Attached files
PERSONAL & CONFIDENTIAL
July 1,
2010
Mr. Larry E.
Ott
[Address redacted]
[Address redacted]
Dear Larry:
We are pleased to
confirm the verbal offer of employment made to you for the position of Senior
Vice President, Human Resources, reporting directly to Chip McClure, Chairman,
CEO & President, with a starting base salary of $29,166.67 per month, or
$350,000.00 annually. Subject to the approval of the ArvinMeritor Board of
Directors (the Board) you will become an elected officer of ArvinMeritor,
effective as of the first date employed.
Please note that this
offer is subject to formal approval by the Board. Discussions have been held
with members of the Board, and we are confident that the Board will approve our
offer. If you decide to accept this offer you will be provided with an
employment agreement. Attached is a form of officer employment agreement which
has been previously approved by the Board for use with officers (Attachment A). We would expect you to enter into this agreement upon
hire. In addition, we have attached to this letter the current form of Executive
Separation Agreement (Attachment B). Both of these agreements will not supersede
nor change in any way the terms and conditions contained in this letter.
Annual
Incentives
You will be eligible to
participate in our annual Incentive Compensation Plan (ICP). Your ICP target
award is 55% of your base salary during the fiscal year for which the award is
made. This can increase up to 110% depending upon the performance of
ArvinMeritor. Your individual performance will also impact the final award with
opportunities ranging from 0 – 150% of your calculated award. Enclosed is an ICP
Fact Sheet for the current performance period that outlines the
program.
You will be eligible to
participate on a prorated basis under this plan for the FY2010 fiscal year based
on your active time worked during the performance period. The performance cycle
began on October 1, 2009, with a potential payout in two equal payments, the
first 50 percent to be received in December 2010 and the other 50 percent to be
received in January 2011.
Long-Term Incentives
Your position is
eligible for participation in our Long-term Incentive Plan (LTIP). Enclosed is
an LTIP Fact Sheet from the most recent cycle that explains the program and
provisions and will help you understand the current design of the program.
Eligibility begins October 1st of each performance period. As a result, your
first opportunity to fully participate in the LTIP is FY2011-2013. Participation
levels, targets and final awards are all subject to Board’s approval . As a
point of information, the current
target for your level is $300,000 cash and restricted share units value
equivalent to $300,000. Individual grants may change from year to year based on
plan provisions as well as stock price at the time of grant. Your specific
grant(s) will be made consistent with others in similar positions within the
organization and you will be notified each year of your participation, targets
and grant levels shortly after the beginning of the performance
cycle.
Larry Ott
Page 2
July 1, 2010
We will recommend to the
Board’s Compensation and Management Development Committee (the Committee) that
you be eligible to participate in the cash portion of two existing long-term
incentive cycles on a prorated basis. The target award of opportunity for the
FY2009-2011 cycle, will be $125,000. The target award of opportunity for the
FY2010-2012 cycle will be $225,000. Both plans are based upon the achievement of
specified performance objectives, over the three-year performance periods that
have already begun. Participation in these existing cycles will be contingent
upon the Committee’s approval.
Special Award
Furthermore, we will
recommend to the Committee that you be awarded a special award. Contingent on
Committee approval, you will be granted restricted share units on December 1,
2010 with a value at the time of grant of $225,000. The actual number of shares
will be determined based upon the closing share price at the time of the grant.
Those shares will vest on December 1, 2013, assuming continued service or if you
die, are disabled, or are terminated by the Company without cause in accordance
with the ArvinMeritor, Inc. 2010 Long-term Incentive Plan Restricted Share Unit
Agreement provided at the time of grant, substantial in all material aspects to
the agreement attached hereto as Attachment 3.
