,000 shares. A copy of the proposed amendment is ~~prorated when~~attached to this proxy statement as Annex B. On March 3, 2008 there were 117,393,116 issued and 116,412,639 outstanding shares of common stock. As of December 31, 2007, 9,158,500 shares were reserved for business purposes, including for equity compensation awards in accordance with shareholder approved equity plans.

Your Board of Directors approved the proposed increase in authorized common stock because it believes that the continued availability of shares of common stock is advisable to provide the Company with the flexibility to take advantage of opportunities to issue such stock to obtain capital, or as consideration for possible acquisitions or for other purposes (including, without limitation, the issuance of additional shares of common stock through stock splits and stock dividends in appropriate circumstances). Other than as permitted under our employee benefit plans and under outstanding options, warrants and other securities convertible into common stock, there are, at present, no plans, understandings, agreements or arrangements concerning the issuance of additional shares of common stock or preferred stock. However, if the proposed increase in authorized shares is approved by our stockholders, then shares of common stock could be issued from time to time by action of our board of directors on such terms and conditions as our board may consider appropriate. No additional action or authorization by our stockholders would be necessary prior to any such issuance unless required by applicable law or the rules of the New York Stock Exchange (or any other stock exchange or national securities association trading system on which our common stock is then listed or quoted). Depending upon the circumstances, the issuance of such additional shares could have a ~~new member joins~~dilutive effect or ~~a current member leaves our Board, as in~~an anti-takeover effect (although that is not the ~~cases~~intent of ~~Dr. Brimmer, Mr. Rau, and Mr. Stallkamp. Mr. Rau retired from the Board in February 2006, while Dr. Brimmer retired from the Board in April 2006. Mr. Stallkamp joined the Board in February 2006.~~this proposal).

2931

Our non-employee directors may elect to defer, up to 100% in increments of 5%, their annual retainer in one or more investment options, including BorgWarner stock units. The investment options were expanded beginning with the 2007 deferral year. The BorgWarner stock units remain an investment option. The Moody’s and Prime Account investments have been replaced with fifteen other fund options, which mirror those in the executive Deferred Compensation Plan. The fifteen funds include nine Ready-Mix Portfolio funds, one Money Market/Stable Value fund, one Bond fund, and four Stock funds.

Recommendation

~~Our non-employee directors are expected to own Company stock in an amount equivalent to two times the amount of the annual retainer within five years of joining the Board of Directors.~~

P~~ROPOSAL 2 - STOCKHOLDER PROPOSAL CONCERNING DIRECTOR ELECTIONS~~

We have been advised by a shareholder, the Massachusetts State Carpenters Pension Fund, 350 Fordham Road, Wilmington, MA 01887, beneficial owner of approximately 2300 shares, that it intends to present the following non-binding stockholder proposal at our Annual Meeting. The proposal will be voted on at the Annual Meeting if the proponent, or a qualified representative, is present at the meeting and submits the proposal for a vote. The proposal and the supporting statement appear below as received by us. The Company is not responsible for the accuracy or content of the proposal and supporting statement. Following the stockholder proposal are the Company's reasons for opposing the proposal.

RESOLVED, That the shareholders of BorgWarner Inc. (“Company”) hereby request that the Board of Directors initiate the appropriate process to amend the Company’s governance documents (certificate of incorporation or bylaws) to provide that director nominees shall be elected by the affirmative vote of the majority of votes cast at an annual meeting of shareholders, with a plurality vote standard retained for contested director elections, that is, when the number of director nominees exceeds the number of board seats.

Supporting Statement: In order to provide shareholders a meaningful role in director elections, our company’s director election vote standard should be changed to a majority vote standard. A majority vote standard would require that a nominee receive a majority of the votes cast in order to be elected. The standard is particularly well-suited for the vast majority of director elections in which only board nominated candidates are on the ballot. We believe that a majority vote standard in board elections would establish a challenging vote standard for board nominees and improve the performance of individual directors and entire boards. Our Company presently uses a plurality vote standard in all director elections. Under the plurality vote standard, a nominee for the board can be elected with as little as a single affirmative vote, even if a substantial majority of the votes cast are “withheld” from the nominee.

In response to strong shareholder support for a majority vote standard in director elections, an increasing number of companies, including Intel, Dell, Motorola, Texas Instruments, Wal-Mart, Safeway, Home Depot, Gannett, Marathon Oil, and Supervalu, have adopted a majority vote standard in company by-laws. Additionally, these companies have adopted director resignation policies in their bylaws or corporate governance policies to address post-election issues related to the status of director nominees that fail to win election. Other companies have responded only partially to the call for change by simply adopting post-election director resignation policies that set procedures for addressing the status of director nominees that receive more “withhold” votes than “for” votes. At the time of the submission of this proposal, our Company and its board had not taken either action.

We believe the critical first step in establishing a meaningful majority vote policy is the adoption of a majority vote standard in Company governance documents. Our Company needs to join the growing list of companies that have taken this action. With a majority vote standard in place, the board can then consider action on developing post election procedures to address the status of directors that fail to win election. A combination of a majority vote standard and a post-election director resignation policy would establish a meaningful right for shareholders to elect directors, while reserving for the board an important post-election role in determining the continued status of an unelected director. We feel that this combination of the majority vote standard with a post-election policy represents a true majority vote standard.

~~Recommendation~~

~~YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL.~~

This proposal would require that director nominees receive the support of a majority of votes cast to be elected. For compelling reasons, plurality voting is the prevailing standard for the election of federal, state and local officials as well as for directors of U.S. public companies. The methodology is well known and understood by stockholders. The proposal would alter this longstanding and widespread director election voting procedure. We do not believe that electing directors under a different standard would result in a more effective board.

BorgWarner elects directors by a plurality standard for the same reasons that democracies use plurality standards. A plurality system ensures continuity of governance by preventing a situation where no or limited candidates receive a majority of the votes cast, leaving director positions vacant. The long-standing plurality system also safeguards stockholders against special interest groups that, under a majority system, would be empowered to remove a director based upon narrow, parochial interests. If a majority vote by-law is adopted, and a director does not receive a majority of the votes cast, a vacancy on the board will result and will be filled by the directors, not by the stockholders. We do not believe that result is an improvement over the current plurality voting system.

Our stockholders have consistently had a meaningful role in the director election process. Indeed, since the Company became a public company with an elected Board, each director nominee has received the affirmative vote of more than 90% of the shares voted through the plurality process. Last year each director standing for election received the affirmative vote of more than 98% of the shares voted. The proposal suggests, however, that your Board is being elected by minimal affirmative votes. We do not believe that the facts support that conclusion.

We are committed to good corporate governance. Our directors' corporate governance guidelines are available for review at www.borgwarner.com in the corporate governance section of our website. In particular, the Board felt it appropriate to respond to the concerns that have been raised about plurality voting standards and has adopted a corporate governance guideline to provide that, in the event that a director receives a greater number of "withheld" votes than "for" votes in an uncontested election, the director will promptly offer his or her resignation for consideration. The Corporate Governance Committee will consider the resignation and recommend to the Board whether to accept it, reject it, or take other action. In considering the resignation, the Committee will take into consideration such factors as the stated reasons why stockholders withheld votes for the election of the director, the director’s length of service, qualifications and contributions to the Company and continued compliance with New York Stock Exchange listing standards.

