<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
- - ---- Quarterly Report Pursuant to Section 13 or 15(d)
Of the Securities Exchange Act of 1934
- - ----
Commission
For the Quarterly Period Ended June 30, 1994 File Number 1-1063
--------------- ------
Dana Corporation
- - --------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Virginia 34-4361040
- - ---------------------------------- --------------------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
4500 Dorr Street, Toledo, Ohio 43615
- - ---------------------------------- --------------------------------
(Address of Principal Executive Offices) (Zip Code)
(419) 535-4500
- - ----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at June 30, 1994
- - ------------------------------ -----------------------------
Common stock of $1 par value 98,711,914
<PAGE> 2
DANA CORPORATION AND CONSOLIDATED SUBSIDIARIES
INDEX
Page Number
-----------
Cover 1
Index 2
Part I. Financial Information
Item 1. Financial Statements
Condensed Balance Sheet
December 31, 1993 and
June 30, 1994 3
Statement of Income
Three and Six Months Ended
June 30, 1993 and 1994 4
Condensed Statement of Cash Flows
Six Months Ended
June 30, 1993 and 1994 5
Notes to Condensed Financial Statements 5 - 6
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operations 7 - 11
Part II. Other Information
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibit Index 15
<PAGE> 3
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. DANA CORPORATION
- - -------
CONDENSED BALANCE SHEET (Unaudited)
(in Millions)
<CAPTION>
Assets December 31, 1993 June 31, 1994
------ ----------------- -------------
<S> <C> <C>
Cash $ 49.5 $ 50.7
Marketable Securities, at Cost
Which Approximates Market 28.1 33.3
Accounts Receivable, Less
Allowance for Doubtful Accounts 790.5 990.3
Inventories
Raw Materials 141.8 159.9
Work in Process and Finished Goods 508.1 502.0
Lease Financing 849.3 859.8
Investments and Other Assets 846.3 788.2
Deferred Income Tax Benefits 276.2 263.7
Property, Plant and Equipment 2,529.3 2,619.8
Less - Accumulated Depreciation (1,387.2) (1,430.1)
-------- --------
Total Assets $4,631.9 $4,837.6
======== ========
Liabilities and Shareholders' Equity
------------------------------------
Short-Term Debt $ 474.1 $ 653.1
Accounts Payable 310.6 366.7
Other Liabilities 684.7 693.0
Deferred Employee Benefits 1,011.5 1,031.6
Long-Term Debt 1,207.4 1,060.4
Minority Interest 142.2 147.2
Shareholders' Equity 801.4 885.6
-------- --------
Total Liabilities and
Shareholders' Equity $4,631.9 $4,837.6
======== ========
</TABLE>
3
<PAGE> 4
<TABLE>
ITEM 1. (Continued)
- - -------
DANA CORPORATION
STATEMENT OF INCOME (Unaudited)
(in Millions Except Per Share Amounts)
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
-------------------------- ----------------------------------
1993 1994 1993 1994
--------------------- ---------------------------------
As Reported As Restated
-----------------------
<S> <C> <C> <C> <C> <C>
Net Sales $ 1,418.3 $ 1,712.6 $ 2,741.8 $ 2,741.8 $ 3,309.3
Revenue from Financial Holdings
and Other Income 28.4 37.5 67.3 67.3 71.3
Foreign Currency Adjustments (7.4) (15.8) (14.6) (14.6) (23.5)
--------- --------- --------- --------- ---------
1,439.3 1,734.3 2,794.5 2,794.5 3,357.1
--------- --------- --------- --------- ---------
Cost of Sales 1,200.9 1,427.8 2,336.2 2,336.2 2,786.9
