Exhibit 10-a
ARVINMERITOR, INC.
2004 DIRECTORS STOCK PLAN
1. PURPOSE OF THE PLAN.
The purpose of the 2004 Directors Stock Plan (the Plan) is to link the
compensation of non-employee directors of ArvinMeritor, Inc. (ArvinMeritor)
directly with the interests of the ArvinMeritor shareowners.
2. PARTICIPANTS.
Participants in the Plan shall consist of directors of ArvinMeritor who are
not employees of ArvinMeritor or any of its subsidiaries (Non-Employee
Directors). The term "subsidiary" as used in the Plan means a corporation
more than 50% of the voting stock of which, or an unincorporated business
entity more than 50% of the equity interest in which, shall at the time be
owned directly or indirectly by ArvinMeritor.
3. SHARES RESERVED UNDER THE PLAN.
Subject to the provisions of Section 14, there shall be reserved for
delivery under the Plan 275,000 shares of Common Stock, par value $1.00 per
share, of ArvinMeritor (Shares). Shares to be delivered under the Plan may
be authorized and unissued Shares, Shares held in treasury or any
combination thereof. Shares with respect to the unexercised, undistributed
or unearned portion of any terminated or forfeited award or grant made
pursuant to the Plan shall be available for further awards or grants.
4. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Corporate Governance and Nominating
Committee (the Committee) of the Board of Directors of ArvinMeritor (the
Board), subject to the right of the Board, in its sole discretion, to
exercise or authorize another committee or person to exercise some or all
of the responsibilities, powers and authority vested in the Committee under
the Plan. The Committee (or the Board or any other committee or person
authorized by the Board) shall have authority to interpret the Plan, and to
prescribe, amend and rescind rules and regulations relating to the
administration of the Plan, and all such interpretations, rules and
regulations shall be conclusive and binding on all persons.
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5. EFFECTIVE DATE OF THE PLAN.
The Plan has been approved by the Board and shall be submitted to the
shareowners of ArvinMeritor for approval at the Annual Meeting of
Shareowners to be held in 2004 and, if approved by the shareowners, shall
become effective on the date and at the time of such approval.
6. RESTRICTED SHARE UNITS.
(a) Annual Awards. Immediately following each Annual Meeting of
Shareowners of ArvinMeritor, each Non-Employee Director who is elected
a director at, or who was previously elected and continues as a
director after, that Annual Meeting may be awarded a right to receive
Shares (Restricted Share Units) upon the terms and conditions set
forth in the Plan and the applicable award agreement. The number of
Restricted Share Units, if any, so awarded (the Annual RSU Amount)
shall be fixed from time to time by the Board. Unless otherwise
provided in the applicable award agreement, (i) each Restricted Share
Unit shall be paid or settled by the issuance of one Share after the
earliest of (A) six (6) years from the date of the award, (B) ten days
after the Non-Employee Director retires from the Board after reaching
age 72 and having served at least three years as a director or (C) the
date the Non-Employee Director resigns from the Board or ceases to be
a director by reason of the antitrust laws, compliance with
ArvinMeritor's conflict of interest policies, death, disability or
other circumstances that the Board determines not to be adverse to the
best interests of ArvinMeritor and (ii) if the Non-Employee Director
ceases to be a director prior to six years from the date of the award
of the Restricted Share Unit for any reason other than as described in
clause (i)(B) or clause (i)(C) above, such Restricted Share Unit will
terminate and all right, title and interest of the Non-Employee
Director thereunder will be forfeited. A participant shall not be
required to make any payment for any Restricted Share Units or Shares
delivered under this Section 6. Upon the delivery of Shares under this
Section 6, the recipient shall have the entire beneficial ownership
interest in, and all rights and privileges of a shareowner as to those
Shares, including the right to vote the Shares and to receive
dividends thereon.
(b) Discretionary Awards. At such times as the Board may determine, the
Board may award to each Non-Employee Director, or to one or more
designated Non-Employee Directors, such additional number of
Restricted Share Units as the Board in its sole discretion shall
determine.
