Exhibit 10-r

September 14,
2009
 

Jeffrey A. Craig
Troy, MI


Dear Jay:

This letter confirms our mutual
understanding of your employment as an elected officer and Senior Vice President
and Chief Financial Officer with ArvinMeritor, Inc. (“Company”). This letter supersedes
your letter dated March 22, 2006. 

If you accept the terms of this
letter, please return a signed copy to me. 

Base Salary 

You will continue to receive your
current monthly base salary in accordance with Company payroll practices. Your
performance will be assessed at the end of each performance year against both
your annual goals and objectives and the Company’s performance. Based on your
performance and the Company’s performance, your salary will be reviewed each
year by the Compensation and Management Development Committee of the Board of
Directors (“Committee”) which may, at its discretion, adjust your base salary as
a direct result of your past performance. Any annual adjustments are typically
effective the following February. (Nothing herein shall preclude the Chairman
and CEO from effecting a downward adjustment of your salary if in his judgment
and the judgment of the Compensation Committee, such adjustment is warranted as
a result of the Company’s poor performance or other economic/business related
factors.) 

Annual Incentive
Plans 

You will be eligible to
participate in the Company’s annual incentive plan (Incentive Compensation Plan
or ICP) on a basis consistent with those of comparable executives. Your target
award will be based upon the Incentive Compensation Plan target percentage for
your position within the Company multiplied by your base salary at the end of
the fiscal year. Actual award payments will be in accordance with the terms of
the Incentive Compensation Plan and may be adjusted to reflect Company
performance and your individual performance as approved by the
Committee.

Long-Term
Incentives 

Your outstanding equity awards are
subject to the provisions in your grant letters as well as any related equity
award agreements. 

You will continue to participate
in the Company’s Long-Term Incentive Plan (LTIP) cash performance plan cycles
that are underway at the target cash award level contained in your employment or
notification letters for those cycles. 

In addition, you will be eligible
to participate in the Company’s Long-Term Incentive Plan (LTIP) cycles in future
years on a basis consistent with those of comparable executives in accordance
with the provisions of the LTIP and as approved by the Committee. Your LTIP
target levels are based upon your position and Officer Band within the Company
at the beginning of the three-year performance cycle. 




Jeffrey A. Craig
September
14, 2009
Page 2 of 7

Payment of any awards under the
LTIP will be made in accordance with the terms and conditions of the LTIP and
any related award agreements. 

Stock Ownership
Guideline 

In order to assure your Long-Term
interest in the Company’s success, as an officer of the Company you are expected
to acquire and retain a minimum of 75,000 shares of Company common stock. The
stock ownership guidelines provide a transition period within which to achieve
compliance. This period ends five years after the date the ownership guidelines
become applicable to you (i.e., five years after the date
of your hire or becoming an officer). 

Benefits 

You will be eligible to
participate in all employee retirement and health and welfare benefit plans
maintained by the Company and offered to all full time employees of the Company,
including medical, disability, life insurance and vacation, to the extent
permitted by the terms of the plans and by the law, subject to the Company’s
rights to amend or terminate such plans as set forth in those plans. 

As an officer of the Company, you
will continue to be eligible for the following additional benefits, payable in
accordance with the terms of the applicable policies, subject to the Company’s
rights to modify or terminate such benefits: 


	Car Allowance 

	Financial Counseling
Allowance

	Personal Excess Liability Coverage






Severance
Benefits 

If you incur a separation from
service with the Company within the meaning of Section 409A (as defined below)
(“Separation from Service”), you will be eligible for certain severance benefits
as follows: 


	By the Company Without Cause. 




	Any accrued and unpaid salary
and vacation pay through your date of Separation from Service with the Company
(“Accrued Obligations”) paid within thirty (30) days following your Separation
from Service or such earlier date as may be required by law. 

	Monthly severance pay for a period
of thirty (30) months (“Severance Period”) payable in accordance with the
following paragraphs.

