10-K

TABLE OF CONTENTS

INDEX
PART I
	ITEM 1 — BUSINESS
	ITEM 2 — PROPERTIES
	ITEM 3 — LEGAL PROCEEDINGS
	ITEM 4 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
PART II
	ITEM 5 — MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
	ITEM 6 — SELECTED FINANCIAL DATA
	ITEM 7 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 8 — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
	ITEM 9 — CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
PART III
	ITEM 10 — DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
	ITEM 11 — EXECUTIVE COMPENSATION
	ITEM 12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
	ITEM 13 — CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PART IV
	ITEM 14 — EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
SIGNATURES

[DANA LOGO]

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 1999 Commission file number 1-1063

DANA CORPORATION
—————————————————————————————————
(Exact name of registrant as specified in its charter)

Virginia	34-4361040
——————————————	——————————————
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
4500 Dorr Street, Toledo Ohio	43615
——————————————	——————————————
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (419)535-4500

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
——————————————	——————————————
Common Stock, $1 par value	New York and Pacific Stock Exchanges

Securities registered pursuant to Section 12(g) of the Act:

None
———————————————
(Title of Class)

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 by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.      

The aggregate market value of the voting stock held by non-affiliates of the registrant at February 25, 2000, was approximately $3,442,980,000.

The number of shares of registrant’s Common Stock, $1 Par Value, outstanding at February 25, 2000, was 156,988,206 shares.

DOCUMENTS INCORPORATED BY REFERENCE

	Document	Where Incorporated
1.	Proxy Statement for Annual Meeting of Shareholders to be held on April 5, 2000.	Part III
2.	Annual Report to Shareholders for year ended December 31, 1999.	Parts I, II, IV

The Exhibit Index is located at pages 19-20 of the sequential numbering system.

1

INDEX

DANA CORPORATION — FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1999

		10-K Pages
Cover			1
Index			2
Part I
	Item 1 - Business		3-9
	Item 2 - Properties		10
	Item 3 - Legal Proceedings		10
	Item 4 - Submission of Matters to a Vote of Security Holders		10
Part II
	Item 5 - Market for Registrant’s Common Equity and Related Stockholder Matters		11
	Item 6 - Selected Financial Data		11
	Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations		11
	Item 7A – Quantitative and Qualitative Disclosures About Market Risk		11
	Item 8 - Financial Statements and Supplementary Data		11
	Item 9 - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		11
Part III
	Item 10 - Directors and Executive Officers of the Registrant		12
	Item 11 - Executive Compensation		12
	Item 12 - Security Ownership of Certain Beneficial Owners and Management		12
	Item 13 - Certain Relationships and Related Transactions		12
Part IV
	Item 14 - Exhibits, Financial Statement Schedules and Reports on Form 8-K		13-20
Signatures			21

2

PART I

ITEM 1 — BUSINESS

      Dana Corporation was incorporated in 1905. Today, we are one of the world’s largest independent suppliers of components and systems to vehicular manufacturers and the related aftermarkets. We are also a leading provider of lease financing services in certain markets through our wholly-owned subsidiary, Dana Credit Corporation.

      Our operations are organized into the following seven market-focused Strategic Business Units (SBUs):

• Automotive Systems Group (ASG) — This group serves the world’s light truck, sport utility vehicles and passenger car markets with light duty axles and driveshafts, structural products (such as engine cradles and frames), transfer cases, original equipment brakes and integrated modules and systems. The group has 93 facilities and employs 26,000 people in 20 countries. Its three largest customers, DaimlerChrysler AG, Ford Motor Company (Ford) and General Motors Corporation (GM), helped it attain sales of $4.5 billion in 1999.

• Automotive Aftermarket Group (AAG) — The AAG sells hydraulic brake components and disc brakes for light vehicle applications, internal engine hard parts, chassis products and a complete line of filtration products for a variety of applications worldwide. In addition, it sells electrical, brake, power transmission, steering and suspension system components in the United Kingdom and continental Europe. The AAG has 142 facilities and 20,400 people in 27 countries. In 1999, its sales were $3.0 billion and its three largest customers were National Automotive Parts Association (NAPA), Carquest Corporation and Auto Parts Plus.

• Engine Systems Group (ESG) — This group serves the automotive, light to heavy truck, leisure and outdoor power equipment and industrial markets (including nearly every major engine manufacturer in the world and related aftermarkets) with sealing products, internal engine hard parts, electronic modules and sensors. The group has 98 facilities and 15,600 people in 17 countries. In 1999, its sales were $1.4 billion and its three largest customers were Ford, GM and DaimlerChrysler.

• Fluid Systems Group (FSG) — This group manufactures an extensive line of products focused on the pumping, routing and thermal management of fluid systems for a wide range of applications, from passenger cars to heavy trucks and off-highway vehicles. Its products include an extensive line of rubber hose and fluid products and management systems. FSG has 50 facilities and 10,300 people in 8 countries. Its 1999 sales were $1.2 billion to a customer base led by Ford, DaimlerChrysler and GM.

• Heavy Truck Group (HTG) – The HTG, a major global supplier to the medium and heavy truck markets, produces heavy axles and brakes, power take-off units and commercial vehicle systems. It also assembles modules and systems for heavy trucks. The group has 40 facilities in 9 countries. In 1999, this group recorded sales of $1.9 billion while employing 7,200 people. Its largest customers were Mack Trucks, Inc., PACCAR Inc and Navistar International Corp.

• Off-Highway Systems Group (OHSG) — This group produces axles and brakes, transaxles, power-shift transmissions, torque converters, electronic controls and hydraulic pumps, motors, valves, filters and electronic components. These products serve the construction, agriculture, mining, specialty chassis, outdoor power, material handling, forestry and leisure/utility equipment markets. OHSG has 16 facilities and 4,300 people in 5 countries. Its 1999 sales were nearly $800 million and CNH Global N.V. (Case and New Holland), Textron and AGCO were its three largest customers.

• Leasing Services — DCC and its subsidiaries provide leasing services to selected markets in the U.S., Canada, the United Kingdom and continental Europe. DCC’s key products are middle ticket and capital markets leasing and other finance products. It also provides asset and real property management services. DCC has 8 facilities in two countries and employs approximately 300 people.

This SBU alignment reflects the elimination of the Industrial Systems Group (ISG) at the end of 1999. Portions of the ISG and of the ESG were combined to form the FSG. You can find more information in “Note 13. Business Segments” on pages 33 – 35 of our 1999 Annual Report.

3

RECENT PAST DEVELOPMENTS

      In 1997 and 1998, we completed the five largest acquisitions in our history, adding operations that generated $5.3 billion in annualized sales. The largest transaction was our July 1998 merger with Echlin Inc., a worldwide supplier of automotive products. This acquisition was accounted for as a pooling of interests and all of our prior period financial statements were restated accordingly. Our other major acquisitions were:

• The Clark-Hurth Components assets of Ingersoll-Rand Company in February 1997

• The Sealed Power Division of SPX Corporation in February 1997

• The heavy axle and brake business of Eaton Corporation in January 1998

• The Glacier Vandervell Bearings Group and the AE Clevite North American aftermarket engine hard parts business from Federal-Mogul Corporation in December 1998

There is more information about these transactions in “Note 18. Acquisitions” on page 37 of our 1999 Annual Report.

      We also completed several restructuring and rationalization plans during this period and divested a number of operations. The divestitures included our European aftermarket business, our worldwide vehicular clutch business, DCC’s Technology Leasing Group and several other non-core businesses. See “Note 19. Divestitures” on page 38 and “Note 20. Restructuring of Operations” on pages 38 – 39 of our 1999 Annual Report for more information about these transactions.

DEVELOPMENTS AND STRATEGY IN 1999

      Our focus in 1999 was on integrating our newly acquired businesses and rationalizing our global operations. This included implementing the restructuring plans announced at the end of 1998, continuing various integration efforts, especially those related to the Echlin merger, and finalizing additional restructuring plans announced in 1999, the largest component of which is downsizing our Reading, Pa. structures facility. The operations and employees affected by these plans are described in “Note 20. Restructuring of Operations” on pages 38 – 39 of our 1999 Annual Report.

      We announced a new strategy – our Five-Point Plan – in April 1999, which includes the following tactics:

• Grow while focusing on returns and maintaining financial discipline;

• Seek strategic, bolt-on acquisitions at reasonable valuations;

• Divest non-strategic and non-performing operations;

• Repurchase stock as we generate cash; and

• Complete integration efforts and realize synergy savings.

      Consistent with the objectives of the plan, we improved our gross margin from 16.2% in 1998 to 16.7% in 1999. Return on sales also improved from 4.7% to 5.1% when nonrecurring items are excluded.

      One acquisition closed in 1999 and three more have closed in the first two months of 2000. These transactions are all consistent with our objective of making strategic acquisitions. The July 1999 acquisition of Innovative Manufacturing, Inc. added a machining operation that supplies machined castings to our Outdoor Power Equipment Components Division. We also increased our ownership in four subsidiaries, acquiring the shares previously held by minority interests. Thus far in 2000 we have announced definitive agreements to acquire the Invensys plc axle manufacturing operations in Australia and South Africa and a majority interest in the Tribometal a.s. engine bearings and metal-polymer bushings operations in Slovakia. We also completed the acquisition of the cardan-jointed propeller shaft business of GKN plc. and signed a related agreement to form a joint venture with GKN to develop advanced driveline systems and modular assemblies for all-wheel and four-wheel drive passenger cars, light trucks and sport utility vehicles. See “Note 18. Acquisitions” on page 37 of our 1999 Annual Report for more information on our recent acquisitions.

      During 1999 we announced plans to divest operations with annual sales approximating $850 million. The sale of Coldform Special Products, a manufacturer of starter and suspension components and steering hubs, was completed in October and the sale of Sierra International Inc., a manufacturer and distributor of marine and power equipment engine, drive and hose products, was completed in November. During the first two months of 2000 we completed the sales of our Gresen Hydraulics operations, our constant velocity joint driveshaft business and most of our Warner Electric businesses. Additional information on divestitures completed in 1997 through 1999 can be found in “Note 19. Divestitures” on page 38 of our 1999 Annual Report.

      Under a program authorized by our Board in April 1999, we repurchased nearly three million shares of our common stock in 1999 at a cost of $100 million. We have accelerated our activity in 2000 using the proceeds from the divestitures described above and expect to complete the initial $350 million program by the end of the first quarter of 2000. At its February 2000 meeting, the Board authorized additional repurchases of up to $250 million through the end of 2000.

      We have realized savings from the integration of the Echlin and Glacier Vandervell operations in 1999 and have targeted further savings at these and other operations in the future. Integration efforts will also be initiated at the newly acquired business described previously.

GEOGRAPHICAL AREAS

      We maintain administrative organizations in four regions – North America, Europe, South America and Asia Pacific – to facilitate financial and statutory reporting and tax compliance on a worldwide basis and to support the seven SBUs.

      Our operations are located in the following countries:

North America	Europe		South America	Asia Pacific
Canada	Austria	Netherlands	Argentina	Australia	Singapore
Mexico	Belgium	Russia	Brazil	China	South Korea
United States	France	Poland	Colombia	Japan	Taiwan
	Germany	Spain	South Africa	Malaysia	Thailand
	India	Sweden	Uruguay	New Zealand
	Ireland	Switzerland	Venezuela
	Italy	United Kingdom

      Our non-U.S. subsidiaries and affiliates manufacture and sell a number of products similar to those produced in the U.S. In addition to normal business risks, operations outside the U.S. are subject to others such as changing political, economic and social environments, changing governmental laws and regulations, currency revaluations and market fluctuations.

      Consolidated non-U.S. sales were $3.7 billion, or 28% of our 1999 sales. Including U.S. exports of $939 million, non-U.S. sales accounted for 36% of 1999 consolidated sales. Non-U.S. net income was $102 million, or 20% of consolidated 1999 net income. In addition, there was $28 million of equity in earnings of non-U.S. affiliates in 1999.

      You can find more information about regional operating results in “Note 13. Business Segments” on pages 33 - - 35 of our 1999 Annual Report.

4

CUSTOMER DEPENDENCE

      We have thousands of customers around the world and have developed long-standing business relationships with many of them. Our attention to quality, delivery and service has been recognized by numerous customers who have awarded us with supplier quality awards. Ford and DaimlerChrysler were the only individual customers accounting for more than 10% of our consolidated sales in 1999. We have been supplying products to these companies and their subsidiaries for many years. Sales to Ford, as a percentage of total sales, were 15%, 15% and 16% in 1997, 1998 and 1999, and sales to DaimlerChrysler were 11%, 13% and 14%. Loss of all or a substantial portion of our sales to Ford, DaimlerChrysler or other large volume customers would have a significant adverse effect on our financial results until such lost sales volume could be replaced. There would be no assurance, in such event, that the lost volume would be replaced.

PRODUCTS

      As a result of our internal development and acquisition activities in the past several years, we now have nine core products and services. During the past three years, our sales by core product were as follows:

		Percentage of Consolidated Sales
		1997			1998			1999
Type of Products
	Axle		25	%		32	%		31	%
	Engine		10			10			12
	Brake		10			10			9
	Driveshaft		9			9			9
	Fluid Systems		7			7			7
	Structural		7			6			6
	Sealing		5			5			5
	Filtration		4			4			4
			77			83			83
	Other Products		23			17			17
			100	%		100	%		100	%

      We do not consider our leasing service revenue to be sales and none of our other products are core or account for 10% of sales.

MATERIAL SOURCE AND SUPPLY

      Most raw materials (such as steel) and semi-processed or finished items (such as forgings and castings) are purchased from long-term suppliers located within the geographic regions of our operating units. Generally, these materials are available from numerous qualified sources in quantities sufficient for our needs. Temporary shortages of a particular material or part occasionally occur, but we do not consider the overall availability of materials to be a significant risk factor for our operations.

5

SEASONALITY

      Our businesses are not seasonal. However, sales to our manufacturing customers are closely related to the production schedules of those manufacturers.

BACKLOG

      Generally, our products are not on a backlog status. They are produced from readily available materials and have a relatively short manufacturing cycle. Each operating unit maintains its own inventories and production schedules and many of our products are available from more than one facility. We believe that our production capacity is adequate to handle current requirements and we regularly review anticipated growth in our product lines to determine when additional capacity may be needed.

COMPETITION

      We compete worldwide with a number of other manufacturers and distributors which produce and sell similar products. These competitors include vertically-integrated units of our major original equipment (OE) customers and a number of independent U.S. and non-U.S. suppliers. Our traditional U.S. OE customers, facing substantial foreign competition, have expanded their worldwide sourcing of components to better compete with lower cost imports. In addition, these customers have been shifting research and development, design and validation responsibilities to their Tier 1 suppliers, focusing on stronger relationships with fewer suppliers. We have established operations throughout the world to enable us to meet these competitive challenges and to be a strong global supplier of our core products.

      In the area of leasing services, we compete in selected markets with various international, national and regional leasing and finance organizations.

6

PATENTS AND TRADEMARKS

      Our proprietary drivetrain, engine parts, chassis, structural components, fluid power systems and industrial power transmission product lines have strong identities in the markets which we serve. Throughout these product lines, we manufacture and sell our products under a number of patents and licenses which have been obtained over a period of years and expire at various times. We consider each of them to be of value and aggressively protect our rights throughout the world against infringement. Because we are involved with many product lines, the loss or expiration of any particular patent or license would not materially affect our sales and profits.

      We own numerous trademarks which are registered in many countries, enabling us to market our products worldwide. Our Spicer®, Parish®, Perfect Circle®, Victor Reinz®, Wix®, Weatherhead®, Boston®, Raybestos®, Aimco®, Clevite®, Glacier® and Vandervell® trademarks, among others, are widely recognized in their respective industries.

RESEARCH AND DEVELOPMENT

      Our objective is to be the leader in offering superior quality, technologically advanced products and systems to our customers at competitive prices. To enhance quality and reduce costs, we use statistical process control, cellular manufacturing, flexible regional production and assembly, global sourcing and extensive employee training.

      In addition, we engage in ongoing engineering, research and development activities to improve the reliability, performance and cost-effectiveness of existing products and to design and develop new products for existing and new applications. Our spending on engineering, research and development and quality control programs was $248 million in 1997, $275 million in 1998 and $290 million in 1999.

EMPLOYMENT

      Our worldwide employment (including consolidated subsidiaries) was approximately 84,200 at December 31, 1999.

ENVIRONMENTAL COMPLIANCE

      We make capital expenditures in the normal course of business as necessary to ensure that our facilities are in compliance with applicable environmental laws and regulations. The cost of environmental compliance was not a material part of our capital expenditures and did not have a material adverse effect on our earnings or competitive position in 1999. We do not anticipate that future environmental compliance costs will be material. You can find more information in “Environmental Compliance and Remediation” under “Note 1. Summary of Significant Accounting Policies” on page 27 of our 1999 Annual Report.

7

EXECUTIVE OFFICERS

      This table contains information about our current executive officers. Unless otherwise indicated, all positions are with Dana. The first six officers listed are the members of Dana’s Policy Committee.

Name and Age	Present Position(s)	Other Positions During Past 5 Years
S. J. Morcott (61)	Chairman of the Board of Directors since 1990	Chief Executive Officer, 1989-99; Chief Operating Officer, 1986-97; President, 1986-95
J. M. Magliochetti (57)	Chief Executive Officer since February 1999; Chief Operating Officer since 1997; Director and President since 1996	President - Dana North American Operations, 1992-95
R. C. Richter (48)	Chief Financial Officer since September 1999; Vice President since 1997	Vice President - Finance and Administration 1998-99; Vice President - Administration, 1997-98; General Manager - Perfect Circle Sealed Power Europe, 1997; Vice President and General Manager - Perfect Circle Europe, 1994-97
W. J. Carroll (55)	President - Automotive Systems Group since 1997	President - Diversified Products & Distribution, 1996-97; President - Dana Distribution Service Group, 1995-97; President - DTF Trucking, 1985-97; Chairman of the Board of Dana Canada Inc. (a wholly-owned Dana subsidiary in Canada), 1995-97; President of Dana Canada Inc., 1993-97
M. A. Franklin, III (52)	President - Dana International since 1997	President - Dana Europe, 1993-97
E. J. Shultz (55)	Chairman and President - Dana Credit Corporation since 1995
R. L. Clayton (39)	President - Heavy Truck Group since 1998	Vice President - Heavy Truck Components Group, 1997-98; Vice President and General Manager - Spicer Heavy Axle & Brake Division, 1996-97; General Manager - Spicer Clutch Division, 1995-96
B. N. Cole (57)	President - Off-Highway Systems Group since 1997	President - Structural Components Group, 1995-97
C. F. Heine (47)	President - Engine Components Group since 1998	President - Dana Asia Pacific, 1996-98; Vice President - Asia Pacific Operations, 1995
C. W. Hinde (61)	Vice President and Chief Accounting Officer since 1992; Assistant Treasurer since 1986
J. M. Laisure (48)	Group Vice President - Fluid Systems Group since December 1999	Vice President, Modules and Systems Group, 1994-99

8

Name and Age	Present Position(s)	Other Positions During Past 5 Years
L. W. McCurdy (64)	President - Automotive Aftermarket Group since 1998	Chairman, President and Chief Executive Officer of Echlin, Inc., 1997-98; Executive Vice President – Automotive, Cooper Industries, 1994-97
J. I. Melgar (52)	Vice President - Automotive Axle Products since February 2000	Vice President, Driveshaft Products, 1997-2000; Executive President, Metalcon (a Dana affiliate in Venezuela), 1993-97
W. L. Myers (59)	President - Automotive Axle Products since 1997	President – Spicer Driveshaft Group, 1995-97
M. J. Strobel (59)	Vice President since 1976; General Counsel since 1970; Secretary since 1982
J. H. Woodward, Jr. (47)	Director of E-Business since February 2000; Vice President since 1996	Corporate Controller, 1996-2000; Controller - - Dana North American Operations, 1994-96

      Those officers who are designated in Dana’s By-Laws are elected by the Board annually at its first meeting after the annual meeting of shareholders. The others are appointed by the Board from time to time. None of the officers has a family relationship with any other Dana officer or director or an arrangement or understanding with any Dana officer or other person pursuant to which he was elected as an officer.

9

ITEM 2 — PROPERTIES

      As shown in the following table, we have nearly 500 manufacturing, distribution and service branch or office facilities worldwide. We own the majority of our manufacturing and larger distribution facilities. We lease a few manufacturing facilities and most of our smaller distribution outlets and financial service branches and offices.

Dana Facilities by Geographic Region

Type of		North				South		Asia/
Facility		America		Europe		America		Pacific		Total
Manufacturing			187		79		38		7		311
Distribution			59		19		13		19		110
Service Branches, Offices			55		7		5		8		75
	Total		301		105		56		34		496

ITEM 3 — LEGAL PROCEEDINGS

      We are a party to various pending judicial and administrative proceedings arising in the ordinary course of business. After reviewing the proceedings that are currently pending (including the probable outcomes, reasonably anticipated costs and expenses, availability and limits of our insurance coverage, and our established reserves for uninsured liabilities), we do not believe that any liabilities that may result from these proceedings are reasonably likely to have a material adverse effect on our liquidity, financial condition or results of operations.

      Under the rules of the Securities and Exchange Commission, we are required to report certain environmental proceedings involving governmental agencies that are not deemed to be routine proceedings incidental to our business. We are not currently a party to any such proceedings.

ITEM 4 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      - None -

10

PART II

ITEM 5 — MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      Our common stock is listed on the New York and Pacific Stock Exchanges. On February 25, 2000, there were 34,800 shareholders of record.

      Dividends have been paid on our common stock every year since 1936. Quarterly dividends have been paid since 1942.

      You can find more information in “Shareholders’ Investment” on page 50 of our 1999 Annual Report.

ITEM 6 — SELECTED FINANCIAL DATA

      You can find “Financial Highlights” under “Eleven Year History” on page 51 of our 1999 Annual Report.

ITEM 7 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      You can find “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 40 — 46 of our 1999 Annual Report.

ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      You can find information in “Financial Instruments,” “Derivative Financial Instruments” and “Marketable Securities” under “Note 1. Summary of Significant Accounting Policies” on page 27, in “Note 7. Interest Rate Agreements” on page 29 and in “Note 16. Fair Value of Financial Instruments” on page 37 of our 1999 Annual Report.

ITEM 8 — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      You can find our financial statements and the report by PricewaterhouseCoopers LLP dated January 25, 2000, on pages 21 — 39 and “Unaudited Quarterly Financial Information” under “Shareholders’ Investment” on page 50 of our 1999 Annual Report.

ITEM 9 — CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

      - None -

11

PART III

ITEM 10 — DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      You can find general information about our directors and executive officers in Part I, Item 1 of this Form 10-K and under “Election of Directors” on pages 1 – 2 in our 2000 Proxy Statement.

      You can find information about the filing of reports by our directors, officers and 10% stockholders under Section 16(a) of the Securities Exchange Act of 1934 under “Section 16(a) Beneficial Ownership Reporting Compliance” on pages 16 – 17 in our 2000 Proxy Statement.

ITEM 11 — EXECUTIVE COMPENSATION

      You can find information about executive compensation in the following sections of our 2000 Proxy Statement: “Compensation” on pages 3 – 4 under “The Board and its Committees,” “Executive Compensation” on pages 6 – 13 and “Compensation Committee Report on Executive Compensation” on pages 13 – 16.

      You can find information about our stock performance under “Comparison of Five-Year Cumulative Total Return” on page 16 of our 2000 Proxy Statement.

ITEM 12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      You can find information about the stock ownership of our directors, officers and 5% stockholders under “Stock Ownership” on pages 4 – 5 of our 2000 Proxy Statement.

ITEM 13 — CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      You can find information about transactions between Dana and our directors, officers and 5% stockholders under “Transactions with Management” on page 21 of our 2000 Proxy Statement.

12

PART IV

ITEM 14 — EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

			Page in
			Annual Report
(a)	The following documents are filed as part of this report:
	(1)	Financial Statements:
		Report of Independent Accountants		21
		Statement of Income for each of the three years in the period ended December 31, 1999		22
		Balance Sheet at December 31, 1998 and 1999		23
		Statement of Cash Flows for each of the three years in the period ended December 31, 1999		24
		Statement of Shareholders’ Equity for each of the three years in the period ended December 31, 1999		25
		Notes to Financial Statements		26 — 39
		Unaudited Quarterly Financial Information		50
			10-K Pages
	(2)	Financial Statement Schedule:
		Report of Independent Accountants on Financial Statement Schedule for the three years ended December 31, 1999		14
		Valuation and Qualifying Accounts and Reserves (Schedule II)		15 — 17
		Supplementary Information — Commitments and Contingencies		18
		All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
	(3)	Exhibits listed in the “Exhibit Index”		19 — 20
		Exhibits Nos. 10-A through 10-L are exhibits required to be filed pursuant to Item 14(c) of this report.
(b)	Reports on Form 8-K
		None

13

Report of Independent Accountants on
Financial Statement Schedule

To the Board of Directors
of Dana Corporation

Our audits of the consolidated financial statements referred to in our report dated January 25, 2000 appearing in the 1999 Annual Report to Shareholders of Dana Corporation (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedule listed in Item 14(a)(2) of this Form 10-K. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

PricewaterhouseCoopers LLP

Toledo, Ohio
January 25, 2000

14

DANA CORPORATION AND CONSOLIDATED SUBSIDIARIES

SCHEDULE II(a) — VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE

								Adjustment
					Trade accounts			arising
					receivable			from change
	Balance at		Additions		“written off”			in currency			Balance at
	beginning		charged		net of			exchange rates			end of
	of period		to income		recoveries			and other items			period
Year ended-
December 31, 1997	$	31,987,000	$	13,880,000	$	(12,479,000	)	$	554,000		$	33,942,000
December 31, 1998	$	33,942,000	$	20,694,000	$	(16,698,000	)	$	2,516,000		$	40,454,000
December 31, 1999	$	40,454,000	$	15,521,000	$	(11,407,000	)	$	(752,000	)	$	43,816,000

15

DANA CORPORATION AND CONSOLIDATED SUBSIDIARIES

SCHEDULE II(b) — VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

ALLOWANCE FOR CREDIT LOSSES — LEASE FINANCING

								Adjustment
								arising
					Amounts			from change
	Balance at		Additions		“written off”			in currency			Balance at
	beginning		charged		net of			exchange rates			end of
	of period		to income		recoveries			and other items (1)			period
Year ended-
December 31, 1997	$	50,825,000	$	12,141,000	$	(9,851,000	)	$	(462,000	)	$	52,653,000
December 31, 1998	$	52,653,000	$	20,117,000	$	(10,561,000	)	$	(29,537,000	)	$	32,672,000
December 31, 1999	$	32,672,000	$	8,172,000	$	(6,000	)		—		$	40,838,000

(1) Other items in 1998 include $(28,889,000) from the sale of the Technology Leasing Group portfolio.

16

DANA CORPORATION AND CONSOLIDATED SUBSIDIARIES

SCHEDULE II(c) — VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

VALUATION ALLOWANCE FOR DEFERRED TAX ASSETS

								Adjustment
								arising
					Amounts			from change
	Balance at		Additions		“written off”			in currency		Balance at
	beginning		charged		net of			exchange rates		end of
	of period		to income		recoveries			and other items		period
Year ended-
December 31, 1997	$	4,800,000	$	30,400,000	$	(4,800,000	)		—	$	30,400,000
December 31, 1998	$	30,400,000	$	28,800,000		—			—	$	59,200,000
December 31, 1999	$	59,200,000	$	24,000,000		—			—	$	83,200,000

17

DANA CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTARY INFORMATION TO FINANCIAL STATEMENTS

COMMITMENTS AND CONTINGENCIES

      We are a party to various legal proceedings (judicial and administrative) arising in the normal course of business, including proceedings which involve environmental and product liability claims. You can find additional information in “Note 17. Commitments and Contingencies” on page 37 of our 1999 Annual Report.

      With respect to environmental claims, we are involved in investigative and/or remedial efforts at a number of locations, including “on-site” activities at currently or formerly owned facilities and “off-site” activities at “Superfund” sites where we have been named as a potentially responsible party. You can find more information in “Environmental Compliance and Remediation” under “Note 1. Summary of Significant Accounting Policies” on page 27 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 40 – 46 of our 1999 Annual Report.

      With respect to product liability claims, we are named in proceedings involving alleged defects in our products. Such proceedings currently include a large number of claims (most of which are for relatively small damage amounts) based on alleged asbestos-related personal injuries. At December 31, 1999, approximately 82,000 such claims were outstanding, of which approximately 30,000 were subject to pending settlement agreements. We have agreements with our insurance carriers providing for the payment of substantially all of the indemnity costs and the legal and administrative expenses for these claims. We are also a party to a small number of asbestos-related property damage proceedings. Our insurance carriers are paying the major portion of the defense costs in connection with these cases and we have incurred minimal indemnity costs to date.

18

EXHIBIT INDEX

No.	Description	Method of Filing
3-A	Restated Articles of Incorporation	Filed by reference to Exhibit 3-A to our Form 10-Q for the quarter ended June 30, 1998
3-B	By-Laws, effective April 5, 2000	Filed with this Report
4-A	Specimen Single Denomination Stock Certificate	Filed by reference to Exhibit 4-B to our Registration Statement No. 333-18403 filed December 20, 1996
4-B	Rights Agreement, dated as of April 25, 1996, between Dana and ChemicalMellon Shareholder Services, L.L.C., Rights Agent	Filed by reference to Exhibit 1 to our Form 8-A filed May 1, 1996
4-C	Indenture for Senior Securities between Dana and Citibank, N.A., Trustee, dated as of December 15, 1997	Filed by reference to Exhibit 4-B of our Registration Statement No. 333-42239 filed December 15, 1997
4-D	First Supplemental Indenture between Dana, as Issuer, and Citibank, N.A., Trustee, dated as of March 11, 1998	Filed by reference to Exhibit 4-B-1 to our Report on Form 8-K dated March 12, 1998
4-E	Form of 6.5% Notes due March 15, 2008 and 7.00% Notes due March 15, 2028	Filed by reference to Exhibit 4-C-1 to our Report on Form 8-K dated March 12, 1998
4-F	Second Supplemental Indenture between Dana, as Issuer, and Citibank, N.A., Trustee, dated as of February 26, 1999	Filed by reference to Exhibit 4.B.1 to our Form 8-K dated March 2, 1999
4-G	Form of 6.25% Notes due 2004, 6.5% Notes due 2009, and 7.0% Notes due 2029	Filed by reference to Exhibit 4.C.1 to our Form 8-K dated March 2, 1999
10-A	Additional Compensation Plan	Filed by reference to Exhibit A to our Proxy Statement dated March 3, 2000
10-B	1997 Stock Option Plan	Filed by reference to Exhibit A to our Proxy Statement dated March 5, 1999
10-C	Excess Benefits Plan	Filed by reference to Exhibit 10-F to our Form 10-K for year ended December 31, 1998
10-D	Director Deferred Fee Plan	Filed by reference to Exhibit B to our Proxy Statement dated February 28, 1997
10-D(1)	First Amendment to Director Deferred Fee Plan	Filed by reference to Exhibit 10-I(1) to our Form 10-Q for the quarter ended March 31, 1998
10-D(2)	Second Amendment to Director Deferred Fee Plan	Filed by reference to Exhibit 10-I(2) to our Form 10-K for year ended December 31, 1998
10-E	Employment Agreement between Dana and S.J. Morcott. There are substantially similar agreements with J.M. Magliochetti and M.J. Strobel	Filed with this Report

19

No.	Description	Method of Filing
10-F	Change of Control Agreement between Dana and W.J. Carroll. There are substantially similar agreements with B.N. Cole, M.A. Franklin, W.L. Myers, R.C. Richter, and E.J. Shultz	Filed by reference to Exhibit 10-J(4) to our Form 10-K for the year ended December 31, 1997
10-G	Collateral Assignment Split-Dollar Insurance Agreement for Universal Life Policies between Dana and S.J. Morcott. There are substantially similar agreements with J.M. Magliochetti and M.J. Strobel	Filed by reference to Exhibit 10-J(13) to our Form 10-K for the year ended December 31, 1992
10-H	Employment Agreement between Dana and L.W. McCurdy	Filed by reference to Exhibit 10-J(7) to our Form 10-Q for the quarter ended September 30, 1999
10-I	Supplemental Benefits Plan	Filed by reference to Exhibit 10-K to our Form 10-K for the year ended December 31, 1998
10-J	1999 Restricted Stock Plan	Filed by reference to Exhibit B to our Proxy Statement dated March 5, 1999
10-K	1998 Directors’ Stock Option Plan	Filed by reference to Exhibit A to our Proxy Statement dated February 27, 1998
10-L	Supplementary Bonus Plan	Filed by reference to Exhibit 10-N to our Form 10-Q for the quarter ended June 30, 1995
13	Those sections of our 1999 Annual Report that are referred to in this Form 10-K	Filed with this Report
21	List of Subsidiaries of Dana	Filed with this Report
23	Consent of PricewaterhouseCoopers LLP	Filed with this Report
24	Power of Attorney	Filed with this Report
27	Financial Data Schedule	Filed with this Report

Note: Exhibits Nos. 10-A through 10-L are exhibits required to be filed pursuant to Item 14(c) of Form 10-K.

20

SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DANA CORPORATION
———————————————————
(Registrant)

Date: March 10, 2000 By: /S/ Martin J. Strobel
———————————————————
Martin J. Strobel, Vice President

      Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

Date: March 10, 2000		* /S/ Southwood J. Morcott ———————————————————
		Southwood J. Morcott, Chairman of the Board
Date: March 10, 2000		/S/ Joseph M. Magliochetti ———————————————————
		Joseph M. Magliochetti, Director and Chief Executive Officer
Date: March 10, 2000		/S/ Robert C. Richter ———————————————————
		Robert C. Richter, Chief Financial Officer
Date: March 10, 2000		/S/ Charles W. Hinde ———————————————————
		Charles W. Hinde, Chief Accounting Officer
Date: March 10, 2000		* /S/ B.F. Bailar ———————————————————
		B.F. Bailar, Director
Date: March 10, 2000		* /S/ A.C. Baillie ———————————————————
		A.C. Baillie, Director
Date: March 10, 2000		* /S/ E.M. Carpenter ———————————————————
		E.M. Carpenter, Director
Date: March 10, 2000		* /S/ E. Clark ———————————————————
		E. Clark, Director
Date: March 10, 2000		* /S/ G.H. Hiner ———————————————————
		G.H. Hiner, Director
Date: March 10, 2000		* /S/ M.R. Marks ———————————————————
		M. R. Marks, Director
Date: March 10, 2000		* /S/ R.B. Priory ———————————————————
		R. B. Priory, Director
	*By:	/S/ Martin J. Strobel ———————————————————
		Martin J. Strobel, Attorney-in-Fact

