-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NlRqh6SZKknKCrUBZpl+xK7yXXiqOPehtt1Gn5gn/PV2qacjyl02eU+TvL3guK06 bOKoSp4Gehogr5fCHk24Mw== 0000950152-98-004329.txt : 19980513 0000950152-98-004329.hdr.sgml : 19980513 ACCESSION NUMBER: 0000950152-98-004329 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980512 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DANA CORP CENTRAL INDEX KEY: 0000026780 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 344361040 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-01063 FILM NUMBER: 98616496 BUSINESS ADDRESS: STREET 1: 4500 DORR ST CITY: TOLEDO STATE: OH ZIP: 436997 BUSINESS PHONE: 4195354500 MAIL ADDRESS: STREET 1: PO BOX 1000 CITY: TOLEDO STATE: OH ZIP: 43697 10-Q 1 DANA CORPORATION QUARTERLY REPORT FORM 10-Q 1 [DANA LOGO] UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 /X/ Form 10-Q Quarterly Report Pursuant to Section 13 or 15(d) Of the Securities Exchange Act of 1934 Commission For the Quarterly Period Ended March 31, 1998 File Number 1-1063 -------------- ------- Dana Corporation - -------------------------------------------------------------------------------- (Exact name of Registrant as Specified in its Charter) Virginia 34-4361040 - --------------------------------- ---------------------- (State or other jurisdiction (IRS Employer of incorporation or organization) Identification Number) 4500 Dorr Street, Toledo, Ohio 43615 - ---------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) (419)535-4500 ---------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No -- -- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at April 30, 1998 ---------------------------- ----------------------------- Common stock of $1 par value 105,813,864 PEOPLE FINDING A BETTER WAY 2 DANA CORPORATION AND CONSOLIDATED SUBSIDIARIES INDEX
Page Number ----------- Cover 1 Index 2 Part I. Financial Information Item 1. Financial Statements Condensed Balance Sheet December 31, 1997 and March 31, 1998 3 Statement of Income Three Months Ended March 31, 1997 and 1998 4 Condensed Statement of Cash Flows Three Months Ended March 31, 1997 and 1998 5 Notes to Condensed Financial Statements 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-12 Part II. Other Information Item 1. Legal Proceedings 13 Item 4. Submission of Matters to a Vote of Security Holders 13 Item 5. Other Events 14 Item 6. Exhibits and Reports on Form 8-K 14 Signature 15 Exhibit Index 16
2 3 PART I. FINANCIAL INFORMATION ITEM 1. DANA CORPORATION CONDENSED BALANCE SHEET (Unaudited) (in Millions)
Assets December 31, 1997 March 31, 1998 - ------ ----------------- -------------- Cash and Cash Equivalents $ 394.3 $ 214.7 Accounts Receivable Trade 1,030.6 1,341.1 Other 132.3 176.8 Inventories Raw Materials 252.9 303.9 Work in Process and Finished Goods 656.9 715.1 Lease Financing 1,330.1 1,359.4 Investments and Other Assets 1,276.8 1,344.1 Property, Plant and Equipment 3,911.3 4,180.9 Less: Accumulated Depreciation 1,866.5 1,960.2 -------- -------- Total Assets $7,118.7 $7,675.8 ======== ======== Liabilities and Shareholders' Equity - ------------------------------------ Accounts Payable and Other Liabilities $1,518.4 $1,847.5 Short-Term Debt 504.2 455.0 Long-Term Debt 2,178.3 2,387.5 Deferred Employee Benefits 1,062.5 1,054.4 Minority Interest 154.1 157.1 Shareholders' Equity 1,701.2 1,774.3 -------- -------- Total Liabilities and Shareholders' Equity $7,118.7 $7,675.8 ======== ========
3 4 ITEM 1. (Continued) - ------- DANA CORPORATION STATEMENT OF INCOME (Unaudited) (in Millions Except Per Share Amounts)
Three Months Ended ------------------ March 31 -------- 1997 1998 --------- --------- Net Sales $ 2,115.3 $ 2,350.2 Revenue from Lease Financing and Other Income 135.9 64.2 --------- --------- 2,251.2 2,414.4 --------- --------- Costs and Expenses Cost of Sales 1,821.3 1,985.0 Selling, General and Administrative Expenses 193.0 199.1 Interest Expense 48.2 57.6 --------- --------- 2,062.5 2,241.7 --------- --------- Income Before Income Taxes 188.7 172.7 Estimated Taxes on Income (96.6) (71.4) Minority Interest (5.6) (3.3) Equity in Earnings of Affiliates 6.1 9.6 --------- --------- Net Income $ 92.6 $ 107.6 ========= ========= Net Income Per Common Share - Basic $ .90 $ 1.02 ========= ========= Diluted $ .89 $ 1.00 ========= ========= Dividends Declared and Paid per Common Share $ .25 $ .27 Average Number of Shares Outstanding - For Basic 103.4 105.4 For Diluted 104.3 107.2
4 5 ITEM 1. (Continued) - ------- DANA CORPORATION CONDENSED STATEMENT OF CASH FLOWS (Unaudited) (in Millions)
Three Months Ended March 31 --------------------------- 1997 1998 ------- ------- Net Income $ 92.6 $ 107.6 Depreciation and Amortization 79.5 88.0 Gain on Sale of Distribution Operations (45.0) Working Capital Change and Other (95.0) (102.2) ------- ------- Net Cash Flows from Operating Activities 32.1 93.4 ------- ------- Purchases of Property, Plant and Equipment (85.0) (85.8) Purchases of Assets to be Leased (101.7) (117.5) Payments Received on Leases and Loans 89.9 84.7 Acquisitions (475.8) (293.0) Divestitures 152.0 25.0 Other 15.4 (25.8) ------- ------- Net Cash Flows-Investing Activities (405.2) (412.4) ------- ------- Net Change in Short-Term Debt (53.8) (91.1) Proceeds from Long-Term Debt 539.0 376.5 Payments on Long-Term Debt (186.2) (124.2) Dividends Paid (25.8) (28.5) Other 3.2 6.7 ------- ------- Net Cash Flows-Financing Activities 276.4 139.4 ------- ------- Net Change in Cash and Cash Equivalents (96.7) (179.6) Cash and Cash Equivalents-beginning of period 227.8 394.3 ------- ------- Cash and Cash Equivalents-end of period $ 131.1 $ 214.7 ======= =======
5 6 ITEM 1. (Continued) - ------- NOTES TO CONDENSED FINANCIAL STATEMENTS (in Millions Except Per Share Amounts) 1. In the opinion of management, all normal recurring adjustments necessary to a fair presentation of results for the unaudited interim periods have been included. 2. In February 1997, Dana acquired the assets of Clark-Hurth Components, a worldwide manufacturer of off-highway vehicle and equipment components, and the Sealed Power worldwide piston ring and cylinder liner operations and assets of SPX Corporation. In January 1998, the acquisition of the heavy axle and brake business of Eaton Corporation was completed. These acquisitions have been accounted for as purchases and their results of operations have been included since the dates of acquisition. Goodwill relating to the acquisitions is included in Investments and Other Assets. 3. In March 1997, Dana completed the sale of its warehouse distribution operations in the U.K., the Netherlands and Portugal to U.K.-based Partco Group plc for Pound Sterling 103 (U.S. $164) resulting in an after-tax gain of $45 (44 cents per share). In February 1998, Dana announced the completion of the sale of its hydraulic brake hose facilities in Columbia City, Ind., and Garching, Germany, to CF Gomma, S.p.A., of Passirano, Italy. 4. The Company initiated a rationalization plan at its Perfect Circle Europe operations resulting in a charge of $36 (35 cents per share) in the first quarter of 1997. 5. Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share," is effective for periods ending after December 15, 1997. Accordingly, basic and diluted income per share have been computed in accordance with this statement. Following is a reconciliation of average shares for purposes of calculating basic and diluted net income per share.