After careful consideration, the Board unanimously believes that this corporate governance guideline will adequately address the concerns of those wishing a more meaningful outcome to situations where a director might receive fewer “for” votes than votes “withheld” in connection with election to the Board, while still allowing Board consideration of whether a particular director’s resignation is in the best interests of the Company and its stockholders. We intend to continue to follow and evaluate developments in this area and to consider carefully whether further changes to our policies are appropriate and in the best interests of BorgWarner and its stockholders.

For the foregoing reasons, your Board of Directors believes that this proposal is ~~not~~ in the best interests of BorgWarner orand its stockholders and unanimously recommends that you vote ~~AGAINST~~FOR this proposal.

If a majority of our outstanding shares of common stock are voted FOR the amendment, then the amendment will be approved.

If your shares are held by your broker as your nominee (that is, in “street name”), and you do not timely tell your nominee how to vote your shares, then your nominee may not be permitted to vote your shares on this proposal (a so-called "broker nonvote"). For purposes of this proposal, a broker nonvote and an abstention are the functional equivalents of a "no" vote.

Accordingly, if your shares are held in street name, then you will need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker to vote your shares. If your shares are held in street name, your proxy card may contain instructions from your broker that allow you to vote your shares using the Internet or telephone. Please consult with your broker if you have any questions regarding the electronic voting of shares held in street name.

PR~~OPOSAL~~PROPOSAL 3 — RATIFICATION OF SELECTION OF

INDEPENDENTREGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors proposes that the stockholders approve the selection by the Audit Committee of Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, “Deloitte”) to serve as the Company’s independent registered public accounting firm for the ~~2007~~2008 fiscal year.

The Board of Directors anticipates that representatives of Deloitte will be present at the meeting to respond to appropriate questions, and will have an opportunity, if they desire, to make a statement.

Recommendation

~~YOUR~~ ~~BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE~~ Your Board of Directors believes that this proposal is in the best interests of BorgWarner and its stockholders and unanimously recommends that you vote FOR this proposal.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING ~~FIRM.~~

~~PRINCIPAL ACCOUNTANT~~FIRM FEES AND SERVICES

Aggregate fees including expenses billed to us for the years ended December 31, ~~2006~~2007 and ~~2005,~~2006, for professional services performed by Deloitte & Touche, were as follows:

2006

2005

        Audit Fees and Expenses (1) $ 4,236,600 $ 3,672,300
        Audit-Related Fees (2) $ 348,900 $ 248,500
        Tax Fees (3) $ 346,700 $ 266,000
        All Other Fees (4) $ — $ —

        Totals $ 4,932,200 $ 4,186,800

(1) Audit fees and expenses are for professional services performed to comply with the standards of the Public Company Accounting Oversight Board (United States), including the recurring audit of the Company’s consolidated financial statements and the audit of the Company's internal control over financial reporting. This category also includes fees for audits provided in connection with statutory and regulatory filings or services that generally only the principal auditor reasonably can provide to a client.
(2) Audit-related fees are for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements. This category includes fees related to services associated with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters, consents), review of response to SEC comment letters, consultations by the Company's management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, PCAOB, FASB, or other regulatory or standard setting bodies, assistance in financial due diligence related to acquisitions, and audits of financial statements of employee benefit plans and various attest services.
(3) Tax fees are for professional services provided by Deloitte & Touche in connection with tax compliance and tax planning.
(4) All other fees are for products and services other than the services reported above.

	2007		2006
Audit Fees and Expenses	$	4,268,900	$	4,236,600
Audit-Related Fees	$	253,700	$	348,900
Tax Fees	$	362,000	$	346,700
All Other Fees	$	—	$	—

Totals	$	4,884,600	$	4,932,200

Your Audit Committee has adopted procedures for pre-approving all audit and non-audit services provided by the independent registered public accounting firm, including the fees and terms of such services. These procedures include reviewing detailed back-up documentation for audit and permitted non-audit services. The documentation includes a description of, and a budgeted amount for, particular categories of non-audit services that are recurring in nature and therefore anticipated at the time that the budget is submitted. Audit Committee approval is required to exceed the pre-approved amount for a particular category of non-audit services and to engage the independent registered public accounting firm for any non-audit services not included in those pre-approved amounts. For both types of pre-approval, the Audit Committee considers whether such services are consistent with the ~~Securities and Exchange Commission’s and Public Company Accounting Oversight Board’s~~ rules on auditor ~~independence.~~independence promulgated by the SEC and the PCAOB. The Audit Committee also considers whether the independent registered public accounting firm is best positioned to provide the most effective and efficient service, based on such reasons as the auditor’s familiarity with the Company’s business, people, culture, accounting systems, risk profile, and whether the services enhance the Company’s ability to manage or control risks and improve audit quality. The Audit Committee may form and delegate pre-approval authority to subcommittees consisting of one or more members of the Audit Committee, and such subcommittees must report any pre-approval decisions to the Audit Committee at its next scheduled meeting. All of the services provided by the independent registered public accounting firm were pre-approved by your Audit Committee.

OOTHER INFORMATION~~THER INFORMATION~~

The Company ~~has no reason~~is not aware of any business to ~~believe that any~~come before this annual meeting other ~~business will be presented at~~than the ~~Annual Meeting of Stockholders, but~~matters described in this proxy statement. However, if any other ~~business shall be presented,~~matters should properly come before this meeting, votes pursuant to the proxy will be cast thereon in accordance with the discretion of the persons named in the accompanying proxy.

Expenses of Solicitation

The cost of solicitation of proxies will be borne by the Company. In addition to solicitation of proxies by use of the mail, proxies may be solicited by directors, officers and regularly engaged employees of the Company. None of these directors, officers or employees will receive any extra compensation for doing this. We have also retained Georgeson to assist us in soliciting proxies for a fee of $8500 plus reasonable out-of-pocket expenses. Brokers, nominees and other similar record holders will be requested to forward solicitation material and will be reimbursed by the Company upon request for their reasonable out-of-pocket expenses.

Stockholder Proposals

Stockholder proposals which are intended to be presented at the ~~2008~~2009 Annual Meeting of Stockholders pursuant to SEC Rule 14a-8 must be received by the Company on or before November 22, ~~2007,~~2008, for inclusion in the proxy statement relating to that meeting.

