Document:

EXHIBIT 4(Z)

                              REMARKETING AGREEMENT

                  REMARKETING AGREEMENT, dated as of __________, _____ (the
"Remarketing Agreement") by and among FPL Group, Inc., a Florida corporation
(the "Company"), FPL Group Capital Inc, a Florida corporation and a wholly-owned
subsidiary of the Company ("FPL Group Capital"), and ______________ not
individually but solely as purchase contract agent, trustee and attorney-in-fact
of the holders of Purchase Contracts ("Purchase Contract Agent"), and
_____________________________, ____________________ as remarketing agent (the
"Remarketing Agent").

                                   WITNESSETH:

                  WHEREAS, the Company will issue $___________ aggregate Stated
Amount of its Securities (the "Securities") under the Purchase Contract
Agreement, dated as of ________, ____ (the "Purchase Contract Agreement"), by
and between the Purchase Contract Agent and the Company; and

                  WHEREAS, the Securities will initially consist of ___________
units referred to as "Type A Securities," each such security consisting of a ___
Debenture, Series __due ____________ issued concurrently by FPL Group Capital in
the principal amount of $______ (a "Debenture") and a Purchase Contract issued
by the Company ("Purchase Contract") pursuant to the Purchase Contract Agreement
and _________ units referred to as "Type B Securities," each such security
consisting of certain U.S. Treasury Securities and a Purchase Contract.

                  WHEREAS, the Debentures will be pledged pursuant to the Pledge
Agreement (the "Pledge Agreement"), dated as of ________, ____, by and between
the Company, ________________________, as Collateral Agent, Securities
Intermediary and Custodial Agent (the "Collateral Agent") and the Purchase
Contract Agent, to secure a Type A Security holder's obligations to purchase
common stock of the Company under the related Purchase Contract on the Purchase
Contract Settlement Date; and

                  WHEREAS, the Debentures of such holders electing to have their
Debentures that are not pledged pursuant to the Pledge Agreement remarketed, or
of such Type A Security holders who have elected not to settle the Purchase
Contracts related to their Type A Security from the proceeds of a Cash
Settlement and who have not early settled their Purchase Contracts, by the
Remarketing Agent, will be remarketed on the third Business Day immediately
preceding the Purchase Contract Settlement Date; and

                  WHEREAS, the applicable interest rate on the Debentures that
remain outstanding on and after the Purchase Contract Settlement Date will be
reset, on the third Business Day immediately preceding the Purchase Contract
Settlement Date, to the Reset Rate to be determined by the Reset Agent (as
defined herein) as the rate that such Debentures should bear in order to have an
approximate market value of ___% of the aggregate principal amount of the
Debentures on the third Business Day immediately preceding the Purchase Contract
Settlement Date, provided that in the determination of such Reset Rate, the
Company and FPL

<PAGE>

Group Capital may limit the Reset Spread (a component of the Reset Rate) to be
no higher than ___ basis points (__%); and

                  WHEREAS, the Company has requested __________________________
______________________________ ("_____________") to act as the Reset Agent and
______________________ as the Remarketing Agent and in such capacities to
perform the services described herein; and

                  WHEREAS, _____________ is willing to act as Reset Agent and
Remarketing Agent and as such to perform such duties on the terms and conditions
expressly set forth herein;

                  NOW, THEREFORE, for and in consideration of the covenants
herein made, and subject to the conditions herein set forth, the parties hereto
agree as follows:

                  Section 1. Definitions. Capitalized terms used and not defined
in this Agreement shall have the meanings assigned to them in the Purchase
Contract Agreement or, if not therein stated, the Pledge Agreement.

                  Section 2. Appointment and Obligations of Reset Agent and
Remarketing Agent. The Company and FPL Group Capital hereby appoint (a)
_______________, and ________________ hereby accepts such appointment, as the
Reset Agent to determine, in consultation with the Company and FPL Group Capital
and in the manner provided for in the Officer's Certificate establishing the
terms of the Debentures and the Indenture, the Reset Rate, that in the opinion
of the Reset Agent, will, when applied to the Debentures, enable the Debentures
to have an approximate market value of approximately ___% of the aggregate
principal amount of such Debentures on the third Business Day immediately
preceding the Purchase Contract Settlement Date, provided that the Company and
FPL Group Capital may limit such Reset Rate to be no higher than the rate on the
___ Benchmark Treasury plus ___ basis points (___%), and (b) ____________, and
_____________ hereby accepts such appointment as the exclusive Remarketing Agent
to remarket the Debentures (x) of Debenture holders electing to have their
Debentures remarketed, or (y) of Type A Security holders who have not early
settled the related Purchase Contracts and have failed to notify the Purchase
Contract Agent, on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, of their intention to settle the related
Purchase Contracts through Cash Settlement, for settlement on the Purchase
Contract Settlement Date, pursuant to the Supplemental Remarketing Agreement
attached hereto as Exhibit A, among the Company, FPL Group Capital, the Purchase
Contract Agent and the Remarketing Agent (with such changes as the Company, FPL
Group Capital, the Purchase Contract Agent and the Remarketing Agent may agree
upon, it being understood that changes may be necessary in the representations,
warranties, covenants and other provisions of the Supplemental Remarketing
Agreement due to changes in law or facts and circumstances) (all such Debentures
specified in clauses (x) and (y) above are hereinafter referred to as the
"Subject Debentures"). Pursuant to the Supplemental Remarketing Agreement, the
Remarketing Agent will agree, subject to the terms and conditions set forth
therein, that the Remarketing Agent will use its reasonable efforts to remarket
not less than the percentage agreed to in the Supplemental Remarketing Agreement
of the Subject Debentures on the Remarketing Date at a price of approximately
___% of the aggregate principal amount of such Subject Debentures plus any
accrued and unpaid interest. The Remarketing Agent shall not