Three Months Ended March 31 --------------------------- 1997 1998 ----- ----- Weighted average common shares outstanding 103.4 105.4 ----- ----- Plus: Incremental shares from assumed conversion of - Deferred compensation units .3 .5 Stock options .6 1.3 ----- ----- Total potentially dilutive securities .9 1.8 ----- ----- Adjusted average common shares outstanding 104.3 107.2 ===== =====
6 7 ITEM 1. (Continued) - ------------------- Notes to Consolidated Financial Statements - ------------------------------------------ (in Millions) 6. SFAS No. 130, "Reporting Comprehensive Income," is effective for fiscal years beginning after December 15, 1997. The statement requires, among other things, the reporting of total comprehensive income in condensed financial statements of interim periods. Comprehensive income includes net income and components of other comprehensive income, such as foreign currency translation adjustments and minimum pension liability adjustments. Dana's total comprehensive earnings were as follows:
Three Months Ended March 31 --------------------------- 1997 1998 -------- -------- Net Income $ 92.6 $ 107.6 Other comprehensive income/(loss) (1.1) (12.0) -------- -------- Total comprehensive income $ 91.5 $ 95.6 ======== ========
7. In the first quarter of 1998, Dana sold $350 of new senior unsecured notes consisting of $150 of 6.5% notes due March 15, 2008 and $200 of 7.0% notes due March 15, 2028. Proceeds from the issues are being used to pay off existing short- and medium-term debt. 8. In April 1998, the Company acquired 98 percent of the share capital of Nakata S.A. Industria e Comercio of Sao Paulo, Brazil. The acquisition will be accounted for as a purchase and the results of operations will be included from the date of acquisition. 9. In May 1998, the Company announced a merger agreement with Echlin Inc., a global producer of parts for the automotive aftermarket. Under the agreement, each share of Echlin common stock will be exchanged for 0.9293 shares of Dana common stock; Dana will also assume $570 of net debt. The transaction, which is conditioned on the approval of Dana and Echlin shareholders and subject to customary regulatory approvals, is expected to be accounted for as a pooling of interests. Echlin reported sales of $3,569 for the fiscal year ended August 31, 1997 and $836 for the quarter ended February 28, 1998. Total assets of Echlin were $2,382 at February 28, 1998 with net assets of $946. 7 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF - ------- --------------------------------------- FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- Liquidity and Capital Resources - ------------------------------- (in Millions) Net cash provided by operating activities increased $61 for the three months ended March 31, 1998 when compared to the same three months in 1997. The increase was attributable to higher operating net income and depreciation and amortization expenses in 1998, partially offset by the increased change in working capital requirements.
CASH FLOWS FROM OPERATIONS FOR THREE MONTHS ENDED MARCH 31 1996 $73 1997 32 1998 93
The acquisition of Eaton Corporation's heavy axle and brake business was the most significant investing activity in the first quarter of 1998. Dana also acquired the remaining 40% interest in Simesc, its Brazilian structural components manufacturing company, and divested the Weatherhead brake hose operations. In the first quarter of 1997, Dana acquired the assets of Clark-Hurth Components and the piston ring and cylinder liner operations of SPX Corporation. The Company sold its European warehouse distribution operations in March 1997.