Restructuring Charges 4.0 4.0 10.9 10.9 7.8
Selling, General and
Administrative Expenses 136.8 161.3 266.3 266.3 306.9
Interest Expense 38.5 26.7 75.0 75.0 54.7
--------- --------- --------- --------- ---------
1,380.2 1,619.8 2,688.4 2,688.4 3,156.3
--------- --------- --------- --------- ---------
Income Before Income Taxes 59.1 114.5 106.1 106.1 200.8
Estimated Taxes on Income 21.8 46.4 45.3 45.3 86.5
--------- --------- --------- --------- ---------
Income Before Minority Interest and
Equity in Earnings of Affiliates 37.3 68.1 60.8 60.8 114.3
Minority Interest (6.9) (7.3) (9.3) (9.3) (10.5)
Equity in Earnings of Affiliates 6.2 7.2 8.6 8.6 11.9
--------- --------- --------- --------- ---------
Income Before Effect of a
Change in Accounting Principle 36.6 68.0 60.1 60.1 115.7
Effect on Prior Years of the
Change in Accounting for
Postemployment Benefits (48.9)
--------- --------- --------- --------- ---------
Net Income $ 36.6 $ 68.0 $ 60.1 $ 11.2 $ 115.7
========= ========= ========= ========= =========
Net Income Per Common Share
Before Effect of a Change
in Accounting Principle $ .40 $ .69 $ .65 $ .65 $ 1.17
Effect on Prior Years of the Change
in Accounting for Postemployment
Benefits (.53)
----- ----- ----- ----- ------
Net Income Per Common Share $ .40 $ .69 $ .65 $ .12 $ 1.17
===== ===== ===== ===== ======
Dividends Declared and Paid per
Common Share $ .20 $ .21 $ .40 $ .40 $ .41
===== ===== ===== ===== =====
Average Number of Shares Outstanding 92.0 98.6 92.0 92.0 98.6
</TABLE>
4
<PAGE> 5
<TABLE>
ITEM 1. (Continued)
- - --------
DANA CORPORATION
CONDENSED STATEMENT OF CASH FLOWS (Unaudited)
(in Millions)
<CAPTION>
Six Months Ended June 30
-------------------------------
1993 1994
---- ----
<S> <C> <C>
Net Income $ 11.2 $ 115.7
Effect on Prior Years of the Change in
Accounting for Postemployment Benefits 48.9
Depreciation and Amortization 94.8 102.1
Net Change in Receivables, Inventory and Payables 48.5 (99.3)
Other 28.9 25.1
-------- --------
Net Cash Flows from Operating Activities 232.3 143.6
-------- --------
Purchases of Property, Plant and Equipment (70.2) (102.9)
Net Cash Flows-Leasing Activities (5.3) (42.8)
Net Cash Flows-Lending Activities (11.6) 4.5
Other 35.3 4.8
-------- --------
Net Cash Flows-Investing Activities (51.8) (136.4)
-------- --------
Net Change in Short-Term Debt (34.7) 161.1
Proceeds from Long-Term Debt 394.7 135.7
Payments on Long-Term Debt (502.5) (261.7)
Dividends Paid (36.8) (40.4)
Other 6.3 4.5
-------- --------
Net Cash Flows-Financing Activities (173.0) (.8)
-------- --------
Net Change in Cash and Cash Equivalents $ 7.5 $ 6.4
======== ========
</TABLE>
NOTES TO CONDENSED FINANCIAL STATEMENTS
(in Millions Except Per Share Amounts)
1. In the opinion of management, all normal recurring adjustments necessary
to a fair presentation of the results for the unaudited interim periods
have been included.
2. In accordance with generally accepted accounting principles, Dana's
wholly-owned financial subsidiary, Diamond Financial Holdings, Inc.
(DFHI) is included in the consolidated financial statements. The
following is a recap of the revenue, net income, total assets, total
liabilities and shareholder's equity of this subsidiary (unaudited):
5
<PAGE> 6
<TABLE>
ITEM 1. (Continued)
- - -------
NOTE 2. (Continued)
DIAMOND FINANCIAL HOLDINGS, INC.
