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): September 11, 2013

MERITOR, 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.

Election of New Director

On September 11, 2013, the Board of Directors of Meritor, Inc. (“Meritor”) elected Thomas L. Pajonas to the Board of Directors as a Class I director with a term expiring at the 2016 annual meeting of shareholders.

As a non-employee director of Meritor, Mr. Pajonas will receive a cash retainer at the rate of $90,000 per year for Board service. Non-employee directors also receive fees of $1,500 for attendance at each standing and special committee meeting ($750 for each telephone meeting). As part of director compensation, each non-employee director is also entitled to receive, immediately after each annual meeting of shareholders, an equity grant equal to a value of approximately $100,000, in the form of shares of common stock, restricted stock or restricted share units, at the director's discretion. The restricted stock and restricted share units vest upon the earliest of (a) three years from the date of grant or (b) the date the director resigns or ceases to be a director under circumstances the Board determines not to be adverse to the best interests of the Company. In connection with his appointment, Mr. Pajonas will receive an equity award pro-rated for his time of service for the current year.

There are no family relationships, as defined in Item 401 of Regulation S-K, between Mr. Pajonas and any of Meritor's executive officers and any director, executive officer or person nominated to become a director or executive officer. Mr. Pajonas was not selected pursuant to any arrangement or understanding between him and any person other than Meritor.  In addition, Mr. Pajonas 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. 

Mr. Pajonas has been Senior Vice President and Chief Operating Officer of Flowserve Corporation since January 2012. From 2004 to January 2012, he served as President of the Flow Control Division, holding the positions of Vice President from 2004 to December 2006 and Senior Vice President from December 2006. He was previously employed as Managing Director of Alstom Transport, a supplier of rail products, from 2003 to 2004 and Senior Vice President from 1999 to 2003 of the Worldwide Power Boiler Business of Alstom, Inc. From 1996 to 1999 he served in various capacities as Senior Vice President and General Manager International Operations and subsequently Senior Vice President and General Manager Standard Boilers Worldwide of Asea Brown Boveri.

CEO Compensation Arrangements

As previously disclosed, on May 3, 2013, the Board of Directors of Meritor appointed Ivor J. Evans Executive Chairman of the Board and Interim Chief Executive Officer and President. Also as previously disclosed, on August 9, 2013, the Board approved the appointment of Mr. Evans as Chairman, Chief Executive Officer and President.

On September 11, 2013, the Board of Directors approved a letter agreement with Mr. Evans relating to his compensation as permanent Chairman, Chief Executive Officer and President. Under the terms of the letter agreement, Mr. Evans will receive:

• A base salary of $1,000,000 annually;

• A new hire grant of 350,000 performance-based stock options with vesting contingent upon three separate stock price performance targets;

• Participation in the annual incentive compensation plan beginning with fiscal year 2014 with a target award of 100% of base salary and a maximum opportunity of 200% of base salary;

• Participation in the 2014-2016 cycle with a target award of approximately $4.2 million (and the mix of cash versus equity and general terms and conditions of to be determined at the beginning of the performance period); and

• Eligibility to participate in the savings, and health and welfare benefit plans, including short-term and long-term disability programs, that are sponsored by Meritor and generally available to executive employees and payment of cash in lieu of perquisites in the amount of $34,000 annually.

This description is only a summary of, and is qualified in its entirety by reference to, the terms of the letter agreement which is filed as an exhibit to this Form 8-K.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

10a – Letter Agreement dated as of September 11, 2013 between Meritor, Inc. and Ivor J. Evans

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.

MERITOR, INC.
By:	/s/  Vernon G. Baker, II
Vernon G. Baker, II
Senior Vice President and General Counsel

Date: September 13, 2013

EXHIBIT INDEX

Exhibit No.	Description
10a	Letter Agreement dated as of September 11, 2013 between Meritor, Inc. and Ivor J. Evans

EX-10.A

CONFIDENTIAL

September 11, 2013

Mr. Ivor J. Evans

Meritor, Inc.

2135 West Maple Road

Troy, MI 48084

Dear Ike:

As Chairman of the Compensation and Management Development Committee (the “Committee”) of Meritor, Inc. (“Meritor” or the “Company”), I am pleased to provide you the proposed terms of compensation for your employment as Chairman, Chief Executive Officer and President of Meritor. If you agree with these terms, please countersign this letter, after which all terms of this letter will be subject to approval by the Meritor Board of Directors and shall not become effective until such approval is received.