(c) Dividend Equivalents. If and to the extent provided for in the
applicable award agreement, a recipient of Restricted Share Units
shall be entitled,
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during the period after the Restricted Share Units are awarded and
until the termination and forfeiture or payment and settlement
thereof, to receive dividend equivalents in respect of such Restricted
Share Units equal to the amount or value of any cash or other
dividends or distributions payable on an equivalent number of Shares.
Any such dividend equivalents shall be paid, with or without interest,
as and when provided for in the applicable award agreement.
(d) Deferrals. If and to the extent provided for in the applicable award
agreement and on such terms and conditions as may be set forth
therein, a Non-Employee Director may from time to time elect in
advance to defer the issuance and delivery of Shares otherwise
issuable in respect of Restricted Share Units held by the Non-Employee
Director.
7. SHARES.
(a) Annual Awards. Immediately following each Annual Meeting of
Shareowners of ArvinMeritor, each Non-Employee Director who is elected
a director at, or who was previously elected and continues as a
director after, that Annual Meeting may receive an award of Shares.
The number of Shares, if any, so awarded (the Annual Share Amount)
shall be fixed from time to time by the Board. A participant shall not
be required to make any payment for any Shares delivered under this
Section 7. Upon the delivery of Shares under this Section 7, the
recipient shall have the entire beneficial ownership interest in, and
all rights and privileges of a shareowner as to those Shares,
including the right to vote the Shares and to receive dividends
thereon.
(b) Discretionary Awards. At such times as the Board may determine, the
Board may award to each Non-Employee Director, or to one or more
designated Non-Employee Directors, such additional number of Shares as
the Board in its sole discretion shall determine.
8. RESTRICTED SHARES.
(a) Annual Awards. Immediately following each Annual Meeting of
Shareowners of ArvinMeritor, each Non-Employee Director who is elected
a director at, or who was previously elected and continues as a
director after, that Annual Meeting may receive an award of restricted
Shares (Restricted Shares). The number of Restricted Shares, if any,
so awarded (the Annual Restricted Share Amount) shall be fixed from
time to time by the Board. A participant shall not be required to make
any payment for any Restricted Shares delivered under this Section 8.
Upon receipt of an award of Restricted Shares, the recipient shall
have the right to vote the Restricted Shares and to receive dividends
thereon, and the
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Restricted Shares shall have all the attributes of outstanding Shares,
except that the Restricted Shares shall be held in book-entry accounts
subject to the direction of ArvinMeritor (or if ArvinMeritor elects,
certificates therefor may be issued in the recipient's name but
delivered to and held by ArvinMeritor). Unless otherwise provided in
the applicable award agreement, (i) the Restricted Shares so held
shall be delivered to the Non-Employee Director and cease to be
Restricted Shares upon the earliest of (A) the date the restrictions
set forth in the applicable award agreement lapse, (B) ten days after
the Non-Employee Director retires from the Board after reaching age 72
and having served at least three years as a director or (C) the date
the Non-Employee Director resigns from the Board or ceases to be a
director by reason of the antitrust laws, compliance with
ArvinMeritor's conflict of interest policies, death, disability or
other circumstances the Board determines not to be adverse to the best
interests of ArvinMeritor and (ii) if the Non-Employee Director ceases
to be a director for any reason other than as described in clause
(i)(B) or clause (i)(C) above prior to the date the restrictions set
forth in the applicable award agreement lapse, all right, title and
interest of the Non-Employee Director in such Restricted Shares shall
be forfeited and such Restricted Shares shall be transferred to
ArvinMeritor.
(b) Discretionary Awards. At such times as the Board may determine, the
Board may award to each Non-Employee Director, or to one or more
designated Non-Employee Directors, such additional number of
Restricted Shares as the Board in its sole discretion shall determine.
9. STOCK OPTIONS.
(a) Annual Grants. Immediately following each Annual Meeting of
Shareowners of ArvinMeritor, each Non-Employee Director who is elected
a director at, or was previously elected and continues as a director
after, that Annual Meeting may be granted an option (Option) to
purchase Shares. The number of Shares subject to Options, if any, so
granted (the Annual Option Amount) shall be fixed from time to time by
the Board.