21 EX-3.B 2 EXHIBIT 3-B 1 EXHIBIT 3-B BY-LAWS OF DANA CORPORATION ARTICLE I. EFFECTIVE DATE SECTION 1.1. EFFECTIVE DATE. These By-Laws are adopted by the Board of Directors (the "Board") of Dana Corporation ("Dana") effective April 5, 2000. ARTICLE II. OFFICES SECTION 2.1. REGISTERED OFFICE. Dana's registered office shall be located at Riverfront Plaza, East Tower, 951 East Byrd Street, Richmond, Virginia 23219. SECTION 2.2. BUSINESS OFFICE. Dana's principal business office shall be located at 4500 Dorr Street, Toledo, Ohio 43615, with a mailing address of P.O. Box 1000, Toledo, Ohio 43697. ARTICLE III. SHAREHOLDER MEETINGS SECTION 3.1. ANNUAL MEETINGS. Unless the Board fixes a different date, the annual meeting of shareholders of Dana to elect directors and to transact other business (if any) shall be held on the first Wednesday of April each year, at the time and place designated by the Board in the notice of meeting. The Board may postpone or cancel any annual meeting at any time prior to the designated meeting date and time by means of (i) a press release reported by the Dow Jones News, Associated Press or a comparable national news service, or (ii) a document filed with the Securities and Exchange Commission ("SEC") (in either case, a "Public Announcement"). SECTION 3.2. SPECIAL MEETINGS. Special meetings of shareholders may be called by the Board, the Chairman of the Board (the "Chairman"), or the President, to elect directors and/or transact such other business as is described in the notice of meeting, at the date, time and place designated therein. Notice of special meetings shall be given to shareholders in accordance with the Virginia Stock Corporation Act ("Virginia Law"). The Board may postpone or cancel any special meeting at any time prior to the designated meeting date and time by means of a Public Announcement. Only such business as is brought before the special meeting pursuant to Dana's notice of meeting shall be conducted at the meeting. SECTION 3.3. SHAREHOLDER NOMINATIONS AND PROPOSALS. In submitting nominations for persons to be elected as directors of Dana or proposals for other business to be presented at any shareholder meeting, shareholders shall comply with the following procedures and such other requirements as are imposed by Virginia Law and the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder (the "Exchange Act"): a. DELIVERY. Shareholder notices shall be addressed and delivered to the Secretary at Dana's principal business office. 1 2 b. TIMELINESS. i. ANNUAL MEETINGS. Shareholder proposals to be included in Dana's proxy materials for any annual meeting shall be submitted in accordance with the timeliness requirements of the Exchange Act. Other shareholder proposals and shareholder nominations for directors to be voted on at any annual meeting shall be delivered before the close of business on the 90th day before the anniversary date of the prior year's annual meeting, or, if the meeting is called for a date not within 30 days before or after such anniversary date, before the close of business on the 10th day following the date on which the notice of the meeting was mailed or the date on which Dana first made a Public Announcement of the meeting date, whichever occurs first. ii. SPECIAL MEETINGS. Shareholder proposals related to the business to be conducted at any special meeting and shareholder nominations for directors to be voted on at any special meeting at which directors are to be elected shall be delivered before the close of business on the 3rd day following the date on which the notice of the meeting was mailed or the date on which Dana first made a Public Announcement of the meeting date, whichever occurs first. iii. ADJOURNMENTS AND POSTPONEMENTS. A Public Announcement of an adjournment or postponement of an annual or special meeting shall not commence a new time period for the giving of shareholder notices. c. CONTENTS. Shareholder notices shall contain the names and addresses (as they appear on the records of Dana's transfer agent) of the shareholders and all beneficial owners on whose behalf the nomination or proposal is made, the class and number of Dana shares which are owned of record and beneficially by the shareholders and the beneficial owners, and a representation that the shareholders intend to appear in person or by proxy at the meeting to bring the proposal or nomination before the meeting. In addition, (i) shareholder nominations for directors shall contain the information about the director-nominees and about the nominating shareholders which is required to be disclosed in solicitations of proxies for the election of directors in an election contest or otherwise under the Exchange Act, and (ii) shareholder proposals shall contain a brief description of the proposed business to be presented, the reason for presenting such business at the meeting, and any material interests which the shareholders and the beneficial owners have in such business. SECTION 3.4. CONDUCT OF MEETINGS. SECTION 3.4.1. CHAIRMAN AND PROCEDURES. Shareholder meetings shall be chaired by the Chairman of the Board or by such person as he or she may designate. The chairman of the meeting shall determine and announce the rules of procedure for the meeting and shall rule on all procedural questions during the meeting. 2 3 SECTION 3.4.2. PROPER NOMINATIONS AND BUSINESS. Nominations for directors and other proposals shall be deemed properly brought before a shareholder meeting only when brought in accordance with Virginia Law, the Exchange Act, and this Article III. The chairman of the meeting shall determine whether each nomination or proposal has been properly brought and shall declare that any improperly brought nomination or proposal be disregarded. SECTION 3.4.3. ADJOURNMENTS. The chairman of any shareholder meeting, or the holders of a majority of the shares represented at the meeting (whether or not constituting a quorum), may adjourn the meeting from time to time. No further notice need be given if the adjournment is for a period not exceeding 120 days and the new date, time and place are announced at the adjourned meeting. Otherwise, notice shall be given in accordance with Virginia Law. ARTICLE IV. BOARD OF DIRECTORS SECTION 4.1. AUTHORITY. The business and affairs of Dana shall be managed under the direction of the Board, and all of Dana's corporate powers shall be exercised by or pursuant to the Board's authority. SECTION 4.2. NUMBER AND TERM OF DIRECTORS. The number of directors of Dana shall be eight. Each director shall hold office until the next annual meeting of shareholders and the election and qualification of his or her successor, or until his or her earlier retirement, resignation, or removal. SECTION 4.3. MEETINGS AND NOTICE. SECTION 4.3.1. REGULAR MEETINGS. The Board shall hold regular meetings at such dates, times and places as it may determine from time to time, and no notice thereof need be given other than such determination. However, if the date, time or place of any regular meeting is changed, notice of the change shall be given to all directors by means of (i) a written notice mailed at least 5 calendar days before the meeting, (ii) a written notice delivered in person, by recognized national courier service, or by telecopy at least 1 business day before the meeting, or (iii) by telephone notification given at least 12 hours before the meeting. SECTION 4.3.2. SPECIAL MEETINGS. The Board or the Chairman may call a special meeting of the Board at any date, time and place by causing the Secretary to give notice thereof to each director in the manner provided in Section 4.3.1. Neither the purpose of the meeting nor the business to be transacted need be specified in the notice of meeting, except for proposed amendments to these By-Laws. SECTION 4.3.3. TELEPHONIC MEETINGS. Members of the Board may participate in any Board meeting by means of conference telephone or similar communications equipment by means of which all meeting participants can hear each other, and such participation shall constitute presence in person at such meeting. SECTION 4.3.4. WAIVER OF NOTICE. A director may waive any notice of meeting 3 4 required under Virginia Law, Dana's Articles of Incorporation ("Dana's Articles") or these By-Laws, before or after the date and time set out in the notice, by signed written waiver submitted to the Secretary and filed with the minutes of the meeting. A director's attendance or participation at any meeting shall constitute a waiver of notice unless the director objects, at the beginning of the meeting or promptly upon his or her arrival, to holding the meeting or transacting business at the meeting, and thereafter does not vote on or assent to actions taken at the meeting. SECTION 4.4. ACTION WITHOUT A MEETING. Any action required or permitted to be taken at a Board meeting may be taken without a meeting if the action is taken by all members of the Board. The action shall be evidenced by one or more written consents, signed by each director either before or after the action is taken. The action shall be effective when the last director signs his or her consent unless the consent specifies a different effective date, in which event the action taken will be effective as of the date specified therein provided that the consent states the date of execution by each director. SECTION 4.5. QUORUM, BOARD ACTION. A majority of the directors shall constitute a quorum of the Board. If a quorum is present when a vote is taken, the affirmative vote of the majority of directors present shall constitute the act of the Board; provided, that the authorization, approval or ratification of any transaction in which a director has a direct or indirect personal interest shall also be subject to the provisions of Virginia Law. SECTION 4.6. RESIGNATIONS. A director may resign at any time by giving written notice to the Board, the Chairman, the President or the Secretary. Unless otherwise specified in the notice, the resignation shall take effect upon delivery and without Board action. A director's resignation shall not affect any contractual rights and obligations of Dana or the director, except as specified in any particular contract. SECTION 4.7. VACANCIES. The Board shall fill all vacancies, including those resulting from an increase in the number of directors, by majority vote of the remaining directors, whether or not such number constitutes a quorum. ARTICLE V. BOARD COMMITTEES SECTION 5.1. ESTABLISHMENT OF COMMITTEES. The Board may, by amendment to the By-Laws, establish and dissolve Board Committees and establish and change the authority of such Committees; provided, that each Committee shall consist of two or more directors (who shall serve thereon at the Board's pleasure) and shall have a chairman who is designated by the Board. Each Committee shall exercise such of the Board's powers as are authorized by the Board, subject to any limitations imposed by Virginia Law. The Board may, from time to time and without amendment to the By-Laws, change the membership or chairmanship of any Board Committee and fill any vacancies thereon or designate another director to act in the place of any Committee member who is absent or disqualified from voting at any meeting of the Committee. SECTION 5.2. STANDING COMMITTEES. The Board shall have the following Standing Committees: 4 5 a. ADVISORY COMMITTEE. The Advisory Committee shall make recommendations to the Board on matters relating to the qualifications of directors; the selection of nominees for election as directors at annual shareholder meetings and in filling Board vacancies; the selection and retention of elected officers and management succession; the cash and non-cash compensation of directors; the structure of the Board's Committees; the schedule and agenda for meetings of the Board and its Committees; the criteria for assessing the performance of the Board, its Committees, and the individual directors; and other Board governance matters. When the Board is not in session and when the Advisory Committee is convened by and meeting with the Chairman of the Board for such purpose, the Advisory Committee shall serve as an "executive committee" of the Board and shall have the full authority of the Board under Virginia Law. b. AUDIT COMMITTEE. The Audit Committee shall periodically meet with Dana's financial and accounting management and independent auditors and accountants to review Dana's audit plans, financial reporting, internal controls, and significant issues relating to Dana's contingent liabilities, taxes and insurance programs. The Audit Committee shall provide oversight for Dana's audit programs and shall make recommendations to the Board on matters relating to the selection and retention of the independent auditors. The members of the Audit Committee shall not be employees of Dana. c. COMPENSATION COMMITTEE. The Compensation Committee shall make recommendations to the Board on matters relating to base salaries and other cash and non-cash compensation for senior management under those Dana executive benefit plans in effect from time to time which the Committee interprets and administers. The Compensation Committee shall maintain familiarity with generally accepted national and international compensation practices and may consult with such compensation consultants as it deems appropriate. In making its recommendations, the Compensation Committee shall endeavor to maintain the compensation of Dana's senior management at levels appropriate for Dana's size and business, the responsibilities and performance of the individuals, and Dana's performance. The members of the Compensation Committee shall qualify as "outside directors" under Internal Revenue Service Regulation Section 1.162-27 and shall not be employees of Dana. d. FINANCE COMMITTEE. The Finance Committee shall review Dana's financial condition, liquidity (including aggregate corporate borrowings) and results of operations, and shall recommend to the Board appropriate courses of action with respect to Dana's financial performance and capital structure. Within parameters established with the Board, the Finance Committee shall review and approve management's recommendations on matters relating to major corporate actions (including fixed capital expenditures; acquisitions, investments, and divestitures; working capital programs; and 5 6 issuances of equity and debt securities) and shall present such recommendations to the Board. e. FUNDS COMMITTEE. The Funds Committee shall review the structure and allocation of assets in Dana's pension and other employee benefit funds and the performance of the fund managers, to assure that the funds are managed in compliance with applicable laws and regulations. In performing these advisory functions, the Funds Committee shall refrain from making specific investment recommendations. The Funds Committee shall review and approve management's recommendations on matters relating to the selection and retention of the investment managers. SECTION 5.3. COMMITTEE MEETINGS AND PROCEDURES. Each Committee shall hold regular meetings at such dates, times and places as it may determine from time to time, and no notice thereof need be given other than such determination. Sections 4.3 through 4.5, which govern meetings, notices and waivers of notice, actions without meeting, and quorum and voting requirements for the Board and the directors, shall also apply to the Committees and their members. Each Committee shall keep written records of its proceedings and shall report such proceedings to the Board from time to time as the Board may require. SECTION 5.4. RESIGNATIONS. A Committee member may resign at any time by giving written notice to the Chairman of the Board. Unless otherwise specified in the notice, the resignation shall take effect upon delivery and without Board action. ARTICLE VI. OFFICERS SECTION 6.1. OFFICES AND ELECTION. The Board shall elect the following officers annually at the first Board meeting following the annual shareholders meeting: the Chairman (who shall be a member of the Board), the Chief Executive Officer, the Chief Operating Officer, the President, the President-Dana international, the Chief Financial Officer, the Treasurer, the Secretary, and such Executive Vice Presidents, Vice Presidents, Assistant Treasurers and Assistant Secretaries as it deems appropriate. Any person may simultaneously hold more than one office. Each officer shall hold office until the election and qualification of his or her successor, or until his or her earlier resignation or removal. Election as an officer shall not, of itself, create any contractual rights in the officer or in Dana, including, without limitation, any rights in the officer for compensation beyond his or her term of office. SECTION 6.2. REMOVALS AND RESIGNATIONS. Officers shall serve at the pleasure of the Board and may be removed from office by the Board at any time. An officer may resign at any time by giving written notice to the Chairman or the Secretary. Unless otherwise specified in the notice, the resignation shall take effect upon delivery and without Board action. An officer's resignation shall not affect any contractual rights and obligations of Dana or the officer, except as specified in any particular contract. SECTION 6.3. DUTIES OF OFFICERS. The officers shall perform the following duties and any others which are assigned by the Board from time to time, are required by Virginia 6 7 Law, or are commonly incident to their offices: a. CHAIRMAN OF THE BOARD. The Chairman shall provide leadership to the Board in discharging its functions; shall preside at all meetings of the Board; shall act as a liaison between the Board and Dana's management; and, with the Chief Executive Officer, shall represent Dana to the shareholders, investors and other external groups. If the Chairman is absent or incapacitated, the Chairman of the Advisory Committee shall have his or her powers and duties. b. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall be Dana's principal executive officer, with responsibility for the general management of Dana's business affairs. The Chief Executive Officer shall develop and recommend to the Board long-term strategies for Dana, annual business plans and budgets to support those strategies, and plans for management development and succession that will provide Dana with an effective management team. He or she shall serve as Dana's chief spokesperson to internal and external groups. If the Chief Executive Officer is absent or incapacitated, the President shall have his or her powers and duties. c. CHIEF OPERATING OFFICER. The Chief Operating Officer shall oversee the management of Dana's day-to-day business in a manner consistent with Dana's financial and operating goals and objectives, continuous improvement in Dana's products and services, and the achievement and maintenance of satisfactory competitive positions within Dana's industries. d. PRESIDENT. The President shall have such duties as are assigned by the Chief Executive Officer. If the President is absent or incapacitated, the Chairman shall have his or her powers and duties. e. PRESIDENT-DANA INTERNATIONAL. The President-Dana International shall have such duties as are assigned by the Chairman. f. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall be responsible for the overall management of Dana's financial affairs. g. EXECUTIVE VICE PRESIDENTS AND VICE PRESIDENTS. The Executive Vice Presidents and the Vice Presidents shall have such duties as are assigned by the Chairman. h. TREASURER. The Treasurer shall have charge and custody of Dana's funds and securities and shall receive monies due and payable to Dana from all sources and deposit such monies in banks, trust companies, and depositories as authorized by the Board. If the Treasurer is absent or incapacitated and has not previously designated in writing another person or persons to have his or her powers and duties, any Assistant Treasurer shall have such powers and duties. i. SECRETARY. The Secretary shall prepare and maintain minutes of all meetings of the Board and of Dana's shareholders; shall assure that notices required by these By-Laws, Dana's Articles, Virginia Law or the Exchange Act are duly given; shall be custodian of Dana's seal (if any) and affix it as required; shall authenticate Dana's 7 8 records as required; shall keep or cause to be kept a register of the shareholders' names and addresses as furnished by them; and shall have general charge of Dana's stock transfer books. If the Secretary is absent or incapacitated and has not previously designated in writing another person or persons to have his or her powers and duties, any Assistant Secretary shall have such powers and duties. j. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The Assistant Treasurers and Assistant Secretaries shall have such duties as are assigned by the Treasurer and the Secretary, respectively. SECTION 6.4. CONTRACTS AND INSTRUMENTS. Except as limited in Section 6.5 with respect to Dana's guarantees of the indebtedness of subsidiaries, affiliates and third parties, each of the Chairman, the Chief Executive Officer, the Chief Operating Officer, the President, the President-Dana International, the Chief Financial Officer, any Executive Vice President, any Vice President, and the Treasurer shall have the power to enter into, sign (manually or through facsimile), execute, and deliver contracts (including, without limitation, bonds, deeds and mortgages) and other instruments evidencing Dana's rights and obligations on behalf of and in the name of Dana. Except as otherwise provided by law, any of these officers may delegate the foregoing powers to any other officer, employee or attorney-in-fact of Dana by written special power of attorney. SECTION 6.5. GUARANTEES OF INDEBTEDNESS. SECTION 6.5.1. DEBT OF WHOLLY OWNED SUBSIDIARIES. Within any limitations set by the Board on total outstanding guarantees for Dana subsidiaries, each of the Chairman, the Chief Executive Officer, the Chief Operating Officer, the President, the Chief Financial Officer, and the Treasurer shall have the power to approve guarantees by Dana of the indebtedness of direct and indirect wholly owned Dana subsidiaries. SECTION 6.5.2. DEBT OF NON-WHOLLY OWNED SUBSIDIARIES, AFFILIATES, AND OTHER ENTITIES. Each of the Chairman, the Chief Executive Officer, the Chief Operating Officer, the President, the Chief Financial Officer, and the Treasurer shall have the power to approve guarantees by Dana of the indebtedness of non-wholly owned Dana subsidiaries, Dana affiliates and third party entities; provided, that the aggregate amount of such guarantees made by these officers collectively between Board meetings may not exceed $10 million and that all such guarantees in the aggregate may not exceed any limitations set by the Board on total outstanding guarantees for Dana subsidiaries. SECTION 6.6. STOCK CERTIFICATES. The Chairman, the President, and the Secretary shall each have the power to sign (manually or through facsimile) certificates for shares of Dana stock which the Board has authorized for issuance. SECTION 6.7. SECURITIES OF OTHER ENTITIES. With respect to securities issued by another entity which are beneficially owned by Dana, each of the Chairman, the Chief Executive Officer, the Chief Operating Officer, the President, the President-Dana International, the Chief Financial Officer, any Executive Vice President, any Vice President, the Treasurer, and the Secretary shall have the power to attend any meeting 8 9 of security holders of the entity and vote thereat; to execute in the name and on behalf of Dana such written proxies, consents, waivers or other instruments as they deem necessary or proper to exercise Dana's rights as a security holder of the entity; and otherwise to exercise all powers to which Dana is entitled as the beneficial owner of the securities. Except as otherwise provided by law, any of these officers may delegate any of the foregoing powers to any other officer, employee or attorney-in-fact of Dana by written special power of attorney. ARTICLE VII. INDEMNIFICATION SECTION 7.1. INDEMNIFICATION. Dana shall indemnify any of the following persons who was, is or may become a party to any "proceeding" (as such term is defined in Section 1 of Article SIXTH of Dana's Articles) to the same extent as if such person were specified as one to whom indemnification is granted in Section 3 of the foregoing Article SIXTH: (i) any Dana director, officer or employee who was, is, or may become a party to the proceeding by reason of the fact that he or she is or was serving at Dana's request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, and (ii) any Dana employee who was, is, or may become a party to the proceeding by reason of the fact that he or she is or was an employee of Dana. In all cases, the provisions of Sections 4 through 7 of the foregoing Article SIXTH shall apply to the indemnification granted hereunder. ARTICLE VIII. DANA STOCK SECTION 8.1. LOST CERTIFICATES. A shareholder claiming that any certificate for Dana stock has been lost or destroyed shall furnish the Secretary with an affidavit stating the facts relating to such loss or destruction. The shareholder shall be entitled to have a new certificate issued in the place of the certificate which is claimed to be lost or destroyed if (i) the affidavit is satisfactory to the Secretary, and (ii) if requested by the Secretary, the shareholder gives a bond (in form and amount satisfactory to the Secretary) to protect Dana and other persons from any liability or expense that might be incurred upon the issue of a new certificate by reason of the original certificate remaining outstanding. SECTION 8.2. RIGHTS AGREEMENT. Any restrictions which are deemed to be imposed on the transfer of Dana securities by the Rights Agreement dated as of April 25, 1996, between Dana and Chemical Mellon Shareholder Services, L.L.C., or by any successor or replacement rights plan or agreement, are hereby authorized. SECTION 8.3. CONTROL SHARE ACQUISITIONS. Article 14.1 of the Virginia Stock Corporation Act shall not apply to the acquisition of shares of Dana's common stock. ARTICLE IX. AMENDMENT SECTION 9.1. AMENDMENT. The Board, by resolution, or the shareholders may amend or repeal these By-Laws, subject to any limitations imposed by Dana's Articles and Virginia Law. 9 EX-10.E 3 EXHIBIT 10-E 1 EXHIBIT 10-E DANA WORLD HEADQUARTERS December 12, 1998 Southwood J. Morcott Dana Corporation 4500 Dorr Street Toledo, OH 43615 Dear Mr. Morcott: The Corporation is on this date entering into an amended and restated employment agreement with you (the Employment Agreement). As a separate and additional inducement for you to enter into the amended and restated Employment Agreement and to provide you with reasonable assurance that the purposes of the Employment Agreement will not be frustrated as a result of the cost of its enforcement should a dispute arise out of or relate to any provision of the Employment Agreement, the Corporation hereby agrees to pay, in consideration of and following your execution of the amended and restated Employment Agreement, all legal expenses, including costs, which you may incur in any such dispute in accordance with the terms and conditions of the Memorandum attached to this letter. This letter supersedes a corresponding letter (and Memorandum) dated December 8, 1997 which shall no longer be of any force or effect. It is suggested that you retain this letter and the Memorandum with the Employment Agreement and your other documents of value. For the Corporation's files please acknowledge receipt and your agreement on the enclosed copy of this letter and return it in an envelope marked "Confidential" to the Secretary of Dana Corporation. Sincerely, DANA CORPORATION By: /S/ MARTIN J. STROBEL --------------------------------- Chairman of the Board of Directors By: /S/ R. B. PRIORY --------------------------------- Chairman of the Compensation Committee My agreement to and receipt of the foregoing letter and the Memorandum is hereby acknowledged this 12TH day of JUNE , 1999. ---- --------------- /S/ S. J. MORCOTT - ------------------------------------ Southwood J. Morcott People Finding A Better Way DANA CORPORATION P.O. Box 1000 Toledo, Ohio 43697, Tel: (419) 535-4500 Fax: (419) 535-4643 2 Memorandum of Terms and Conditions Relating to Legal Fees and Expenses Referred to in Letter dated December 12, 1998 from Dana Corporation to the Executive (The "Letter") ----------------------------------------------------- 1. The words used in this memorandum and in the Letter shall have the same meaning as in the Employment Agreement. Reference hereafter to the Letter shall be deemed to refer also to this memorandum. 2. The Corporation's obligations under the Letter shall become effective if and when any claim or dispute by or against the Executive or anyone claiming under or through the Executive (such person being hereinafter referred to as the "beneficiary"), or any dispute between the Executive or his beneficiary and the Corporation or any third party, should arise out of or relate to the Employment Agreement or the Letter, or both, or the validity, operation, interpretation, enforceability or breach thereof. 3. The Corporation shall, upon presentation of appropriate commercial vouchers, pay all legal expenses, including all reasonable legal fees, court costs, arbitration costs, and ordinary and necessary out-of-pocket expenses of attorneys, billed to and payable by the Executive or the beneficiary in connection with bringing, prosecuting, defending, litigating, arbitrating, negotiating or settling such dispute or claim, provided that (a) the Executive or his beneficiary shall repay to the Corporation any such expenses theretofore paid by or on behalf of the Corporation if and to the extent that the Executive and his beneficiary shall fail to prevail in such dispute or claim and such expenses were not incurred by the Executive and his beneficiary while acting in good faith, and provided further, that (b) in the case of any claim or dispute by the Executive or his beneficiary, such claim shall be timely made, or notice of such dispute timely given, in writing, with specific reference to the provisions of the Letter, delivered in the same manner as provided in Section 14(b) of the Employment Agreement, in no event later than three (3) years after the occurrence of the event giving rise to such claim or dispute. 4. (a) At such time after the date of the Employment Agreement as the Corporation shall receive written demand by the 3 Executive or, in the event of his death, by his beneficiary, together with a statement signed by an attorney selected by the Executive or his beneficiary stating that in the opinion of such attorney a suit or claim described in paragraph 2 above exists which could reasonably be expected to lead to litigation, the Corporation will set aside in trust an amount equal to (i) the Annual Base Salary payable to the Executive under the provisions of Section 3(a) of the Employment Agreement for the month immediately preceding the month in which such demand shall have been made or, if no such salary was payable for such month, for the first month preceding the month in which such demand shall have been made for which such salary was payable, multiplied by (ii) twelve (12). (b) Such amount and any income thereon shall be held, paid and applied by the trustee of such trust for the purpose of assuring and securing payment of the Corporation's obligations under paragraph 3 above. As and when any funds are paid out by the trustee, the Corporation shall replenish same by payment to the trustee of an amount equal to the funds so paid by the trustee. Any funds remaining in the trust at such time as the trustee, in its sole discretion, reasonably exercised, determines, upon the advice of counsel and after consultation with the Corporation and the Executive or, in the event of his death, his beneficiary, that all obligations of the parties under the Employment Agreement and the Letter have been substantially satisfied, shall be repaid by the trustee to the Corporation. (c ) The trustee of such trust, the fees and expenses of which shall be paid by the Corporation, shall be a national or state bank or trust company having a combined capital, surplus and undivided profits and reserves of not less than Ten Million Dollars ($10,000,000) which is duly authorized and qualified to do business in the state in which the Executive resides at the time of such demand. 5. The following provisions of the Employment Agreement shall be deemed applicable to the Letter to the same extent as if incorporated herein at length, with the term "this Letter" being deemed substituted for the term "this Agreement" where appropriate in any such provision: Section 5(e)(i), relating to arbitration and judicial proceedings; Section 11, relating to successors to the Corporation; Section 12(a), relating to the 2 4 definition of "beneficiary"; Section 13, relating to amendment, modification and waiver; Section 14(a), relating to governing law and captions; Section 14(b), relating to notices; Section 14(c), relating to severability; Section 14(d), relating to withholding; Section 14(f), relating to the entirety of the Letter; Section 14(g), relating to non-assignability and the like; Section 14(j), relating to specific performance and the like; Section 14(m), relating to the meaning of Executive after death or during incompetence; and Section 14(n), relating to legal holidays. 6. The Letter is not intended to enlarge, diminish or otherwise alter in any way the Executive's rights, duties and obligations and those of the Corporation under the Employment Agreement. 3 5 EMPLOYMENT AGREEMENT BETWEEN DANA CORPORATION AND SOUTHWOOD J. MORCOTT DATED DECEMBER 12, 1998 6 TABLE OF CONTENTS

SECTION PAGE Recitals ...................................................................................................1 1. Employment and Term................................................................................1 2. Position and Duties of the Executive...............................................................2 (a) Position..................................................................................2 (b) Duties....................................................................................3 (c) Location of Office........................................................................4 3. Compensation.......................................................................................4 (a) Salary....................................................................................4 (b) Additional Compensation...................................................................4 (c) Incentive, Stock and Savings Plans........................................................5 (d) Retirement and Welfare Benefit Plans......................................................5 (e) Expenses..................................................................................6 (f) Fringe Benefits...........................................................................6 (g) Office and Support Staff..................................................................6 (h) Vacation and Other Absences...............................................................7 (i) Benefits Shall Not Be Reduced Under Certain Circumstances.................................7 (j) Supplemental Retirement Annuity...........................................................8 4. Termination of Employment.........................................................................11 (a) Death or Disability......................................................................11 (b) Cause....................................................................................12 (c) Good Reason..............................................................................14 (d) Notice of Termination....................................................................15 (e) Date of Termination......................................................................16 5. Obligations of the Corporation Upon Termination...................................................16 (a) Termination Other Than for Cause.........................................................16 (b) Termination On or After Change of Control................................................19 (c) Cause; Other Than for Good Reason........................................................19 (d) Death or Disability......................................................................20 (e) Resolution of Disputes...................................................................20 (i) Right of Election by Executive to Arbitrate or Sue..............................20 (ii) Third-Party Stakeholder.........................................................21 (f) Benefits are in Addition to Supplemental Retirement Annuity..............................22

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6. Non-exclusivity of Rights.........................................................................22 7. Full Settlement...................................................................................22 8. Golden Parachute Tax Payments.....................................................................23 9. Confidential Information..........................................................................24 10. Competition.......................................................................................25 11. Successors........................................................................................27 12. Certain Definitions...............................................................................27 (a) Beneficiary..............................................................................28 (b) Change of Control........................................................................28 (c) Change of Control Date...................................................................30 (d) Change of Control Period.................................................................30 13. Amendment or Modification; Waiver................................................................30 14. Miscellaneous.....................................................................................30 Exhibit A .................................................................................................34

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DEFINED TERMS ------------- DEFINED TERMS* SECTION PAGE - -------------- ------- ---- Accounting Firm 8(b) 23 Accrued Obligation 5(a)(i)(3) 16 ACP 3(b) 5 Affiliate 2(a) 3 Affiliated Company 3(a) 4 Agreement Introduction 1 Annual Base Salary 3(a) 4 Annual Bonus 3(b) 4 Beneficiary 12(a) 28 Board 3(a) 4 Cause 4(b) 12 Change of Control 12(b) 28 Change of Control Date 12(c) 30 Change of Control Period 12(d) 30 Code 5(a)(ii) 17 Competition 10(c) 26 Corporation Introduction 1 11(b) 27 14(e) 31 Date of Termination 4(e) 16 Disability 4(a)(ii) 12 Disability Effective Date 4(a)(ii) 12 Employment Period 1(a) 1 Excise Tax 8(a) 23 Executive Introduction 1 Gross-Up Payment 8(a) 23

- -------- *Each listed term is intended to include both the singular and plural form of the term. iii 9

DEFINED TERMS ------------- DEFINED TERMS* SECTION PAGE - -------------- ------- ---- Highest Average Monthly Compensation 3(j)(vi) 11 Notice of Termination 4(d) 15 Other Benefits 5(a)(v) 19 Payment 8(a) 23 Pension and Retirement Pro gram of the Corporation 3(j)(vii) 11 Renewal Date 1(c) 2 Service 3(j)(viii) 11 Subsidiary 2(a) 3 Target Annual Bonus 3(b) 5 Terminal Date 1(b) 1 Termination 5(a) 16 Termination Period 5(a)(ii) 17 Welfare Benefit Continuation 5(a)(iii) 18