                                       2
<PAGE>

remarket any Subject Debentures for a price less than ___% of the aggregate
principal amount of such Debentures, plus accrued and unpaid interest and shall
not be required to purchase any Subject Debentures not successfully remarketed.
The proceeds of such remarketing shall be paid to the Collateral Agent in
accordance with Section 4.6 of the Pledge Agreement and Section 5.4 of the
Purchase Contract Agreement (both of which Sections are incorporated herein by
reference). If fewer than all of the Subject Debentures are remarketed in
accordance with the terms hereof, a Remarketing shall be deemed to have failed
as to all Subject Debentures.

                  Section 3. Fees. With respect to the Remarketing, the
Remarketing Agent shall retain as a Remarketing Fee, an amount to be agreed upon
by the Company, FPL Group Capital and the Remarketing Agent, not exceeding ___
basis points (.___%) of the aggregate principal amount of the Subject Debentures
remarketed from any amount received in connection with such Remarketing in
excess of aggregate principal amount of such remarketed Subject Debentures plus
any accrued and unpaid interest. In addition, the Reset Agent shall receive from
FPL Group Capital a reasonable and customary fee for acting as the Reset Agent
(the "Reset Agent Fee"); provided, however, that if the Remarketing Agent shall
also act as the Reset Agent, then the Reset Agent shall not be entitled to
receive any such Reset Agent Fee. Payment of such Reset Agent Fee shall be made
by FPL Group Capital on the third Business Day immediately preceding the
Purchase Contract Settlement Date in immediately available funds or, upon the
instructions of the Reset Agent, by certified or official bank check or checks
or by wire transfer.

                  Section 4. Replacement and Resignation of Remarketing Agent
and Reset Agent. (a) The Company and FPL Group Capital may in their absolute
discretion replace _____________ as the Remarketing Agent and/or as the Reset
Agent in its capacities hereunder by giving notice prior to 3:00 p.m., New York
City time, on the eighth Business Day immediately prior to the Purchase Contract
Settlement Date. Any such replacement shall become effective upon the Company's
and FPL Group Capital's appointment of a successor to perform the services that
would otherwise be performed hereunder by the Remarketing Agent and/or the Reset
Agent. Upon providing such notice, the Company and FPL Group Capital shall use
all reasonable efforts to appoint such a successor and to enter into a
remarketing agreement with such successor as soon as reasonably practicable.

                  (b) _____________ may resign at any time and be discharged
from its duties and obligations hereunder as the Remarketing Agent and/or the
Reset Agent by giving notice prior to 3:00 p.m., New York City time, on the
eighth Business Day immediately prior to the Purchase Contract Settlement Date.
Any such resignation shall become effective upon the Company's and FPL Group
Capital's appointment of a successor to perform the services that would
otherwise be performed hereunder by the Remarketing Agent and/or the Reset
Agent. Upon receiving notice from the Remarketing Agent and/or the Reset Agent
that it wishes to resign hereunder, the Company and FPL Group Capital shall
appoint such a successor and enter into a remarketing agreement with it as soon
as reasonably practicable.

                  Section 5. Dealing in the Securities. The Remarketing Agent,
when acting hereunder or acting in its individual or any other capacity, may, to
the extent permitted by law, buy, sell, hold or deal in any of the Debentures.
With respect to any Debentures owned by it, the Remarketing Agent may exercise
any vote or join in any action with like effect as if it did not act in any
capacity hereunder. The Remarketing Agent, in its individual capacity, either as
principal

                                       3
<PAGE>

or agent, may also engage in or have an interest in any financial or other
transaction with the Company or FPL Group Capital as freely as if it did not act
in any capacity hereunder.

                  Section 6. Registration Statement and Prospectus. In
connection with the Remarketing, if and to the extent required (in the opinion
of counsel for either the Remarketing Agent or the Company and FPL Group
Capital) by applicable law, regulations or interpretations in effect at the time
of such Remarketing, the Company and FPL Group Capital shall use their
reasonable efforts to have a registration statement relating to the Subject
Debentures effective under the Securities Act of 1933 by the third Business Day
immediately preceding the Purchase Contract Settlement Date, shall furnish a
current prospectus and/or prospectus supplement to be used in such Remarketing
by the Remarketing Agent under the Supplemental Remarketing Agreement.

