ArvinMeritor, Inc.
2135 W. Maple Rd.
Troy, MI 48084

 

January 15, 2010
  
 
James D. Donlon, III
[Address Redacted]

Dear Jim:
 
Subject: Mutually Agreed Upon Separation
 
This letter confirms your acceptance of a separation package from ArvinMeritor,
Inc (“ArvinMeritor” or the “Company”). The decision was reached after
consideration of a number of factors, including your service with ArvinMeritor.
Both parties expressly agree that your acceptance of this agreement is
completely voluntary. You and the Company have agreed to enter into this
agreement pursuant to the following terms and conditions:

1.     

Your last day of work with the Company is January 15, 2010.

2.     

Beginning January 16, 2010, you will receive separation pay equal to twenty-four
(24) months (or 104 weeks) of your annual salary (at a compensation rate of
$703,800.00 annually). Payments will be made semi-monthly through January 13,
2012.

3.     

Given that your last day of active employment will be January 15, 2010, you will
be eligible to receive an incentive compensation plan (ICP) payment for active
time worked in fiscal year 2010. Such payment will be subject to the applicable
formula, in accordance with the Plan metrics. Final award determination, if any,
is subject to approval by the Compensation & Management Development Committee of
the Board of Directors. If an award is approved, payment will be paid 50% in
December 2010 and 50% in January 2011.

4.     

You will be eligible to receive Long-Term Incentive (LTIP) Performance Plan
awards in accordance with your letter dated September 15, 2009 as follows:

-     

FY2008-FY2010 LTIP award will be paid 50% in December 2010 and 50% in January
2011, pending Board of Directors approval, based upon applicable formulae and
final results.

-     

FY2009-FY2011 LTIP award will be paid 50% in December 2011 and 50% in January
2012, pending Board of Directors approval, based upon applicable formulae and
final results.

5.     

You have received annual grant(s) of restricted stock. In accordance with your
letter dated September 15, 2009, you are eligible for full and immediate vesting
of your shares granted on January 2, 2008 and September 14, 2009. Shares will
vest on January 18, 2010 – the next available trading date post active
employment - in accordance with the terms of the agreements signed at the time
of the grants.

6.     

Your financial planning and car allowances will continue through your separation
(January 13, 2012).

7.     

You will receive Company sponsored outplacement assistance in the form of a
twelve (12) month program not to exceed $10,000.

8.     

Short and long term disability coverage will cease as of January 16, 2010.

9.     

Savings plan participation will cease as of January 16, 2010. You are 100%
vested in your savings plan deferrals and related company matching contributions
and partially vested in the pension contribution in your savings plan accounts
You will be able to request a plan distribution before the end of your
separation. Please contact T. Rowe Price for information about your ArvinMeritor
Savings Plan account at 1-800-922-9945.

10.     

If you are currently enrolled in medical, dental and/or vision coverage and the
payroll deductions associated therewith, coverage will remain in force through
January 31, 2012. After January 31, 2012, you will be entitled to continue your
group medical, dental and vision coverage at your own expense for a period of up
to 18 months through COBRA. Information as to the cost of such coverage will be
supplied to you approximately two weeks following the expiration of your
separation period. Life and accidental death and personal loss insurance
coverage will remain in force through January 31, 2012 and the life insurance
coverage only may be converted to an individual policy within 31 days after
termination of coverage by contacting MetLife at (888)622-6616. Payroll
deductions for any supplemental life insurance and/or supplemental accidental
death and dismemberment insurance coverage that you may have elected will
continue through January 31, 2012. MetLife will contact you through the mail
following that date with regard to your ability to convert the supplemental
coverage to an individual policy. If you become subsequently employed and
covered by a health insurance plan of a new employer, your coverage under the
Company’s health plans will cease as of the date you become covered under such
other employer’s health plan.

11.     