(b) Discretionary Grants. At such times as the Board may determine, the
Board may grant to each Non-Employee Director, or to one or more
designated Non-Employee Directors, Options for such additional number
of Shares as the Board in its sole discretion shall determine.
(c) Exercise Price. The exercise price per Share for each Option granted
under this Section 9 shall be one-hundred percent (100%) of the Fair
Market Value (as defined below) of the Shares on the date of grant.
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(d) Exercise and Termination. The purchase price of the Shares with
respect to which an Option or portion thereof is exercised shall be
payable in full in cash, Shares valued at their Fair Market Value on
the date of exercise, or a combination thereof. Unless otherwise
provided in the applicable award agreement: (i) each Option may be
exercised in whole or in part at any time after it becomes
exercisable, (ii) each Option shall become exercisable in three
approximately equal installments on each of the first, second and
third anniversaries of the date the Option is granted and (iii) no
Option shall be exercisable prior to one year or after ten years from
the date of the grant thereof; provided, however, that (A) if the
holder of an Option dies, the Option may be exercised from and after
the date of the optionee's death for a period of three years (or until
the expiration date specified in the Option if earlier) even if it was
not exercisable at the date of death; (B) if an optionee retires after
reaching age 72 and having served at least three years as a director,
all Options then held by that optionee shall be exercisable even if
they were not exercisable at the optionee's retirement date, provided,
however, that each such Option shall expire at the earlier of five
years after the date of the optionee's retirement or the expiration
date specified in the Option; (C) if an optionee ceases to be a
director by reason of disability or resignation from the Board for
reasons of the antitrust laws, compliance with ArvinMeritor's conflict
of interest policies or other circumstances that the Board determines
not to be adverse to the best interests of ArvinMeritor, all Options
then held by such optionee may be exercised from and after such
termination date for a period of one year (or until the expiration
date specified in the Option, if earlier), even if they were not
exercisable at such termination date, unless otherwise determined by
the Board; and (D) if an optionee ceases to be a director while
holding unexercised Options for any reason not specified above, such
Options are then void.
(e) Nonassignability. Except as otherwise provided in an applicable award
agreement, Options granted under the Plan are not transferable other
than (i) by will or by the laws of descent and distribution or (ii) by
gift to the grantee's spouse or natural, adopted or step-children or
grandchildren (Immediate Family Members) or to a trust for the benefit
of one or more of the grantee's Immediate Family Members or to a
family charitable trust established by the grantee or a member of the
grantee's family.
10. STOCK APPRECIATION RIGHTS.
(a) Annual Grants. Immediately following each Annual Meeting of
Shareowners of ArvinMeritor, each Non-Employee Director who is elected
a director at, or was previously elected and continues as a director
after, that Annual Meeting may be granted Stock Appreciation Rights
(as defined below). The number of Stock Appreciation Rights, if any,
so
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granted (the Annual SAR Amount) shall be fixed from time to time by
the Board. Tandem SARs (as defined below) may be granted at the time
of grant of an Option or at any time thereafter during the term of an
Option.
(b) Discretionary Grants. At such times as the Board may determine, the
Board may grant to each Non-Employee Director, or to one or more
designated Non-Employee Directors, awards of such additional number of
Stock Appreciation Rights as the Board in its sole discretion shall
determine.