CAPITAL EXPENDITURES YEAR THREE MONTHS ENDED ENDED DECEMBER 31 MARCH 31 1996 $357 $69 1997 426 85 1998 430 * 86 * Projected
Capital expenditures were slightly higher than the first quarter of 1997. The Company currently anticipates capital spending for the full year to be slightly above the 1997 level. Net purchases of leased assets (purchases less principal payments on leases and loans) were $33 in 1998, an increase of $21 over 1997. Financing activities provided net cash of $139. In the quarter, Dana sold $350 of new senior unsecured notes consisting of $150 of 6.5% notes due March 15, 2008 and $200 of 7.0% notes due March 15, 2028. Proceeds from the issues are being used to pay off existing short- and medium-term debt. In January, Standard & Poor's Corporation increased Dana's corporate credit and senior debt ratings to "A-" from "BBB+." The ratings of Dana Credit Corporation (DCC), Dana's wholly-owned leasing subsidiary, were also raised to "A-." Cash dividends paid in the first quarter of 1998 were $28 compared to $26 last year. On April 20, 1998, Dana's Board of Directors approved a 7% increase in the dividend, payable June 15, 1998, to an annualized rate of $1.16 per share. Dana utilizes short-term committed and uncommitted bank lines for the issuance of commercial paper and bank direct borrowings. Dana (excluding DCC) had committed and uncommitted borrowing lines of credit totaling approximately $1,374 at the end of the first quarter of 8 9 ITEM 2. (Continued) - ------------------- Liquidity and Capital Resources - ------------------------------- (in Millions) 1998, while DCC's lines were $922. Dana's strong cash flows from operations, together with worldwide credit facilities, are expected to provide adequate liquidity to meet the Company's debt service obligations, projected capital expenditures and working capital requirements for the balance of 1998. Dana's management and legal counsel have reviewed the legal proceedings to which the Company and its subsidiaries were parties as of March 31, 1998 (including, among others, those involving product liability claims and alleged violations of environmental laws) and concluded that neither the liabilities that may result from these legal proceedings nor the cash flows related to such liabilities are reasonably likely to have a material adverse effect on the Company's liquidity, financial condition or results of operations. The Company estimates its contingent environmental and product liabilities based upon the most probable method of remediation or outcome considering currently enacted laws and regulations and existing technology. Measurement of liabilities is made on an undiscounted basis and excludes the effects of inflation. In those cases where there is a range of equally probable remediation methods or outcomes, the Company accrues at the lower end of the range. At March 31, 1998, the Company had accrued $47 for product liability costs (products) and $55 for environmental liability costs (environmental), compared to $50 for products and $55 for environmental at December 31, 1997. The difference between the Company's minimum and maximum estimates for contingent liabilities, while not considered material, was $15 for products and $4 for environmental at March 31, 1998, compared to $15 for products and $1 for environmental at December 31, 1997. At March 31, 1998, the Company had recorded (as assets) probable recoveries from insurance or third parties in the amounts of $27 for products and $5 for environmental, compared to $29 for products and $10 for environmental at December 31, 1997. Restructuring and Rationalization Expenses - ------------------------------------------ Restructuring and rationalization charges of $162 were recorded in 1997. An accrued liability of $123 remained at December 31, 1997. During the first quarter of 1998, $17 was charged against the liability, consisting of cash payments of $4 and non-cash charges of $13. The remaining cash outlays of $84 ($52 in 1998, $16 in 1999, and $16 thereafter) generally represent employee separation costs for the approximately 1,440 workers affected by these activities. The balance of the accrual is non-cash and will be utilized to write down the affected assets. Dana's liquidity and cash flows will not be materially impacted by these actions. It is anticipated that Dana's operations over the long term will benefit from these realignment strategies. 9 10 ITEM 2. (Continued) - ------------------- Impact of the Year 2000 - ----------------------- The Company has established a Global Year 2000 Readiness Team to coordinate its Year 2000 activities and has engaged an outside consultant to assist in these efforts. The Company is finalizing its plan and timetable for reviewing any calendar functions in its products and for determining whether its critical business and operating systems (including those which interface with customers, suppliers and other third parties) will function properly when processing data for the Year 2000. At present, the Company has not determined the total cost of addressing Year 2000 issues or the impact that any incomplete or untimely resolution of these issues by Dana or its customers or suppliers could have on the Company's business, financial condition or results of operations. Results of Operations (Three Months 1998 vs Three Months 1997) - -------------------------------------------------------------- (in Millions) Worldwide sales of $2,350 in the first quarter surpassed the record first quarter of 1997 by $235 or 11%. Sales of companies acquired, net of divestitures, amounted to $95 of the increase. Excluding such activities, sales increased $140 or 7% during the quarter with price changes having a minimal effect. Dana's U.S. sales increased 15% over 1997 ($131 or 9% excluding the effect of acquisitions and divestitures). Sales from Dana's international operations increased 2% over 1997, with the impact of divestitures equaling the acquisition impact. Changes in foreign currency exchange rates since the first quarter of 1997 served to reduce first quarter 1998 sales by approximately $47.
1ST QUARTER SALES % 1997 1998 CHANGE U.S. $1,528 $1,754 15 International 587 596 2 Total $2,115 $2,350 11
U.S. sales of light truck components to OE manufacturers increased 7% over a record 1997 first quarter, with acquisitions having little impact. U.S. sales of heavy truck OE components rose 78% over last year (14% excluding acquisitions). Worldwide sales to manufacturers of off-highway vehicles increased 20% and passenger car OE sales grew 2%, primarily from acquisitions. North American sales increased 15% in the first quarter, with acquisitions accounting for nearly three-fourths of the increase. Excluding the net effect of acquisitions and divestitures, sales in Europe and South America increased 9% and 6%, respectively. Asia Pacific sales were flat overall; however, OE sales increased 10% in the first quarter, offset by sluggish distribution sales.