A stockholder who intends to present business, including the election of a director, at the ~~2008~~2009 Annual Meeting of Stockholders other than pursuant to Rule 14a-8, must comply with the requirements set forth in the Company’s Amended and Restated By-Laws. Among other things, under the Company’s Bylaws to bring business before an annual meeting a stockholder must give written notice to the Secretary of the Company not less than 90 days and not more than 120 days prior to the first anniversary of the preceding year’s annual meeting. Therefore, for stockholder proposals to be presented other than pursuant to Rule 14a-8, the Company must receive notice no sooner than December 27, ~~2007,~~2008, and no later than January ~~26, 2008.~~28, 2009. The notice should contain (a) as to each person whom the stockholder proposes to nominate for election as director, all information that is required to be disclosed in solicitations of proxies for election of directors under the securities laws, including the person’s written consent to serve as a director if elected, and (b) as to any other business: the reason for conducting such business; any material interest in such business the stockholder has; the name and address of the stockholder proposing such business as it appears in the Company’s books; and the number of shares of the Company that are beneficially owned by the stockholder. Stockholders should consult the Company’s Amended and Restated By-Laws to ensure that all of the specific requirements of such notice are met.

Available Information on Corporate Governance and SEC Filings

Through its website (www.borgwarner.com~~www.borgwarner.com~~), the Company makes available, free of charge, the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, all amendments to those reports, and other filings with the Securities and Exchange Commission, as soon as reasonably practicable after they are ~~filed.~~electronically filed with, or furnished to, the SEC. The Company also makes the following documents available on its website: the Audit Committee Charter; the Compensation Committee Charter; the Corporate Governance Committee Charter; the Company’s Corporate Governance Guidelines; the Company’s Code of Ethical Conduct; and the Company’s Code of Ethics for CEO and Senior Financial Officers. You may also obtain a copy of any of the foregoing documents, free of charge, if you submit a written request to Mary Brevard, Vice President, Investor Relations, ~~and Corporate Communications,~~ 3850 Hamlin Road, Auburn Hills, Michigan 48326.

No person is authorized to give any information or make any representation other than that contained in this proxy statement, and if given or made, such information may not be relied upon as having been authorized.

ANNEX A

CHARTER

BORGWARNER INC.

AUDIT COMMITTEE

The BorgWarner Inc. Audit Committee (the "Committee") is responsible for providing assistance to the Board of Directors in monitoring (i) the integrity of the financial statements of the Corporation, (ii) the independent auditor’s qualifications and independence (iii) the performance of the Corporation’s internal audit function and independent auditors, and (iv) the compliance by the Corporation with legal and regulatory requirements.

The Committee shall be composed of three or more directors who are free of any relationship that, in the opinion of the Board of Directors, would interfere with their individual exercise of independent judgment as a Committee member and who meet the independence and experience requirements of the New York Stock Exchange and applicable regulations of the Securities and Exchange Commission (the “Commission”). All members of the Committee shall be generally knowledgeable in financial and auditing matters and at least one member of the Committee shall be “an audit committee financial expert” as defined by the Commission. Committee members shall not simultaneously serve on the audit committees of more than two other public corporations.

In its audit capacity, the Committee shall provide assistance to the Board in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing and financial reporting practices of the Corporation. The Committee shall report regularly to the Board and establish and maintain free and open communication between the directors, the independent accountants, the internal auditors and the financial management of the Corporation. The Committee will:

Be directly responsible for the selection of, and compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. The independent auditor shall report directly to the Committee.

Pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Corporation by its independent auditor, subject to the de minimus exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act that are approved by the Committee prior to the completion of the audit. Discuss and consider the independence of the independent auditors, including the auditors' written affirmation of independence.

Discuss and review with the independent auditors and financial management of the Corporation the proposed scope of the audit for the current year and the nature and thoroughness of the audit process; and at the conclusion thereof, receive and review audit reports including any comments or recommendations of the independent auditors.

4.	Review with the independent auditor any audit problems or difficulties and management’s response.

5.	Adopt hiring policies for employees or former employees of the independent auditor who participated in any capacity in the audit of the Corporation.

Review with the independent auditors, the Corporation's Director of Internal Audit and with the Corporation's financial and accounting managers, the adequacy and effectiveness of the Corporation's internal auditing, accounting and financial policies, procedures and controls; and elicit any recommendations for the improvement of existing internal control procedures or the establishment of controls or procedures. Particular emphasis should be given to the adequacy of the internal controls to expose payments, transactions or procedures which might be deemed illegal or otherwise improper.

7.	Review the internal audit function of the Corporation including proposed audit plans for the coming year, the coordination of its programs with the independent auditors and the results of the internal programs.

Review and discuss recurring financial statements (including quarterly reports and disclosures made in management’s discussion and analysis) to be issued to the stockholders or the public with management and the independent auditor and recommend to the Board the inclusion of the Corporation's audited financial statements in the Corporation's Annual Report on Form 10-K.

9.	Review and discuss:

(a)	All critical accounting policies and practices to be used.

(b)	All alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor.

(c)	Other material written communication between the independent auditor and management, such as any management letter or schedule of unadjusted differences.

10.

Discuss with management the Corporation’s earnings press releases, including the use of “proforma” or “adjusted” non-GAAP information, as well as financial information and earnings guidance provided to analysts and rating agencies. Such discussion may be done generally (consisting of discussing the types of information to be disclosed and the types of presentations to be made.)

11.

Investigate any matter brought to its attention within the scope of its duties and retain outside counsel or other experts for this or any other purpose, if, in its judgment, such retention is appropriate. The Corporation shall provide appropriate funding, as determined by the Committee, for payment of compensation to the independent auditor for the purpose of rendering or issuing an audit report and to any advisors employed by the Committee and for other expenses necessary or appropriate in carrying out its duties.

12.	Report Committee activities to the full Board and annually issue a summary report (including appropriate oversight conclusions) suitable for submission to stockholders.

13.

Review disclosures made to the Committee by the Corporation’s CEO and CFO during their certification process for the Form 10-K and Form 10-Q about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a role in the Company’s internal controls.

14.	Ensure the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law.

15.

Obtain and review a report from the independent auditor at least annually regarding (a) the independent auditor’s internal quality-control procedures, (b) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm, (c) any steps taken to deal with any such issues, and (d) all relationships between the independent auditor and the Corporation. Evaluate the qualifications, performance and independence of the independent auditor, including considering whether the auditor’s quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditor’s independence, taking into account the opinions of management and internal auditors. The Committee shall present its conclusions with respect to the independent auditor to the Board.

16.	Establish procedures for the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

17.	Discuss with the Corporation’s General Counsel legal matters that may have a material impact on the financial statements or the Corporation’s compliance policies.

18.

Discuss with management the Corporation’s risk assessment and risk management policies.

The Committee's charter, policies and procedures will be reassessed at least annually to allow reaction to changing conditions and environment and to assure that the Corporation's accounting and reporting practices are in accordance with all requirements and are of the highest quality. The Committee may amend or repeal its charter, policies and procedures, as the Committee deems appropriate. The Committee shall annually review the Committee’s own performance.

The Committee shall meet as often as it determines necessary, but not less frequently than quarterly. The Committee shall meet periodically with management, the internal auditors and the independent auditor in separate executive sessions. These meetings shall include the independent auditors' evaluation of the Corporation's financial, accounting and auditing personnel and an assessment of the cooperation the independent auditors received during the review. The Committee may request any officer or employee of the Corporation or the Corporation’s outside counsel or independent auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee.

The Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee shall be presented to the full Committee at its next scheduled meeting.

The Chair of the Committee shall establish such rules for the Committee and its members as may from time to time be necessary and proper for the conduct of the Committee’s business, in conformity with applicable laws, rules and regulations.

ANNEX B

PROPOSED AMENDMENT TO THE RESTATED

CERTIFICATE OF INCORPORATION OF BORGWARNER INC.

The proposed amendment to the Company’s restated certificate of incorporation would amend and restate the first sentence of Article IV in its entirety to read as follows:

The total number of shares of all classes of stock which the Corporation shall have the authority to issue is 420,000,000 shares, consisting of 390,000,000 shares of Common Stock, par value $0.01 per share (“Common Stock”), 25,000,000 shares of Non-Voting Common Stock, par value $0.01 per share (“Non-Voting Common Stock” and, together with the Common Stock, the “Junior Stock”), and 5,000,000 shares of Preferred Stock, par value $0.01 per share (“Preferred Stock”).

This Proxy is Solicited by the Board of Directors in Connection

With the Annual Meeting of Stockholders

9:00 A.M. (local time)

April ~~25, 2007~~30, 2008


		PLACE:		BorgWarner Inc.
				3850 Hamlin Road
				Auburn Hills, Michigan 48326

PROXY: JOHN J. GASPAROVIC and LAURENE H. HORISZNY and each of them, are hereby appointed by the undersigned as attorneys and proxies with full power of substitution, to vote all the shares of Common Stock held of record by the undersigned on March ~~2, 2007~~3, 2008 at the Annual Meeting of Stockholders of BorgWarner Inc. or at any adjournment(s) or postponement(s) of the ~~meeting, on each of the items on the reverse side and in accordance with the directions given therein.~~meeting.

WITH RESPECT TO ANY MATTER THAT SHOULD PROPERLY COME BEFORE THE ANNUAL MEETING THAT IS NOT SPECIFIED HEREIN, THIS PROXY WILL BE VOTED IN THE DISCRETION OF THE PROXY HOLDER.

THIS PROXY IS CONTINUED ON THE REVERSE SIDE

PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY

Address Change/Comments (Mark the corresponding box on the reverse side)

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IF NO CHOICE IS SPECIFIED, this Proxy will be voted “FOR” the election of all listed nominees, ~~and~~ “FOR” proposals 2 and 3, all in accordance with the recommendations ~~of a majority~~ of the Board of Directors.

Please

Mark Here

for Address o Change or

Comments

SEE REVERSE SIDE

1.	Election of ~~three~~two Class IIIII Directors:	for all nominees	withhold authority
		listed (except as indicated)	to vote for all nominees listed
	01 ~~Jere A. Drummond~~Robin J. Adams	o 	o
	02 ~~Timothy M. Manganello~~David T. Brown
	~~03 Ernest J. Novak, Jr.~~

(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee’s name on the space provided below.)

		FOR	AGAINST	ABSTAIN
2.	To ~~vote upon a stockholder proposal concerning director elections.~~approve the Amendment to the Company’s Restated Certificate of Incorporation to increase the authorized common stock of the Company from 150,000,000 shares to 390,000,000 shares.	o 	o 	o

		FOR	AGAINST	ABSTAIN
3.	To ratify the appointment of Deloitte & Touche LLP as Independent Registered Public Accounting Firm for the Company for ~~2007.~~	o2008.	o 	o 	

4.
4.	To transact such other business as may properly come before the meeting or any ~~adjournment~~adjourment or postponement thereof.

Dated:		~~__________________________________________2007~~__________________________________________2008

		~~Signature~~
		__________________________________________
60; Signature

		Signature if held jointly

Please sign exactly as your name appears hereon. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee, or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person.

/\ FOLD AND DETACH HERE /\

WE ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING,

BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.

Internet and telephone voting is available through 11:59 PM Eastern Time

the day prior to annual meeting day.

Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner

as if you marked, signed and returned your proxy card.

Internet

~~Internet~~

http://www.proxyvoting.com/bwa

Use the internet to vote your proxy.

Have your proxy card in hand when

you access the web site.

Telephone

~~Telephone~~

1-866-540-5760

Use any touch-tone telephone to

vote your proxy. Have your proxy

card in hand when you call.

If you vote your proxy by Internet or by telephone,you do NOT need to mail back your proxy card.

To vote by mail, mark, sign and date your proxy card and return it in the enclosed postage-paid envelope.

Choose MLink~~MLink~~SM^SM for ~~Fast,~~fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on to Investor ServiceDirect® at ~~www.melloninvestor.com/~~www.bnymellon.com/shareowner/isd where step-by-step instructions will prompt you through enrollment.

You can view the Annual Report and Proxy Statement on the internet at ~~www.borgwarner.com~~ww3.ics.adp.com/streetlink/BWA

*	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: ~~26,482~~80,926 for Mr. Adams; ~~18,952~~24,000 for Ms. Bonanno; 28,000 for Mr. Drummond; 28,000 for Mr. Glaske; 112,440 for Mr. Manganello; ~~12,000 for Ms. Bonanno; 16,000~~14,840 for Mr. ~~Drummond; 16,000 for Mr. Glaske; 16,000~~Matthes; 24,000 for Mr. Michas; ~~4,000~~28,000 for Ms. Niekamp; 8,000 for Mr. Novak; ~~11,038~~39,418 for Mr. Wood; ~~5,000 for Ms. Niekamp;~~ and ~~259,190~~675,186 for all directors and executive officers of the Company.

~~(b)~~(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.
~~(c)~~(d)	~~Dr. Brimmer retired from the Board on~~Retiring at April ~~26, 2006.~~
~~(d)~~	~~Mr. Rau resigned from the Board on February 8, 2006.~~ 30, 2008 Annual Meeting of Stockholders

AMSTED Industries, Inc.	Fleetwood Enterprises, Inc.	Praxair Inc.
BAE Systems, Inc.	Freightliner LLC	Robert Bosch Corporation
Ball Corporation	Harley-Davidson Motor Co.	The Sherwin-Williams Co.
Brunswick Corporation	Illinois Tool Works Inc.	SPS Technologies Inc.
Cummins Inc.	Intl Truck and Engine Corp.	Thyssen Krupp Budd Co.
Dana Corporation	ITT Industries, Inc.	The Timken Company
Denso Intl America, Inc.	Kennametal Inc.	TRW Automotive Inc.
Donaldson Company Inc.	Metaldyne Corporation	Valmont Industries Inc.
Dover Corporation	PACCAR Inc.	Worthington Industries Inc.
Eastman Chemical Co.	Parker Hannifin Corporation
Eaton Corporation	Polaris Industries Inc.

