1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1999 ----------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ________ Commission file number 1-4651 ------ A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Dana Corporation Employee Incentive and Savings Investment Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Dana Corporation 4500 Dorr Street Toledo, Ohio 43615
2 DANA CORPORATION EMPLOYEE INCENTIVE AND SAVINGS INVESTMENT PLAN FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION DECEMBER 31, 1999 AND 1998
3 DANA CORPORATION EMPLOYEE INCENTIVE AND SAVINGS INVESTMENT PLAN INDEX TO FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION - -------------------------------------------------------------------------------- Page I REQUIRED INFORMATION Report of Independent Accountants 4 Financial Statements: Statement of Net Assets Available for Benefits as of December 31, 1999 and 1998 5 Statement of Changes In Net Assets Available for Benefits, for the Years Ended December 31, 1999 and 1998 6 Notes to Financial Statements 7 - 10 Additional Information*: Line 27a - Schedule of Assets Held for Investment Purposes 11 Line 27d - Schedule of Reportable Transactions 12 II SIGNATURE 13 III EXIHIBIT A - Consent of independent accountants 14
4 REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of the Dana Corporation Employee Incentive and Savings Investment Plan In our opinion, the accompanying statement of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Dana Corporation Employee Incentive and Savings Investment Plan (the "Plan") at December 31, 1999 and 1998, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of Assets Held for Investment Purposes and Reportable Transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ PricewaterhouseCoopers LLP -------------------------- PricewaterhouseCoopers LLP June 21, 2000
5 DANA CORPORATION EMPLOYEE INCENTIVE AND SAVINGS INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS (AMOUNTS IN THOUSANDS) - -------------------------------------------------------------------------------- DECEMBER 31, 1999 1998 Assets Investments, At fair value: Putnam New Opportunities Fund $ 29,056 $ 18,278 Putnam Voyager Fund 43,629 30,807 Dodge & Cox Balanced Fund 6,618 6,298 Vanguard Index Trust 500 Fund 17,758 14,367 AIM Constellation Fund 12,069 9,568 Templeton Foreign Equity Fund 3,615 2,858 Dana Corporation common stock 30,330 29,992 At contract value: New York Life Insurance Company Annuity 6,740 INVESCO Stable Value Fund 36,876 30,963 -------- -------- Total investments 179,951 149,871 Receivables: Participants notes receivable 8,021 7,566 Other receivables 128 114 -------- -------- Total assets 188,100 157,551 -------- -------- Liabilities Other payables 333 212 -------- -------- Total liabilities 333 212 -------- -------- Net assets available for benefits $187,767 $157,339 ======== ======== The accompanying notes are an integral part of the financial statements.
6 DANA CORPORATION EMPLOYEE INCENTIVE AND SAVINGS INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (AMOUNTS IN THOUSANDS) - -------------------------------------------------------------------------------- DECEMBER 31, 1999 1998 Investment income: Net appreciation of investments $ 21,588 $ 15,190 Interest and dividends 11,943 7,332 -------- -------- Total investment income 33,531 22,522 Employees' contributions 12,740 13,870 Employees' rollovers 884 1,000 Employer incentive match contribution 872 998 Interest on employee loans 629 471 -------- -------- Total additions 48,656 38,861 -------- -------- Benefit payments (18,228) (36,979) -------- -------- Net increase in net assets available for benefits 30,428 1,882 Net assets available for benefits at beginning of year 157,339 155,457 -------- -------- Net assets available for benefits at end of year $187,767 $157,339 ======== ======== The accompanying notes are an integral part of the financial statements.