	Your separation pay will be paid
in equal semi-monthly installments beginning with the first payroll cycle that
includes the Release Effective Date (as defined on page 6). You will receive any
amount due for the period from the date of your Separation from Service through
the Release Effective Date in a lump sum within one week of the Release
Effective Date. 




	Notwithstanding the foregoing,
if you are a “specified employee” within the meaning of Section 409A of the
Internal Revenue Code of 1986, as amended and the final regulations thereunder
(“Section 409A), you will be required to wait to receive any portion of your
severance pay that is not exempt from Section 409A. 




	A portion of your severance pay
may be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii). The amount that is exempt under Section 409A is the amount of
separation pay that does not exceed two times the lesser of (1) your annualized
compensation determined in accordance with Section
409A regulations and (2) the maximum amount that may be taken into account under
IRC Section 401(a)(17) for the year in which you separate from service (the
“409A Exempt Amount”).








Jeffrey A. Craig
September
14, 2009
Page 3 of 7 


	Any portion of your severance
pay that is not exempt under the Section 409A exemption that would otherwise
have been paid during the first six months following your Separation from
Service will be paid in a lump sum the first payroll cycle following the six
month anniversary of your Separation from Service. 

	The balance of your severance pay
that is not exempt under the Section 409A exemption will be paid in equal
semi-monthly payments beginning with the later of (1) the first payroll cycle
after the payroll cycle in which the 409A Exempt Amount has been completely paid
and (2) the first payroll cycle after your six month anniversary of your
Separation from Service. 




	Pro-rata annual incentive bonus
participation for the then-current fiscal year, based on the time actually
worked, paid after the end of the fiscal year, in accordance with the terms of
the Incentive Compensation Plan. 

	Continued health coverage through
the end of the Severance Period, provided that (A) to the extent any such
benefit is provided via reimbursement to you, no such reimbursement will be made
by the Company later than the end of the year following the year in which the
underlying expense is incurred, (B) any such benefit provided by the Company in
any year will not be affected by the amount of any such benefit provided by the
Company in any other year, subject to any maximum benefit limitations under the
applicable plan's terms, and (C) under no circumstances you be permitted to
liquidate or exchange any such benefit for cash or any other benefit.


	Continued life insurance coverage
through the end of the Severance Period.

	Short and Long-Term Disability
coverage will remain in effect through the last day actually worked prior to the
start of the Severance Period.


	Vesting or forfeiture of special
grants of service-based restricted shares, performance shares or RSUs, made
either at the time of your hire or as a special retention incentive, will be
determined under the agreement relating to the grant. 

	Vesting or forfeiture of all other
restricted shares, RSU’s and performance shares and payouts under cash
performance plans, will be determined under the terms of the 1998B, 1997 and
2007 LTIP (which term as used in this agreement shall include any successor
plan) as applicable and any related agreements. 

	Payment of all vested benefits
under the Company’s savings plans and pension plan if applicable, in accordance
with the terms of such plans.

	Reasonable outplacement services
for a period of twelve (12) months from the date of your Separation from Service
at a cost not to exceed $10,000.

	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.










Jeffrey A. Craig
September
14, 2009
Page 4 of 7

	By the
  Company for Cause (Cause defined
  as continued and willful failure to perform duties, provided that you have
  been given written notice and an opportunity to cure the failure within five
  business days; gross misconduct which is materially and demonstrably
  injurious to the Company; or conviction of or pleading guilty or
  no contest to a (a) felony or (b) other crime which materially and adversely
  affects the Company): 


	Accrued Obligations paid within thirty (30)
  days following your Separation from Service or such earlier date as may be
  required by law. 
  
	Any vested plan benefits under the Company’s
  savings plans, payable in accordance with the terms of such plans. 
  
	Forfeit all unvested long-term incentive
  awards, performance shares, restricted stock, RSU’s and cash portions of any
  Long-Term incentive cycles. 
  
