Exhibit 10b-7
 
DESCRIPTION OF ANNUAL INCENTIVE GOALS ESTABLISHED FOR FISCAL YEAR
2011 UNDER THE INCENTIVE COMPENSATION PLAN
 
     The Compensation and Management Development Committee of the Board of
Directors of ArvinMeritor, Inc.(“ArvinMeritor”), established annual incentive
goals for fiscal year 2011 under the Incentive Compensation Plan, as amended.
These annual incentive goals are based on the levels of Adjusted EBITDA and free
cash flow from continuing operations that are achieved for the year, measured
against fixed target amounts. Adjusted EBITDA is defined as earnings before
interest, income taxes, depreciation and amortization, non-controlling interests
of consolidated joint ventures, loss on sale of receivables, restructuring
expenses and asset impairment charges. Free cash flow is defined as operating
cash flows provided by continuing operations (before restructuring payments)
minus capital expenditures. The Compensation Committee also established target
awards, stated as a percentage of base salary, for participants.
 
     Potential annual incentive bonuses are comprised of two components:
one-half of potential payments is dependent on each of (a) the level of
achievement of the Adjusted EBITDA targets and (b) the level of achievement of
free cash flow targets. In addition, the final award calculation is subject to a
modifier that is based on an employee’s annual performance rating. The
calculated award may be adjusted up to +50% or -100%. The adjustment process
maintains the original budget.
 
     To determine the amounts that are paid as bonuses, performance is measured
against targets for each of the applicable components of the award calculation.
For each part of the calculation for which performance exceeds that threshold,
the portion of an individual’s target award that is paid out is dependent on,
and increases with, the percentage of the goal that is achieved. The calculated
payout, before any adjustments, for an individual cannot exceed 200% of his
target award.
 

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