7 DANA CORPORATION EMPLOYEE INCENTIVE AND SAVINGS INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. DESCRIPTION OF THE PLAN GENERAL The Dana Corporation Employee Incentive and Savings Investment Plan (Plan) is a defined contribution employee benefit plan that was established on March 1, 1984 to provide benefits for all eligible employees of the former Echlin Inc. (Echlin) as identified in the Plan agreement. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The following is a brief description of the Plan. Participants should refer to the Plan agreement for more complete information. The Plan is sponsored by Echlin. During 1998, Echlin was acquired by Dana Corporation (Company). ADMINISTRATION The Plan is administered by the Employee Benefits Committee of Echlin. The Plan has entered into a trust arrangement with The Chase Manhattan Bank (Trustee). PARTICIPATION Each employee who is in a covered class of employees within a participating division, has attained age 21 and has met the service requirements stipulated in the plan agreement is eligible to participate in the Plan. EMPLOYEE CONTRIBUTIONS An employee may elect to have up to 20 percent of his or her eligible compensation, as defined in the Plan agreement, up to the maximum elective deferral amount as determined under Section 402(g) of the Internal Revenue Code, contributed to his or her account. Contributions for some participants may be further limited as a result of other Internal Revenue Code requirements. EMPLOYER CONTRIBUTIONS Echlin contributes ten percent on the first six percent of the employee's compensation contributed to the Plan. An additional Echlin contribution, as defined in the Plan agreement, may be made depending on the Echlin's financial performance during the Plan year. VESTING Participants are fully vested at all times in their contributions. Before completing five years of service, participants become vested in Echlin's matching contributions at the end of the third calendar year after the contribution was made. Participants who have attained five years of service are fully vested in Echlin's matching contributions.
8 DANA CORPORATION EMPLOYEE INCENTIVE AND SAVINGS INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. DESCRIPTION OF THE PLAN (CONTINUED) NORMAL RETIREMENT, DISABILITY, TERMINATION OR DEATH In accordance with the Plan provisions, participating employees who retire upon attaining age sixty-five or become totally and permanently disabled and whose account balance is greater than $5,000 are eligible to receive the full value of their account in a lump sum. Upon termination, the vested portion of the participant's account will be payable in a lump sum if the account balance is less than $5,000. Otherwise, the participant's account may remain in the Plan until the participant attains the age of 65. Upon a participant's death, the participant's account balance will be paid to the beneficiary in one lump sum. LOANS The Trustee may extend loans to participants with the approval of the Plan administrator. Participant loans shall not be made for less than $1,000 or exceed the lesser of 50% of the participant's account balance or $50,000 minus the highest amount of outstanding balance of loans to the participant for the previous 12 month period. The loan term shall not be longer than 60 months unless the loan is used to acquire a principal residence. Interest shall be charged on the loan based on rates currently being charged by financial institutions lending money under similar circumstances. As participant loans are repaid, the amounts are allocated to the investment fund according to the participant's most recent election with respect to current contributions. INVESTMENT OPTIONS The following investment options are available to Plan participants: a. Company Stock Fund - Funds are invested in common stock of Dana Corporation. b. Invesco Stable Value Fund - Funds are invested in a mutual fund which invests in pooled fixed income contracts. c. Dodge and Cox Balanced Fund - Funds are invested in a mutual fund which invests approximately 60% in large, well-established companies and the remainder in high quality bonds and cash. d. Vanguard Index Trust 500 Fund - Funds are invested in a mutual fund which invests in common stocks listed on the Standard & Poor's 500 Composite Index. e. AIM Constellation Fund - Funds are invested in a mutual fund which invests in common stock of medium-sized and smaller emerging growth companies.
