As filed with the Securities and Exchange Commission on July 14, 1997
Registration No. ______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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BORG-WARNER AUTOMOTIVE, INC.
(Exact name of registrant as specified in its charter)
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Delaware 13-3404508
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
200 South Michigan Avenue, Chicago, Illinois 60604, (312) 322-8500
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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Laurene H. Horiszny, Esq.
Vice President, Secretary and General Counsel
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
(312) 322-8500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. --
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box./x/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. --
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.--
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.--
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CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of each Amount maximum maximum Amount of
class of securities to be offering price aggregate registration
to be registered registered per unit (1) offering price(1) fee
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Common Stock, $.01 500,000 $53.75 $26,875,000 $8,143.94
par value shares
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) on the basis of the average high and low prices for the
Common Stock reported on the New York Stock Exchange Composite Tape on July 10,
1997.
<PAGE>
PROSPECTUS
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
[BUG]
BORG-WARNER AUTOMOTIVE, INC.
500,000 Shares
Common Stock
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Borg-Warner Automotive, Inc. (the "Company" and/or "Registrant"), through its
Dividend Reinvestment and Stock Purchase Plan (the "Plan"), hereby offers to
stockholders and other interested parties the opportunity to purchase the
Company's Common Stock, $.01 par value, ("Common Stock"), through the Plan by
making initial cash purchases and optional cash purchases and to automatically
reinvest their dividends into additional shares of Common Stock. No trading
fees will be charged on any shares purchased through either initial or optional
cash purchases or reinvested dividends.
Shares of Common Stock needed to meet the requirements of the Plan will either
be purchased in the open market or issued directly by the Company from
authorized but unissued shares or treasury shares. If shares are purchased on
the open market, the price per share will be the weighted average price of
shares purchased to satisfy Plan requirements. If shares are purchased from the
Company, the price per share will be the average of the daily high and low sale
prices quoted on the NYSE composite tape for the Investment Date.
The Company's Common Stock is listed on the New York Stock Exchange ("NYSE")
under the ticker BWA. The closing price of the Common Stock on July 10, 1997 as
shown by the NYSE composite tape was $54.00.
To the extent required by applicable law in certain jurisdictions, including AZ,
FL, NJ, NC, ND and TX, shares of Common Stock offered under the Plan to persons
not presently record holders of Common Stock are offered only through a
broker/dealer registered in such jurisdictions.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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The date of this prospectus is July 14, 1997.
No person is authorized in connection with any offering made hereby to give any
information or to make any representations not contained or incorporated by
reference in this Prospectus or any Prospectus Supplement, and any information
or representation not contained or incorporated by reference herein or therein
must not be relied upon as having been authorized by the Company or any other
person. This Prospectus is not an offer to sell, or a solicitation of any offer
to buy, by any person in any jurisdiction in which it is unlawful for such
person to make such an offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information contained herein is correct as of any time
subsequent to the date of such information.
<PAGE>
TABLE OF CONTENTS
PAGE
Borg-Warner Automotive, Inc. . . . . . . . . . . . . . . . 4
Incorporation of Certain Information by Reference . . . .. 4
The Company . . . . . . . . . . . . . . . . . . . . . . . . 4
The Plan . . . . . . . . . . . . . . . . . . . . . . . . . 5
Administration . . . . . . . . . . . . . . . . . . . . . . 5
Plan Service Fees. . . . . . . . . . . . . . . . . . . . . .6
Eligibility/Enrollment . . . . . . . . . . . . . . . . . . 6
Purchase Options . . . . . . . . . . . . . . . . . . . . .. 6
Purchase of Shares for the Plan . . . . . . . . . . . . . . 7
Source and Pricing of Shares . . . . . . . . . . . . . . . 7
Sale of Shares for the Plan . . . . . . . . . . . . . . . . 7
Book Entry; Certificates for Shares; Share Safekeeping . .. 8
Gift/Transfer of Shares within the Plan . . . . . . . . . ..8
Reports to Participants . . . . . . . . . . . . . . . . . .8
Federal Income Tax Consequences . . . . . . . . . . . . . 9
Other Information . . . . . . . . . . . . . . . . . . . . .9
Description of Capital Stock . . . . . . . . . . . . . . . 11
Commission Position on Indemnification for Securities Act
Liabilities. . . . . . . . . . . . . . . . . . . . . . . 12
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The Registration
Statement, such reports, proxy statements and other information, may be
inspected and copied at the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549; and at the regional offices of the
Commission at 7 World Trade Center (13th Floor), New York, New York 10048; and
Suite 1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661.
Copies of such material can be obtained at prescribed rates from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549. The Commission also maintains an internet web site at http://www.sec.gov
that contains reports, proxy statements and other information. Additionally,
reports, proxy statements and other information concerning the Company filed
pursuant to the Exchange Act are available for inspection at the NYSE, on which
the Common Stock is listed, located at 20 Broad Street, New York, New York
10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act with respect to the shares of Common Stock being
offered by this Prospectus. The Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits thereto.
For further information with respect to the Company and the Common Stock,
reference is hereby made to such Registration Statement and the exhibits
thereto.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
Incorporated herein by reference are (i) the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996 (including the portions of
the Company's annual report to stockholders incorporated by reference therein)
(the "Company's Annual Report"); (ii) the Company's proxy statement dated March
21, 1997 for its Annual Meeting of Stockholders held on April 29, 1997 (other
than the sections entitled "Compensation Committee Report on Executive
Compensation" and "Performance Graph" which shall not be so incorporated); (iii)
the Company's Quarterly Reports on Form 10-Q for the period ended March 31,
1997; and (iv) the Company's Current Report on Form 8-K dated February 6, 1997.
All reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering described herein shall
be deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing such documents. Any statement contained herein
or in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein, or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will furnish, without charge, to each person to whom a
Prospectus is delivered, upon written or oral request, a copy of any or all of
the foregoing incorporated herein by reference other than exhibits to such
documents (unless such exhibits are specifically incorporated by reference
therein). Requests for such documents should be submitted in writing to
Borg-Warner Automotive, Inc., 200 South Michigan Avenue, Chicago, Illinois
60604, Attention: Investor Relations Department, or by telephone at (312) 322-
8683.
THE COMPANY
The Company is a leading, global Tier I supplier of highly engineered
systems and components, primarily to original equipment manufacturers ("OEMs")
of passenger cars, sport utility vehicles and light trucks. The Company is an
original equipment supplier to every major OEM in the world. The Company was
incorporated in Delaware in 1987. The Company's executive offices are located
at 200 South Michigan Avenue, Chicago, Illinois 60604, telephone (312) 322-8500.