- ------------- *Each listed term is intended to include both the singular and plural form of the term. iv 10 AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") made and entered into as of this 12th day of December, 1998, by and between DANA CORPORATION, a Virginia corporation whose principal place of business is located at 4500 Dorr Street, Toledo, Ohio (the "Corporation"), and Southwood J. Morcott (the "Executive"); WHEREAS, the Executive is a principal executive officer of the Corporation and an integral part of its management; and WHEREAS, the Corporation wishes to assure itself of the continuing services of the Executive and to assure the Executive of continued employment during the period of employment hereunder; and WHEREAS, the Executive is willing to commit himself to remain in the employ of the Corporation during such period on terms and conditions substantially similar to those on which other senior executive officers of the Corporation are employed, and to forego opportunities elsewhere during such period; and WHEREAS, the parties have entered into an Agreement dated December 14, 1992, as amended from time to time thereafter (the "Prior Agreement"); and WHEREAS, the parties wish to amend and restate the Prior Agreement (as it had been amended from time to time thereafter) in its entirety; NOW, THEREFORE, IN CONSIDERATION of the mutual promises, covenants and agreements set forth below, it is hereby agreed as follows: 1. EMPLOYMENT AND TERM. (a) The Corporation agrees to continue the employment of the Executive, and the Executive agrees to remain in the employ of the Corporation, in accordance with the terms and provisions of this Agreement, for the period set forth below (the "Employment Period"). 11 (b) The Employment Period under this Agreement shall commence as of December 12, 1998, and, subject only to the provisions of Section 4 below relating to termination of employment, shall continue until (i) the close of business on December 31, 2001 or (ii) such later date as shall result from the operation of subparagraph (c) below (the "Terminal Date"). (c) Commencing on December 31, 1998, and on each anniversary of such date (such date and each such annual anniversary thereof, the "Renewal Date") the Terminal Date set forth in subparagraph (b) above shall be extended so as to occur three (3) years from the Renewal Date unless either party shall have given notice to the other party that the Terminal Date is not to be extended or further extended. 2. POSITION AND DUTIES OF THE EXECUTIVE. (a) POSITION. It is contemplated that during the Change of Control Period (as defined in Section 12(d), below), the Executive will continue to serve as a principal officer of the Corporation and as a member of its Board of Directors if serving as a member of the Board of Directors immediately prior to the Change of Control Date, with the office(s) and title(s), reporting responsibility, and duties and responsibilities of the Executive immediately prior to the Change of Control Date. The Executive hereby agrees that at any time prior to the Change of Control Date, the Board of Directors of the Corporation (or the individual to whom the Executive reports) may, without the Executive's consent, change the Executive's office(s), title(s), reporting responsibility, and duties or responsibilities. The office(s), title(s), reporting responsibility, duties and responsibilities of the Executive on the date of this Agreement, as the same may be changed from time to time after the date of this Agreement in accordance with the provisions of the previous paragraph, shall be summarized in Exhibit A to this Agreement, it being understood and agreed that if, as and when the office(s), title(s), reporting responsibility, duties or responsibilities of the Executive shall be so changed after the date of this Agreement, Exhibit A shall be deemed to be, and shall be updated by the parties to reflect such change; PROVIDED, HOWEVER, that Exhibit A is 2 12 intended only as a memorandum for the convenience of the parties and shall be disregarded if, and to the extent that, Exhibit A shall fail to reflect accurately the office(s), title(s), reporting responsibility, duties or responsibilities of the Executive as so changed after the date of this Agreement because the parties shall have failed to update Exhibit A as aforesaid. At all times during the Change of Control Period, the Executive shall hold a position of responsibility and importance and a position of scope, with the functions, duties and responsibilities attached thereto, at least equal in responsibility and importance and in scope to and commensurate with his position described in general terms above in this Section 2(a) and intended to be summarized in Exhibit A to this Agreement. During the Employment Period the Executive shall, without compensation other than that herein provided, also serve and continue to serve, if and when elected and re-elected, as an officer or director, or both, of any United States Subsidiary, division or Affiliate of the Corporation. For all purposes of this Agreement, (i) a 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, and (ii) an 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. (b) DUTIES. Throughout the Employment Period the Executive shall devote his full time and undivided attention during normal business hours to the business and affairs of the Corporation except for reasonable vacations and except for illness or incapacity, but nothing in this Agreement shall 3 13 preclude the Executive from devoting reasonable periods required for: (i) serving as a director or member of a committee or any organization involving no conflict of interest with the interests of the Corporation; (ii) delivering lectures, fulfilling speaking engagements, teaching at educational institutions; (iii) engaging in charitable and community activities; and (iv) managing his personal investments; provided that such activities do not materially interfere with the regular performance of his duties and responsibilities under this Agreement. (c) LOCATION OF OFFICE. During the Change of Control Period, the office of the Executive shall be located at the principal offices of the Corporation, within the greater Toledo, Ohio area, and the Executive shall not be required to locate his office elsewhere without his prior written consent, nor shall he be required to be absent therefrom on travel status or otherwise more than thirty (30%) of the working days in any calendar year nor for more than ten (10) consecutive days at any one time. 3. COMPENSATION. The Executive shall receive the following compensation for his services: (a) SALARY. So long as the Executive is employed by the Corporation, he shall be paid an annual base salary, payable not less often than monthly, at the rate of not less than $100,000 per month with such increases as shall be awarded from time to time in accordance with the Corporation's regular administrative practices of other salary increases applicable to executives of the Corporation, subject to any and all required withholdings and deductions for Social 4 14 Security, income taxes and the like (the "Annual Base Salary"). The Board of Directors of the Corporation (the "Board") may from time to time direct such upward adjustments to Annual Base Salary as the Board deems to be necessary or desirable; PROVIDED, HOWEVER, that during the Change of Control Period (as defined in Section 12(d) below), the Annual Base Salary shall be reviewed at least annually and shall be increased at any time and from time to time but not less often than annually and shall be substantially consistent with increases in base salary generally awarded in the ordinary course of business to other senior executives of the Corporation and its Affiliated Companies (a term which, as used in this Agreement, shall mean a Subsidiary or Affiliate of the Corporation) and, in addition, shall be adjusted effective as of January lst of each calendar year commencing in the Change of Control Period to reflect increases in the cost of living during the preceding calendar year. Annual Base Salary shall not be reduced after any increase thereof pursuant to this Section 3(a). Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation of the Corporation under this Agreement. (b) ADDITIONAL COMPENSATION. So long as the Executive is employed by the Corporation, he shall be eligible to receive annual short-term incentive awards or bonuses (such award or bonus is hereinafter referred to as "Short-Term Award" or "Annual Bonus") from the Dana Corporation Additional Compensation Plan, and from any successor or replacement plan (the Dana Corporation Additional Compensation Plan and such successor or replacement plans being referred to herein collectively as the "ACP"), in accordance with the terms thereof; PROVIDED, HOWEVER, that, with respect to each fiscal year of the Corporation ending during the Change of Control Period, the Executive shall be awarded (whether under the terms of the ACP or otherwise) an Annual Bonus in an amount that shall not be less than fifty percent (50%) of his Annual Base Salary rate in effect on the last day of such fiscal year (which amount shall be prorated if such fiscal year shall be less than 12 months) (the "Target Annual Bonus"). Each Annual Bonus shall be paid no later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded, unless the receipt of such Annual Bonus is deferred in accordance with the terms of the ACP. 5 15 (c) INCENTIVE, STOCK AND SAVINGS PLANS. So long as the Executive is employed by the Corporation, he shall be and continue to be a full participant in the Dana Corporation 1997 Stock Option Plan, the ACP (providing for Short-Term Awards) and in any and all other incentive, stock, savings or retirement plans, practices or policies in which executives of the Corporation participate that are in effect on the date hereof and that may hereafter be adopted, including, without limitation, any stock option, stock purchase or stock appreciation plans, or any successor plans that may be adopted by the Corporation with, except in the case of the ACP after the commencement of the Change of Control Period, at least the same reward opportunities, if any, that have heretofore been provided to the Executive. Nothing in this Agreement shall preclude improvement of reward opportunities in such plans or other plans in accordance with the practice of the Corporation on or after the date of this Agreement. Any provision of the ACP or of this Agreement to the contrary notwithstanding, any Short-Term Awards made to the Executive during the Change of Control Period (whether for services rendered prior to or after the Change of Control Date) shall be paid wholly in cash as soon as practicable after the awards are made. (d) RETIREMENT AND WELFARE BENEFIT PLANS. The Executive, his dependents and Beneficiary, including, without limitation, any beneficiary of a joint and survivor or other optional method of payment applicable to the payment of benefits under the Pension and Retirement Program of the Corporation, as defined in Section 3(j)(vii) below, shall be entitled to all payments and benefits and service credit for benefits during the Employment Period to which other senior executives of the Corporation, their dependents and their beneficiaries are entitled under the terms of employee retirement and welfare benefit plans and practices of the Corporation, including, without limitation, the Pension and Retirement Program of the Corporation (as defined in Section 3(j)(vii) below), the Corporation's Savings and Investment Plan, its Stock Purchase Plan, its Stock Award Plan, its Income Protection Plan for Management and Certain Other Employees providing layoff and severance benefits, its 1989 Restricted Stock Plan, its Excess Benefits Plan, its Supplemental Benefits Plan, its death benefit plans (consisting of 6 16 its Group Insurance Plan for Management Employees providing life insurance, accidental death and dismemberment insurance, and travel accident insurance), its disability benefit plans (consisting of its salary continuation, sickness and accident and long-term disability benefits programs), its medical, dental and health and welfare plans and other present or equivalent successor plans and practices of the Corporation, its Subsidiaries and divisions, for active and retired employees, for which officers, their dependents and beneficiaries, are eligible, and to all payments or other benefits under any such plan or practice subsequent to the Employment Period as a result of participation in such plan or practice during the Employment Period. (e) EXPENSES. So long as the Executive is employed by the Corporation, he shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the polices, practices and procedures of the Corporation and its Affiliated Companies from time to time in effect, commensurate with his position and on a basis at least comparable to that of other senior executives of the Corporation. (f) FRINGE BENEFITS. So long as the Executive is employed by the Corporation, he shall be entitled to fringe benefits, including, without limitation, the business and personal use of an automobile, and payment or reimbursement of club initiation fees and dues, in accordance with the plans, practices, programs and policies of the Corporation and its Affiliated Companies from time to time in effect, commensurate with his position and at least comparable to those received by other senior executives of the Corporation. (g) OFFICE AND SUPPORT STAFF. So long as the Executive is employed by the Corporation, he shall be entitled to an office or offices of a size and with furnishings and other appointments, and to exclusive personal secretarial and other assistance, commensurate with his position and at least comparable to those received by other senior executives of the Corporation. (h) VACATION AND OTHER ABSENCES. So long as the Executive is employed by the Corporation, he shall be entitled 7 17 to paid vacation and such other paid absences whether for holidays, illness, personal time or any similar purposes, in accordance with the plans, policies, programs and practices of the Corporation and its Affiliated Companies in effect from time to time, commensurate with his position and at least comparable to those received by other senior executives of the Corporation. (i) BENEFITS SHALL NOT BE REDUCED UNDER CERTAIN CIRCUMSTANCES. Nothing in this Agreement shall preclude the Corporation from amending or terminating any employee benefit or welfare plan or practice, but, it being the intent of the parties that the Executive shall continue to be entitled during the Employment Period to perquisites as set forth in this Section 3 and to benefits and service credit for benefits under Section 3(d) above at least equal to those attached to his position on February 13, 1984, the date of the original agreement between the parties, and except as provided in the last sentence of this Section 3(i), nothing in this Agreement shall operate or be construed to reduce, or authorize a reduction without the Executive's written consent in, the level of such perquisites, benefits or service credit for benefits; in the event of any such reduction, by amendment or termination of any plan or practice or otherwise, the Executive, his dependents and Beneficiary, shall continue to be entitled to perquisites, benefits and service credit for benefits at least equal to the perquisites, benefits and service credit for benefits under such plans or practices that he or his dependents and Beneficiary would have received if such reduction had not taken place. If and to the extent that such perquisites, benefits and service credits are not payable or provided under any such plans or practices by reason of such amendment or termination thereof, the Corporation itself shall pay or provide therefor. Notwithstanding the foregoing provisions of this Section 3(i), the Executive hereby waives the benefit of the foregoing minimum benefit protection only as it applies to the Dana Corporation Savings and Investment Plan, and to its medical, dental and health plans for active and retired employees. The Executive expressly does not waive the application of the foregoing minimum benefit protection to any of the other benefit plans, programs or practices enumerated in Section 3 above, including, without limitation, the Pension and Retirement Program of the Corporation (including 8 18 the lump sum discount factor in effect on February 13, 1984), its death benefit plans, its disability benefit plans, and its Income Protection Plan for Management and Certain Other Employees. The Executive reserves the right to cancel the above waiver, prospectively, at any future time by giving written notice to the Corporation of such cancellation. Nothing in this Section 3(i) shall be construed to prohibit the Corporation from amending or terminating any employee benefit or welfare plan or practice to reduce benefits, so long as such reduction applies to all salaried Corporation employees covered by such plan or practice equally and such reduction is adopted prior to the commencement of the Change of Control Period. (j) SUPPLEMENTAL RETIREMENT ANNUITY. (i) If the Service of the Executive, including, without limitation, the period set forth in Section 5(a)(iv)(2) below, relating to the period between the Date of Termination and the end of the Termination Period, shall terminate other than for Cause as defined in Section 4(b) below, and if the Executive shall have a total of not less than fifteen (15) years of Service, as defined in subparagraph (viii) of this Section 3(j), whether or not consecutive, the Executive, subject to compliance with the provisions of Sections 9 and 10 below, relating to confidential information and Competition, respectively, and after the Executive's death, his Beneficiary shall be entitled to the supplemental retirement annuity provided by this Section 3(j) in addition to all other benefits to which the Executive (or his Beneficiary), may be entitled including, without limitation, benefits under the Pension and Retirement Program of the Corporation. Such supplemental retirement annuity shall be payable by the Corporation on a straight life annuity basis commencing on the first day of the month coinciding with or next following the latest of (1) termination of Service; (2) attainment by the Executive of age 55; and 9 19 (3) if the Executive had not previously retired with 15 years or more of Service, the expiration of the Employment Period; and continuing on the first day of each month thereafter during his lifetime. (ii) The monthly payment provided for in Section 3(j)(i) above shall be equal to fifty percent (50%) (or if higher, the percentage which is the product of 1.6% multiplied by the Executive's Credited Service at retirement, as such Credited Service is determined by application of the definition of Credited Service under the Dana Corporation Retirement Plan), of the Executive's Highest Average Monthly Compensation, as defined in Section 3(j)(vi), less the sum of (1) commencing at the earliest date that it could be payable on or after termination of Service, the aggregate monthly retirement benefit payable to the Executive for life on a straight life annuity basis under the Pension and Retirement Program of the Corporation to the extent attributable to contributions of the Corporation, its Subsidiaries and Affiliates; (2) commencing at the earliest date that it could be payable on or after termination of Service, the aggregate monthly retirement or disability benefit payable to the Executive for life on a straight life annuity basis following his retirement or termination from employment by the Corporation, its Subsidiaries and Affiliates, to the extent attributable to contributions other than by the Executive under pension or retirement plans of all corporations, organizations or entities other than the Corporation, its Subsidiaries and Affiliates; (3) commencing at the earliest date payable on or after termination of Service, 50% of the monthly primary Social Security benefit that 10 20 would be or would have been payable to the Executive in the absence of any compensation that may at the time be or have been earned by him; and (4) commencing at the earliest date payable on or after termination of Service and continuing until no longer payable, the aggregate monthly disability benefit payable to the Executive under disability benefit plans and pension plans of the Corporation, its Subsidiaries and Affiliates to the extent attributable to contributions of the Corporation, its Subsidiaries and Affiliates. (iii) The Executive may elect to receive payment of the supplemental retirement annuity provided by this Section 3(j), under a joint and survivor or any other optional method of payment available under the Dana Corporation Retirement Plan, including, without limitation, any deferment in the time of payment thereof. The amount of the benefit payable pursuant to any form of payment under this Section 3(j) shall be determined by applying the mortality assumptions, interest rates, and other factors contained in the Dana Corporation Retirement Plan that would be applicable to the form of payment elected by the Executive (subject, however, to any actuarial factor that may apply as a result of the operation of Section 3(i)); PROVIDED THAT, if a lump sum distribution is made hereunder, the amount of the lump sum distribution shall be actuarially equivalent to the monthly benefit prescribed by Section 3(j)(ii), calculated using the basis described in subparagraph (1) or (2), below, whichever produces the larger lump sum amount: (1) the lump sum amount calculated on the basis of the "applicable interest rate" (as in effect for the November preceding the calendar year in which the calculation is made) and the "applicable mortality table," both as defined in Section 417(e) of the Internal Revenue Code; or 11 21 (2) the lump sum amount calculated on the basis of the actuarial equivalent factor used to convert the Executive's Earned Benefit Account into a life annuity under the Dana Corporation Retirement Plan at the time the calculation is made, subject to any lump sum discount factor that might apply as a result of the operation of Section 3(i) of this Agreement. If it is determined that the Executive is subject to federal income taxation on an amount in respect of the supplemental retirement annuity prior to the distribution of all of such amount to him, the Corporation shall forthwith pay to the Executive all (or the balance) of such amount as is includable in the Executive's federal gross income and correspondingly reduce future payments, if any, of the supplemental retirement annuity. (iv) In the event the Executive should die prior to terminating Service with the Corporation, the Executive's surviving spouse to whom he is then married, or if no such surviving spouse is then living, his Beneficiary, shall be entitled to receive a lump sum benefit equal to 100% of the benefit to which the Executive would have been entitled under this Section 3(j), as if the Executive had retired on the date of his death and elected a lump sum benefit hereunder. (v) In the event that the Corporation defaults in payment of all or any part of the supplemental retirement annuity provided above in this Section 3(j) and fails to remedy such default within thirty days after having received notice from the Executive or his Beneficiary, the Corporation shall thereupon pay to the Executive or his Beneficiary, as the case may be, in full discharge of its obligations under this Section 3(j), (1) a lump sum amount actuarially equivalent (based on the same assumptions and discount factors as would be applicable under the Dana Corporation Retirement Plan) to the future payments otherwise payable under this Section 3(j), and (2) an amount equal to any and all past due payments under this Section 3(j). 12 22 (vi) The term "Highest Average Monthly Compensation" shall mean the sum of (1) one-twelfth (1/12) of the Annual Base Salary provided in Section 3(a) at the rate being paid at the time the Executive's termination of employment occurred, and (2) one-twelfth (1/12) of the average of the highest Annual Bonuses payable to the Executive for any three (3) consecutive full or partial fiscal years during his employment by the Corporation, PROVIDED, HOWEVER, that, solely for purposes of this Section 3(j), and for no other purposes under this Agreement, with respect to 1994 and subsequent years' Annual Bonuses, only that portion of the Employee's Annual Bonus as does not exceed 125% of his Annual Base Salary will be considered. (vii) The term "Pension and Retirement Program of the Corporation" shall mean the Dana Corporation Retirement Plan, the Dana Corporation Excess Benefits Plan, the Dana Corporation Supplemental Benefits Plan, and any other supplemental, early retirement and similar plan or plans of the Corporation, its Subsidiaries and Affiliates, providing for pension or retirement benefits that may be applicable to the Executive and that are in effect on the date hereof or may hereafter be adopted or substituted for any such plan, but exclusive of the Dana Corporation Savings and Investment Plan and any similar plan or plans. (viii) The term "Service" shall mean employment as an employee by the Corporation, any Subsidiary or Affiliate thereof or any corporation the capital stock or assets of which have been acquired by, or which has been merged into or consolidated with the Corporation or any Subsidiary or Affiliate thereof. 4 TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY. (i) The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. 13 23 (ii) If the Corporation determines in good faith that the Disability (as defined below) of the Executive has occurred during the Employment Period, it may give to the Executive written notice in accordance with Section 14(b) below of its intention to terminate the Executive's employment. In such event, the Employment Period shall terminate effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), PROVIDED, that within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" shall mean the absence of the Executive from the Executive's duties with the Corporation on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Corporation or its insurers and acceptable to the Executive or the Executive's legal representative (such agreement as to acceptability not to be withheld unreasonably). (b) CAUSE. The Corporation may terminate the Executive's employment during the Employment Period for Cause. For purposes of this Agreement, the termination of the Executive's employment shall be deemed to have been for "Cause" only (i) if termination of his employment shall have been the result of his conviction of, or plea of guilty or nolo contendere to, the charge of having committed a felony (whether or not such conviction is later reversed for any reason), or (ii) if there has been a breach by the Executive during the Employment Period of the provisions of Section 2(b), relating to the time to be devoted to the affairs of the Corporation, or of Section 9, relating to confidential information, and such breach results in demonstrably material injury to the Corporation, and, with respect to any alleged breach of Section 2(b) hereof, the Executive shall have either failed to remedy such alleged breach within thirty days from his receipt 14 24 of written notice from the Secretary of the Corporation pursuant to resolution duly adopted by the Board of Directors of the Corporation after notice to the Executive and an opportunity to be heard demanding that he remedy such alleged breach, or shall have failed to take all reasonable steps to that end during such thirty-day period and thereafter; PROVIDED, that there shall have been delivered to the Executive a certified copy of a resolution of the Board of Directors of the Corporation adopted by the affirmative vote of not less than three-fourths of the entire membership of the Board of Directors called and held for that purpose and at which the Executive was given an opportunity to be heard, finding that the Executive was guilty of conduct set forth in subparagraph (i) or (ii) above, specifying the particulars thereof in detail. Anything in this Section 4(b) or elsewhere in this Agreement to the contrary notwithstanding, the employment of the Executive shall in no event be considered to have been terminated by the Corporation for Cause if termination of his employment took place (1) as the result of bad judgment or negligence on the part of the Executive, or (2) because of an act or omission believed by the Executive in good faith to have been in or not opposed to the interests of the Corporation, or (3) for any act or omission in respect of which a determination could properly be made that the Executive met the applicable standard of conduct prescribed for indemnification or reimbursement or payment of expenses under (A) the Bylaws of the Corporation, or (B) the laws of the State of Virginia, or (C) the directors' and officers' liability insurance of the Corporation, in each case either as in effect at the time of this Agreement or in effect at the time of such act or omission, or 15 25 (4) as the result of an act or omission which occurred more than twelve calendar months prior to the Executive's having been given notice of the termination of his employment for such act or omission unless the commission of such act or such omission could not at the time of such commission or omission have been known to a member of the Board of Directors of the Corporation (other than the Executive, if he is then a member of the Board of Directors), in which case more than twelve calendar months from the date that the commission of such act or such omission was or could reasonably have been so known, or (5) as the result of a continuing course of action which commenced and was or could reasonably have been known to a member of the Board of Directors of the Corporation (other than the Executive, if he is then a member of the Board of Directors) more than twelve calendar months prior to notice having been given to the Executive of the termination of his employment. (c) GOOD REASON. Following a Change of Control (as defined in Section 12(b) below), the Executive may terminate his employment for Good Reason. For purposes of this Agreement, "Good Reason" shall mean the occurrence after the Change of Control Date of any of the following events: (i) Failure to elect or reelect the Executive to the Board of Directors of the Corporation, if the Executive shall have been a member of the Board of Directors on the date of this Agreement or at any time thereafter during the Employment Period, or failure to elect or reelect the Executive to, or removal of the Executive from, the office(s) described in Section 2(a) above and intended to be summarized in Exhibit A to this Agreement. (ii) A significant change in the nature or scope of the authorities, powers, functions or duties attached to the position described in Section 2 above and 16 26 intended to be summarized in Exhibit A to this Agreement, or a reduction in compensation, which is not remedied within 30 days after receipt by the Corporation of written notice from the Executive. (iii) A determination by the Executive made in good faith that as a result of a Change of Control, and a change in circumstances thereafter and since the date of this Agreement significantly affecting his position, he is unable to carry out the authorities, powers, functions or duties attached to his position and contemplated by Section 2 of this Agreement and the situation is not remedied within 30 days after receipt by the Corporation of written notice from the Executive of such determination. (iv) A breach by the Corporation of any provision of this Agreement not embraced within the foregoing clauses (i), (ii) and (iii) of this Section 4(c) which is not remedied within 30 days after receipt by the Corporation of written notice from the Executive. (v) The liquidation, dissolution, consolidation or merger of the Corporation or transfer of all or a significant portion of its assets unless a successor or successors (by merger, consolidation or otherwise) to which all or a significant portion of its assets have been transferred shall have assumed all duties and obligations of the Corporation under this Agreement but without releasing the corporation that is the original party to this Agreement; PROVIDED, that in any event set forth in this Section 4(c), the Executive shall have elected to terminate his employment under this Agreement, upon not less than ten and not more than ninety days' advance written notice to the Corporation, attention of the Secretary, given, except in the case of a continuing breach, within three calendar months after (A) failure to be so elected or reelected, or removal, (B) expiration of the thirty-day cure period with respect to such event, or (C) the closing date of such liquidation, dissolution, consolidation, merger or transfer of assets, as the case may be. 17 27 An election by the Executive to terminate his employment given under the provisions of this Section 4(c) shall not be deemed a voluntary termination of employment by the Executive for the purpose of this Agreement or any plan or practice of the Corporation. (d) NOTICE OF TERMINATION. Any termination by the Corporation for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 14(b) below. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the Date of Termination (as defined in Section 4(e) below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than fifteen days after the giving of such notice). (e) DATE OF TERMINATION. "Date of Termination" means (i) if the Executive's employment is terminated by the Corporation for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive's employment is terminated by the Corporation other than for Cause or Disability, the Date of Termination shall be the date on which the Corporation notifies the Executive of such termination and 18 28 (iii) if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be. 5 OBLIGATIONS OF THE CORPORATION UPON TERMINATION. (a) TERMINATION OTHER THAN FOR CAUSE. If, during the Employment Period, the Corporation shall terminate the Executive's employment other than for Cause or the Executive shall terminate his employment following a Change of Control for Good Reason (termination in any such case referred to as "Termination"): (i) the Corporation shall pay the Executive in a lump sum in cash within 30 days after the Date of Termination the sum of (1) the Executive's Annual Base Salary through the Date of Termination to the extent not theretofore paid, (2) the product of (x) the Target Annual Bonus and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365, and (3) any compensation previously deferred by the Executive (together with any accrued interest or earnings thereon) and any accrued vacation pay, in each case to the extent not theretofore paid (the sum of the amounts described in clauses (1), (2), and (3) shall be hereinafter referred to as the "Accrued Obligations"); and (ii) at the end of the month next following the Termination, and at the end of each month thereafter until the earliest of the end of the Employment Period, three years following the Date of Termination, or until the Executive shall attain the age of 65 years, but in no event beyond the end of the month in which the death of the Executive shall have occurred or 19 29 the end of the sixth month following the Disability Effective Date (such period to be called the "Termination Period"), the Corporation shall pay to the Executive an amount equal to the Highest Average Monthly Compensation; PROVIDED, HOWEVER, that such amount shall be reduced by any other amounts payable to the Executive in respect of salary or bonus continuation to be received by the Executive under any severance plan, policy or arrangement of the Corporation; and, PROVIDED, FURTHER, that if the Date of Termination occurs on or after the occurrence of a Change of Control, such amount shall be paid as a lump-sum within 30 days following the Date of Termination, such lump-sum calculated based upon the present value (within the meaning of Section 28OG(d)(4) of the Internal Revenue Code of 1986 as amended (the "Code")) of the payments which would be made absent the Change of Control; and (iii) During the Termination Period, or such longer period as any plan, program, practice or policy may provide, the Corporation shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 3(d) above if the Executive's employment had not been terminated in accordance with the most favorable plans, practices, programs or policies of the Corporation and its Affiliated Companies as in effect and applicable generally to other senior executives of the Corporation and its Affiliated Companies and their families during the 90-day period immediately preceding the Date of Termination or, if more favorable to the Executive, as in effect at any time thereafter or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other senior executives of the Corporation and its Affiliated Companies and their families, PROVIDED, HOWEVER, that if the Executive becomes reemployed with another employer and is eligible to receive medical or other welfare benefits under another employer-provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility 20 30 (such continuation of such benefits for the applicable period herein set forth shall be hereinafter referred to as "Welfare Benefit Continuation"). For purposes of determining eligibility of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until the end of the Termination Period and to have retired on the date of the end of the Termination Period. To the extent that any benefits referred to in this Section 5(a)(iii) shall not be payable or provided under any such plan by reason of the Executive's no longer being an employee of the Corporation as the result of Termination, the Corporation shall itself pay, or provide for payment of, such benefits and the service credit for benefits provided for in Section 5(a)(iv) below, to the Executive, his dependents and Beneficiary; and (iv) The period from the Date of Termination until the end of the Termination Period shall be considered: (1) Service with the Corporation for the purpose of continued credits under the employee benefit plans referred to in Section 3(d) above and all other benefit plans of the Corporation applicable to the Executive or his Beneficiary as in effect immediately prior to Termination but prior to any reduction of benefits thereunder as the result of amendment or termination during the Employment Period; (2) Service within the meaning of Section 3(j)(viii) above for purposes of Section 3(j) above; and (3) Employment with the Corporation for purposes of determining payments and other rights in respect of awards made or accrued and award opportunities granted prior to Termination under the executive incentive plans referred to in Section 3(c) above and all other incentive 21 31 plans of the Corporation in which the Executive was a participant prior to Termination; and (v) to the extent not theretofore paid or provided, the Corporation shall timely pay or provide to the Executive and/or the Executive's family any other amounts or benefits required to be paid or provided or which the Executive and/or the Executive's family is eligible to receive pursuant to this Agreement and under any plan, program, policy or practice or contract or agreement of the Corporation and its Affiliated Companies as in effect and applicable generally to other senior executives of the Corporation and its Affiliated Companies and their families during the 90-day period immediately preceding the Date of Termination or, if more favorable to the Executive, as in effect generally thereafter with respect to other senior executives of the Corporation and its Affiliated Companies and their families (such other amounts and benefits shall be referred to below as the "Other Benefits"). (b) TERMINATION ON OR AFTER CHANGE OF CONTROL. If Termination shall have occurred coincidental with a Change of Control or during the Change of Control Period, any provision of Section 5(a)(iv) above or of the ACP to the contrary notwithstanding, upon such Termination, the Corporation shall pay or distribute to the Executive on an accelerated basis, to the extent, if any, not theretofore accelerated, any and all outstanding Short-Term Awards, or installments thereof, under the ACP that shall have been awarded to the Executive prior to Termination and deferred for payment subsequent to termination of employment, with any such accelerated payment based on the value, determined in accordance with such plan (or successor plan), of such awards or installments (and any increments thereon) on the Termination Date, and such accelerated payment or distribution shall constitute a complete discharge of the Corporation's obligation in respect of the Short-Term Awards so paid or distributed. (c) CAUSE; OTHER THAN FOR GOOD REASON. If the Executive's employment shall be terminated for Cause during the Employment Period, the Corporation shall have no further obligations to the Executive under this Agreement other than 22 32 the obligation to pay the Executive's Annual Base Salary, any compensation previously deferred by the Executive (together with any accrued interest or earnings thereon), and accrued vacation pay through the Date of Termination, in each case to the extent not theretofore paid, and any other amounts or benefits to which the Executive and/or the Executive's family is otherwise entitled under the terms of any employee benefit or incentive plan of the Corporation. If the Executive terminates employment during the Employment Period, excluding a termination for Good Reason following a Change of Control, the Corporation shall have no further obligations to the Executive, other than to pay the Executive's Annual Base Salary, any compensation previously deferred by the Executive (together with any accrued interest or earnings thereon), and accrued vacation pay through the termination date, in each case to the extent not theretofore paid, any other benefits to which the Executive and/or the Executive's family is otherwise entitled under the terms of any employee benefit or incentive plan of the Corporation, and, if the Executive is otherwise eligible under the provisions of Section 3(j) of this Agreement, he shall also be entitled to receive the supplemental retirement annuity described in such Section 3(j). (d) DEATH OR DISABILITY. (i) In the event of the death of the Executive during the Employment Period, the legal representative of the Executive shall be entitled to the compensation provided for in Sections 3(a) and 3(b) above for the month in which death shall have taken place, at the rate being paid at the time of death, and the Employment Period shall be deemed to have ended as of the close of business on the last day of the month in which death shall have occurred but without prejudice to any payments due in respect of the Executive's death. Further, in the event the Executive should die prior to terminating Service with the Corporation, the Executive's surviving spouse or Beneficiary, as the case may be, shall be entitled to receive the supplemental retirement annuity pursuant to Section 3(j)(iv). (ii) In the event of the Disability of the Executive during the Employment Period, the Executive 23 33 shall be entitled to the compensation provided for in Sections 3(a) and 3(b) above, at the rate being paid on the Disability Effective Date, for the period of such Disability but not in excess of six months. The amount of any payments due under this Section 5(d)(ii) shall be reduced by any payments to which the Executive may be entitled for the same period because of disability under any disability or pension plan of the Corporation or of any Subsidiary or Affiliate thereof. (e) RESOLUTION OF DISPUTES. (i) RIGHT OF ELECTION BY EXECUTIVE TO ARBITRATE OR SUE. In the event that the Executive's employment shall be terminated by the Corporation during the Employment Period and such termination is alleged to be for Cause, or the Executive's right to terminate his employment under Section 4(c) above shall be questioned by the Corporation, or the Corporation shall withhold payments or provision of benefits for any other reason, the Executive shall have the right, in addition to all other rights and remedies provided by law, at his election either to seek arbitration within the Toledo, Ohio area under the rules of the American Arbitration Association by serving a notice to arbitrate upon the Corporation or to institute a judicial proceeding, in either case within ninety days after having received notice of termination of his employment or notice in any form that the termination of his employment under Section 4(b) above is subject to question or that the Corporation is withholding or proposes to withhold payments or provision of benefits. (ii) THIRD-PARTY STAKEHOLDER. In the event that the Corporation defaults on any obligation set forth in Section 5(a) above, relating to Termination, and shall have failed to remedy such default within thirty (30) days after having received written notice of such default from the Executive, in addition to all other rights and remedies that the Executive may have as a result of such default, the Executive may demand and the Corporation shall thereupon be required to deposit, with the third-party stakeholder hereinafter described, an amount equal to the undiscounted value of any and all 24 34 undischarged, future obligations of the Corporation under Section 5(a) above and such amount shall thereafter be held, paid, applied or distributed by such third-party stakeholder for the purpose of satisfying such undischarged, future obligations of the Corporation when and to the extent that they become due and payable. Any interest or other income on such amount shall be retained by the third-party stakeholder and applied, if necessary, by it to satisfy such obligations, PROVIDED, HOWEVER, that any interest or other income that is earned on such undischarged, future obligations after the date that the third-party stakeholder determines, in its sole discretion, that such obligations are due and owing to the Executive, shall be paid to the Executive as earned. To the extent not theretofore expended, such amount (including any remaining unexpended interest or other income) shall be repaid to the Corporation at such time as the third-party stakeholder, in its sole discretion, reasonably exercised, determines, upon the advice of counsel and after consultation with the Corporation and the Executive or, in the event of his death, his Beneficiary, that all obligations of the Corporation under Section 5(a) above have been substantially satisfied. Such amount shall, in the event of any question, be determined jointly by the firm of certified public accountants regularly employed by the Corporation and a firm of certified public accountants selected by the Executive, in each case upon the advice of actuaries to the extent the certified public accountants consider necessary, and, in the event such two firms of accountants are unable to agree on a resolution of the question, such amount shall be determined by an independent firm of certified public accountants selected jointly by both firms of accountants. The third-party stakeholder, the fees and expenses of which shall be paid by the Corporation, shall be a national or state bank or trust company having a combined capital, surplus and undivided profits and reserves of not less than Ten Million Dollars ($10,000,000) which is duly authorized and qualified to 25 35 do business in the state in which the Executive resides at the time of such default. (f) BENEFITS ARE IN ADDITION TO SUPPLEMENTAL RETIREMENT ANNUITY. Any provision of this Agreement to the contrary notwithstanding, the payments, benefits, service credit for benefits and other matters provided by this Section 5, including without limitation Section 5(a) above, in the event of a Termination, are in addition to any payments, benefits, service credit for benefits and other matters provided by Section 3(j) above relating to a supplemental retirement annuity that may apply in such event. 6 NON-EXCLUSIVITY OF RIGHTS. Except as provided in Sections 5(a)(ii), 5(b) and 5(c) above, nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any plan, program, policy or practice provided by the Corporation or any of its Affiliated Companies and for which the Executive may qualify, nor shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement entered into after the date hereof with the Corporation or any of its Affiliated Companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of, or any contract or agreement entered into after the date hereof with, the Corporation or any of its Affiliated Companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement. 7 FULL SETTLEMENT. The Corporation's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Corporation may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the 26 36 provisions of this Agreement and, except as provided in Section 5(a)(iii) above, such amounts shall not be reduced whether or not the Executive obtains other employment. 8 GOLDEN PARACHUTE TAX PAYMENTS. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution involving a change of control of the Corporation, by the Corporation or any other person or entity, to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 8) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision) or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") from the Corporation in an amount such that, after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. (b) All calculations and determinations required to be made under this Section 8, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by Price Waterhouse (or any successor thereto by merger or operation of law) (the "Accounting Firm"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the change of control, the Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne 27 37 solely by the Corporation. Any Gross-Up Payment, as determined pursuant to this Section 8, shall be paid by the Corporation to the Executive within five days of the receipt of the Accounting Firm's determination. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that failure to report the Excise Tax on the Executive's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Corporation and the Executive. (c) The Executive shall promptly notify the Corporation in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Corporation of the Gross-Up Payment. The Corporation shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such claim and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 8(c), the Corporation shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or to contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Corporation shall determine; PROVIDED, HOWEVER, that if the Corporation directs the Executive to pay such claim and sue for a refund, the Corporation shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance. 28 38 Furthermore, the Corporation's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. 9 CONFIDENTIAL INFORMATION. (a) The Executive agrees not to disclose, either while in the Corporation's employ or at any time thereafter, to any person not employed by the Corporation, or not engaged to render services to the Corporation, except with the prior written consent of an officer authorized to act in the matter by the Board of Directors of the Corporation, any confidential information obtained by him while in the employ of the Corporation, including, without limitation, information relating to any of the Corporation's inventions, processes, formulae, plans, devices, compilations of information, methods of distribution, customers, client relationships, marketing strategies or trade secrets; PROVIDED, HOWEVER, that this provision shall not preclude the Executive from use or disclosure of information known generally to the public or of information not considered confidential by persons engaged in the business conducted by the Corporation or from disclosure required by law or Court order. The agreement herein made in this Section 9(a) shall be in addition to, and not in limitation or derogation of, any obligations otherwise imposed by law upon the Executive in respect of confidential information and trade secrets of the Corporation, its Subsidiaries and Affiliates. (b) The Executive also agrees that upon leaving the Corporation's employ he will not take with him, without the prior written consent of an officer authorized to act in the matter by the Board of Directors of the Corporation, and he will surrender to the Corporation any record, list, drawing, blueprint, specification or other document or property of the Corporation, its Subsidiaries and Affiliates, together with any copy and reproduction thereof, mechanical or otherwise, which is of a confidential nature relating to the Corporation, its Subsidiaries and Affiliates, or, without limitation, relating to its or their methods of distribution, client 29 39 relationships, marketing strategies or any description of any formulae or secret processes, or which was obtained by him or entrusted to him during the course of his employment with the Corporation. 10 COMPETITION. (a) Subject to the provisions of Section 5(e) above relating to resolution of disputes, there shall be no obligation on the part of the Corporation to make any further payments provided for in Section 3(j) above relating to payment of a supplemental retirement annuity, if the Executive shall, during the period that such payments are being made or benefits provided, engage in Competition with the Corporation as hereinafter defined, provided all of the following shall have taken place: (i) the Secretary of the Corporation, pursuant to resolution of the Board of Directors of the Corporation, shall have given written notice to the Executive that, in the opinion of the Board of Directors, the Executive is engaged in such Competition, specifying the details; (ii) the Executive shall have been given a reasonable opportunity upon reasonable notice to appear before and to be heard by the Board of Directors prior to the determination of the Board evidenced by such resolution; (iii) the Executive shall neither have ceased to engage in such Competition within thirty days from his receipt of such notice nor diligently taken all reasonable steps to that end during such thirty-day period and thereafter. Notwithstanding any provision to the contrary contained herein, in the event of a Termination, as defined in Section 5(a) above, this Section 10(a) shall not apply following a Change of Control. (b) The Executive agrees in addition to the provisions relating to Competition set forth in Section 10(a) above that he will not engage in Competition at any time (i) during 30 40 the Employment Period, and (ii) except in the event of a Termination, during the thirty-six (36) months immediately following the termination of his employment with the Corporation. (c) The word "Competition" for the purposes of this Agreement shall mean (i) taking a management position with or control of a business engaged in the design, development, manufacture, marketing or distribution of products, which constituted 15% or more of the sales of the Corporation and its Subsidiaries and Affiliates during the last fiscal year of the Corporation preceding the termination of the Executive's employment, in any geographical area in which the Corporation, its Subsidiaries or Affiliates is at the time engaging in the design, development, manufacture, marketing or distribution of such products; PROVIDED, HOWEVER, that in no event shall ownership of less than 5% of the outstanding capital stock entitled to vote for the election of directors of a corporation with a class of equity securities held of record by more than 500 persons, standing alone, be deemed Competition with the Corporation within the meaning of this Section 10, (ii0 soliciting any person who is a customer of the businesses conducted by the Corporation, or any business in which the Executive has been engaged on behalf of the Corporation and its Subsidiaries or Affiliates at any time during the term of this Agreement on behalf of a business described in clause (i) of this Section 10, (iii0 inducing or attempting to persuade any employee of the Corporation or any of its Subsidiaries or Affiliates to terminate his employment relationship in order to enter into employment with a business described in clause (i) of this Subsection 10(c), or (iv) making or publishing any statement which is, or may reasonably be considered to be, disparaging of the Corporation or any of its Subsidiaries or Affiliates, or directors, officers, employees or the operations or 31 41 products of the Corporation or any of its Subsidiaries or Affiliates, except to the extent the Executive, during the Employment Period, makes the statement to employees or other representatives of the Corporation or any of its Subsidiaries or Affiliates in furtherance of the Corporation's business and the performance of his services hereunder. 11. SUCCESSORS. Except as otherwise provided herein, (a This Agreement shall be binding upon and shall inure to the benefit of the Executive, his heirs and legal representatives, and the Corporation and its successors as provided in this Section 11. (b This Agreement shall be binding upon and inure to the benefit of the Corporation and any successor of the Corporation, including, without limitation, any corporation or corporations acquiring, directly or indirectly, 50% or more of the outstanding securities of the Corporation, or all or substantially all of the assets of the Corporation, whether by merger, consolidation, sale or otherwise (and such successor shall thereafter be deemed embraced within the term "the Corporation" for the purposes of this Agreement), but shall not otherwise be assignable by the Corporation. 12. CERTAIN DEFINITIONS. The following defined terms used in this Agreement shall have the meanings indicated: (a BENEFICIARY. The term "Beneficiary" as used in this Agreement shall, in the event of the death of the Executive, mean an individual or individuals and/or an entity or entities, including, without limitation, the Executive's estate, duly designated on a form filed with the Corporation by the Executive to receive any amount that may be payable after his death or, if no such individual, individuals, entity or entities has or have been so designated, or is at the time in existence or able to receive any such amount, the Executive's estate. 32 42 (b CHANGE OF CONTROL. A "Change of Control" shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred: (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 the date hereof, constitute the 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 the date hereof 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, including but not limited to a consent solicitation, relating to the election of directors of the Corporation, shall not be counted; or (iii) there is consummated a merger or consolidation of the Corporation or any direct or indirect Subsidiary of the Corporation with any other corporation, other than (1) a merger or consolidation which would result in the voting securities of the Corporation outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any 33 43 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 consolidation 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. "Beneficial Owner" 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 temporarily holding securities pursuant to an offering of such securities or (iv) a corporation owned, directly or indirectly, by the stockholders of the Corporation 34 44 in substantially the same proportions as their ownership of stock of the Corporation. (c CHANGE OF CONTROL DATE. The "Change of Control Date" shall mean the first date on which a Change of Control occurs. Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and if the Executive's employment with the Corporation is terminated or the Executive ceases to have the position with the Corporation set forth in Section 2(a) above prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that such termination or cessation (i) was at the request of a third party who has taken steps reasonably calculated to effect the Change of Control or (ii) otherwise arose in connection with or anticipation of the Change of Control, then for all purposes of this Agreement the "Change of Control Date" shall mean the date immediately prior to the date of such termination or cessation. (d CHANGE OF CONTROL PERIOD. The "Change of Control Period" shall mean the period commencing on the Change of Control Date and ending on the last day of the Employment Period. 13. AMENDMENT OR MODIFICATION; WAIVER. No provision of this Agreement may be amended, modified or waived unless such amendment, modification or waiver shall be authorized by the Board of Directors of the Corporation or any authorized committee of the Board of Directors and shall be agreed to in writing, signed by the Executive and by an officer of the Corporation thereunto duly authorized. Except as otherwise specifically provided in this Agreement, no waiver by either party hereto of any breach by the other party hereto of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of a subsequent breach of such condition or provision or a waiver of a similar or dissimilar provision or condition at the same time or at any prior or subsequent time. 35 45 14. MISCELLANEOUS. (a This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. (b All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: IF TO THE EXECUTIVE: COPY TO: - ------------------- ------- Mr. Southwood J. Morcott Mr. Southwood J. Morcott c/o Dana Corporation 29765 Durham Circle 4500 Dorr Street Perrysburg, Ohio 43551 Toledo, Ohio 43615 IF TO THE CORPORATION: - --------------------- Dana Corporation 4500 Dorr Street Toledo, Ohio 43615 Attention: Secretary or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee. (c The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. (d The Corporation may withhold from any amounts payable under this Agreement such Federal, state or local taxes as it determines is required to be withheld pursuant to any applicable law or regulation. (e When used herein in connection with plans, programs and policies relating to the Executive, employees, 36 46 compensation, benefits, perquisites, executive benefits, services and similar words and phrases, the word "Corporation" shall be deemed to include all wholly-owned Subsidiaries of the Corporation. (f This instrument contains the entire agreement of the parties concerning the subject matter, and all promises, representations, understandings, arrangements and prior agreements concerning the subject matter are merged herein and superseded hereby, including, without limitation, the agreements between the parties dated February 13, 1984, December 10, 1990, December 14, 1992, and December 8, 1997. (g No right, benefit or interest hereunder, shall be subject to anticipation, alienation, sale, assignment, encumbrance, charge, pledge, hypothecation, or set-off in respect of any claim, debt or obligation, or to execution, attachment, levy or similar process, or assignment by operation of law. Any attempt, voluntary or involuntary, to effect any action specified in the immediately preceding sentence shall, to the full extent permitted by law, be null, void and of no effect. (h The Executive shall not have any right, title, or interest whatsoever in or to any investments which the Corporation may make to aid it in meeting its obligations under this Agreement. (i Subject to the provisions of Section 5(e) above, all payments to be made under this Agreement shall be paid from the general funds of the Corporation and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of amounts payable under this Agreement. (j The Corporation and the Executive recognize that each party will have no adequate remedy at law for breach by the other of any of the agreements contained in this Agreement and, in the event of any such breach, the Corporation and the Executive hereby agree and consent that the other shall be entitled to a decree of specific performance, mandamus or other appropriate remedy to enforce performance of such agreements. 37 47 (k Subject to the provisions of Section 5(e) above, nothing contained in this Agreement shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Corporation and the Executive or any other person. (l Subject to the provisions of Section 5(e) above, to the extent that any person acquires a right to receive payments from the Corporation under this Agreement, except to the extent provided by law such right shall be no greater than the right of an unsecured general creditor of the Corporation. (m In the event of the Executive's death or a judicial determination of his incompetence, reference in this Agreement to the Executive shall be deemed, where appropriate, to refer to his legal representative or, where appropriate, to his Beneficiary. (n If any event provided for in this Agreement is scheduled to take place on a legal holiday, such event shall take place on the next succeeding day that is not a legal holiday. 38 48 IN WITNESS WHEREOF, the Executive and, pursuant to due authorization from its Board of Directors, the Corporation have caused this Agreement to be executed as of the day and year first above written. DANA CORPORATION By /S/ MARTIN J. STROBEL ------------------------------------ Name: Title: By /S/ R. B. PRIORY ------------------------------------ Chairman of the Compensation Committee Attest: /S/ SUE A. GRIFFIN - -------------------- Assistant Secretary /S/ S. J. MORCOTT ------------------------------------ Executive 39 49 Exhibit A to Agreement made as of December 12, 1998 between Dana Corporation and Southwood J. Morcott --------------------------------------------------- As of February 18, 1999, for purposes of Section 2(a), the office and title of the Executive is Chairman of the Board of Directors of the Corporations; the reporting responsibility of the Executive is to report directly and only to the Board of Directors of the Corporation; and the duties and responsibilities of the Executive are: The Executive shall continue to serve as the principal officer of the Corporation and as general manager of all operations and affairs of the Corporation, its subsidiaries, affiliates and divisions, at all times having the authority, powers and duties of the person charged with the general management of the business and affairs of the Corporation, with authority to manage and direct all operations and affairs of the Corporation, its subsidiaries, affiliates and divisions, and to employ and discharge all employees thereof subject to approval of the Board of Directors of the Corporation with respect to elected officers of the Corporation. The Executive shall serve as Chairman of the Policy Committee of the Corporation and as Co-Chairman of the Strategic Operating Committee of the Corportion. The Executive shall continue to report to and be responsible only to the Board of Directors of the Corporation, with all employees of the Corporation, its subsidiaries, affiliates and divisions reporting directly or indirectly to him. 40 EX-13 4 EXHIBIT 13

Statement of Income

in millions except per share amounts

		Year Ended December 31
		1997			1998			1999
Net sales		$	11,911		$	12,464		$	13,159
Revenue from lease financing			172			173			111
Other income, net			319			202			83
			12,402			12,839			13,353
Costs and expenses
	Cost of sales		10,067			10,449			10,964
	Selling, general and administrative expenses		1,152			1,122			1,192
	Restructuring and integration charges		328			118			181
	Merger expenses					50
	Interest expense		251			280			279
			11,798			12,019			12,616
Income before income taxes			604			820			737
Estimated taxes on income			294			315			251
Income before minority interest and equity in earnings of affiliates			310			505			486
Minority interest			(22	)		(8	)		(13	)
Equity in earnings of affiliates			32			37			40
Net income		$	320		$	534		$	513
Net income per common share
	Basic income per share	$	1.97		$	3.24		$	3.10
	Diluted income per share	$	1.94		$	3.20		$	3.08
Cash dividends declared and paid per common share		$	1.04		$	1.14		$	1.24
Average shares outstanding — Basic			163			165			165
Average shares outstanding — Diluted			165			167			166

      The accompanying notes are an integral part of the financial statements.

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Balance Sheet

in millions except par value

			December 31
			1998			1999
Assets
Current assets
Cash and cash equivalents			$	230		$	111
Accounts receivable
	Trade, less allowance for doubtful accounts of $41 - 1998 and $44 - 1999			1,617			1,935
	Other			248			411
Inventories				1,679			1,784
Other current assets				563			560
		Total current assets		4,337			4,801
Investments and other assets				1,645			1,858
Investment in leases				852			1,014
Property, plant and equipment, net				3,304			3,450
		Total assets	$	10,138		$	11,123
Liabilities and Shareholders’ Equity
Current liabilities
Notes payable, including current portion of long-term debt			$	1,698		$	1,418
Accounts payable				996			1,129
Accrued payroll and employee benefits				355			462
Other accrued liabilities				783			755
Taxes on income				155			124
		Total current liabilities		3,987			3,888
Deferred employee benefits and other noncurrent liabilities				1,337			1,398
Long-term debt				1,718			2,732
Minority interest in consolidated subsidiaries				156			148
		Total liabilities		7,198			8,166
Shareholders’ equity
	Common stock, $1 par value, shares authorized, 350; shares issued, 166 - 1998 and 163 - 1999			166			163
	Additional paid-in capital			591			520
	Retained earnings			2,455			2,762
	Accumulated other comprehensive loss			(272	)		(488	)
		Total shareholders’ equity		2,940			2,957
		Total liabilities and shareholders’ equity	$	10,138		$	11,123

      The accompanying notes are an integral part of the financial statements.

3

Statement of Cash Flows

in millions

			Year Ended December 31
			1997			1998			1999
Net cash flows from operating activities			$	929		$	795		$	608
Cash flows from investing activities:
		Purchases of property, plant and equipment		(579	)		(661	)		(807	)
		Purchases of assets to be leased		(452	)		(546	)		(480	)
		Acquisitions		(601	)		(829	)		(18	)
		Divestitures		491			1,039			36
		Changes in investments and other assets		(79	)		(96	)		(115	)
		Loans made to customers and partnerships		(115	)		(232	)		(299	)
		Payments received on leases		250			265			200
		Proceeds from sales of certain assets		33			9			45
		Proceeds from sales of leased assets		26			91			135
		Payments received on loans		155			228			206
		Other		(6	)		(2	)		(4	)
Net cash flows — investing activities				(877	)		(734	)		(1,101	)
Cash flows from financing activities:
		Net change in short-term debt		(247	)		54			(341	)
		Issuance of long-term debt		939			473			1,396
		Payments on long-term debt		(461	)		(624	)		(376	)
		Dividends paid		(165	)		(198	)		(206	)
		Other		33			41			(99	)
Net cash flows — financing activities				99			(254	)		374
Net increase (decrease) in cash and cash equivalents				151			(193	)		(119	)
Cash and cash equivalents — beginning of year				272			423			230
Cash and cash equivalents — end of year			$	423		$	230		$	111
Reconciliation of net income to net cash flows from operating activities:
		Net income	$	320		$	534		$	513
		Depreciation and amortization		450			488			519
		Unremitted earnings of affiliates		(19	)		(33	)		(37	)
		Deferred income taxes		3			64			66
		Minority interest		15			12			6
		Change in accounts receivable		(65	)		(162	)		(528	)
		Change in inventories		75			(72	)		(183	)
		Change in other operating assets		9			17			1
		Change in operating liabilities		275			13			296
		Additions to lease and loan loss reserves		12			20			8
		Gains on divestitures		(163	)		(80	)		(5	)
		Other		17			(6	)		(48	)
	Net cash flows from operating activities		$	929		$	795		$	608

      The accompanying notes are an integral part of the financial statements.

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Statement of Shareholders’ Equity

in millions

												Accumulated Other
												Comprehensive Income (Loss)
						Additional						Foreign			Minimum			Net Unrealized
			Common			Paid-In			Retained			Currency			Pension			Investment			Shareholders'
			Stock			Capital			Earnings			Translation			Liability			Gain (Loss)			Equity
Balance, December 31, 1996			$	161		$	460		$	1,950		$	(139	)	$	—		$	3		$	2,435
Comprehensive income:
	Net income for 1997									320
	Foreign currency translation												(71	)
	Minimum pension liability															(2	)
	Net unrealized investment gains																		4
		Total comprehensive income																				251
Cash dividends declared										(165	)											(165	)
Issuance of shares for defined benefit pension plans				1			31															32
Cost of shares reacquired				(1	)		(13	)														(14	)
Issuance of shares for employee stock plans				2			44															46
Issuance of shares in connection with acquisitions				1			18															19
Balance, December 31, 1997				164			540			2,105			(210	)		(2	)		7			2,604
Comprehensive income:
	Net income for 1998									534
	Foreign currency translation												(54	)
	Minimum pension liability															(9	)
	Net unrealized investment gains																		(4	)
		Total comprehensive income																				467
Cash dividends declared										(184	)											(184	)
Cost of shares reacquired							(14	)														(14	)
Issuance of shares for director and employee stock plans				2			65															67
Balance, December 31, 1998				166			591			2,455			(264	)		(11	)		3			2,940
Comprehensive income:
	Net income for 1999									513
	Foreign currency translation												(214	)
	Minimum pension liability															(2	)
		Total comprehensive income																				297
Cash dividends declared										(206	)											(206	)
Cost of shares reacquired				(3	)		(105	)														(108	)
Issuance of shares for director and employee stock plans							34															34
Balance, December 31, 1999			$	163		$	520		$	2,762		$	(478	)	$	(13	)	$	3		$	2,957

      The accompanying notes are an integral part of the financial statements.

5

Notes to Financial Statements

in millions except share and per share amounts

Note 1. Summary of Significant Accounting Policies

      Dana is a global leader in the engineering, manufacturing and distribution of components and systems for worldwide vehicular and industrial manufacturers and the related aftermarkets and a leading provider of lease financing services in certain markets through its wholly-owned subsidiary, Dana Credit Corporation (DCC).

      The preparation of these financial statements requires estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. Some of the more significant estimates include depreciation and amortization of long-lived assets; deferred tax assets and inventory valuations; sales returns, restructuring, environmental and warranty accruals; postemployment and postretirement benefits; residual values of leased assets and allowances for doubtful accounts. Actual results could differ from those estimates.

      The following summary of significant accounting policies should help you evaluate the financial statements. Certain amounts in 1997 and 1998 have been reclassified to conform with the 1999 presentation.

Principles of Consolidation

      The consolidated financial statements include all significant subsidiaries in which we have the ability to control operating and financial policies. Affiliated companies (20% to 50% ownership) are generally recorded in the statements using the equity method of accounting. Operations of affiliates accounted for on the equity method of accounting are generally included for periods ended within one month of our year end. Less than 20%-owned companies are included in the financial statements at the cost of our investment. Dividends, royalties and fees from these cost basis affiliates are recorded in income when received.

Foreign Currency Translation

      The financial statements of subsidiaries and equity affiliates outside the United States (U.S.) located in non-highly inflationary economies are measured using the currency of the primary economic environment in which they operate as the functional currency, which for the most part is the local currency. Transaction gains and losses which result from translating assets and liabilities of these entities into the functional currency are included in net earnings. When translating into U.S. dollars, income and expense items are translated at average monthly rates of exchange and assets and liabilities are translated at the rates of exchange at the balance sheet date. Translation adjustments resulting from translating the functional currency into U.S. dollars are deferred as a component of accumulated other comprehensive income in shareholders’ equity. For affiliates operating in highly inflationary economies, non-monetary assets are translated into U.S. dollars at historical exchange rates and monetary assets are translated at current exchange rates. Translation adjustments for these affiliates are included in net earnings.

Inventories

      Inventories are valued at the lower of cost or market. Cost is generally determined on the last-in, first-out (LIFO) basis for U.S. inventories and on the first-in, first-out (FIFO) or average cost basis for non-U.S. inventories.

Lease Financing

      Lease financing consists of direct financing leases, leveraged leases and equipment on operating leases. Income on direct financing leases is recognized by a method which produces a constant periodic rate of return on the outstanding investment in the lease. Income on leveraged leases is recognized by a method which produces a constant rate of return on the outstanding net investment in the lease, net of the related deferred tax liability, in the years in which the net investment is positive. Initial direct costs are deferred and amortized using the interest method over the lease period. Equipment under operating leases is recorded at cost, net of accumulated depreciation. Income from operating leases is recognized ratably over the term of the leases.

Allowance for Losses on Lease Financing

      Provisions for losses on lease financing receivables are determined based on loss experience and assessment of inherent risk. Adjustments are made to the allowance for losses to adjust the net investment in lease financing to an estimated collectible amount. Income recognition is generally discontinued on accounts which are contractually past due and where no payment activity has occurred within 120 days. Accounts are charged against the allowance for losses when determined to be uncollectible. Accounts where equipment repossession has started as the primary means of recovery are classified within other assets at their estimated realizable value.

Goodwill

      Cost in excess of net assets of companies acquired is generally amortized on a straight-line basis over the estimated period of expected benefit, ranging from 10 to 40 years.

Loans Receivable

      Loans receivable consist primarily of loans to partnerships in which DCC has an interest and loans secured by equipment and first mortgages on real property. The loans to partnerships are secured by the partnerships’ assets. Income on all loans is recognized using the interest method. Interest income on impaired loans is recognized as cash is collected or on a cost recovery basis.

Allowance for Losses on Loans Receivable

      Provisions for losses on loans receivable are determined on the basis of loss experience and assessment of inherent risk. Adjustments are made to the allowance for losses to adjust loans receivable to an estimated collectible amount. Income recognition is generally discontinued on accounts which are contractually past due and where no payment activity has occurred within 120 days. Accounts are charged against the allowance for losses when determined to be uncollectible.

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Properties and Depreciation

      Property, plant and equipment are valued at historical costs. Depreciation is recognized over the estimated useful lives using primarily the straight-line method for financial reporting purposes and accelerated depreciation methods for federal income tax purposes. Long-lived assets are reviewed for impairment and where appropriate are adjusted to fair market value.

Revenue Recognition

      Sales are recognized when products are shipped. Accruals for warranty costs, sales returns and other allowances are provided at the time of shipment based upon experience. Adjustments are made as new information becomes available.

Income Taxes

      Current tax liabilities and assets are recognized for the estimated taxes payable or refundable on the tax returns for the current year. Deferred tax balances reflect the impact of temporary differences between the carrying amount of assets and liabilities and their tax basis. Amounts are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. Deferred tax assets are reduced, if necessary, by the amount of any tax benefits not expected to be realized. The “flow-through” method of accounting is used for investment tax credits, except for investment tax credits arising from leveraged leases and certain direct financing leases for which the deferred method is used for financial statement purposes.

Financial Instruments

      The reported fair values of financial instruments are based on a variety of factors. Where available, fair values represent quoted market prices for identical or comparable instruments. Where quoted market prices are not available, fair values are estimated based on assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates reflecting varying degrees of credit risk. Fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future.

Derivative Financial Instruments

      Various types of derivative financial instruments are used primarily to hedge interest rate and foreign currency effects. Derivatives are not used for trading or speculative purposes. Gains and losses relating to qualifying hedges of firm commitments or anticipated transactions are deferred and recognized as adjustments of carrying amounts when the hedged transaction occurs. Interest rate swaps are primarily used to manage exposure to fluctuations in interest rates. Differentials to be paid or received on certain interest rate agreements are accrued and recognized as adjustments to interest expense.

      Statement of Financial Accounting Standards (SFAS) No. 133, “Accounting for Derivative Instruments and Hedging Activities,” was issued in June 1998 and revises the accounting for derivative financial instruments. We are currently analyzing the impact of this statement, which is required to be adopted in 2001, but do not expect it to have a material impact on our financial statements.

Environmental Compliance and Remediation

      Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to existing conditions caused by past operations which do not contribute to current or future revenue generation are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable and the costs can be reasonably estimated. Estimated costs are based upon current laws and regulations, existing technology and the most probable method of remediation. The costs are not discounted and exclude the effects of inflation and other societal and economic factors. If the cost estimates result in a range of equally probable amounts, the lower end of the range is accrued.

Pension Plans

      Annual net periodic pension costs under defined benefit pension plans are determined on an actuarial basis. Our policy is to fund these costs as accrued, including amortization of the initial unrecognized net obligation over 15 years and obligations arising due to plan amendments over the period benefited, through deposits with trustees. Benefits are determined based upon employees’ length of service, wages and a combination of length of service and wages.

Postretirement Benefits Other Than Pensions

      Annual net postretirement benefits liability and expense under the defined benefit plans are determined on an actuarial basis. Our current policy is to pay these benefits as they become due. Benefits are determined primarily based upon employees’ length of service and include applicable employee cost sharing.

Postemployment Benefits

      Annual net postemployment benefits liability and expense under our benefit plans are accrued as service is rendered for those obligations that accumulate or vest and can be reasonably estimated. Obligations that do not accumulate or vest are recorded when payment of the benefits is probable and the amounts can be reasonably estimated.

Statement of Cash Flows

      For purposes of reporting cash flows, we consider highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Marketable Securities

      The majority of marketable securities satisfy the criteria for cash equivalents and are classified accordingly. The remainder of marketable securities are classified as available for sale. Available-for-sale securities, which are included in investments and other assets, are carried at fair value and any unrealized gains or losses, net of income taxes, are reported as a component of accumulated other comprehensive loss in shareholders’ equity.

7

Notes to Financial Statements

in millions except share and per share amounts

Note 1. Summary of Significant Accounting Policies (Continued)

Stock-Based Compensation

      Stock-based compensation is accounted for using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. No compensation expense is recorded for stock options when granted as the option price is set at the market value of the underlying stock.

Note 2. Common Shares

      In connection with employee stock plans, we repurchased 406,616 shares in 1997, 299,082 in 1998 and 304,927 in 1999.

      In 1997, we contributed 1,000,000 shares of common stock to the Dana Corporation Pension Plans Trust.

      During 1999, the Board of Directors (Board) authorized the expenditure of up to $350 to repurchase shares of our common stock. The authorization extends through October 19, 2000. The repurchases are being accomplished through open market transactions. In 1999, we repurchased 2,994,400 shares at an aggregate cost of $100. All shares repurchased are cancelled and become authorized but unissued shares.