	Forfeit eligibility to receive an annual
  incentive award. 


	By the
  Executive for any reason (other than death or disability): 


	Accrued Obligations paid within thirty (30)
  days following your Separation from Service or such earlier date as may be
  required by law.
  
	Any vested plan benefits under the Company’s
  savings plans, payable in accordance with the terms of such plans. 
  
	Payment of any earned but unused vacation.
  


Change in
Control 

In the event of a Change in
Control as defined the 1998B Stock Benefit Plan and 1997 Long-Term Incentives
Plan, as applicable, you will be eligible for vesting and payment of equity
grants and awards under cash performance plans under those plans in accordance
with the terms of those plans, as applicable, and the related grants and
agreements. 

In the event of a Change in
Control as defined in the 2007 Long-Term Incentive Plan, you will be eligible
for vesting and payment of equity grants and awards under cash performance plans
under the 2007 Long-Term Incentive Plan in accordance with the terms of that
plan and the related grants and agreements.


In the event of your Separation
from Service as a result of a Change in Control (as defined in the 2007
Long-Term Incentive Plan) or within one year thereafter (except for Cause), you
will also be eligible for: 

	The severance terms outlined above under “By
  The Company Without Cause”; provided, that the full target
  amount of the annual bonus under the Incentive Compensation Plan for the
  then-current fiscal year will be paid within thirty (30) days of your
  termination (instead of a pro rata amount of actual payout at the end of the
  fiscal year). 


Death Benefits 

	Accrued Obligations paid within thirty (30)
  days following your death or such earlier date as may be required by law.
  
  
	Pro-rata annual incentive bonus participation
  for the time actually worked in the year of death, paid in accordance with the
  terms of the Incentive Compensation Plan. 
  
	Forfeiture or vesting of restricted
  shares/RSU’s, performance shares and stock options and payouts under cash
  performance plans in accordance with the terms of the 1998B, 1997 or the 2007
  LTIP, or your original employment letter, as applicable. 
  
	Continued medical, dental and/or vision plan
  coverage for your spouse and other dependents for six months following your
  death and at the end of this six month period your spouse and dependents may
  be eligible for coverage under COBRA (for
  an additional period not to exceed 30 months).
  
	Payment of all death benefits
  under the Company’s savings plans and pension plans, if applicable, in
  accordance with the terms of such plans. 





Jeffrey A. Craig
September
14, 2009
Page 5 of 7

Disability 

Disability is initially
defined as the inability to perform the duties of your current job as a result
of disease or injury. Based on your years of service, your first six months of
disability (“Short-Term Disability”) will result in either full salary
continuation for the entire six-month period or a combination of full salary
continuation and reduced salary continuation for said six-month period.
Following Short-Term Disability, if you are unable to perform your job duties
and otherwise meet the requirements for benefits under the Company’s Long-Term
Disability Plan, you will be placed on a leave of absence due to Long-Term
Disability and will receive benefits under the provisions of the Company’s
Long-Term Disability Plan. Following a one and one-half-year period on
Long-Term Disability, eligibility for continued coverage under the Company’s
Long-Term Disability Plan will be based on your inability to perform any job for
which you are qualified by education, training or experience. While you are on
Long-Term Disability, you will 


	Be eligible to receive a pro
rata annual incentive bonus based on the time that you were actively at work,
paid in accordance with the terms of the Incentive Compensation Plan.


	Forfeit or vest in your equity and
cash performance awards in accordance with the terms of the 1998B, 1997 or the
2007 LTIP and any related award agreements.

	Be entitled to medical, dental,
vision and life insurance coverage on the same terms as if you were actively
employed while you are on Long-Term Disability.

	If you participate in the
Company’s defined benefit pension plans, continue to earn vesting service but
you will not receive credited service for the purpose of determining your plan
benefit; and if you are eligible to receive Company pension contributions to the
401(k) plan and the supplemental 401(k) restoration plan, you will continue to
earn vesting service, but Company contributions to such plans will cease.