Name											Grant Date	Estimated Possible Payout Under			Estimated Future Payout Under			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 (4)	Closing Market Price on Date of Option Grant	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			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 (4)		Non-Equity Incentive Plan Awards (1)			Equity Incentive Plan Awards
		Threshold	Target	Maximum	Threshold	Target	Maximum					Threshold	Target	Maximum	Threshold	Target	Maximum
Name	Grant Date	($)			(#)					($/Share)
												($)			(#)					($/Share)		($)
(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)	(i)	(j)	(k)	(b)	(c)	(d)	(e)	(f)	(g)	(h)	(i)	(j)	(k)	(l)	(m)
Timothy M. Manganello		540,000	1,080,000	2,160,000				-				562,500	1,125,000	2,250,000
CEO	2/8/2006(2)				11,250	45,000	78,750				2/6/2007 (2)				22,000	88,000	154,000					3,080,000
											2/6/2007 (3)								114,840	34.95	35.00	1,208,117
	7/26/2006(3)								50,000	58.18	8/3/2007 (5)							253,274				11,166,851

Robin J. Adams		186,400	372,800	745,600				-				233,000	466,000	932,000				-
CFO	2/8/2006 (2)				3,000	12,000	21,000				2/6/2007 (2)				8,350	33,400	58,450					1,169,000
	7/26/2006 (3)								20,000	58.18	2/6/2007 (3)								43,460	34.95	35.00	457,199

Roger J. Wood		138,300	276,500	553,000				-				167,900	335,800	671,500				-
President, TBS/E	2/8/2006 (2)				2,750	11,000	19,250				2/6/2007 (2)				5,200	20,800	36,400					728,000
	7/26/2006 (3)								14,000	58.18	2/6/2007 (3)								27,060	34.95	35.00	284,671

Alfred Weber		131,300	262,500	525,000				-
President, MT/T	2/8/2006 (2)				2,300	9,200	16,100
	7/26/2006 (3)								11,000	58.18

Cynthia A. Niekamp		127,800	255,500	511,000				-				155,150	310,300	620,500				-
President, TTS	2/8/2006 (2)				2,025	8,100	14,175				2/6/2007 (2)				3,800	15,200	26,600					532,000
	7/26/2006 (3)								10,500	58.18	2/6/2007 (3)								19,700	34.95	35.00	207,244

Bernd W. Matthes												155,100	310,300	620,500				-
President, TS											2/6/2007 (2)				3,800	15,200	26,600					532,000
											2/6/2007 (3)								19,700	34.95	35.00	207,244


(1) 2007 bonus opportunity under the MIP. Estimated possible payout levels do not reflect carryover opportunities for the prior years.											(1) 2007 bonus opportunity under the MIP. Estimated possible payout levels do not reflect carryover opportunities for the prior years.
(2) 2007 Performance Share Grant: Value of grant = number of target shares times the closing stock price on grant date of $35.00.											(2) 2007 Performance Share Grant: Value of grant = number of target shares times the closing stock price on grant date of $35.00.
All amounts reflect values after December 17, 2007 stock split.											All amounts reflect values after December 17, 2007 stock split.
(3) 2007 Stock Option Grant: Stock options granted same day as approved by Compensation Committee of the Board of Directors.											(3) 2007 Stock Option Grant: Stock options granted same day as approved by Compensation Committee of the Board of Directors.
FMV at grant date = number of shares times $10.52, excluding forfeitures in accordance with FAS123R. All amounts reflect											FMV at grant date = number of shares times $10.52, excluding forfeitures in accordance with FAS123R. All amounts reflect
values after December 17, 2007 stock split.											values after December 17, 2007 stock split.
(4) Exercise Price is the average of the high and the low stock price on day of grant. Value is adjusted to reflect December 17, 2007 stock split.											(4) Exercise Price is the average of the high and the low stock price on day of grant. Value is adjusted to reflect December 17, 2007 stock split.
(5) 2007 Recognition and Retention Grant: Value of Grant = number of stock units times the average of the high and low stock price on											(5) 2007 Recognition and Retention Grant: Value of Grant = number of stock units times the average of the high and low stock price on
August 3, 2007 of $44.09. Values are adjusted to reflect December 17, 2007 stock split. Details of this grant were disclosed in an 8-K filing on August 7, 2007.											August 3, 2007 of $44.09. Values are adjusted to reflect December 17, 2007 stock split. Details of this grant were disclosed in an 8-K filing on August 7, 2007.

		Closing Market Price on Date of Option Grant	Grant Date Fair Value of Stock and Option Awards
Name	Grant Date	($/Share)	($)
(a)	(b)	(l)	(m)
Timothy M. Manganello
CEO	2/8/2006(2)		2,445,750
	7/26/2006(3)	58.40	890,500

Robin J. Adams
CFO	2/8/2006(2)		652,200
	7/26/2006(3)	58.40	356,200

Roger J. Wood
President, TBS/E	2/8/2006(2)		597,850
	7/26/2006(3)	58.40	249,340

Alfred Weber
President, MT/T	2/8/2006(2)		500,020
	7/26/2006(3)	58.40	195,910

Cynthia A. Niekamp
President, TTS	2/8/2006(2)		440,235
	7/26/2006(3)	58.40	187,005

~~ArvinMeritor Inc.~~ American Axle & Manufacturing	Johnson Controls Inc.	Tenneco Automotive Inc.
~~American Axle~~ ArvinMeritor Inc.	Lear Corporation	TRW Automotive Inc.
Autoliv Inc.	Magna International Inc.	Visteon Corporation
Gentex Corporation	Modine Manufacturing Co.

	Option Awards					Stock Awards				Option Awards					Stock Awards
Name	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	Market Value of Shares or Units of Stock That Have Not Vested	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (2)	Equity Incentive Plan Awards: Market or Payout of Unearned Shares, Units or Other Rights That Have Not Vested (2)	Number of Securities Underlying Unexercised Options Exercisable (1)	Number of Securities Underlying Unexercised Options Unexercisable (1)	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options	Option Exercise Price (1)	Option Expiration Date (2)	Number of Shares or Units of Stock That Have Not Vested (1)(3)	Market Value of Shares or Units of Stock That Have Not Vested (1)(3)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (1)(4)	Equity Incentive Plan Awards: Market or Payout of Unearned Shares, Units or Other Rights That Have Not Vested (1)(4)
	(#)	(#)	(#)	($)		(#)	($)	(#)	($)	(#)	(#)	(#)			(#)	($)	(#)	($)
(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)	(i)	(j)	(b)	(c)	(d)	(e)	(f)	(g)	(h)	(i)	(j)
Timothy M. Manganello	-	50,000	-	58.18	07/26/2016	-	-				114,840		34.95	02/06/2017
CEO	-	62,000	-	58.08	07/27/2015						100,000		29.09	07/26/2016
	6,268	6,268	-	44.56	07/28/2014					62,000	62,000		29.04	07/27/2015
	11,532	-	-	25.33	07/24/2012					25,072			22.28	07/28/2014
	1,152	-	-	24.14	07/25/2011					23,064			12.66	07/24/2012
								111,038	6,553,463	2,304			12.07	07/25/2011
															253,698	12,281,514
																	311,500	15,079,715