Based on your age, you have met the vesting rights under the ArvinMeritor
Retirement Plan. You are currently eligible to retire and you can commence your
retirement benefit prior to the end of your separation. Please call the
ArvinMeritor Retirement Center at 888-869-3772 for information about your
pension benefit. You must apply for your pension benefits at least 60 days but
not more than 90 days prior to your retirement date. However, if you elect to
retire prior to the end of your separation period, your active employee medical,
dental and/or vision coverages will terminate and you will become eligible for
the then available retiree medical coverage, if any.

12.     

Your compensation checks will be mailed to your home or direct deposited unless
you specify otherwise. Please let us know in writing if you change your address.

13.     

You will not disparage, portray in a negative light, or take any action which
would be harmful to, or lead to unfavorable publicity for, the Company or its
subsidiaries or divisions, or any of its or their current or former officers,
directors, employees, agents, consultants, contractors, owners, divisions,
parents or successors, whether public or private, including without limitation,
in any and all interviews, oral statements, written materials, electronically
displayed materials and materials or information displayed on Internet- or
intranet-related sites. In the event of a breach or threatened breach of this
paragraph, you agree that the Company will be entitled to injunctive relief in a
court of appropriate jurisdiction to remedy any such breach or threatened breach
and you acknowledge that damages would be inadequate and insufficient.

14.     

The Company will not disparage, portray in a negative light, or take any action
which would be harmful to, or lead to unfavorable publicity for, you, including
without limitation, in any and all interviews, oral statements, written
materials, electronically displayed materials and materials or information
displayed on Internet- or intranet-related sites. In the event of a breach or
threatened breach of this paragraph, the Company agrees that you will be
entitled to injunctive relief in a court of appropriate jurisdiction to remedy
any such breach or threatened breach and the Company acknowledges that damages
would be inadequate and insufficient.

15.     

You will deliver promptly to the Company (and not keep in your possession or
deliver to any other person or entity) any and all property belonging to the
Company in your possession or under your control, including without limitation,
computer hardware/software, credit cards, PDA’s, pagers, other electronic
equipment, records, data, notes, reports, correspondence, financial information,
customer files and information and other documents or information (including any
and all copies of such Company property).

16.     

You agree, on behalf of yourself, your heirs, executors, administrators and
assigns, to release, acquit and forever discharge the Company and its
subsidiaries and divisions and its and their respective current and former
officers, directors, employees, agents, owners, affiliates, successors and
assigns (the "Company Released Parties") of and from any and all manner of
actions and causes of action, suits, debts, damages, dues, accounts, bonds,
covenants, contracts, agreements, judgments, charges, claims, rights and demands
whatsoever, whether known or unknown ("Losses"), which you, your heirs,
executors, administrators and assigns ever had, now have or may hereafter have,
against the Company Released Parties or any of them arising out of or by reason
of any cause, matter or thing whatsoever from the beginning of the world to the
date hereof, including without limitation, any and all matters relating to your
employment by the Company and its predecessors and the cessation thereof, any
and all matters relating to your compensation and benefits by or from the
Company and its predecessors and any and all matters arising under any federal,
state or local statute, rule, regulation or principle of contract law or common
law.

          

You understand that as a result of this, you will not have the right to assert
that the Company unlawfully terminated your employment or violated any of your
rights in connection with your employment.

          

You affirm that you have not filed, and agree not to initiate or cause to be
initiated on your behalf, any complaint, charge, claim or proceeding against the
Company Released Parties before any federal, state or local agency, court or
other body relating to your employment, the cessation thereof or any other
matters covered by the terms described above, and agree not to voluntarily
participate in such a proceeding.

17.     

