Exhibit 10-b-3

DESCRIPTION OF PERFORMANCE GOALS
ESTABLISHED IN CONNECTION WITH 2014-2016
LONG-TERM INCENTIVE PLAN
 
The Compensation and Management Development Committee of the Board of Directors
of Meritor, Inc. (“Meritor”), established a performance share unit plan for the
three-year performance period ending September 30, 2016 (the “2016 Plan”), and
also established targets for the 2014 fiscal year of the cash performance plan
for the three year performance period ending September 30, 2014 (the “2014
Plan”) and the cash performance plan for the three year performance period
ending September 30, 2015 (the “2015 Plan”), under Section 13 of the 2010
Long-Term Incentive Plan. Performance goals for each of the 2014 and 2015
performance plans are based on three one-year targets, which are set at the
beginning of each one year period within the three year performance period. For
the 2014 fiscal year of each of the 2014 Plan and the 2015 Plan, these targets
are based on a targeted Adjusted EBITDA margin that was set at the beginning of
the fiscal year. At the end of the three year performance period, the total
amount paid will be the sum of the percentages of target award earned for each
year.

For the 2016 Plan, the three-year performance period is based on a targeted
Adjusted EBITDA margin, debt reduction goals and new business wins. These
targets are set at the beginning of the 2014 fiscal year. For the 2014 Plan, the
2015 Plan and the 2016 Plan, participants can earn from 0% to 200% of his/her
target award, based on actual performance against specified levels and in each
case, paid out after the end of the three-year performance cycle.

In addition, for the 2014 Plan and the 2015 Plan, there is established a penalty
threshold for significant underperformance in a given year within the three-year
performance period. This penalty threshold is established at the beginning of
the year, when the target is set. If Meritor’s Adjusted EBITDA margin for the
year falls below the penalty threshold, a penalty would be applied to the final
three-year award. The penalty would be capped at 50% for each year in the cycle.