1ST QUARTER SALES BY REGION % REGION 1997 1998 CHANGE North America $1,617 $1,862 15 Europe 318 291 (8) South America 135 154 14 Asia Pacific 45 43 (4)
10 11 ITEM 2. (Continued) - ------- Results of Operations (Three Months 1998 vs Three Months 1997) - -------------------------------------------------------------- (in Millions) Dana's worldwide distribution business declined 10% in the first quarter primarily due to the sale of the European warehouse distribution business in March 1997. U.S. distribution sales declined 3%, while the international distribution sales decreased 21% due to the disposition. Worldwide automotive distribution sales were down 18%; excluding the net effect of acquisitions and divestitures, sales increased 7%. Off-highway/industrial distribution sales increased 1% and truck parts distribution sales fell 7%, with a negligible impact from acquisitions/divestitures. Revenue from lease financing and other income decreased $72 in the first quarter of 1998. Other income recorded in 1997 included $76 relating to the divestiture of the European warehouse distribution operations and $13 from the sale of an investment in a leveraged lease by DCC. Lease-related revenue increased $5 in 1998. Dana's gross margin for the first quarter was 15.5%, compared to 13.9% in 1997. Gross margin in 1997 was adversely affected by a charge of $26 to cost of sales during the first quarter relating to the rationalization plan at the Company's Perfect Circle Europe operations in France. Excluding the 1997 charge, Dana's gross margin improved .5% in 1998. Selling, general and administrative expenses (SG&A) increased $6 in 1998. The net impact of acquisitions and divestitures helped to reduce SG&A expenses slightly in the first quarter although not enough to offset higher expenses at DCC due to start-up and development costs associated with new programs and expansion. The ratio of SG&A expense to sales improved from 9.1% in 1997 to 8.5% in 1998. Dana's operating margin for the first quarter of 1998 was 7.1% compared to 4.8% in 1997. Excluding the previously explained charge to cost of sales recorded in 1997, Dana's operating margin improved 1.1% in 1998. Interest expense was $9 higher than last year due to higher average debt levels related to acquisitions in 1997 and 1998. Dana's first quarter 1998 effective tax rate was 41% compared to 51% for 1997's first quarter. The effective rate is lower due to the 1997 provision of a valuation reserve for tax benefits previously recorded in France and the valuation reserve for tax benefits associated with the expenses recorded for the rationalization plan at Dana's Perfect Circle Europe operations. Equity in earnings of affiliates was higher in 1998 by $4, primarily due to losses no longer being recorded for Korea Spicer Corporation, which was sold in November of 1997. Minority interest in net income of consolidated subsidiaries decreased $2, primarily due to the lower earnings of Albarus S.A. (a Brazilian subsidiary) and its majority-owned subsidiaries. The Company reported record first quarter earnings of $108 which included a $3 after-tax gain on the sale of its hydraulic brake hose business. 11 12 ITEM 2. (Continued) - ------- Results of Operations (Three Months 1998 vs Three Months 1997) - -------------------------------------------------------------- (in Millions) Dana's component sales to producers of light truck and sport utility vehicles continued strong in the first quarter of 1998 as the popularity of these vehicles remained steady. Second-quarter sales are expected to be above last year's levels, which were affected by work stoppages at two of Dana's major customers during the quarter in 1997. Sales to the medium and heavy truck markets should continue significantly above last year due to the integration of the Eaton axle operations and higher North American truck production levels. Forward Looking Information - --------------------------- Any forward-looking statements contained in this report represent management's current expectations based on present information and current assumptions. Such statements are indicated by words such as "anticipates," "expects," "believes," "intends," "plans," and similar expressions. Forward-looking statements are inherently subject to risks and uncertainties. Actual results could differ materially from those which are anticipated or projected due to a number of factors. These factors include changes in business relationships with the Company's major customers, work stoppages at major customers, competitive pressures on sales and pricing, increases in production or material costs that cannot be recouped in product pricing and changes in global economic and market conditions. 12 13 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS - -------------------------- The Company and its consolidated subsidiaries are parties to various pending judicial and administrative proceedings arising in the ordinary course of business. The Company's management and legal counsel have reviewed the probable outcome of these proceedings, the costs and expenses reasonably expected to be incurred, the availability and limits of the Company's insurance coverage and the Company's established reserves for uninsured liabilities. While the outcome of the pending proceedings cannot be predicted with certainty, based on its review, management believes that any liabilities that may result are not reasonably likely to have a material effect on the Company's liquidity, financial condition or results of operations. Under the rules of the Securities and Exchange Commission, certain environmental proceedings are not deemed to be ordinary routine proceedings incidental to a company's business and are required to be reported in a company's annual and/or quarterly reports. The Company is not currently a party to any such proceedings. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------------------------------------------------------------ The following are the results of voting by stockholders present or represented at the Annual Meeting of Stockholders on April 1, 1998: 1. ELECTION OF DIRECTORS. The following were elected to serve as directors of the Company until the next annual meeting of stockholders or until their successors are elected:
Votes For Votes Withheld --------- -------------- B. F. Bailar 92,297,530 780,701 E. M. Carpenter 92,292,351 785,880 E. Clark 92,326,709 751,522 G. H. Hiner 92,321,301 756,930 J. M. Magliochetti 92,323,284 754,947 M. R. Marks 92,314,986 763,245 S. J. Morcott 92,295,300 782,931 R. B. Priory 92,194,305 883,926 J. D. Stevenson 90,977,660 2,100,571 T. B. Sumner Jr. 92,290,131 788,100
2. APPROVAL OF THE DANA CORPORATION 1998 DIRECTORS' STOCK OPTION PLAN. The stockholders approved the 1998 Directors' Stock Option Plan and the issuance of 150,000 shares of Dana common stock under the Plan. There were 83,024,650 votes approving the Plan; 9,504,634 votes against; 548,947 votes abstaining; and no broker nonvotes. 3. RATIFICATION OF PRICE WATERHOUSE: The stockholders ratified the Board's selection of Price Waterhouse LLP as the Company's independent auditors for fiscal year 1998. There were 92,616,964 votes ratifying the selection of Price Waterhouse; 324,497 votes against; and 136,770 votes abstaining. 13 14 ITEM 5. OTHER EVENTS - --------------------- On May 4, 1998, Dana and Echlin Inc. ("Echlin") announced the execution of an Agreement and Plan of Merger, dated as of May 3, 1998, pursuant to which a wholly-owned subsidiary of Dana will be merged with and into Echlin, with Echlin as the surviving corporation. In the merger, each share of Echlin common stock outstanding immediately prior to the effective time of the merger will be converted into 0.9293 of a share of Dana common stock. Based on the $59.1875 closing price of Dana stock on May 1, 1998, the transaction is valued at $55 per share of Echlin stock or an aggregate consideration of approximately $3.5 billion. Consummation of the merger is conditioned upon, among other things, the requisite approval of the shareholders of Dana and Echlin and customary regulatory and governmental approvals. In connection with the Merger Agreement, Dana and Echlin entered into a Stock Option Agreement, dated as of May 3, 1998, pursuant to which Echlin granted to Dana an option to purchase, under certain circumstances, up to 12,655,345 shares of Echlin common stock at a price (subject to certain adjustments) of $55 per share. The option is exercisable upon the occurrence of certain events, none of which has occurred as of the date hereof. If exercised, the option would give Dana the right to acquire (before giving effect to the exercise of the option) 19.9% of the total outstanding shares of Echlin common stock. The Stock Option Agreement was granted by Echlin as a condition and inducement to Dana to enter into the Merger Agreement. Under certain circumstances, Echlin may be required to repurchase the option or the shares acquired pursuant to the exercise thereof. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ----------------------------------------- a) The Exhibits listed in the "Exhibit Index" are filed as a part of this report b) Reports on Form 8-K The Company filed a Form 8-K on March 12, 1998, containing the following documents related to its Registration Statement No. 333-42239 filed on December 15, 1997: (1)Terms Agreement between Dana Corporation and Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and J.P. Morgan Securities Inc., dated March 11, 1998; (2) First Supplemental Indenture between Dana Corporation, as Issuer,and Citibank, N.A., Trustee, dated as of March 11, 1998; and (3) Form of 6.50% Notes due March 15, 2008 and 7.00% Notes due March 15, 2028. The Company also filed a Form 8-K on May 4, 1998, reporting the Agreement and Plan of Merger and the Stock Option Agreement with Echlin Inc. which are described in Item 5, above. 14 15 SIGNATURE 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. DANA CORPORATION Date: May 12, 1998 /s/ John S. Simpson - ------------------ ---------------------------------- John S. Simpson Chief Financial Officer 15 16 EXHIBIT INDEX
No. Description Method of Filing - --- ----------- ---------------- 3-A Restated Articles of Incorporation, effective June Filed by reference to Exhibit 4 to Registrant's Form 1, 1994 8-A/A, Amendment No. 3 filed October 4, 1994 3-B Restated By-Laws, effective December 9, 1996 Filed by reference to Exhibit 3-B to Registrant's Form 10-K for the year ended December 31, 1996 4-A Specimen Single Denomination Stock Certificate Filed by reference to Exhibit 4-B to Registrant' s Registration Statement No. 333-18403 filed December 20, 1996 4-B Rights Agreement, dated as of April 25, 1996, Filed by reference to Exhibit 1 to Registrant's Form 8-A between Registrant and ChemicalMellon Shareholder filed May 1, 1996 Services, L.L.C., Rights Agent 4-C Indenture for Senior Securities between Dana Filed by reference to Exhibit 4-B of Registrant's Corporation and Citibank, N.A., Trustee, dated as of Registration Statement No. 333-42239 filed December 15, December 15, 1997 1997 4-D First Supplemental Indenture between Dana Filed by reference to Exhibit 4-B-1 to Registrant's Corporation, as Issuer, and Citibank, N. A., Report on Form 8-K dated March 12, 1998 Trustee, dated as of March 11, 1998 4-E Form of 6.50% Notes due March 15, 2008 and 7.00% Included in Exhibit 4-D and filed by reference to Exhibit Notes due March 15, 2028 4-C-1 to Registrant's Report on Form 8-K dated March 12, 1998 10-A(4) Fourth Amendment to Additional Compensation Plan, Filed with this Report effective December 8, 1997 10-E(3) Third Amendment to 1997 Stock Option Plan, Filed with this Report effective December 8, 1997 10-F(1) First Amendment to Excess Benefits Plan, effective Filed with this Report December 8, 1997 10-G(3) Third Amendment to Retirement Plan, effective Filed with this Report December 8, 1997 10-H(1) First Amendment to Directors Retirement Plan, Filed with this Report effective December 8, 1997 10-I(1) First Amendment to Director Deferred Fee Plan, Filed with this Report effective December 8, 1997 10-K(1) First Amendment to Supplemental Benefits Plan, Filed with this Report effective December 8, 1997 10-M Directors' Stock Option Plan Filed by reference to Exhibit A to Registrant's Proxy Statement for its Annual Meeting on April 1, 1998 27 Financial Data Schedules Filed with this Report
16 EX-10.A.4 2 EXHIBIT 10.A(4) 1 Exhibit 10-A(4) FOURTH AMENDMENT TO THE DANA CORPORATION ADDITIONAL COMPENSATION PLAN ---------------------------- Pursuant to resolutions of the Board of Directors adopted on July 21, 1997, the Dana Corporation Additional Compensation Plan (the "Plan") is hereby amended, effective as of December 8, 1997, as set forth below. 1. Section 2B of the Plan is hereby amended to read in its entirety as follows: "B. "Change in Control of the Corporation" shall mean the occurrence of the event set forth in any one of the following paragraphs: (i) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Corporation or its Affiliates) representing 20% or more of the combined voting power of the Corporation's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (1) of paragraph (iii) below; or (ii) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on December 8, 1997, constitute the Board of Directors of the Corporation ("Board") and any new director whose appointment or election by the Board or nomination for election by the Corporation's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on December 8, 1997 or whose appointment, election or nomination for election was previously so approved or recommended. For purposes of the preceding sentence, any director whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the Corporation, shall not be counted; or (iii) there is consummated a merger of the Corporation or any direct or indirect Subsidiary of the Corporation with any other corporation, or a statutory share exchange of the Corporation's voting securities, other than (1) a merger or statutory share exchange which would 2 result in the voting securities of the Corporation outstanding immediately prior to such merger continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of the Corporation or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (2) a merger or statutory share exchange effected to implement a recapitalization of the Corporation (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Corporation or its Affiliates) representing 20% or more of the combined voting power of the Corporation's then outstanding securities; or (iv) the stockholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation or there is consummated an agreement for the sale or disposition by the Corporation of all or substantially all of the Corporation's assets, other than a sale or disposition by the Corporation of all or substantially all of the Corporation's assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Corporation in substantially the same proportions as their ownership of the Corporation immediately prior to such sale. For purposes of this "Change in Control of the Corporation" definition, the following terms shall have the following meanings: "Affiliate" shall mean a corporation or other entity which is not a Subsidiary and which directly, or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the Corporation. For the purpose of this definition, the terms "control", "controls" and "controlled" mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a corporation or other entity, whether through the ownership of voting securities, by contract, or otherwise. "Beneficial Owner" or "Beneficially Owned" shall have the meaning set forth in Rule 13d-3 under the Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Corporation or any of its Subsidiaries, 3 (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation. "Subsidiary" shall mean a corporation or other entity, of which 50% or more of the voting securities or other equity interests is owned directly, or indirectly through one or more intermediaries, by the Corporation." IN WITNESS WHEREOF, the undersigned has hereby executed this Fourth Amendment on behalf of the Corporation this 26th day of March, 1998. DANA CORPORATION /s/ Martin J. Strobel ---------------------- ATTEST: /s/ Mark A. Smith - ----------------- EX-10.E.3 3 EXHIBIT 10.E(3) 1 Exhibit 10-E(3) THIRD AMENDMENT TO THE DANA CORPORATION 1997 STOCK OPTION PLAN ---------------------- Pursuant to resolutions of the Board of Directors adopted on July 21, 1997, the Dana Corporation 1997 Stock Option Plan (the "Plan") is hereby amended, effective as of December 8, 1997, as set forth below. 