THE PLAN
The Plan provides existing and potential investors the opportunity to make
optional or initial cash purchases of Common Stock directly from the Plan,
thereby avoiding fees and commissions. Optional cash purchases of Common Stock
must be at least $50. Initial cash purchases of Common Stock must be at least
$500. Purchases of Common Stock (both optional and initial cash purchases) can
be no greater than $120,000 in a calendar year. Participants in the Plan may
also elect to reinvest all or a portion of their cash dividends in additional
shares of Common Stock. Participants, for no charge, may deposit Common Stock
certificates with the Administrator for safekeeping. Participants may also sell
shares of Common Stock through the Plan.
ADMINISTRATION
The Chase Manhattan Bank (the "Administrator") has been appointed by the
Company to act as administrator of the Plan. The Administrator, as agent for
Plan Participants, is responsible for receiving all cash to be invested by
Participants and performing other duties required by the Plan. The
Administrator will forward funds to be used to purchase shares of Common Stock
in the open market to Chase Securities, Inc. ("Chase"), an affiliate of the
Administrator. The Administrator also will promptly forward instructions to
sell shares to Chase. Chase is responsible for purchasing and selling shares of
Common Stock in the open market for Participants' Plan accounts in accordance
with the provisions of the Plan. Additionally, ChaseMellon Shareholder Services,
L.L.C., an affiliate of the Administrator, will perform certain services for the
Plan, including keeping records, sending statements of account activity to
Participants and other ministerial duties.
For information about the Plan, Participants should contact ChaseMellon
Shareholder Services:
Call ChaseMellon Shareholder Services: (800) 851-4229
Outside the United States call collect: (212) 946-7101
Website address: www.chasemellon.com
E-mail address: info(at sign)chasemellon.com
Participants should send written requests and notices as follows:
A. For optional cash purchases:
The Chase Manhattan Bank
c/o ChaseMellon Shareholder Services
Optional Cash Investments
P.O. Box 382009
Pittsburgh, PA 15250
Check or money order should be made payable to
The Chase Manhattan Bank in U.S. dollars.
Participants should use the transaction stub at the bottom
of their statement for optional cash purchases.
B. For correspondence and all requests
except optional cash purchases:
The Chase Manhattan Bank
c/o ChaseMellon Shareholder Services
P.O. Box 750
Pittsburgh, PA 15230-9625
Participants should include their daytime telephone number.
PLAN SERVICE FEES
Fees and charges for the Plan are as follows:
Share Safekeeping No charge
Certification of Shares No charge
Initial Cash Purchase No charge
Optional Cash Purchase No charge
Sale of Shares $15.00 plus $0.12/share
Dividend Reinvestment No charge
ELIGIBILITY/ENROLLMENT
To participate in the Plan, the requirements listed below must be met.
Citizens or residents of countries other than the United States should first
determine if there are any governmental regulations which would prohibit
participation in the Plan.
To make an initial cash purchase of Common Stock, Participants must forward
a completed enrollment form and the initial cash purchase to the Administrator.
Initial cash purchases must be at least $500. Participants may not sell or
withdraw shares purchased by check for a period of fifteen (15) calendar days
from the receipt of the check by the Administrator. Payment can be made by
check, money order or by automatic withdrawal from a bank account. Interest will
not be paid on funds held pending investment. Funds will be held in an account
for the exclusive benefit of Participants pending investment.
Current investors who hold Common Stock registered in their names may join
the Plan by returning a completed enrollment form to the Administrator. Current
investors whose shares are held in a brokerage, bank or other intermediary
account, should (i) instruct their broker, bank or trustee to register some or
all of their Common Stock directly in their name and (ii) return a completed
enrollment form to the Administrator. Unless investors make a written request
for the issuance of certificates, shares will be registered in book entry form.
(See "Book Entry; Certificates for Shares; Share Safekeeping" on page 8).
PURCHASE OPTIONS
Dividends
Participants in the Plan may elect (i) full reinvestment of cash dividends
for the purchase of additional shares of Common Stock or (ii) partial
reinvestment of cash dividends and partial payment of cash dividends.
Participants who choose partial dividend reinvestment may have their cash
dividend payment deposited electronically into their bank account instead of
receiving a check by mail. Participants may elect to reinvest dividends on as
little as one share of Common Stock. For Participants who do not elect to
reinvest their dividends, cash dividends will be paid by check or electronic
deposit, as chosen under the Plan.
Optional Cash Purchases
Participants may purchase additional shares of Common Stock through the
Plans optional cash purchases feature. The minimum optional cash purchases is
$50. The total investment (both initial and optional cash purchases) allowed in
any calendar year is $120,000 per Participant. Optional cash purchases can be
made by check or money order, or by automatic withdrawal from Participants' bank
accounts. Funds will be deducted from Participants' bank accounts on the 15th
day of each month. If this date falls on a bank holiday or weekend, funds will
be deducted on the next business day.
PURCHASE OF SHARES FOR THE PLAN
The Administrator will purchase Common Stock using initial and optional
cash purchases as promptly as possible, but at least once each week. The
Administrator will reinvest dividends to purchase Common Stock on a quarterly
basis. Purchases can be made over a number of days to meet the requirements of
the Plan.
SOURCE AND PRICING OF SHARES
Common Stock needed to meet the requirements of the Plan will either be
purchased by the Administrator in the open market or issued directly by the
Company from authorized but unissued shares or treasury shares. Initially,
Common Stock will be purchased in the open market.
If shares are purchased in the open market, whether for initial or optional
cash purchases or dividend reinvestment, the price per share will be the
weighted average price of shares purchased to satisfy Plan requirements.
If the shares are purchased from the Company, the price per share for
initial and optional cash purchases will be the average of the daily high and
low sales prices quoted on the NYSE composite tape for the relevant Investment
Date. An "Investment Date" is the date each week on which shares of Common
Stock are allocated to the Plan accounts for Participants who acquire shares
through initial or optional cash purchases. For quarterly reinvestment of
dividends, the "Investment Date" is the Dividend Payment Date, and the price per
share will be the average of the daily high and low sales prices quoted on the
NYSE composite tape for that date. In the event no trading is reported for the
Investment Date, the purchase price will be the average of the high and low
sales prices of Common Stock for the most recent business day for which trading
for Common Stock was reported on the NYSE composite tape.