                  Section 7. Conditions to the Remarketing Agent's Obligations.
(a) The obligations of the Remarketing Agent to remarket and purchase the
Subject Debentures, as the case may be, shall be subject to the terms and
conditions of the Supplemental Remarketing Agreement.

                  (b) If at any time during the term of this Agreement, any
Event of Default (as defined therein) under the Indenture, or event that with
the passage of time or the giving of notice or both would become an Event of
Default under the Indenture, has occurred and is continuing, then the
obligations and duties of the Remarketing Agent under this Agreement shall be
suspended until such Event of Default or event has been cured. The Company and
FPL Group Capital will cause the Indenture Trustee to give the Remarketing Agent
notice of all such Events of Default and events of which the Indenture Trustee
is aware.

                  Section 8.  Indemnification.  [To be inserted]

                  Section 9. Termination of Remarketing Agreement. Unless
otherwise terminated in accordance with the provisions hereof and except as
otherwise provided herein, the Remarketing Agreement shall remain in full force
and effect from the date hereof until the first day after the date on which no
Debentures are outstanding, or, if earlier, the Business Day immediately
following the Purchase Contract Settlement Date, in the case of a __________
Remarketing. Notwithstanding any such termination, the obligations set forth in
Section 3 hereof shall survive and remain in full force and effect until all
amounts payable under said Section 3 shall have been paid in full. In addition,
the former Remarketing Agent and Reset Agent shall be entitled to the rights and
benefits, and subject to the obligations, under Section 8, notwithstanding the
replacement or resignation of the Remarketing Agent or Reset Agent.

                  Section 10. Remarketing Agent's Performance; Duty of Care. The
duties and obligations of the Remarketing Agent hereunder shall be determined
solely by the express provisions of this Agreement and the Supplemental
Remarketing Agreement.

                  Section 11. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES THEREUNDER,

                                       4
<PAGE>

EXCEPT TO THE EXTENT THAT THE LAWS OF ANY OTHER JURISDICTION SHALL BE
MANDATORILY APPLICABLE.

                  Section 12. Term of Agreement. Unless otherwise terminated in
accordance with the provisions hereof and except as otherwise provided herein,
this Agreement shall remain in full force and effect from the date hereof until
the first day thereafter on which no Debentures are outstanding.

                  Section 13. Successors and Assigns. The rights and obligations
of the Company or FPL Group Capital hereunder may not be assigned or delegated
to any other person without the prior written consent of _____________, as the
Remarketing Agent, and the Purchase Contract Agent. The rights and obligations
of _____________ as the Remarketing Agent or _______________ as the Reset Agent
hereunder, may not be assigned or delegated to any other person without the
prior written consent of the Company and FPL Group Capital. This Agreement shall
inure to the benefit of and be binding upon the Company, FPL Group Capital and
_____________ as the Remarketing Agent and _______________ as the Reset Agent,
and their respective successors and assigns. The terms "successors" and
"assigns" shall not include any purchaser of Securities merely because of such
purchase.

                  Section 14. Headings. Section headings have been inserted in
this Agreement as a matter of convenience of reference only, and it is agreed
that such section headings are not a part of this Agreement and will not be used
in the interpretation of any provision of this Agreement.

                  Section 15. Severability. If any provision of this Agreement
shall be held or deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any or all jurisdictions
because it conflicts with any provisions of any constitution, statute, rule or
public policy or for any other reason, such circumstances shall not have the
effect of rendering the provision in question invalid, inoperative or
unenforceable in any other case, circumstances or jurisdiction, or of rendering
any other provision or provisions of this Agreement invalid, inoperative or
unenforceable to any extent whatsoever.

                  Section 16. Counterparts. This Agreement may be executed in
counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.

                  Section 17.  Amendments.  This  Agreement may be amended by
any  instrument in writing  signed by the parties hereto.

                  Section 18. Notices. Unless otherwise specified, any notices,
requests, consents or other communications given or made hereunder or pursuant
hereto shall be made in writing or transmitted by any standard form of
telecommunication, including telephone, telegraph or telecopy, and confirmed in
writing. All written notices and confirmations of notices by telecommunication
shall be deemed to have been validly given or made when delivered or mailed,
registered or certified mail, return receipt requested and postage prepaid or
transmitted by facsimile. All such notices, requests, consents or other
communications shall be addressed as follows: if to the Company or FPL Group
Capital, to FPL Group, Inc., 700 Universe Boulevard,

                                       5
<PAGE>

Juno Beach, Florida 33408, Attention: Treasurer; if to the Remarketing Agent or
Reset Agent, ________________________________; and if to the Purchase Contract
Agent, ______________________________, or to such other address as any of the
above shall specify to the other in writing.