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
-------------------------- ------------------------
1993 1994 1993 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue $ 38.3 $ 44.1 $ 79.3 $ 86.0
Net Income $ 2.0 $ 4.3 $ 3.9 $ 8.1
December 31, 1993 June 30, 1994
----------------- -------------
Total Assets $ 1,310.3 $ 1,326.3
Total Liabilities 1,215.3 1,232.5
-------- --------
Shareholder's Equity $ 95.0 $ 93.8
======== ========
</TABLE>
3. In January 1994, Dana announced the adoption of Statement of Financial
Accounting Standards (SFAS) No. 112 "Employers' Accounting for
Postemployment Benefits," effective January 1, 1993. This accounting
change resulted in a one-time charge to first quarter 1993 net income of
$48.9 ($.53 per share). 1993 results of operations have been restated to
reflect adoption of SFAS 112.
4. On April 18, 1994, Dana's Board of Directors approved a two-for-one stock
split effective for stockholders of record on June 1, 1994. Share and per
share amounts have been restated to reflect the stock split.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- - ------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
Liquidity and Capital Resources
- - -------------------------------
(in Millions)
Expenditures for property, plant and equipment were $103 for the first six
months of 1994, compared to $70 for the first six months of 1993. This higher
level of capital spending is attributable to an increased worldwide demand for
Dana products and the Company's commitment to productivity and product quality
improvements. Capital expenditures for 1994 are currently projected to be
approximately $300 compared to actual expenditures of $178 for 1993.
Dana Corporation and its consolidated subsidiaries' (Dana) first half 1994
short-term debt totaled $653 which is up $179 from year end 1993. A
significant portion of this increase offsets the reduction in long-term debt
over the same period as maturities of the long-term debt were replaced with new
short-term borrowings. Dana, excluding Diamond Financial Holdings, Inc. and
its consolidated subsidaries (DFHI), funds its short-term debt through the
issuance of commercial paper and bank borrowings. To fund short-term working
capital requirements, Dana (excluding DFHI) arranged $360 in committed credit
facilities to back up commercial paper issuance and $755 in uncommitted lines
available for bank borrowings. At June 30, 1994, Dana's (excluding DFHI)
domestic and international short-term borrowings were $243, compared to $155 at
December 31, 1993. DFHI funds short-term domestic and international debt
through committed commercial paper back-up lines and bank borrowings. At June
30, 1994, DFHI had committed commercial paper back-up lines totaling $250 and
bank lines amounting to $370. DFHI had a short-term debt position of $408 at
June 30, 1994, which was up $89 from year end 1993.
Dana's consolidated long-term debt was reduced to $1,060 at June 30, 1994,
from $1,207 at December 31, 1993. This decrease offsets the majority of the
increase in short-term debt over the same period as the maturities of the
long-term debt were replaced with short-term borrowings. Dana's (excluding
DFHI) long term debt position at June 30, 1994 was $501, down from $659 at year
end 1993. DFHI's long term debt at the end of the first half of 1994 was $561
as compared to $549 at December 31, 1993. On March 1, 1994, Dana redeemed at
par the remaining $3 of its 5 7/8% debentures with an effective yield of 12.4%.
The Company's management evaluates its operations on an ongoing basis to
identify non-strategic and under-performing assets. Pursuant to these
evaluations, restructuring plans are developed which may result in abandonment,
consolidation or relocation of operations. Estimated costs incurred in the
implementation of these plans are charged to restructuring expense and include
employee benefits, losses on disposal of assets and other expenses incidental
to the restructuring activities. Restructuring expense for the first half of
1994 was $8 compared to $11 for the same period in 1993. Dana's liquidity and
cash flows will not be materially impacted by these actions. It is anticipated
that Dana's operations over the long term will benefit from these realignment
strategies.
Dana's management and legal counsel have reviewed the legal proceedings to
which the Company and its subsidiaries were parties as of June 30, 1994
(including, among others, those involving product liability claims and alleged
violations of environmental laws) and concluded that any liabilities that may
result from these proceedings are not likely to have a material effect on the
Company's liquidity, financial condition or results of operations. In
connection with product liability and environmental claims, the Company has
recorded an estimated gross liability of $108 and probable recoveries of $54.
It is not anticipated that the timing of the cash flows for these liabilities
will have a material effect on the liquidity of the Company.
Dana anticipates that net cash flows from operating activities, along with
available short-term and medium-term financing capabilities, will be sufficient
to meet its funding requirements for 1994.