Timing and Control
Because the Administrator will arrange for the open market purchase of
shares on behalf of the Plan, neither the Company nor any Participant in the
Plan has the authority or power to control the timing or pricing of shares
purchased or the selection of the broker making the purchases. Therefore,
Participants will not be able to precisely time their purchases through the
Plan, and will bear the market risk associated with fluctuations in the price of
the Common Stock. It is possible that the market price of the Common Stock
could go up or down before the broker purchases Common Stock with a
Participant's funds. In addition, Participants will not earn interest on initial
or optional cash purchases for the period before the shares are purchased.
SALE OF SHARES FOR THE PLAN
Participants may sell any number of shares held in their Plan account or
other eligible book entry shares by notifying the Administrator. The
Administrator will arrange for sales to be made at least weekly. Sales may be
made more frequently if volume dictates. The sale price will be the weighted
average price of all shares sold for Plan Participants during that period.
Participants will receive the proceeds of the sale less a $15 sales transaction
fee, a $0.12 per share trading fee, and any required tax withholdings.
Participants may choose to sell their shares through a stockbroker of their
choice, in which case they should contact the Administrator to authorize a
transfer to their broker or request a certificate for their shares. If a
Participant's total holdings fall below one share, the Administrator will
liquidate the fractional share and remit the proceeds, less any applicable fees,
and close the Plan account.
Timing and Control
Because the Administrator will sell the shares on behalf of the Plan,
neither the Company nor any Participant in the Plan has the authority or power
to control the timing or pricing of shares sold or the selection of the broker
making the sales. Therefore, Participants will not be able to precisely time
the sales through the Plan and will bear the market risk associated with
fluctuation in the price of the Common Stock. It is possible that the market
price of the Common Stock could go down or up before the broker sells a
Participant's shares. In addition, Participants will not earn interest on a
sales transaction.
BOOK ENTRY; CERTIFICATES FOR SHARES; SHARE SAFEKEEPING
Shares purchased under the Plan will be maintained in Participants' Plan
accounts in book entry form. Certificates for shares will be issued only upon
written request to the Administrator. Participants may use the Plan's share
safekeeping service to deposit with the Administrator any shares of Common Stock
in their possession. Safekeeping is beneficial because Participants no longer
bear the risks associated with loss, theft or destruction of stock certi-
ficates. With safekeeping, Participants have the options of reinvesting their
dividends or receiving cash dividends, or selling their shares under the Plan.
To use the safekeeping service, Participants should send their certificates to
ChaseMellon Shareholder Services by registered mail with written instruction to
deposit them in safekeeping. If Participants use registered mail, their certi-
ficates will be automatically covered by an Administrator blanket bond up to the
first $100,000 of value. Participants should not endorse the certificates or
complete the assignment section.
GIFT/TRANSFER OF SHARES WITHIN THE PLAN
Participants can give or transfer shares of Common Stock to anyone they
choose by:
. Making an initial $500 cash purchase to establish an account in a
recipient's name; or
. Submitting an optional cash purchase on behalf of an existing
Participant in the Plan in an amount not less than $50; or
. Transferring shares from their account to the recipient.
Participants must transfer a whole number of shares unless the entire account is
transferred. Participants may transfer shares to new or existing shareholders.
ChaseMellon Shareholder Services will automatically place such new accounts in
full dividend reinvestment status. New Participants, at their discretion, may
elect another option. Requests by Participants who reinvest dividends to either
(i) transfer all their shares or (ii) make a partial sale and transfer the
balance of their shares may have processing of their request held until after
their account is credited with reinvested dividends if their request is received
between the ex-dividend and the dividend payment date. This hold period could
be as long as four weeks.
Upon requesting a gift or transfer, Participants must have their signature
guaranteed by a financial institution participating in the Medallion Guarantee
program. The Medallion Guarantee program ensures that the individual signing
the certificate is in fact the registered owner as it appears on the stock
certificate or stock power. Participants should contact their bank or broker
for more information regarding the Medallion Guarantee program. Participants
may also call ChaseMellon Shareholder Services at (800) 851-4229 for additional
assistance.
REPORTS TO PARTICIPANTS
If Participants reinvest dividends, the Administrator will mail a quarterly
statement showing all transactions (shares, amounts invested, purchase prices,
sale prices) for the account including year-to-date and other account
information. Supplemental statements or notices will be sent when Participants
make an initial or optional cash purchase or a deposit, transfer, withdrawal or
other change in share holdings.
If Participants do not reinvest dividends, the Administrator will promptly
mail a statement or notice confirming any transactions, including transfers and
certificate deposits. Such Participants who continue to be enrolled in the
Plan, but have no transactions, will receive an annual statement of holdings.
Participants should retain their account statements to establish the cost
basis of shares purchased under the Plan for income tax and other purposes.
Participants should notify the Administrator promptly of any change in
address since all notices, statements and reports will be mailed to the address
of record.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion relates to the material federal income tax
consequences of participation in the Plan. The effect of such tax consequences
upon any Participant will depend upon such Participant's individual
circumstances which together with the state and local tax consequences of
participation should be discussed by each Participant with his or her tax
advisor.
A Participant will be required to include in federal taxable income
dividend amounts reinvested in Common Stock pursuant to the Plan even though the
Participant does not actually receive the dividend amount in cash. When the
Administrator purchases Common Stock for a Participant's account on the open
market with reinvested dividends, the amount of the dividend included in taxable
income will also include that portion of any trading fees, service charges and
any applicable taxes paid by the Company that are attributable to the
acquisition of the shares.
A Participant's tax basis in shares acquired pursuant to the Plan is in
general equal to the amount of the dividend income included in federal taxable
income described above. Such shares of Common Stock will have a holding period
beginning on the day after the shares are allocated to the Participant's
account.
A Participant will not realize any taxable income upon the Participant's
request for certificates for certain or all shares acquired pursuant to the
Plan. However, a Participant will realize gain or loss when shares held by the
Participant or shares held in the participant's Plan account are sold.
OTHER INFORMATION
Stock Split, Stock Dividend and Other Distributions
In the event dividends are paid in Common Stock, or Common Stock is
distributed in connection with any stock split or similar transaction, each
account will be adjusted to reflect the receipt of the Common Stock so paid or
distributed.
Voting of Plan Shares
Participants will have the exclusive right to exercise all voting rights
for shares of Common Stock held in their account. The Administrator will
forward all shareholder material relating to shares of Common Stock held in a
Participant's account to the Participant. Shares held in a Plan account may be
voted in person or by proxy received by the Participant prior to any meeting of
the shareholders. Shares of Common Stock held in a Participant's account will
not be voted unless the Participant or his or her proxy votes them.
