<DOCUMENT>
<TYPE>EX-10.C.1
<SEQUENCE>3
<FILENAME>y66532exv10wcw1.txt
<DESCRIPTION>1997 LONG-TERM INCENTIVES PLAN
<TEXT>
<PAGE>
 
                                                                  Exhibit 10-c-1
 
                               ARVINMERITOR, INC.
                         1997 LONG-TERM INCENTIVES PLAN
                    (Amended and Restated as of July 6, 2000)
 
      1. PURPOSE
 
      The purpose of the 1997 Long-Term Incentives Plan is to foster creation of
and enhance ArvinMeritor, Inc. (ArvinMeritor) shareowner value by linking the
compensation of officers and other key employees of the Corporation to increases
in the price of ArvinMeritor stock or by offering the incentives of long-term
monetary rewards to key employees of ArvinMeritor or its business units directly
linked to their contribution to the creation of ArvinMeritor shareowner value,
thus providing means by which persons of outstanding abilities can be attracted,
motivated and retained.
 
      2. DEFINITIONS
 
      For the purpose of the Plan, the following terms shall have the meanings
set forth below:
 
      (a) ArvinMeritor. ArvinMeritor, Inc. or its predecessor, Meritor
Automotive, Inc., as the context requires.
 
      (b) Assumed Rockwell Options. Options granted under the Rockwell Plan on
or after December 9, 1996 to persons who were Employees (as herein defined) on
the Distribution Date which (i) by action of the board of directors of Rockwell
under Section 11 of the Rockwell Plan have been adjusted as of the Distribution
Date to entitle the grantee thereof to purchase Shares; (ii) as so adjusted,
have been assigned to ArvinMeritor; and (iii) by action of the Board of
Directors have been assumed by ArvinMeritor under Section 5 of this Plan.
 
      (c) Board of Directors. The Board of Directors of ArvinMeritor.
 
      (d) Committee. The Compensation and Management Development Committee
designated by the Board of Directors from among its members who are not eligible
to receive a Grant under the Plan.
 
      (e) Corporation. ArvinMeritor and those of its subsidiary corporations or
affiliates designated by the Committee to participate in the Plan.
 
      (f) Distribution Date. The date of the pro-rata distribution by Rockwell
to its shareowners of all the issued and outstanding stock of ArvinMeritor.
 
      (g) Employees. Officers and other key employees of the Corporation, but
not directors who are not also employees of the Corporation.
 
 
                                       1
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                                                                  Exhibit 10-c-1
 
      (h) Executive Officer. An Employee who is an executive officer of
ArvinMeritor as defined in Rule 3b-7 under the Securities Exchange Act of 1934,
as amended, or any successor provision.
 
      (i) Fair Market Value. The closing price of Shares as reported in the New
York Stock Exchange--Composite Transactions on the date of a determination (or
on the next preceding day Shares were traded if not traded on the date of a
determination).
 
      (j) Grant. A grant made pursuant to the Plan by the Grant Committee to an
Employee in the form of Options, Stock Appreciation Rights or Restricted Shares
or a grant made pursuant to the Rockwell Plan of Assumed Rockwell Options.
 
      (k) Grant Committee. The Committee excluding those members of the
Committee who are not at the time any Grant is made both "outside directors" as
defined for purposes of Section 162(m) and the regulations thereunder and
"Non-Employee Directors" as defined in rule 16b-3(b)(3)(i) under the Securities
Exchange Act of 1934, as amended, for purposes of Section 16 of that Act and the
rules thereunder.
 
      (l) Option. An option to purchase Shares granted to an Employee by the
Grant Committee pursuant to Section 5 or 8 of the Plan or an Assumed Rockwell
Option.
 
      (m) Participant. Any Employee to whom a Grant is made.
 
      (n) Performance Cycle. Any period of three or more consecutive fiscal
years of ArvinMeritor established for ArvinMeritor or a designated business
component under a Performance Plan.
 
