Exhibit 10-k-1
[Letterhead of ArvinMeritor, Inc.]
August 10, 2001
Mr. ▇. ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear ▇▇▇▇:
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.), ▇▇▇▇▇
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
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
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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,
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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, ▇▇▇▇▇ Ind. Code ▇▇▇. 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 ▇▇▇▇▇ 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 ▇▇▇▇▇ 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.
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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
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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.
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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.
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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: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to the Company: ArvinMeritor, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇, 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.
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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/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chairman of the Board
and Chief Executive Officer
ACCEPTED AND AGREED TO
as of the date first written above:
/s/ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------
▇. ▇▇▇▇▇▇▇ ▇▇▇▇
Date:
--------------------------------
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