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Subject: Mutually Agreed Upon Separation

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Title: Subject: Mutually Agreed Upon Separation
Date: 2/6/2009
Industry: Auto and Truck Parts     Sector: Consumer Cyclical

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January 21, 2009


Dear Phil:

Subject: Mutually Agreed Upon Separation

This letter confirms your acceptance of a separation package from ArvinMeritor, Inc. (“ArvinMeritor” or the “Company”) as a result of the company’s decision not to sell the Light Vehicle Systems as a single ongoing business. The decision was reached after consideration of a number of factors, including your service with ArvinMeritor and its predecessor. Both parties expressly agree that your acceptance of this agreement is completely voluntary. You and the Company have agreed to enter into this agreement pursuant to the following terms and conditions:


Your last day of work with the Company is January 15, 2009.



Beginning January 16, 2009, you will receive separation pay equal to thirty (30) months of your annual salary (at your current compensation rate of $600,000 annually), minus applicable taxes or certain other deductions. Payments will be made in equal semi-monthly installments through July 15, 2011.


· 

Internal Revenue Code Section 409A and the regulations thereunder (“Section 409A”) require that you wait at least six (6) months to begin receiving severance payments subject to Section 409A. However, pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii), separation pay due to an involuntary separation from service of no more than a certain dollar amount (in this case, $490,000) is not subject to Section 409A and may be paid within the six-month waiting period. Accordingly, any separation pay you receive during the first six (6) months of your separation from service will be paid pursuant to such Section 409A exemption.


· 

In the event of your death prior to July 15, 2011 , the payments described herein shall be paid to your spouse or estate in the same form and at the same time as such payments would have been payable to you.



Given that your last day of active employment will be January 15, 2009, you will be eligible to receive an incentive compensation plan (ICP) payment for fiscal year 2009 on a prorated basis for time worked during the fiscal year. Such payment will be subject to the applicable formula and paid pursuant to the terms of the ICP , in accordance with ICP metrics. Final award determination, if any, is subject to approval by the Compensation & Management Development Committee of the Board of Directors . If an award is approved, payment will be in December 2009.


You will be eligible to receive Long-Term Incentive (LTIP) Performance Plan awards based on your grant letter(s) as follows:


FY2007-FY2009 LTIP award will be paid in December 2009, pending Board of Directors approval, based upon applicable formulae on a prorated basis (27 months out of 36) for time worked during the performance cycle.



FY2008-FY2010 LTIP award will be paid in December 2010, pending Board of Directors approval, based upon applicable formulae on a prorated basis (15 months out of 36) for time worked during the performance cycle.


You have grant(s) of restricted stock under the LTIP for the FY2007-2009 and FY2008-2010 cycles (grant dates 12/1/2006 and 1/2/2008). Since your separation will end following the original vesting date of those shares, you will be entitled to receive those shares. As there is an immediate tax liability related to your entitlement to those shares, they will be vested as of the date this agreement is signed. You have also received a special grant of restricted shares as part of your new hire agreement (grant date of 9/11/2006). The shares under the special grant will also vest as of the date this agreement is signed.


You will be eligible to vest in your grant of performance shares for the FY2007-2009 performance cycle on a prorated basis (27 months out of 36) for time worked during the performance cycle . The actual number of shares received will be based upon applicable formulae and the vesting would occur in December 2009 following the close of the performance period.


Your financial planning and car allowances will cease as of January 15, 2009.


You will receive reasonable company-sponsored outplacement assistance in the form of a twelve (12) month program up to a maximum value of $10,000, or if you prefer, an additional $10,000 cash payment within 30 days.


Your short and long term disability and accidental death and dismemberment coverage will cease as of January 15, 2009.


Savings plan participation will cease as of January 15, 2009. You are 100% vested in your savings plan deferrals and related company matching contributions. Based upon your years of service with the Company, you will vest in 20% of the pension contribution amount in your savings plan accounts. You will be able to request a qualified plan distribution in accordance with the terms of the savings plan. Distribution of your Supplemental Savings Plan account will be in accordance with your election on file. Please contact T. Rowe Price for information about your ArvinMeritor Savings Plan account at 1-800-922-9945.


If you are currently enrolled in medical, dental and/or vision coverage and the payroll deductions associated therewith, coverage will remain in force for 18 months following your separation from service (through July 31, 2010). After July 31, 2010, you will be entitled to continue your group medical, dental and vision coverage at your own expense for a period of up to 18 months through COBRA. Information as to the cost of such coverage will be supplied to you approximately two weeks following the expiration of your separation period. Life insurance coverage will remain in force through July 31, 2010 and the life insurance coverage only may be converted to an individual policy within 31 days after termination of coverage by contacting MetLife at (888)622-6616. Payroll deductions for any supplemental life insurance and/or supplemental accidental death and dismemberment insurance coverage that you may have elected will continue through July 15, 2010. MetLife will contact you through the mail following that date with regard to your ability to convert the supplemental coverage to an individual policy.


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


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

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