Limitation of Liability
Neither the Company nor the Administrator (nor any of their respective
agents, representatives, employees, officers, directors, or subcontractors) will
be liable to Plan Participants in administering the Plan for any act done in
good faith or for any good faith omission to act, including, without limitation,
any claim of liability arising from (i) failure to terminate a Participant's
account upon a Participant's death or adjudicated incompetency, prior to the
receipt of notice in writing of such death or adjudicated incompetency, (ii) the
prices or times at which shares are purchased or sold for Participants or (iii)
fluctuations in the market value of the Common Stock.
Change or Termination of the Plan
In its sole discretion, the Company may suspend, modify, or terminate the
Plan at any time in whole, in part, or with respect to Participants in one or
more jurisdictions. Notice of such suspension, modification, or termination
will be sent promptly to all Participants. Upon any whole or partial
termination of the Plan, the Plan accounts of affected Participants shall be
treated as individual book entry accounts. Fractional shares in Plan accounts
will be sold in the open market in the aggregate and their cash value determined
for each account by reference to the price received for sales of all shares,
including fractions in the aggregate (less trading fees, related service charges
and applicable taxes, as described herein), for the relevant sale date. A check
for the proceeds of the fractional share sale will be sent to each Participant
at his or her latest address of record. Dividends paid thereafter on shares
held in individual book entry accounts shall be transmitted via check.
Termination of Individual Participation
In its sole discretion, the Company may suspend, modify or terminate the
Plan account of any Participant after advance written notice is mailed to the
Participant at the address appearing on the Administrator's records. Upon any
whole or partial termination of a Plan account, the Plan accounts of affected
Participants shall be treated as individual book entry accounts. Fractional
shares in Plan accounts will be sold in the open market and their cash value
determined for each account by reference to the price received for sales of all
shares, including fractions in the aggregate (less trading fees, related service
charges and applicable taxes, as described herein), for the relevant sale date.
A check for the proceeds of the fractional share sale will be sent to each
Participant at his or her latest address of record. Dividends paid thereafter
on shares held in individual book entry accounts shall be transmitted via check.
A Participant may request termination of his or her participation in the
Plan at any time. Upon termination, the Participant may instruct the
Administrator to send the appropriate stock certificates for all whole shares of
Common Stock in the Plan account to the Participant's address of record. A
Participant will receive a check for the liquidation proceeds for any fractional
share held in his or her Plan account at the date of termination. Fractional
shares in Plan accounts for terminating Participants will be sold in the open
market and their cash value determined for each account by reference to the
price received together with other fractions and whole shares to be sold for
other Participants (less trading fees, related service charges and applicable
taxes, as described herein) for the relevant sale date. After participation in
the Plan has been terminated, no further investments may be made without re-
enrolling in the Plan.
Participants may also terminate participation in the Plan by requesting the
Administrator to sell all shares in his or her Plan account. Upon such request,
the Administrator shall sell such shares in the manner described in the section
entitled Sale of Shares for the Plan. The check a Participant will receive
from the Administrator upon such termination will include the sale proceeds of
whole shares in the Plan account plus the liquidation value of any fractional
share. Fractional shares in Plan accounts will be sold in the open market
together with other fractions and whole shares to be sold for other Participants
and their cash value determined for each account by reference to the price
received for all whole shares sold (less trading fees, related service charges
and applicable taxes, as described herein) for the relevant sale date.
Participants may also be able in the future to terminate participation in
the Plan by requesting the Administrator to transfer all the Participant's plan
shares electronically to a financial intermediary the Participant designates.
These services are not fully operational on an industry-wide basis as of this
date.
Use of Proceeds
As of the date of the Prospectus, it is expected that shares of Common
Stock needed to meet the requirements of the Plan will be purchased on the open
market. From time to time, the Company may elect to have the Plan purchase
Common Stock directly from the Company in the form of authorized but unissued or
treasury shares. The Company intends to use any net proceeds from the sales of
such shares for general corporate purposes.
Legal Matters
Laurene H. Horiszny, Vice President, Secretary and General Counsel of the
Company, has given her opinion concerning the validity of the Common Stock
covered by the Prospectus. Ms. Horiszny owns Common Stock and is eligible to
participate in the Plan.
Foreign Participation
Participants who live outside the United States should determine whether
any laws or governmental regulations prohibit their participation in the Plan.
In addition, the Company reserves the right to terminate participation of any
shareholder if it deems it advisable under any foreign law or regulation.
Experts
The consolidated financial statements of the Company and its subsidiaries
for each of the three years in the period ended December 31, 1996 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
The financial statements of NSK-Warner as of March 31, 1997 and 1996, and
for each of the years in the three-year period ended March 31, 1997, have been
incorporated by reference herein in reliance upon the report of KPMG Peat
Marwick, independent certified public accountants and upon the authority of said
firm as experts in accounting and auditing.
DESCRIPTION OF CAPITAL STOCK
General
The Company has three authorized classes of capital stock: Common Stock,
Non-Voting Common Stock and Preferred Stock. The shares of such stock which are
authorized and outstanding as of July 10, 1997 are as follows:
Number of Number of
Shares Shares
Authorized Outstanding*
------------- ---------------
Common Stock............................... 50,000,000 23,669,215
Non-Voting Common Stock.................... 25,000,000 59,000
Preferred Stock......................... 5,000,000 0
- ---------------------------------
*Shares subject to exercisable but unexercised options are not treated as
outstanding.
Common Stock
The Common Stock and the Non-Voting Common Stock have the same terms except
as to voting rights and certain conversion features.
Each share of Common Stock entitles the holder thereof to one vote in the
election of directors and all other matters submitted to a vote of the Company's
stockholders. Holders of Common Stock do not have cumulative voting rights.
The Non-Voting Common Stock has no voting rights, other than those required by
law.
As to conversion rights, certain institutional investors who are subject to
regulatory requirements that forbid or limit their right to own general voting
stock may convert their Common Stock into Non-Voting Common Stock on a share-for
- -share basis as needed to satisfy the applicable regulatory requirements, or
directly purchase Non-Voting Common Stock because of such regulatory
requirements. Thereafter, the Non-Voting Common Stock may be converted into
Common Stock on a share-for-share basis in certain circumstances as permitted by
the applicable regulatory requirements.
Subject to any preferential rights of any outstanding shares of Preferred
Stock, holders of shares of Common Stock and Non-Voting Common Stock, treated as
a single class, are entitled to receive, pro rata based on the number of shares
held, cash dividends when, as and if declared by the Board from funds legally
available for such purpose.