7
<PAGE> 8
ITEM 2. (Continued)
- - -------
Results of Operations (Second Quarter 1994 vs Second Quarter 1993)
- - ------------------------------------------------------------------
(in Millions)
Dana's consolidated sales for the second quarter of 1994 were $1,713, up 21%
from the $1,418 reported for the second quarter of 1993. The 21% overall sales
gain reflects an increase of 21% in the U.S. and 20% internationally. This
sales growth is the result of overall unit volume increases throughout Dana's
worldwide markets.
Dana continues to benefit from the ongoing strength of the U.S. vehicular
original equipment (OE) market. Dana's sales to U.S. light truck builders in
the second quarter of 1994 increased nearly 28% over 1993's second quarter and
domestic sales of heavy truck OE products were up 36%.
Consolidated sales to the worldwide highway vehicle market, Dana's largest,
were up 27% over the second quarter of 1993. U.S. sales to that market
increased 28% while international (primarily Canada and South America)
experienced a 20% growth in the second quarter of 1994 versus 1993. Mobile
off-highway OE sales were up 38% reflecting increased demand for Dana products
by our agricultural and construction machinery customers, particularly in North
America. Industrial OE component sales for the second quarter of 1994 were 1%
lower compared to the same period of 1993 with gains in the U.S. being offset
by softness principally in the German market.
Dana's international sales increased 20% in the second quarter of 1994 to $420
from the $351 for the second quarter of 1993. This increase reflects the
contribution of the Reinz group of companies which Dana acquired in late 1993
and continuing growth in South America.
The Company's distribution sales continued to be strong in the second quarter
with auto distribution up 12%, truck parts distribution up nearly 10% and
mobile off-highway/industrial distribution up 13% over 1993's second quarter
levels. These 1994 sales include the operations of the Reinz group of companies
but also reflect ongoing strength in virtually all of Dana's global replacement
parts markets.
Revenue from Financial Holdings and other income increased 32% to $38 in the
second quarter of 1994 due in part to higher leasing related revenue.
Foreign currency translation losses were $16 for the quarter ended June 30,
1994, as compared to $7 in the second quarter of 1993. The increased losses are
almost exclusively related to Dana's Brazilian operations.
Dana's gross margin, principally in North America, improved in the second
quarter of 1994 to over 16% as compared to 15% in the second quarter of 1993.
Margins of the Company's operations are benefiting from higher sales volume,
productivity improvement and cost containment as compared to second quarter of
1993.
Restructuring charges for the second quarter 1994 were level with the second
quarter of 1993 at $4.0.
8
<PAGE> 9
ITEM 2. Results of Operations (Second Quarter 1994 vs Second Quarter 1993)
- - --------------------------------------------------------------------------
(continued)
(in Millions)
Selling, general and administrative expenses (S,G & A) were $161 for the
quarter ended June 30, 1994, a 13% increase over the same period in 1993 after
excluding the effect on S,G & A of acquisitions made in the latter half of 1993
and the first half of 1994. Higher business levels have contributed to the 13%
increase, although the ratio of expense to sales improved.
Interest expense decreased 31% to $27 in the second quarter of 1994 due to
lower overall interest rates and to reduced average debt levels. The Company
has benefited in 1994 from the maturity and early redemption during 1993 and
1994 of higher interest rate notes and debentures and replacement with other
financing at lower rates.
Taxes on income in the second quarter of 1994 increased to $46 from $22 in the
same period of 1993 due to higher taxable income. The effective tax rates were
41% and 37% in the second quarter of 1994 and 1993, respectively. The increase
is principally due to a lower effective rate experienced by Dana's leasing
operations in the second quarter of 1993.
Equity in earnings of affiliates increased to $7 from $6 due to improved
performances by the Company's affiliates in Korea and Mexico. Minority interest
in net income of consolidated subsidiaries in the second quarter of 1994 and
1993 were level.