                                       6
<PAGE>

                  IN WITNESS WHEREOF, each of the Company, FPL Group Capital,
the Remarketing Agent and the Purchase Contract Agent has caused this Agreement
to be executed in its name and on its behalf by one of its duly authorized
officers as of the date first above written.

                                            FPL GROUP, INC.

                                            By:
                                               ---------------------------------
                                               Name:
                                               Title:

                                            FPL GROUP CAPITAL INC

                                            By:
                                               ---------------------------------
                                               Name:
                                               Title:

CONFIRMED AND ACCEPTED:

------------------------------------------------

By:
   ---------------------------------
         Authorized Signatory

-----------------------------------------------
not individually but solely as Purchase
Contract Agent, trustee and as attorney-in-fact
for the holders of the Purchase Contracts

By:
   ----------------------------------
   Name:
   Title:

                                       7
<PAGE>

                                                                    EXHIBIT A TO
                                                           REMARKETING AGREEMENT

                   FORM OF SUPPLEMENTAL REMARKETING AGREEMENT

         This Supplemental Remarketing Agreement supplements a Remarketing
Agreement, dated ___________, among the parties hereto (the "Remarketing
Agreement"), and the terms hereof together with the terms of the Remarketing
Agreement constitute the entire agreement among the parties with respect to the
Remarketing of the Subject Debentures named in Schedule I hereto.
_______________ (the "Remarketing agent") hereby agrees, subject to the terms
and conditions herein set forth or incorporated herein, to use its reasonable
efforts to remarket the Subject Debentures as set forth in Schedule I hereto.
All such Subject Debentures have been tendered for remarketing by the holders
thereof, or are Pledged Debentures of holders of Type A Securities who have not
given notice that they intend to settle the Purchase Contracts related to their
Type A Securities by a Cash Settlement and have not early settled their Purchase
Contracts.

         1.   Definitions. Terms defined in the Remarketing Agreement are used
herein with the meaning ascribed to them therein. Capitalized terms used and not
defined in this Agreement and the Remarketing Agreement shall have the meanings
assigned to them in the Purchase Contract Agreement, the Underwriting Agreement
and the Indenture, as applicable.

         2.   Registration Statement and Prospectus. If required (in the opinion
of counsel to either the Remarketing Agent or the Company and FPL Group Capital)
by applicable law, the Company and FPL Group Capital have filed with the
Securities and Exchange Commission, and there has become effective, a
registration statement on Form S-3 (No. 333- _____ and 333-______-01), including
a prospectus, relating to the Subject Debentures. Such registration statement,
and the documents incorporated by reference therein, as amended to the date of
this Agreement, is hereinafter referred to as the "Registration Statement", and
the prospectus included in the Registration Statement, as amended or
supplemented to the date of this Agreement to relate to the Subject Debentures
and to the remarketing of the Subject Debentures and the documents incorporated
by reference therein, is hereinafter referred to as the "Prospectus" (including
in each case all documents incorporated by reference).

         3.   Provisions Incorporated by Reference.

              (a) Subject to Section 3(b), the following provisions of the
Underwriting Agreement shall be incorporated, as applicable, into this Agreement
and made applicable to the obligations of the Remarketing Agent, except as
explicitly amended hereby:

                  ------------------------

and such provisions are made applicable to the obligations of the Remarketing
Agent to the extent applicable, except as such provisions are explicitly amended
hereby.

                                      A-1
<PAGE>

                  If the Remarketing Agent has determined, based on advice of
counsel, that applicable law, regulations or interpretations of the Securities
and Exchange Commission make it necessary or advisable to deliver a current
prospectus or other offering document in connection with this remarketing, the
entirety of the Underwriting Agreement (other than Sections ________) shall be
incorporated by reference into this Agreement and, to the extent they are
relevant to a Remarketing of Subject Debentures, made applicable hereto, except
as explicitly amended hereby; provided that (i) the following sentence shall be
added at the beginning of section ____: "The Remarketing Agreement, as
supplemented by the Supplemental Remarketing Agreement, constitutes a valid and
binding agreement of the Company and FPL Capital Group" and (ii) ___________.

