exhibit10-1.htm


    April 28, 2010


     

    Timothy
Bowes
Shanghai, China 

     

    Dear Tim:


     

    This letter confirms
our mutual understanding of your employment as an elected officer and Vice
President and President, Industrial with ArvinMeritor, Inc.
(“Company”).

     

    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. 

     

    

    
    


    Timothy
Bowes
April 28, 2010
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 25,000 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 eighteen (18) months commencing on the date of your Separation from Service
  (“Severance Period”) payable in accordance with the following paragraphs.
  Notwithstanding any other provision of this Agreement to the contrary, in no
  event will any payments extend beyond the Severance Period.
 
        
	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. 


    

    
    


    Timothy
Bowes
April 28, 2010
Page 3 of 7 

    	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”). 


    	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. 


    

    
    


    Timothy Bowes

April 28, 2010 
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. 


    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. 


    

    
    

     

    
    



    Timothy Bowes

April 28, 2010 
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.


     

    

    
    



    Timothy Bowes

April 28, 2010 
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 (45
days in the case of a group termination) 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. In such case, any unpaid amounts for the period from the 14th
day following your separation from service to the Release Effective Date will be
paid on the first payroll date that includes the Release Effective Date.
Notwithstanding any other provision of this Agreement to the contrary, if you do
not sign the general release agreement within the 21 day (or 45 day period, as
the case may be) or if you sign such agreement and revoke it within the 21 day
(or 45 day period, as the case may be) no amounts or benefits will be payable
upon your Separation from Service (other than Accrued Obligations and benefits
in which you are otherwise vested under the terms of the applicable benefit
plans). 

     

    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.

     

    

    
    



    Timothy Bowes

April 28, 2010 
Page 7 of 7 

     

    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. 

     

    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,


     

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


      

       

    

    
      	Accepted:	       	
            	
            
	  	
            
	/s/ Timothy
      Bowes	 	May 4, 2010	
            
	Timothy Bowes	
            	Date