      (o) Performance Measure. Criteria established to serve as a measure of
performance of ArvinMeritor or a designated business component during a
Performance Cycle under a Performance Plan.
 
      (p) Performance Objectives. Levels of achievement, related to the
Performance Measure, established as goals for a Performance Cycle to be used in
determining whether and to what extent grants under a Performance Plan shall be
deemed to be earned.
 
      (q) Performance Plan. A performance plan applicable to ArvinMeritor or one
or more business components of the Corporation authorized pursuant to Section 4
of the Plan.
 
      (r) Plan. This 1997 Long-Term Incentives Plan.
 
      (s) Restricted Period. The period (i) not less than three years or (ii)
until achievement of performance goals specified at the time of Grant by the
Grant Committee with respect to a Grant of Restricted Shares during which the
Shares are subject to forfeiture if the grantee does not continue as an
Employee.
 
 
                                       2
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                                                                  Exhibit 10-c-1
 
      (t) Restricted Shares. Shares subject to conditions prescribed by the
Committee under Section 7 of the Plan.
 
      (u) Rockwell. Rockwell International Corporation.
 
      (v) Rockwell Plan. The 1995 Long-Term Incentives Plan of Rockwell
International Corporation.
 
      (w) Section 162(m). Section 162(m) of the Internal Revenue Code, as
amended, or any successor provision.
 
      (x) Shares. Shares of Common Stock of ArvinMeritor.
 
      (y) Stock Appreciation Right. A right granted to an Employee by the Grant
Committee pursuant to Section 6 or 8 of the Plan (i) in conjunction with all or
any part of any Option, which entitles the Employee, 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 Stock Appreciation Right) or (ii)
separate and apart from any Option, which entitles the Employee, 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 Employee exercises such right (a
Freestanding Stock Appreciation Right).
 
      (z) Supplementary Stock Plan. A supplementary stock plan applicable to
Employees subject to the tax laws of one or more countries other than the United
States authorized pursuant to Section 8 of the Plan.
 
      3. PLAN ADMINISTRATION
 
      (a) The Grant Committee shall determine the Employees to whom Grants are
made, the number of Shares or Stock Appreciation Rights to be subject to each
Grant and the Restricted Period for any Grant of Restricted Shares.
 
      (b) The Committee shall exercise all other responsibilities, powers and
authority relating to the administration of the Plan not reserved to the Board
of Directors.
 
      (c) The Board of Directors reserves the right, in its sole discretion, to
exercise or authorize another committee or person to exercise some of or all the
responsibilities, powers and authority vested in the Committee and the Grant
Committee under the Plan.
 
      (d) In making their determinations with respect to Grants under the Plan
or grants under any Performance Plan, the Grant Committee and the Committee may
consider recommendations of the Chief Executive Officer of ArvinMeritor and
shall take into
 
 
                                       3
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                                                                  Exhibit 10-c-1
 
account such factors as the Employee's level of responsibility, performance,
performance potential, level and type of compensation and potential value of
Grants.
 