                  (b) To the extent the Underwriting Agreement is applicable
hereto, references therein to (i) the "Underwriter" or "Underwriters" or the
"Representative" or "Representatives", as the case may be, shall be deemed to
refer to the Remarketing Agent; (ii) "Securities" shall be deemed to refer to
the Subject Debentures; (iii) "this Agreement" shall be deemed to refer to the
Remarketing Agreement as supplemented by this Agreement, (iv) "the date hereof"
shall be deemed to refer to the third Business Day preceding the Purchase
Contract Settlement Date, and (v) "Closing Date" shall be deemed to refer to the
Remarketing Closing Date specified in Schedule I hereto (the "Remarketing
Closing Date"). To the extent the provisions of such Underwriting Agreement
refer to the "Prospectus" or the "Registration Statement," such reference shall
be deemed to (i) refer to any prospectus or registration statement, or other
offering document, that the Company and FPL Group Capital is required to prepare
or file with respect to the Subject Debentures pursuant to applicable law,
regulations or interpretations of the Securities and Exchange Commission in
effect at the time of the Remarketing of such Subject Debentures, including all
documents incorporated by reference therein and (ii) refer to each such document
as amended or supplemented to the third Business Day preceding the Remarketing
Date. The term "Incorporated Documents" in such Underwriting Agreement shall be
deemed to include those filed and incorporated through the date hereof and
_______. References to issuance and/or sale of Debentures shall be deemed to
refer to Remarketing of the Subject Debentures. References in Section ___ to
information furnished by the Underwriters shall be deemed to refer to
information provided by the Remarketing Agent for use in the Registration
Statement and Prospectus.

         4.   Purchase and Sale; Remarketing Fee. Subject to the terms and
conditions and in reliance upon the representations and warranties herein set
forth or incorporated herein, the Remarketing Agent agrees to use its reasonable
efforts to remarket, and to purchase from the registered holder or holders
thereof in the manner specified in Section 5 hereof, the principal amount of the
Subject Debentures set forth in Schedule I hereto at a purchase price not less
than ___% of the aggregate principal amount of such Debentures, plus any accrued
and unpaid interest thereon. In connection therewith under the terms of the
Debentures, the registered holder or holders thereof have agreed, in the manner
specified in Section 5 hereof, to pay to the Remarketing Agent a Remarketing Fee
equal to an amount determined by agreement of the Company, FPL Group Capital and
the Remarketing Agent, which shall not exceed ___ basis points (.___%) of the
aggregate principal amount of the remarketed Debentures, from any amount
received from such Remarketing in excess of the aggregate principal amount of
such remarketed Debentures plus any accrued and unpaid interest. If fewer than
all of the Subject Debentures are remarketed in accordance with the terms
hereof, the Remarketing shall be deemed to have failed as to all Subject
Debentures.

                                      A-2

         5.   Delivery and Payment. Delivery of payment for the remarketed
Subject Debentures and payment of the Remarketing Fee shall be made on the
Remarketing Closing Date (as defined in Schedule I hereto) at the location and
time specified in Schedule I hereto (or such later date not later than five
Business Days after such date as the Remarketing Agent shall designate), which
date and time may be postponed by agreement among the Remarketing Agent, the
Company, FPL Group Capital and the registered holder or holders thereof.
Delivery of the Subject Debentures to be remarketed shall be made by the
Collateral Agent to the Remarketing Agent on ___________. Upon a successful
Remarketing, the Remarketing Agent may deduct the Remarketing Fee from any
amount of such Remarketing proceeds in excess of ________ plus accrued and
unpaid interest, if any, or if the remarketed Debentures are represented by a
Global Security, payment of the Remarketing Fee may be made by any method of
transfer agreed upon by the Remarketing Agent and the Depositary for the
Debentures under the Indenture.

         If the Debentures are not represented by a Global Security,
certificates for the Debentures shall be registered in such names and
denominations as the Remarketing Agent may request, and the Company agrees to
have such certificates available for inspection, packaging and checking by the
Remarketing Agent in New York, New York not later than 1:00 p.m. on the Business
Day prior to the Remarketing Closing Date.

         6.   Notices. Unless otherwise specified, any notices, requests,
consents or other communications given or made hereunder or pursuant hereto
shall be made in writing or transmitted by any standard form of
telecommunication, including telephone, telegraph or telecopy, and confirmed in
writing. All written notices and confirmations of notices by telecommunication
shall be deemed to have been validly given or made when delivered or mailed,
registered or certified mail, return receipt requested and postage prepaid or
transmitted by facsimile. All such notices, requests, consents or other
communications shall be addressed as follows: if to the Company or FPL Group
Capital, to FPL Group, Inc., 700 Universe Boulevard, Juno Beach Florida 33408,
Attention: ________; if to the Remarketing Agent or Reset Agent, to
_________________________; and if to the Purchase Contract Agent, to
_________________________, or to such other address as any of the above shall
specify to the other in writing.

         7.   Counterparts. This Agreement may be executed in counterparts, each
of which shall be regarded as an original and all of which shall constitute one
and the same document.

                                      A-3
<PAGE>

                  If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, FPL Group Capital and the Remarketing Agent.

                                            Very truly yours,

                                            FPL GROUP, INC.

