8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
 
Date of Report (Date of earliest event reported): November 5, 2009
 

ARVINMERITOR, INC.
(Exact name of registrant as specified in its charter)
 
 

                        Indiana  1-15983 38-3354643
        (State or other jurisdiction          (Commission                   (IRS Employer

                of incorporation)                      File No.)                     Identification No.)
 
 

2135 West Maple Road

Troy, Michigan
(Address of principal executive offices)
 

48084-7186
(Zip code)
 

Registrant’s telephone number, including area code: (248) 435-1000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02.      Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Compensation Actions

Effective January 16, 2009, ArvinMeritor, Inc. (“ArvinMeritor”) temporarily decreased the base salaries of its senior executives by 10% as part of a more general cost cutting initiative in response to worsening economic conditions. On November 5, 2009, the Compensation and Management Development Committee of the Board of Directors (the “Compensation Committee”) reinstated the original salary levels of such executives effective November 1, 2009. On November 6, 2009, the full Board of Directors also reinstated the company match on its 401K savings plans, effective November 16, 2009, which had also been temporarily suspended due to economic conditions.

On November 5, 2009, the Compensation Committee also increased the annual base salaries, effective January 1, 2010, of Jeffrey A. Craig, Senior Vice President and Chief Financial Officer, and Carsten Reinhardt, Senior Vice President and President, Commercial Vehicle Systems, to $478,000 per year and $600,000 per year, respectively.

On November 5, 2009, the Compensation Committee approved performance goals in connection with a cash performance plan under the 2007 Long-Term Incentive Plan, as amended, for the three-year performance period ending September 30, 2012. A description of these performance goals is filed as an exhibit to this Form 8-K and incorporated herein by reference. On November 5, 2009, the Compensation Committee also approved annual incentive goals for fiscal year 2010 under the Incentive Compensation Plan, as amended. Descriptions of these annual incentive goals are filed as an exhibit to this Form 8-K and incorporated herein by reference.

Executive Officer Appointments

On November 6, 2009, the Board of Directors of ArvinMeritor appointed Carsten Reinhardt as Senior Vice President and Chief Operating Officer and appointed the following additional executive officers: Timothy E. Bowes, Vice President and President, Industrial, and Joseph Mejaly, Vice President and President, Aftermarket & Trailer.

Mr. Bowes, 46, held the position of vice president and managing director, Asia Pacific, for ArvinMeritor prior to his appointment as President, Industrial. Mr. Bowes was formerly vice president of ArvinMeritor’s Specialty Products business group. He joined ArvinMeritor in December 2005 as the general manager of Specialty Products. Prior to joining the company, Mr. Bowes held senior level management positions at automotive suppliers including Hilite International, ITT Automotive and Intermet Corporation.

Mr. Mejaly, 49, held the position of vice president and general manager of ArvinMeritor’s Commercial Vehicle Aftermarket and Trailer business prior to his appointment as President, Aftermarket & Trailer, and prior to that, held roles of increasing responsibility including director of Customer Support for Commercial Vehicle Systems. Mr. Mejaly joined the company in 1985.

In conjunction with the Board’s appointment of Messrs. Bowes and Mejaly as executive officers, the Compensation Committee approved, effective January 1, 2010, annual base salaries of $300,000 per year for each officer as well as an annual incentive compensation target of 45% of their annual base salary and a fiscal year 2010-2012 performance plan cash award target of $150,000 for each officer.

There are no family relationships, as defined in Item 401 of Regulation S-K, between Mr. Bowes or Mr. Mejaly and any of ArvinMeritor’s executive officers and any director, executive officer or person nominated to become a director or executive officer. No officer of ArvinMeritor was selected pursuant to any arrangement or understanding between him or her and any person other than ArvinMeritor. In addition, Mr. Bowes and Mr. Mejaly did not have a direct or indirect material interest in any transaction that would be required to be disclosed under Item 404(a) of Regulation S-K.

Item 8.01.     Other Events
 

At a meeting held on January 30, 2009, the Board of Directors of ArvinMeritor reduced the amount of their own annual compensation by 10% until further notice due to worsening economic conditions and in light of the temporary reduction in executive and other salaries. In conjunction with the reinstatement of executive salaries, the Board of Directors on November 6, 2009, also reinstated director annual compensation to suspend the temporary 10% reduction.

Item 9.01     Financial Statements and Exhibits

(d) Exhibits

10a-   Description of Performance Goals Established in Connection with 2010-2012 Cash Performance Plan under the 2007 Long-Term Incentive Plan.