      Common stock transactions in the last three years are as follows:

		1997			1998			1999
Outstanding at beginning of year			161,010,241			163,810,306			165,690,844
Issued for acquisitions			493,559
Issued for director and employee stock plans			1,713,122			2,179,620			764,535
Issued for defined benefit pension plans			1,000,000
Repurchased and cancelled			(406,616	)		(299,082	)		(309,837	)
Repurchase program									(2,994,400	)
Outstanding at end of year			163,810,306			165,690,844			163,151,142
Average outstanding for the year (basic)			162,743,602			165,057,443			165,322,644
Plus: Incremental shares from assumed conversion of -
	Deferred compensation units		424,615			476,197			461,112
	Deferred restricted stock units		6,357			27,917			106,044
	Stock options		1,402,763			1,480,967			608,165
	Potentially dilutive shares		1,833,735			1,985,081			1,175,321
Adjusted average shares outstanding for the year (diluted)			164,577,337			167,042,524			166,497,965

Note 3. Preferred Share Purchase Rights

      We have a Preferred Share Purchase Rights Plan which is designed to deter coercive or unfair takeover tactics. One right has been issued on each share of our common stock outstanding on and after July 25, 1996. Under certain circumstances, the holder of each right may purchase 1/1000th of a share of our Series A Junior Participating Preferred Stock, no par value. The rights have no voting privileges and will expire on July 15, 2006, unless exercised, redeemed or exchanged sooner.

      Generally, the rights cannot be exercised or transferred apart from the shares to which they are attached. However, if any person or group acquires 15% or more of our outstanding common stock or commences a tender offer that would result in the acquirer owning 15% of our outstanding shares, the rights not owned by the acquirer will become exercisable and, for the exercise price of $110 per share (unless adjusted), holders of these rights will be able to purchase Dana common shares at 50% of the market value. If we merge with or sell 50% or more of our assets or earnings power to the acquirer or engage in similar transactions, the rights not held by the acquirer can also be exercised. In that event, for the $110 exercise price, the holders will be able to purchase common shares of the acquiring or surviving company at 50% of market value.

      The Board may redeem the rights at a price of $.01 each before anyone acquires 15% or more of our common shares. After that, and before the acquirer owns 50% of our outstanding shares, the Board may exchange each right for one share of our common stock.

Note 4. Preferred Shares

      There are 5,000,000 shares of preferred stock authorized, without par value, including 1,000,000 shares reserved for issuance under the Rights Plan. No shares of preferred stock have been issued.

Note 5. Inventories

      The components of inventory are as follows:

	December 31
	1998		1999
Raw materials	$	471	$	534
Work in process and finished goods		1,208		1,250
	$	1,679	$	1,784

      Inventories amounting to $1,053 and $1,161 at December 31, 1998 and 1999, respectively, are valued using the LIFO method. If all inventories were valued at replacement cost, inventories would be increased by $127 and $135 at December 31, 1998 and 1999, respectively.

8

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Note 6. Short-Term Debt

      Short-term funds for certain U.S. and non-U.S. operations are obtained from issuing commercial paper, short-term notes payable to banks and bank overdrafts.

      At December 31, 1999, Dana, excluding DCC, had $420 of commercial paper outstanding, $75 borrowed against uncommitted U.S. bank lines, $28 of non-U.S. notes and $77 of notes payable at its non-U.S. subsidiaries. DCC had $182 of commercial paper issued, $156 borrowed against uncommitted U.S. bank lines and $30 of notes payable at its non-U.S. subsidiaries.

      Dana, excluding DCC, had committed borrowing lines of $875 and uncommitted borrowing lines of $537 at December 31, 1999. DCC had committed borrowing lines of $561 and uncommitted borrowing lines of $390 at December 31, 1999. Fees are paid to the banks for providing committed lines, but not for uncommitted lines. Such fees are not considered material.

      Selected details of short-term borrowings are as follows:

			Weighted
			Average
			Interest
	Amount		Rate
Balance at December 31, 1998	$	1,321		5.8	%
Average during 1998		1,369		5.8
Maximum during 1998 (month end)		1,576		5.8
Balance at December 31, 1999	$	968		6.0	%
Average during 1999		1,162		5.4
Maximum during 1999 (month end)		1,490		5.6

      In March 1999, we terminated our agreement with a financial institution to sell, without recourse, undivided fractional interests in designated pools of trade accounts receivable, up to a maximum of $200. Accounts receivable at December 31, 1998 is presented net of the $200 of trade receivables sold under this agreement.

Note 7. Interest Rate Agreements

      We enter into interest rate agreements to manage interest rate risk by reducing our exposure to the effects of future interest rate movements. Under interest rate swap agreements, we agree to exchange with third parties, at specific intervals, the difference between fixed rate and floating rate interest amounts calculated by reference to an agreed notional amount. At December 31, 1999, DCC was committed to receive interest rates which change periodically in line with prevailing short-term market rates (the average rate being received at December 31, 1999 was 6.13%) and to pay an average rate of 7.46% which is fixed over the period of the agreements on notional amounts of $200. DCC’s notional amounts of interest rate swaps expire as follows: 2000, $125; 2001, $30 and 2002, $45. Dana, exclusive of DCC, was not a party to any interest rate swap agreements at December 31, 1999.

Note 8. Long-Term Debt

			December 31
			1998		1999
Indebtedness of Dana, excluding consolidated subsidiaries —
	Unsecured notes payable, fixed rates -
		6.13% - 7.04%, due 2000 to 2002	$	960	$	745
		7.0% notes, due March 15, 2028		200		200
		6.5% notes, due March 15, 2008		150		150
		6.25% notes, due March 1, 2004				250
		6.5% notes, due March 1, 2009				350
		7.0% notes, due March 1, 2029				400
	Various industrial revenue bonds and other			5		4
Indebtedness of DCC —
	Unsecured notes payable, fixed rates, 5.98% - 8.44%, due 2000 to 2007			336		654
	Unsecured notes payable, variable rates, 6.31% - 6.47%, due 2000 to 2002			320		215
	Nonrecourse notes payable, fixed rates, 6.80% - 12.05%, due 2000 to 2010			66		154
Indebtedness of other consolidated subsidiaries				58		60
Total long-term debt				2,095		3,182
Less: Current maturities				377		450
			$	1,718	$	2,732

      The total maturities of all long-term debt for the five years after 1999 are as follows: 2000, $450; 2001, $389; 2002, $475; 2003, $26 and 2004, $463.

      We filed universal shelf registration statements in December 1997 and December 1998 authorizing us to issue debt or equity securities, or a combination thereof, in an aggregate amount not to exceed $1,350. In March 1998, we issued $200 of 7.0% unsecured notes due March 15, 2028 and $150 of 6.5% unsecured notes due March 15, 2008. In March 1999, we issued $250 of 6.25% unsecured notes due March 1, 2004, $350 of 6.5% unsecured notes due March 1, 2009 and $400 of 7.0% unsecured notes due March 1, 2029.

      During 1999, DCC established a $500 Medium Term Note Program. Notes under the program are offered on terms determined at the time of issuance. At December 31, 1999, notes totaling $175 were outstanding under the program. Interest on the notes is payable on a semi-annual basis. These notes are general, unsecured obligations of DCC. DCC has agreed that it will not issue any other notes which are secured or senior to notes issued under the program, except as permitted by the program.

      Interest paid on short-term and long-term debt was $236 in 1997, $283 in 1998 and $285 in 1999.

9

Notes to Financial Statements

in millions except share and per share amounts

Note 9. Stock Option Plans

      The Compensation Committee of the Board grants stock options to selected Dana employees under the 1997 Stock Option Plan. The option price is equal to the market price of the stock at the date of grant. One-fourth of the options granted become exercisable at each of the first four anniversary dates of the grant; options generally expire ten years from the date of grant. Stock appreciation rights may be granted separately or in conjunction with the options.

      This is a summary of transactions under the plan in the last three years:

		Number			Weighted Average
		of Shares			Exercise Price
Outstanding at    December 31, 1996			7,724,146			$	26.15
	Granted - 1997		2,258,199				37.96
	Exercised - 1997		(1,627,188	)			22.78
	Cancelled - 1997		(127,549	)			29.76
Outstanding at    December 31, 1997			8,227,608			$	30.01
	Granted - 1998		2,519,524				48.14
	Exercised - 1998		(2,062,466	)			25.17
	Cancelled - 1998		(174,009	)			35.89
Outstanding at    December 31, 1998			8,510,657			$	36.43
	Granted - 1999		2,333,919				45.50
	Exercised - 1999		(569,933	)			30.65
	Cancelled- 1999		(193,138	)			43.24
Outstanding at    December 31, 1999			10,081,505			$	38.78

			Weighted
			Average		Weighted				Weighted
Range of	Number of		Remaining		Average		Number of		Average
Exercise	Options		Contractual		Exercise		Options		Exercise
Prices	Outstanding		Life in Years		Price		Exercisable		Price
$11.02-$28.13		1,878,719		4.8	$	25.81		1,608,846	$	25.42
29.06-38.44		3,403,632		6.4		34.62		2,954,932		34.04
40.08-52.56		4,799,154		9.0		46.81		951,898		46.61
		10,081,505		7.4	$	38.78		5,515,676	$	33.70

      At December 31, 1999, 4,477,834 shares were available for future grants.

      In accordance with our accounting policy for stock-based compensation, we have not recognized any expense relating to these stock options. If we had used the fair value method of accounting, the alternative policy set out in SFAS No. 123, “Accounting for Stock-Based Compensation,” the after-tax expense relating to the stock options would have been $6 in 1997, $12 in 1998 and $11 in 1999. If we had charged this expense to income, our net income and earnings per share would have been as follows:

	1997		1998		1999
Net Income	$	314	$	522	$	502
Basic EPS		1.93		3.16		3.03
Diluted EPS		1.91		3.13		3.01

      The above does not take into consideration pro forma compensation expense relating to grants made before 1995.

      The fair value of each option grant was estimated on the date of grant using the Black-Scholes model with the following assumptions:

	1997			1998			1999
Risk-free interest rate		6.1- 6.2	%		4.24 - 5.52	%		5.82	%
Dividend yield		2.6	%		2.21 - 2.87	%		2.73	%
Expected life		5.3 years			5.4 years			5.4 years
Stock price volatility		19.6 - 21.3	%		30.1 - 33.7	%		38.6	%

      Under our Directors’ Stock Option Plan, options for 3,000 common shares are automatically granted to each non-employee director once a year. The option price is the market value of the stock at the date of grant. The options can be exercised after one year and expire ten years from the date of grant.

      This is a summary of the stock option activity of the Directors’ plan in the last three years:

		Number			Weighted Average
		of Shares			Exercise Price
Outstanding at   December 31, 1996			75,000		$	27.76
	Granted - 1997		24,000			31.81
Outstanding at   December 31, 1997			99,000		$	28.74
	Granted - 1998		24,000			60.09
	Exercised - 1998		(3,000	)		24.25
Outstanding at   December 31, 1998			120,000		$	35.12
	Granted - 1999		21,000			50.25
	Exercised - 1999		(3,000	)		24.25
Outstanding at   December 31, 1999			138,000		$	37.66

				Weighted
				Average		Weighted				Weighted
Range of		Number of		Remaining		Average		Number of		Average
Exercise		Options		Contractual		Exercise		Options		Exercise
Prices		Outstanding		Life in Years		Price		Exercisable		Price
$24.25-$32.25			93,000		5.7	$	29.03		93,000	$	29.03
	50.25-60.09		45,000		8.8		55.50		24,000		60.09
			138,000		6.7	$	37.66		117,000	$	35.40

      At December 31, 1999, 127,000 shares were available for future grants.

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TABLE OF CONTENTS

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      The non-employee directors of Echlin participated in the 1996 Non-Executive Director Stock Option Plan under which options for 232,325 shares were authorized for issuance. Options were granted at market value at the date of grant, were exercisable after one year and expire ten years from the date of grant, except in the event of the retirement or death of the director. During 1997, options were granted to purchase 25,091 shares at $37.93 per share; no options were exercised or cancelled. During 1998, options to purchase 17,654 shares were exercised at $33.49. During 1999, options to purchase 39,265 shares were exercised at $35.43. At December 31, 1999, there were 38,752 options outstanding and exercisable at exercise prices ranging from $33.49 to $37.93 per share with a weighted average exercise price of $34.40. The weighted average remaining contractual life of these options was 7.2 years. No future grants are expected under this plan.

Note 10. Employees’ Stock Purchase Plan

      The majority of our full-time U.S. and some of our non-U.S. employees are eligible to participate in our stock purchase plan. Plan participants can authorize us to withhold up to 15% of their earnings and deposit this amount with an independent custodian. The custodian uses the funds to purchase our common stock at current market prices. As record keeper for the plan, we allocate the purchased shares to the participants’ accounts. Shares are distributed to the participants on request.

      We match up to 50% of the participants’ contributions over a five-year period beginning with the year the amounts are withheld. If a participant withdraws any shares before the end of five years, the amount of our match will depend on how long the shares were in the account. The custodian purchased 947,950 shares in 1997, 874,272 shares in 1998 and 1,177,541 shares in 1999. The charge to expense for our match was $7 in 1997, $9 in 1998 and $10 in 1999.

Note 11. Additional Compensation Plans

      We have numerous additional compensation plans under which we pay our employees for increased productivity and improved performance. These include gain sharing and group incentive plans. We expensed $135 in 1997, $119 in 1998 and $147 in 1999 for amounts earned by employees under these plans.

      One such plan is our Additional Compensation Plan for certain officers and other key employees. Under this plan, a percentage of the participants’ compensation is accrued for additional compensation if we attain certain profit levels. The Compensation Committee selects the participants and determines whether to pay the awards immediately in cash or to defer them for payment later in cash, stock or a combination of both.

Activity related to the plan for the last three years is as follows:

	1997		1998		1999
Awarded to participants based on preceding year’s performance	$	11	$	14	$	14
Dividends and interest credited to participants’ accounts		1		1		4
Charges to expense		20		9		19
Shares issued to participants		7,074		1,143		3,721

      We also have a Restricted Stock Plan under which the Compensation Committee grants restricted common shares to certain key employees. The shares are subject to forfeiture until the restrictions lapse or terminate. Generally, the employee must remain employed with us for a specified number of years after the date of grant to receive shares. There were 47,245 shares granted in 1997, 55,100 shares in 1998 and 102,500 shares in 1999. Since 1997, participants have been able to convert their restricted stock into restricted stock units under certain conditions. The units are payable in unrestricted stock upon retirement or termination of employment. There were 27,491 restricted shares converted to restricted units in 1997 and 200,037 in 1999. Charges to expense for this plan were $1 in 1997, $1 in 1998 and $2 in 1999. There are 678,389 shares authorized for future issuance under the plan at December 31, 1999.

11

Notes to Financial Statements

in millions except share and per share amounts

Note 12. Pension and Other Postretirement Benefits

      We provide defined contribution and defined benefit, qualified and nonqualified, pension plans for certain employees. We also provide other postretirement benefits including medical and life insurance for certain employees upon retirement.

      The following tables provide a reconciliation of the changes in the defined benefit pension plans’ and other postretirement plans’ benefit obligations and fair value of assets over the two-year period ended December 31, 1999, statements of the funded status and schedules of the net amounts recognized in the balance sheet at December 31, 1998 and 1999:

			Pension Benefits						Other Benefits
			1998			1999			1998			1999
Reconciliation of benefit obligation
		Obligation at January 1	$	2,257		$	2,382		$	992		$	1,083
		Service cost		71			78			18			18
		Interest cost		153			153			70			69
		Employee contributions		2			4			4			4
		Plan amendments		18			20			2			(28	)
		Actuarial (gain) loss		78			(41	)		63			48
		Benefit payments		(178	)		(162	)		(68	)		(78	)
		Settlement, curtailment and terminations		(22	)					(15	)
		Acquisitions and divestitures		6			(5	)		18			23
		Translation adjustments		(3	)		(4	)		(1	)		1
		Obligation at December 31	$	2,382		$	2,425		$	1,083		$	1,140
Reconciliation of fair value of plan assets
		Fair value at January 1	$	2,507		$	2,703
		Actual return on plan assets		326			284
		Acquisitions and divestitures		9			58
		Employer contributions		50			36
		Employee contributions		3			4
		Benefit payments		(167	)		(158	)
		Settlements		(18	)
		Translation adjustments		(7	)		4
		Fair value at December 31	$	2,703		$	2,931
Funded Status
	Balance at December 31		$	321		$	506		$	(1,083	)	$	(1,140	)
	Unrecognized transition obligation			6			1
	Unrecognized prior service cost			72			82			(31	)		(29	)
	Unrecognized (gain) loss			(409	)		(581	)		211			254
	Accrued cost		$	(10	)	$	8		$	(903	)	$	(915	)
Amounts recognized in the balance sheet consist of:
		Prepaid benefit cost	$	117		$	129
		Accrued benefit liability		(153	)		(150	)	$	(903	)	$	(915	)
		Intangible assets		7			8
		Accumulated other comprehensive loss		19			21
		Net amount recognized	$	(10	)	$	8		$	(903	)	$	(915	)

      Benefit obligations of the U.S. non-qualified and certain non-U.S. pension plans, amounting to $84 at December 31, 1999, and the other postretirement benefit plans are not funded.

      Components of net periodic benefit costs for the last three years are as follows:

	Pension Benefits									Other Benefits
	1997			1998			1999			1997			1998			1999
Service cost	$	61		$	71		$	78		$	14		$	18		$	18
Interest cost		149			153			153			67			70			67
Expected return on plan assets		(190	)		(181	)		(219	)
Amortization of transition obligation		3			4			3
Amortization of prior service cost		16			16			23			(9	)		(9	)		(9	)
Recognized net actuarial (gain) loss		18			(8	)		5						5			5
Net periodic benefit cost		57			55			43			72			84			81
Curtailment (gain) loss		3			4						(9	)		(19	)
Settlement gain					(3	)
Termination expenses		1			2
Net periodic benefit cost after curtailments and settlements	$	61		$	58		$	43		$	63		$	65		$	81

      The assumptions used in the measurement of pension benefit obligations are as follows:

	U.S. Plans
	1997			1998			1999
Discount rate		7 - 8	%		6.75	%		7.25	%
Expected return on plan assets		8.75 - 10	%		8.75	%		9.25	%
Rate of compensation increase		4.31 - 5	%		4.31 - 5	%		4.31 - 5	%

	Non-U.S. Plans
	1997			1998			1999
Discount rate		5 - 8.5	%		5 - 8	%		5.5 - 7	%
Expected return on plan assets		7.5 - 9	%		7.25 - 9	%		6.5 - 9	%
Rate of compensation increase		2.5 - 7.5	%		3.5 - 5	%		3 - 5	%

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      The assumptions used in the measurement of other postretirement benefit obligations are as follows:

	1997			1998			1999
Discount rate		7	%		6.75	%		7.25	%
Initial weighted health care costs trend rate		7.8	%		7.5	%		7.2	%
Ultimate health care costs trend rate		5	%		5	%		5	%
Years to ultimate		11			10			9

      Assumed health care costs trend rates have a significant effect on the health care plan. A one-percentage-point change in assumed health care costs trend rates would have the following effects for 1999:

	1% Point		1% Point
	Increase		Decrease
Effect on total of service and interest cost components	$	7	$	(6	)
Effect on postretirement benefit obligations		90		(76	)

Note 13. Business Segments

      Our operations are organized into seven market-focused Strategic Business Units (SBUs). This structure allows our people in each of these areas to focus their resources to benefit Dana and our global customers. At the end of 1999 we redefined our SBUs. The Industrial Systems Group (ISG) was eliminated and portions of it and of the Engine Systems Group were combined to form the Fluid Systems Group. The segment information has been restated to reflect this change.

      The Automotive Systems Group (ASG) designs, develops and manufactures “under the vehicle” products for passenger cars and light trucks. Its global, full-service engineering provides its customers with complete modules and systems. In the automotive market, the group is a leader in axles, constant velocity joints and driveshafts, chassis and structural components and modules and full Rolling Chassis(TM) systems.

      The Automotive Aftermarket Group (AAG) provides more than 300,000 different parts to cover a vast array of aftermarket needs for brake and chassis products, filtration products and engine systems.

      The Heavy Truck Group (HTG) serves the global market for class 5 through 8 trucks. Products include heavy axles and brakes, drivetrain components, power take-offs, trailer products and heavy systems modular assemblies.

      The Engine Systems Group (ESG) provides its customers with complete engine systems for their sealing and power cylinder needs. Its products include gaskets and other sealing products, piston rings, bearings, liners and camshafts.

      The Fluid Systems Group (FSG) manufactures an extensive line of products focused on the pumping, routing and thermal management of fluid systems for a wide range of applications, from passenger cars to heavy trucks and off-highway vehicles. Products include an extensive line of rubber hose, fluid products and fluid management systems.

      The Off-Highway Systems Group (OHSG) manufactures and markets off-highway axles, powershift transmissions, transaxles, torque converters and electronic controls, as well as hydraulic valves, pumps, motors, filters and electronic components.

      Dana Commercial Credit (DCC) provides leasing and financing services to a broad range of customers in selected markets around the world.

13

Notes to Financial Statements

in millions except share and per share amounts

Note 13. Business Segments (Continued)

Management evaluates the operating segments and regions as if DCC were accounted for on the equity method of accounting. Information used to evaluate the SBUs and regions is as follows:

			Operating			Net			Net			Capital		Depreciation/
1997	Sales		PAT			Profit			Assets			Spend		Amortization
ASG	$	3,882	$	302		$	242		$	1,627		$	234	$	121
AAG		2,727		99			51			1,731			77		71
HTG		925		49			30			249			18		13
ESG		967		49			35			819			57		41
FSG		1,171		65			50			745			60		45
OHSG		867		38			26			588			36		40
DCC				31			31			139
Other		1,372		(164	)		4			303			43		50
Total operations		11,911		469			469			6,201			525		381
Restructuring and nonrecurring items				(149	)		(149	)
Consolidated	$	11,911	$	320		$	320		$	6,201		$	525	$	381
North America	$	9,101	$	518		$	408		$	4,396		$	309	$	243
Europe		1,832		35			11			1,167			126		80
South America		734		50			39			646			59		44
Asia Pacific		244		11			3			148			15		10
DCC				31			31			139
Other				(176	)		(23	)		(295	)		16		4
Total operations		11,911		469			469			6,201			525		381
Restructuring and nonrecurring items				(149	)		(149	)
Consolidated	$	11,911	$	320		$	320		$	6,201		$	525	$	381
1998
ASG	$	4,185	$	325		$	260		$	1,823		$	221	$	131
AAG		2,826		133			86			1,748			86		66
HTG		1,746		104			73			654			42		36
ESG		1,035		47			33			1,222			65		54
FSG		1,173		75			60			766			56		48
OHSG		878		46			34			551			44		37
DCC				34			34			122
Other		621		(173	)		11			67			38		24
Total operations		12,464		591			591			6,953			552		396
Restructuring and nonrecurring items				(57	)		(57	)
Consolidated	$	12,464	$	534		$	534		$	6,953		$	552	$	396
North America	$	9,657	$	642		$	520		$	4,862		$	341	$	260
Europe		1,844		66			37			1,355			116		86
South America		779		27			14			777			61		40
Asia Pacific		184		(5	)		(12	)		138			13		8
DCC				34			34			122
Other				(173	)		(2	)		(301	)		21		2
Total operations		12,464		591			591			6,953			552		396
Restructuring and nonrecurring items				(57	)		(57	)
Consolidated	$	12,464	$	534		$	534		$	6,953		$	552	$	396
1999
ASG	$	4,474	$	344		$	269		$	1,773		$	190	$	141
AAG		2,972		181			125			1,931			117		74
HTG		1,903		127			91			689			48		34
ESG		1,376		74			54			1,166			85		73
FSG		1,219		81			63			750			59		49
OHSG		797		33			21			542			31		36
DCC				34			34			145
Other		418		(196	)		21			244			17		22
Total operations		13,159		678			678			7,240			547		429
Restructuring and nonrecurring items				(165	)		(165	)
Consolidated	$	13,159	$	513		$	513		$	7,240		$	547	$	429
North America	$	10,308	$	775		$	611		$	5,258		$	381	$	283
Europe		2,051		60			22			1,231			102		96
South America		549		13			3			581			48		37
Asia Pacific		251		(1	)		(10	)		143			13		9
DCC				34			34			145
Other				(203	)		18			(118	)		3		4
Total operations		13,159		678			678			7,240			547		429
Restructuring and nonrecurring items				(165	)		(165	)
Consolidated	$	13,159	$	513		$	513		$	7,240		$	547	$	429

14

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      With the exception of DCC, operating profit after taxes (PAT) represents earnings before interest and taxes (EBIT), tax effected at 39% (our estimated long-term effective rate), plus equity in earnings of affiliates. The Other category includes discontinued businesses, trailing liabilities for closed plants, SBU and regional administrative expenses, interest expense net of interest income, corporate expenses and adjustments to reflect the actual effective tax rate. In arriving at net profit from operating PAT, expenses relating to a specific SBU or region are allocated directly. Other allocations are based on sales.

      Net assets at the SBU and regional level is intended to correlate with invested capital. It includes accounts receivable, inventories (on a first-in, first-out basis), net property, plant and equipment, investments in affiliates, goodwill, trade accounts payable and 2% of annualized sales as an assumption for cash and prepaid expense.

      DCC is evaluated based upon numerous criteria of which net profit and net assets (equity investment) shown above are the major items.

      Restructuring and nonrecurring items consist of the restructuring and integration charges discussed in Note 20, gains on sales of business discussed in Note 19 and other nonrecurring charges.

      Sales by region are based upon location of the entity recording the sale. Sales from the U.S. amounted to $8,413 in 1997, $8,784 in 1998 and $9,413 in 1999. No other country’s sales exceeded 10% of total sales. U.S. long-lived assets were $1,485 in 1997, $1,713 in 1998 and $1,835 in 1999. No other country’s long-lived assets exceeded 10% of total long-lived assets.

      Net operating assets differ from consolidated assets as follows:

	1997				1998		1999
Net operating assets		$	6,201	$	6,953	$	7,240
Accounts payable			760		996		1,129
DCC’s assets in excess of equity			1,697		1,330		1,902
Non-trade receivables and other current assets			633		629		655
Other long-term assets			220		230		197
Consolidated assets		$	9,511	$	10,138	$	11,123

      The difference between operating capital spend and depreciation shown above and purchases of property, plant and equipment and depreciation shown on the cash flow statement represents the method of measuring DCC for operating purposes. DCC’s capital spend and depreciation are not included above. In addition, DCC purchases equipment and leases the equipment to the other SBUs. These operating leases are included in the consolidated statements as purchases of assets and depreciated over their useful life.

      Export sales from the U.S. to customers outside the U.S. amounted to $766 in 1997, $756 in 1998 and $939 in 1999. Total export sales (including sales to our non-U.S. subsidiaries which are eliminated for financial statement presentation) were $1,060 in 1997, $1,001 in 1998 and $1,229 in 1999.

      Worldwide sales to Ford Motor Company and subsidiaries amounted to $1,757 in 1997, $1,911 in 1998 and $2,130 in 1999, which represented 15%, 15% and 16% of our consolidated sales. Sales to DaimlerChrysler AG and subsidiaries were $1,269 in 1997, $1,602 in 1998 and $1,777 in 1999 representing 11%, 13% and 14% of our consolidated sales. Sales to Ford were primarily from our ASG and FSG segments, while sales to DaimlerChrysler were primarily from the ASG and HTG segments. No other customer accounted for more than 10% of our consolidated sales.

Note 14. Estimated Income Taxes

      Income tax expense (benefit) consists of the following components:

		Year Ended December 31
		1997			1998		1999
Current
	U.S. Federal	$	167		$	140	$	23
	U.S. state and local		48			46		15
	Non-U.S		108			74		139
			323			260		177
Deferred
	U.S. Federal		17			43		120
	Non-U.S		(46	)		12		(46	)
			(29	)		55		74
Total expense		$	294		$	315	$	251

      Deferred tax benefits (liabilities) consist of the following:

				December 31
	1997			1998			1999
Postretirement benefits other than pensions	$	351		$	386		$	387
Postemployment benefits		55			38			38
Expense accruals		199			144			150
Inventory reserves		42			28			35
Net operating loss carryforwards		46			123			117
Valuation allowances		(30	)		(59	)		(83	)
Other employee benefits		6			16			24
Other		59			30			63
Deferred tax benefits		728			706			731
Depreciation — non-leasing		(195	)		(179	)		(215	)
Leasing activities		(358	)		(383	)		(441	)
Pension accruals		(27	)		(23	)		(15	)
Other		(8	)		(11	)		(17	)
Deferred tax liabilities		(588	)		(596	)		(688	)
Net deferred tax benefits	$	140		$	110		$	43

      Worldwide, we have operating loss carryforwards of approximately $357 with remaining lives ranging from one year to an indefinite period. Valuation allowances are provided for deferred benefits if the realization of the benefits is uncertain. To reflect uncertainties related to utilization of specific loss carryforwards, we increased the valuation allowance by $29 in

15

Notes to Financial Statements

in millions except share and per share amounts

Note 14. Estimated Income Taxes (Continued)

1998 and $24 in 1999. Net benefits recognized for loss carryforwards generally relate to the U.S., where we have traditionally been a taxpayer, and Germany and Brazil, where operating losses may be carried forward indefinitely.

      Cumulative undistributed earnings of non-U.S. subsidiaries for which U.S. income taxes, exclusive of foreign tax credits, have not been provided approximated $883 at December 31, 1999. U.S. income taxes have not been provided on these undistributed earnings since we intend to permanently reinvest them. If the total undistributed earnings of non-U.S. subsidiaries had been remitted in 1999, a significant amount of the additional tax provision would have been offset by foreign tax credits.

      We paid income taxes of $265 in 1997, $228 in 1998 and $136 in 1999.

      The effective income tax rate differs from the U.S. Federal income tax rate for the following reasons:

		Year Ended December 31
		1997			1998			1999
U.S. Federal income tax rate			35.0	%		35.0	%		35.0	%
Increases (reductions) resulting from:
	State and local income taxes, net of Federal income tax benefit		4.5			3.6			2.1
	Non-U.S. income		8.1			(1.1	)		(.7	)
	Capital loss utilization		(.9	)
	General business tax credits		(.3	)		(.4	)		(1.9	)
	Amortization of goodwill		3.6			.5			.6
	Miscellaneous items		(1.4	)		.9			(1.0	)
Effective income tax rate			48.6	%		38.5	%		34.1	%

Note 15. Composition Of Certain Balance Sheet Amounts

      The following items comprise the net amounts indicated in the respective balance sheet captions:

	December 31
	1998		1999
Investments and Other Assets
Goodwill	$	1,064	$	997
Investments at equity		304		429
Marketable securities, cost of $55 - 1998 and $46 - 1999		58		49
Loans receivable		33		103
Other		186		280
	$	1,645	$	1,858
Property, Plant and Equipment, net
Land and improvements to land	$	164	$	159
Buildings and building fixtures		1,123		1,202
Machinery and equipment		4,479		4,820
		5,766		6,181
Less: Accumulated depreciation		2,462		2,731
	$	3,304	$	3,450
Deferred Employee Benefits and Other Noncurrent Liabilities
Postretirement other than pension	$	839	$	839
Deferred income tax		137		160
Pension		92		40
Postemployment		82		82
Compensation		51		68
Other noncurrent liabilities		136		209
	$	1,337	$	1,398

	December 31
	1998			1999
Investment in Leases
Direct financing leases	$	118		$	173
Leveraged leases		703			816
Property on operating leases, net of accumulated depreciation		81			87
Allowance for credit losses		(33	)		(41	)
		869			1,035
Less: Current portion		17			21
	$	852		$	1,014

      The components of the net investment in direct financing leases are as follows:

	December 31
	1998		1999
Total minimum lease payments	$	138	$	201
Residual values		35		43
Deferred initial direct costs		2		2
		175		246
Less: Unearned income		57		73
	$	118	$	173

      The components of the net investment in leveraged leases are as follows:

	December 31
	1998			1999
Rentals receivable	$	5,465		$	7,218
Residual values		755			788
Nonrecourse debt service		(4,627	)		(6,036	)
Unearned income		(879	)		(1,143	)
Deferred investment tax credit		(11	)		(11	)
		703			816
Less: Deferred taxes arising from leveraged leases		338			355
	$	365		$	461

      Total minimum lease payments receivable on direct financing leases as of December 31, 1999 are as follows:

Year Ending December 31:
	2000	$	34
	2001		32
	2002		29
	2003		27
	2004		24
Later years			55
Total minimum lease payments receivable		$	201

16

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Note 16. Fair Value Of Financial Instruments

      The estimated fair values of Dana’s financial instruments are as follows:

	December 31
	1998							1999
	Carrying			Fair				Carrying			Fair
	Amount			Value				Amount			Value
Financial assets
Cash and cash equivalents		$	230		$	230			$	111		$	111
Loans receivable (net)			117			119				184			180
Investment securities			73			73				67			67
Financial liabilities
Short-term debt			1,321			1,321				968			968
Long-term debt			2,100			2,286				3,198			3,101
Security deposits — leases			6			5				4			3
Deferred funding commitments under leveraged leases			4			4				4			3
Unrecognized financial instruments, net						(10	)						(4	)

Note 17. Commitments and Contingencies

      At December 31, 1999, we had purchase commitments for property, plant and equipment of approximately $170. Future minimum rental commitments under operating leases were $359 at December 31, 1999, with rental payments during the next five years of: 2000, $72; 2001, $59; 2002, $49; 2003, $42 and 2004, $36. Net rental expense was $116 in 1997, $119 in 1998 and $117 in 1999.

      We are a party to various pending judicial and administrative proceedings arising in the ordinary course of business. These include, among others, proceedings based on product liability claims and alleged violations of various environmental laws. We have reviewed the proceedings that are currently pending including the probable outcomes, reasonably anticipated costs and expenses, availability and limits of our insurance coverage and our established reserves for uninsured liabilities. We do not believe that any liabilities that may result from these proceedings are reasonably likely to have a material effect on our liquidity, financial condition or results of operations.

Note 18. Acquisitions

      In 1997, we acquired the piston ring and cylinder liner operations of SPX Corporation (SPD), the assets of Clark-Hurth Components (CH) from Ingersoll-Rand, the North American Aftermarket division of ITT Automotive (ITT), the Brazilian engine components business of Industria e Commercio Brosol Ltda. (Brosol), a 75% share of Wix Filtron Sp.zo.o and 50% of the shares of Estampados Argentina S.A. (EASA), bringing our effective ownership in this affiliate to 85%. SPD manufactures and sells piston rings and cylinder liners primarily for internal combustion engines. CH manufactures and sells transmissions and axles for use in off-highway vehicles and equipment.

      ITT manufactures and distributes motor vehicle brake system parts. Brosol produces motor-vehicle fuel system parts. Wix Filtron is a Polish manufacturer of filtration products and EASA is an Argentine manufacturer of heavy-duty structural components.

      These acquisitions were accounted for as purchases and the results of their operations have been included in the consolidated financial statements since the dates of acquisition. Sales in 1997 were $704 higher than 1996 as a result of acquisitions and total assets of companies acquired in 1997 amounted to $819.

      In 1998, we acquired the heavy axle and brake business of Eaton Corporation; General Automotive Specialty Company, Inc. (GAS); a 98-percent share of the capital of Nakata S.A. Industria e Comercio (Nakata); full ownership of SIMESC-Parish, our Brazilian structural components manufacturing company; the Glacier Vandervell Bearings Group and the AE Clevite North American non-bearing aftermarket engine hard parts business. GAS manufactures motor switches and locks. SIMESC-Parish, which has been renamed Dana Parish Produtos Estruturais, S.A., produces a range of structural products, including full frames and heavy-truck side rails. Nakata and its subsidiaries are the leading Brazilian manufacturers of suspension components, such as tie rods and ball joints. Glacier Vandervell produces and distributes products used in passenger car and light-duty vehicle applications for both original equipment manufacturers and the aftermarket. The AE Clevite business includes products such as camshafts, valves and other valvetrain, timing and cylinder components.

      These acquisitions were accounted for as purchases and the results of their operations have been included in the consolidated financial statements since the dates of acquisition. Sales in 1998 were $784 higher than 1997 as a result of acquisitions and total assets of companies acquired in 1998 amounted to $980.

      In July 1998 we completed the merger with Echlin Inc. by exchanging 59.6 million shares of our common stock for all of the common stock of Echlin. Each share of Echlin was exchanged for .9293 of one share of our common stock. In addition, the outstanding Echlin stock options were converted at the same exchange ratio into options to purchase approximately 1.8 million shares of our common stock.

      The merger has been accounted for as a pooling of interests and all prior period consolidated financial statements have been restated to include the combined results of operations, financial position and cash flows of Echlin.

      In 1999, we acquired Innovative Manufacturing, Inc., a machining operation that supplies machined castings to our Outdoor Power Equipment Components Division. We also acquired the remaining interests not previously owned in Industrias Serva S.A. (30%), Dana Heavy Axle Mexico S.A. de C.V. (9%), Automotive Motion Technology Limited (49%) and Echlin Charger Mfg. Co. Pty. Ltd. (8%). These acquisitions have been accounted for as purchases and the results of operations and earnings previously allocated to minority owners have been included from the dates of acquisition. The sales and total assets were not material.

17

Notes to Financial Statements

dollars in millions

Note 19. Divestitures

      In March 1997, we completed the sale of our automotive warehouse distribution business in the United Kingdom, the Netherlands and Portugal. In August 1997, we sold our worldwide vehicular clutch operations and our Preferred Plastic Sheet Division. In September 1997, the automotive transmission operations were sold to a subsidiary of our 49%-owned Mexican affiliate, Spicer S.A. de C.V., and the sale of Ace Electric, a producer of starting and charging parts for engine systems, was completed. In October 1997, we sold our flat rubber products operations. In November 1997, we completed the sales of our 49% interest in Korea Spicer Corporation and the assets of automotive parts distributors Echlin Australia Pty. Ltd. and WAWD-EAP. In December 1997, as part of the rationalization plan announced in the first quarter, we completed the sale of our automotive warehouse distribution operation in France. Net gains recorded on these sales totaled $147. These operations contributed sales of $385 through the dates of divestiture in 1997.

      In February 1998, we completed the sale of our hydraulic brake hose facilities in Columbia City, Ind. and Garching, Germany. In April 1998, we sold our Midland-Grau heavy-duty brake operations. In June 1998, we completed the sale of our hydraulic cylinder business. In December 1998, DCC completed the sale of its Technology Leasing Group portfolio resulting in an after-tax gain of $76. These operations contributed sales of $471 in 1997; through the dates of divestiture, 1998 sales for these operations totaled $140.

      In October 1999, we sold the Coldform operations of our Engine Systems Group and in November we sold Sierra International Inc. Coldform manufactured starter components, steering hubs and suspension components and Sierra manufactured and distributed marine and power equipment engine, drive and hose products. Annual sales of these operations were approximately $50.

Note 20. Restructuring of Operations

      We initiated various restructuring plans in 1997. The cost of these plans included a charge of $254 at former Echlin facilities. This charge related to facility realignments and rationalizations associated with closing or consolidating 14 locations, writing down to net realizable value the assets of six operations to be divested, writing off goodwill that had no future value and writing down certain joint venture investments in Europe and Asia. The estimated workforce reduction was 1,215 people. Other charges taken included $36 to initiate a rationalization plan at our Perfect Circle Europe operations, resulting in a workforce reduction of 368 people; $39 relating to rationalizing our Reading, Pa. structural components plant, with an expected workforce reduction of 1,140 people; $20 to reduce deferred income tax benefits that we had expected to realize from operating losses in France; $14 relating to the closure of our Vimercate, Italy plant, with an anticipated workforce reduction of 120 people; and $54 relating to downsizing or closing various facilities and exiting several unprofitable lines of business, with an estimated workforce reduction of 440 people. Of the $417 outlined above, $59 was charged to cost of sales, $30 to income tax expense and $328 to restructuring.

      In the fourth quarter of 1998, we finalized our synergy plans for integrating the operations of Echlin into our businesses and recorded restructuring and integration charges of $138. Of this amount $118 was charged to restructuring and $20, for writing down inventory, was charged to cost of sales. The announced restructuring and integration plans include the closing of eight facilities (seven in the AAG and one in the ESG) which will result in a workforce reduction of approximately 2,450 people.

      During 1999, we continued executing the Echlin restructuring plan announced in 1998, including the closing and downsizing of facilities begun in 1998. We also incurred integration charges of $51 for relocating assets, training and relocating employees and other integration activities at the acquired operations. These costs were charged to expense as incurred.

      During the fourth quarter of 1999, we announced plans to downsize and close additional operations in the U.S., South America and Europe and recorded restructuring and integration charges totaling $170. The charges include the costs of exiting businesses, asset impairments and termination benefits. The announced restructuring and integration plans include closing five facilities, downsizing three facilities and terminating 1,280 people. The largest component of these plans is the downsizing of our Reading, Pa. structures facility. In total, $229 million was charged to income during the year. This amount consisted of $181 charged to restructuring and integration, $57 charged to cost of sales and a $9 gain on the sale of Sierra credited to other income.

18

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      The following summarizes the restructuring charges and activity recorded in the last three years:

					Impairment
											Write-Down
		Employee						Investments			of Goodwill
		Termination			Long-Lived			in Operations			and			Exit			Integration
		Benefits			Assets			To be Sold			Intangibles			Costs			Expenses			Total
Charged to expense in 1997		$	96		$	41		$	102		$	89		$	–		$	–		$	328
Activity during the year
	Cash payments		(8	)																	(8	)
	Write-off of assets					(11	)		(40	)		(89	)								(140	)
Balance at December 31, 1997			88			30			62			–			–			–			180
Activity during the year
	Charged to expense		65			40									13						118
	Cash payments		(37	)											(2	)					(39	)
	Write-off of assets					(70	)		(62	)											(132	)
Balance at December 31, 1998			116			–			–			–			11			–			127
Activity during the year
	Charged to expense		60			59									11			51			181
	Cash payments		(85	)											(9	)		(51	)		(145	)
	Write-off of assets					(59	)														(59	)
Balance at December 31, 1999		$	91		$	–		$	–		$	–		$	13		$	–		$	104

      Employee terminations relating to the plans were as follows:

		1997			1998			1999
Total estimated			3,282			2,450			1,280
Less terminated:
	1997		(711	)
	1998		(2,292	)
	1999		(117	)		(1,123	)		(595	)
Estimated adjustments			(150	)
Balance at December 31, 1999			12			1,327			685

      At December 31, 1999, $104 of restructuring charges remained in accrued liabilities. This balance was comprised of $91 for the reduction of approximately 2,020 employees to be completed in 2000 and $13 for lease terminations and other exit costs. The estimated annual cash expenditures will be approximately $54 in 2000, $34 in 2001 and $16 thereafter. Our liquidity and cash flows will not be materially impacted by these actions. It is anticipated that our operations over the long term will benefit from these realignment strategies.

Note 21. Noncash Investing and Financing Activities

      In leveraged leases, the issuance of nonrecourse debt financing and subsequent repayments thereof are transacted directly between the lessees and the lending parties to the transactions. Nonrecourse debt issued to finance leveraged leases was $389 in 1997, $225 in 1998 and $878 in 1999. Nonrecourse debt obligations repaid were $158 in 1997, $182 in 1998 and $273 in 1999.

      In 1997, in addition to cash contributions, 1,000,000 shares of Dana common stock, with a market value of $32, were contributed to the Dana Corporation Pension Plans Trust.

