Exhibit 10-t
September 7, 2004
Mr. X. Xxxx Xxxxxxxxxx, Xx.
Dear Xxxx:
Subject: Mutually Agreed Upon Separation
This letter confirms the substance of our conversation regarding a mutually
agreed upon separation between you and the Company. As per our conversation, you
will remain in your current position as Senior Vice President and Chief
Financial Officer, until such time as your successor is named. Upon the naming
of your successor, you agree to resign as an officer of the Company. You also
agree to provide transitional services as may reasonably be required. We
emphasize that your acceptance of this agreement is completely voluntary.
ArvinMeritor agrees to provide you the following:
1. Beginning January 1, 2005, through December 31, 2007 (the
"Separation Period"), you will receive separation pay equal to
thirty-six months of pay (at your current compensation rate of
$435,000 annually), spread equally over the Separation Period. The
Separation Period is inclusive of vacation. Your Separation Period
will be treated as credited service under the ArvinMeritor
Retirement Plan.
2. You will be eligible to receive an incentive compensation plan (ICP)
payment for fiscal year 2005 on a prorated basis (3 months out of
12) for time worked during the fiscal year. Such payment will be
subject to the applicable formula. Final award determination, if
any, is subject to Board of Directors' approval.
3. You will be eligible to receive long term incentive plan (LTIP)
payments based on your grant letters for FY2003-2005 and FY2004-2006
plan years as follows:
- FY2003-2005 LTIP will be paid in December, 2005, pending Board
of Directors' approval based on the applicable formulas, on a
pro-rated basis (27 months out of 36) for time worked during
the performance cycle.
- FY2004-2006 LTIP will be paid in December, 2006, pending Board
of Directors' approval, based on the applicable formulas on a
prorated basis (15 months out of 36) for time worked during
the performance cycle.
Mr. X. Xxxx Xxxxxxxxxx, Xx.
Page 2
September 7, 2004
4. All outstanding stock options will continue to vest through your
Separation Period. Stock options can be exercised up to three months
after the last day of your Separation Period. Any option not
exercised by March 31, 2008 will be forfeited.
5. You received a grant of restricted stock in exchange for cancelled
options on July 16, 2001. These restricted shares and the associated
shares purchased with reinvested dividends, will vest on July 16,
2006. However, if the Company achieves performance objectives set
forth in the Restricted Stock Agreement these restricted shares and
the associated shares purchased with reinvested dividends will vest
on January 3, 2005 or January 3, 2006.
6. You also received two grants of performance contingent restricted
shares. The first grant occurred on November 22, 2002, and the
second grant occurred on January 2, 2004. The restrictions on these
restricted shares will not lapse until after the corresponding LTIP
performance cycles (FY2003-2005) (FY2004-2006), are completed and
the Compensation and Management Development Committee of the Board
of Directors determines the extent to which the restricted shares in
the aforementioned grants and the associated shares purchased with
reinvested dividends will vest as set forth in the Restricted Stock
Agreement.
7. Your present Company vehicle may be driven at Company expense
through the end of your lease period, June 28, 2005, at which time
you may purchase it in accordance with the Company Car Policy as
though you were an active employee.
8. You will continue to be provided financial counseling reimbursement
at your current annual rate through your Separation Period.
9. Short and long term disability coverage will cease as of December
31, 2004.
10. Medical, dental, vision and flexible spending account coverage will
remain in force through December 31, 2007. After December 31, 2007,
you will be entitled to continue your group medical, dental, vision
and flexible spending account 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 following the expiration of
benefits. Basic life and accidental death and dismemberment coverage
will remain in force through December 31, 2007 and the life
insurance coverage only may be converted to an individual policy
within 31 days after termination of coverage by contacting
Prudential at 000-000-0000. Payroll deductions for any optional life
insurance and/or supplemental accidental death and dismemberment
insurance coverage that you may have elected will continue through
December 31, 2007. Prudential will contact you through the mail
following that date with regard to your ability to convert these
coverages to an individual policy.
11. You may continue to submit your Great Oaks Country Club expenses to
the Company for reimbursement, during your Separation Period.
Mr. X. Xxxx Xxxxxxxxxx, Xx.
Page 3
September 7, 2004
12. You will be eligible to continue to participate in the Company
savings plan through the Separation Period. As a designated
participant in the ArvinMeritor Supplemental Savings Plan you have
made an irrevocable contribution election for 2004. If you wish to
change the direction of your investments or your contribution level
for 2005 or later, you will need to call X. Xxxx Price at
0-000-000-0000.
13. You will receive Company sponsored outplacement assistance from the
outplacement firm of your choice under the executive management
program.
14. Your compensation checks will be mailed to your home or direct
deposited unless you specify otherwise. Please let us know in
writing if you change your address.
15. 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 16, 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.
16. 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, 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). You may, however, retain your
computer hardware.
17. 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.
Mr. X. Xxxx Xxxxxxxxxx, Xx.
Page 4
September 7, 2004
You understand that as a result of this paragraph 17, 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 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 17, and agree not to voluntarily
participate in such a proceeding.
18. 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, (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.
19. ArvinMeritor shall have the right to terminate this agreement at any
time if you materially breach any of the obligations stated herein
under this agreement.
20. You acknowledge that you have been advised to consult with an
attorney prior to signing this agreement. You also acknowledge,
understand and agree that this agreement is voluntarily entered into
by you in consideration of the undertakings by XxxxxXxxxxxx as set
forth herein and is consistent in all respects with the discussions
by ArvinMeritor personnel with you relating to your separation.
21. You agree that for a period of eighteen months following the date of
your departure (January 1, 2005) from the Company, you will not join
or start a business that competes with ArvinMeritor, nor will you
provide consultancy services, nor for the same eighteen month period
will you solicit for employment any ArvinMeritor related employee,
unless permission to do so is granted to you in writing by
XxxxxXxxxxxx's CEO or his designee. Notwithstanding the foregoing,
specific companies that would be deemed as competing against
ArvinMeritor are: Xxxx-Xxxxxx Automotive, Inc.; Cummins Engine,
Inc.; Xxxx Corporation; Delphi Automotive Systems; Xxxxx
Corporation; Xxxxxxx Controls, Inc.; Xxxx Corporation; Superior
Industries International; Tenneco Automotive, Inc.; Tower
Automotive, Inc.; and Visteon Corporation.
In the event there is any question as to direct or indirect
competition, you agree to obtain approval from ArvinMeritor in
writing prior to commencement of employment with the company which
could be in competition. You also agree that you will not disclose,
nor will you use any ArvinMeritor proprietary information.
22. This agreement is a complete and final agreement between
ArvinMeritor and its successors and X. Xxxx Xxxxxxxxxx, Xx., and
supercedes all other offers, agreements,
Mr. X. Xxxx Xxxxxxxxxx, Xx.
Page 5
September 7, 2004
and negotiations except for the Invention Assignment and Arbitration
Agreements which remain in full force.
23. You will have until October 22, 2004, in which to consider this
agreement, and you may revoke this agreement within seven days of
signing. This agreement will not become effective until the
revocation period has expired.
Sincerely,
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Senior Vice President - Human Resources
cc: X. XxXxxxx
X. Xxxxx, XX
Accepted and Agreed by:
/s/ S. Xxxx Xxxxxxxxxx
--------------------------------
X. Xxxx Xxxxxxxxxx, Xx.
September 7, 2004
Date