                                            By:
                                               ---------------------------
                                               Name:
                                               Title:

                                            FPL GROUP CAPITAL INC

                                            By:
                                               ---------------------------
                                               Name:
                                               Title:

CONFIRMED AND ACCEPTED:

------------------------------------------

By:
   ---------------------------------------
         Authorized Signatory

----------------------------------
not individually but solely as Purchase
Contract Agent and as attorney-in-fact
for the holders of the Purchase Contracts

By:
   ---------------------------------------
   Name:
   Title:

                                      A-4
<PAGE>

                                                                     SCHEDULE I

Title of Subject Debentures:  ___ Debentures, Series due ____

Principal Amount of Supplemental Debentures:  $

Underwriting Agreement, dated as of _______ _, __, between the Company, FPL
Group Capital and _______________________________________

Remarketing Fee: _____ %  ($_____)

Remarketing Closing Date, Time and Location:  _______________________

                                      A-5<PAGE>
                                                                  Exhibit 10-k-1

                       [Letterhead of ArvinMeritor, Inc.]

August 10, 2001

Mr. V. William Hunt
5775 Sunset Lane
Indianapolis, Indiana  46228

Dear Bill:

        This letter will confirm the substance of our conversations regarding
your resignation from ArvinMeritor, Inc. (the "Company"). In consideration of
the mutual covenants and agreements contained herein, you and the Company agree
as follows:

          1. Pursuant to this Letter Agreement, you hereby resign voluntarily
from your employment with the Company, including your position as Vice Chairman
and President of the Company, and all your other positions with subsidiaries and
affiliates of the Company, which resignations will be effective as of August 18,
2001 (the "Resignation Date"). In addition, you hereby resign voluntarily,
effective as of the Resignation Date, from your position as a director of the
Company and as a director of any of its subsidiaries and affiliates. The Company
accepts your resignations set forth above.

          2. Effective upon the Resignation Date, the Company will pay or
provide to you the amounts or benefits described in Section 5(a) of the
Agreement by and among the Company (formerly named Mu Sub, Inc.), Arvin
Industries, Inc. and you dated as of the 6th day of April, 2000 (the "Employment
Agreement") as and when such payments or benefits would be paid or provided
under Section 5(a) of the Employment Agreement as if that Section were
applicable pursuant to the terms of the Employment Agreement, provided that for
purposes of determining the amount or other terms of any payment or benefit
under Section 5(a) of the Employment Agreement or the date of payment or
provision thereof, the term "Date of Termination" in Section 5(a) of the
Employment Agreement will be deemed to refer to the Resignation Date. You agree
that Schedule A attached hereto sets forth a complete and accurate list of all
payments and benefits to be paid or provided to you under this paragraph 2. In
addition, you acknowledge that you have received from the Company (i) detailed
calculations of all amounts set forth on Schedule A and Exhibit 2 and you agree
that such calculations are complete and accurate and (ii) a summary of retiree
health benefits.

          3. The provisions of Section 8, Section 9 and the first two sentences
of Section 7 of the Employment Agreement are incorporated herein as if set forth
in their

<PAGE>

entirety herein and as if those provisions were applicable pursuant to the terms
of the Employment Agreement, provided that the period applicable to your
obligations under Sections 9(b) and 9(c) of the Employment Agreement will be
deemed to be a period of one year following the Resignation Date and that it
shall not be deemed a violation of such Section 9(b) for you to (i) serve as a
non-employee director of any person, firm, corporation or other entity or (ii)
serve as a consultant to any person, firm, corporation or other entity that may,
when taken as a whole, engage in businesses that are in substantial and direct
competition with the Company, provided that your consulting services relate
solely to aspects of such entity's business that are not in substantial and
direct competition with the Company.

          4. The Company agrees to issue a press release on or promptly after
the Resignation Date regarding your resignation in the form attached hereto as
Exhibit 1.

          5. (a) 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; provided that this paragraph 5(a) will not
apply to the extent you (i) are seeking to enforce your rights under this Letter
Agreement or (ii) are making truthful statements when required by order of a
court or other legal body having jurisdiction, provided you have given the
Company reasonable prior notice of, and a reasonable opportunity to contest,
such order. In the event of a breach or threatened breach of this paragraph
5(a), 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.

             (b) The Company will not, and will take reasonable measures to
cause its senior officers (senior vice presidents or higher level officers) and
directors not to, 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; provided that this paragraph
5(b) will not apply to the extent the Company (i) is seeking to enforce its
rights under this Letter Agreement or (ii) is making truthful statements when
required by order of a court or other legal body having jurisdiction, provided
the Company has given you reasonable prior notice of, and a reasonable
opportunity to contest, such order. In the event of a breach or threatened
breach of this paragraph 5(b), the Company agrees that you will be entitled to
injunctive relief in a court of appropriate jurisdiction to remedy

                                       2

<PAGE>

any such breach or threatened breach and the Company acknowledges that damages
would be inadequate and insufficient.

          6. 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, credit cards, computer hardware and software, palm pilots,
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). Notwithstanding the foregoing, you may retain the laptop computer and
docking station that the Company provided to you during the course of your
employment, provided, that you will promptly remove and permanently delete any
of the Company's proprietary and/or confidential information stored on such
equipment.