(c) Exercise and Other Terms. A Tandem SAR shall be exercisable only when
and to the extent that the related Option is exercisable and in lieu
thereof. Freestanding SARs (as defined below) may be granted on terms
and conditions determined by the Committee, consistent with the
provisions of the Plan. The payment to which the grantee of a Stock
Appreciation Right is entitled upon exercise thereof may be made in
Shares valued at their Fair Market Value on the date of exercise, or
in cash or partly in cash and partly in Shares, as the Committee may
determine. Upon exercise of a Tandem SAR and surrender of the related
Option or part thereof, such Option, to the extent surrendered, shall
not thereafter be exercisable, and the Shares covered by the
surrendered Option shall not again be available for grants pursuant to
the Plan. Upon exercise of a Freestanding SAR, any Shares delivered in
payment thereof shall not again be available for grants pursuant to
the Plan. Unless otherwise provided in the applicable award agreement:
(i) each Freestanding SAR may be exercised in whole or in part at any
time after it becomes exercisable, (ii) each Freestanding SAR shall
become exercisable in three approximately equal installments on each
of the first, second and third anniversaries of the date the
Freestanding SAR is granted and (iii) no Freestanding SAR shall be
exercisable prior to one year or after ten years from the date of the
grant thereof; provided, however, that (A) if the holder of a
Freestanding SAR dies, the Freestanding SAR may be exercised from and
after the date of the Non-Employee Director's death for a period of
three years (or until the expiration date specified in the
Freestanding SAR if earlier) even if it was not exercisable at the
date of death; (B) if a Non-Employee Director retires after reaching
age 72 and having served at least three years as a director, all
Freestanding SARs then held by that Non-Employee Director shall be
exercisable even if they were not exercisable at the Non-Employee
Director's retirement date, provided, however, that each such
Freestanding SAR shall expire at the earlier of five years after the
date of the Non-Employee Director's retirement or the expiration date
specified in the Freestanding SAR; (C) if a Non-Employee Director
ceases to be a director by reason of disability or resignation from
the Board for reasons of the antitrust laws, compliance with
ArvinMeritor's conflict of interest
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policies or other circumstances that the Board determines not to be
adverse to the best interests of ArvinMeritor, all Freestanding SARs
then held by such Non-Employee Director may be exercised from and
after such termination date for a period of one year (or until the
expiration date specified in the Freestanding SAR, if earlier), even
if they were not exercisable at such termination date, unless
otherwise determined by the Board; and (D) if a Non-Employee Director
ceases to be a director while holding unexercised Freestanding SARs
for any reason not specified above, such Freestanding SARs are then
void.
(d) Definitions. For purposes of the Plan, "Stock Appreciation Right" or
"SAR" means a right granted to a Non-Employee Director (i) in
conjunction with all or any part of any Option, which entitles the
Non-Employee Director, upon exercise of such right, to surrender such
Option, or any part thereof, and to receive a payment equal to the
excess of the Fair Market Value on the date of such exercise of the
Shares covered by such Option, or part thereof, over the purchase
price of such Shares pursuant to the Option (a Tandem SAR) or (ii)
separate and apart from any Option, which entitles the Non-Employee
Director, upon exercise of such right, to receive a payment measured
by the increase in the Fair Market Value of a number of Shares
designated by such right from the date of grant of such right to the
date on which the Non-Employee Director exercises such right (a
Freestanding SAR).
11. PRO RATA AWARDS.
Each Non-Employee Director who is elected a director at any meeting of the
Board shall receive effective immediately after that meeting an award of
one hundred percent (100%) of the Annual RSU Amount, the Annual Share
Amount, the Annual Restricted Share Amount, the Annual Option Amount and
the Annual SAR Amount (the "Annual Grant Amount") if elected after an
Annual Meeting of Shareowners and prior to May 1; an award of seventy-five
percent (75%) of the Annual Grant Amount if elected between May 1 and July
31; an award of fifty percent (50%) of the Annual Grant Amount if elected
between August 1 and October 31; and an award of twenty-five percent (25%)
of the Annual Grant Amount if elected between November 1 and the next
Annual Meeting of Shareowners.
12. RESTRICTED SHARE UNITS OR RESTRICTED SHARES IN LIEU OF CASH COMPENSATION OR
SHARES.