      4. PERFORMANCE PLANS
 
      (a) The Committee may authorize Performance Plans applicable to
ArvinMeritor or one or more business components of the Corporation on such terms
and conditions, not inconsistent with the Plan, and applicable to such Employees
or categories of Employees as the Committee shall determine. In connection with
its authorization of any Performance Plan, the Committee may authorize
ArvinMeritor's Chief Executive Officer to approve the definitive terms and
conditions of that Performance Plan, including but not limited to the Employees
or categories of Employees to which that Performance Plan shall apply and the
committee or person who shall be delegated authority to administer that
Performance Plan, except that authorization by the Committee shall be required
for participation by any Executive Officer in any Performance Plan. Each
Performance Plan shall include provision for: (i) establishment of Performance
Cycles of not less than three consecutive fiscal years for ArvinMeritor (if a
Performance Plan applicable to it should be authorized), and each designated
business component, provided that no Performance Cycle shall begin later than
September 30, 2007 and only one Performance Cycle for ArvinMeritor or any
designated business component shall begin with any one fiscal year; (ii)
establishment of a Performance Measure and Performance Objectives for each
Performance Cycle established for ArvinMeritor and each designated business
component; and (iii) approval by the Committee of any grants thereunder to any
Executive Officer. In addition, a Performance Plan may but need not provide for
(x) grants under such Performance Plan with respect to a Performance Cycle to be
made at any time during the Performance Cycle, provided that any grant made
after the first fiscal year of the Performance Cycle shall provide for a
pro-rated award; (y) adjustment (up or down) of the Performance Objectives or
modification of the Performance Measure (or both) for a Performance Cycle for
ArvinMeritor or any designated business component if the Committee (or with the
Committee's approval, the committee or person delegated to administer the
Performance Plan except insofar as it relates to any Executive Officer)
determines that conditions, including but not limited to changes in the economy,
changes in laws or government regulations, changes in generally accepted
accounting principles, or acquisitions or dispositions determined by the
Committee to be material, so warrant; and (z) a Change-of-Control contingency
similar to Section 13(f) of the Plan.
 
      (b) Potential awards granted to participating Employees under Performance
Plans shall be expressed as cash amounts (whether in currency or in units having
a currency equivalent) and shall be paid in accordance with determinations of
the Committee. Payments shall be in cash unless the Committee determines to make
payment to one or more named participating Employees in Shares (which may be
Restricted Shares) or a combination of cash and Shares. Any payment which is
made in cash may be made in a lump sum, in installments or on a deferred basis.
Any payment which is made in Shares shall be valued at the Fair Market Value on
the last trading day of the week preceding the day of the Committee's
determination to make payment in Shares. No award under a
 
 
                                       4
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                                                                  Exhibit 10-c-1
 
Performance Plan shall bear interest except as may be determined by the
Committee in respect of payments made in installments or on a deferred basis.
 
      (c) If and to the extent an award under a Performance Plan for any
Performance Cycle becomes payable to a participating Employee whose compensation
is subject to the limitation on deductibility under Section 162(m) for the
applicable year and the amount of that award when combined with all base,
incentive or other compensation of such Employee for the applicable year which
constitutes "applicable employee remuneration," as defined for purposes of
Section 162(m), would exceed the limitation of Section 162(m)(1), the amount
payable pursuant to the Performance Plan in excess of that limitation, whether
payable in cash, Shares or a combination of both, may in the sole discretion of
the Grant Committee be deferred until and paid on the first business day of the
calendar year following the Corporation's fiscal year in which such Employee's
employment by the Corporation terminates. Any Shares to which a participating
Employee will become entitled in respect of a payment deferred pursuant to this
paragraph shall be held in book-entry accounts subject to the direction of
ArvinMeritor (or if ArvinMeritor elects, certificates therefor may be issued in
the Employee's name but delivered to and held by ArvinMeritor) and any dividends
that may be paid in cash or otherwise on those Shares shall be delivered to and
held by ArvinMeritor until the end of the period for which such payment is
deferred unless the Grant Committee determines at the time it determines to
defer any payment pursuant to this paragraph that the Employee shall be entitled
to receive when paid dividends on Shares the delivery of which has been so
deferred. At the end of the deferral period under this paragraph, the
restrictions on the book-entry accounts for those Shares shall be released (or
any certificates issued shall be delivered), and any dividends and any cash
payment deferred pursuant to this paragraph shall be delivered, to the Employee,
together with interest on the amount of any cash dividends and any such cash
payment so delivered computed at the same rate and in the same manner as
interest credited from time to time under ArvinMeritor's Deferred Compensation
Plan.
 