The Company agrees on behalf of its subsidiaries and divisions and its and their
respective current and former officers, directors, employees, agents, owners,
affiliates, successors and assigns (the "Company") to release, acquit and
forever discharge you, your heirs, executors, administrators and assigns, of and
from any and all manner of actions and causes of action, suits, debts, damages,
dues, accounts, bonds, covenants, contracts, agreements, judgments, charges,
claims, rights and demands whatsoever, whether known or unknown ("Losses"),
which the Company, its subsidiaries and divisions and its and their respective
current and former officers, directors, employees, agents, owners, affiliates,
successors and assigns, ever had, now have or may hereafter have, against you or
any of them arising out of or by reason of any cause, matter or thing
whatsoever, excepting any act found to be criminal, by a court of competent
jurisdiction, from the beginning of the world to the date hereof, including
without limitation, any and all matters relating to your employment by the
Company and its predecessors and the cessation thereof, any and all matters
relating to your compensation and benefits by or from the Company and its
predecessors and any and all matters arising under any federal, state or local
statute, rule, regulation or principle of contract law or common law.

         

The Company understands that as a result described above, the Company will not
have the right to assert that you unlawfully terminated your employment or
violated any of the Company’s rights in connection with your employment.

         

The Company affirms that it has not filed, and agrees not to initiate or cause
to be initiated on its behalf, any complaint, charge, claim or proceeding
against you before any federal, state or local agency, court or other body
relating to your employment, the cessation thereof or any other matters covered
by the terms of described above, and agrees not to voluntarily participate in
such a proceeding.

18.     

The Company and you agree that the terms and conditions of this Letter Agreement
are confidential and that neither party will disclose the terms of this Letter
Agreement to any third parties, other than (i) disclosure by you to your spouse,
(ii) disclosure by the Company or you to its or your respective attorneys,
auditors, financial advisors and accountants, (iii) as may be required by law
(including securities laws) or (iv) as may be necessary to enforce this Letter
Agreement. Without limiting the generality of the foregoing, you acknowledge
that the Company may, to the extent required by applicable law, describe or
incorporate the terms of this Letter Agreement in, and/or file or incorporate
this Letter Agreement as an exhibit to, one or more filings with the Securities
and Exchange Commission.

19.     

ArvinMeritor shall have the right to terminate this agreement at any time if you
materially breach any of the obligations stated herein under this agreement.

20.     

You acknowledge that you have been advised to consult with an attorney prior to
signing this agreement. You also acknowledge, understand and agree that this
agreement is voluntarily entered into by you in consideration of the
undertakings by ArvinMeritor as set forth herein and is consistent in all
respects with the discussions by ArvinMeritor personnel with you relating to
your separation.

21.     

You agree that for a period of twenty-four (24) months following the date of
your departure January 15, 2010 from the Company, you will not solicit for
employment any ArvinMeritor related employee, unless permission to do so is
granted to you in writing by ArvinMeritor’s CEO or his designee. You also agree
that you will not disclose, nor will you use any ArvinMeritor proprietary
information.

22.     

This agreement is a complete and final agreement between ArvinMeritor and its
successors and James D. Donlon, III, and supersedes all other offers,
agreements, and negotiations. Notwithstanding the foregoing, the Invention
Assignment and Arbitration Agreements remain in full force and effect.

23.     

You will have until February 5, 2010, in which to consider this agreement, and
you may revoke this agreement within seven days of signing. This agreement will
not become effective until the revocation period has expired. For the avoidance
of doubt, until such time as the revocation period has expired, the separation
pay described herein shall be limited to two weeks of your current salary. In
the event that you take the full time provided hereunder to review this
agreement and you sign on February 5, 2010 and you do not exercise your right to
revoke, you will receive in a lump sum an amount equal to the number of weeks
due and owning since the payments ceased.

24.     

If you decide not to sign this agreement you will be paid 2 weeks salary and the
dates and eligibility for the various incentives and benefits indicated in this
agreement would be modified to your final day of separation.

Sincerely,
 
 
 
/s/ Vernon G. Baker, II     
Vernon G. Baker, II
Senior Vice President & General Counsel
 

cc:      C. McClure
           D. Riddell

     Accepted and Agreed by:
 
 /s/James D. Donlon, III          

 James D. Donlon, III
 
 January 15, 2010                  

 Date