Robin J. Adams	-	20,000	-	58.18	07/26/2016	-	-				43,460		34.95	02/06/2017
CFO	-	15,000	-	58.08	07/27/2015						40,000		29.09	07/26/2016
										15,000	15,000		29.04	07/27/2015
	6,482	6,481	-	44.56	07/28/2014					25,926			22.28	07/28/2014
	10,000	10,000	-	44.30	04/26/2014					40,000			22.15	04/26/2014
								37,144	2,192,239								100,450	4,862,785

Roger J. Wood	-	14,000	-	58.18	07/26/2016	-	-				27,060		34.95	02/06/2017
President, TBS/E	-	10,000	-	58.08	07/27/2015						28,000		29.09	07/26/2016
	3,672	3,671	-	44.56	07/28/2014					10,000	10,000		29.04	07/27/2015
	7,366	-	-	33.04	07/23/2013					14,686			22.28	07/28/2014
								31,238	1,843,667	14,732			16.52	07/23/2013
																	74,900	3,625,909
Alfred Weber	-	11,000	-	58.18	07/26/2016	-	-
President, MT/T	-	8,000	-	58.08	07/27/2015
								28,088	1,657,754

Cynthia A. Niekamp	-	10,500	-	58.18	07/26/2016	-	-				19,700		34.95	02/06/2017
President, TTS	-	8,000	-	58.08	07/27/2015						21,000		29.09	07/26/2016
	5,000	5,000	-	44.56	07/28/2014					8,000	8,000		29.04	07/27/2015
								26,163	1,544,140	20,000			22.28	07/28/2014
																	54,950	2,660,130

Bernd W. Matthes											19,700		34.95	02/06/2017
President, TS											21,000		29.09	07/26/2016
										8,000	8,000		29.04	07/27/2015
										6,840			22.28	07/28/2014
																	54,950	2,660,130

(1) All amounts reflect values after December 17, 2007 stock split.										(1) All amounts reflect values after December 17, 2007 stock split.
(2) The stock options noted with expiration dates of 2011, 2012, 2013, and 2014 are fully vested. Stock options with an expiration date of										(2) The stock options noted with expiration dates of 2011, 2012, 2013, and 2014 are fully vested. Stock options with an expiration date of
2015 are 50% vested, with the other 50% vesting on July 27, 2008. Stock options with an expiration date of 2016 will vest 50% on July 26, 2008										2015 are 50% vested, with the other 50% vesting on July 27, 2008. Stock options with an expiration date of 2016 will vest 50% on July 26, 2008
and 50% on July 26, 2009. Stock options with an expiration date of 2017 will vest 50% on February 6, 2009 and 50% on February 6, 2010.										and 50% on July 26, 2009. Stock options with an expiration date of 2017 will vest 50% on February 6, 2009 and 50% on February 6, 2010.
(3) The values in columns (g) and (h) represent the number of shares granted and the year-end value of the August 3, 2007 Recognition and										(3) The values in columns (g) and (h) represent the number of shares granted and the year-end value of the August 3, 2007 Recognition and
Retention stock grant to Mr. Manganello, valued at $48.41 per share, which is the closing stock price on December 31, 2007.										Retention stock grant to Mr. Manganello, valued at $48.41 per share, which is the closing stock price on December 31, 2007.
Dividend equivalents earned on Novemeber 15, 2007 are included. Details of this grant were disclosed in an 8-K filing on August 7, 2007.										Dividend equivalents earned on Novemeber 15, 2007 are included. Details of this grant were disclosed in an 8-K filing on August 7, 2007.
(4) The values of columns (i) and (j) are comprised of performance share grants made under the SIP, issued for the performance periods of										(4) The values of columns (i) and (j) are comprised of performance share grants made under the SIP, issued for the performance periods of
2006-2008 and 2007-2009. Column (i) represents the number of all outstanding unearned performance shares that would be paid out at the										2006-2008 and 2007-2009. Column (i) represents the number of all outstanding unearned performance shares that would be paid out at the
end of each performance period if maximum TSR performance is achieved. The maximum value was assumed based on actual performance										end of each performance period if maximum TSR performance is achieved. The maximum value was assumed based on actual performance
over the most recent period at maximum levels. Column (j) represents the number of performance shares in column (i) times the closing										over the most recent period at maximum levels. Column (j) represents the number of performance shares in column (i) times the closing
stock price of $48.41 on December 31, 2007. Actual future payouts will depend on several factors, including (i) the number of performance										stock price of $48.41 on December 31, 2007. Actual future payouts will depend on several factors, including (i) the number of performance
shares that are earned, as determined after the end of the performance period based on the level at which the applicable performance goals										shares that are earned, as determined after the end of the performance period based on the level at which the applicable performance goals
have been achieved, as described on page 16; and (ii) the fair market value of stock, as defined in the Plan.										have been achieved, as described on page 16; and (ii) the fair market value of stock, as defined in the Plan.

(1) The stock options noted with expiration dates of 2011, 2012 and 2013 are fully vested. Stock options with an expiration date of April 26, 2014 are 50% vested, with the other 50% due to vest on April 26, 2007. Stock options with an expiration date of July 28, 2014 are 50% vested, with the other 50% due to vest on July 28, 2007. Stock options with an expiration date of 2015 will vest 50% on July 27, 2007 and 50% on July 27, 2008. Stock options with an expiration date of 2016 will vest 50% on July 26, 2008 and 50% on July 26, 2009.
(2) The values of columns (i) and (j) are comprised of performance share grants made under the SIP, issued for the performance periods of 2005-2007 and 2006-2008. Column (i) represents the number of all outstanding unearned performance shares that would be paid out at the end of each performance period if maximum TSR performance is achieved. The maximum value was assumed based on actual performance over the most recent period falling between the target and maximum levels. Column (j) represents the number of performance shares in column (i) times the closing stock price of $59.02 on December 29, 2006. Actual future payouts will depend on several factors, including (i) the number of performance shares that are earned, as determined after the end of the performance period based on the level at which the applicable performance goals have been achieved, as described on pages 14 -16; and (ii) the fair market value of stock, as defined in the Plan.

	Option Awards(1)		Stock Awards
Name	Number of Shares Acquired on Exercise (#)	Value Realized On Exercise ($)	Number of Shares Acquired on Vesting (2) (#)	Value Realized On Vesting (3) ($)
(a)	(b)	(c)	(d)	(e)
Timothy M. Manganello	-	-	700	788,200
CEO
Robin J. Adams	-	-	400	450,400
CFO
Roger J. Wood	-	-	260	292,760
President, TBS/E
Alfred Weber	-	-	260	292,760
President, MT/T
Cynthia A. Niekamp	-	-	260	292,760
President, TTS
(1) No Named Executive Officer exercised vested stock options during the 2006 fiscal year.
(2) Number of "shares" disclosed in column (d) represents the total number of units earned for the 2004-2006 performance period of the ESPP and paid in 2007.
(3) Amount in column (e) is equal to the number of units vested multiplied by $1,126.

