SCHEDULE 14A SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [ ] Filed by a Party Other than the Registrant [X ] Check the appropriate box: [ ] Preliminary Proxy Statement [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 Name of Registrant as Specified in Its Charter: Borg-Warner Security Corporation Name of Person(s) Filing Proxy Statement: Borg-Warner Shareholders Committee Payment of Filing Fee (check the appropriate box) [X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2). [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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: (1) ______________________________________________________ 4) Proposed maximum aggregate value of transaction: ______________________________________________________ (1) Set forth the amount on which the filing fee is calculated and state how it was determined. [ ] 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: ____________________ Date Filed: _____________ DEFINITIVE PROXY STATEMENT BORG-WARNER SHAREHOLDERS COMMITTEE 25 Louisiana Avenue Washington, D.C. 20001 Tel: (202) 624-8100 Fax: (202) 624-6833 INDEPENDENT SHAREHOLDER SOLICITATION Re: Borg-Warner Security Corp.. ANNUAL MEETING: APRIL 25, 1995 10:00 a.m. 200 S. Michigan Ave. Chicago, Ill. Released to shareholders March 7, 1995 Dear fellow Borg-Warner Security Corp. shareholder, You may well be disappointed in the performance of Borg- Warner Security Corp. We are writing to offer what we believe is a necessary reform in turning around our company: establishing an independent director as a chairman of the board. Here is the record under the tenure of the current Chairman and CEO Donald Trauscht: * The company stock slid from a high of nearly $22 in January 1994 to $7, which it reached February 1, 1995. * The company reported earnings of 3 cents a share for the fourth quarter of 1994, compared with 48 cents a share in the same quarter last year. Before accounting for tax accruals, the company actually lost $10 million in the forth quarter. * In January, 1995, Borg-Warner attributed its problems, in part, to "an unusually high rate of external theft, which caused unusually high cargo losses and higher insurance premiums," explained company spokesman Joe Allen to Reuters. in January 1995 (emphasis added). We feel this is a disquieting admission for a security company. * After disclosing disappointing earnings in the third quarter of 1994, the company said that "the escalating rate of violent armed attacks against armored and automated-teller- machine personnel is dramatically increasing security costs and insurance premiums throughout the industry." (emphasis added) [GRAPH OF STOCK HISTORY FROM IPO TO 2/95:] Date Borg-Warner closing price 2/93 21 3/93 20.6 4/93 21.25 5/93 20.8 6/93 20.6 7/93 19.25 8/93 21.4 9/93 19.75 10/93 20 11/93 20.25 12/93 20.5 1/94 21.8 2/94 18.5 3/94 16.8 4/94 14.8 5/94 14.25 6/94 11.25 7/94 11.25 8/94 12.1 9/94 10.8 10/94 10.4 11/94 9.4 12/94 9.75 1/95 8.12 2/95 6.6 * Similar problems plagued the company in 1993, when a memo to all Wells Fargo Armored/ATM associates pointed out that its $18 million in claims and insurance premiums associated with theft, negligence, worker's compensation, vehicle accidents and general liability claims "is almost double the profit income of the company." * Crain's Chicago Business identified the company as "biggest loser" of the week in stock trading between Jan. 30 and Feb. 3. * Competitor Brinks reported an 18% increase in its 4th quarter earnings, compared with the 4th quarter of 1993. Brinks reported record operating profit in 1994. Brinks competes with Borg-Warner's guard and armored truck units. [GRAPH COMPARING STOCK PRICES:] Date Borg-Warner closing price Dow Jones Index and (Indexed to 100) Commercial Services (Indexed to 100) 2/93 100 457.797 100 3/93 98.09524 457 99.82591 4/93 101.1905 434 94.80184 5/93 99.04762 443 96.76778 6/93 98.09524 498 108.7818 7/93 91.66667 493 107.6897 8/93 101.9048 487 106.379 9/93 94.04762 484 105.7237 10/93 95.2381 474 103.5393 11/93 96.42857 477 104.1947 12/93 97.61905 491 107.2528 1/94 103.8095 516 112.7137 2/94 88.09524 496 108.345 3/94 80 456 99.60747 4/94 70.47619 470 102.6656 5/94 67.85714 472 103.1025 6/94 53.57143 455 99.38903 7/94 53.57143 465 101.5734 8/94 57.61905 496 108.345 9/94 51.42857 481 105.0684 10/94 49.52381 477 104.1947 11/94 44.7619 457 99.82591 12/94 46.42857 463 101.1365 1/95 38.66667 470 102.6656 2/95 31.42857 498 108.7818 This graph compares the percentage change in share prices of Borg-Warner Security Corp. and the Dow Jones Industrial & Commercial Services Index. This index was used by the company in its 1994 proxy, where it is described as tracking "the price performance of equity securities of companies that provide services to other commercial enterprises." This graph illustrates what would have happened if $100 were invested in Borg-Warner in February 1993, compared with $100 invested in the index. In November, 1994, Standard & Poors along with Duff & Phelps placed Borg-Warner on "watch" for a possible downgrade of its long-term debt. In February, 1995, Standard & Poors reiterated that it held the company on "CreditWatch" with "negative implications." S&P explained that the "potential for covenant violations at future periods remains due to continued subpar financial performance." (emphasis added) * On November 21, 1994 Reuters reported that "Due to lower than expected earnings from the company's transportation and alarm units, Borg-Warner expects that at year end it may not be in compliance with all of its bank covenants." * Major shareholders have abandoned their positions, including Ariel, the second largest shareholder which sold its entire 9% stake of the company, Hartford