9
<PAGE> 10
ITEM 2. Results of Operations (Six Months 1994 vs. Six Months 1993)
- - -------------------------------------------------------------------
(in Millions)
Dana's consolidated sales for the six months ended June 30, 1994 were $3,309 up
21% from the $2,742 reported for the same period in 1993. The 21% overall sales
gain reflects an increase of 21% in the U.S. and 20% internationally. This
sales growth is the result of overall unit volume increases throughout Dana's
worldwide markets.
Dana continues to benefit from the ongoing strength of the U.S. vehicular
original equipment (OE) market. Dana's sales to U.S. light truck builders in
the first six months of 1994 increased more than 26% over 1993's first half
level and domestic sales of heavy truck OE products were up 32%.
Six months 1994 consolidated sales to the worldwide highway vehicle market,
Dana's largest, were up 26% over the same period in 1993. U.S. sales to that
market increased nearly 27% while international (primarily Canada and South
America) experienced a 21% growth in the first half of 1994 compared to the
first half of 1993. Mobile off-highway OE sales were up 37% reflecting
increased demand for Dana products by our agricultural and construction
machinery customers, particularly in North America. Industrial OE component
sales for the six months ended June 30, 1994 were 3% lower compared to the same
period of 1993 with gains in the U.S. being offset by softness principally in
the German market.
Dana's international sales increased 20% for the first half of 1994 to $781
from $650 for the first half of 1993. This increase reflects the contribution
of the Reinz group of companies which Dana acquired in late 1993 and continuing
growth in South America.
The Company's distribution sales continued to be strong in the first six months
of 1994 with auto distribution up 13%, truck parts distribution up 14% and
mobile off-highway/industrial distribution up 13% over 1993's six month
levels. These 1994 sales include the operations of the Reinz group of companies
but also reflect ongoing strength in virtually all of Dana's global replacement
parts markets.
Revenue from Financial Holdings and other income increased 6% to $71 for the
period ended June 30,1994 compared to the period ended June 30, 1993 due to
higher leasing related revenue.
Foreign currency translation losses were $24 for year-to-date 1994, as compared
to $15 in 1993's first six months. The increased losses are almost exclusively
related to Dana's Brazilian operations.
Dana's gross margin, principally in North America, improved for the first half
of 1994 to 16% compared to 15% for the same period in 1993. Margins of the
Company's operations are benefiting from higher sales volume, productivity
improvement and cost containment as compared to the first six months of 1993.
Restructuring charges for the period ended June 30, 1994 decreased to $8 from
the $11 incurred for the same period in 1993 due to lower expenses in the North
and South American regions.
10
<PAGE> 11
ITEM 2. Results of Operations (Six Months 1994 vs Six Months 1993) (continued)
- - ------------------------------------------------------------------
(in Millions)
Selling, general and administrative expenses (S,G & A) were $307 for the first
half of 1994, an 11% increase over the same period in 1993 after excluding the
effect on S,G & A of acquisitions made in the latter half of 1993 and the first
half of 1994. Higher business levels have contributed to the 11% increase,
although the ratio of expense to sales improved.
Interest expense decreased 27% to $55 for the first six months of 1994 compared
to the same period in 1993 due to lower overall interest rates and to reduced
average debt levels. The Company has benefited from the maturity and early
redemption during 1993 and 1994 of higher interest rate notes and debentures
and replacement with other financing at lower rates.
Taxes on income in the first half of 1994 increased to $87 from $45 in the
first half of 1993 due to higher taxable income. The effective tax rate was 43%
in the first six months of 1994 and 1993.
Equity in earnings of affiliates increased to $12 from $9 due to improved
performances by the Company's affiliates in Korea and Venezuela. Minority
interest in net income of consolidated subsidiaries increased in 1994 due to
the increased earnings of Dana's subsidiary in Canada.
Dana projects continued growth for the balance of 1994 over 1993 particularly
due to the strong demand for its vehicular products in North America and global
strength in its aftermarket sales. The recent growth experienced in Dana's
mobile off-highway and industrial markets is also forecasted to continue. The
Company is encouraged by the signs of potential economic recovery in Europe and
Korea. Margins should be maintained as a result of the stronger sales volume
and the Company's cost containment and productivity programs.
Dana will continue to monitor the allocation of its assets to pursue further
growth in all of its global markets.