19

Management’s Discussion and Analysis of Financial Condition and Results of Operations

dollars in millions, except per share amounts

      In 1999, our focus was on integrating our newly acquired businesses and rationalizing our global operations. These efforts included implementing the restructuring plans announced in December 1998 and identifying non-strategic and under-performing operations. Over a period of several months we announced plans to divest operations with annual sales approximating $850. As we entered the fourth quarter, it became apparent that we needed to evaluate our global capacity in certain product areas. This evaluation resulted in further rationalization charges being recorded in December 1999.

Liquidity and Capital Resources

      Operating activities provided net cash of $608 in 1999 compared to $795 in the previous year. Net income adjusted for depreciation and amortization was marginally higher in 1999. We discontinued our accounts receivable financing program this year, adding $200 to working capital. This change, combined with an inventory increase of $183 and a further increase in accounts receivable due to higher fourth quarter sales, more than offset the increase in accounts payable and other operating liabilities.

      Investing activities in 1999 used net cash of $1,101, a 50% increase over 1998. Capital spending exceeded $800, reflecting the investment in our core product capacity and enterprise computer systems. Also included were investments in our regional distribution facilities, a major component of our plan to realize savings through the realignment of our aftermarket distribution system. Due in part to the divestiture of DCC’s small-ticket leasing business in 1998, we saw a $66 decrease in the purchases of assets to be leased. This was offset by increases in DCC’s lending ($67) and other investment activities ($38).

[GRAPH]
Capital Spending
’97	$	579
’98	$	661
’99	$	807
Dana’s capital spending increased 22 percent in 1999.

      We recorded net proceeds of $210 in 1998 related to acquisition and divestiture activities. The 1999 impact was less than $20; however, several of the divestitures pending at the end of 1999 are expected to close in the first quarter of 2000.

      Financing activities in 1999 generated net cash of $374. We issued notes totaling $1,000 in March 1999 and used a portion of the proceeds to pay down both short-term debt, including the bridge financing on the Glacier Vandervell and AE Clevite acquisition, and medium-term debt. We also spent $100 to repurchase approximately three million shares of our stock as part of a program approved by our directors in April 1999 which authorizes spending up to $350 to repurchase stock through October 19, 2000. This authorization was increased to $600 and extended through December 31, 2000 by our board at its February 2000 meeting.

      Dividend payments increased to $206 in 1999 as the annualized rate increased 9% to $1.24 per share. Total dividends paid rose only 4%, however, as the 1998 amount includes dividends paid by Echlin prior to the merger.

      Committed and uncommitted bank lines enable us to issue commercial paper and make direct bank borrowings. We have committed and uncommitted bank lines totaling $1,412; DCC has separate lines totaling $951. Based on our 1999 budgeting process, we expect our cash flows from operations, combined with these credit facilities, to provide sufficient liquidity to fund our debt service obligations and projected working capital requirements, capital spending and potential acquisitions for the foreseeable future.

      We have reviewed the liabilities that may result from legal proceedings (including those involving product liability claims and alleged violations of environmental laws) to which we were a party as of December 31, 1999. We do not believe that these liabilities or the related cash flows are reasonably likely to have a material adverse effect on our liquidity, financial condition or results of operations. Contingent environmental and product liabilities were estimated based on the most probable method of remediation or outcome, current laws and regulations and existing technology. Estimates were made on an undiscounted basis and exclude the effects of inflation. If there was a range of equally probable remediation methods or outcomes, we accrued at the lower end of the range. At December 31, 1999:

• $96 was accrued for contingent product liability costs and $45 for contingent environmental liability costs, compared to $38 and $57 in 1998, respectively.

• $65 was recorded (as assets) for probable recoveries from insurance or third parties for product liability claims and $1 for environmental liability claims, compared to $17 and $1 in 1998.

• The difference between the minimum and maximum estimates for contingent liabilities was $12 for product liability claims and $3 for environmental liability claims, compared to $15 and $2 in 1998. These differences are not considered material.

      We increased our product liability and the related amounts recorded for probable recoveries due to new asbestos bodily injury claims that have been made against us since the United States Supreme Court rejected a class action settlement to which we were a party and ended an injunction on the filing of new claims. These new claims are being administered by the Center for Claims Resolution, an outside service which has been handling similar claims for us for some time, in accordance with group settlement agreements in which we participate.

20

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Restructuring and Integration Expenses

      We initiated various restructuring plans in 1997. The cost of these plans included a charge of $254 at former Echlin facilities. This charge related to facility realignments and rationalizations associated with closing or consolidating 14 locations, writing down to net realizable value the assets of six operations to be divested, writing off goodwill that had no future value and writing down certain joint venture investments in Europe and Asia. The estimated workforce reduction was 1,215 people. Other charges taken included $36 to initiate a rationalization plan at our Perfect Circle Europe operations, resulting in a workforce reduction of 368 people; $39 relating to rationalizing our Reading, Pa. structural components plant, with an expected workforce reduction of 1,140 people; $20 to reduce deferred income tax benefits that we had expected to realize from operating losses in France; $14 relating to the closure of our Vimercate, Italy plant, with an anticipated workforce reduction of 120 people; and $54 relating to downsizing or closing various facilities and exiting several unprofitable lines of business, with an estimated workforce reduction of 440 people. Of the $417 outlined above, $59 was charged to cost of sales, $30 to income tax expense and $328 to restructuring.

      In the fourth quarter of 1998, we finalized our synergy plans for integrating the operations of Echlin into our businesses and recorded restructuring and integration charges of $138. Of this amount, $118 was charged to restructuring and $20, for writing down inventory, was charged to cost of sales. The announced restructuring and integration plans include the closing of eight facilities (seven in the Automotive Aftermarket Group and one in the Engine Systems Group) which will result in a workforce reduction of approximately 2,450 people.

      During 1999, we continued executing the Echlin restructuring plan announced in 1998, including the closing and downsizing of facilities begun in 1998. We also incurred integration charges of $51 for relocating assets, training and relocating employees and other integration activities at the acquired operations. These costs were charged to expense as incurred.

      During the fourth quarter of 1999, we announced plans to downsize and close additional operations in the U.S., South America and Europe and recorded restructuring and integration charges totaling $170. The charges include the costs of exiting businesses, asset impairments and termination benefits. The announced restructuring and integration plans include closing five facilities, downsizing three facilities and terminating 1,280 people. The largest component of these plans is the downsizing of our Reading, Pa. structures facility. In total, $229 million was charged to income during the year for net nonrecurring items. This amount consisted of $181 charged to restructuring and integration, $57 charged to cost of sales and a $9 gain on the sale of Sierra credited to other income.

The following summarizes the restructuring charges and activity for the last three years:

					Impairment
											Write-Down
		Employee						Investments			of Goodwill
		Termination			Long-Lived			in Operations			and			Exit			Integration
		Benefits			Assets			To be Sold			Intangibles			Costs			Expenses			Total
Charged to expense in 1997		$	96		$	41		$	102		$	89		$	–		$	–		$	328
Activity during the year
	Cash payments		(8	)																	(8	)
	Write-off of assets					(11	)		(40	)		(89	)								(140	)
Balance at December 31, 1997			88			30			62			–			–			–			180
Activity during the year
	Charged to expense		65			40									13						118
	Cash payments		(37	)											(2	)					(39	)
	Write-off of assets					(70	)		(62	)					–						(132	)
Balance at December 31, 1998			116			–			–			–			11			–			127
Activity during the year
	Charged to expense		60			59									11			51			181
	Cash payments		(85	)											(9	)		(51	)		(145	)
	Write-off of assets					(59	)														(59	)
Balance at December 31, 1999		$	91		$	–		$	–		$	–		$	13		$	–		$	104

21

Management’s Discussion and Analysis of Financial Condition and Results of
Operations

dollars in millions

      Employee terminations relating to the plans were as follows:

		1997			1998			1999
Total estimated			3,282			2,450			1,280
Less terminated:
	1997		(711	)
	1998		(2,292	)
	1999		(117	)		(1,123	)		(595	)
Estimated adjustments			(150	)
Balance at December 31, 1999			12			1,327			685

      At December 31, 1999, $104 of restructuring charges remained in accrued liabilities. This balance was comprised of $91 for the reduction of approximately 2,020 employees to be completed in 2000 and $13 for lease terminations and other exit costs. The estimated annual cash expenditures will be approximately $54 in 2000, $34 in 2001 and $16 thereafter. We expect our operations to benefit over the long term from these realignment strategies, which are not expected to materially affect liquidity and cash flows.

Impact of the Year 2000

      We did not experience any significant malfunctions or errors in our operating or business systems at the beginning of 2000. Based on operations since January 1, 2000 we do not expect any significant impact on our ongoing business as a result of the Year 2000 date formatting issues. However, it is possible that the full impact of the date change has not been fully recognized. For example, Year 2000 or leap year problems could occur within billing, payroll or general ledger applications at the end of a month, a quarter or the year. We believe that any such problems are likely to be minor and correctable. In addition, we could still experience problems if our customers or suppliers are adversely affected by Year 2000 issues, although we are not currently aware of any such problems.

      We have spent approximately $78 on our Year 2000 readiness efforts, which included assessment of our products and critical internal systems, as well as those of our major customers and suppliers, and development of contingency plans. Of this amount, $56 was charged to expense and $22 was capitalized. We expect that transition monitoring and related follow-up activities will cause an additional $3 to be charged to expense in 2000.

      As part of our contingency planning, we increased our inventory levels by $27 in the fourth quarter of 1999. We expect this incremental inventory to be utilized or sold in the first quarter of 2000 without having a material effect on our margins.

Impact of the Euro Conversion

      Our Euro Steering Committee was established in 1998 to guide our efforts to comply with the requirements of the Euro conversion. The committee established guidelines and timetables for compliance by the European facilities. Four facilities converted to the Euro in 1999 and seven more are converting at the beginning of 2000. The committee continues to monitor progress at the remaining operations. These operations are at different stages of readiness, but we believe that all of them are capable of complying with the conversion timetable and with customer requirements for quoting and billing in Euros. We have not incurred material costs to date nor do we expect the future cost of conversions to be material.

Results of Operations (1999 vs. 1998)

      Our worldwide sales increased by $695 in 1999 to $13,159, nearly 6% above the record level of 1998. Organic growth accounted for $359 or 3% while acquisitions, net of divestitures, added $336. U.S. sales increased $629 or 7% with $122 attributable to acquisitions net of divestitures. Exports increased 24% to $939 despite the increasing strength of the U.S. dollar.

	1998		1999					$% Change
North America	$	9,657	$	10,308	$	651			7
Europe		1,844		2,051		207			11
South America		779		549		(230	)		(30	)
Asia Pacific		184		251		67			36

      Overall sales outside of the U.S. increased 2% in 1999 but declined 4% when excluding the net effect of acquisitions and divestitures. The increased strength of the U.S. dollar had an adverse impact on sales in all regions except Asia Pacific. Mexico and Canada incurred a $24 negative currency effect on a combined basis. Europe, which experienced an 11% net increase, benefited by $194 from net acquisitions but gave back $47 in negative currency impact. South America, struggling to recover from economic downturns in Brazil and Argentina, incurred a $230 or 30% decrease in sales. The devaluation of the Brazilian real accounted for nearly all of the $240 in sales lost to currency effects in this region. Asia Pacific increased sales by $67 or 36% with currency changes contributing a $5 increase.

22

[DANA]

      Our Strategic Business Units (SBUs) – Automotive Systems Group (ASG), Automotive Aftermarket Group (AAG), Heavy Truck Group (HTG), Engine Systems Group (ESG), Fluid Systems Group (FSG) and Off-Highway Systems Group (OHSG) – represent our business segments. The “Other” category represents facilities that have been closed or sold and operations not assigned to a specific SBU. At the end of 1999 we eliminated the Industrial Systems Group (ISG) and combined portions of it and of the ESG to form the FSG. Our segment information has been restated to reflect these changes.

      Sales for 1998 and 1999 are presented in the table below. DCC, our seventh SBU, did not record sales in either year.

	1998		1999		$			% Change
ASG	$	4,185	$	4,474	$	289			7
AAG		2,826		2,972		146			5
HTG		1,746		1,903		157			9
ESG		1,035		1,376		341			33
FSG		1,173		1,219		46			4
OHSG		878		797		(81	)		(9	)
Other		621		418		(203	)		(33	)

      The popularity of sport utility vehicles (SUVs) and light trucks continues to push ASG sales to higher levels. Axle sales experienced most of the growth in this SBU. Driveshaft sales were up slightly less than 3% and structural product sales were relatively flat. Sales growth was most significant in North America where sales increased $354. Asia Pacific experienced a 72% increase and South America was down 34% for the year.

      The December 1998 acquisition of AE Clevite, a distributor of camshafts, valves and engine components, helped the AAG grow its North American sales by $133 in 1999. Our new filtration operation in the United Kingdom helped Europe register an 8% increase over 1998. Sales were down 10% in South America and 7% in Asia Pacific.

      The HTG continued to benefit from high build rates in medium to heavy trucks (class 5 through 8) in the United States. Heavy axle and brake operations led the way to a 12% sales increase in North America where nearly 94% of HTG’s sales occur. Sales were flat in Asia Pacific, down 13% in Europe and down nearly 50% in South America.

      The acquisition of Glacier Vandervell in December 1998 made the difference for the ESG in 1999. The manufacturer of engine bearings helped the ESG increase sales 22% in North America and 67% in Europe. Sales of the other engine and sealing products were generally flat for the year.

      FSG, our newest SBU, transacts more than 80% of its business in North America, where strength in coolant systems carried it to a 4% sales increase in 1999. Sales increased 13% in Europe but declined 26% in South America.

      OHSG had a challenging year. Sales decreased 11% in North America and 6% in Europe as the depressed agricultural market limited demand for off-highway axles, powershift transmissions, hydraulic pumps and auxiliary equipment.

      Revenue from lease financing decreased 36% in 1999 due to the sale of DCC’s Technology Leasing Group portfolio in December 1998. Other income in 1998 included a gain of $126 on this divestiture and $27 from the settlement of a lawsuit.

      Our gross margin was 16.7% in 1999 compared to 16.2% in 1998. Cost of sales in 1999 was increased by a charge of $57 related to impairment and other rationalization adjustments. In 1998 we charged $20 of inventory adjustments to cost of sales. Excluding these nonrecurring items, the gross margins would have been 17.1% in 1999 and 16.3% in 1998.

      Selling, general and administrative expenses (SG&A) increased only $70 in 1999 despite $83 of expenses at newly acquired businesses. SG&A at our manufacturing and distribution businesses (including newly acquired businesses) increased $76. DCC realized net savings of $8 with the reduction resulting from the December 1998 sale of its Technology Leasing Group portfolio being partially offset by expenses related to development of a new lease administration system. On a regional basis, North America increased $25 with all of it attributable to the net effect of acquisitions and divestitures. Europe increased by $78 including a net acquisition/divestiture impact of $42. Currency devaluation in South America caused SG&A to decline by nearly $28.

      Operating income, which excludes restructuring and integration charges and the 1998 merger expenses, increased by $110 in 1999. Acquisitions, net of divestitures, added $31 and DCC contributed $8. The vast majority of the improvement is based in North America as Europe improved a modest $7 and South America decreased $14. Excluding the nonrecurring items charged to cost of sales, operating margin would have increased from 7.3% in 1998 to 8.1% in 1999.

      Interest expense was virtually unchanged in 1999. DCC lowered its borrowing costs following the divestiture of its small-ticket leasing operation but the manufacturing operations incurred greater interest charges due to a higher debt level.

23

Management’s Discussion and Analysis of Financial Condition and Results of
Operations

dollars in millions

      Our effective tax rate improved from 39% to 34% in 1999. State tax incentives played a significant role in the change as did general business credits realized by our leasing operations. Nondeductible merger expenses adversely affected the 1998 rate.

      Minority interest increased by $5 due to the minority interest acquired as part of the Glacier Vandervell acquisition and earnings improvement at Automotive Motion Technology Limited prior to our acquiring the remaining shares of that subsidiary.

      Equity in earnings of affiliates rose $3 or 8% including a $16 decline in our Venezuelan affiliate, a $13 increase in our Mexican affiliates and a $7 increase related to our leasing partnerships.

      Net income for 1999 came in at $513, slipping 4% from the $534 we earned in 1998. Both years include several items that make it difficult to compare these results. In 1998 we recorded $57 of nonrecurring charges net of gains on divestitures and the settlement of a patent infringement case. This year we recorded $165 of nonrecurring charges net of the gain on the sale of Sierra. With these items excluded from both years, our earnings would have increased $87 or 15% to $678.

      The SBUs affected by the 1999 adjustments were ASG $59, AAG $41, ESG $31, HTG $3, FSG $3, OHSG $1 and Other $27. In 1998, adverse adjustments were recorded by AAG $45, ESG $17, OHSG $1 and Other $50. DCC recorded a gain of $56.

Market Trends

      Sales of SUVs and light trucks, our biggest market, finally exceeded passenger car sales in 1999. We see continuing strength in SUVs, light trucks and passenger cars but expect volume to finish slightly lower for 2000. This outlook could be revised downward if gasoline prices adversely affect demand for these vehicles. In the medium and heavy truck markets we expect build rates to decline by as much as 10% after a couple years of record volume. From a regional viewpoint, our expectations are that North America will continue to be strong, Europe will experience very modest growth, South America will begin to show signs of recovery and Asia Pacific will have a very solid year for us.

Forward Looking Information

      Forward-looking statements in this annual report are indicated by words such as “anticipates,” “expects,” “believes,” “intends,” “plans” and similar expressions. These statements represent our expectations based on current information and assumptions. Forward-looking statements are inherently subject to risks and uncertainties. Our actual results could differ materially from those which are anticipated or projected due to a number of factors including changes in business relationships with major customers, competitive pressures on sales and pricing, increases in production or material costs that cannot be recouped in product pricing, significant increases in the price of gasoline, flattening of demand for SUVs and light, medium and heavy trucks, softening demand for off-highway agricultural and structural products, and continued economic weakness in Europe, South America and Asia Pacific.

Results of Operations (1998 vs. 1997)

      Our worldwide sales increased $553 in 1998 to a record $12,464, nearly 5% above 1997. Excluding the effect of acquisitions and divestitures, sales increased $428 or 4%. U.S. sales increased $371 or 4% on the strength of the light truck and SUV markets and record build rates in medium and heavy trucks. Acquisitions net of divestitures accounted for $95 of the increase. Exports from the U.S. were $10 lower than 1997 at $756.

								%Change
								Excluding
								Acquisitions/
	1997		1998		%Change			Divestitures
North America	$	9,101	$	9,657		6			5
Europe		1,832		1,844		1			4
South America		734		779		6			(7	)
Asia Pacific		244		184		(25	)		(11	)

24

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      Sales outside the U.S. increased $181 or 5%. Excluding the net effect of acquisitions and divestitures, these sales were up $152 or 5%. Changes in currency rates had a $180 adverse effect on reported sales. Mexico and Canada gave up nearly 9% of their 1998 sales as a result of the relative strength of the U.S. dollar. South American sales increased $45 or 6% when the net effect of acquisitions and divestitures is included but declined 7% on a comparable basis. The weakening of the Brazilian real was a key factor in the region losing $193 of sales due to currency exchange impact. In Europe, sales increased $12 or 1% but would have decreased if not for a positive $91 currency impact. As a result of depressed economic conditions, Asia Pacific lost $60 or 25% in sales; $3 was attributable to exchange rates.

      Sales for 1997 and 1998 are represented in the table below. DCC, our seventh SBU, did not record sales in either year.

								% Change
								Excluding
								Acquisitions/
	1997		1998		% Change			Divestitures
ASG	$	3,882	$	4,185		8			6
AAG		2,727		2,826		4			3
HTG		925		1,746		89			18
ESG		967		1,035		7			1
FSG		1,171		1,173		—			—
OHSG		867		878		1			(4	)
Other		1,372		621		(55	)		(1	)

      ASG saw strong demand for light trucks, SUVs and passenger cars drive an 8% increase for the year. Growth in North America, which comprised 77% of this SBU’s sales, was just under 7% for the year, while Europe was up 13% after benefiting from a new product launch. South America registered the biggest gain at 15% with modular and structural products leading the way. Asia Pacific was off 5% for the year.

      AAG realized moderate growth, finishing 1998 about 5% above 1997. Leading the way in North America, which accounted for 84% of AAG’s sales, were brake parts and electronic controls. Our new filter operation in Poland was a bright spot but Europe grew only 2%. South America declined 9% for the year.

      HTG had excellent organic growth of 20% in North America as the heavy truck build rate reached a record level. The addition of the Eaton heavy axle and brake business as of the beginning of 1998 added an additional 77% of growth. The Eaton acquisition also accounted for the twelve-fold increase in sales in Europe and the 780% increase in South America. Sales in those regions were flat excluding acquisition impact.

      ESG ended 1998 more than 7% ahead of 1997 as our piston ring and cylinder liner business performed well. Europe was up 15% on the strength of our sealing business and a late boost from our December acquisition of Glacier Vandervell. South America declined 23% with weakness in all products.

      FSG benefited from a 9% improvement in its cooling systems business in North America but gave back an equal amount due to divestitures, finishing the year even with 1997. Sales in Europe were also flat. Only South America showed measurable improvement with a 5% increase on the strength of its cooling systems business.

      OHSG experienced a $6 decline in North American sales, primarily the net result of the Clark-Hurth acquisition and a divestiture and a plant closing in our hydraulics business. Sales in Europe rose 5% on the inclusion of Clark-Hurth’s European operations, net of the sale of our German hydraulics operation. South America lost $4 or 15% due mainly to weakness in the hydraulics business.

      Other income in 1998 decreased $117 from a 1997 amount that included gains of $261 from the sales of:

• the European warehouse distribution operations ($76)

• the vehicular clutch operations ($119)

• the Preferred Plastic Sheet Division ($21)

• the flat rubber products business ($14)

• the 49% share of Korea Spicer Corporation ($18)

• an investment in a leveraged lease by DCC ($13)

25

Management’s Discussion and Analysis of Financial Condition and Results of Operations

dollars in millions

      In 1998, we won a judgment on a patent infringement case in the amount of $27. DCC recorded a gain of $126 on the sale of its Technology Leasing Group portfolio and charges of $34 related to discontinued businesses in commuter aircraft and vehicle leasing.

      Gross margin improved to 16.2% in 1998 compared to 15.5% for 1997. In 1997, we recorded a $59 charge to cost of sales for inventory write-downs related to rationalized and discontinued product lines. A similar charge for $20 affected gross margin in 1998. Excluding the nonrecurring charges in both years, gross margin would have been 16.3% in 1998 and 16.0% in 1997.

      Selling, general and administrative expenses (SG&A) decreased $30 in 1998. The net impact of acquisitions and divestitures accounted for $8 of the decrease. Restructuring efforts started in 1997 and ongoing cost control initiatives had a positive impact. SG&A at DCC were higher in 1998 due to the effect of higher start-up and development costs associated with new leasing programs and the expansion of its lease portfolio. SG&A as a percentage of sales improved from 9.7% in 1997 to 9.0% in 1998.

      Operating income, which excludes restructuring and integration charges and merger expenses, increased by $200 in 1998. Operating margin improved to 7.2% from 5.8% in 1997. Excluding the nonrecurring charges to cost of sales and the net impact of acquisitions and divestitures, our operating margin would have been 7.2% in 1998 and 6.4% in 1997.

      Interest expense increased $28 in 1998 primarily due to higher average debt levels associated with acquisitions.

      The effective tax rate was 39% in 1998 compared to 49% for 1997. The 1997 rate was higher due to providing valuation reserves for tax benefits previously recorded in France and for tax benefits associated with the expenses recorded for the rationalization plan at the Perfect Circle Europe operations. Portions of the 1997 restructuring charge are not deductible for tax purposes, which also caused the rate to increase.

      Minority interest in net income of consolidated subsidiaries decreased $15 in 1998, with lower earnings at Albarus S.A. and its majority-owned subsidiaries in Brazil and at Automotive Motion Technology Limited in Europe.

      Equity in earnings of affiliates increased by $5 in 1998 as we discontinued the recognition of losses on our investment in Korea Spicer Corporation, which was sold in November 1997, and recognized higher earnings in DCC’s leasing affiliates and our Venezuelan affiliate.

      Earnings increased 67% in 1998 to finish at $534. This improvement occurred despite the recognition of $57 in nonrecurring charges net of gains recorded on divestitures and the patent infringement case. Segments adversely affected by these charges were AAG $45, ESG $17, OHSG $1 and Other $50 while DCC recorded a net gain of $56. Profits for 1997 were adversely affected by nonrecurring charges of $149 net of gains recorded on divestitures. Segments adversely affected by these charges were ASG $29, AAG $117, ESG $21, FSG $11, OHSG $13 and HTG $7. The other SBU recorded a net gain of $50.

26

Additional Information

in millions except per share amounts

Shareholders’ Investment

      The following table shows the range of market prices of our common stock on the New York Stock Exchange and the cash dividends declared and paid for each quarter during 1998 and 1999. At December 31, 1999, the closing price of Dana common stock was $29.94.

													Cash Dividends
					Stock Price								Declared and Paid
			1998						1999				1998		1999
Quarter Ended	HI		LO		CLOSE		HI		LO		CLOSE
March 31	$	59.00	$	48.00	$	58.06	$	43.50	$	34.00	$	38.00	$	.27	$	.31
June 30		61.50		51.06		53.50		54.06		37.38		46.06		.29		.31
September 30		54.94		35.13		37.31		47.63		35.13		37.13		.29		.31
December 31		44.88		31.31		40.88		39.06		26.00		29.94		.29		.31

Unaudited Quarterly Financial Information

      The following information has been reviewed by our independent accountants in accordance with generally accepted auditing standards (GAAS); however, they have not performed an audit in accordance with GAAS on the quarterly information to enable them to opine on each quarter.

								Net Income
				Gross				Per Share
Quarter Ended		Net Sales		Profit		Net Income		Basic		Diluted
For the year ended December 31, 1998
	March 31	$	3,233	$	535	$	141	$	.86	$	.84
	June 30		3,237		555		160		.97		.96
	September 30		2,962		483		98		.59		.59
	December 31		3,032		442		135		.82		.81
For the year ended
December 31, 1999
	March 31	$	3,381	$	566	$	162	$	.97	$	.97
	June 30		3,408		610		190		1.15		1.14
	September 30		3,127		563		161		.98		.97
	December 31		3,243		456		*		*		*

* Amount is less than $.5 and per share amounts are less than one-half cent.

      The information for the first two quarters of 1998 has been restated to reflect the Echlin merger, which has been accounted for as a pooling of interests.

      Expenses of $38 were incurred in the third quarter of 1998 to effect the Echlin merger. In the fourth quarter, DCC sold its technology leasing group portfolio, realizing a gain of $76 (46 cents per share); DCC also incurred a charge of $20 (12 cents per share) related to exiting certain businesses. In addition, Dana recorded $73 (44 cents per share) of restructuring charges and $12 (7 cents per share) of inventory write-offs as part of its plan to integrate the former Echlin operations.

      In the fourth quarter of 1999, we recorded rationalization, integration and other nonrecurring charges of $144 (87 cents per share). These charges relate to the downsizing of three facilities, including our Reading, Pa. facility, and the closing of five facilities in the U.S., South America and Europe, net of the gain on the sale of the Sierra marine aftermarket operation.

27

Eleven-Year History†

in millions except per share amounts

[DANA LOGO]

Financial Highlights
For the Years		1989		1990		1991		1992			1993		1994
Net Sales		$	6,320	$	6,553	$	6,084	$	6,655		$	7,404	$	8,843
Net Income (Loss)			176		123		55		(318	)		174		352
Net Income (Loss) per Common Share
	Basic		1.32		.92		.41		(2.27	)		1.18		2.29
	Diluted		1.30		.91		.41		(2.26	)		1.17		2.28
Cash Dividends per Common Share			.80		.80		.80		.80			.80		.83
Total Assets			6,259		5,705		5,371		5,584			5,895		6,701
Long-Term Debt			1,542		1,505		1,684		1,608			1,341		1,381

[Additional columns below]

[Continued from above table, first column(s) repeated]

Financial Highlights
For the Years		1995		1996		1997		1998		1999
Net Sales		$	10,472	$	10,979	$	11,911	$	12,464	$	13,159
Net Income (Loss)			443		451		320		534		513
Net Income (Loss) per Common Share
	Basic		2.81		2.83		1.97		3.24		3.10
	Diluted		2.80		2.81		1.94		3.20		3.08
Cash Dividends per Common Share			.90		.98		1.04		1.14		1.24
Total Assets			7,814		8,522		9,511		10,138		11,123
Long-Term Debt			1,325		1,887		1,790		1,718		2,732

† The information for years prior to 1998 has been restated to reflect the Echlin merger, which has been accounted for as a pooling of interests. Echlin amounts included for years prior to 1995 are for fiscal years ended August 31.

28 EX-21 5 EXHIBIT 21 1 Exhibit 21 DANA CORPORATION CONSOLIDATED SUBSIDIARIES AS OF DECEMBER 31, 1999 Dana Corporation 4500 Dorr Street Toledo, Ohio 43615 UNITED STATES - ------------- Dana Distribution, Inc. Delaware Dana Risk Management Services, Inc. Ohio Dana World Trade Corporation Delaware DTF Trucking, Inc. Delaware Albarus, Inc. Delaware Precision Specialities, Inc. Delaware GemStone Gasket Company Delaware Flight Operations, Inc. Delaware Results Unlimited, Inc. Delaware Dana International Finance Inc. Delaware Dana International Limited Delaware Krizman International, Inc. Delaware McQuay-Norris, Inc. Delaware Reinz Wisconsin Gasket Co. Delaware Victor Reinz Valve Seals, L.L.C. Delaware Wix Filtration Media Specialists, Inc. Delaware Sealed Power Technologies Corporation of Nevada Nevada Dana Technology Inc (f.k.a. Sanford Acquisition Company) Michigan DSA of America, Inc. Michigan Spicer Heavy Axle & Brake, Inc. Michigan Glacier Vandervell, Inc. Michigan Glacier Daido America, LLC Ohio Dandorr L.L.C. Delaware Innovative Manufacturing, Inc. Ohio Spicer Heavy Axle Holdings, Inc. Michigan Spicer Manufacturing, Inc. Indiana Spicer Technology, Inc. Indiana Spicer Axle, Inc. Indiana Dana Global Logistics, Inc. Indiana Echlin Inc Connecticut American Electronic Components, Inc. Indiana Automotive Brake Company Inc. Delaware Brake Parts Inc. Delaware Friction Inc. Delaware Brake Systems, Inc. Delaware EPE, Inc. California Prattville Mfg., Inc. (dormant) Delaware Hydraulics Inc. Delaware Automotive Controls Corp. Connecticut Auto Parts Acquisition Inc. (fka WAWD-EAP) (dormant) Delaware Beck/Arnley Worldparts Corp. Delaware Blackstone Manufacturing Co., Inc. Delaware Brake Realty Inc. Delaware 1 2 BWD Automotive Corporation Delaware BWD International Inc. Delaware Echlin-Ponce, Inc. Delaware Friction Materials, Inc. Massachusetts Iroquois Tool Systems, Inc. Pennsylvania Lipe Corporation (dormant) Delaware Long USA Inc. Delaware Long Automotive Inc. Texas Long Cooling Systems Inc. Delaware Midland Brake, Inc. (dormant) Delaware Mr. Gasket, Inc. Delaware Pacer Industries, Inc. Missouri PAH Mexico Inc. (holding co.) Delaware W.M. Holding Company, Inc. (holding co.) Delaware Preferred Technical Group International, Inc. Delaware Preferred Technical Group, Inc. Delaware Multitec-PTG, Inc. Delaware Ristance Corporation Indiana Tekonsha Engineering Company Michigan Theodore Bargman Company Michigan United Brake Systems Inc. (dormant) Delaware Engine Controls Distribution Services, Inc. Delaware Diamond Financial Holdings, Inc. Delaware Findlay Properties, Inc. Ohio Ottawa Properties, Inc. Michigan Shannon Properties, Inc. Delaware First Shannon Realty of North Carolina, Inc. North Carolina Summey Building Systems, Inc. North Carolina Dana Credit Corporation Delaware Farnborough Properties Partners I Limited Delaware Farnborough Properties Partners II Limited Delaware Farnborough Properties Partners III Limited Delaware Farnborough Properties Partners IV Limited Delaware DCC Project Finance Nine, Inc. Delaware Dana Commercial Credit Corporation Delaware Camotop Two Corporation Delaware CCD Air Ten, Inc. Delaware CCD Air Eleven, Inc. Delaware CCD Air Twelve, Inc. Delaware CCD Air Thirteen, Inc. Delaware CCD Air Fourteen, Inc. Delaware CCD Air Twenty, Inc. Delaware CCD Air Twenty-One, Inc. Delaware CCD Air Twenty-Two, Inc. Delaware CCD Air Twenty-Three, Inc. Delaware CCD Air Thirty, Inc. Delaware CCD Air Thirty-Two, Inc. Delaware CCD Air Thirty-Three, Inc. Delaware CCD Air Thirty-Four, Inc. Delaware CCD Air Thirty-Five, Inc. Delaware CCD Air Thirty-Six, Inc. Delaware CCD Air Thirty-Seven, Inc. Delaware CCD Air Thirty-Eight, Inc. Delaware CCD Air Thirty-Nine, Inc. Delaware CCD Air Forty, Inc. Delaware CCD Air Forty-One, Inc. Delaware CCD Air Forty-Two, Inc. Delaware CCD Air Forty-Four, Inc. Delaware 2 3 CCD Air Forty-Six, Inc. Delaware CCD Air Forty-Eight, Inc. Delaware CCD Airway One, Inc. Delaware CCD Rail Two, Inc. Delaware CCD Rail Three, Inc. Delaware CCD Rail Five, Inc. Delaware Comprehensive Asset Services, Inc. Delaware Dana Business Credit Corporation Delaware Dana Commercial Finance Corporation Delaware Dana Fleet Leasing, Inc. Delaware DCC Company 100, Inc. Delaware DCC Company 102, Inc. Delaware DCC Franchise Services, Inc. Delaware DCC Project Finance One, Inc. Delaware DCC Project Finance Two, Inc. Delaware DCC Project Finance Three, Inc. Delaware DCC Linden, Inc. Delaware DCC Project Finance Four, Inc. Delaware DCC Project Finance Five, Inc. Delaware DCC Project Finance Six, Inc. Delaware DCC Project Finance Ten, Inc. Delaware DCC Project Finance Eleven, Inc. Delaware Washington 10 Gas Holdings, Inc. Delaware Washington 10 Storage Corporation Delaware DCC Project Finance Twelve, Inc. Delaware DCC Project Finance Thirteen, Inc. Delaware DCC Project Finance Fourteen, Inc. Delaware DCC Project Finance Eighteen, Inc. Delaware DCC Servicing, Inc. Delaware Energy Credit Corporation Delaware Energy Services Credit Corporation Delaware GSP I Corporation Oregon Isom & Associates Delaware Leased Equipment, Inc. Delaware Lease Recovery, Inc. Delaware Midwest Housing Investments J.V., Inc. Delaware Potomac Leasing Company Delaware REBAC, Inc. Delaware REBNEC Three, Inc. Delaware REBNEC Five, Inc. Delaware REBNEC Nine, Inc. Delaware REBNEC Eleven, Inc. Delaware ReDade, Inc. Delaware Redison, Inc. Delaware REFIRST, Inc. Delaware REFREEZE, Inc. Delaware REHAT, Inc. Delaware RENAT, Inc. Delaware RENOVO One, Inc. Delaware RENOVO Three, Inc. Delaware RENOVO Five, Inc. Delaware RENOVO Seven, Inc. Delaware RENOVO Nine, Inc. Delaware RENOVO Eleven, Inc. Delaware RENOVO Thirteen, Inc. Delaware RENOVO Fifteen, Inc. Delaware RENOVO Seventeen, Inc. Delaware ReSun, Inc. Delaware 3 4 RETRAM, Inc. Delaware Shannon Health Care Realty, Inc. Delaware Shannon Property Management, Inc. Delaware Shannon Michigan Properties, Inc. Michigan Shannon Supermarket Investors, Inc. Delaware Dana Lease Finance Corporation Delaware Camotop One Corporation Delaware CCD Air Four, Inc. Delaware CCD Air Five, Inc. Delaware CCD Air Seven, Inc. Delaware CCD Air Eight, Inc. Delaware CCD Air Nine, Inc. Delaware CCD Air Forty-Three, Inc. Delaware CCD Air Forty-Seven, Inc. Delaware CCD Air Forty-Nine, Inc. Delaware CCD Airway Two, Inc. Delaware CCD Rail One, Inc. Delaware CCD Rail Four, Inc. Delaware DCC Project Finance Seven, Inc. Delaware DCC Project Finance Eight, Inc. Delaware DCC Project Finance Fifteen, Inc. Delaware DCC Project Finance Nineteen, Inc. Delaware DCC Spacecom Two, Inc. Delaware DCC Vendorcom, Inc. Delaware DLF Company 101, Inc. Delaware JVQ Capital One, Inc. Delaware REBNEC One, Inc. Delaware REBNEC Two, Inc. Delaware REBNEC Four, Inc. Delaware REBNEC Six, Inc. Delaware REBNEC Ten, Inc. Delaware REBNEC Twelve, Inc. Delaware RECONN, Inc. Delaware RENOVO Two, Inc. Delaware RENOVO Four, Inc. Delaware RENOVO Six, Inc. Delaware RENOVO Eight, Inc. Delaware RENOVO Ten, Inc. Delaware RENOVO Twelve, Inc. Delaware RENOVO Fourteen, Inc. Delaware RERSEY, Inc. Delaware RESAMM, Inc. Delaware REVA, Inc. Delaware Letovon Rosehill One Pty Limited Australia Letovon Rosehill Two Pty Limited Australia Letovon St. Kilda One Pty Limited Australia Letovon St. Kilda Two Pty Limited Australia DCC Canada Inc. Canada Dana Capital S.A. France Dana Finance S.A. France DCC Leasing GmbH Germany Shannon Properties GmbH Germany Northavon Investments Limited Jersey Letovon Packs Limited Jersey Letovon Tower Hill Limited Jersey Sibi Packs Limited Jersey Dana Commercial Credit (UK) Limited United Kingdom Dana Capital Limited United Kingdom 4 5 DCC (June) Limited United Kingdom DCC (September) Limited United Kingdom Farnborough Properties Company United Kingdom Farnborough Airport Properties Company United Kingdom Farnborough Aerospace Centre Management Limited United Kingdom Letovon Hammersmith Co. United Kingdom Letovon Heathrow Co. United Kingdom Letovon Waterloo Co. United Kingdom Tecnologia de Mocion Controlada S.A. de C.V. Mexico Dana Heavy Axle Mexico S.A. de C.V. (f.k.a. Eaton Manufacturera) Mexico Grupo Echlin Automotrices S.A. de C.V. Mexico Balatas American Brakebloks, S.A. de C.V. Mexico Producciones Automotrices, S.A. de C.V. Mexico Echlin Comercial, S.A. de C.V. Mexico Frenos Lusac, S.A. de C.V. Mexico Lusac Comfhia de Mexico, S.A. de C.V. Mexico Itapsa, S.A. de C.V. Mexico FTE Mexicana, S.A. de C.V. Mexico Inversiones Echlin S.A. de C.V. Mexico Echlin Mexicana, S.A. de C.V. Mexico Long de Mexico, S.A. de C.V. Mexico Candados Universales de Mexico, S.A. de C.V. Mexico Echlin de Saltillo, S.A. de C.V. Mexico Echlin Industrias de Mexico, S.a. de C.V. Mexico Lipe Rollway Mexicana S.A. de C.V. Mexico Wrenford Insurance Company Limited Bermuda Spicer Asia Holdings I Bermuda ROC Spicer Investment Co. British Virgin Islands Dana Canada, Inc. (fka Hayes-Dana Inc.) Canada 3125025 Canada Inc. (federal company) Canada Echlin Canada Inc. (federal company) Canada Long Manufacturing Ltd. Canada Brake Parts Canada Inc. Canada Echlin Dominicana, S.A. Dominican Republic Dana Foreign Sales Corporation U.S. Virgin Islands Echlin International, V.I., Inc. U.S. Virgin Islands Dana Australia (Holdings) Pty. Ltd. Australia Dana New Zealand, Ltd. Australia Dana Australia Pty. Ltd. Australia Dana Structural Components Australia Pty. Ltd. Australia Dana Spicer Axle Australia Pty Ltd. Australia Dana Australia Trading Pty. Ltd. Australia Dana Asia Pacific Industrial Australia Echlin Australia Pty. Ltd. (holding co.) Australia Kelray Australia Pty. Ltd. Australia P.J. Warneford Components Australia Turtle Wax Austalasia Pty. Ltd. Australia Warneford & Oldfield Pty. Limited Australia Fujian Spicer Drivetrain Systems Co., Ltd. China Dana Hong Kong Limited Hong Kong Kentning Industries Limited (Never Active) Hong Kong Shui Hing Manufacturing Company Limited Hong Kong Echlin China Limited (Hong Kong) Hong Kong P.T. Spicer Indonesia (Never Active) Indonesia Dana Japan, Ltd. Japan Dana Korea Co. Ltd. Korea Dana Asia Pacific (Malaysia) Sdn. Bhd. Malaysia Spicer Philippines Manufacturing Co. (inactive) Philippines 5 6

Dana Asia (Singapore) Pte. Ltd. Singapore R.O.C. Spicer Ltd. Taiwan Timing Investments Limited Taiwan Taiyin Enterprise Ltd. Taiwan Spicer Asia Engineering Ltd. Taiwan Dana Asia (Taiwan) Ltd. (Warner Electric Trading Co.) Taiwan Dana Asia (Taiwan) APD Co., Ltd. Taiwan Echlin Taiwan Ltd. Taiwan Dantean Company, Limited. (f.k.a. Spicer Thailand) Thailand Dana Industrial Co., Limited Thailand Dana Asia (Thailand) Limited Thailand Dana Spicer (Thailand) Limited (fka Spicer Asia (Thailand) Thailand Dana Austria GmbH Austria Glacier Gleitlager Handelsgesellschaft mbH Austria Warner Electric SA (Dormant) Belgium Clark-Hurth Belgium N.V. Belgium Clark Equipment Belgium N.V. Belgium Glacier Belgium Belgium Quinton Hazell Belgium SA Belgium Dana Holdings UK Limited United Kingdom Echlin (Southern) Holdings Ltd. (Jersey) United Kingdom Dana Holdings Limited United Kingdom Dana Spicer Europe Ltd. United Kingdom Warner Electric Limited United Kingdom Dana Interlock Limited (Dormant 1/1/94) United Kingdom Taylor Industrial Clutches Ltd. United Kingdom Wichita Company Limited United Kingdom Dana Limited (formerly Dana (1982) Limited) United Kingdom Superior Electric Engineering Services, Ltd. United Kingdom Dana Spicer Limited United Kingdom Stieber Formsprag Limited (Dormant) United Kingdom Echlin Europe Ltd. UK United Kingdom Quinton Hazell Plc. United Kingdom Motaproducts Automotive Limited (Dormant) United Kingdom Supra Group Limited (Dormant) United Kingdom Commercial Ignition Limited (Dormant) United Kingdom British Filters Limited (Dormant) United Kingdom TJ Filters Limited (Dormant) United Kingdom Quinton Hazell Automotive Limited United Kingdom QH Pension Trustee Limited (Dormant) United Kingdom Quinton Hazell (Far East) Limited United Kingdom Whitely Rishworth Exports Ltd. (Dormant) United Kingdom Preferred Technical Group-CHA Limited United Kingdom Hobourn Automotive Limited United Kingdom HG Pension Trust Company Limited (Dormant) United Kingdom SU Automotive Limited United Kingdom SU Pension Trustee Limited United Kingdom Hobourn Group Pension Trust Company Limited United Kingdom Dana Automotive Limited United Kingdom Automotive Motion Technology Limited United Kingdom Echlin Automotive Systems Limited United Kingdom Lipe Limited United Kingdom Driveline Specialist Limited United Kingdom Drinclog Limited (Dormant) United Kingdom Dana SAS France Perfect Circle Europe (fka Floquet Monopole S.A.) France Societe Industrielle de Precision Marti, S.A. France Societe de Reconditionnement Industriel de Moteurs S.A. (S.R.I.M.) France