Fire Insurance, National City Bank/Columbus, and Prudential Insurance Co. In the fourth quarter of 1994, Wood Island Associates, Delphi Management, and Russell Frank each reduced their positions by at least 100,000 shares. These are critical times for Borg-Warner. As the cascading stock price, credit-rating alerts and loan renegotiations attest, our company's own security is on the line. Shareholders deserve careful, independent scrutiny over the decisions that will determine the fate of our company. THE PROPOSAL: We question whether the board's current structure allows it to exercise the oversight necessary to steer this company on a path of earnings growth. The company's governance rules include measures that we believe frustrate shareholder accountability, including a classified board, an 80% supermajority voting requirement to make changes, and restrictions of shareholders calling a special meeting. In reforming what we believe to be board insulation from shareholder accountability, we maintain that the first step is establishing an independent chairman. We have alerted company management that we intend to bring the following resolution to shareholders at the company's annual meeting: Resolved: That the Chairman of the Board of directors must be an independent director who does not also hold the position of Chief Executive Officer. We do not know whether the company will include this proposal in its proxy materials, but regardless, we will present this proposal at the meeting. If the proposal is approved by a majority of shares, we hope the board will select a chairman who is not a company manager. Because this resolution does not amend the bylaws, the Board may lawfully view this proposal as precatory under Delaware law, where the company is incorporated. This means that even if a majority of shares approves the proposal, it may not have any effect unless the board acts on it; just because it is approved does not mean the board must act on it. We urge you to support this proposal. BORG-WARNER SHAREHOLDERS COMMITTEE The sole members of the shareholder committee at this time are William B. Patterson, Director of Corporate Affairs, International Brotherhood of Teamsters ("IBT"), and Thomas Metzinger, IBT Director of Investments. MANAGEMENT COMPENSATION- SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS The committee incorporates herein by reference the discussion of these subjects in the Company's 1994 proxy statement and the forthcoming 1995 proxy statement. PROPOSALS FOR 1996 MEETINGS Stockholders who wish to have their proposals considered for inclusion in the Company's proxy statement should deliver their proposals in writing to the Company at 200 South Michigan Avenue, Chicago, Ill., 60604, by a date that will be identified in the Company's upcoming proxy statement. IMPORTANT INFORMATION RE: ELECTION OF DIRECTORS AND VOTING RIGHTS We have not supplied you with a proxy card at this time because at the 1995 meeting, shareholders will be also asked to vote in the election for board of directors and may be asked to vote on other matters (currently unknown to the Committee). Once those nominees have been announced, we will revise our proxy materials to include the nominees and any other matters to be voted upon. We will make these revised materials available to shareholders so they may direct our votes on these other matters. The Committee does not know of any contest for the board of directors and does not intend to engage in one. Giving the Committee a proxy will not give the Committee any discretionary voting authority. We incorporate by reference the additional information about voting requirements contained in the Company's 1995 proxy statement, such as the record date and outstanding shares. According to the company's 1994 proxy statement, there were 21,731,057 shares of Common Stock issued and outstanding. Each share of Common Stock entitled the holder to one vote. Holders of the Company's Series I Non-Voting Common Stock are not entitled to notice of, or to vote at, the Annual Meeting. Last year, the record date was March 15, 1994. REVOCATION RIGHTS A proxy card is revocable at any time prior to being voted by (1) executing a new proxy card; or (2) attending and voting at the meeting; or (3) delivering written notice of revocation to the Company or to the authorized agents of the employee benefit plan through which your stock is held. Only your latest-dated proxy card will be counted. SOLICITATION OF PROXIES We expect to solicit proxies by mail, telephone, telecopier and personal interviews. We will ask trustees, brokers, custodians and other nominees to forward solicitation materials to the beneficial owners of common stock, and reimburse them for their reasonable out-of-pocket expenses. Proxies will be solicited by Committee members and by members and employees of IBT, who do not receive any additional compensation for such solicitations. No other specially engaged employees have been employed to solicit shareholders. The Committee is sponsored by the IBT, which owns 100 shares of Borg-Warner's common stock. Other shareholders are invited to join the Committee. The cost of solicitation is being borne by IBT. While the exact cost of the solicitation is not at this time known, it is estimated at $1,000. About 4,000 employees of the Pony Express Courier Corp., a wholly owned subsidiary of Borg-Warner Security Corp., are represented by IBT. Pony Express has never entered into a collective bargaining agreement, and in the past 12 months, Pony Express employees have gone on strike at several locations. * * * For more information contact: Borg-Warner Shareholders Committee 25 Louisiana Avenue Washington, DC 20001 Fax 202-624-6833 Telephone: 202-624-8100