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