Deferred
Compensation 

If you incur a Separation from
Service with the Company, any amounts deferred by or on your behalf under the
Company’s Deferred Compensation Plan, the Supplemental 401(k) Restoration Plan
and the Supplemental Pension Plan, if applicable, will be paid in accordance
with the terms of such plans. 

Retirement
Benefits 

You are eligible to participate in
the 401(k) savings plan, which has discretionary matching company contributions,
and the supplemental savings restoration plan. In addition, you are eligible to
receive the pension contribution in accordance with the terms of the Company’s
savings plans, which is a percentage of base pay and ICP varying by age that is
available under those plans.

Indemnification 

The Company will provide
indemnification and defend you with regard to any claims arising from any
decision made by you in good faith, while performing services for the Company,
in accordance with the provisions of the Company’s by-laws. 




Jeffrey A. Craig
September
14, 2009
Page 6 of 7 

Director’s and Officer’s
Insurance 

The Company shall provide you with
reasonable Director’s and Officer’s liability insurance coverage. 

Arbitration 

You have previously agreed to sign
the Company’s “Mutual Agreement to Arbitrate Claims” and the Company “Standards
of Business Conduct and Conflict of Interest Certificate.” Any controversy
involving the construction or application of any terms, covenants or conditions
of this Agreement, or any claims arising out of any alleged breach of this
Agreement, will be submitted to and resolved by final and binding arbitration in
Oakland County, Michigan (conducted pursuant to the rules of the American
Arbitration Association). 

Proprietary
Information 

In the event you leave employment
of the Company for any reason, you agree that you will not disclose, nor will
you use, any Company proprietary information after you leave employment of the
Company. 

Release
Agreement 

You agree that, as a condition to
receive any amounts or benefits payable upon your Separation from Service (other
than Accrued Obligations and benefits in which you are otherwise vested under
the terms of the applicable benefits plans), you will execute a general release
agreement in a form provided by the Company, within 21 days of the date of your
Separation from Service and not revoke such acceptance of the agreement within
any revocation period prescribed by law. The date the release agreement becomes
irrevocable will be the Release Effective Date. If you do not sign a general
release agreement within 14 days of the date of your Separation from Service or
if you sign such agreement and revoke it within such 14 day period, any amounts
and benefits (other than Accrued Obligations and benefits in which you are
otherwise vested under the terms of the applicable benefit plans) will cease as
of last day of such 14 day period and will not resume unless and until the
Release Effective Date.

Review by
Counsel 

You acknowledge and agree that you
have been advised to consult with an attorney prior to signing this agreement.
You also acknowledge and agree that this agreement is voluntarily entered into
by you in consideration of the undertakings by the Company as set forth in this
agreement and is consistent in all respects with discussions by the Company’s
personnel with you.

Entire
Agreement 

Except with respect to provisions
regarding vesting or forfeiture of certain equity grants and payout of cash
plans that are specifically referred to above, this letter supersedes the
provisions of any prior employment letter between you and the Company.
Notwithstanding the foregoing, the Invention Assignment and Arbitration
Agreements remain in full force and effect. 




Jeffrey A. Craig
September
14, 2009
Page 7 of 7 

Successors and
Assigns 

This agreement will be binding
upon and inure to the benefit of any successors to the Company.

Counterparts 

This agreement may be executed in
several counterparts, each of which will be deemed to be an original, and all
such counterparts when taken together will constitute one and the same original.


Governing Law 

This agreement will be governed by
the laws of the State of Michigan. 
 

Sincerely,
 

Charles G. McClure,
Jr.
Chairman, Chief Executive Officer and
President
ArvinMeritor, Inc. 

	Accepted:  	  
	  
	/s/ Jeffrey A.
      Craig   	 	September 22, 2009
    
	Jeffrey
      A. Craig  	Date