      5. OPTIONS
 
      As of the Distribution Date, the Assumed Rockwell Options are assumed by
ArvinMeritor as Options under this Plan with the terms and conditions specified
on the respective dates of grant thereof under the Rockwell Plan as adjusted
pursuant to Section 11 of the Rockwell Plan. Thereafter, the Grant Committee may
grant from time to time to Employees, Options which may be incentive stock
options (as defined in Section 422 of the Internal Revenue Code), nonqualified
stock options, or both, to purchase Shares on terms and conditions determined by
the Grant Committee, consistent with the provisions of the Plan, including the
following:
 
      (a) The purchase price of the Shares subject to any Option shall not be
less than the Fair Market Value on the date the Option is granted.
 
      (b) Each Option may be exercised in whole or in part from time to time
during such period as the Option shall specify; provided, however, that if the
Grant Committee
 
 
                                       5
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                                                                  Exhibit 10-c-1
 
does not establish a different exercise schedule at or before the date of grant
of an Option, the 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 provided, further, that no Option shall be
exercisable prior to one year (except as provided in Section 9(c) or 13(f)) nor
after ten years from the date of the grant thereof.
 
      (c) Each Option may provide for related Stock Appreciation Rights. The
aggregate Fair Market Value (determined as of the date the Option is granted) of
the Shares for which any Employee may be granted incentive stock options which
are exercisable for the first time in any calendar year under all plans of the
Corporation and any parent or subsidiary of the Corporation shall not exceed
$100,000 (or such other amount as may be fixed as the maximum amount permitted
by Section 422(d) of the Internal Revenue Code, as amended, or any successor
provision). The Grant Committee shall grant incentive stock options only to
employees of ArvinMeritor or a corporation which is a subsidiary of ArvinMeritor
within the meaning of Section 425(f) of the Internal Revenue Code.
 
      (d) The purchase price of the Shares with respect to which an Option or
portion thereof is exercised shall be payable in full in cash or in Shares or in
a combination of cash and Shares. The value of any Share delivered in payment of
the purchase price shall be its Fair Market Value on the date the Option is
exercised.
 
      6. STOCK APPRECIATION RIGHTS
 
      (a) The Grant Committee may grant Tandem Stock Appreciation Rights to an
Employee either at the time of grant of an Option or at any time thereafter
during the term of an Option. A Tandem Stock Appreciation Right shall be
exercisable only when and to the extent that the related Option is exercisable.
 
      (b) The Grant Committee may grant from time to time to Employees,
Freestanding Stock Appreciation Rights on terms and conditions determined by the
Grant Committee, consistent with the provisions of the Plan.
 
      (c) The payment to which the grantee of a Stock Appreciation Right is
entitled upon exercise thereof may be made in Shares valued at Fair Market Value
on the date of exercise, or in cash or partly in cash and partly in Shares, as
the Grant Committee may determine.
 
      (d) Upon exercise of a Tandem Stock Appreciation Right 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, or awards
under a Performance Plan.
 
      (e) Upon exercise of a Freestanding Stock Appreciation Right, any Shares
delivered in payment thereof shall not again be available for Grants pursuant to
the Plan, or awards under a Performance Plan.
 
 
                                       6
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                                                                  Exhibit 10-c-1
 
      7. RESTRICTED SHARES
 
      The Grant Committee may grant from time to time to Employees, Restricted
Shares on terms determined by the Grant Committee, consistent with the
provisions of the Plan, including the following:
 
      (a) The Grant Committee shall specify a Restricted Period and may specify
performance or other criteria for each Grant of Restricted Shares, and the
Restricted Shares granted shall be forfeited if the grantee does not continue as
an Employee throughout the Restricted Period, or if and to the extent the
specified performance or other criteria are not met during the Restricted
Period, except as otherwise provided in Section 9(a), 9(b) or 13(f).
 