6 7 Spicer France SarL France Warner France, S.A. France Collins & Tournadre "TOURCO" France G.I.E. Warner & Tourco France Sealed Power Europe S.A. France Glacier Vandervell SAS France Nobel Plastiques S.A. France Nobel Plastiques Climatisation S.A. France Quinton Hazell SarL France IP Marti SNC France Autoclavite S.A. France Clark-Hurth Components S.A.R.L. France Dana GmbH Germany Dana Holdings GmbH Germany Reinz Dichtungs GmbH Germany Warner Electric GmbH Germany M. Friesen GmbH Germany Spicer GmbH (f.k.a. Superior Electric GmbH) Germany Clark-Hurth Components Vertriebs GmbH Germany DKW Kunststoffwerke GmbH Germany Thermoplast+Apparatebau GmbH Germany Dana (Duetchland) Grundstucksverwaltung GmbH Germany Sealed Power Europe GmbH Germany Echlin (Duetchland) Holding GmbH Germany FTE Automotive GmbH Germany Move Brems-Und Kupplungsschlauch Germany FTE Automotive Systems GmbH Germany Echlin Grundstucksverwaltung (Deutchland) GmbH Germany Quinton Hazell Deutschland GmbH Germany Spicer India Limited India Stieber Precision Pvt. Ltd. India Dana Finance (Ireland) Limited Ireland Quinton Hazell (Ireland) Limited Ireland Moprod (Ireland) Limited Ireland Quinton Hazell Limited Ireland Dana Italia, SpA Italy Metaltechno SpA Italy Quinton Hazell Italia SpA Italy D.E.H. Holdings SARL Luxembourg Dana Europe Holdings B.V. Netherlands Spicer Netherland B.V. (Dormant) Netherlands Leguana Participations B.V. (Holding Co.) Netherlands Warner Electric BV (f.k.a. Maumee Holdings B.V.) Netherlands Superior Electric Nederland B.V. (shell) Netherlands Glacier Bearings Benelux B.V. Netherlands Glacier Netherland B.V. Netherlands Echlin (Investments) Netherlands B.V. Netherlands Echlin (Properties) Netherlands BV Netherlands Quinton Hazell Nederland B.V. Netherlands Wix Filtron Sp. zo.o. Poland Quinton Hazell Polska Sp. zo.o. Poland Dana Equipamientos SA (f.k.a. Spicer Espana S.A.) Spain Sealed Power Europe S.L. Spain Industrias Seloc Reinz S.A. (closed) Spain Industrias Serva S.A. Spain Glaser Serva S.A. Spain Quinton Hazel Espana S.A. Spain Nobel Plastiques Iberica S.A. Spain 7 8

Warner-Tollo AB Sweden WarnerElectric AB Sweden Quinton Hazell Svenska AB Sweden Warner Electric (International) S.A. Switzerland (International Headquarters, f.k.a. Warner Electric S.A., locally known as "Swiss Inc.") T&N Zug AG Switzerland Glacier Tristar SA Switzerland Warner Electric S.A. Switzerland (Operating and local sales company, f.k.a. Societe de Vente Warner Electric S.A., locally known as "Swiss Trade") Dana South Africa (Propreitary) Limited (fka Echlin Charger Mfg. Co. (Pty.) Ltd.) South Africa MAG Brakes (Prop.) Limited South Africa Electron Seventeen (Prop.) Limited South Africa Insom Investments (Prop.) Limited South Africa J&H Marcus Manufacturing Company (Prop.) Ltd. South Africa Miclaric Investments (Prop.) Limited South Africa South African Engineering Company (Prop.) Limited South Africa South African Engineering Company (Natal) (Prop.) Limited South Africa Dana Argentina S.A. Argentina Dana San Juan S.A. (f.k.a. AROS Daneri, S.A.) Argentina Dana San Luis S.A. (f.k.a. Trasa San Luis) Argentina Transmissiones Homocineticas Argentina S.A. (THA) Argentina Farlock S.A. Argentina Cerro de los Medanos S.A. Argentina Spicer Ejes Pesatos S.A. Argentina Nakata Autoparts S.A. Argentina Echlin Argentina S.A. (a/k/a Plasbestos) Argentina Fanacif Products Argentina S.A. Argentina Dana Equipamentos Ltda. Brazil Dana-Albarus, S.A. Industrial E Comercio Brazil Cardhom Commercial Ltda. Brazil Pellegrino Autopecas Industrial e Comerico Ltda. Brazil CIDAP-Industrial e Distribuidora de Aurtopecas Ltda. (Dormant) Brazil Albarus Sistemas Hidraulicos Ltda. Brazil Albarus S.A. Comercial e Exportadora Brazil Cirane Industria e Comercio Ltda. Brazil Previalbarus Societe de Providencia Brazil Dana Industrial S.A. Brazil Metalurgica Brasitalia Ltda. Brazil Suzuki Comercial Ltda. Brazil Dana Bahia Ltda. Brazil Warner Electric do Brasil Ltda. Brazil Dana do Brasil Ltda. Brazil Dana Industrias Ltda. Brazil SM-Sistemas Modulares Ltda. Brazil Glacier do Brasil Limitada Brazil Glacier Daido do Brasil Limitada Brazil Echlin Do Brasil S.A. Brazil Industria De Ejes Y Transmissiones S.A. (Transejes) Colombia Transejes C.D. Ltda. Colombia Transcar Ltda. Colombia Transmotor Ltda. Colombia Echlin de Colombia Ltda. Colombia Echlin Del Peru S.R. Ltda. Peru UBALI S.A. Uruguay Talesol S.A. Uruguay Echlin Uruguay Uruguay Inversora Sabana, S.A. Venezuela

8 9 Echlin de Venezuela C.A. Venezuela Finaciera Platwel S.A. Venezuela 9 EX-23 6 EXHIBIT 23 1 Exhibit 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 333-67307, 333-42239, 333-23733, 333-22935, 333-00539 and 033-58121) and in the Registration Statements on Form S-8 (Nos. 333-84417, 333-69449, 333-52773-1, 333-50919, 033-64198 and 333-37435) of Dana Corporation of our report dated January 25, 2000 relating to the financial statements, which appears in the Annual Report to Shareholders, which is incorporated in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our report dated January 25, 2000 relating to the financial statement schedule, which appears in this Form 10-K. PricewaterhouseCoopers LLP Toledo, Ohio March 10, 2000 EX-24 7 EXHIBIT 24 1 EXHIBIT 24 POWER OF ATTORNEY ----------------- The undersigned directors and/or officers of Dana Corporation hereby constitute and appoint Southwood J. Morcott, Joseph M. Magliochetti, Robert C. Richter, Charles W. Hinde, Martin J. Strobel and Sue A. Griffin, and each of them, severally, their true and lawful attorneys-in-fact with full power for and on their behalf of execute the Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 1999, including any and all amendments thereto, in their names, places and stead in their capacity as directors and/or officers of the Corporation, and to file the same with the Securities and Exchange Commission on behalf of the Corporation under the Securities and Exchange Act of 1934, as amended. This Power of Attorney automatically ends as to each appointee upon the termination of his or her service with the Corporation. In witness whereof, the undersigned have executed this instrument December 13, 1999. /S/ B. F. BAILAR /S/ S. J. MORCOTT - ----------------------------------- ------------------------- B. F. Bailar S. J. Morcott /S/ A. C. BAILLIE /S/ R. B. PRIORY - ----------------------------------- ------------------------- A. C. Baillie R. B. Priory /S/ E. M. CARPENTER /S/ ROBERT C. RICHTER - ----------------------------------- ------------------------- E. M. Carpenter R. C. Richter /S/ ERIC CLARK /S/ C. W. HINDE - ----------------------------------- ------------------------- E. Clark C. W. Hinde /S/ G. H. HINER /S/ M. J. STROBEL - ----------------------------------- ------------------------- G. H. Hiner M. J. Strobel /S/ J. MAGLIOCHETTI /S/ SUE A. GRIFFIN - ----------------------------------- ------------------------- J. M. Magliochetti S. A. Griffin /S/ M. MARKS - ----------------------------------- M. R. Marks EX-27.A 8 EXHIBIT 27(A)

<ARTICLE> 5 <MULTIPLIER> 1,000,000 <PERIOD-TYPE> YEAR <FISCAL-YEAR-END> DEC-31-1999 <PERIOD-START> JAN-01-1999 <PERIOD-END> DEC-31-1999 <CASH> 111 <SECURITIES> 0 <RECEIVABLES> 1,935 <ALLOWANCES> 44 <INVENTORY> 1,784 <CURRENT-ASSETS> 4,801 <PP&E> 6,181 <DEPRECIATION> 2,731 <TOTAL-ASSETS> 11,123 <CURRENT-LIABILITIES> 3,888 <BONDS> 0 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <COMMON> 163 <OTHER-SE> 2,794 <TOTAL-LIABILITY-AND-EQUITY> 11,123 <SALES> 13,159 <TOTAL-REVENUES> 13,353 <CGS> 10,964 <TOTAL-COSTS> 10,964 <OTHER-EXPENSES> 1,373 <LOSS-PROVISION> 0 <INTEREST-EXPENSE> 279 <INCOME-PRETAX> 737 <INCOME-TAX> 251 <INCOME-CONTINUING> 513 <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> 513 <EPS-BASIC> 3.10 <EPS-DILUTED> 3.08

EX-27.B 9 EXHIBIT 27(B)

<ARTICLE> 5 <MULTIPLIER> 1,000,000 <PERIOD-TYPE> YEAR <FISCAL-YEAR-END> DEC-31-1998 <PERIOD-START> JAN-01-1998 <PERIOD-END> DEC-31-1998 <CASH> 230 <SECURITIES> 0 <RECEIVABLES> 1,617 <ALLOWANCES> 41 <INVENTORY> 1,679 <CURRENT-ASSETS> 4,337 <PP&E> 5,766 <DEPRECIATION> 2,462 <TOTAL-ASSETS> 10,138 <CURRENT-LIABILITIES> 3,987 <BONDS> 0 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <COMMON> 166 <OTHER-SE> 2,774 <TOTAL-LIABILITY-AND-EQUITY> 10,138 <SALES> 12,464 <TOTAL-REVENUES> 12,839 <CGS> 10,449 <TOTAL-COSTS> 10,449 <OTHER-EXPENSES> 1,290 <LOSS-PROVISION> 0 <INTEREST-EXPENSE> 280 <INCOME-PRETAX> 820 <INCOME-TAX> 315 <INCOME-CONTINUING> 534 <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> 534 <EPS-BASIC> 3.24 <EPS-DILUTED> 3.20

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EX-3.B

   1
                                                                     EXHIBIT 3-B


                           BY-LAWS OF DANA CORPORATION

                            ARTICLE I. EFFECTIVE DATE

SECTION 1.1. EFFECTIVE DATE. These By-Laws are adopted by the Board of Directors
(the "Board") of Dana Corporation ("Dana") effective April 5, 2000.

                               ARTICLE II. OFFICES

SECTION 2.1. REGISTERED OFFICE. Dana's registered office shall be located at
Riverfront Plaza, East Tower, 951 East Byrd Street, Richmond, Virginia 23219.

SECTION 2.2. BUSINESS OFFICE. Dana's principal business office shall be located
at 4500 Dorr Street, Toledo, Ohio 43615, with a mailing address of P.O. Box
1000, Toledo, Ohio 43697.

                        ARTICLE III. SHAREHOLDER MEETINGS

SECTION 3.1. ANNUAL MEETINGS. Unless the Board fixes a different date, the
annual meeting of shareholders of Dana to elect directors and to transact other
business (if any) shall be held on the first Wednesday of April each year, at
the time and place designated by the Board in the notice of meeting. The Board
may postpone or cancel any annual meeting at any time prior to the designated
meeting date and time by means of (i) a press release reported by the Dow Jones
News, Associated Press or a comparable national news service, or (ii) a document
filed with the Securities and Exchange Commission ("SEC") (in either case, a
"Public Announcement").

SECTION 3.2. SPECIAL MEETINGS. Special meetings of shareholders may be called by
the Board, the Chairman of the Board (the "Chairman"), or the President, to
elect directors and/or transact such other business as is described in the
notice of meeting, at the date, time and place designated therein. Notice of
special meetings shall be given to shareholders in accordance with the Virginia
Stock Corporation Act ("Virginia Law"). The Board may postpone or cancel any
special meeting at any time prior to the designated meeting date and time by
means of a Public Announcement. Only such business as is brought before the
special meeting pursuant to Dana's notice of meeting shall be conducted at the
meeting.

SECTION 3.3. SHAREHOLDER NOMINATIONS AND PROPOSALS. In submitting nominations
for persons to be elected as directors of Dana or proposals for other business
to be presented at any shareholder meeting, shareholders shall comply with the
following procedures and such other requirements as are imposed by Virginia Law
and the Securities Exchange Act of 1934, as amended, and the rules promulgated
thereunder (the "Exchange Act"):

         a. DELIVERY. Shareholder notices shall be addressed and delivered to
the Secretary at Dana's principal business office.



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         b.  TIMELINESS.

                  i. ANNUAL MEETINGS. Shareholder proposals to be included in
Dana's proxy materials for any annual meeting shall be submitted in accordance
with the timeliness requirements of the Exchange Act. Other shareholder
proposals and shareholder nominations for directors to be voted on at any annual
meeting shall be delivered before the close of business on the 90th day before
the anniversary date of the prior year's annual meeting, or, if the meeting is
called for a date not within 30 days before or after such anniversary date,
before the close of business on the 10th day following the date on which the
notice of the meeting was mailed or the date on which Dana first made a Public
Announcement of the meeting date, whichever occurs first.

                  ii. SPECIAL MEETINGS. Shareholder proposals related to the
business to be conducted at any special meeting and shareholder nominations for
directors to be voted on at any special meeting at which directors are to be
elected shall be delivered before the close of business on the 3rd day following
the date on which the notice of the meeting was mailed or the date on which Dana
first made a Public Announcement of the meeting date, whichever occurs first.

                  iii. ADJOURNMENTS AND POSTPONEMENTS. A Public Announcement of
an adjournment or postponement of an annual or special meeting shall not
commence a new time period for the giving of shareholder notices.

         c. CONTENTS. Shareholder notices shall contain the names and addresses
(as they appear on the records of Dana's transfer agent) of the shareholders and
all beneficial owners on whose behalf the nomination or proposal is made, the
class and number of Dana shares which are owned of record and beneficially by
the shareholders and the beneficial owners, and a representation that the
shareholders intend to appear in person or by proxy at the meeting to bring the
proposal or nomination before the meeting. In addition, (i) shareholder
nominations for directors shall contain the information about the
director-nominees and about the nominating shareholders which is required to be
disclosed in solicitations of proxies for the election of directors in an
election contest or otherwise under the Exchange Act, and (ii) shareholder
proposals shall contain a brief description of the proposed business to be
presented, the reason for presenting such business at the meeting, and any
material interests which the shareholders and the beneficial owners have in such
business.

SECTION 3.4.  CONDUCT OF MEETINGS.

SECTION 3.4.1. CHAIRMAN AND PROCEDURES. Shareholder meetings shall be chaired by
the Chairman of the Board or by such person as he or she may designate. The
chairman of the meeting shall determine and announce the rules of procedure for
the meeting and shall rule on all procedural questions during the meeting.



                                       2
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SECTION 3.4.2. PROPER NOMINATIONS AND BUSINESS. Nominations for directors and
other proposals shall be deemed properly brought before a shareholder meeting
only when brought in accordance with Virginia Law, the Exchange Act, and this
Article III. The chairman of the meeting shall determine whether each nomination
or proposal has been properly brought and shall declare that any improperly
brought nomination or proposal be disregarded.

SECTION 3.4.3. ADJOURNMENTS. The chairman of any shareholder meeting, or the
holders of a majority of the shares represented at the meeting (whether or not
constituting a quorum), may adjourn the meeting from time to time. No further
notice need be given if the adjournment is for a period not exceeding 120 days
and the new date, time and place are announced at the adjourned meeting.
Otherwise, notice shall be given in accordance with Virginia Law.


                         ARTICLE IV. BOARD OF DIRECTORS

SECTION 4.1. AUTHORITY. The business and affairs of Dana shall be managed under
the direction of the Board, and all of Dana's corporate powers shall be
exercised by or pursuant to the Board's authority.

SECTION 4.2. NUMBER AND TERM OF DIRECTORS. The number of directors of Dana shall
be eight. Each director shall hold office until the next annual meeting of
shareholders and the election and qualification of his or her successor, or
until his or her earlier retirement, resignation, or removal.

SECTION 4.3. MEETINGS AND NOTICE.

         SECTION 4.3.1. REGULAR MEETINGS. The Board shall hold regular meetings
at such dates, times and places as it may determine from time to time, and no
notice thereof need be given other than such determination. However, if the
date, time or place of any regular meeting is changed, notice of the change
shall be given to all directors by means of (i) a written notice mailed at least
5 calendar days before the meeting, (ii) a written notice delivered in person,
by recognized national courier service, or by telecopy at least 1 business day
before the meeting, or (iii) by telephone notification given at least 12 hours
before the meeting.

         SECTION 4.3.2. SPECIAL MEETINGS. The Board or the Chairman may call a
special meeting of the Board at any date, time and place by causing the
Secretary to give notice thereof to each director in the manner provided in
Section 4.3.1. Neither the purpose of the meeting nor the business to be
transacted need be specified in the notice of meeting, except for proposed
amendments to these By-Laws.

         SECTION 4.3.3. TELEPHONIC MEETINGS. Members of the Board may
participate in any Board meeting by means of conference telephone or similar
communications equipment by means of which all meeting participants can hear
each other, and such participation shall constitute presence in person at such
meeting.

         SECTION 4.3.4. WAIVER OF NOTICE. A director may waive any notice of
meeting



                                       3
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required under Virginia Law, Dana's Articles of Incorporation ("Dana's
Articles") or these By-Laws, before or after the date and time set out in the
notice, by signed written waiver submitted to the Secretary and filed with the
minutes of the meeting. A director's attendance or participation at any meeting
shall constitute a waiver of notice unless the director objects, at the
beginning of the meeting or promptly upon his or her arrival, to holding the
meeting or transacting business at the meeting, and thereafter does not vote on
or assent to actions taken at the meeting.

SECTION 4.4. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at a Board meeting may be taken without a meeting if the action is taken
by all members of the Board. The action shall be evidenced by one or more
written consents, signed by each director either before or after the action is
taken. The action shall be effective when the last director signs his or her
consent unless the consent specifies a different effective date, in which event
the action taken will be effective as of the date specified therein provided
that the consent states the date of execution by each director.

SECTION 4.5. QUORUM, BOARD ACTION. A majority of the directors shall constitute
a quorum of the Board. If a quorum is present when a vote is taken, the
affirmative vote of the majority of directors present shall constitute the act
of the Board; provided, that the authorization, approval or ratification of any
transaction in which a director has a direct or indirect personal interest shall
also be subject to the provisions of Virginia Law.

SECTION 4.6. RESIGNATIONS. A director may resign at any time by giving written
notice to the Board, the Chairman, the President or the Secretary. Unless
otherwise specified in the notice, the resignation shall take effect upon
delivery and without Board action. A director's resignation shall not affect any
contractual rights and obligations of Dana or the director, except as specified
in any particular contract.

SECTION 4.7. VACANCIES. The Board shall fill all vacancies, including those
resulting from an increase in the number of directors, by majority vote of the
remaining directors, whether or not such number constitutes a quorum.

                           ARTICLE V. BOARD COMMITTEES

SECTION 5.1. ESTABLISHMENT OF COMMITTEES. The Board may, by amendment to the
By-Laws, establish and dissolve Board Committees and establish and change the
authority of such Committees; provided, that each Committee shall consist of two
or more directors (who shall serve thereon at the Board's pleasure) and shall
have a chairman who is designated by the Board. Each Committee shall exercise
such of the Board's powers as are authorized by the Board, subject to any
limitations imposed by Virginia Law. The Board may, from time to time and
without amendment to the By-Laws, change the membership or chairmanship of any
Board Committee and fill any vacancies thereon or designate another director to
act in the place of any Committee member who is absent or disqualified from
voting at any meeting of the Committee.

SECTION 5.2. STANDING COMMITTEES. The Board shall have the following Standing
Committees:




                                       4
   5

         a. ADVISORY COMMITTEE. The Advisory Committee shall make
recommendations to the Board on matters relating to the qualifications of
directors; the selection of nominees for election as directors at annual
shareholder meetings and in filling Board vacancies; the selection and retention
of elected officers and management succession; the cash and non-cash
compensation of directors; the structure of the Board's Committees; the schedule
and agenda for meetings of the Board and its Committees; the criteria for
assessing the performance of the Board, its Committees, and the individual
directors; and other Board governance matters. When the Board is not in session
and when the Advisory Committee is convened by and meeting with the Chairman of
the Board for such purpose, the Advisory Committee shall serve as an "executive
committee" of the Board and shall have the full authority of the Board under
Virginia Law.

         b. AUDIT COMMITTEE. The Audit Committee shall periodically meet with
Dana's financial and accounting management and independent auditors and
accountants to review Dana's audit plans, financial reporting, internal
controls, and significant issues relating to Dana's contingent liabilities,
taxes and insurance programs. The Audit Committee shall provide oversight for
Dana's audit programs and shall make recommendations to the Board on matters
relating to the selection and retention of the independent auditors. The members
of the Audit Committee shall not be employees of Dana.

         c. COMPENSATION COMMITTEE. The Compensation Committee shall make
recommendations to the Board on matters relating to base salaries and other cash
and non-cash compensation for senior management under those Dana executive
benefit plans in effect from time to time which the Committee interprets and
administers. The Compensation Committee shall maintain familiarity with
generally accepted national and international compensation practices and may
consult with such compensation consultants as it deems appropriate. In making
its recommendations, the Compensation Committee shall endeavor to maintain the
compensation of Dana's senior management at levels appropriate for Dana's size
and business, the responsibilities and performance of the individuals, and
Dana's performance. The members of the Compensation Committee shall qualify as
"outside directors" under Internal Revenue Service Regulation Section 1.162-27
and shall not be employees of Dana.

         d. FINANCE COMMITTEE. The Finance Committee shall review Dana's
financial condition, liquidity (including aggregate corporate borrowings) and
results of operations, and shall recommend to the Board appropriate courses of
action with respect to Dana's financial performance and capital structure.
Within parameters established with the Board, the Finance Committee shall review
and approve management's recommendations on matters relating to major corporate
actions (including fixed capital expenditures; acquisitions, investments, and
divestitures; working capital programs; and



                                       5
   6

issuances of equity and debt securities) and shall present such recommendations
to the Board.

         e. FUNDS COMMITTEE. The Funds Committee shall review the structure and
allocation of assets in Dana's pension and other employee benefit funds and the
performance of the fund managers, to assure that the funds are managed in
compliance with applicable laws and regulations. In performing these advisory
functions, the Funds Committee shall refrain from making specific investment
recommendations. The Funds Committee shall review and approve management's
recommendations on matters relating to the selection and retention of the
investment managers.

SECTION 5.3. COMMITTEE MEETINGS AND PROCEDURES. Each Committee shall hold
regular meetings at such dates, times and places as it may determine from time
to time, and no notice thereof need be given other than such determination.
Sections 4.3 through 4.5, which govern meetings, notices and waivers of notice,
actions without meeting, and quorum and voting requirements for the Board and
the directors, shall also apply to the Committees and their members. Each
Committee shall keep written records of its proceedings and shall report such
proceedings to the Board from time to time as the Board may require.

SECTION 5.4. RESIGNATIONS. A Committee member may resign at any time by giving
written notice to the Chairman of the Board. Unless otherwise specified in the
notice, the resignation shall take effect upon delivery and without Board
action.

                              ARTICLE VI. OFFICERS

SECTION 6.1. OFFICES AND ELECTION. The Board shall elect the following officers
annually at the first Board meeting following the annual shareholders meeting:
the Chairman (who shall be a member of the Board), the Chief Executive Officer,
the Chief Operating Officer, the President, the President-Dana international,
the Chief Financial Officer, the Treasurer, the Secretary, and such Executive
Vice Presidents, Vice Presidents, Assistant Treasurers and Assistant Secretaries
as it deems appropriate. Any person may simultaneously hold more than one
office. Each officer shall hold office until the election and qualification of
his or her successor, or until his or her earlier resignation or removal.
Election as an officer shall not, of itself, create any contractual rights in
the officer or in Dana, including, without limitation, any rights in the officer
for compensation beyond his or her term of office.

SECTION 6.2. REMOVALS AND RESIGNATIONS. Officers shall serve at the pleasure of
the Board and may be removed from office by the Board at any time. An officer
may resign at any time by giving written notice to the Chairman or the
Secretary. Unless otherwise specified in the notice, the resignation shall take
effect upon delivery and without Board action. An officer's resignation shall
not affect any contractual rights and obligations of Dana or the officer, except
as specified in any particular contract.

SECTION 6.3. DUTIES OF OFFICERS. The officers shall perform the following duties
and any others which are assigned by the Board from time to time, are required
by Virginia



                                       6
   7

Law, or are commonly incident to their offices:

         a. CHAIRMAN OF THE BOARD. The Chairman shall provide leadership to the
Board in discharging its functions; shall preside at all meetings of the Board;
shall act as a liaison between the Board and Dana's management; and, with the
Chief Executive Officer, shall represent Dana to the shareholders, investors and
other external groups. If the Chairman is absent or incapacitated, the Chairman
of the Advisory Committee shall have his or her powers and duties.

         b. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall be Dana's
principal executive officer, with responsibility for the general management of
Dana's business affairs. The Chief Executive Officer shall develop and recommend
to the Board long-term strategies for Dana, annual business plans and budgets to
support those strategies, and plans for management development and succession
that will provide Dana with an effective management team. He or she shall serve
as Dana's chief spokesperson to internal and external groups. If the Chief
Executive Officer is absent or incapacitated, the President shall have his or
her powers and duties.

         c. CHIEF OPERATING OFFICER. The Chief Operating Officer shall oversee
the management of Dana's day-to-day business in a manner consistent with Dana's
financial and operating goals and objectives, continuous improvement in Dana's
products and services, and the achievement and maintenance of satisfactory
competitive positions within Dana's industries.

         d. PRESIDENT. The President shall have such duties as are assigned by
the Chief Executive Officer. If the President is absent or incapacitated, the
Chairman shall have his or her powers and duties.

         e. PRESIDENT-DANA INTERNATIONAL. The President-Dana International shall
have such duties as are assigned by the Chairman.

         f. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall be
responsible for the overall management of Dana's financial affairs.

         g. EXECUTIVE VICE PRESIDENTS AND VICE PRESIDENTS. The Executive Vice
Presidents and the Vice Presidents shall have such duties as are assigned by the
Chairman.

         h. TREASURER. The Treasurer shall have charge and custody of Dana's
funds and securities and shall receive monies due and payable to Dana from all
sources and deposit such monies in banks, trust companies, and depositories as
authorized by the Board. If the Treasurer is absent or incapacitated and has not
previously designated in writing another person or persons to have his or her
powers and duties, any Assistant Treasurer shall have such powers and duties.

         i. SECRETARY. The Secretary shall prepare and maintain minutes of all
meetings of the Board and of Dana's shareholders; shall assure that notices
required by these By-Laws, Dana's Articles, Virginia Law or the Exchange Act are
duly given; shall be custodian of Dana's seal (if any) and affix it as required;
shall authenticate Dana's



                                       7
   8

records as required; shall keep or cause to be kept a register of the
shareholders' names and addresses as furnished by them; and shall have general
charge of Dana's stock transfer books. If the Secretary is absent or
incapacitated and has not previously designated in writing another person or
persons to have his or her powers and duties, any Assistant Secretary shall have
such powers and duties.

         j. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The Assistant
Treasurers and Assistant Secretaries shall have such duties as are assigned by
the Treasurer and the Secretary, respectively.

SECTION 6.4. CONTRACTS AND INSTRUMENTS. Except as limited in Section 6.5 with
respect to Dana's guarantees of the indebtedness of subsidiaries, affiliates and
third parties, each of the Chairman, the Chief Executive Officer, the Chief
Operating Officer, the President, the President-Dana International, the Chief
Financial Officer, any Executive Vice President, any Vice President, and the
Treasurer shall have the power to enter into, sign (manually or through
facsimile), execute, and deliver contracts (including, without limitation,
bonds, deeds and mortgages) and other instruments evidencing Dana's rights and
obligations on behalf of and in the name of Dana. Except as otherwise provided
by law, any of these officers may delegate the foregoing powers to any other
officer, employee or attorney-in-fact of Dana by written special power of
attorney.

SECTION 6.5. GUARANTEES OF INDEBTEDNESS.

         SECTION 6.5.1. DEBT OF WHOLLY OWNED SUBSIDIARIES. Within any
limitations set by the Board on total outstanding guarantees for Dana
subsidiaries, each of the Chairman, the Chief Executive Officer, the Chief
Operating Officer, the President, the Chief Financial Officer, and the Treasurer
shall have the power to approve guarantees by Dana of the indebtedness of direct
and indirect wholly owned Dana subsidiaries.

         SECTION 6.5.2. DEBT OF NON-WHOLLY OWNED SUBSIDIARIES, AFFILIATES, AND
OTHER ENTITIES. Each of the Chairman, the Chief Executive Officer, the Chief
Operating Officer, the President, the Chief Financial Officer, and the Treasurer
shall have the power to approve guarantees by Dana of the indebtedness of
non-wholly owned Dana subsidiaries, Dana affiliates and third party entities;
provided, that the aggregate amount of such guarantees made by these officers
collectively between Board meetings may not exceed $10 million and that all such
guarantees in the aggregate may not exceed any limitations set by the Board on
total outstanding guarantees for Dana subsidiaries.

SECTION 6.6. STOCK CERTIFICATES. The Chairman, the President, and the Secretary
shall each have the power to sign (manually or through facsimile) certificates
for shares of Dana stock which the Board has authorized for issuance.

SECTION 6.7. SECURITIES OF OTHER ENTITIES. With respect to securities issued by
another entity which are beneficially owned by Dana, each of the Chairman, the
Chief Executive Officer, the Chief Operating Officer, the President, the
President-Dana International, the Chief Financial Officer, any Executive Vice
President, any Vice President, the Treasurer, and the Secretary shall have the
power to attend any meeting



                                       8
   9

of security holders of the entity and vote thereat; to execute in the name and
on behalf of Dana such written proxies, consents, waivers or other instruments
as they deem necessary or proper to exercise Dana's rights as a security holder
of the entity; and otherwise to exercise all powers to which Dana is entitled as
the beneficial owner of the securities. Except as otherwise provided by law, any
of these officers may delegate any of the foregoing powers to any other officer,
employee or attorney-in-fact of Dana by written special power of attorney.

                          ARTICLE VII. INDEMNIFICATION

SECTION 7.1. INDEMNIFICATION. Dana shall indemnify any of the following persons
who was, is or may become a party to any "proceeding" (as such term is defined
in Section 1 of Article SIXTH of Dana's Articles) to the same extent as if such
person were specified as one to whom indemnification is granted in Section 3 of
the foregoing Article SIXTH: (i) any Dana director, officer or employee who was,
is, or may become a party to the proceeding by reason of the fact that he or she
is or was serving at Dana's request as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, and (ii) any Dana employee who was, is, or may become a party
to the proceeding by reason of the fact that he or she is or was an employee of
Dana. In all cases, the provisions of Sections 4 through 7 of the foregoing
Article SIXTH shall apply to the indemnification granted hereunder.

                            ARTICLE VIII. DANA STOCK

SECTION 8.1. LOST CERTIFICATES. A shareholder claiming that any certificate for
Dana stock has been lost or destroyed shall furnish the Secretary with an
affidavit stating the facts relating to such loss or destruction. The
shareholder shall be entitled to have a new certificate issued in the place of
the certificate which is claimed to be lost or destroyed if (i) the affidavit is
satisfactory to the Secretary, and (ii) if requested by the Secretary, the
shareholder gives a bond (in form and amount satisfactory to the Secretary) to
protect Dana and other persons from any liability or expense that might be
incurred upon the issue of a new certificate by reason of the original
certificate remaining outstanding.

SECTION 8.2. RIGHTS AGREEMENT. Any restrictions which are deemed to be imposed
on the transfer of Dana securities by the Rights Agreement dated as of April 25,
1996, between Dana and Chemical Mellon Shareholder Services, L.L.C., or by any
successor or replacement rights plan or agreement, are hereby authorized.

SECTION 8.3. CONTROL SHARE ACQUISITIONS. Article 14.1 of the Virginia Stock
Corporation Act shall not apply to the acquisition of shares of Dana's common
stock.

                              ARTICLE IX. AMENDMENT

SECTION 9.1. AMENDMENT. The Board, by resolution, or the shareholders may amend
or repeal these By-Laws, subject to any limitations imposed by Dana's Articles
and Virginia Law.



                                       9

EX-10.E

   1
                                                                 EXHIBIT 10-E

DANA WORLD HEADQUARTERS

                                                              December 12, 1998

Southwood J. Morcott
Dana Corporation
4500 Dorr Street
Toledo, OH  43615

Dear Mr. Morcott:

         The Corporation is on this date entering into an amended and restated
employment agreement with you (the Employment Agreement). As a separate and
additional inducement for you to enter into the amended and restated Employment
Agreement and to provide you with reasonable assurance that the purposes of the
Employment Agreement will not be frustrated as a result of the cost of its
enforcement should a dispute arise out of or relate to any provision of the
Employment Agreement, the Corporation hereby agrees to pay, in consideration of
and following your execution of the amended and restated Employment Agreement,
all legal expenses, including costs, which you may incur in any such dispute in
accordance with the terms and conditions of the Memorandum attached to this
letter. This letter supersedes a corresponding letter (and Memorandum) dated
December 8, 1997 which shall no longer be of any force or effect.

         It is suggested that you retain this letter and the Memorandum with the
Employment Agreement and your other documents of value. For the Corporation's
files please acknowledge receipt and your agreement on the enclosed copy of this
letter and return it in an envelope marked "Confidential" to the Secretary of
Dana Corporation.


                                          Sincerely,

                                          DANA CORPORATION

                                          By:  /S/  MARTIN J. STROBEL
                                               ---------------------------------
                                                     Chairman of the Board
                                                         of Directors

                                          By:  /S/  R. B. PRIORY
                                               ---------------------------------

                                                 Chairman of the Compensation
                                                          Committee

My agreement to and receipt of the
foregoing letter and the Memorandum
is hereby acknowledged this 12TH
day of   JUNE   , 1999.     ----
       ---------------

/S/  S. J. MORCOTT
- ------------------------------------
Southwood J. Morcott
People Finding A Better Way
DANA CORPORATION
P.O. Box 1000 Toledo, Ohio 43697, Tel: (419) 535-4500  Fax: (419) 535-4643


   2


                       Memorandum of Terms and Conditions
                       Relating to Legal Fees and Expenses
                  Referred to in Letter dated December 12, 1998
              from Dana Corporation to the Executive (The "Letter")
              -----------------------------------------------------

         1. The words used in this memorandum and in the Letter shall have the
same meaning as in the Employment Agreement. Reference hereafter to the Letter
shall be deemed to refer also to this memorandum.

         2. The Corporation's obligations under the Letter shall become
effective if and when any claim or dispute by or against the Executive or anyone
claiming under or through the Executive (such person being hereinafter referred
to as the "beneficiary"), or any dispute between the Executive or his
beneficiary and the Corporation or any third party, should arise out of or
relate to the Employment Agreement or the Letter, or both, or the validity,
operation, interpretation, enforceability or breach thereof.

         3. The Corporation shall, upon presentation of appropriate commercial
vouchers, pay all legal expenses, including all reasonable legal fees, court
costs, arbitration costs, and ordinary and necessary out-of-pocket expenses of
attorneys, billed to and payable by the Executive or the beneficiary in
connection with bringing, prosecuting, defending, litigating, arbitrating,
negotiating or settling such dispute or claim, provided that

                  (a) the Executive or his beneficiary shall repay to the
Corporation any such expenses theretofore paid by or on behalf of the
Corporation if and to the extent that the Executive and his beneficiary shall
fail to prevail in such dispute or claim and such expenses were not incurred by
the Executive and his beneficiary while acting in good faith, and provided
further, that

                  (b) in the case of any claim or dispute by the Executive or
his beneficiary, such claim shall be timely made, or notice of such dispute
timely given, in writing, with specific reference to the provisions of the
Letter, delivered in the same manner as provided in Section 14(b) of the
Employment Agreement, in no event later than three (3) years after the
occurrence of the event giving rise to such claim or dispute.

         4. (a) At such time after the date of the Employment Agreement as the
Corporation shall receive written demand by the

   3


Executive or, in the event of his death, by his beneficiary, together with a
statement signed by an attorney selected by the Executive or his beneficiary
stating that in the opinion of such attorney a suit or claim described in
paragraph 2 above exists which could reasonably be expected to lead to
litigation, the Corporation will set aside in trust an amount equal to (i) the
Annual Base Salary payable to the Executive under the provisions of Section 3(a)
of the Employment Agreement for the month immediately preceding the month in
which such demand shall have been made or, if no such salary was payable for
such month, for the first month preceding the month in which such demand shall
have been made for which such salary was payable, multiplied by (ii) twelve
(12).

                  (b) Such amount and any income thereon shall be held, paid and
applied by the trustee of such trust for the purpose of assuring and securing
payment of the Corporation's obligations under paragraph 3 above. As and when
any funds are paid out by the trustee, the Corporation shall replenish same by
payment to the trustee of an amount equal to the funds so paid by the trustee.
Any funds remaining in the trust at such time as the trustee, in its sole
discretion, reasonably exercised, determines, upon the advice of counsel and
after consultation with the Corporation and the Executive or, in the event of
his death, his beneficiary, that all obligations of the parties under the
Employment Agreement and the Letter have been substantially satisfied, shall be
repaid by the trustee to the Corporation.

                  (c ) The trustee of such trust, the fees and expenses of which
shall be paid by the Corporation, shall be a national or state bank or trust
company having a combined capital, surplus and undivided profits and reserves of
not less than Ten Million Dollars ($10,000,000) which is duly authorized and
qualified to do business in the state in which the Executive resides at the time
of such demand.

         5. The following provisions of the Employment Agreement shall be deemed
applicable to the Letter to the same extent as if incorporated herein at length,
with the term "this Letter" being deemed substituted for the term "this
Agreement" where appropriate in any such provision: Section 5(e)(i), relating to
arbitration and judicial proceedings; Section 11, relating to successors to the
Corporation; Section 12(a), relating to the


                                       2
   4


definition of "beneficiary"; Section 13, relating to amendment, modification and
waiver; Section 14(a), relating to governing law and captions; Section 14(b),
relating to notices; Section 14(c), relating to severability; Section 14(d),
relating to withholding; Section 14(f), relating to the entirety of the Letter;
Section 14(g), relating to non-assignability and the like; Section 14(j),
relating to specific performance and the like; Section 14(m), relating to the
meaning of Executive after death or during incompetence; and Section 14(n),
relating to legal holidays.

         6. The Letter is not intended to enlarge, diminish or otherwise alter
in any way the Executive's rights, duties and obligations and those of the
Corporation under the Employment Agreement.



                                       3
   5



                              EMPLOYMENT AGREEMENT

                                     BETWEEN

                                DANA CORPORATION

                                       AND

                              SOUTHWOOD J. MORCOTT


                             DATED DECEMBER 12, 1998


   6





                                TABLE OF CONTENTS



         SECTION                                                                            PAGE
                                                                                                        
Recitals ...................................................................................................1

1.       Employment and Term................................................................................1

2.       Position and Duties of the Executive...............................................................2
         (a)      Position..................................................................................2
         (b)      Duties....................................................................................3
         (c)      Location of Office........................................................................4

3.       Compensation.......................................................................................4
         (a)      Salary....................................................................................4
         (b)      Additional Compensation...................................................................4
         (c)      Incentive, Stock and Savings Plans........................................................5
         (d)      Retirement and Welfare Benefit Plans......................................................5
         (e)      Expenses..................................................................................6
         (f)      Fringe Benefits...........................................................................6
         (g)      Office and Support Staff..................................................................6
         (h)      Vacation and Other Absences...............................................................7
         (i)      Benefits Shall Not Be Reduced Under Certain Circumstances.................................7
         (j)      Supplemental Retirement Annuity...........................................................8

4.       Termination of Employment.........................................................................11
         (a)      Death or Disability......................................................................11
         (b)      Cause....................................................................................12
         (c)      Good Reason..............................................................................14
         (d)      Notice of Termination....................................................................15
         (e)      Date of Termination......................................................................16

5.       Obligations of the Corporation Upon Termination...................................................16
         (a)      Termination Other Than for Cause.........................................................16
         (b)      Termination On or After Change of Control................................................19
         (c)      Cause; Other Than for Good Reason........................................................19
         (d)      Death or Disability......................................................................20
         (e)      Resolution of Disputes...................................................................20
                  (i)      Right of Election by Executive to Arbitrate or Sue..............................20
                  (ii)     Third-Party Stakeholder.........................................................21
         (f)      Benefits are in Addition to Supplemental Retirement Annuity..............................22



                                       i

   7




                                                                                                        
6.       Non-exclusivity of Rights.........................................................................22

7.       Full Settlement...................................................................................22

8.       Golden Parachute Tax Payments.....................................................................23

9.       Confidential Information..........................................................................24

10.      Competition.......................................................................................25

11.      Successors........................................................................................27

12.      Certain Definitions...............................................................................27
         (a)      Beneficiary..............................................................................28
         (b)      Change of Control........................................................................28
         (c)      Change of Control Date...................................................................30
         (d)      Change of Control Period.................................................................30

13.       Amendment or Modification; Waiver................................................................30

14.      Miscellaneous.....................................................................................30

Exhibit A .................................................................................................34



                                       ii

   8





                                  DEFINED TERMS
                                  -------------

DEFINED TERMS*                                              SECTION                              PAGE
- --------------                                              -------                              ----
                                                                                    
Accounting Firm                                             8(b)                          23
Accrued Obligation                                          5(a)(i)(3)                    16
ACP                                                         3(b)                          5
Affiliate                                                   2(a)                          3
Affiliated Company                                          3(a)                          4
Agreement                                                   Introduction                  1
Annual Base Salary                                          3(a)                          4
Annual Bonus                                                3(b)                          4


Beneficiary                                                 12(a)                         28
Board                                                       3(a)                          4

Cause                                                       4(b)                          12
Change of Control                                           12(b)                         28
Change of Control Date                                      12(c)                         30
Change of Control Period                                    12(d)                         30
Code                                                        5(a)(ii)                      17
Competition                                                 10(c)                         26
Corporation                                                 Introduction                  1
                                                            11(b)                         27
                                                            14(e)                         31


Date of Termination                                         4(e)                          16
Disability                                                  4(a)(ii)                      12
Disability Effective Date                                   4(a)(ii)                      12



Employment Period                                           1(a)                          1
Excise Tax                                                  8(a)                          23
Executive                                                   Introduction                  1

Gross-Up Payment                                            8(a)                          23


- --------
            *Each listed term is intended to include both the singular and
            plural form of the term.