	Option Awards		Stock Awards
	Number of Shares Acquired on Exercise (1)	Value Realized On Exercise	Number of Shares Acquired on Vesting (2)	Value Realized On Vesting (3)
Name	(#)	($)	(#)	($)
(a)	(b)	(c)	(d)	(e)
Timothy M. Manganello	-	-	64,575	3,126,076
CEO
Robin J. Adams	-	-	32,288	1,563,062
CFO
Roger J. Wood	-	-	23,975	1,160,630
President, TBS/E
Cynthia A. Niekamp	-	-	23,975	1,160,630
President, TTS
Bernd W. Matthes	7,740	355,586	23,975	1,160,630
President, TS

(1) Stock option exercises on June 19, 2007 were comprised of two exercises, 4,320 shares
that were granted on July 23, 2003 and 3,420 shares granted on July 24, 2004.
(2) Number of “shares” disclosed in column (d) represents the total number of performance
shares earned for the 2005-2007 performance period and paid in 2008. The performance
shares are actually paid 60% in stock and 40% in cash.
(3) Amount in column (e) is equal to the number of units vested multiplied by $48.41, which
is the closing stock price at the end of the performance period on December 31, 2007.

Name	Plan Name	Number of Years Credited Service		Present Value of Accumulated Benefit (1)		Payment During Last Fiscal Year
			(#)	($)		($)
(a)	(b)	(c)		(d)		(e)
Timothy M. Manganello			-		-		-
C CEO
Robin J. Adams			-		-		-
CFO
Roger J. Wood			-		-		-
President, TBS/E
Cynthia A. Niekamp			-		-		-
President, TTS
Bernd W. Matthes	BorgWarner Transmission Systems GmbH Pension Plan		11.8		593,026		-
President, TS

(1) Converted from Euro to US Dollar using an exchange rate of 1 Euro = 1.4598 US Dollar for SFAS 87/158 disclosure purposes.

Name	Plan Name	Number of Years Credited Service (#)	Present Value of Accumulated Benefit (1) ($)	Payment During Last Fiscal Year ($)
(a)	(b)	(c)	(d)	(e)
Timothy M. Manganello	-	-	-	-
CEO
Robin J. Adams	-	-	-	-
CFO
Roger J. Wood	-	-	-	-
President, TBS/E
Alfred Weber	Richtlinien fur einzelvertragliche Pensionszusagen	13	85,392	-
President, MT/T	"Guidelines for single contractual pension promises"
Cynthia A. Niekamp	-	-	-	-
President, TTS
(1) Converted from Euro to US Dollar using an exchange rate of 1 Euro = 1.3201 US Dollar for SFAS 87/158 disclosure purposes.

Name	Executive Contributions in Last FY ($)	Registrant Contributions in Last FY ($)	Aggregate Earnings in Last FY ($)	Aggregate Withdrawals/ Distributions ($)	Aggregate Balance at Last FYE ($)
(a)	(b)	(c)	(d)	(e)	(f)
Timothy M. Manganello
(1)	-	-	-	-	-
(2)	-	243,142	133,248	-	1,333,930
Robin J. Adams
(1)	-	-	-	-	-
(2)	-	99,011	7,662	-	213,556
Roger J. Wood
(1)	-	-	38,562	-	252,238
(2)	-	71,454	34,133	-	353,425
Alfred Weber
(1)	-	-	-	-	-
(2)	-	71,007	37,786	-	238,117
Cynthia A. Niekamp
(1)	-	-	-	-	-
(2) (3)	-	47,652	9,969	-	86,495

(1) Deferred Compensation Plan
(2) Excess Plan
(3) All amounts subject to vesting and forfeiture

Name			Executive Contributions in Last FY		Registrant Contributions in Last FY		Aggregate Earnings in Last FY		Aggregate Withdrawals/ Distributions		Aggregate Balance at Last FYE
			($)		($)		($)		($)		($)
(a)			(b)		(c)		(d)		(e)		(f)
Timothy M. Manganello,
CEO (1		)		-		-		-		-		-
	(2	)		-		169,385		292,008		-		1,795,324
Robin J. Adams,
CFO (1		)		-		-		-		-		-
	(2	)		-		59,369		74,161		-		347,086
Roger J. Wood
President, TBS/E (1		)		-		-		21,313		-		273,551
	(2	)		-		72,476		60,144		-		486,045
Cynthia A. Niekamp
President, TTS (1		)		-		-		-		-		-
	(2	)		-		21,206		12,309		-		120,009
Bernd W. Matthes
President, TS (1		)		-		-		-		-		-
	(2	)		-		20,279		2,879		-		62,004

(1) Deferred Compensation Plan
(2) Excess Plan

No Deferred Compensation elections were made by Named Executive Officers for fiscal year 2007.

Barclays Equity Index:	~~15.78%~~5.38%
Barclays Life Path 2010:	~~10.53%~~5.08%
Barclays Life Path 2015:	~~12.00%~~4.73%
Barclays Life Path 2020:	~~13.45%~~4.42%
Barclays Life Path 2025:	~~14.60%~~4.01%
Barclays Life Path 2030:	~~15.68%~~3.82%
Barclays Life Path 2035:	~~16.50%~~3.52%
Barclays Life Path 2040:	~~17.49%~~3.34%
Barclays Life Path 2045:	~~17.50%~~3.06%
Barclays Life Path RET:	~~9.03%~~5.24%
BGI US Debt Index:	~~4.24%~~6.95%
BorgWarner Company Stock:	~~-1.59%~~65.41%
Buffalo Small Cap:	~~13.95%~~(.33%)
Harbor International Fund:	~~32.69%~~21.82%
~~Investment Contracts Fund:~~ TRP Stable Value Fund, Sched N1:	~~4.58%~~ 4.73%
Vanguard Mid Cap Index:	~~13.78%~~6.22%

	Payment Triggering Events Not In Connection with a Change of Control ("CoC")
	Involuntary Termination		Voluntary Termination
	with Cause (1)	without Cause (2)	with Good Reason (3)	without Good Reason (3)	Retirement (2)	Death (4)	Disability (2)
	($)	($)	($)	($)	($)	($)	($)
Timothy M. Manganello	1,333,930	3,246,433	1,853,260	1,853,260	3,246,433	3,746,433	3,246,433
CEO
Robin J. Adams	213,556	1,113,955	454,478	454,478	1,113,955	1,579,955	1,113,955
CFO
Roger J. Wood	605,663	1,471,628	850,122	850,122	1,471,628	1,866,628	1,471,628
President, TBS/E
Alfred Weber	238,117	732,498	238,117	238,117	732,498	1,107,498	732,498
President, MT/T
Cynthia A. Niekamp	-	406,999	72,300	72,300	406,999	771,999	406,999
President, TTS