1. Section 2 of the Plan is hereby amended by adding the following definition: "Change in Control of the Corporation" shall mean the occurrence of the event set forth in any one of the following paragraphs: (a) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Corporation or its Affiliates) representing 20% or more of the combined voting power of the Corporation's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (1) of paragraph (c) below; or (b) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on December 8, 1997, constitute the Board of Directors of the Corporation ("Board") and any new director whose appointment or election by the Board or nomination for election by the Corporation's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on December 8, 1997 or whose appointment, election or nomination for election was previously so approved or recommended. For purposes of the preceding sentence, any director whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the Corporation, shall not be counted; or (c) there is consummated a merger of the Corporation or any direct or indirect Subsidiary of the Corporation with any other corporation, or a statutory share exchange of the Corporation's voting securities, other than (1) a merger or statutory share exchange which would result in the voting securities of the Corporation outstanding immediately prior to such merger continuing to represent (either by 2 remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of the Corporation or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (2) a merger or statutory share exchange effected to implement a recapitalization of the Corporation (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Corporation or its Affiliates) representing 20% or more of the combined voting power of the Corporation's then outstanding securities; or (d) the stockholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation or there is consummated an agreement for the sale or disposition by the Corporation of all or substantially all of the Corporation's assets, other than a sale or disposition by the Corporation of all or substantially all of the Corporation's assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Corporation in substantially the same proportions as their ownership of the Corporation immediately prior to such sale. For purposes of this "Change in Control of the Corporation" definition, the following terms shall have the following meanings: "Affiliate" shall mean a corporation or other entity which is not a Subsidiary and which directly, or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the Corporation. For the purpose of this definition, the terms "control", "controls" and "controlled" mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a corporation or other entity, whether through the ownership of voting securities, by contract, or otherwise. "Beneficial Owner" or "Beneficially Owned" shall have the meaning set forth in Rule 13d-3 under the Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Corporation or any of its Subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or any of its Affiliates, (iii) an underwriter 3 temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation. "Subsidiary" shall mean a corporation or other entity, of which 50% or more of the voting securities or other equity interests is owned directly, or indirectly through one or more intermediaries, by the Corporation." 2. Delete the second paragraph of Section 8(a) and replace it in its entirety with the following language: "provided, however, that anything elsewhere in the Plan to the contrary notwithstanding, upon a Change in Control of the Corporation, all outstanding unexercised options granted under the Plan, whether or not then exercisable, shall become fully exercisable, and shall remain fully exercisable for their term." IN WITNESS WHEREOF, the undersigned has hereby executed this Third Amendment on behalf of the Corporation this 26th day of March, 1998. DANA CORPORATION /s/ Martin J. Strobel ---------------------- ATTEST: /s/ Mark A. Smith - ----------------- EX-10.F.3 4 EXHIBIT 10.F(3) 1 Exhibit 10-F(1) FIRST AMENDMENT TO THE DANA CORPORATION EXCESS BENEFITS PLAN -------------------- Pursuant to resolutions of the Board of Directors adopted on July 21, 1997, the Dana Corporation Excess Benefits Plan (the "Plan") is hereby amended, effective as of December 8, 1997, as set forth below. 1. Section 1.3 of the Plan is hereby amended to read in its entirety as follows: "1.3. Change in Control" means the occurrence of the event set forth in any one of the following paragraphs: (a) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 20% or more of the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (1) of paragraph (c) below; or (b) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on December 8, 1997, constitute the Board of Directors of the Company ("Board") and any new director whose appointment or election by the Board or nomination for election by the Company's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on December 8, 1997 or whose appointment, election or nomination for election was previously so approved or recommended. For purposes of the preceding sentence, any director whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the Company, shall not be counted; or (c) there is consummated a merger of the Company or any direct or indirect Subsidiary of the Company with any other corporation, or a statutory share exchange of the Company's voting securities, other than (1) a merger or statutory share exchange which would result in 2 the voting securities of the Company outstanding immediately prior to such merger continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (2) a merger or statutory share exchange effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 20% or more of the combined voting power of the Company's then outstanding securities; or (d) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale. For purposes of this "Change in Control" definition, the following terms shall have the following meanings: "Affiliate" shall mean a corporation or other entity which is not a Subsidiary and which directly, or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company. For the purpose of this definition, the terms "control", "controls" and "controlled" mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a corporation or other entity, whether through the ownership of voting securities, by contract, or otherwise. "Beneficial Owner" or "Beneficially Owned" shall have the meaning set forth in Rule 13d-3 under the Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its Subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily 3 holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. "Subsidiary" shall mean a corporation or other entity, of which 50% or more of the voting securities or other equity interests is owned directly, or indirectly through one or more intermediaries, by the Company." IN WITNESS WHEREOF, the undersigned has hereby executed this First Amendment on behalf of the Company this 26th day of March, 1998. DANA CORPORATION /s/ Martin J. Strobel ---------------------- ATTEST: /s/ Mark A. Smith - ------------------ EX-10.G.3 5 EXHIBIT 10.G(3) 1 Exhibit 10-G(3) THIRD AMENDMENT TO THE DANA CORPORATION RETIREMENT PLAN --------------- Pursuant to resolutions of the Board of Directors adopted on July 21, 1997, the Dana Corporation Retirement Plan (the "Plan") is hereby amended, effective as of December 8, 1997, as set forth below. 