10b-   Description of Annual Incentive Goals Established for Fiscal Year 2010 under the Incentive Compensation Plan.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
                         ARVINMERITOR, INC.
 
 

By:_/s/ Vernon G. Baker, II_____      

             Vernon G. Baker, II

                                                                      Senior Vice President and General Counsel
 
 
Date: November 11, 2009

EXHIBIT INDEX
 
 

Exhibit No.Description
 

10a- Description of Performance Goals Established in Connection with 2010-2012 Cash Performance Plan under the 2007 Long-Term Incentive Plan.

10b- Description of Annual Incentive Goals Established for Fiscal Year 2010 under the Incentive Compensation Plan.

EX-10

DESCRIPTION OF PERFORMANCE GOALS

ESTABLISHED IN CONNECTION WITH 2010 FISCAL YEAR OF 2009-2011 CASH PERFORMANCE PLAN AND THE 2010-2012 CASH PERFORMANCE PLAN UNDER THE 2007 LONG-TERM INCENTIVE PLAN

The Compensation and Management Development Committee of the Board of Directors of ArvinMeritor, Inc. (“ArvinMeritor”), established a cash performance plan for the three-year performance period ending September 30, 2012, and also established targets for the 2010 fiscal year of the cash performance plan for the three year performance period ending September 30, 2011, in each case under Section 13 of the 2007 Long-Term Incentive Plan, as amended. Performance goals for each of the performance plans are based on three one-year targets, which are set at the end of the year for the following year. For the 2009-2011 cash performance plan, the target for the 2009 fiscal year was based on return on invested capital (“ROIC”), defined to mean ArvinMeritor’s net income for the fiscal year (before cumulative effect of accounting changes, gains and losses on sale of businesses, minority interest, tax-effected interest expense and tax effected restructuring expense) divided by the invested capital (total debt, including preferred capital securities, minority interests and shareowners’ equity), for such fiscal year. For the 2010 fiscal year of the 2009-2011 performance cycle and for the 2010 fiscal year of the 2010-2012 cash performance plan, these targets are based on a targeted EBITDA margin that is set at the end of each year for the following year.

The Compensation Committee also established target awards, stated as dollar amounts, for each participant. For the 2009-2011 performance cycle, participants can earn from 0% to 200% of his target award, based on actual performance against specified levels, and payouts are also multiplied by the percentage change in the price of ArvinMeritor common stock over the three-year performance period, which may increase the payment finally awarded up to a maximum of 200% of the original amount or reduce it down to a minimum of 50% of the original amount. For the 2010-2012 cash performance plan, participants can earn from 0% to 300% of his target award, based on actual performance against specified levels. There is no stock multiplier for this plan.     

      At the end of the three year performance period, the total amount paid will be the sum of the percentages of target award earned for each year.

EX-10

DESCRIPTION OF ANNUAL INCENTIVE GOALS ESTABLISHED FOR FISCAL YEAR 2010 UNDER THE INCENTIVE COMPENSATION PLAN

The Compensation and Management Development Committee of the Board of Directors of ArvinMeritor, Inc.(“ArvinMeritor”), established annual incentive goals for fiscal year 2010 under the Incentive Compensation Plan, as amended. These annual incentive goals are based on the levels of EBITDA and free cash flow from continuing operations that are achieved for the year, measured against fixed target amounts (rather than target levels specified in the Company’s Annual Operating Plan). The fixed target amounts are more stringent than the comparable amounts in the Annual Operating Plan. EBITDA is defined as earnings before interest, taxes, depreciation and amortization, and free cash flow is defined as net cash provided by operating activities minus capital expenditures. Both the EBITDA and free cash flow calculations exclude the Body Systems business of ArvinMeritor. The Compensation Committee also established target awards, stated as a percentage of base salary, for participants.

Potential annual incentive bonuses are comprised of two components: one-half of potential payments is dependent on each of (a) the level of achievement of the EBITDA targets and (b) the level of achievement of free cash flow targets. In addition, the final award calculation is subject to a modifier that is based on an employee’s annual performance rating. The calculated award may be adjusted up to +50% or -100%. The adjustment process maintains the original budget.

To determine the amounts that are paid as bonuses, performance is measured against targets for each of the applicable components of the award calculation. For each part of the calculation for which performance exceeds that threshold, the portion of an individual’s target award that is paid out is dependent on, and increases with, the percentage of the goal that is achieved. The calculated payout, before any adjustments, for an individual cannot exceed 200% of his target award.