Additionally, you will
be eligible to receive a $250,000 sign-on bonus - $125,000 payable November 30,
2010 and the remaining $125,000 payable on the first regularly scheduled payroll
occurring after the first anniversary of your first day of employment. In the
event you voluntarily terminate your employment with ArvinMeritor before the
second anniversary of your first day of employment, you will be required to
reimburse ArvinMeritor for amounts actually received on a prorated portion of
the full bonus amount based on the time worked for ArvinMeritor calculated in
full months. Additionally, you agree and consent to executing any additional
documents that the Company deems necessary to effectuate repayment, without
delay, prior to your last day.
Benefits
You will be eligible to
participate in a full range of ArvinMeritor’s Choice Benefit Programs (see
attached brochure) including:
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Larry Ott
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July 1, 2010
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July 1, 2010
As an officer of
ArvinMeritor, you shall also be entitled to participate in perquisite plans and
programs (see below), of ArvinMeritor, which are generally available to its
senior executive employees:
- Car Allowance of $1,250 per month
($15,000 per year)
- Financial Planning Allowance of
$1,000 per month ($12,000 per year)
- Annual Executive
Physical
- Personal Excess Liability Coverage
Reimbursement of Legal
Fees
You will be promptly
reimbursed any legal fees incurred in connection with reviewing this agreement
not to exceed $5,000.
Miscellaneous
In the event that your
employment is terminated and you receive severance payments, you are under no
obligation to seek employment during the severance period, and any severance
payments that you receive will not be reduced nor offset by any compensation you
receive from another employer after your termination date. If you become
subsequently employed and covered by a health insurance plan of a new employer,
your coverage under the Company’s health plans will cease as of the date you
become covered under such other employer’s health plan. This letter and its
terms and conditions may not be modified, amended nor terminated other than by a
writing signed by both you and the Company. This letter will be binding upon and
inure to the benefit of any successors to the Company. This agreement may be
executed in several counterparts, each of which will be deemed to be an
original, and all such counterparts when taken together will constitute one and
the same original. This letter will be governed by the laws of the State of
Michigan.
This offer is contingent
upon verification of references, successful passing of a drug screen, and you
supplying satisfactory proof of your physical capability, with reasonable
accommodation, to safely perform the duties and responsibilities of this
position. For this purpose, a physical examination and drug test at
ArvinMeritor's expense should be scheduled at least one week prior to your
actual employment. You will be directed to a medical clinic where an appointment
can be made. Enclosed are a Clinical Evaluation Form and a Medical History
Questionnaire that you should complete and give to the physician at the time of
your examination. Also, in accordance with the 1986 Immigration Reform and
Control Act, you must provide proof of your legal right to be employed by
presenting to us the appropriate document(s) as outlined in Section 2 of the
enclosed Employment Eligibility Verification form on your first day of
employment. Employment is also contingent on your signing and returning to the
Company, before your first day of work, the enclosed Mutual Agreement to
Arbitrate Claims. This offer is for employment of indefinite duration that can
be terminated with or without cause and notice at any time, either by
ArvinMeritor, Inc. or the employee.
Perhaps the most
important consideration in making your career decision is the opportunity for
personal development in a challenging and stimulating business environment. We
believe the opportunities at ArvinMeritor are outstanding in terms of both
responsibility and compensation. Based upon your educational qualifications,
past accomplishments, and the enthusiastic reactions of those with whom you
spoke, we are convinced that you have the potential to make substantial
contributions to the Company. We also believe the Company can furnish a
rewarding opportunity to you.
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Larry Ott
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July 1, 2010
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July 1, 2010
On behalf of everyone, I
welcome you to ArvinMeritor!
If you have any
questions, please do not hesitate to contact me at 248-435-0786.
Sincerely,
/s/ Vernon G. Baker
Vernon G. Baker, II
Senior Vice President and General Counsel
ArvinMeritor, Inc.
Vernon G. Baker, II
Senior Vice President and General Counsel
ArvinMeritor, Inc.
Enclosures
CC: D. Riddell (w/o enc)
Accepted: /s/ Larry Ott Date: July 2, 2010
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