          7. For a period of three (3) years following the Resignation Date, the
Company will pay or reimburse you for your annual membership dues with respect
to your Company-sponsored country club membership in effect as of the date
hereof, and following such period the Company will consent to your retention of
such country club membership upon your reimbursement of the Company for any
equity interest in such country club. Within thirty (30) days after your
submission to the Company of an invoice for a country club initiation fee for
such club membership, the Company will reimburse you in an amount not to exceed
$60,000 for such initiation fee.

          8. The Company will make the lease payments under the lease in effect
on the date hereof with respect to your present Company vehicle for the
remaining term of such lease, it being understood that the Company will have no
obligation to pay or reimburse you for any other amounts with respect to such
vehicle, including without limitation, fuel, maintenance, insurance or
registration fees. You agree to comply with all other terms and conditions of
such lease. At the conclusion of such lease you may purchase such vehicle in
accordance with the terms of such lease or the Company policy, whichever is more
favorable to you.

          9. For a period of three (3) years following the Resignation Date, the
Company will pay or reimburse you for the costs of financial counseling services
actually incurred by you in an amount per year not to exceed $10,000.

          10. The Company will reimburse you for any reasonable costs invoiced
to you by one moving company hired to relocate your possessions from your
apartment in Troy, Michigan to one location in the Columbus, Indiana area.

          11. For a period of ninety (90) days following the Resignation Date,
the Company will make available to you at the Company's Troy, Michigan and
Columbus,

                                       3

<PAGE>

Indiana executive offices during regular business hours secretarial services at
a level substantially comparable to the level of secretarial services provided
to you as of the date hereof.

          12. 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, including but not limited to, Title VII of the Civil Rights Act of 1964, as
amended, 42 U.S.C. Sections 2000e et seq., the Age Discrimination in Employment
Act of 1967, as amended, 29 U.S.C. Sections 621 et seq. (the "ADEA"), the
Americans with Disabilities Act of 1990, as amended, 42 U.S.C. Sections 12101 et
seq., the Indiana Civil Rights Law, Burns Ind. Code Ann. Section 22-9 et seq.,
as amended, and any other equivalent or similar federal, state or local statute;
provided, however, that you do not release, acquit or discharge the Company
Released Parties from (i) any of the Company's express obligations arising out
of or in connection with this Letter Agreement, (ii) any Losses under the ADEA
arising after the Resignation Date which relate to occurrences after the
Resignation Date, (iii) any express rights you have under stock option plans or
agreements in effect on the date hereof with respect to stock options owned by
you and set forth on Exhibit 2 or (iv) the Company's obligation to indemnify you
for your acts prior to the Resignation Date to the same extent and only to such
extent that the Company is obligated to provide such indemnification to its
former officers and former directors generally, which shall in no event be less
favorable than the indemnification provided to former Arvin Industries, Inc.
officers and directors pursuant to Section 6.8(a) of the Agreement and Plan of
Reorganization dated as of April 6, 2000 by and among Meritor Automotive, Inc.,
the Company and Arvin Industries, Inc. It is understood that nothing in this
paragraph 12 is to be construed as an admission on behalf of the Company
Released Parties of any wrongdoing with respect to you, any such wrongdoing
being expressly denied.

                                       4

<PAGE>

        You understand that as a result of this paragraph 12, 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 understand that you have the right to take up to twenty-one (21)
days to consider whether to execute this Letter Agreement; however, having had
the advice of counsel, by execution hereof, you hereby knowingly waive such
21-day period to consider whether to execute this Letter Agreement. Upon your
execution of this Letter Agreement you will have seven (7) days following such
execution to revoke the provisions of this Letter Agreement, which revocation
will only be effective upon receipt by the Company of written notice of such
revocation in accordance with paragraph 20 below. Upon the Company's receipt of
any such revocation, this Letter Agreement (with the exception of paragraph 14
below, which will remain in full force and effect) will be void ab initio and
the Company will have no obligation to you hereunder. If seven (7) days pass
following your execution hereof without such notice of revocation, this Letter
Agreement, including without limitation this paragraph 12, will become binding
and effective on the eighth (8th) day following such execution.

        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 of this paragraph 12, and agree not to
voluntarily participate in such a proceeding.

          13. The Company agrees, on behalf of itself and its current and former
officers, directors, agents, subsidiaries, affiliates, divisions, successors and
assigns, to release, acquit and forever discharge you and your heirs, executors,
administrators and assigns (the "Executive Released Parties") of and from any
and all manner of Losses which the Company, its current and former officers,
directors, agents, subsidiaries, affiliates, divisions, successors and assigns
ever had, now have or may hereafter have, against the Executive Released Parties
or any of them arising out of or by reason of any act or omission undertaken by
you in the scope of your duties with the Company and its affiliates from the
beginning of the world to the date hereof; provided, however, that the Company
does not release, acquit or discharge the Executive Released Parties from: (i)
any of your express obligations arising out of or in connection with this Letter
Agreement; and (ii) any of your acts or omissions involving fraud, dishonesty,
gross negligence or willful malfeasance. It is understood that nothing in this
paragraph 13 is to be construed as an admission on behalf of the Executive
Released Parties of any wrongdoing with respect to the Company, any such
wrongdoing being expressly denied.

