Exhibit 10-r
October 28, 2003
Xx. Xxxxx Xxxxxxx
0000 X. Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Dear Xxxxx:
Subject: Mutually Agreed Upon Separation
This letter confirms the substance of our conversation regarding a mutually
agreed upon separation between you and the Company. We emphasize that your
acceptance of this agreement is completely voluntary. ArvinMeritor agrees to
provide you the following:
1. Beginning August 26, 2003, through August 25, 2006 (the "Separation
Period"), you will receive separation pay equal to thirty six months
of pay (at your current compensation), spread equally over the
Separation Period. The Separation Period is inclusive of unused
vacation for calendar year 2003.
2. Notwithstanding the fact that your last day of actual work was
August 25, 2003, you will be eligible to receive an incentive
compensation plan (ICP) payment for fiscal year 2003, as if your
last day actually worked was September 30, 2003. Such payment will
be subject to the applicable formula. Final award determination, if
any, is subject to Board of Directors' approval.
3. Notwithstanding the fact that your last day of actual work was
August 25, 2003, you will be eligible to receive long term incentive
plan (LTIP) payments, as if your last day actually worked was
September 30, 2003, based on your grant letters for the FY2001-2003;
FY2002-2004; and FY2003-2005 plan years as follows:
- FY2001-2003 LTIP will be paid in December, 2003, pending Board
of Directors' approval based on the applicable formulas, (36
months out of 36) for time worked during the performance
cycle.
- FY2002-2004 LTIP will be paid in December, 2004, pending Board
of Directors' approval, based on the applicable formulas on a
prorated basis (24 months out of 36) for time worked during
the performance cycle.
- FY2003-2005 LTIP will be paid in December, 2005, pending Board
of Directors' approval, based on the applicable formulas on a
prorated basis (12 months out of 36) for time worked during
the performance cycle.
Xxxxx Xxxxxxx
October 28, 2003
Page 2
4. All outstanding stock options not vested will vest on the last day
of your Separation Period. Stock options can be exercised up to
three months after the last day of your Separation Period, November
25, 2006. Any option not exercised by that date 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 a grant of performance contingent restricted
shares on November 22, 2002. The restrictions on these restricted
shares will not lapse until after the corresponding LTIP performance
cycle (2003-2005) is completed and the Compensation and Management
Development Committee of the Board of Directors determines the
extent to which the restricted shares in that grant 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 (April 6, 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 August 26,
2003.
10. Medical, dental and vision coverage will remain in force through
August 31, 2006. After August 31, 2006, 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 personal loss insurance coverage will remain in
force through August 31, 2006 and the life insurance coverage only
may be converted to an individual policy within 31 days after
termination of coverage by contacting Aetna at 0-000-000-0000.
Payroll deductions for any Group Universal Life (GUL) and/or
supplemental accidental death and personal loss insurance coverage
that you may have elected will continue through August 31, 2006.
Aetna will contact you through the mail following that date with
regard to your ability to convert these coverages to an individual
policy.
11. You were offered the choice of whether to retain your Company
sponsored social membership at Oakland Hills Country Club, or your
Company sponsored membership at Harrison Lake Country Club, through
your Separation Period. You have decided to retain your Company
sponsored social membership at Oakland Hills. If during the
Separation Period, you become eligible to transition from a social
member to a stock member of Oakland Hills, the Company will pay the
costs associated therewith and will continue to pay your associated
expenses, pursuant to the policy then in effect, with
Xxxxx Xxxxxxx
October 28, 2003
Page 3
respect to senior executives. At the end of your Separation Period,
you may retain your Oakland Hills membership, by reimbursing the
Company for any equity interest in the Club. In addition, if during
your Separation Period, you become employed and as a benefit of your
new employment you are eligible for a country club membership, you
will reimburse to the Company as of the date first employed, the
entire amount paid to secure your stock membership at Oakland Hills.
Any costs associated with the Harrison Lake Country Club are no
longer the responsibility of the Company.
12. In full and complete satisfaction of the costs associated with
selling your Columbus, Indiana residence, including the sale loss
provision set forth in the June 11, 2003, letter, addressed to Xxxx
Xxxxxxxxxxx and the costs associated with purchasing your Rochester
Hills residence, including all associated relocation costs, the
Company will pay to you the sum of Three Hundred Fifty Thousand
Dollars ($350,000), less applicable taxes, said sum to be paid to
you by wire transfer to your designated bank account on or about
January 6, 2004.
13. You will be eligible to continue to participate in the Company
savings plan through the Separation Period. If you wish to change
your contribution level or change the direction of your investments,
you will need to call X. Xxxx Price at 0-000-000-0000.
14. You will receive Company sponsored outplacement assistance from the
outplacement firm of your choice under the executive management
program.
15. 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.
16. 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 13, 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.
17. 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).
18. 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,
Xxxxx Xxxxxxx
October 28, 2003
Page 4
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.
You understand that as a result of this paragraph 15, 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 15, and agree not to voluntarily
participate in such a proceeding.
19. 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.
20. 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.
21. 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.
22. You agree that for a period of twelve months following the date of
your departure (August 25, 2003), from the Company, you will not
join or start a business that competes with ArvinMeritor's Light
Vehicle Systems business unit, nor will you provide consultancy
services, nor for the same twelve-month period will you solicit for
employment any other ArvinMeritor related employee. Notwithstanding
the foregoing, specific companies that would be deemed as competing
against ArvinMeritor's Light Vehicle Systems business unit are:
Xxxx, Tenneco and Xxxxx Paecher.
Xxxxx Xxxxxxx
October 28, 2003
Page 5
23. 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.
24. This agreement is a complete and final agreement between
ArvinMeritor and its successors and Xxxxx Xxxxxxx, and supercedes
all other offers, agreements, and negotiations except for the
Invention Assignment and Arbitration Agreements which remain in full
force.
25. You will have until December 11, 2003, in which to consider this
final 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/ Xxxxx X'Xxxxxx
Xxxxx X'Xxxxxx
President & COO
cc: X. X. Xxxx Accepted and agreed to:
X. X. Xxxxx, XX
E. T. Xxxxxx /s/ Xxxxx X. Xxxxxxx
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Xxxxx Xxxxxxx
11/7/03
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Date