      (b) Restricted Shares granted to an Employee shall have all the attributes
of outstanding Shares, except that the registered owner shall have no right to
direct the transfer thereof. 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 Employee's name but delivered to and
held by ArvinMeritor), and, unless the Grant Committee determines otherwise at
time of grant, any dividends that may be paid in cash or otherwise on Restricted
Shares shall be delivered to and held by ArvinMeritor, so long as the Restricted
Shares remain subject to forfeiture. As and to the extent that Restricted Shares
are no longer subject to forfeiture, the Employee shall have the right to direct
the transfer thereof, the restrictions on the book-entry accounts for those
Restricted Shares shall be released, and certificates that may have been issued
for those Restricted Shares and any dividends thereon held by ArvinMeritor shall
be delivered to the Employee. There shall also be paid to the Employee at such
time interest on the amount of cash dividends so delivered computed at the same
rate and in the same manner as interest credited from time to time under
ArvinMeritor's Deferred Compensation Plan.
 
      8. SUPPLEMENTARY STOCK PLANS
 
      (a) The Committee may authorize Supplementary Stock Plans applicable to
Employees subject to the tax laws of one or more countries other than the United
States and providing for the grant of Options, Stock Appreciation Rights,
Restricted Shares or any combination thereof to such Employees on terms and
conditions, consistent with the Plan, determined by the Committee which may
differ from the terms and conditions of Grants pursuant to Sections 5, 6 and 7
of the Plan for the purpose of complying with the conditions for qualification
of Options, Stock Appreciation Rights or Restricted Shares for favorable
treatment under foreign tax laws.
 
      (b) Notwithstanding any other provision hereof, Options granted under any
Supplementary Stock Plan shall include provisions that conform with Sections
5(a), (b), (c) and (e) and 6(d); Restricted Shares granted under any
Supplementary Stock Plan shall include provisions that conform with Sections
7(a) and (b); and subject to Section 3(c),
 
 
                                       7
<PAGE>
                                                                  Exhibit 10-c-1
 
only the Grant Committee shall have authority to grant Options, Stock
Appreciation Rights or Restricted Shares under any Supplementary Stock Plan.
 
      9. EFFECT OF DEATH OR TERMINATION OF EMPLOYMENT
 
      (a) If a participating Employee's employment by the Corporation terminates
prior to the end of a Performance Cycle under a Performance Plan or the
Restricted Period applicable to any Grant of Restricted Shares because of the
Employee's (i) death or (ii) retirement under a retirement plan of the
Corporation not less than one year after the beginning of that Performance Cycle
or the date of that Grant, the amount of the award under the Performance Plan or
the number of Restricted Shares such Employee shall be deemed to have earned
shall be the amount or number thereof determined as though such Employee's
employment had not terminated prior to the end of the Performance Cycle or
Restricted Period.
 
      (b) If a participating Employee's employment by the Corporation terminates
prior to the end of a Performance Cycle under a Performance Plan or the
Restricted Period applicable to any Grant of Restricted Shares, for any reason
other than (i) death or (ii) retirement under a retirement plan of the
Corporation not less than one year after the beginning of that Performance Cycle
or the date of that Grant, such Employee shall be deemed not to have earned any
award for purposes of the Performance Plan or Restricted Shares except as and to
the extent the Committee (or with the Committee's approval, the committee or
person delegated to administer a Performance Plan except insofar as it relates
to any Executive Officer), taking into account the purpose of the Plan and such
other factors as in its sole discretion it deems appropriate, may determine,
provided that the amount of the award or the number of Restricted Shares which
may be so determined by the Committee to have been earned shall not exceed the
amount or number which would have been earned had the provisions of paragraph
(a) above been applicable.
 
      (c) If the employment by the Corporation of a Participant who (or whose
permitted transferee) holds an outstanding Grant of Options or Stock
Appreciation Rights terminates by reason of the death of the Participant, the
Options or Stock Appreciation Rights subject to that Grant and not theretofore
exercised may be exercised from and after the date of the death of the
Participant for a period of three years (or until the expiration date specified
in the Grant if earlier) even if any of them was not exercisable at the date of
death.
 