	Payment Triggering Events In Connection with a CoC
Name						Payment Triggering Events Not In Connection with a Change of Control ("CoC")							Payment Triggering Events In Connection with a CoC
		Involuntary Termination		Voluntary Termination		Involuntary Termination		Voluntary Termination						Involuntary Termination		Voluntary Termination
	CoC only	with Cause (6)	without Cause (5)	for Good Reason (5)	without Good Reason (7)	with Cause (1)	without Cause (2)	with Good Reason (3)	without Good Reason (3)	Retirement (2)	Death (4)	Disability (2)	CoC only	with Cause (6)	without Cause (5)	for Good Reason (5)	without Good Reason (7)
	($)			($)	($)	($)				($)	($)		($)		($)		($)
Timothy M. Manganello	-		12,370,804	12,370,804	-	1,795,324	10,259,153	4,559,606	4,559,606	14,938,414	12,305,474	11,805,474	-	-	34,949,750		-
CEO
Robin J. Adams	-		6,987,506	6,987,506	-	347,086	4,943,330	2,365,582	2,365,582	6,591,869	5,994,519	5,528,519	-	-	8,232,553		-
CFO
Roger J. Wood	-		4,738,058	4,738,058	-	759,596	3,642,755	1,806,845	1,806,845	4,741,778	4,402,118	4,007,118	-	-	6,612,416		-
President, TBS/E
Alfred Weber	-		4,305,593	4,305,593	-
President, MT/T
Cynthia A. Niekamp	-		3,582,022	3,582,022	-	120,009	2,798,941	797,569	797,569	3,624,882	3,429,202	3,064,202	-	-	4,486,334		-
President, TTS
Bernd W. Matthes						62,004	2,026,886	574,422	574,422	2,852,827	2,622,147	2,292,147	-	-	4,492,694		-
President, TS

(1) Includes vested balance of the Excess Plan and vested balance of the Deferred Compensation Plan (Mr. Wood only).						(1) Includes vested balance of the Excess Plan and vested balance of the Deferred Compensation Plan (Mr. Wood only).
(2) Includes 2007 MIP payment, value of vested stock options, 2005-2007 PSP payment, vested balance of the						(2) Includes 2007 MIP payment, value of vested stock options, 2005-2007 PSP payment, vested balance of the
Excess Plan, and vested balance of the Deferred Compensation Plan (Mr. Wood only).						Excess Plan, and vested balance of the Deferred Compensation Plan (Mr. Wood only).
(3) Includes value of vested stock options, vested balance of the Excess Plan, and vested balance of the Deferred						(3) Includes value of vested stock options, vested balance of the Excess Plan, and vested balance of the Deferred
Compensation Plan (Mr. Wood only).						Compensation Plan (Mr. Wood only).
(4) Includes 2007 MIP payment, value of vested stock options, 2005-2007 PSP payment, vested balance of the						(4) Includes 2007 MIP payment, value of vested stock options, 2005-2007 PSP payment, vested balance of the
Excess Plan, vested balance of the Deferred Compensation Plan (Mr. Wood only), and life insurance.						Excess Plan, vested balance of the Deferred Compensation Plan (Mr. Wood only), and life insurance.
(5) Includes cash severance payment based on three times the average of base plus bonus, 2007 MIP payment,						(5) Includes cash severance payment based on three times the average of base plus bonus, 2007 MIP payment,
stock option payment, 2007 stock unit payment, 2006-2008 and 2007-2009 performance share payment, retirement benefit based on						stock option payment, 2007 stock unit payment, 2006-2008 and 2007-2009 performance share payment, retirement benefit based on
three times the 2007 Company contributions to the RSP, value of welfare benefits (i.e. health care, life						three times the 2007 Company contributions to the RSP, value of welfare benefits (i.e. health care, life
insurance, and disability insurance coverage for 3 years), outplacement services, and excise tax and tax						insurance, and disability insurance coverage for 3 years), outplacement services, and excise tax and tax
gross-up payment.
(6) While there are no additional payments associated with Involuntary Termination for Cause associated with a						(6) While there are no additional payments associated with Involuntary Termination for Cause associated with a
Change of Control, each Named Executive Officer would be eligible for the same payments listed under footnote (1) above.						Change of Control, each Named Executive Officer would be eligible for the same payments listed under footnote (1) above.
(7) While there are no additional payments associated with Voluntary Termination without Good Reason associated						(7) While there are no additional payments associated with Voluntary Termination without Good Reason associated
with a Change of Control, each Named Executive Officer would be eligible for the same payments listed under footnote (3) above.						with a Change of Control, each Named Executive Officer would be eligible for the same payments listed under footnote (3) above.

Name	Fees Earned or Paid in Cash ($)	Stock Awards (1) ($)	Option Awards ($)	Aggregate Number of Outstanding Stock and Option Awards (2) (#)	Non-Equity Incentive Plan Compensation ($)	Changes in Pension Value and Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)	(i)
Phyllis O. Bonanno	53,500	53,246	-	19,109	-	-	-	106,746

Dr. Andrew F. Brimmer	19,333	66,177	-	-	-	-	-	85,510

David T. Brown	53,500	55,002	-	1,894	-	-	-	108,502

Jere A. Drummond	65,500	48,654	-	17,219	-	-	-	114,154

Paul E. Glaske	59,500	66,988	-	18,166	-	-	-	126,488

Alexis P. Michas	53,500	53,246	-	19,109	-	-	-	106,746

Ernest J. Novak, Jr.	88,500	48,654	-	5,219	-	-	-	137,154

John Rau	9,667	66,177	-	-	-	-	-	75,844

Richard O. Schaum	58,000	41,260	-	2,837	-	-	-	99,260

Thomas T. Stallkamp	55,667	22,926	-	2,837	-	-	-	78,593


(1) 2006 compensation expense of aggregate grant date fair value of the 2004, 2005, 2006 Restricted Stock Awards, excluding forfeitures, in accordance with FAS 123R.
(2) Aggregate number of outstanding shares of restricted stock and outstanding vested and unvested stock options at fiscal year-end.

	2006		2005
Audit Fees and Expenses (1)	$	4,236,600	$	3,672,300
Audit-Related Fees (2)	$	348,900	$	248,500
Tax Fees (3)	$	346,700	$	266,000
All Other Fees (4)	$	—	$	—

Totals	$	4,932,200	$	4,186,800
(1) Audit fees and expenses are for professional services performed to comply with the standards of the Public Company Accounting Oversight Board (United States), including the recurring audit of the Company’s consolidated financial statements and the audit of the Company's internal control over financial reporting. This category also includes fees for audits provided in connection with statutory and regulatory filings or services that generally only the principal auditor reasonably can provide to a client.
(2) Audit-related fees are for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements. This category includes fees related to services associated with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters, consents), review of response to SEC comment letters, consultations by the Company's management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, PCAOB, FASB, or other regulatory or standard setting bodies, assistance in financial due diligence related to acquisitions, and audits of financial statements of employee benefit plans and various attest services.
(3) Tax fees are for professional services provided by Deloitte & Touche in connection with tax compliance and tax planning.
(4) All other fees are for products and services other than the services reported above.