In the event of a liquidation of the Company, holders of shares of Common
Stock and Non-Voting Common Stock, treated as a single class, are entitled to
receive, pro rata based on the number of shares held, all of the assets
available for distribution to stockholders after payment of all prior claims,
including any preferential liquidation rights of any Preferred Stock then
outstanding.
Holders of shares of Common Stock and Non-Voting Common Stock have no
preemptive rights to subscribe to additional shares of any such class or other
securities of the Company. All outstanding shares of Common Stock and Non-
Voting Common Stock are fully paid and non-assessable.
The Shares being offered in the Prospectus are fully paid and non-
assessable and are not subject to any future call or assessment.
The transfer agent and registrar for the Common Stock is ChaseMellon
Shareholder Services.
COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Section 145 of the General Corporation Law of the State of Delaware
("DGCL") provides that a corporation has the power to indemnify its officers and
directors against the expenses, including attorney's fees, judgments, fines or
settlement amounts actually and reasonably incurred by them in connection with
the defense of any action by reason of being or having been directors or
officers, if such person shall have acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
corporation, except that if such action shall be in the right of the
corporation, no such indemnification shall be provided as to any claim, issue or
matter as to which such person shall have been judged to have been liable to the
corporation unless and to the extent that the Court of Chancery of the State of
Delaware, or another court in which the suit was brought, shall determine upon
application that, in view of all of the circumstances of the case, such person
is fairly and reasonably entitled to indemnity.
As permitted by Section 102 of the DGCL, the Amended and Restated
Certificate of Incorporation (the "Certificate of Incorporation") of the Company
provides that no director shall be liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director other than (i) for
breaches of the director's duty of loyalty to the Company and its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) for the unlawful payment of
dividends or unlawful stock purchases or redemptions under Section 174 of the
DGCL, and (iv) for any transaction from which the director derived an improper
personal benefit.
The Certificate of Incorporation provides for indemnification of its
directors and officers to the fullest extent permitted by the DGCL, and allows
the Company to advance or reimburse litigation expenses upon submission by the
director, officer or employee of an undertaking to repay such advances or
reimbursements if it is ultimately determined that indemnification is not
available to such director or officer.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy and unenforceable.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following are the estimated expenses of the issuance and distribution
of the securities being registered (other than the ongoing costs of
administration of the Plan), all of which will be paid by the Registrant.
Registration fee . . . . . . . . . . . . . . . . . . . . $ 8,143
Blue Sky fees and expenses . . . . . . . . . . . . . . . . 15,000
Printing and related expenses . . . . . . . . . . . . . . .15,000
Legal fees andexpenses . . . . . . . . . . . . . . . . . . 20,000
Accounting fees and expenses . . . . . . . . . . . . . . . .5,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 1,857
Total . . . . . . . . . . . . . . . . . . . .$ 65,000
Item 15. Indemnification of Directors and Officers
Reference is made to Commission Position on Indemnification for Securities
Act Liabilities in the Prospectus filed as part of this Registration Statement.
Item 16. Exhibits
The following documents are filed as a part of this Registration Statement.
For each such exhibit there is shown below the registration statement number or
periodic report and exhibit number of the document in the previous filing.
5.1 Opinion of Laurene H. Horiszny
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Laurene H. Horiszny (contained in Exhibit 5.1)
23.3 Consent of KPMG Peat Marwick
24.1 Powers of Attorney
99.1 Administration Agreement
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized in the City of Chicago, State of Illinois, on July 14, 1997.
BORG-WARNER AUTOMOTIVE, INC.
By: /s/ JOHN F. FIEDLER
-------------------------------------------------
John F. Fiedler
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on July 14, 1997.
/s/ JOHN F. FIEDLER Chairman, Chief Executive Officer, and
Director
- --------------------------------
John F. Fiedler (Principal Executive Officer)
/s/ ROBIN J. ADAMS Vice President and Treasurer
- ---------------------------------
Robin J. Adams (Principal Financial Officer)
/s/ WILLIAM C. CLINE Vice President and Controller
- ----------------------------------
William C. Cline (Principal Accounting Officer)
* Director
- -----------------------------------
Andrew F. Brimmer
* Director
- ------------------------------------
Alexis P. Michas
* Director
- -------------------------------------
Jere A. Drummond
* Director
- -------------------------------------
Albert J. Fitzgibbons III
* Director
- ------------------------------------
Paul E. Glaske
* Director
- -------------------------------------
Ivan W. Gorr
* Director
- -------------------------------------
James J. Kerley
/s/ JOHN F. FIEDLER As attorney-in-fact for the
officers and/or directors
- --------------------------------------- marked by an asterisk.
John F. Fiedler
<PAGE>
EXHIBIT INDEX
Exhibit Sequential
No. Page No.
Description of Document
5.1 Opinion of Laurene H. Horiszny . . . . . . . . . . . . . .
23.1 Consent of Deloitte & ToucheLLP . . . . . . . . . . . . .
23.2 Consent of Laurene H. Horiszny (contained in Exhibit 5.1).
23.3 Consent of KPMG Peat Marwick . . . . . . . . . . . . . . .
24.1 Power of Attorney . . . . . . . . . . . . . . . . . . . .
99.1 Administration Agreement . . . . . . . . . . . . . . . . .
[BORG-WARNER AUTOMOTIVE, INC. LETTERHEAD]
July 14, 1997
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Dear Sirs:
I am Vice President and General Counsel of Borg-Warner Automotive, Inc. (the
"Company"), a Delaware corporation, and have advised the Company in connection
with the registration under the Securities Act of 1933, as amended (the "1933
Act"), of an S-3 Registration Statement ("Registration Statement") which is
being filed on or about the date of this letter with the Securities and Exchange
Commission relating to the proposed offering of 500,000 shares (the "Shares") of
the Company's common stock, par value $.01 per share ("Common Stock") pursuant
to the terms of the Company's dividend reinvestment and stock purchase plan, the
Borg-Warner Automotive, Inc. Dividend Reinvestment and Stock Purchase Plan (the
"Plan").
As counsel to the Company, I am familiar with its amended articles of
incorporation, by-laws, minutes of meetings of shareholders and directors, and
other corporate records. I have examined the Registration Statement and the
exhibits thereto, including the Plan. Based upon the foregoing, I am of the
opinion that:
1. The Company is a corporation duly organized and existing under the
laws of the State of Delaware.
2. The shares being offered pursuant to the Plan are duly authorized and
when delivered in accordance with the terms and conditions of the Plan will be
legally issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of my name in the Registration Statement and related
prospectus.