1. Section 10.01 of the Plan is hereby amended to read in its entirety as follows: "10.01 CHANGE IN CONTROL For purposes of the Plan, a "Change in Control" shall mean the occurrence of the event set forth in any one of the following paragraphs: A. any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Corporation or its Affiliates) representing 20% or more of the combined voting power of the Corporation's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (1) of paragraph C. below; or B. the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on December 8, 1997, constitute the Board of Directors of the Corporation ("Board") and any new director whose appointment or election by the Board or nomination for election by the Corporation's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on December 8, 1997 or whose appointment, election or nomination for election was previously so approved or recommended. For purposes of the preceding sentence, any director whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the Corporation, shall not be counted; or 2 C. there is consummated a merger of the Corporation or any direct or indirect Subsidiary of the Corporation with any other corporation, or a statutory share exchange of the Corporation's voting securities, other than (1) a merger or statutory share exchange which would result in the voting securities of the Corporation outstanding immediately prior to such merger continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of the Corporation or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (2) a merger or statutory share exchange effected to implement a recapitalization of the Corporation (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Corporation or its Affiliates) representing 20% or more of the combined voting power of the Corporation's then outstanding securities; or D. the stockholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation or there is consummated an agreement for the sale or disposition by the Corporation of all or substantially all of the Corporation's assets, other than a sale or disposition by the Corporation of all or substantially all of the Corporation's assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Corporation in substantially the same proportions as their ownership of the Corporation immediately prior to such sale. For purposes of this "Change in Control" definition, the following terms shall have the following meanings: "Affiliate" shall mean a corporation or other entity which is not a Subsidiary and which directly, or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the Corporation. For the purpose of this definition, the terms "control", "controls" and "controlled" mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a corporation or other entity, whether through the ownership of voting securities, by contract, or otherwise. "Beneficial Owner" or "Beneficially Owned" shall have the meaning set forth in Rule 13d-3 under the Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. 3 "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14 (d) thereof, except that such term shall not include (i) the Corporation or any of its Subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation. "Subsidiary" shall mean a corporation or other entity, of which 50% or more of the voting securities or other equity interests is owned directly, or indirectly through one or more intermediaries, by the Corporation." IN WITNESS WHEREOF, the undersigned has hereby executed this Third Amendment on behalf of the Corporation this 30th day of March, 1998. DANA CORPORATION /s/ John S. Simpson -------------------- ATTEST: /s/ Mark A. Smith - ------------------ EX-10.H.1 6 EXHIBIT 10.H(1) 1 Exhibit 10-H(1) FIRST AMENDMENT TO THE DANA CORPORATION DIRECTORS RETIREMENT PLAN ------------------------- Pursuant to resolutions of the Board of Directors adopted on July 21, 1997, the Dana Corporation Directors Retirement Plan (the "Plan") is hereby amended, effective as of December 8, 1997, as set forth below. 1. The second paragraph of Paragraph 7(a) of the Plan is hereby amended to read in its entirety as follows: "For purposes of this paragraph 7, a "change in control of the Company" shall mean the occurrence of the event set forth in any one of the following paragraphs: (i) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 20% or more of the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (1) of paragraph (iii) below; or (ii) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on December 8, 1997, constitute the Board of Directors of the Company ("Board") and any new director whose appointment or election by the Board or nomination for election by the Company's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on December 8, 1997 or whose appointment, election or nomination for election was previously so approved or recommended. For purposes of the preceding sentence, any director whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the Company, shall not be counted; or (iii) there is consummated a merger of the Company or any direct or indirect Subsidiary of the Company with any other corporation, or a 2 statutory share exchange of the Company's voting securities, other than (1) a merger or statutory share exchange which would result in the voting securities of the Company outstanding immediately prior to such merger continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (2) a merger or statutory share exchange effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 20% or more of the combined voting power of the Company's then outstanding securities; or (iv) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale. For purposes of this "change in control of the Company" definition, the following terms shall have the following meanings: "Affiliate" shall mean a corporation or other entity which is not a Subsidiary and which directly, or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company. For the purpose of this definition, the terms "control", "controls" and "controlled" mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a corporation or other entity, whether through the ownership of voting securities, by contract, or otherwise. "Beneficial Owner" or "Beneficially Owned" shall have the meaning set forth in Rule 13d-3 under the Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its Subsidiaries, (ii) a 3 trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. "Subsidiary" shall mean a corporation or other entity, of which 50% or more of the voting securities or other equity interests is owned directly, or indirectly through one or more intermediaries, by the Company." IN WITNESS WHEREOF, the undersigned has hereby executed this First Amendment on behalf of the Company this 26th day of March, 1998. DANA CORPORATION /s/ Martin J. Strobel ---------------------- ATTEST: /s/ Mark A. Smith - ------------------ EX-10.I.1 7 EXHIBIT 10.I(1) 1 Exhibit 10-I(1) FIRST AMENDMENT TO THE DANA CORPORATION DIRECTOR DEFERRED FEE PLAN -------------------------- Pursuant to resolutions of the Board of Directors adopted on July 21, 1997, the Dana Corporation Director Deferred Fee Plan (the "Plan") is hereby amended, effective as of December 8, 1997, as set forth below. 