11
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
- - -------
The Company and its consolidated subsidiaries are parties to various
pending judicial and administrative proceedings arising in the ordinary course
of business, including, among others, those involving product liability claims
and those involving alleged violations of various federal, state and local
environmental laws. Management has reviewed with legal counsel the probable
outcome of these pending legal proceedings, the costs and expenses reasonably
expected to be incurred, the availability and limits of the Company's insurance
coverage, and the Company's established reserves for uninsured liabilities.
While the outcome of these proceedings cannot be predicted with certainty,
management believes that the liabilities that may result are not reasonably
likely to have a material effect on the Company's liquidity, financial
condition or results of operations.
Under the rules of the Securities and Exchange Commission, certain
environmental proceedings are not deemed to be ordinary routine proceedings
incidental to the Company's business and are required to be reported. The
Company is a party to one such proceeding, IN THE MATTER OF DANA CORPORATION -
VICTOR PRODUCTS DIVISION AND BRC RUBBER GROUP, a previously reported
administrative proceeding involving alleged violations of the federal Resource
Conservation and Recovery Act by the Company's former plant in Churubusco,
Indiana. There were no significant developments in this proceeding in the
second quarter.
UNITED STATES V. DANA CORPORATION: On November 9, 1992, the Department
of Justice, on behalf of the United States, sued Dana Corporation, Warner
Electric Brake and Clutch Company, Inc.("Warner Electric"), and Beaver
Precision Products, Inc.("Beaver"), in the U.S. District Court, Eastern
District of Michigan under the federal False Claims Act and various common law
theories. The complaint alleged overcharging on eighteen U.S. government
contracts or subcontracts awarded to Beaver during the 1980s. Dana acquired
Warner Electric in January 1985. Beaver was a subsidiary of Warner Electric
when Dana acquired the company. Warner Electric and Beaver were later merged
into Dana. Although Dana sold the Beaver operations in 1991, it retained
financial responsibility for the majority of the damages alleged in the
complaint, and Warner Electric and Beaver were subsequently dismissed as
parties to this suit. The government's complaint includes claims for both
statutory civil penalties and damages in the amount of $8.9 million. The
damages, if proven, may be subject to doubling or trebling or to accrual of
interest. Recently, as part of ongoing settlement discussions, the government
has requested certain additional damages in amounts beyond those stated in the
complaint. Dana is defending this case vigorously and the litigation issues
and alleged damages continue to be actively discussed and evaluated by Dana
and the government.
12
<PAGE> 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
- - -------
a) The Exhibit listed in the "Exhibit Index" is filed
as a part of this report
b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter
ended June 30, 1994.
13
<PAGE> 14
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DANA CORPORATION
____________________________
Date: August 9, 1994 James E. Ayers
____________________________
James E. Ayers
Chief Financial Officer
Vice President Finance and Treasurer
Duly Authorized Officer and
Principal Financial Officer.
14
<PAGE> 15
<TABLE>
EXHIBIT INDEX
<CAPTION>
Exhibit Page No.
- - ------- --------
<S> <C> <C>
10-M(2) First Amendment to the Directors' Stock Option Plan, 16
effective April 18, 1994
</TABLE>
15
<PAGE> 1
Exhibit 10-M(2)
---------------
4/18/94
FIRST AMENDMENT TO THE DANA CORPORATION
DIRECTORS' STOCK OPTION PLAN
WHEREAS, at the Dana Corporation Board of Directors meeting held on April
18, 1994, the Board of Directors resolved that the Dana Corporation Directors'
Stock Option Plan ("Plan") should be amended to adjust the number of shares
that will be granted each year in recognition of the two-for-one stock split
that had been authorized by the Board.
NOW THEREFORE, BE IT RESOLVED, that the Plan is amended, effective April
18, 1994, as follows:
1. Amend Section 6(a) of the Plan by adding the following
sentence at the end of that Section:
"Such number of shares is subject to adjustment upon
changes in capitalization as provided in Section 12
hereof."
Secretary Martin J. Strobel
------------------
Mark A. Smith, Jr.
- - -------------------
Witness
16