(a) Each Non-Employee Director may elect each year, not later than
December 31 of the year preceding the year as to which deferral of
fees is to be applicable, to defer all or any portion of the cash
retainer to be paid for Board or other service related to Board
activities in the following calendar year through the issuance or
transfer of Restricted Share Units
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or Restricted Shares, valued at the Fair Market Value of the Shares on
the date when each payment of such retainer amount would otherwise be
made in cash. Such Restricted Share Units or Restricted Shares shall
be the same as and subject to the same provisions as are applicable to
Restricted Share Units and Restricted Shares that may be awarded
pursuant to Sections 6 and 8, respectively.
(b) Each Non-Employee Director may elect each year, not later than
December 31 of the year preceding the year in which an annual award of
Shares is to be made pursuant to Section 7(a), to receive the annual
award in the form of Restricted Share Units or Restricted Shares. Such
Restricted Share Units or Restricted Shares shall be the same as and
subject to the same provisions as are applicable to Restricted Share
Units and Restricted Shares that may be awarded pursuant to Sections 6
and 8, respectively.
13. AWARD AGREEMENTS.
Each award or grant under the Plan may be evidenced by an award agreement
setting forth such terms and conditions of the award or grant, not
inconsistent with the terms of the Plan, as the Committee shall determine.
In the event of any conflict between an award agreement and the Plan, the
terms of the Plan shall govern.
14. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
If there shall be any change in or affecting Shares on account of any
merger, consolidation, reorganization, recapitalization, reclassification,
stock dividend, stock split or combination, or other distribution to
holders of Shares (other than a cash dividend), there shall be made or
taken such amendments to the Plan and outstanding awards or grants and
award agreements and such adjustments and actions thereunder as the Board
may deem appropriate under the circumstances.
15. GOVERNMENT AND OTHER REGULATIONS.
The obligations of ArvinMeritor to issue or deliver Shares under the Plan
or upon exercise of Options granted under the Plan shall be subject to (a)
all applicable laws, rules and regulations and such approvals by any
governmental agencies as may be required, including, without limitation,
compliance with the Securities Act of 1933, as amended, and (b) the
condition that such Shares shall have been duly listed on the New York
Stock Exchange.
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16. AMENDMENT AND TERMINATION OF THE PLAN.
The Plan may be amended by the Board in any respect, provided that, without
shareowner approval, no amendment shall (a) materially increase the number
of Shares available under the Plan (other than adjustments pursuant to
Section 14), (b) expand the types of awards available under the Plan, (c)
materially expand the class of directors eligible to participate in the
Plan, (d) materially change the method of determining the exercise price of
Options under the Plan or (e) otherwise be effective to the extent that
shareowner approval is necessary to comply with applicable requirements of
the New York Stock Exchange. The Plan may also be terminated at any time by
the Board. Termination of the Plan shall not affect the rights of
Non-Employee Directors with respect to awards previously granted to them
and all unexpired awards shall continue in force and effect after
termination of the Plan except as they may lapse or be terminated by their
own terms and conditions.
17. MISCELLANEOUS.
(a) Nothing contained in the Plan shall be deemed to confer upon any
person any right to continue as a director of or to be associated in
any other way with ArvinMeritor.
(b) For purposes of the Plan, the "Fair Market Value" of Shares means the
closing sale price of the Shares as reported in the New York Stock
Exchange -- Composite Transactions on the date of a determination (or
on the next preceding day that Shares were traded if they were not
traded on the date of a determination).
(c) Notwithstanding any other provision of the Plan, if a Change of
Control as defined in Section 8.10 of ArvinMeritor's Amended By-Laws
shall occur, then, unless prior to the occurrence thereof the Board of
Directors shall determine otherwise by vote of at least two-thirds of
its members, (i) all Options and Stock Appreciation Rights then
outstanding pursuant to the Plan shall forthwith become fully
exercisable whether or not then exercisable, (ii) the restrictions on
all Restricted Shares awarded under the Plan shall forthwith lapse and
(iii) all outstanding Restricted Share Units shall forthwith be paid
or settled by the issuance of Shares thereunder.
(d) To the extent that Federal laws do not otherwise control, the Plan and
all determinations made and actions taken pursuant hereto shall be
governed by the laws of the State of Delaware.
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