          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 the

                                       5

<PAGE>

Executive Released Parties before any federal, state or local agency, court or
other body relating to any matters covered by the terms of this paragraph 13 and
agrees not to voluntarily participate in such a proceeding.

          14. 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 as of the date hereof, (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.

          15. The Company will cause to be maintained for a period of six years
after the Resignation Date your coverage under the current policies of
directors' and officers' liability insurance maintained by the Company (provided
that the Company may substitute therefor policies of at least the same coverage
and amounts containing terms and conditions which are, in the aggregate, no less
advantageous to you) with respect to claims arising from facts or events that
occurred on or before the Resignation Date; provided, however, that in no event
shall the Company be required to expend in any one year an amount in excess of
200% of the annual premiums currently paid by the Company for such insurance;
and, provided, further, that if the annual premiums of such insurance coverage
exceed such amount, the Company shall be obligated to obtain a policy with the
greatest coverage available for a cost not exceeding such amount.

          16. You represent and warrant that you are entering voluntarily into
this Letter Agreement, and that, except as set forth herein, no promises or
inducements for this Letter Agreement have been made, and you enter into this
Letter Agreement without reliance upon any statement or representation by any of
the Company Released Parties or any other person, concerning any fact material
hereto. You agree and acknowledge that it is your responsibility, in conjunction
with your tax advisors, to consider the effect of this Letter Agreement on your
individual tax situation and that the Company Released Parties make no
representations with regard thereto.

          17. You declare and represent that you have carefully read and fully
understand the terms of this Letter Agreement, have had the advice and
assistance of counsel with respect thereto, and knowingly and of your own free
will, without any duress, being fully informed and after due deliberation,
voluntarily accept the terms of this Letter Agreement and sign the same as your
own free act.

                                       6

<PAGE>

          18. (a) This Letter Agreement is personal to you and without the prior
written consent of the Company will not be assignable by you otherwise than by
will or the laws of descent and distribution. This Letter Agreement will inure
to the benefit of and be enforceable by your legal representatives.

              (b) This Letter Agreement will inure to the benefit of and be
binding upon the Company and its successors and assigns.

              (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company expressly to
assume and agree to perform this Letter Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Letter Agreement, "Company" will
mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Letter
Agreement by operation of law or otherwise.

          19. This Letter Agreement will be governed by and construed in
accordance with the laws of the State of Indiana, without reference to
principles of conflict of laws. This Letter Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.

                                        7
<PAGE>

          20. All notices and other communications hereunder will be in writing
and will be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

        If to you:              V. William Hunt
                                5775 Sunset Lane
                                Indianapolis, Indiana  46228

        If to the Company:      ArvinMeritor, Inc.
                                2135 West Maple Road
                                Troy, Michigan  48084

                                Attention: Vernon G. Baker, II, Esq.
                                           Senior Vice President, General
                                             Counsel and Secretary

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications will be effective
when actually received by the addressee.

          21. The invalidity or unenforceability of any provision of this Letter
Agreement will not affect the validity or enforceability of any other provision
of this Letter Agreement.

          22. The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

          23. The failure by you or the Company to insist upon strict compliance
with any provision of this Letter Agreement, or the failure to assert any right
you or the Company may have hereunder, will not be deemed to be a waiver of such
provision or right or any other provision of or right under this Letter
Agreement.

          24. You and the Company agree that effective on the Resignation Date,
without limiting the force and effect of paragraphs 2 and 3 above, the
Employment Agreement will be terminated and of no further force or effect. This
Letter Agreement constitutes the entire agreement between you and the Company
with respect to the subject matter hereof and this Letter Agreement will
supersede all prior negotiations, agreements or understandings, including
without limitation, any other employment, severance or change of control
agreement, between you and the Company with respect to the subject matter
hereof.

                                       8

<PAGE>

          25. The Company agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses which you may reasonably incur as
a result of any contest including arbitration (regardless of the outcome
thereof) by you arising out of the Company's failure to pay or provide you
payments or benefits expressly specified to be paid or provided by the Company
under this Letter Agreement, plus in each case interest on any delayed payment
at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Internal Revenue Code of 1986, as amended.

          26. This Letter Agreement may be executed in several counterparts,
each of which will be deemed to be an original but all of which together will
constitute one and the same instrument below.

        Please indicate your agreement with the foregoing by signing below
where indicated.

                                     Sincerely,

                                     ARVINMERITOR, INC.

                                     By: /s/ Larry D. Yost
                                         -----------------------------------
                                         Name: Larry D. Yost
                                         Title:  Chairman of the Board
                                                 and Chief Executive Officer

ACCEPTED AND AGREED TO
as of the date first written above:

         /s/ V. William Hunt
-------------------------------------
              V. William Hunt

Date:
     --------------------------------

                                       9

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