1. Section 4 of the Plan is hereby amended by deleting the third and fourth sentences of the seventh paragraph thereof and replacing such sentences in their entirety with the following: "For purposes of this paragraph, a "Change in Control of the Corporation" shall mean the occurrence of the event set forth in any one of the following paragraphs: (i) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Corporation or its Affiliates) representing 20% or more of the combined voting power of the Corporation's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (1) of paragraph (iii) below; or (ii) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on December 8, 1997, constitute the Board of Directors of the Corporation ("Board") and any new director whose appointment or election by the Board or nomination for election by the Corporation's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on December 8, 1997 or whose appointment, election or nomination for election was previously so approved or recommended. For purposes of the preceding sentence, any director whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the Corporation, shall not be counted; or (iii) there is consummated a merger of the Corporation or any direct or indirect Subsidiary of the Corporation with any other corporation, or 2 a statutory share exchange of the Corporation's voting securities, other than (1) a merger or statutory share exchange which would result in the voting securities of the Corporation outstanding immediately prior to such merger continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of the Corporation or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (2) a merger or statutory share exchange effected to implement a recapitalization of the Corporation (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Corporation or its Affiliates) representing 20% or more of the combined voting power of the Corporation's then outstanding securities; or (iv) the stockholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation or there is consummated an agreement for the sale or disposition by the Corporation of all or substantially all of the Corporation's assets, other than a sale or disposition by the Corporation of all or substantially all of the Corporation's assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Corporation in substantially the same proportions as their ownership of the Corporation immediately prior to such sale. For purposes of this "Change in Control of the Corporation" definition, the following terms shall have the following meanings: "Affiliate" shall mean a corporation or other entity which is not a Subsidiary and which directly, or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the Corporation. For the purpose of this definition, the terms "control", "controls" and "controlled" mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a corporation or other entity, whether through the ownership of voting securities, by contract, or otherwise. "Beneficial Owner" or "Beneficially Owned" shall have the meaning set forth in Rule 13d-3 under the Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. 3 "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14 (d) thereof, except that such term shall not include (i) the Corporation or any of its Subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation. "Subsidiary" shall mean a corporation or other entity, of which 50% or more of the voting securities or other equity interests is owned directly, or indirectly through one or more intermediaries, by the Corporation." IN WITNESS WHEREOF, the undersigned has hereby executed this First Amendment on behalf of the Corporation this 26th day of March, 1998. DANA CORPORATION /s/ Martin J. Strobel ---------------------- ATTEST: /s/ Mark A. Smith - ------------------ EX-10.K.1 8 EXHIBIT 10.K(1) 1 Exhibit 10-K(1) FIRST AMENDMENT TO THE DANA CORPORATION SUPPLEMENTAL BENEFITS PLAN -------------------------- Pursuant to resolutions of the Board of Directors adopted on July 21, 1997, the Dana Corporation Supplemental Benefits Plan (the "Plan") is hereby amended, effective as of December 8, 1997, as set forth below. 1. Section 1.3 of the Plan is hereby amended to read in its entirety as follows: "1.3 Change in Control" means the occurrence of the event set forth in any one of the following paragraphs: (a) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 20% or more of the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (1) of paragraph (c) below; or (b) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on December 8, 1997, constitute the Board of Directors of the Company ("Board") and any new director whose appointment or election by the Board or nomination for election by the Company's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on December 8, 1997 or whose appointment, election or nomination for election was previously so approved or recommended. For purposes of the preceding sentence, any director whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the Company, shall not be counted; or (c) there is consummated a merger of the Company or any direct or indirect Subsidiary of the Company with any other corporation, or a statutory share exchange of the Company's voting securities, other than (1) a merger or statutory share exchange which would result in 2 the voting securities of the Company outstanding immediately prior to such merger continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (2) a merger or statutory share exchange effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 20% or more of the combined voting power of the Company's then outstanding securities; or (d) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale. For purposes of this "Change in Control" definition, the following terms shall have the following meanings: "Affiliate" shall mean a corporation or other entity which is not a Subsidiary and which directly, or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company. For the purpose of this definition, the terms "control", "controls" and "controlled" mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a corporation or other entity, whether through the ownership of voting securities, by contract, or otherwise. "Beneficial Owner" or "Beneficially Owned" shall have the meaning set forth in Rule 13d-3 under the Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its Subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily 3 holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. "Subsidiary" shall mean a corporation or other entity, of which 50% or more of the voting securities or other equity interests is owned directly, or indirectly through one or more intermediaries, by the Company." IN WITNESS WHEREOF, the undersigned has hereby executed this First Amendment on behalf of the Company this 26th day of March, 1998. DANA CORPORATION /s/ Martin J. Strobel ---------------------- ATTEST: /s/ Mark A. Smith - ------------------ EX-27.1 9 EXHIBIT 27.1
5 1,000 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 214,700 0 1,341,100 0 1,019,000 0 4,180,900 1,960,200 7,675,800 0 2,387,500 0 0 105,599 1,668,701 7,675,800 2,350,200 2,414,400 1,985,000 1,985,000 0 0 57,600 172,700 71,400 0 0 0 0 107,600 1.02 1.00
EX-27.2 10 EXHIBIT 27.2
5 1,000 9-MOS 6-MOS 3-MOS YEAR DEC-31-1997 DEC-31-1997 DEC-31-1997 DEC-31-1996 JAN-01-1997 JAN-01-1997 JAN-01-1997 JAN-01-1996 SEP-30-1997 JUN-30-1997 MAR-31-1997 DEC-31-1996 355,500 179,800 131,100 105,300 0 0 0 122,500 1,337,100 1,363,800 1,361,700 1,069,100 0 0 0 26,000 922,800 932,400 943,200 912,900 0 0 0 0 3,843,900 3,859,100 3,814,700 3,642,000 1,869,800 1,911,800 1,881,400 1,817,200 7,062,400 6,934,600 6,886,800 6,160,000 0 0 0 0 2,130,200 2,097,500 2,040,700 1,697,700 0 0 0 0 0 0 0 0 105,300 104,400 104,200 103,000 1,549,700 1,481,200 1,426,000 1,325,700 7,062,400 6,934,600 6,886,800 6,160,000 6,216,800 4,256,100 2,115,300 7,686,300 6,603,500 4,467,500 2,251,200 7,890,700 5,361,800 3,646,400 1,821,300 6,525,200 5,361,800 3,646,400 1,821,300 6,525,200 0 0 0 0 0 0 0 0 144,200 97,900 48,200 159,000 532,300 342,600 188,700 491,700 251,900 157,300 96,600 166,300 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 284,700 186,400 92,600 306,000 2.73 1.80 .90 3.01 2.70 1.78 .89 2.99
EX-27.3 11 EXHIBIT 27.3
5 1,000 9-MOS 6-MOS 3-MOS YEAR DEC-31-1996 DEC-31-1996 DEC-31-1996 DEC-31-1995 JAN-01-1996 JAN-01-1996 JAN-01-1996 JAN-01-1995 SEP-30-1996 JUN-30-1996 MAR-31-1996 DEC-31-1995 116,500 54,700 45,400 30,300 0 0 0 36,300 1,160,200 1,201,200 1,223,300 1,081,600 0 0 0 23,500 910,000 836,800 876,100 874,800 0 0 0 0 3,539,800 3,448,800 3,416,000 3,337,300 1,789,800 1,735,700 1,712,700 1,687,800 5,991,100 5,863,000 5,884,500 5,713,500 0 0 0 0 1,364,900 1,343,700 1,286,900 1,315,100 0 0 0 0 0 0 0 0 101,800 101,700 101,600 101,500 5,889,300 1,177,600 1,112,600 1,063,100 5,991,100 5,863,000 5,884,500 5,713,500 5,809,000 3,993,200 1,972,700 7,597,700 5,970,200 4,105,700 2,036,200 7,794,500 4,913,300 3,377,300 1,677,300 6,449,700 4,913,300 3,377,300 1,677,300 6,449,700 0 0 0 0 0 0 0 0 116,400 75,500 38,500 146,400 389,000 280,900 138,600 513,200 139,800 103,400 54,000 181,200 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 235,400 170,200 78,700 288,100 2.32 1.68 .78 2.84 2.30 1.66 .77 2.83
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