                                      iii


   9




                                  DEFINED TERMS
                                  -------------

DEFINED TERMS*                                              SECTION                              PAGE
- --------------                                              -------                              ----
                                                                                    
Highest Average Monthly Compensation                        3(j)(vi)                      11



Notice of Termination                                       4(d)                          15



Other Benefits                                              5(a)(v)                       19



Payment                                                     8(a)                          23
Pension and Retirement Pro gram of the Corporation          3(j)(vii)                     11




Renewal Date                                                1(c)                          2



Service                                                     3(j)(viii)                    11
Subsidiary                                                  2(a)                          3



Target Annual Bonus                                         3(b)                          5
Terminal Date                                               1(b)                          1
Termination                                                 5(a)                          16
Termination Period                                          5(a)(ii)                      17



Welfare Benefit Continuation                                5(a)(iii)                     18



- -------------
         *Each listed term is intended to include both the singular and plural
form of the term.


                                       iv



   10


                  AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement")
made and entered into as of this 12th day of December, 1998, by and between DANA
CORPORATION, a Virginia corporation whose principal place of business is located
at 4500 Dorr Street, Toledo, Ohio (the "Corporation"), and Southwood J. Morcott
(the "Executive");

                  WHEREAS, the Executive is a principal executive officer of the
Corporation and an integral part of its management; and

                  WHEREAS, the Corporation wishes to assure itself of the
continuing services of the Executive and to assure the Executive of continued
employment during the period of employment hereunder; and

                  WHEREAS, the Executive is willing to commit himself to remain
in the employ of the Corporation during such period on terms and conditions
substantially similar to those on which other senior executive officers of the
Corporation are employed, and to forego opportunities elsewhere during such
period; and

                  WHEREAS, the parties have entered into an Agreement dated
December 14, 1992, as amended from time to time thereafter (the "Prior
Agreement"); and

                  WHEREAS, the parties wish to amend and restate the Prior
Agreement (as it had been amended from time to time thereafter) in its entirety;

                  NOW, THEREFORE, IN CONSIDERATION of the mutual promises,
covenants and agreements set forth below, it is hereby agreed as follows:

         1.       EMPLOYMENT AND TERM.

                  (a) The Corporation agrees to continue the employment of the
Executive, and the Executive agrees to remain in the employ of the Corporation,
in accordance with the terms and provisions of this Agreement, for the period
set forth below (the "Employment Period").


   11

                  (b) The Employment Period under this Agreement shall commence
as of December 12, 1998, and, subject only to the provisions of Section 4 below
relating to termination of employment, shall continue until (i) the close of
business on December 31, 2001 or (ii) such later date as shall result from the
operation of subparagraph (c) below (the "Terminal Date").

                  (c) Commencing on December 31, 1998, and on each anniversary
of such date (such date and each such annual anniversary thereof, the "Renewal
Date") the Terminal Date set forth in subparagraph (b) above shall be extended
so as to occur three (3) years from the Renewal Date unless either party shall
have given notice to the other party that the Terminal Date is not to be
extended or further extended.

         2.       POSITION AND DUTIES OF THE EXECUTIVE.

                  (a) POSITION. It is contemplated that during the Change of
Control Period (as defined in Section 12(d), below), the Executive will continue
to serve as a principal officer of the Corporation and as a member of its Board
of Directors if serving as a member of the Board of Directors immediately prior
to the Change of Control Date, with the office(s) and title(s), reporting
responsibility, and duties and responsibilities of the Executive immediately
prior to the Change of Control Date. The Executive hereby agrees that at any
time prior to the Change of Control Date, the Board of Directors of the
Corporation (or the individual to whom the Executive reports) may, without the
Executive's consent, change the Executive's office(s), title(s), reporting
responsibility, and duties or responsibilities.

                  The office(s), title(s), reporting responsibility, duties and
responsibilities of the Executive on the date of this Agreement, as the same may
be changed from time to time after the date of this Agreement in accordance with
the provisions of the previous paragraph, shall be summarized in Exhibit A to
this Agreement, it being understood and agreed that if, as and when the
office(s), title(s), reporting responsibility, duties or responsibilities of the
Executive shall be so changed after the date of this Agreement, Exhibit A shall
be deemed to be, and shall be updated by the parties to reflect such change;
PROVIDED, HOWEVER, that Exhibit A is



                                       2
   12

intended only as a memorandum for the convenience of the parties and shall be
disregarded if, and to the extent that, Exhibit A shall fail to reflect
accurately the office(s), title(s), reporting responsibility, duties or
responsibilities of the Executive as so changed after the date of this Agreement
because the parties shall have failed to update Exhibit A as aforesaid.

                  At all times during the Change of Control Period, the
Executive shall hold a position of responsibility and importance and a position
of scope, with the functions, duties and responsibilities attached thereto, at
least equal in responsibility and importance and in scope to and commensurate
with his position described in general terms above in this Section 2(a) and
intended to be summarized in Exhibit A to this Agreement.

                  During the Employment Period the Executive shall, without
compensation other than that herein provided, also serve and continue to serve,
if and when elected and re-elected, as an officer or director, or both, of any
United States Subsidiary, division or Affiliate of the Corporation.

                  For all purposes of this Agreement, (i) a 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, and (ii) an 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.

                  (b) DUTIES. Throughout the Employment Period the Executive
shall devote his full time and undivided attention during normal business hours
to the business and affairs of the Corporation except for reasonable vacations
and except for illness or incapacity, but nothing in this Agreement shall



                                       3
   13

preclude the Executive from devoting reasonable periods required for:

                           (i) serving as a director or member of a committee or
         any organization involving no conflict of interest with the interests
         of the Corporation;

                           (ii) delivering lectures, fulfilling speaking
         engagements, teaching at educational institutions;

                           (iii) engaging in charitable and community
         activities; and

                           (iv) managing his personal investments;

provided that such activities do not materially interfere with the regular
performance of his duties and responsibilities under this Agreement.

                  (c) LOCATION OF OFFICE. During the Change of Control Period,
the office of the Executive shall be located at the principal offices of the
Corporation, within the greater Toledo, Ohio area, and the Executive shall not
be required to locate his office elsewhere without his prior written consent,
nor shall he be required to be absent therefrom on travel status or otherwise
more than thirty (30%) of the working days in any calendar year nor for more
than ten (10) consecutive days at any one time.

         3.       COMPENSATION.

                  The Executive shall receive the following compensation for his
services:

                  (a) SALARY. So long as the Executive is employed by the
Corporation, he shall be paid an annual base salary, payable not less often than
monthly, at the rate of not less than $100,000 per month with such increases as
shall be awarded from time to time in accordance with the Corporation's regular
administrative practices of other salary increases applicable to executives of
the Corporation, subject to any and all required withholdings and deductions for
Social



                                       4
   14

Security, income taxes and the like (the "Annual Base Salary"). The Board of
Directors of the Corporation (the "Board") may from time to time direct such
upward adjustments to Annual Base Salary as the Board deems to be necessary or
desirable; PROVIDED, HOWEVER, that during the Change of Control Period (as
defined in Section 12(d) below), the Annual Base Salary shall be reviewed at
least annually and shall be increased at any time and from time to time but not
less often than annually and shall be substantially consistent with increases in
base salary generally awarded in the ordinary course of business to other senior
executives of the Corporation and its Affiliated Companies (a term which, as
used in this Agreement, shall mean a Subsidiary or Affiliate of the Corporation)
and, in addition, shall be adjusted effective as of January lst of each calendar
year commencing in the Change of Control Period to reflect increases in the cost
of living during the preceding calendar year. Annual Base Salary shall not be
reduced after any increase thereof pursuant to this Section 3(a). Any increase
in Annual Base Salary shall not serve to limit or reduce any other obligation of
the Corporation under this Agreement.

                  (b) ADDITIONAL COMPENSATION. So long as the Executive is
employed by the Corporation, he shall be eligible to receive annual short-term
incentive awards or bonuses (such award or bonus is hereinafter referred to as
"Short-Term Award" or "Annual Bonus") from the Dana Corporation Additional
Compensation Plan, and from any successor or replacement plan (the Dana
Corporation Additional Compensation Plan and such successor or replacement plans
being referred to herein collectively as the "ACP"), in accordance with the
terms thereof; PROVIDED, HOWEVER, that, with respect to each fiscal year of the
Corporation ending during the Change of Control Period, the Executive shall be
awarded (whether under the terms of the ACP or otherwise) an Annual Bonus in an
amount that shall not be less than fifty percent (50%) of his Annual Base Salary
rate in effect on the last day of such fiscal year (which amount shall be
prorated if such fiscal year shall be less than 12 months) (the "Target Annual
Bonus"). Each Annual Bonus shall be paid no later than the end of the third
month of the fiscal year next following the fiscal year for which the Annual
Bonus is awarded, unless the receipt of such Annual Bonus is deferred in
accordance with the terms of the ACP.




                                       5
   15

                  (c) INCENTIVE, STOCK AND SAVINGS PLANS. So long as the
Executive is employed by the Corporation, he shall be and continue to be a full
participant in the Dana Corporation 1997 Stock Option Plan, the ACP (providing
for Short-Term Awards) and in any and all other incentive, stock, savings or
retirement plans, practices or policies in which executives of the Corporation
participate that are in effect on the date hereof and that may hereafter be
adopted, including, without limitation, any stock option, stock purchase or
stock appreciation plans, or any successor plans that may be adopted by the
Corporation with, except in the case of the ACP after the commencement of the
Change of Control Period, at least the same reward opportunities, if any, that
have heretofore been provided to the Executive. Nothing in this Agreement shall
preclude improvement of reward opportunities in such plans or other plans in
accordance with the practice of the Corporation on or after the date of this
Agreement. Any provision of the ACP or of this Agreement to the contrary
notwithstanding, any Short-Term Awards made to the Executive during the Change
of Control Period (whether for services rendered prior to or after the Change of
Control Date) shall be paid wholly in cash as soon as practicable after the
awards are made.

                  (d) RETIREMENT AND WELFARE BENEFIT PLANS. The Executive, his
dependents and Beneficiary, including, without limitation, any beneficiary of a
joint and survivor or other optional method of payment applicable to the payment
of benefits under the Pension and Retirement Program of the Corporation, as
defined in Section 3(j)(vii) below, shall be entitled to all payments and
benefits and service credit for benefits during the Employment Period to which
other senior executives of the Corporation, their dependents and their
beneficiaries are entitled under the terms of employee retirement and welfare
benefit plans and practices of the Corporation, including, without limitation,
the Pension and Retirement Program of the Corporation (as defined in Section
3(j)(vii) below), the Corporation's Savings and Investment Plan, its Stock
Purchase Plan, its Stock Award Plan, its Income Protection Plan for Management
and Certain Other Employees providing layoff and severance benefits, its 1989
Restricted Stock Plan, its Excess Benefits Plan, its Supplemental Benefits Plan,
its death benefit plans (consisting of



                                       6
   16

its Group Insurance Plan for Management Employees providing life insurance,
accidental death and dismemberment insurance, and travel accident insurance),
its disability benefit plans (consisting of its salary continuation, sickness
and accident and long-term disability benefits programs), its medical, dental
and health and welfare plans and other present or equivalent successor plans and
practices of the Corporation, its Subsidiaries and divisions, for active and
retired employees, for which officers, their dependents and beneficiaries, are
eligible, and to all payments or other benefits under any such plan or practice
subsequent to the Employment Period as a result of participation in such plan or
practice during the Employment Period.

                  (e) EXPENSES. So long as the Executive is employed by the
Corporation, he shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in accordance with the polices,
practices and procedures of the Corporation and its Affiliated Companies from
time to time in effect, commensurate with his position and on a basis at least
comparable to that of other senior executives of the Corporation.

                  (f) FRINGE BENEFITS. So long as the Executive is employed by
the Corporation, he shall be entitled to fringe benefits, including, without
limitation, the business and personal use of an automobile, and payment or
reimbursement of club initiation fees and dues, in accordance with the plans,
practices, programs and policies of the Corporation and its Affiliated Companies
from time to time in effect, commensurate with his position and at least
comparable to those received by other senior executives of the Corporation.

                  (g) OFFICE AND SUPPORT STAFF. So long as the Executive is
employed by the Corporation, he shall be entitled to an office or offices of a
size and with furnishings and other appointments, and to exclusive personal
secretarial and other assistance, commensurate with his position and at least
comparable to those received by other senior executives of the Corporation.

                  (h) VACATION AND OTHER ABSENCES. So long as the Executive is
employed by the Corporation, he shall be entitled



                                       7
   17

to paid vacation and such other paid absences whether for holidays, illness,
personal time or any similar purposes, in accordance with the plans, policies,
programs and practices of the Corporation and its Affiliated Companies in effect
from time to time, commensurate with his position and at least comparable to
those received by other senior executives of the Corporation.

                  (i) BENEFITS SHALL NOT BE REDUCED UNDER CERTAIN CIRCUMSTANCES.
Nothing in this Agreement shall preclude the Corporation from amending or
terminating any employee benefit or welfare plan or practice, but, it being the
intent of the parties that the Executive shall continue to be entitled during
the Employment Period to perquisites as set forth in this Section 3 and to
benefits and service credit for benefits under Section 3(d) above at least equal
to those attached to his position on February 13, 1984, the date of the original
agreement between the parties, and except as provided in the last sentence of
this Section 3(i), nothing in this Agreement shall operate or be construed to
reduce, or authorize a reduction without the Executive's written consent in, the
level of such perquisites, benefits or service credit for benefits; in the event
of any such reduction, by amendment or termination of any plan or practice or
otherwise, the Executive, his dependents and Beneficiary, shall continue to be
entitled to perquisites, benefits and service credit for benefits at least equal
to the perquisites, benefits and service credit for benefits under such plans or
practices that he or his dependents and Beneficiary would have received if such
reduction had not taken place. If and to the extent that such perquisites,
benefits and service credits are not payable or provided under any such plans or
practices by reason of such amendment or termination thereof, the Corporation
itself shall pay or provide therefor. Notwithstanding the foregoing provisions
of this Section 3(i), the Executive hereby waives the benefit of the foregoing
minimum benefit protection only as it applies to the Dana Corporation Savings
and Investment Plan, and to its medical, dental and health plans for active and
retired employees. The Executive expressly does not waive the application of the
foregoing minimum benefit protection to any of the other benefit plans, programs
or practices enumerated in Section 3 above, including, without limitation, the
Pension and Retirement Program of the Corporation (including



                                       8
   18

the lump sum discount factor in effect on February 13, 1984), its death benefit
plans, its disability benefit plans, and its Income Protection Plan for
Management and Certain Other Employees. The Executive reserves the right to
cancel the above waiver, prospectively, at any future time by giving written
notice to the Corporation of such cancellation. Nothing in this Section 3(i)
shall be construed to prohibit the Corporation from amending or terminating any
employee benefit or welfare plan or practice to reduce benefits, so long as such
reduction applies to all salaried Corporation employees covered by such plan or
practice equally and such reduction is adopted prior to the commencement of the
Change of Control Period.

                  (j)      SUPPLEMENTAL RETIREMENT ANNUITY.

                           (i) If the Service of the Executive, including,
         without limitation, the period set forth in Section 5(a)(iv)(2) below,
         relating to the period between the Date of Termination and the end of
         the Termination Period, shall terminate other than for Cause as defined
         in Section 4(b) below, and if the Executive shall have a total of not
         less than fifteen (15) years of Service, as defined in subparagraph
         (viii) of this Section 3(j), whether or not consecutive, the Executive,
         subject to compliance with the provisions of Sections 9 and 10 below,
         relating to confidential information and Competition, respectively, and
         after the Executive's death, his Beneficiary shall be entitled to the
         supplemental retirement annuity provided by this Section 3(j) in
         addition to all other benefits to which the Executive (or his
         Beneficiary), may be entitled including, without limitation, benefits
         under the Pension and Retirement Program of the Corporation.

                  Such supplemental retirement annuity shall be payable by the
Corporation on a straight life annuity basis commencing on the first day of the
month coinciding with or next following the latest of

                  (1)  termination of Service;

                  (2)  attainment by the Executive of age 55; and




                                       9
   19

                  (3)  if the Executive had not previously retired with 15 years
                       or more of Service, the expiration of the Employment
                       Period;

and continuing on the first day of each month thereafter during his lifetime.

                           (ii) The monthly payment provided for in Section
         3(j)(i) above shall be equal to fifty percent (50%) (or if higher, the
         percentage which is the product of 1.6% multiplied by the Executive's
         Credited Service at retirement, as such Credited Service is determined
         by application of the definition of Credited Service under the Dana
         Corporation Retirement Plan), of the Executive's Highest Average
         Monthly Compensation, as defined in Section 3(j)(vi), less the sum of

                  (1)      commencing at the earliest date that it could be
                           payable on or after termination of Service, the
                           aggregate monthly retirement benefit payable to the
                           Executive for life on a straight life annuity basis
                           under the Pension and Retirement Program of the
                           Corporation to the extent attributable to
                           contributions of the Corporation, its Subsidiaries
                           and Affiliates;

                  (2)      commencing at the earliest date that it could be
                           payable on or after termination of Service, the
                           aggregate monthly retirement or disability benefit
                           payable to the Executive for life on a straight life
                           annuity basis following his retirement or termination
                           from employment by the Corporation, its Subsidiaries
                           and Affiliates, to the extent attributable to
                           contributions other than by the Executive under
                           pension or retirement plans of all corporations,
                           organizations or entities other than the Corporation,
                           its Subsidiaries and Affiliates;

                  (3)      commencing at the earliest date payable on or after
                           termination of Service, 50% of the monthly primary
                           Social Security benefit that


                                       10
   20

                           would be or would have been payable to the Executive
                           in the absence of any compensation that may at the
                           time be or have been earned by him; and

                  (4)      commencing at the earliest date payable on or after
                           termination of Service and continuing until no longer
                           payable, the aggregate monthly disability benefit
                           payable to the Executive under disability benefit
                           plans and pension plans of the Corporation, its
                           Subsidiaries and Affiliates to the extent
                           attributable to contributions of the Corporation, its
                           Subsidiaries and Affiliates.

                           (iii) The Executive may elect to receive payment of
         the supplemental retirement annuity provided by this Section 3(j),
         under a joint and survivor or any other optional method of payment
         available under the Dana Corporation Retirement Plan, including,
         without limitation, any deferment in the time of payment thereof. The
         amount of the benefit payable pursuant to any form of payment under
         this Section 3(j) shall be determined by applying the mortality
         assumptions, interest rates, and other factors contained in the Dana
         Corporation Retirement Plan that would be applicable to the form of
         payment elected by the Executive (subject, however, to any actuarial
         factor that may apply as a result of the operation of Section 3(i));
         PROVIDED THAT, if a lump sum distribution is made hereunder, the amount
         of the lump sum distribution shall be actuarially equivalent to the
         monthly benefit prescribed by Section 3(j)(ii), calculated using the
         basis described in subparagraph (1) or (2), below, whichever produces
         the larger lump sum amount:

                  (1)      the lump sum amount calculated on the basis of the
                           "applicable interest rate" (as in effect for the
                           November preceding the calendar year in which the
                           calculation is made) and the "applicable mortality
                           table," both as defined in Section 417(e) of the
                           Internal Revenue Code; or



                                       11
   21


                  (2)      the lump sum amount calculated on the basis of the
                           actuarial equivalent factor used to convert the
                           Executive's Earned Benefit Account into a life
                           annuity under the Dana Corporation Retirement Plan at
                           the time the calculation is made, subject to any lump
                           sum discount factor that might apply as a result of
                           the operation of Section 3(i) of this Agreement.

         If it is determined that the Executive is subject to federal income
         taxation on an amount in respect of the supplemental retirement annuity
         prior to the distribution of all of such amount to him, the Corporation
         shall forthwith pay to the Executive all (or the balance) of such
         amount as is includable in the Executive's federal gross income and
         correspondingly reduce future payments, if any, of the supplemental
         retirement annuity.

                           (iv) In the event the Executive should die prior to
         terminating Service with the Corporation, the Executive's surviving
         spouse to whom he is then married, or if no such surviving spouse is
         then living, his Beneficiary, shall be entitled to receive a lump sum
         benefit equal to 100% of the benefit to which the Executive would have
         been entitled under this Section 3(j), as if the Executive had retired
         on the date of his death and elected a lump sum benefit hereunder.
                           (v) In the event that the Corporation defaults in
         payment of all or any part of the supplemental retirement annuity
         provided above in this Section 3(j) and fails to remedy such default
         within thirty days after having received notice from the Executive or
         his Beneficiary, the Corporation shall thereupon pay to the Executive
         or his Beneficiary, as the case may be, in full discharge of its
         obligations under this Section 3(j), (1) a lump sum amount actuarially
         equivalent (based on the same assumptions and discount factors as would
         be applicable under the Dana Corporation Retirement Plan) to the future
         payments otherwise payable under this Section 3(j), and (2) an amount
         equal to any and all past due payments under this Section 3(j).




                                       12
   22

                           (vi) The term "Highest Average Monthly Compensation"
         shall mean the sum of (1) one-twelfth (1/12) of the Annual Base Salary
         provided in Section 3(a) at the rate being paid at the time the
         Executive's termination of employment occurred, and (2) one-twelfth
         (1/12) of the average of the highest Annual Bonuses payable to the
         Executive for any three (3) consecutive full or partial fiscal years
         during his employment by the Corporation, PROVIDED, HOWEVER, that,
         solely for purposes of this Section 3(j), and for no other purposes
         under this Agreement, with respect to 1994 and subsequent years' Annual
         Bonuses, only that portion of the Employee's Annual Bonus as does not
         exceed 125% of his Annual Base Salary will be considered.

                           (vii) The term "Pension and Retirement Program of the
         Corporation" shall mean the Dana Corporation Retirement Plan, the Dana
         Corporation Excess Benefits Plan, the Dana Corporation Supplemental
         Benefits Plan, and any other supplemental, early retirement and similar
         plan or plans of the Corporation, its Subsidiaries and Affiliates,
         providing for pension or retirement benefits that may be applicable to
         the Executive and that are in effect on the date hereof or may
         hereafter be adopted or substituted for any such plan, but exclusive of
         the Dana Corporation Savings and Investment Plan and any similar plan
         or plans.

                           (viii) The term "Service" shall mean employment as an
         employee by the Corporation, any Subsidiary or Affiliate thereof or any
         corporation the capital stock or assets of which have been acquired by,
         or which has been merged into or consolidated with the Corporation or
         any Subsidiary or Affiliate thereof.

         4        TERMINATION OF EMPLOYMENT.

                  (a)      DEATH OR DISABILITY.

                           (i) The Executive's employment shall terminate
         automatically upon the Executive's death during the Employment Period.



                                       13
   23

                           (ii) If the Corporation determines in good faith that
         the Disability (as defined below) of the Executive has occurred during
         the Employment Period, it may give to the Executive written notice in
         accordance with Section 14(b) below of its intention to terminate the
         Executive's employment. In such event, the Employment Period shall
         terminate effective on the 30th day after receipt of such notice by the
         Executive (the "Disability Effective Date"), PROVIDED, that within the
         30 days after such receipt, the Executive shall not have returned to
         full-time performance of the Executive's duties. For purposes of this
         Agreement, "Disability" shall mean the absence of the Executive from
         the Executive's duties with the Corporation on a full-time basis for
         180 consecutive business days as a result of incapacity due to mental
         or physical illness which is determined to be total and permanent by a
         physician selected by the Corporation or its insurers and acceptable to
         the Executive or the Executive's legal representative (such agreement
         as to acceptability not to be withheld unreasonably).

                  (b) CAUSE. The Corporation may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, the termination of the Executive's employment shall be deemed to have
been for "Cause" only

                           (i) if termination of his employment shall have been
         the result of his conviction of, or plea of guilty or nolo contendere
         to, the charge of having committed a felony (whether or not such
         conviction is later reversed for any reason), or

                           (ii) if there has been a breach by the Executive
         during the Employment Period of the provisions of Section 2(b),
         relating to the time to be devoted to the affairs of the Corporation,
         or of Section 9, relating to confidential information, and such breach
         results in demonstrably material injury to the Corporation, and, with
         respect to any alleged breach of Section 2(b) hereof, the Executive
         shall have either failed to remedy such alleged breach within thirty
         days from his receipt



                                       14
   24

         of written notice from the Secretary of the Corporation pursuant to
         resolution duly adopted by the Board of Directors of the Corporation
         after notice to the Executive and an opportunity to be heard demanding
         that he remedy such alleged breach, or shall have failed to take all
         reasonable steps to that end during such thirty-day period and
         thereafter;

PROVIDED, that there shall have been delivered to the Executive a certified copy
of a resolution of the Board of Directors of the Corporation adopted by the
affirmative vote of not less than three-fourths of the entire membership of the
Board of Directors called and held for that purpose and at which the Executive
was given an opportunity to be heard, finding that the Executive was guilty of
conduct set forth in subparagraph (i) or (ii) above, specifying the particulars
thereof in detail.

                  Anything in this Section 4(b) or elsewhere in this Agreement
to the contrary notwithstanding, the employment of the Executive shall in no
event be considered to have been terminated by the Corporation for Cause if
termination of his employment took place

                  (1)      as the result of bad judgment or negligence on the
                           part of the Executive, or

                  (2)      because of an act or omission believed by the
                           Executive in good faith to have been in or not
                           opposed to the interests of the Corporation, or

                  (3)      for any act or omission in respect of which a
                           determination could properly be made that the
                           Executive met the applicable standard of conduct
                           prescribed for indemnification or reimbursement or
                           payment of expenses under (A) the Bylaws of the
                           Corporation, or (B) the laws of the State of
                           Virginia, or (C) the directors' and officers'
                           liability insurance of the Corporation, in each case
                           either as in effect at the time of this Agreement or
                           in effect at the time of such act or omission, or



                                       15
   25


                  (4)      as the result of an act or omission which occurred
                           more than twelve calendar months prior to the
                           Executive's having been given notice of the
                           termination of his employment for such act or
                           omission unless the commission of such act or such
                           omission could not at the time of such commission or
                           omission have been known to a member of the Board of
                           Directors of the Corporation (other than the
                           Executive, if he is then a member of the Board of
                           Directors), in which case more than twelve calendar
                           months from the date that the commission of such act
                           or such omission was or could reasonably have been so
                           known, or

                  (5)      as the result of a continuing course of action which
                           commenced and was or could reasonably have been known
                           to a member of the Board of Directors of the
                           Corporation (other than the Executive, if he is then
                           a member of the Board of Directors) more than twelve
                           calendar months prior to notice having been given to
                           the Executive of the termination of his employment.

                  (c) GOOD REASON. Following a Change of Control (as defined in
Section 12(b) below), the Executive may terminate his employment for Good
Reason. For purposes of this Agreement, "Good Reason" shall mean the occurrence
after the Change of Control Date of any of the following events:

                           (i) Failure to elect or reelect the Executive to the
         Board of Directors of the Corporation, if the Executive shall have been
         a member of the Board of Directors on the date of this Agreement or at
         any time thereafter during the Employment Period, or failure to elect
         or reelect the Executive to, or removal of the Executive from, the
         office(s) described in Section 2(a) above and intended to be summarized
         in Exhibit A to this Agreement.

                           (ii) A significant change in the nature or scope of
         the authorities, powers, functions or duties attached to the position
         described in Section 2 above and



                                       16
   26

         intended to be summarized in Exhibit A to this Agreement, or a
         reduction in compensation, which is not remedied within 30 days after
         receipt by the Corporation of written notice from the Executive.

                           (iii) A determination by the Executive made in good
         faith that as a result of a Change of Control, and a change in
         circumstances thereafter and since the date of this Agreement
         significantly affecting his position, he is unable to carry out the
         authorities, powers, functions or duties attached to his position and
         contemplated by Section 2 of this Agreement and the situation is not
         remedied within 30 days after receipt by the Corporation of written
         notice from the Executive of such determination.

                           (iv) A breach by the Corporation of any provision of
         this Agreement not embraced within the foregoing clauses (i), (ii) and
         (iii) of this Section 4(c) which is not remedied within 30 days after
         receipt by the Corporation of written notice from the Executive.

                           (v) The liquidation, dissolution, consolidation or
         merger of the Corporation or transfer of all or a significant portion
         of its assets unless a successor or successors (by merger,
         consolidation or otherwise) to which all or a significant portion of
         its assets have been transferred shall have assumed all duties and
         obligations of the Corporation under this Agreement but without
         releasing the corporation that is the original party to this Agreement;

PROVIDED, that in any event set forth in this Section 4(c), the Executive shall
have elected to terminate his employment under this Agreement, upon not less
than ten and not more than ninety days' advance written notice to the
Corporation, attention of the Secretary, given, except in the case of a
continuing breach, within three calendar months after (A) failure to be so
elected or reelected, or removal, (B) expiration of the thirty-day cure period
with respect to such event, or (C) the closing date of such liquidation,
dissolution, consolidation, merger or transfer of assets, as the case may be.



                                       17
   27

                  An election by the Executive to terminate his employment given
under the provisions of this Section 4(c) shall not be deemed a voluntary
termination of employment by the Executive for the purpose of this Agreement or
any plan or practice of the Corporation.

                  (d) NOTICE OF TERMINATION. Any termination by the Corporation
for Cause, or by the Executive for Good Reason, shall be communicated by Notice
of Termination to the other party hereto given in accordance with Section 14(b)
below. For purposes of this Agreement, a "Notice of Termination" means a written
notice which

                           (i)  indicates the specific termination provision
         in this Agreement relied upon,

                           (ii) to the extent applicable, sets forth in
         reasonable detail the facts and circumstances claimed to provide a
         basis for termination of the Executive's employment under the provision
         so indicated and

                           (iii) if the Date of Termination (as defined in
         Section 4(e) below) is other than the date of receipt of such notice,
         specifies the termination date (which date shall be not more than
         fifteen days after the giving of such notice).

                  (e)      DATE OF TERMINATION.  "Date of Termination" means

                           (i) if the Executive's employment is terminated by
         the Corporation for Cause, or by the Executive for Good Reason, the
         date of receipt of the Notice of Termination or any later date
         specified therein, as the case may be,

                           (ii) if the Executive's employment is terminated by
         the Corporation other than for Cause or Disability, the Date of
         Termination shall be the date on which the Corporation notifies the
         Executive of such termination and



                                       18
   28


                           (iii) if the Executive's employment is terminated by
         reason of death or Disability, the Date of Termination shall be the
         date of death of the Executive or the Disability Effective Date, as the
         case may be.

         5        OBLIGATIONS OF THE CORPORATION UPON TERMINATION.

                  (a) TERMINATION OTHER THAN FOR CAUSE. If, during the
Employment Period, the Corporation shall terminate the Executive's employment
other than for Cause or the Executive shall terminate his employment following a
Change of Control for Good Reason (termination in any such case referred to as
"Termination"):

                           (i)  the Corporation shall pay the Executive in a
         lump sum in cash within 30 days after the Date of Termination the sum
         of

                  (1)      the Executive's Annual Base Salary through the Date
                           of Termination to the extent not theretofore paid,

                  (2)      the product of (x) the Target Annual Bonus and (y) a
                           fraction, the numerator of which is the number of
                           days in the current fiscal year through the Date of
                           Termination, and the denominator of which is 365, and

                  (3)      any compensation previously deferred by the Executive
                           (together with any accrued interest or earnings
                           thereon) and any accrued vacation pay, in each case
                           to the extent not theretofore paid (the sum of the
                           amounts described in clauses (1), (2), and (3) shall
                           be hereinafter referred to as the "Accrued
                           Obligations"); and

                           (ii) at the end of the month next following the
         Termination, and at the end of each month thereafter until the earliest
         of the end of the Employment Period, three years following the Date of
         Termination, or until the Executive shall attain the age of 65 years,
         but in no event beyond the end of the month in which the death of the
         Executive shall have occurred or



                                       19
   29

         the end of the sixth month following the Disability Effective Date
         (such period to be called the "Termination Period"), the Corporation
         shall pay to the Executive an amount equal to the Highest Average
         Monthly Compensation; PROVIDED, HOWEVER, that such amount shall be
         reduced by any other amounts payable to the Executive in respect of
         salary or bonus continuation to be received by the Executive under any
         severance plan, policy or arrangement of the Corporation; and,
         PROVIDED, FURTHER, that if the Date of Termination occurs on or after
         the occurrence of a Change of Control, such amount shall be paid as a
         lump-sum within 30 days following the Date of Termination, such
         lump-sum calculated based upon the present value (within the meaning of
         Section 28OG(d)(4) of the Internal Revenue Code of 1986 as amended (the
         "Code")) of the payments which would be made absent the Change of
         Control; and

                           (iii) During the Termination Period, or such longer
         period as any plan, program, practice or policy may provide, the
         Corporation shall continue benefits to the Executive and/or the
         Executive's family at least equal to those which would have been
         provided to them in accordance with the plans, programs, practices and
         policies described in Section 3(d) above if the Executive's employment
         had not been terminated in accordance with the most favorable plans,
         practices, programs or policies of the Corporation and its Affiliated
         Companies as in effect and applicable generally to other senior
         executives of the Corporation and its Affiliated Companies and their
         families during the 90-day period immediately preceding the Date of
         Termination or, if more favorable to the Executive, as in effect at any
         time thereafter or, if more favorable to the Executive, as in effect
         generally at any time thereafter with respect to other senior
         executives of the Corporation and its Affiliated Companies and their
         families, PROVIDED, HOWEVER, that if the Executive becomes reemployed
         with another employer and is eligible to receive medical or other
         welfare benefits under another employer-provided plan, the medical and
         other welfare benefits described herein shall be secondary to those
         provided under such other plan during such applicable period of
         eligibility


                                       20
   30

         (such continuation of such benefits for the applicable period herein
         set forth shall be hereinafter referred to as "Welfare Benefit
         Continuation"). For purposes of determining eligibility of the
         Executive for retiree benefits pursuant to such plans, practices,
         programs and policies, the Executive shall be considered to have
         remained employed until the end of the Termination Period and to have
         retired on the date of the end of the Termination Period. To the extent
         that any benefits referred to in this Section 5(a)(iii) shall not be
         payable or provided under any such plan by reason of the Executive's no
         longer being an employee of the Corporation as the result of
         Termination, the Corporation shall itself pay, or provide for payment
         of, such benefits and the service credit for benefits provided for in
         Section 5(a)(iv) below, to the Executive, his dependents and
         Beneficiary; and

                           (iv) The period from the Date of Termination until
         the end of the Termination Period shall be considered:

                  (1)      Service with the Corporation for the purpose of
                           continued credits under the employee benefit plans
                           referred to in Section 3(d) above and all other
                           benefit plans of the Corporation applicable to the
                           Executive or his Beneficiary as in effect immediately
                           prior to Termination but prior to any reduction of
                           benefits thereunder as the result of amendment or
                           termination during the Employment Period;

                  (2)      Service within the meaning of Section 3(j)(viii)
                           above for purposes of Section 3(j) above; and

                  (3)      Employment with the Corporation for purposes of
                           determining payments and other rights in respect of
                           awards made or accrued and award opportunities
                           granted prior to Termination under the executive
                           incentive plans referred to in Section 3(c) above and
                           all other incentive



                                       21
   31

                           plans of the Corporation in which the Executive was a
                           participant prior to Termination; and

                           (v) to the extent not theretofore paid or provided,
         the Corporation shall timely pay or provide to the Executive and/or the
         Executive's family any other amounts or benefits required to be paid or
         provided or which the Executive and/or the Executive's family is
         eligible to receive pursuant to this Agreement and under any plan,
         program, policy or practice or contract or agreement of the Corporation
         and its Affiliated Companies as in effect and applicable generally to
         other senior executives of the Corporation and its Affiliated Companies
         and their families during the 90-day period immediately preceding the
         Date of Termination or, if more favorable to the Executive, as in
         effect generally thereafter with respect to other senior executives of
         the Corporation and its Affiliated Companies and their families (such
         other amounts and benefits shall be referred to below as the "Other
         Benefits").

                  (b) TERMINATION ON OR AFTER CHANGE OF CONTROL. If Termination
shall have occurred coincidental with a Change of Control or during the Change
of Control Period, any provision of Section 5(a)(iv) above or of the ACP to the
contrary notwithstanding, upon such Termination, the Corporation shall pay or
distribute to the Executive on an accelerated basis, to the extent, if any, not
theretofore accelerated, any and all outstanding Short-Term Awards, or
installments thereof, under the ACP that shall have been awarded to the
Executive prior to Termination and deferred for payment subsequent to
termination of employment, with any such accelerated payment based on the value,
determined in accordance with such plan (or successor plan), of such awards or
installments (and any increments thereon) on the Termination Date, and such
accelerated payment or distribution shall constitute a complete discharge of the
Corporation's obligation in respect of the Short-Term Awards so paid or
distributed.

                  (c) CAUSE; OTHER THAN FOR GOOD REASON. If the Executive's
employment shall be terminated for Cause during the Employment Period, the
Corporation shall have no further obligations to the Executive under this
Agreement other than



                                       22
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the obligation to pay the Executive's Annual Base Salary, any compensation
previously deferred by the Executive (together with any accrued interest or
earnings thereon), and accrued vacation pay through the Date of Termination, in
each case to the extent not theretofore paid, and any other amounts or benefits
to which the Executive and/or the Executive's family is otherwise entitled under
the terms of any employee benefit or incentive plan of the Corporation. If the
Executive terminates employment during the Employment Period, excluding a
termination for Good Reason following a Change of Control, the Corporation shall
have no further obligations to the Executive, other than to pay the Executive's
Annual Base Salary, any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon), and accrued vacation
pay through the termination date, in each case to the extent not theretofore
paid, any other benefits to which the Executive and/or the Executive's family is
otherwise entitled under the terms of any employee benefit or incentive plan of
the Corporation, and, if the Executive is otherwise eligible under the
provisions of Section 3(j) of this Agreement, he shall also be entitled to
receive the supplemental retirement annuity described in such Section 3(j).

                  (d)      DEATH OR DISABILITY.

                           (i) In the event of the death of the Executive during
         the Employment Period, the legal representative of the Executive shall
         be entitled to the compensation provided for in Sections 3(a) and 3(b)
         above for the month in which death shall have taken place, at the rate
         being paid at the time of death, and the Employment Period shall be
         deemed to have ended as of the close of business on the last day of the
         month in which death shall have occurred but without prejudice to any
         payments due in respect of the Executive's death. Further, in the event
         the Executive should die prior to terminating Service with the
         Corporation, the Executive's surviving spouse or Beneficiary, as the
         case may be, shall be entitled to receive the supplemental retirement
         annuity pursuant to Section 3(j)(iv).

                           (ii) In the event of the Disability of the Executive
         during the Employment Period, the Executive



                                       23
   33

         shall be entitled to the compensation provided for in Sections 3(a) and
         3(b) above, at the rate being paid on the Disability Effective Date,
         for the period of such Disability but not in excess of six months. The
         amount of any payments due under this Section 5(d)(ii) shall be reduced
         by any payments to which the Executive may be entitled for the same
         period because of disability under any disability or pension plan of
         the Corporation or of any Subsidiary or Affiliate thereof.

                  (e)      RESOLUTION OF DISPUTES.
                           (i) RIGHT OF ELECTION BY EXECUTIVE TO ARBITRATE OR
         SUE. In the event that the Executive's employment shall be terminated
         by the Corporation during the Employment Period and such termination is
         alleged to be for Cause, or the Executive's right to terminate his
         employment under Section 4(c) above shall be questioned by the
         Corporation, or the Corporation shall withhold payments or provision of
         benefits for any other reason, the Executive shall have the right, in
         addition to all other rights and remedies provided by law, at his
         election either to seek arbitration within the Toledo, Ohio area under
         the rules of the American Arbitration Association by serving a notice
         to arbitrate upon the Corporation or to institute a judicial
         proceeding, in either case within ninety days after having received
         notice of termination of his employment or notice in any form that the
         termination of his employment under Section 4(b) above is subject to
         question or that the Corporation is withholding or proposes to withhold
         payments or provision of benefits.

                           (ii) THIRD-PARTY STAKEHOLDER. In the event that the
         Corporation defaults on any obligation set forth in Section 5(a) above,
         relating to Termination, and shall have failed to remedy such default
         within thirty (30) days after having received written notice of such
         default from the Executive, in addition to all other rights and
         remedies that the Executive may have as a result of such default, the
         Executive may demand and the Corporation shall thereupon be required to
         deposit, with the third-party stakeholder hereinafter described, an
         amount equal to the undiscounted value of any and all



                                       24
   34

         undischarged, future obligations of the Corporation under Section 5(a)
         above and such amount shall thereafter be held, paid, applied or
         distributed by such third-party stakeholder for the purpose of
         satisfying such undischarged, future obligations of the Corporation
         when and to the extent that they become due and payable. Any interest
         or other income on such amount shall be retained by the third-party
         stakeholder and applied, if necessary, by it to satisfy such
         obligations, PROVIDED, HOWEVER, that any interest or other income that
         is earned on such undischarged, future obligations after the date that
         the third-party stakeholder determines, in its sole discretion, that
         such obligations are due and owing to the Executive, shall be paid to
         the Executive as earned. To the extent not theretofore expended, such
         amount (including any remaining unexpended interest or other income)
         shall be repaid to the Corporation at such time as the third-party
         stakeholder, in its sole discretion, reasonably exercised, determines,
         upon the advice of counsel and after consultation with the Corporation
         and the Executive or, in the event of his death, his Beneficiary, that
         all obligations of the Corporation under Section 5(a) above have been
         substantially satisfied.

                           Such amount shall, in the event of any question, be
         determined jointly by the firm of certified public accountants
         regularly employed by the Corporation and a firm of certified public
         accountants selected by the Executive, in each case upon the advice of
         actuaries to the extent the certified public accountants consider
         necessary, and, in the event such two firms of accountants are unable
         to agree on a resolution of the question, such amount shall be
         determined by an independent firm of certified public accountants
         selected jointly by both firms of accountants.

                           The third-party stakeholder, the fees and expenses of
         which shall be paid by the Corporation, shall be a national or state
         bank or trust company having a combined capital, surplus and undivided
         profits and reserves of not less than Ten Million Dollars ($10,000,000)
         which is duly authorized and qualified to



                                       25
   35

         do business in the state in which the Executive resides at the time of
         such default.

                  (f) BENEFITS ARE IN ADDITION TO SUPPLEMENTAL RETIREMENT
ANNUITY. Any provision of this Agreement to the contrary notwithstanding, the
payments, benefits, service credit for benefits and other matters provided by
this Section 5, including without limitation Section 5(a) above, in the event of
a Termination, are in addition to any payments, benefits, service credit for
benefits and other matters provided by Section 3(j) above relating to a
supplemental retirement annuity that may apply in such event.

         6        NON-EXCLUSIVITY OF RIGHTS.

                  Except as provided in Sections 5(a)(ii), 5(b) and 5(c) above,
nothing in this Agreement shall prevent or limit the Executive's continuing or
future participation in any plan, program, policy or practice provided by the
Corporation or any of its Affiliated Companies and for which the Executive may
qualify, nor shall anything herein limit or otherwise affect such rights as the
Executive may have under any contract or agreement entered into after the date
hereof with the Corporation or any of its Affiliated Companies. Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan, policy, practice or program of, or any contract or agreement
entered into after the date hereof with, the Corporation or any of its
Affiliated Companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.

         7        FULL SETTLEMENT.

                  The Corporation's obligation to make the payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not
be affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Corporation may have against the Executive or others.
In no event shall the Executive be obligated to seek other employment or take
any other action by way of mitigation of the amounts payable to the Executive
under any of the



                                       26
   36

provisions of this Agreement and, except as provided in Section 5(a)(iii) above,
such amounts shall not be reduced whether or not the Executive obtains other
employment.