      (d) If a Participant who (or whose permitted transferee) holds an
outstanding Grant of Options or Stock Appreciation Rights retires under a
retirement plan of the Corporation, at any time after a portion of the Options
or Stock Appreciation Rights subject to a particular Grant has become
exercisable, the Options or Stock Appreciation Rights subject to that Grant and
not theretofore exercised may be exercised from and after the date upon which
they are first exercisable under that Grant for a period of five years from the
date of retirement (or until the expiration date specified in the Grant if
earlier) even if any of them was not exercisable at the date of retirement.
 
 
                                       8
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                                                                  Exhibit 10-c-1
 
      (e) If the employment by the Corporation of a Participant who (or whose
permitted transferee) holds an outstanding Grant of Options or Stock
Appreciation Rights is terminated for any reason other than death or retirement
under a retirement plan of the Corporation, the Options or Stock Appreciation
Rights subject to that Grant and not theretofore exercised may be exercised only
within three months after the termination of such employment (or until the
expiration date specified in the Grant if earlier) and only to the extent the
grantee thereof (or a permitted transferee) was entitled to exercise the Options
or Stock Appreciation Rights at the time of termination of such employment,
unless and except to the extent the Committee may otherwise determine; provided,
however, that the Committee shall not in any event permit a longer period of
exercise than would have been applicable had the provisions of paragraph (d)
above been applicable.
 
      10. SHARES AVAILABLE
 
      (a) The total number of Shares which may be delivered in payment and upon
exercise of Grants and in payments of awards under Performance Plans shall not
exceed 9 million*, as adjusted from time to time as herein provided, and the
total number of Shares as to which Grants may be made in any one fiscal year of
ArvinMeritor beginning after September 30, 1998 shall not exceed 3%** of the
total number of Shares outstanding (including for this purpose Shares held in
Treasury) as of the date of determination. Shares which may be delivered in
payment or upon exercise of Grants or in payment of awards under Performance
Plans may consist in whole or in part of unissued or reacquired Shares;
provided, however, that unless otherwise determined by the Committee, Shares
which may be granted as Restricted Shares shall consist only of reacquired
Shares. Subject to Sections 6(d) and (e), if for any reason Shares as to which
an Option has been granted cease to be subject to purchase thereunder or Shares
granted as Restricted Shares are forfeited to the Corporation, then such Shares
shall again be available under the Plan.
 
      (b) The total number of Shares subject to Options and Stock Appreciation
Rights granted to any one Employee in any one fiscal year of ArvinMeritor under
all plans of ArvinMeritor and any parent or subsidiary of ArvinMeritor shall in
no event exceed 500,000, as adjusted from time to time as herein provided.
 
      (c) No Option, Freestanding Stock Appreciation Right or Restricted Shares
shall be granted under the Plan or any Supplementary Stock Plan after September
30, 2007, but Options or Stock Appreciation Rights and Restricted Shares granted
theretofore may extend beyond that date, and Tandem Stock Appreciation Rights
may be granted after that date with respect to Options outstanding on that date.
 
 
--------
 
* Amended July 6, 2000 to increase the number of shares of Meritor Automotive,
Inc. common stock authorized for issuance under the plan from 7 million to 12
million shares. At the exchange ratio applicable upon the merger of Meritor
Automotive, Inc. and Arvin Industries, Inc., these shares were converted to 9
million shares of ArvinMeritor common stock.
 
** Amended July 6, 2000 to increase the annual limit to 3%. Previous limit for
any one fiscal year beginning after September 30, 1998 was 1-1/2% of the total
number of outstanding shares.
 