Very truly yours,
/s/ LAURENE H. HORISZNY
- -----------------------
Laurene H. Horiszny
General Counsel
[LETTERHEAD OF DELOITTE & TOUCHE LLP]
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Borg-Warner Automotive, Inc. on Form S-3 of our
report dated February 3, 1997,incorporated by reference in the
Annual Report on Form 10-K of Borg-Warner Automotive, Inc. for
the year ended December 31, 1996 and to the reference to us under
the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
/s/DELOITTE & TOUCHE LLP
- ---------------------------------------
Deloitte & Touche LLP
Chicago, Illinois
July 14, 1997
[BORG-WARNER AUTOMOTIVE, INC. LETTERHEAD]
July 14, 1997
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
Dear Sirs:
I am Vice President and General Counsel of Borg-Warner Automotive, Inc. (the
"Company"), a Delaware corporation, and have advised the Company in connection
with the registration under the Securities Act of 1933, as amended (the "1933
Act"), of an S-3 Registration Statement ("Registration Statement") which is
being filed on or about the date of this letter with the Securities and Exchange
Commission relating to the proposed offering of 500,000 shares (the "Shares") of
the Company's common stock, par value $.01 per share ("Common Stock") pursuant
to the terms of the Company's dividend reinvestment and stock purchase plan, the
Borg-Warner Automotive, Inc. Dividend Reinvestment and Stock Purchase Plan (the
"Plan").
As counsel to the Company, I am familiar with its amended articles of
incorporation, by-laws, minutes of meetings of shareholders and directors, and
other corporate records. I have examined the Registration Statement and the
exhibits thereto, including the Plan. Based upon the foregoing, I am of the
opinion that:
1. The Company is a corporation duly organized and existing under the
laws of the State of Delaware.
2. The shares being offered pursuant to the Plan are duly authorized and
when delivered in accordance with the terms and conditions of the Plan will be
legally issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of my name in the Registration Statement and related
prospectus.
Very truly yours,
/s/ LAURENE H. HORISZNY
- -----------------------
Laurene H. Horiszny
General Counsel
[LETTERHEAD OF KPMG PEAT MARWICK]
The Board of Directors
NSK-Warner Kabushiki Kaisha:
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration
Statement of Borg-Warner Automotive, Inc. on Form S-3 of our
report dated April 25, 1997 relating to the balance sheets of
NSK-Warner Kabushiki Kaisha as of March 31, 1997 and 1996, and
the related statements of earnings, stockholders' equity, and
cash flows for each of the years in the three-year period ended
March 31, 1997 which report appears in the December 31, 1996
annual report on Form 10-K of Borg-Warner Automotive, Inc. and to
the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
/s/KPMG PEAT MARWICK
- ------------------------
KPMG Peat Marwick
Tokyo, Japan
July 14, 1997
POWER OF ATTORNEY
The undersigned directors of Borg-Warner Automotive, Inc.
(the "Corporation"), hereby appoint John F. Fiedler and Laurene
H. Horiszny as their true and lawful attorneys-in-fact, with full
power for and on their names and capacities as directors of the
Corporation, and to file with the Securities and Exchange
Commission on behalf of the Corporation under the Securities Act
of 1933, as amended (the "Securities Act"), and and all
Registration Statements (including any and all amendments or
post-effective amendments thereto) relating to the registration
of shares under the Securities Act for the Corporation's dividend
reinvestment and stock purchase plan.
This Power of Attorney automatically ends upon the
termination of Mr. Fiedler's and Ms. Horiszny's service with the
Corporation.
In witness whereof, the undersigned have executed this Power
of Attorney on this 10th day of April, 1997.
/s/ JOHN F. FIEDLER /s/ ANDREW F. BRIMMER
- -------------------------- ----------------------------
John F. Fiedler Andrew F. Brimmer
/s/ ALEXIS P. MICHAS /s/ALBERT J. FITZGIBBONS, III
- --------------------------- -----------------------------
Alexis P. Michas Albert J. Fitzgibbons, III
/s/ JERE A. DRUMMOND /s/ JAMES J. KERLEY
- ---------------------------- ------------------------------
Jere A. Drummond James J. Kerley
/s/ IVAN W. GORR /s/ PAUL E. GLASKE
- ---------------------------- ------------------------------
Ivan W. Gorr Paul E. Glaske
PLAN ADMINISTRATOR AGREEMENT
THIS PLAN ADMINISTRATOR AGREEMENT (the "Agreement") is made as of the 9th
day of July, 1997 by and between Borg-Warner Automotive, Inc., a corporation
organized under the laws of the State of Delaware having its principal place of
business at 200 South Michigan Avenue, Chicago, Illinois 60604 (the "Company")
and The Chase Manhattan Bank, a national banking association having its
principal place of business at 450 West 33rd Street, New York, New York 10001
("Chase" or the "Plan Administrator").
Recitals
WHEREAS, the Company desires to implement a stock purchase plan, registered
with the Securities and Exchange Commission (the "Commission"), that enables new
investors to purchase shares of Company Common Stock directly through the Plan
and permits them to receive or reinvest the dividends paid on stock held under
the Plan, which is referred to as the "Dividend Reinvestment and Stock Purchase
Plan" (the "Plan"); and
WHEREAS, the Company desires to appoint Chase as its agent and
Administrator for the Plan and Chase desires to accept this appointment;
NOW THEREFORE, in consideration of the mutual covenants, promises and
agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Acceptance of Appointment. Subject to the terms, conditions, and
descriptions set forth in this Agreement, the Company hereby appoints Chase to
act as and Chase hereby agrees to act as the Company's agent under the Plan and
as the Administrator of the Plan. Chase agrees that, in addition to the
obligations and duties described in this Agreement, it will administer the Plan
pursuant to the provisions of the Dividend Reinvestment and Stock Purchase Plan
Prospectus, dated July 14, 1997 (attached hereto as Exhibit A) and as hereafter
amended, which document is expressly incorporated herein by reference and
referred to as the "Plan Document." Nothing in this Agreement will be construed
or interpreted to amend or modify the terms of the Plan Document in any way, and
in the event of any apparent conflict between the terms of this Agreement and
the provisions of the Plan Document, the terms of the Plan Document shall
prevail.