         8        GOLDEN PARACHUTE TAX PAYMENTS.

                  (a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution involving a change of control of the Corporation, by the
Corporation or any other person or entity, to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 8) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code (or any successor
provision) or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") from the Corporation in an amount such that, after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.

                  (b) All calculations and determinations required to be made
under this Section 8, including whether and when a Gross-Up Payment is required
and the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by Price Waterhouse (or any
successor thereto by merger or operation of law) (the "Accounting Firm"). In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the change of control, the Executive shall
appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne



                                       27
   37

solely by the Corporation. Any Gross-Up Payment, as determined pursuant to this
Section 8, shall be paid by the Corporation to the Executive within five days of
the receipt of the Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with a written opinion that failure to report the Excise Tax on the
Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Corporation and the Executive.

                  (c) The Executive shall promptly notify the Corporation in
writing of any claim by the Internal Revenue Service that, if successful, would
require the payment by the Corporation of the Gross-Up Payment.

                  The Corporation shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such claim and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 8(c), the Corporation shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or to contest
the claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Corporation
shall determine; PROVIDED, HOWEVER, that if the Corporation directs the
Executive to pay such claim and sue for a refund, the Corporation shall advance
the amount of such payment to the Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance.



                                       28
   38

Furthermore, the Corporation's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.

         9        CONFIDENTIAL INFORMATION.

                  (a) The Executive agrees not to disclose, either while in the
Corporation's employ or at any time thereafter, to any person not employed by
the Corporation, or not engaged to render services to the Corporation, except
with the prior written consent of an officer authorized to act in the matter by
the Board of Directors of the Corporation, any confidential information obtained
by him while in the employ of the Corporation, including, without limitation,
information relating to any of the Corporation's inventions, processes,
formulae, plans, devices, compilations of information, methods of distribution,
customers, client relationships, marketing strategies or trade secrets;
PROVIDED, HOWEVER, that this provision shall not preclude the Executive from use
or disclosure of information known generally to the public or of information not
considered confidential by persons engaged in the business conducted by the
Corporation or from disclosure required by law or Court order. The agreement
herein made in this Section 9(a) shall be in addition to, and not in limitation
or derogation of, any obligations otherwise imposed by law upon the Executive in
respect of confidential information and trade secrets of the Corporation, its
Subsidiaries and Affiliates.

                  (b) The Executive also agrees that upon leaving the
Corporation's employ he will not take with him, without the prior written
consent of an officer authorized to act in the matter by the Board of Directors
of the Corporation, and he will surrender to the Corporation any record, list,
drawing, blueprint, specification or other document or property of the
Corporation, its Subsidiaries and Affiliates, together with any copy and
reproduction thereof, mechanical or otherwise, which is of a confidential nature
relating to the Corporation, its Subsidiaries and Affiliates, or, without
limitation, relating to its or their methods of distribution, client



                                       29
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relationships, marketing strategies or any description of any formulae or secret
processes, or which was obtained by him or entrusted to him during the course of
his employment with the Corporation.

         10       COMPETITION.

                  (a) Subject to the provisions of Section 5(e) above relating
to resolution of disputes, there shall be no obligation on the part of the
Corporation to make any further payments provided for in Section 3(j) above
relating to payment of a supplemental retirement annuity, if the Executive
shall, during the period that such payments are being made or benefits provided,
engage in Competition with the Corporation as hereinafter defined, provided all
of the following shall have taken place:

                           (i) the Secretary of the Corporation, pursuant to
         resolution of the Board of Directors of the Corporation, shall have
         given written notice to the Executive that, in the opinion of the Board
         of Directors, the Executive is engaged in such Competition, specifying
         the details;

                           (ii) the Executive shall have been given a reasonable
         opportunity upon reasonable notice to appear before and to be heard by
         the Board of Directors prior to the determination of the Board
         evidenced by such resolution;

                           (iii) the Executive shall neither have ceased to
         engage in such Competition within thirty days from his receipt of such
         notice nor diligently taken all reasonable steps to that end during
         such thirty-day period and thereafter.

                  Notwithstanding any provision to the contrary contained
herein, in the event of a Termination, as defined in Section 5(a) above, this
Section 10(a) shall not apply following a Change of Control.

                  (b) The Executive agrees in addition to the provisions
relating to Competition set forth in Section 10(a) above that he will not engage
in Competition at any time (i) during



                                       30
   40

the Employment Period, and (ii) except in the event of a Termination, during the
thirty-six (36) months immediately following the termination of his employment
with the Corporation.

                  (c)      The word "Competition" for the purposes of this
                           Agreement shall mean

                           (i) taking a management position with or control of a
         business engaged in the design, development, manufacture, marketing or
         distribution of products, which constituted 15% or more of the sales of
         the Corporation and its Subsidiaries and Affiliates during the last
         fiscal year of the Corporation preceding the termination of the
         Executive's employment, in any geographical area in which the
         Corporation, its Subsidiaries or Affiliates is at the time engaging in
         the design, development, manufacture, marketing or distribution of such
         products; PROVIDED, HOWEVER, that in no event shall ownership of less
         than 5% of the outstanding capital stock entitled to vote for the
         election of directors of a corporation with a class of equity
         securities held of record by more than 500 persons, standing alone, be
         deemed Competition with the Corporation within the meaning of this
         Section 10,

                           (ii0 soliciting any person who is a customer of the
         businesses conducted by the Corporation, or any business in which the
         Executive has been engaged on behalf of the Corporation and its
         Subsidiaries or Affiliates at any time during the term of this
         Agreement on behalf of a business described in clause (i) of this
         Section 10,

                           (iii0 inducing or attempting to persuade any employee
         of the Corporation or any of its Subsidiaries or Affiliates to
         terminate his employment relationship in order to enter into employment
         with a business described in clause (i) of this Subsection 10(c), or

                           (iv) making or publishing any statement which is, or
         may reasonably be considered to be, disparaging of the Corporation or
         any of its Subsidiaries or Affiliates, or directors, officers,
         employees or the operations or



                                       31
   41

         products of the Corporation or any of its Subsidiaries or Affiliates,
         except to the extent the Executive, during the Employment Period, makes
         the statement to employees or other representatives of the Corporation
         or any of its Subsidiaries or Affiliates in furtherance of the
         Corporation's business and the performance of his services hereunder.

         11.      SUCCESSORS.

                  Except as otherwise provided herein,

                  (a This Agreement shall be binding upon and shall inure to the
benefit of the Executive, his heirs and legal representatives, and the
Corporation and its successors as provided in this Section 11.

                  (b This Agreement shall be binding upon and inure to the
benefit of the Corporation and any successor of the Corporation, including,
without limitation, any corporation or corporations acquiring, directly or
indirectly, 50% or more of the outstanding securities of the Corporation, or all
or substantially all of the assets of the Corporation, whether by merger,
consolidation, sale or otherwise (and such successor shall thereafter be deemed
embraced within the term "the Corporation" for the purposes of this Agreement),
but shall not otherwise be assignable by the Corporation.

         12.      CERTAIN DEFINITIONS.

                  The following defined terms used in this Agreement shall have
the meanings indicated:

                  (a BENEFICIARY. The term "Beneficiary" as used in this
Agreement shall, in the event of the death of the Executive, mean an individual
or individuals and/or an entity or entities, including, without limitation, the
Executive's estate, duly designated on a form filed with the Corporation by the
Executive to receive any amount that may be payable after his death or, if no
such individual, individuals, entity or entities has or have been so designated,
or is at the time in existence or able to receive any such amount, the
Executive's estate.



                                       32
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                  (b       CHANGE OF CONTROL. A "Change of Control" shall be
deemed to have occurred if the event set forth in any one of the following
paragraphs shall have occurred:

                  (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 the date hereof, constitute the 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 the date hereof 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, including but
                  not limited to a consent solicitation, relating to the
                  election of directors of the Corporation, shall not be
                  counted; or

                  (iii) there is consummated a merger or consolidation of the
                  Corporation or any direct or indirect Subsidiary of the
                  Corporation with any other corporation, other than (1) a
                  merger or consolidation which would result in the voting
                  securities of the Corporation outstanding immediately prior to
                  such merger or consolidation continuing to represent (either
                  by remaining outstanding or by being converted into voting
                  securities of the surviving entity or any



                                       33
   43

                  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 consolidation 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.

"Beneficial Owner" 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 temporarily holding
securities pursuant to an offering of such securities or (iv) a corporation
owned, directly or indirectly, by the stockholders of the Corporation



                                       34
   44

in substantially the same proportions as their ownership of stock of the
Corporation.

                  (c CHANGE OF CONTROL DATE. The "Change of Control Date" shall
mean the first date on which a Change of Control occurs. Anything in this
Agreement to the contrary notwithstanding, if a Change of Control occurs and if
the Executive's employment with the Corporation is terminated or the Executive
ceases to have the position with the Corporation set forth in Section 2(a) above
prior to the date on which the Change of Control occurs, and if it is reasonably
demonstrated by the Executive that such termination or cessation (i) was at the
request of a third party who has taken steps reasonably calculated to effect the
Change of Control or (ii) otherwise arose in connection with or anticipation of
the Change of Control, then for all purposes of this Agreement the "Change of
Control Date" shall mean the date immediately prior to the date of such
termination or cessation.

                  (d  CHANGE OF CONTROL PERIOD.  The "Change of Control Period"
shall mean the period commencing on the Change of Control Date and ending on the
last day of the Employment Period.

         13.       AMENDMENT OR MODIFICATION; WAIVER.

                  No provision of this Agreement may be amended, modified or
waived unless such amendment, modification or waiver shall be authorized by the
Board of Directors of the Corporation or any authorized committee of the Board
of Directors and shall be agreed to in writing, signed by the Executive and by
an officer of the Corporation thereunto duly authorized. Except as otherwise
specifically provided in this Agreement, no waiver by either party hereto of any
breach by the other party hereto of any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver of a subsequent
breach of such condition or provision or a waiver of a similar or dissimilar
provision or condition at the same time or at any prior or subsequent time.



                                       35
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         14.      MISCELLANEOUS.

                  (a This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, without reference to principles
of conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.

                  (b All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

IF TO THE EXECUTIVE:                        COPY TO:
- -------------------                         -------

Mr. Southwood J. Morcott                    Mr. Southwood J. Morcott
c/o Dana Corporation                        29765 Durham Circle
4500 Dorr Street                            Perrysburg, Ohio  43551
Toledo, Ohio  43615

IF TO THE CORPORATION:
- ---------------------

Dana Corporation
4500 Dorr Street
Toledo, Ohio 43615
Attention: Secretary

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

                  (c The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

                  (d The Corporation may withhold from any amounts payable under
this Agreement such Federal, state or local taxes as it determines is required
to be withheld pursuant to any applicable law or regulation.

                  (e When used herein in connection with plans, programs and
policies relating to the Executive, employees,



                                       36
   46

compensation, benefits, perquisites, executive benefits, services and similar
words and phrases, the word "Corporation" shall be deemed to include all
wholly-owned Subsidiaries of the Corporation.

                  (f This instrument contains the entire agreement of the
parties concerning the subject matter, and all promises, representations,
understandings, arrangements and prior agreements concerning the subject matter
are merged herein and superseded hereby, including, without limitation, the
agreements between the parties dated February 13, 1984, December 10, 1990,
December 14, 1992, and December 8, 1997.

                  (g No right, benefit or interest hereunder, shall be subject
to anticipation, alienation, sale, assignment, encumbrance, charge, pledge,
hypothecation, or set-off in respect of any claim, debt or obligation, or to
execution, attachment, levy or similar process, or assignment by operation of
law. Any attempt, voluntary or involuntary, to effect any action specified in
the immediately preceding sentence shall, to the full extent permitted by law,
be null, void and of no effect.

                  (h The Executive shall not have any right, title, or interest
whatsoever in or to any investments which the Corporation may make to aid it in
meeting its obligations under this Agreement.

                  (i Subject to the provisions of Section 5(e) above, all
payments to be made under this Agreement shall be paid from the general funds of
the Corporation and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of amounts payable under
this Agreement.

                  (j The Corporation and the Executive recognize that each party
will have no adequate remedy at law for breach by the other of any of the
agreements contained in this Agreement and, in the event of any such breach, the
Corporation and the Executive hereby agree and consent that the other shall be
entitled to a decree of specific performance, mandamus or other appropriate
remedy to enforce performance of such agreements.



                                       37
   47


                  (k Subject to the provisions of Section 5(e) above, nothing
contained in this Agreement shall create or be construed to create a trust of
any kind, or a fiduciary relationship between the Corporation and the Executive
or any other person.

                  (l Subject to the provisions of Section 5(e) above, to the
extent that any person acquires a right to receive payments from the Corporation
under this Agreement, except to the extent provided by law such right shall be
no greater than the right of an unsecured general creditor of the Corporation.

                  (m In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his legal representative or,
where appropriate, to his Beneficiary.

                  (n If any event provided for in this Agreement is scheduled to
take place on a legal holiday, such event shall take place on the next
succeeding day that is not a legal holiday.



                                       38
   48


                  IN WITNESS WHEREOF, the Executive and, pursuant to due
authorization from its Board of Directors, the Corporation have caused this
Agreement to be executed as of the day and year first above written.


                                         DANA CORPORATION




                                         By /S/  MARTIN J. STROBEL
                                           ------------------------------------
                                         Name:
                                         Title:



                                         By /S/  R. B. PRIORY
                                           ------------------------------------
                                         Chairman of the
                                         Compensation Committee

Attest:


 /S/  SUE A. GRIFFIN
- --------------------
Assistant Secretary



                                          /S/  S. J. MORCOTT
                                         ------------------------------------
                                          Executive



                                       39
   49


               Exhibit A to Agreement made as of December 12, 1998
                between Dana Corporation and Southwood J. Morcott
               ---------------------------------------------------

                  As of February 18, 1999, for purposes of Section 2(a),

                  the office and title of the Executive is Chairman of the Board
of Directors of the Corporations;

                  the reporting responsibility of the Executive is to report
directly and only to the Board of Directors of the Corporation; and

                  the duties and responsibilities of the Executive are:

                  The Executive shall continue to serve as the principal officer
                  of the Corporation and as general manager of all operations
                  and affairs of the Corporation, its subsidiaries, affiliates
                  and divisions, at all times having the authority, powers and
                  duties of the person charged with the general management of
                  the business and affairs of the Corporation, with authority to
                  manage and direct all operations and affairs of the
                  Corporation, its subsidiaries, affiliates and divisions, and
                  to employ and discharge all employees thereof subject to
                  approval of the Board of Directors of the Corporation with
                  respect to elected officers of the Corporation. The Executive
                  shall serve as Chairman of the Policy Committee of the
                  Corporation and as Co-Chairman of the Strategic Operating
                  Committee of the Corportion. The Executive shall continue to
                  report to and be responsible only to the Board of Directors of
                  the Corporation, with all employees of the Corporation, its
                  subsidiaries, affiliates and divisions reporting directly or
                  indirectly to him.



                                       40

EX-13

Selected Sections of Dana's 1999 Annual Report

EX-21

   1

                                                                      Exhibit 21

                                DANA CORPORATION
                            CONSOLIDATED SUBSIDIARIES
                             AS OF DECEMBER 31, 1999

Dana Corporation
4500 Dorr Street
Toledo, Ohio 43615

UNITED STATES
- -------------
Dana Distribution, Inc.                                            Delaware
Dana Risk Management Services, Inc.                                Ohio
Dana World Trade Corporation                                       Delaware
DTF Trucking, Inc.                                                 Delaware
Albarus, Inc.                                                      Delaware
Precision Specialities, Inc.                                       Delaware
GemStone Gasket Company                                            Delaware
Flight Operations, Inc.                                            Delaware
Results Unlimited, Inc.                                            Delaware
Dana International Finance Inc.                                    Delaware
Dana International Limited                                         Delaware
Krizman International, Inc.                                        Delaware
McQuay-Norris, Inc.                                                Delaware
Reinz Wisconsin Gasket Co.                                         Delaware
Victor Reinz Valve Seals, L.L.C.                                   Delaware
Wix Filtration Media Specialists, Inc.                             Delaware
Sealed Power Technologies Corporation of Nevada                    Nevada
Dana Technology Inc (f.k.a. Sanford Acquisition Company)           Michigan
DSA of America, Inc.                                               Michigan
Spicer Heavy Axle & Brake, Inc.                                    Michigan
Glacier Vandervell, Inc.                                           Michigan
     Glacier Daido America, LLC                                    Ohio
Dandorr L.L.C.                                                     Delaware
Innovative Manufacturing, Inc.                                     Ohio
Spicer Heavy Axle Holdings, Inc.                                   Michigan
Spicer Manufacturing, Inc.                                         Indiana
Spicer Technology, Inc.                                            Indiana
Spicer Axle, Inc.                                                  Indiana
Dana Global Logistics, Inc.                                        Indiana

Echlin Inc                                                         Connecticut
     American Electronic Components, Inc.                          Indiana
     Automotive Brake Company Inc.                                 Delaware
         Brake Parts Inc.                                          Delaware
         Friction Inc.                                             Delaware
              Brake Systems, Inc.                                  Delaware
              EPE, Inc.                                            California
              Prattville Mfg., Inc. (dormant)                      Delaware
         Hydraulics Inc.                                           Delaware
     Automotive Controls Corp.                                     Connecticut
         Auto Parts Acquisition Inc. (fka WAWD-EAP) (dormant)      Delaware
     Beck/Arnley Worldparts Corp.                                  Delaware
     Blackstone Manufacturing Co., Inc.                            Delaware
     Brake Realty Inc.                                             Delaware


                                       1

   2

     BWD Automotive Corporation                               Delaware
         BWD International Inc.                               Delaware
     Echlin-Ponce, Inc.                                       Delaware
     Friction Materials, Inc.                                 Massachusetts
     Iroquois Tool Systems, Inc.                              Pennsylvania
     Lipe Corporation  (dormant)                              Delaware
     Long USA Inc.                                            Delaware
         Long Automotive Inc.                                 Texas
         Long Cooling Systems Inc.                            Delaware
     Midland Brake, Inc. (dormant)                            Delaware
     Mr. Gasket, Inc.                                         Delaware
     Pacer Industries, Inc.                                   Missouri
     PAH Mexico Inc. (holding co.)                            Delaware
     W.M. Holding Company, Inc.  (holding co.)                Delaware
     Preferred Technical Group International, Inc.            Delaware
         Preferred Technical Group, Inc.                      Delaware
         Multitec-PTG, Inc.                                   Delaware
     Ristance Corporation                                     Indiana
     Tekonsha Engineering Company                             Michigan
     Theodore Bargman Company                                 Michigan
     United Brake Systems Inc. (dormant)                      Delaware
     Engine Controls Distribution Services, Inc.              Delaware
Diamond Financial Holdings, Inc.                              Delaware
     Findlay Properties, Inc.                                 Ohio
     Ottawa Properties, Inc.                                  Michigan
     Shannon Properties, Inc.                                 Delaware
        First Shannon Realty of North Carolina, Inc.          North Carolina
     Summey Building Systems, Inc.                            North Carolina
     Dana Credit Corporation                                  Delaware
        Farnborough Properties Partners I Limited             Delaware
        Farnborough Properties Partners II Limited            Delaware
        Farnborough Properties Partners III Limited           Delaware
        Farnborough Properties Partners IV Limited            Delaware
        DCC Project Finance Nine, Inc.                        Delaware
        Dana Commercial Credit Corporation                    Delaware
              Camotop Two Corporation                         Delaware
              CCD Air Ten, Inc.                               Delaware
              CCD Air Eleven, Inc.                            Delaware
              CCD Air Twelve, Inc.                            Delaware
              CCD Air Thirteen, Inc.                          Delaware
              CCD Air Fourteen, Inc.                          Delaware
              CCD Air Twenty, Inc.                            Delaware
              CCD Air Twenty-One, Inc.                        Delaware
              CCD Air Twenty-Two, Inc.                        Delaware
              CCD Air Twenty-Three, Inc.                      Delaware
              CCD Air Thirty, Inc.                            Delaware
              CCD Air Thirty-Two, Inc.                        Delaware
              CCD Air Thirty-Three, Inc.                      Delaware
              CCD Air Thirty-Four, Inc.                       Delaware
              CCD Air Thirty-Five, Inc.                       Delaware
              CCD Air Thirty-Six, Inc.                        Delaware
              CCD Air Thirty-Seven, Inc.                      Delaware
              CCD Air Thirty-Eight, Inc.                      Delaware
              CCD Air Thirty-Nine, Inc.                       Delaware
              CCD Air Forty, Inc.                             Delaware
              CCD Air Forty-One, Inc.                         Delaware
              CCD Air Forty-Two, Inc.                         Delaware
              CCD Air Forty-Four, Inc.                        Delaware

                                       2

   3

              CCD Air Forty-Six, Inc.                            Delaware
              CCD Air Forty-Eight, Inc.                          Delaware
              CCD Airway One, Inc.                               Delaware
              CCD Rail Two, Inc.                                 Delaware
              CCD Rail Three, Inc.                               Delaware
              CCD Rail Five, Inc.                                Delaware
              Comprehensive Asset Services, Inc.                 Delaware
              Dana Business Credit Corporation                   Delaware
                  Dana Commercial Finance Corporation            Delaware
             Dana Fleet Leasing, Inc.                            Delaware
             DCC Company 100, Inc.                               Delaware
             DCC Company 102, Inc.                               Delaware
             DCC Franchise Services, Inc.                        Delaware
             DCC Project Finance One, Inc.                       Delaware
             DCC Project Finance Two, Inc.                       Delaware
             DCC Project Finance Three, Inc.                     Delaware
                 DCC Linden, Inc.                                Delaware
             DCC Project Finance Four, Inc.                      Delaware
             DCC Project Finance Five, Inc.                      Delaware
             DCC Project Finance Six, Inc.                       Delaware
             DCC Project Finance Ten, Inc.                       Delaware
             DCC Project Finance Eleven, Inc.                    Delaware
                 Washington 10 Gas Holdings, Inc.                Delaware
                      Washington 10 Storage Corporation          Delaware
             DCC Project Finance Twelve, Inc.                    Delaware
             DCC Project Finance Thirteen, Inc.                  Delaware
             DCC Project Finance Fourteen, Inc.                  Delaware
             DCC Project Finance Eighteen, Inc.                  Delaware
             DCC Servicing, Inc.                                 Delaware
             Energy Credit Corporation                           Delaware
             Energy Services Credit Corporation                  Delaware
             GSP I Corporation                                   Oregon
             Isom & Associates                                   Delaware
             Leased Equipment, Inc.                              Delaware
             Lease Recovery, Inc.                                Delaware
             Midwest Housing Investments J.V., Inc.              Delaware
             Potomac Leasing Company                             Delaware
             REBAC, Inc.                                         Delaware
             REBNEC Three, Inc.                                  Delaware
             REBNEC Five, Inc.                                   Delaware
             REBNEC Nine, Inc.                                   Delaware
             REBNEC Eleven, Inc.                                 Delaware
             ReDade, Inc.                                        Delaware
             Redison, Inc.                                       Delaware
             REFIRST, Inc.                                       Delaware
             REFREEZE, Inc.                                      Delaware
             REHAT, Inc.                                         Delaware
             RENAT, Inc.                                         Delaware
             RENOVO One, Inc.                                    Delaware
             RENOVO Three, Inc.                                  Delaware
             RENOVO Five, Inc.                                   Delaware
             RENOVO Seven, Inc.                                  Delaware
             RENOVO Nine, Inc.                                   Delaware
             RENOVO Eleven, Inc.                                 Delaware
             RENOVO Thirteen, Inc.                               Delaware
             RENOVO Fifteen, Inc.                                Delaware
             RENOVO Seventeen, Inc.                              Delaware
             ReSun, Inc.                                         Delaware


                                       3

   4


             RETRAM, Inc.                                       Delaware
             Shannon Health Care Realty, Inc.                   Delaware
             Shannon Property Management, Inc.                  Delaware
             Shannon Michigan Properties, Inc.                  Michigan
             Shannon Supermarket Investors, Inc.                Delaware
        Dana Lease Finance Corporation                          Delaware
             Camotop One Corporation                            Delaware
             CCD Air Four, Inc.                                   Delaware
             CCD Air Five, Inc.                                 Delaware
             CCD Air Seven, Inc.                                Delaware
             CCD Air Eight, Inc.                                Delaware
             CCD Air Nine, Inc.                                 Delaware
             CCD Air Forty-Three, Inc.                          Delaware
             CCD Air Forty-Seven, Inc.                          Delaware
             CCD Air Forty-Nine, Inc.                           Delaware
             CCD Airway Two, Inc.                               Delaware
             CCD Rail One, Inc.                                 Delaware
             CCD Rail Four, Inc.                                Delaware
             DCC Project Finance Seven, Inc.                    Delaware
             DCC Project Finance Eight, Inc.                    Delaware
             DCC Project Finance Fifteen, Inc.                  Delaware
             DCC Project Finance Nineteen, Inc.                 Delaware
             DCC Spacecom Two, Inc.                             Delaware
             DCC Vendorcom, Inc.                                Delaware
             DLF Company 101, Inc.                              Delaware
             JVQ Capital One, Inc.                              Delaware
             REBNEC One, Inc.                                   Delaware
             REBNEC Two, Inc.                                   Delaware
             REBNEC Four, Inc.                                  Delaware
             REBNEC Six, Inc.                                     Delaware
             REBNEC Ten, Inc.                                   Delaware
             REBNEC Twelve, Inc.                                Delaware
             RECONN, Inc.                                       Delaware
             RENOVO Two, Inc.                                   Delaware
             RENOVO Four, Inc.                                  Delaware
             RENOVO Six, Inc.                                   Delaware
             RENOVO Eight, Inc.                                 Delaware
             RENOVO Ten, Inc.                                   Delaware
             RENOVO Twelve, Inc.                                Delaware
             RENOVO Fourteen, Inc.                              Delaware
             RERSEY, Inc.                                       Delaware
             RESAMM, Inc.                                       Delaware
             REVA, Inc.                                         Delaware
Letovon Rosehill One Pty Limited                                Australia
Letovon Rosehill Two Pty Limited                                Australia
Letovon St. Kilda One Pty Limited                               Australia
Letovon St. Kilda Two Pty Limited                               Australia
DCC Canada Inc.                                                 Canada
Dana Capital S.A.                                               France
Dana Finance S.A.                                               France
DCC Leasing GmbH                                                  Germany
Shannon Properties GmbH                                         Germany
Northavon Investments Limited                                   Jersey
Letovon Packs Limited                                           Jersey
Letovon Tower Hill Limited                                      Jersey
Sibi Packs Limited                                              Jersey
Dana Commercial Credit (UK) Limited                             United Kingdom
    Dana Capital Limited                                          United Kingdom

                                       4
   5

                                                               
    DCC (June) Limited                                              United Kingdom
    DCC (September) Limited                                           United Kingdom
Farnborough Properties Company                                      United Kingdom
Farnborough Airport Properties Company                              United Kingdom
Farnborough Aerospace Centre Management Limited                     United Kingdom
Letovon Hammersmith Co.                                             United Kingdom
Letovon Heathrow Co.                                                United Kingdom
Letovon Waterloo Co.                                                United Kingdom
Tecnologia de Mocion Controlada S.A. de C.V.                        Mexico
Dana Heavy Axle Mexico S.A. de C.V.  (f.k.a. Eaton Manufacturera)          Mexico
Grupo Echlin Automotrices S.A. de C.V.                              Mexico
     Balatas American Brakebloks, S.A. de C.V.                      Mexico
     Producciones Automotrices, S.A. de C.V.                        Mexico
     Echlin Comercial, S.A. de C.V.                                 Mexico
     Frenos Lusac, S.A. de C.V.                                     Mexico
         Lusac Comfhia de Mexico, S.A. de C.V.                      Mexico
         Itapsa, S.A. de C.V.                                       Mexico
     FTE Mexicana, S.A. de C.V.                                     Mexico
     Inversiones Echlin S.A. de C.V.                                Mexico
         Echlin Mexicana, S.A. de C.V.                              Mexico
Long de Mexico, S.A. de C.V.                                        Mexico
Candados Universales de Mexico, S.A. de C.V.                        Mexico
Echlin de Saltillo, S.A. de C.V.                                    Mexico
     Echlin Industrias de Mexico, S.a. de C.V.                      Mexico
Lipe Rollway Mexicana S.A. de C.V.                                  Mexico
Wrenford Insurance Company Limited                                  Bermuda
Spicer Asia Holdings I                                              Bermuda
ROC Spicer Investment Co.                                           British Virgin Islands
Dana Canada, Inc.  (fka Hayes-Dana Inc.)                            Canada
3125025 Canada Inc.  (federal company)                              Canada
Echlin Canada Inc. (federal company)                                Canada
     Long Manufacturing Ltd.                                        Canada
     Brake Parts Canada Inc.                                        Canada
Echlin Dominicana, S.A.                                             Dominican Republic
Dana Foreign Sales Corporation                                      U.S. Virgin Islands
Echlin International, V.I., Inc.                                    U.S. Virgin Islands
Dana Australia (Holdings) Pty. Ltd.                                 Australia
     Dana New Zealand, Ltd.                                         Australia
     Dana Australia Pty. Ltd.                                       Australia
         Dana Structural Components Australia Pty. Ltd.             Australia
         Dana Spicer Axle Australia Pty Ltd.                        Australia
Dana Australia Trading Pty. Ltd.                                    Australia
Dana Asia Pacific Industrial                                        Australia
Echlin Australia Pty. Ltd. (holding co.)                            Australia
     Kelray Australia Pty. Ltd.                                     Australia
         P.J. Warneford Components                                  Australia
         Turtle Wax Austalasia Pty. Ltd.                            Australia
     Warneford & Oldfield Pty. Limited                              Australia
Fujian Spicer Drivetrain Systems Co., Ltd.                          China
Dana Hong Kong Limited                                              Hong Kong
Kentning Industries Limited         (Never Active)                  Hong Kong
Shui Hing Manufacturing Company Limited                             Hong Kong
Echlin China Limited (Hong Kong)                                    Hong Kong
P.T. Spicer Indonesia        (Never Active)                         Indonesia
Dana Japan, Ltd.                                                    Japan
Dana Korea Co. Ltd.                                                 Korea
Dana Asia Pacific (Malaysia) Sdn. Bhd.                              Malaysia
Spicer Philippines Manufacturing Co. (inactive)                     Philippines





                                       5

   6




                                                                              
Dana Asia (Singapore) Pte. Ltd.                                                    Singapore
R.O.C.  Spicer Ltd.                                                                Taiwan
     Timing Investments Limited                                                    Taiwan
         Taiyin Enterprise Ltd.                                                    Taiwan
Spicer Asia Engineering Ltd.                                                       Taiwan
Dana Asia (Taiwan) Ltd. (Warner Electric Trading Co.)                              Taiwan
Dana Asia (Taiwan) APD Co., Ltd.                                                   Taiwan
Echlin Taiwan Ltd.                                                                 Taiwan
Dantean Company, Limited. (f.k.a. Spicer Thailand)                                 Thailand
Dana Industrial Co., Limited                                                       Thailand
Dana Asia (Thailand) Limited                                                       Thailand
Dana Spicer (Thailand) Limited (fka Spicer Asia (Thailand)                         Thailand
Dana Austria GmbH                                                                  Austria
     Glacier Gleitlager Handelsgesellschaft mbH                                    Austria
Warner Electric SA (Dormant)                                                       Belgium
Clark-Hurth Belgium N.V.                                                           Belgium
     Clark Equipment Belgium N.V.                                                  Belgium
Glacier Belgium                                                                    Belgium
Quinton Hazell Belgium SA                                                          Belgium
Dana Holdings UK Limited                                                           United Kingdom
     Echlin (Southern) Holdings Ltd. (Jersey)                                      United Kingdom
     Dana Holdings Limited                                                         United Kingdom
         Dana Spicer Europe Ltd.                                                   United Kingdom
         Warner Electric Limited                                                   United Kingdom
         Dana Interlock Limited (Dormant 1/1/94)                                   United Kingdom
         Taylor Industrial Clutches Ltd.                                           United Kingdom
         Wichita Company Limited                                                   United Kingdom
         Dana Limited (formerly Dana (1982) Limited)                               United Kingdom
         Superior Electric Engineering Services, Ltd.                              United Kingdom
         Dana Spicer Limited                                                       United Kingdom
         Stieber Formsprag Limited (Dormant)                                       United Kingdom
     Echlin Europe Ltd. UK                                                         United Kingdom
         Quinton Hazell Plc.                                                       United Kingdom
              Motaproducts Automotive Limited (Dormant)                            United Kingdom
              Supra Group Limited (Dormant)                                        United Kingdom
              Commercial Ignition Limited (Dormant)                                United Kingdom
              British Filters Limited (Dormant)                                    United Kingdom
              TJ Filters Limited (Dormant)                                         United Kingdom
              Quinton Hazell Automotive Limited                                    United Kingdom
              QH Pension Trustee Limited (Dormant)                                 United Kingdom
              Quinton Hazell (Far East) Limited                                    United Kingdom
              Whitely Rishworth Exports Ltd. (Dormant)                             United Kingdom
         Preferred Technical Group-CHA Limited                                     United Kingdom
         Hobourn Automotive Limited                                                United Kingdom
              HG Pension Trust Company Limited (Dormant)                           United Kingdom
              SU Automotive Limited                                                United Kingdom
              SU Pension Trustee Limited                                           United Kingdom
              Hobourn Group Pension Trust Company Limited                          United Kingdom
         Dana Automotive Limited                                                   United Kingdom
         Automotive Motion Technology Limited                                      United Kingdom
         Echlin Automotive Systems Limited                                         United Kingdom
         Lipe Limited                                                              United Kingdom
         Driveline Specialist Limited                                              United Kingdom
         Drinclog Limited (Dormant)                                                United Kingdom
Dana SAS                                                                           France
     Perfect Circle Europe (fka Floquet Monopole S.A.)                             France
         Societe Industrielle de Precision Marti, S.A.                             France
         Societe de Reconditionnement Industriel de Moteurs S.A. (S.R.I.M.)        France



                                       6

   7

     Spicer France SarL                                           France
     Warner France, S.A.                                          France
     Collins & Tournadre "TOURCO"                                 France
         G.I.E. Warner & Tourco                                   France
     Sealed Power Europe S.A.                                     France
     Glacier Vandervell SAS                                       France
     Nobel Plastiques S.A.                                        France
         Nobel Plastiques Climatisation S.A.                      France
     Quinton Hazell SarL                                          France
     IP Marti SNC                                                 France
Autoclavite S.A.                                                  France
Clark-Hurth Components S.A.R.L.                                   France
Dana GmbH                                                              Germany
     Dana Holdings GmbH                                           Germany
         Reinz Dichtungs GmbH                                     Germany
         Warner Electric GmbH                                     Germany
         M. Friesen GmbH                                          Germany
         Spicer GmbH (f.k.a. Superior Electric GmbH)              Germany
         Clark-Hurth Components Vertriebs GmbH                    Germany
         DKW Kunststoffwerke GmbH                                 Germany
               Thermoplast+Apparatebau GmbH                       Germany
     Dana (Duetchland) Grundstucksverwaltung GmbH                 Germany
     Sealed Power Europe GmbH                                     Germany
Echlin (Duetchland) Holding GmbH                                  Germany
     FTE Automotive GmbH                                          Germany
         Move Brems-Und Kupplungsschlauch                         Germany
         FTE Automotive Systems GmbH                              Germany
     Echlin Grundstucksverwaltung (Deutchland) GmbH               Germany
Quinton Hazell Deutschland GmbH                                   Germany
Spicer India Limited                                              India
Stieber Precision Pvt. Ltd.                                       India
Dana Finance (Ireland) Limited                                    Ireland
Quinton Hazell (Ireland) Limited                                  Ireland
     Moprod (Ireland) Limited                                     Ireland
     Quinton Hazell Limited                                       Ireland
Dana Italia, SpA                                                  Italy
     Metaltechno SpA                                              Italy
Quinton Hazell Italia SpA                                         Italy
D.E.H. Holdings SARL                                              Luxembourg
Dana Europe Holdings B.V.                                         Netherlands
     Spicer  Netherland B.V. (Dormant)                            Netherlands
         Leguana Participations B.V. (Holding Co.)                Netherlands
     Warner Electric BV (f.k.a. Maumee Holdings B.V.)             Netherlands
     Superior Electric Nederland B.V. (shell)                     Netherlands
     Glacier Bearings Benelux B.V.                                Netherlands
         Glacier Netherland B.V.                                  Netherlands
Echlin (Investments) Netherlands B.V.                             Netherlands
     Echlin (Properties) Netherlands BV                           Netherlands
Quinton Hazell Nederland B.V.                                     Netherlands
Wix Filtron Sp. zo.o.                                             Poland
Quinton Hazell Polska Sp. zo.o.                                   Poland
Dana Equipamientos SA (f.k.a. Spicer Espana S.A.)                 Spain
     Sealed Power Europe S.L.                                     Spain
Industrias Seloc Reinz S.A. (closed)                              Spain
Industrias Serva S.A.                                             Spain
     Glaser Serva S.A.                                            Spain
Quinton Hazel Espana S.A.                                         Spain
Nobel Plastiques Iberica S.A.                                     Spain


                                       7

   8




                                                                              
Warner-Tollo AB                                                                    Sweden
     WarnerElectric AB                                                             Sweden
Quinton Hazell Svenska AB                                                          Sweden
Warner Electric (International) S.A.                                               Switzerland
     (International Headquarters, f.k.a. Warner Electric S.A., locally known as "Swiss Inc.")
     T&N Zug AG                                                                    Switzerland
         Glacier Tristar SA                                                        Switzerland
Warner Electric S.A.                                                               Switzerland
     (Operating and local sales company, f.k.a. Societe de Vente Warner Electric S.A., locally  known as "Swiss
Trade")
Dana South Africa (Propreitary) Limited (fka Echlin Charger Mfg. Co. (Pty.) Ltd.)           South Africa
     MAG Brakes (Prop.) Limited                                                    South Africa
     Electron Seventeen (Prop.) Limited                                            South Africa
     Insom Investments (Prop.) Limited                                             South Africa
     J&H Marcus Manufacturing Company (Prop.) Ltd.                                 South Africa
     Miclaric Investments (Prop.) Limited                                          South Africa
     South African Engineering Company (Prop.) Limited                             South Africa
     South African Engineering Company (Natal) (Prop.) Limited                     South Africa
Dana Argentina S.A.                                                                Argentina
     Dana San Juan S.A. (f.k.a. AROS Daneri, S.A.)                                 Argentina
     Dana San Luis S.A. (f.k.a. Trasa San Luis)                                    Argentina
     Transmissiones Homocineticas Argentina S.A. (THA)                             Argentina
     Farlock S.A.                                                                  Argentina
     Cerro de los Medanos S.A.                                                     Argentina
Spicer Ejes Pesatos S.A.                                                           Argentina
Nakata Autoparts S.A.                                                              Argentina
Echlin Argentina S.A. (a/k/a Plasbestos)                                           Argentina
Fanacif Products Argentina S.A.                                                    Argentina
Dana Equipamentos Ltda.                                                            Brazil
     Dana-Albarus, S.A. Industrial E Comercio                                      Brazil
         Cardhom Commercial Ltda.                                                  Brazil
         Pellegrino Autopecas Industrial e Comerico Ltda.                          Brazil
         CIDAP-Industrial e Distribuidora de Aurtopecas Ltda. (Dormant)            Brazil
         Albarus Sistemas Hidraulicos Ltda.                                        Brazil
         Albarus S.A. Comercial e Exportadora                                      Brazil
               Cirane Industria e Comercio Ltda.                                   Brazil
         Previalbarus Societe de Providencia                                       Brazil
     Dana Industrial S.A.                                                          Brazil
         Metalurgica Brasitalia Ltda.                                              Brazil
         Suzuki Comercial Ltda.                                                    Brazil
     Dana Bahia Ltda.                                                              Brazil
Warner Electric do Brasil Ltda.                                                    Brazil
Dana do Brasil Ltda.                                                               Brazil
     Dana Industrias Ltda.                                                         Brazil
     SM-Sistemas Modulares Ltda.                                                   Brazil
Glacier do Brasil Limitada                                                         Brazil
Glacier Daido do Brasil Limitada                                                   Brazil
Echlin Do Brasil S.A.                                                              Brazil
Industria De Ejes Y Transmissiones S.A. (Transejes)                                Colombia
     Transejes C.D. Ltda.                                                          Colombia
     Transcar Ltda.                                                                Colombia
     Transmotor Ltda.                                                              Colombia
Echlin de Colombia Ltda.                                                           Colombia
Echlin Del Peru S.R. Ltda.                                                         Peru
UBALI S.A.                                                                         Uruguay
Talesol S.A.                                                                       Uruguay
Echlin Uruguay                                                                     Uruguay
Inversora Sabana, S.A.                                                             Venezuela



                                       8

   9

     Echlin de Venezuela C.A.                                    Venezuela
Finaciera Platwel S.A.                                           Venezuela

                                       9

EX-23

   1
                                                                      Exhibit 23

                       CONSENT OF INDEPENDENT ACCOUNTANTS



We hereby consent to the incorporation by reference in the Registration
Statements on Form S-3 (Nos. 333-67307, 333-42239, 333-23733, 333-22935,
333-00539 and 033-58121) and in the Registration Statements on Form S-8 (Nos.
333-84417, 333-69449, 333-52773-1, 333-50919, 033-64198 and 333-37435) of Dana
Corporation of our report dated January 25, 2000 relating to the financial
statements, which appears in the Annual Report to Shareholders, which is
incorporated in this Annual Report on Form 10-K. We also consent to the
incorporation by reference of our report dated January 25, 2000 relating to the
financial statement schedule, which appears in this Form 10-K.



PricewaterhouseCoopers LLP

Toledo, Ohio
March 10, 2000

EX-24

   1
                                                                      EXHIBIT 24

                                POWER OF ATTORNEY
                                -----------------

         The undersigned directors and/or officers of Dana Corporation hereby
constitute and appoint Southwood J. Morcott, Joseph M. Magliochetti, Robert C.
Richter, Charles W. Hinde, Martin J. Strobel and Sue A. Griffin, and each of
them, severally, their true and lawful attorneys-in-fact with full power for and
on their behalf of execute the Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1999, including any and all amendments thereto,
in their names, places and stead in their capacity as directors and/or officers
of the Corporation, and to file the same with the Securities and Exchange
Commission on behalf of the Corporation under the Securities and Exchange Act of
1934, as amended.

         This Power of Attorney automatically ends as to each appointee upon the
termination of his or her service with the Corporation.

         In witness whereof, the undersigned have executed this instrument
December 13, 1999.


 /S/  B. F. BAILAR                                  /S/  S. J. MORCOTT
- -----------------------------------                 -------------------------
B. F. Bailar                                        S. J. Morcott

 /S/  A. C. BAILLIE                                 /S/  R. B. PRIORY
- -----------------------------------                 -------------------------
A. C. Baillie                                       R. B. Priory

 /S/  E. M. CARPENTER                               /S/  ROBERT C. RICHTER
- -----------------------------------                 -------------------------
E. M. Carpenter                                     R. C. Richter

 /S/  ERIC CLARK                                    /S/  C. W. HINDE
- -----------------------------------                 -------------------------
E. Clark                                            C. W. Hinde

 /S/  G. H. HINER                                   /S/  M. J. STROBEL
- -----------------------------------                 -------------------------
G. H. Hiner                                         M. J. Strobel

 /S/  J. MAGLIOCHETTI                               /S/  SUE A. GRIFFIN
- -----------------------------------                 -------------------------
J. M. Magliochetti                                  S. A. Griffin

 /S/  M. MARKS
- -----------------------------------
M. R. Marks

EX-27.A

 

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EX-27.B

 

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