 
                                       9
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                                                                  Exhibit 10-c-1
 
      11. ADJUSTMENTS
 
      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 such adjustments and actions thereunder as the Board of Directors
may deem appropriate under the circumstances. Such amendments, adjustments and
actions may include, without limitation, changes in the number of Shares which
may be issued or transferred, in the aggregate or to any one Employee, pursuant
to the Plan, the number of Shares subject to outstanding Options and Stock
Appreciation Rights and the related price per share; provided, however, that no
such amendment, adjustment or action may change the limitation prescribed by
Section 10(b) to a number of Shares that is a greater proportion of the total
number of Shares outstanding and held in Treasury as of the effective date of
that amendment, adjustment or action than the proportion of the number of Shares
prescribed by Section 10(b) to the total number of Shares outstanding and held
in Treasury immediately prior thereto.
 
      12. AMENDMENT AND TERMINATION
 
      The Committee shall have the power in its discretion to amend, suspend or
terminate the Plan or Grants thereunder at any time except that, subject to the
provisions of Section 11, (a) without the consent of the person affected, no
such action shall cancel or reduce a Grant theretofore made other than as
provided for or contemplated in the agreement evidencing the Grant and (b)
without the approval of the shareowners of ArvinMeritor, the Committee may not
(i) change the class of persons eligible to receive incentive stock options,
(ii) increase the number of Shares provided in Section 10(a) or 10(b), (iii)
reduce the Option exercise price of any Option below the Fair Market Value on
the date such Option was granted or decrease the forfeiture period for any Grant
below that permitted under the Plan.
 
      13. MISCELLANEOUS
 
      (a) Except as determined by the Committee, no person shall have any claim
to receive a Grant or any payment under a Performance Plan, to receive payment
in respect of a Grant or under a Performance Plan in any form other than the
Committee shall approve or, in circumstances where Section 9 is applicable, to
be deemed to have earned any award under a Performance Plan or Restricted Shares
or to be entitled to exercise Options or Stock Appreciation Rights for any
particular period after termination of employment. There is no obligation for
uniformity of treatment of Employees under the Plan or any Performance Plan. No
Employee shall have any right as a Participant or a participant under any
Performance Plan to continue in the employ of the Corporation for any period of
time or to a continuation of any particular rate of compensation, and the
Corporation expressly reserves the right to discharge or change the assignment
of any Employee at any time.
 
 
                                       10
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                                                                  Exhibit 10-c-1
 
      (b) No Option, Stock Appreciation Right or right related to Restricted
Shares granted pursuant to the Plan or right to payment of an award under any
Performance Plan may be assigned, pledged or transferred except (i) by will or
by the laws of descent and distribution; or (ii) in the case of any Grant (other
than an Option granted as an incentive stock option) or any right to payment of
an award under a Performance Plan, by gift to any member of the Employee's
immediate family or to a trust for the benefit of one or more members of the
Employee's immediate family, if permitted in the applicable agreement governing
that Grant or right to payment; or (iii) as otherwise determined by the
Committee. Each Option, Stock Appreciation Right or right related to Restricted
Shares shall be exercisable, and each payment of an award under a Performance
Plan shall be payable, during the lifetime of the Employee to whom granted or
awarded only by or to such Employee, and any payment of an award under a
Performance Plan made after the death of a participating Employee entitled
thereto shall be paid to the legal representative of the estate or to the
designated beneficiary of such Employee, unless in any such case, the Grant or
right to payment has been transferred in accordance with the provisions of the
applicable agreement governing that Grant or right to payment, to a member of
the Employee's immediate family or a trust for the benefit of one or more
members of the Employee's immediate family, in which case it shall be
exercisable or payable only by or to such transferee (or to the legal
representative of the estate or to the heirs or legatees of such transferee).
For purposes of this provision, an Employee's "immediate family" shall mean the
Employee's spouse and natural, adopted or step-children and grandchildren.
 
      (c) No person shall have the rights or privileges of a shareowner with
respect to Shares subject to an Option or deliverable as a payment upon exercise
of a Stock Appreciation Right or under a Performance Plan until exercise of the
Option or Stock Appreciation Right or delivery as a payment under the
Performance Plan.
 