Base Salary -- You will receive a base salary of $1,000,000 annually ($83,333 per month) to be paid in semi-monthly installments and prorated for any partial pay period from the effective date of this offer.

Hiring Incentive Award – Effective September 11, 2013, the Company will provide you with a new hire grant of 350,000 performance-based, non-qualified stock options. Stock options will vest upon achieving three (3) separate stock price performance hurdles, provided, however, that in no event shall any stock options vest prior to one (1) year from the date of grant and if one (1) or more of the performance vesting hurdles are achieved prior to one (1) year from the date of grant, then the vesting thereof shall not occur until the first anniversary of the date of grant. Failure to achieve the performance vesting hurdles by September 30, 2016 will result in forfeiture of any of the unvested stock options. Vested stock options will have a term to exercise of five years from the date of grant. The stock price performance hurdles are defined as achieving a thirty (30) trading-day average closing stock price for shares of Meritor common stock as follows:

• One-third of the grant, or 116,666 stock options, will vest upon the achievement of an average stock price of no less than $12.00 as defined above;

• One-third of the grant, the second third or 116,667 stock options, will vest upon the achievement of an average stock price of no less than $14.00 as defined above; and

• One-third of the grant, the final third or 116,667 stock options, will vest upon the achievement of an average stock price of no less than $16.00 as defined above.

September 11, 2013

Page 2

Notwithstanding the foregoing, should your employment with the Company terminate prior to March 1, 2015, other than with consent by the Board of Directors, all unvested stock options will be forfeited. Termination of employment other than a Termination for Cause (as defined under the Company’s 2010 Long-Term Incentive Plan, as amended (the “LTIP”)) on or subsequent to March 1, 2015 will result in the stock options continuing to vest until September 30, 2016 based on the above performance vesting criteria.

Vesting provisions for the hiring incentive award will be subject to change of control provisions set forth below.

Short-Term and Long-Term Compensation – As part of your employment, you will be eligible to participate in the Meritor Incentive Compensation Plan (“ICP”) with a target award of 100% of your base salary and a maximum opportunity of up to 200% of your base salary based on achievement of Company performance factors as approved under the plan at the beginning of each year; provided, however, that the Committee has the discretion to adjust the award once it is calculated (either upward by up to 50% or downward by up to 100%) based on your performance during the fiscal year. Your participation in the ICP will begin on October 1, 2013 as part of the Fiscal Year 2014 ICP program. Any partial year of active employment will result in a prorated award based on active time worked during the fiscal year.

You will also be eligible to participate in the LTIP on a basis that is reasonably comparable to other Company executive officers as approved by the Board of Directors each year. For the Fiscal Year 2014-2016 cycle, you will be provided with a long-term incentive compensation target award of approximately $4,200,000 for that performance cycle. The amount, mix and general terms and conditions of your long-term incentive compensation awards will be determined by the Committee and approved by the Board of Directors at the beginning of each performance period. For the Fiscal Year 2014-2016 awards, termination of your employment on a voluntary basis by you, other than with consent by the Board of Directors, or by the Company other than in a Termination for Cause (as defined in the LTIP) prior to March 1, 2015 will result in the vesting of shares on a prorated basis based on the number of full and partial months worked prior to termination assuming performance requirements are met. Termination of employment other than in a Termination for Cause on or subsequent to March 1, 2015 will result in the vesting of awards under their approved vesting schedule. The terms and conditions of the long-term incentive awards will be in accordance with the provisions of the LTIP (or any subsequent Plan) and as approved by the Committee.

Vesting provisions for long term incentive compensation awards will be subject to change of control provisions set forth below and defined in the LTIP.

September 11, 2013

Page 3

Employee Benefits – As an employee of Meritor, you will be eligible to participate in the savings, and health and welfare benefit plans, including short-term and long-term disability programs, that are sponsored by Meritor and generally available to our executive employees for the time which you are employed. As the Chief Executive Officer of Meritor, you shall also be entitled to receive cash in lieu of perquisites in the amount of $34,000 annually. Your participation in the benefit plans and programs is determined by the terms and provisions of these plans and programs, as they may be amended from time to time.

Change in Control Protection – In the event of a Change of Control (as defined in the LTIP), although you will not be eligible for cash severance related to your base salary and ICP opportunity, you will be eligible for vesting and payment of equity awards and awards under cash performance plans under the LTIP in accordance with the terms of that plan and the related grants and agreements.

Sincerely,

/s/ William R. Newlin

William R. Newlin

Agreed to:

_/s/ Ivor J. Evans

Ivor J. Evans

Dated: September 11, 2013