2. Plan Services. As Plan Administrator, Chase agrees that it will (i)
perform or arrange for the performance of the administrative services that are
designated in this Agreement and the Plan Document as being Chase's
responsibility or that of an independent agent retained by Chase for such
purpose; (ii) perform or arrange for the performance of such other ancillary or
related administrative services as the Company may from time to time reasonably
request Chase to perform for the Plan, specifically including all of the
services described in the Plan Document as being provided by the Plan
Administrator or its independent agents; and (iii) perform in accordance with
applicable laws and regulations, including without limitation the Securities
Exchange Act of 1934 (the "Exchange Act") and interpretations thereof by the
Commission (including without limitation SEC Release No. 34-35041, dated
December 1, 1994, and SEC Release Nos. 33-7375/34-38067, dated December 20,
1996).
3. Administrative Duties. The Plan Administrator:
(a) shall have no duties or obligations other than those specifically set
forth in this Agreement and the Plan Document or as may subsequently
be agreed to in writing between the Plan Administrator and the
Company. Without limiting the foregoing, nothing herein shall impose
any fiduciary duty upon the Plan Administrator to any Plan participant
("Participant" or "Participants"), except as expressly set forth in
the Plan Document regarding the Plan Administrator s services as agent
to Participants;
(b) shall be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value, or
genuineness of any Company securities purchased or sold in connection
with the Plan, and will not be required to, and will not, make
representations as to the validity, sufficiency, value or genuineness
of any Company securities;
(c) shall not be obligated to take any legal action hereunder, if,
however, the Plan Administrator determines to take any such legal
action hereunder, and where the taking of such action might, in its
judgment, subject or expose it to any expense or liability, the Plan
Administrator shall not be required to act unless it shall have been
furnished with an indemnity satisfactory to it;
(d) may rely on and shall be fully authorized and protected in acting or
refraining from acting based upon any certificate, instrument,
opinion, notice, letter, telegram, telex, facsimile transmission or
other document or security delivered to and reasonably believed by the
Plan Administrator to be genuine and to have been signed by the proper
person or persons;
(e) shall not be liable or responsible for any failure on the part of the
Company or any Participant to comply with any of their respective
obligations relating to the Plan or under law, including without
limitation obligations under applicable state and federal securities
laws and regulations;
(f) shall have no obligation to make any payment unless it has received
the necessary immediately available funds to make such payment in
full;
(g) may consult with counsel satisfactory to the Plan Administrator,
including counsel to the Company, and the advice of such counsel, when
accepted in good faith, shall be full and complete authorization and
protection in respect of any action taken, suffered, or omitted by the
Plan Administrator hereunder in accordance with the advice of such
counsel;
(h) may perform any of its duties hereunder either directly or by or
though agents which are "independent of the issuer" within the meaning
of Rule 10b-18 under the Exchange Act, as amended (except for purchase
and sale orders submitted by Participants and enrollees, including
accompanying funds, all of which will be handled only by the Plan
Administrator's personnel), provided that (i) any activities that
constitute transfer agent functions, as defined in Section 3(a)(25) of
the Exchange Act, must be conducted either by the Plan Administrator
itself or by a service organization that is a transfer agent
registered under the Exchange Act; and (ii) no such agent shall
receive compensation based on the number and types of orders or
transactions processed through the Plan. The Plan Administrator shall
be as fully responsible to the Company for the acts and omissions of
any agent, supplier, or subcontractor the Plan Administrator appoints
as for its own acts and omissions.
(i) shall have the authority to take any lawful act which it in good faith
believes is necessary to fulfill its duties as set forth in this
Agreement and the Plan Document.
4. Recordkeeping. The Plan Administrator shall keep appropriate records
concerning the Plan, accounts of Participants, purchases and sales of the
Company's securities made under the Plan, and Participants addresses of record
and shall send Statements of Account and confirmations to each Participant in
accordance with the provisions of the Plan Document. Without limiting the
foregoing, the Plan Administrator shall maintain and retain for a period of not
less than two years from the date of the event the following information: (a)
the dates and substance of any materials distributed in connection with the
Plan; (b) the number of Participants as of the end of each month; (c) the volume
of the Company's securities purchased under the Plan by the Plan Administrator
each week, or if securities are purchased less frequently, the volume of
Company's securities purchased under the Plan by the Plan Administrator each
month; and (d) a record of any period during which the Company or any of its
affiliates is engaged in any other distribution of Common Stock or other Company
securities for purposes of Regulation M under the Exchange Act. The Company
shall notify the Plan Administrator of the commencement and the termination of
any such distribution period on the date of any such commencement or
termination.
5. Termination of Plan Services. The Company may remove the Plan
Administrator upon 30 days' prior written notice to the Plan Administrator. The
Plan Administrator may resign as Plan Administrator upon 30 days' prior written
notice to the Company. Upon any such removal or resignation, the Plan
Administrator shall be relieved and discharged of any further responsibilities
with respect to its duties hereunder; provided that the Plan Administrator shall
cooperate with the Company and any successor administrator in coordinating the
transfer of files, processing of pending activity, and the dissemination of
notifications to Participants.
6. Fees and Expenses. The Plan Administrator may charge the Company
reasonable fees for its services in connection with the Plan (to the extent
consistent with the provisions of the Plan Document), including without
limitation fees for purchase and sale order processing, enrollment, custody,
account maintenance, and dividend reinvestment and shall be reimbursed by the
Company for all its reasonable out-of-pocket costs and expenses. All such fees,
costs and expenses shall be paid by the Company in accordance with the fee
schedule (attached hereto as Exhibit B), except that Participants will be
required to pay a nominal commission and fee for each sale order and a nominal
fee for the issuance of duplicate Statements of Account or transaction notices.
Any adjustment in the amount of any such fees shall be agreed upon by the
Company and the Plan Administrator.
7. Limitation of Liability. The Plan Document shall provide that the
Plan Administrator shall not be liable to Plan Participants for any act done in
good faith, or for any good faith omission to act, including without limitation,
liability arising out of (i) failure to terminate a Participant's account upon
such Participant's death or adjudicated incompetency, prior to the receipt of
notice in writing of such death or adjudicated incompetency; (ii) the prices at
which shares are purchased for the Participant's account; (iii) the times when
purchases are made, as long as the Plan Administrator operates in accordance
with the Plan Document; or (iv) fluctuations in the market value of the
Company's common stock.
8. Indemnification. The Company will indemnify and hold harmless the
Plan Administrator and its officers, directors, shareholders, and agents from
and against any loss, liability, damage or expense (including reasonable
attorneys' fees and expenses) (a "Loss") incurred as a result of the performance
of the Plan Administrator's duties hereunder or under the Plan Document,
provided that such loss is not (a) due to any negligent or bad faith act or
omission by the Plan Administrator; (b) due to a failure by the Plan
Administrator to act in accordance with the provisions of the Plan Document or
with the instructions of the Company consistent therewith; or (c) due to a
breach of the representations, warranties or covenants made by the Plan
Administrator herein.