      (d) No fractional Shares shall be issued or transferred pursuant to the
Plan. If the portion of any payment pursuant to the Plan or a Performance Plan
to be made in Shares is not equal to the value of a whole number of Shares, the
person entitled thereto shall be paid an amount equal to the Fair Market Value
as of the date of exercise of any fractional Share deliverable in respect of
exercise of a Stock Appreciation Right and the Fair Market Value as of the date
of payment of any fractional Share deliverable in respect of any payment under a
Performance Plan.
 
      (e) The Corporation, the Board of Directors, the Committee, the Grant
Committee and the officers of ArvinMeritor shall be fully protected in relying
in good faith on the computations and reports made pursuant to or in connection
with the Plan by the independent certified public accountants who audit the
Corporation's accounts or others (who may include Employees) whose services are
used by the Board of Directors, Committee or Grant Committee in its
administration of the Plan.
 
      (f) Notwithstanding any other provision of the Plan, if a Change of
Control (as defined in Article 8, Section 8.10(a) of ArvinMeritor's Amended
By-Laws) shall occur, then unless prior to the occurrence thereof, the Board of
Directors shall have determined
 
 
                                       11
<PAGE>
                                                                  Exhibit 10-c-1
 
otherwise by vote of at least two-thirds of its members, (i) all Performance
Cycles (except those under Performance Plans that do not provide for a
Change-of-Control contingency) not then complete shall be deemed completed
forthwith, the Performance Objectives therefor shall be deemed to have been
attained, and each participating Employee shall be deemed to have earned the
maximum amount that could have been earned thereunder; (ii) all Options and any
Stock Appreciation Rights then outstanding pursuant to the Plan shall forthwith
become fully exercisable whether or not otherwise then exercisable; and (iii)
the restrictions on all Restricted Shares granted under the Plan shall forthwith
lapse.
 
      (g) The Corporation shall have the right in connection with the delivery
of any Shares in payment of a Grant or a payment under a Performance Plan or
upon exercise of an Option to require as a condition of such delivery that the
recipient represent that such Shares are being acquired for investment and not
with a view to the distribution thereof.
 
      (h) The Corporation shall have the right in connection with any payment
under a Performance Plan, exercise of any Option or Stock Appreciation Right or
termination of the Restricted Period for any Restricted Shares, to deduct from
any such payment or any other payment by the Corporation, an amount equal to any
taxes required by law to be withheld with respect thereto or to require the
Employee or other person receiving such payment, effecting such exercise or
entitled to Shares and related payments on termination of such Restricted
Period, as a condition of and prior to such payment or exercise or delivery of
Shares on such termination, to pay to the Corporation an amount sufficient to
provide for any such taxes so required to be withheld.
 
      (i) Unless otherwise determined by the Committee or provided in an
agreement between any Employee and the Corporation, for purposes of the Plan an
Employee on authorized leave of absence will be considered as being in the
employ of the Corporation.
 
      (j) The Corporation shall bear all expenses and costs in connection with
the operation of the Plan, including costs related to the purchase, issue or
transfer of Shares, but excluding taxes imposed on any person receiving a
payment or delivery of Shares under the Plan or a Performance Plan.
 
      14. INTERPRETATIONS AND DETERMINATIONS
 
      The Committee shall have the power from time to time to interpret the
Plan, to adopt, amend and rescind rules, regulations and procedures relating to
the Plan, to make, amend and rescind determinations under the Plan and to take
all other actions that the Committee shall deem necessary or appropriate for the
implementation and administration of the Plan. All interpretations,
determinations and other actions by the Committee not revoked or modified by the
Board of Directors shall be final, conclusive and binding upon all parties.
 
 
                                       12
<PAGE>
                                                                  Exhibit 10-c-1
 
      15. EFFECTIVE DATE
 
      Upon approval by the shareowners of ArvinMeritor, the Plan shall become
effective as of September 30, 1997.
 
 
                                       13
 
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