9. Force Majeure and Prevention of Performance. The Plan Administrator
shall not be liable hereunder for any failure to act or delays in acting that
arise out of conditions beyond its reasonable control including, but not limited
to, work stoppages, fires, civil disobedience, riots, rebellions, storms,
electrical, mechanical, computer or communications facilities failures, acts of
God or similar occurrences. Nonetheless, the Plan Administrator agrees to
provide backup and emergency systems to ensure the uninterrupted and reliable
provision of Plan services by it and its agents throughout the period of this
Agreement. The Plan Administrator shall use reasonable care to minimize the
likelihood of all damage, loss of data, delays, and errors resulting from an
uncontrollable event, and should such damage, loss of data, delays, or errors
occur, the Plan Administrator shall use its best efforts to mitigate the effects
of such occurrence.
10. Choice of Law. This Agreement shall be governed by, construed and
interpreted in accordance with the laws of the State of New York, without
reference to the choice of law doctrine of such state.
11. Modification and Amendments. This Agreement may not be amended or
modified in any manner except by a written agreement signed by both the Plan
Administrator and the Company.
12. Assignments. This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by, the respective successors and assigns of the
Plan Administrator and the Company; provided, however, that neither party hereto
may assign its rights or obligations hereunder without the prior written consent
of the other party.
13. Notice. Any notice required to be given under this Agreement shall be
sent via facsimile transmission or certified/registered mail to the respective
parties at the following addresses:
If to the Company:
Laurene H. Horiszny
General Counsel
Borg-Warner Automotive, Inc.
200 South Michigan Avenue
Chicago, Illinois 60604
(312) 322-8823
Fax: (312) 322-8621
If to the Plan Administrator:
Thomas Maupin
Vice President
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
(212) 273-8009
Fax: (212) 947-7628
Notice shall be deemed to have been given on the date reflected in the
proof or evidence of delivery, or if none, on the date actually received. Any
party may from time to time change its address for notification purposes by
giving the other party written notice of the new address and the date upon which
it will become effective.
14. Waiver. No delay, omission or forbearance on the part of a party
herein to exercise any right, option, duty or power arising out of any breach or
default by another party hereto of any of the terms, provisions or covenants
contained herein, shall constitute a waiver by the non-defaulting party to
enforce any such right, option, duty or power as against the defaulting party or
as to a subsequent breach or default of the defaulting party.
15. Entire Agreement. This Agreement constitutes the entire understanding
and agreement between the parties hereto and supersedes any prior agreement with
respect to the subject matter hereof, whether written or oral.
16. Severability. In the event any one or more of the provisions of this
Agreement is held to be invalid or unenforceable, the remaining provisions of
this Agreement will be unimpaired, and the invalid or unenforceable provision
will be replaced by a mutually acceptable provision which, being valid and
enforceable, comes closest to the intention of the parties regarding the invalid
or unenforceable provision. Wherever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid pursuant to
applicable laws. If any provision of this Agreement shall be prohibited by or
invalid pursuant to applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision of the remaining provisions of this Agreement.
17. Performance Standard. The Company and the Plan Administrator agree to
perform all Plan services and other obligations under this Agreement in a
timely, accurate and thorough manner.
18. Confidentiality. The Company and the Plan Administrator each agree
that all information received from the other pursuant to this Agreement shall be
considered and kept as confidential information and agree that said information
shall not be divulged to any person, firm, corporation, or any other entity
except upon the direct written authorization of the other party which originally
provided the information being sought. Neither party shall make use of, or
indirectly furnish or divulge, any such confidential or proprietary information.
Each party shall make reasonable efforts by instruction or otherwise to ensure
that its employees or other persons permitted access to such information comply
fully with all obligations hereunder with respect to the security and
nondisclosure of such confidential information. The requirements with respect
to the confidential and proprietary nature of information set forth herein shall
not cease but shall survive the termination of this Agreement.
19. Legal Compliance. The Plan Administrator agrees to perform all
aspects of this Agreement in a timely, accurate and thorough manner and to
comply with all relevant federal, state, stock exchange, and other legal
requirements pertinent to the performance of services under the Plan. The Plan
Administrator shall be as fully responsible to the Company for the legal
compliance of any subcontractor, supplier or other agent used by the Plan
Administrator in any connection with Plan services required to be performed
hereunder as it is for the legal compliance of its own acts and omissions. The
Plan Administrator warrants that it is familiar with the relevant legal
requirements applicable to the Plan and Plan services to be provided, and the
Plan Administrator undertakes to keep apprised of changes in the relevant legal
requirements.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the day and year above written.
BORG-WARNER AUTOMOTIVE, INC.
By: /s/ ROBIN J. ADAMS
----------------------------------
Name: Robin J. Adams
Title: Vice President and Treasurer
Address: 200 South Michigan Avenue
Chicago, Illinois 60604
THE CHASE MANHATTAN BANK
By: /s/ THOMAS MAUPIN
-----------------------------------
Name: Thomas Maupin
Title: Vice President
Address: 450 West 33rd Street
15th Floor
New York, New York 10001
Attn: ChaseMellon Shareholder Services <PAGE>
EXHIBIT B
Borg-Warner Automotive, Inc.
DIRECT PURCHASE PLAN FEES
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<S> <C> <C>
Fee Item Amount Paid By
Annual program administration fee $5,000.00 Company
Fulfillment processing $1.25 per
fulfillment Company
(includes Blue Sky Transmittal Letter)
Participant setup $1.00 per
participant Company
Reinvestment of quarterly dividend $1.50 per
participant Company
Reinvestment Trading Fee $0.12 per share Company
Purchase of shares with initial
investment: by check $5.00 Company
by ACH Debit $5.00 Company
Trading fee $0.12 per share Company
Purchase of shares with additional $5.00 Company
investment
Trading fee $0.12 per share Company
Sale of Shares $15.00 Participant
Trading fee $0.12 Participant
Duplicate statement - prior year $20.00 Participant
Returned Check/ACH Transaction $25.00 Participant
Inactive participant fee $2.00 N.A.
Annual - per participant
Other services including but not
limited Per Stock Company
to: Certificate Issuance Transfer
Transfer of shares Agency Contract
Out of pocket expenses including
but not limited to: As incurred Company
800 numbers, forms/brochures
Postage/Stationery
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