9 DANA CORPORATION EMPLOYEE INCENTIVE AND SAVINGS INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. DESCRIPTION OF THE PLAN (CONTINUED) INVESTMENT OPTIONS (CONTINUED) f. Putnam New Opportunities Fund - Funds are primarily invested in a mutual fund which invests in common stock of small to medium-sized emerging growth companies. g. Putnam Voyager Fund - Funds are invested in a mutual fund which invests in a range of common stock of small, midsize and large companies. h. Templeton Foreign Equity Fund - Funds are invested in a mutual fund which invests in stocks and debt obligations of companies and governments outside of the United States. The Company Stock Fund also invests in the VISTA Money Market Fund for temporary cash management purposes. PLAN TERMINATION Although it has not expressed any intention to do so, Echlin has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to ERISA. In the event of Plan termination, participants will become vested in their accounts. 2. SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements of the Plan have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles. EXPENSES OF THE PLAN Generally, Echlin pays all expenses associated with the administration of the Plan. VALUATION OF INVESTMENTS The Plan's investments in common stocks and mutual funds are stated at quoted market value. Investments in guaranteed investment contracts are stated at contract value, which approximates market value. Net appreciation or depreciation includes realized gains and losses and net unrealized appreciation and depreciation. Realized gains and losses on investment transactions are recorded as the difference between proceeds received and the fair market value at the beginning of the year of the respective investments sold or cost if acquired during the year. Net unrealized appreciation or depreciation in the fair market value of investments is recorded as the change between the fair market value of investments at the end of the year and the beginning of the year, or cost if acquired during the year.
10 DANA CORPORATION EMPLOYEE INCENTIVE AND SAVINGS INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and reported changes in net assets available for benefits during the reporting period. Actual results could differ from those estimates. 3. INCOME TAX STATUS The Internal Revenue Service has ruled that the Plan, as amended through January 1, 1994, qualifies under Section 401(a) of the Internal Revenue Code of 1986 (IRC) and therefore the related Plan trust is not subject to tax under present tax laws. The Plan has been amended since receiving the determination letter. However, the Plan Administrator believes that the Plan is currently designed and being operated in compliance with the IRC. 4. PARTIES-IN-INTEREST Investments in the Company Stock Fund consisted of 923,000 and 722,000 shares of Dana Corporation common stock at December 31, 1999 and 1998, respectively. Shares for this fund are purchased in the open market at fair market value. Consequently, such transactions are permitted under the provisions of the Plan and are exempt from prohibition of party-in-interest transactions under the IRS Code and ERISA.
11 DANA CORPORATION EMPLOYEE INCENTIVE AND SAVINGS INVESTMENT PLAN Schedule I LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1999 (AMOUNTS IN THOUSANDS) - -------------------------------------------------------------------------------- CURRENT IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT COST VALUE Putnam Investments Putnam New Opportunities Fund $ 15,549 $ 29,056 Putnam Investments Putnam Voyager Equity Fund 22,703 43,629 Dodge & Cox Dodge & Cox Balanced Fund 6,438 6,618 The Vanguard Group Vanguard Index Trust 500 Fund 12,010 17,758 AIM Funds AIM Constellation Fund 7,900 12,069 Franklin Templeton Templeton Foreign Equity Fund 3,191 3,615 AIM Funds INVESCO Stable Value Fund 36,876 36,876 *Dana Common Stock Common stock 30,643 30,330 *Participant Notes Receivable Various interest rates/various maturities -- 8,021 -------- -------- $135,310 $187,972 ======== ======== *Dana Corporation and participants are known parties-in-interest to the Plan. This schedule was prepared from data certified by The Chase Manhattan Bank, the trustee of the Plan.
12 DANA CORPORATION EMPLOYEE INCENTIVE AND SAVINGS INVESTMENT PLAN Schedule II LINE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS* FOR THE YEAR ENDED DECEMBER 31, 1999 (AMOUNTS IN THOUSANDS) - -------------------------------------------------------------------------------- CURRENT VALUE DESCRIPTION OF ASSET ON PARTY OF PURCHASE SELLING COST OF TRANSACTION INVOLVED ASSET PRICE PRICE ASSET DATE NET GAIN Dana Corporation Dana Corporation Common Stock $11,418 $11,418 $11,418 Dana Corporation Dana Corporation Common Stock $ 3,421 2,328 3,421 $1,093 AIM Funds INVESCO Stable Value Fund 16,505 16,505 16,505 AIM Funds INVESCO Stable Value Fund 10,592 10,592 10,592 Putnam Investments Putnam New Opportunities Fund 5,297 5,297 5,297 Putnam Investments Putnam New Opportunities Fund 4,448 2,955 4,448 1,493 Putnam Investments Putnam Voyager Fund 6,609 6,609 6,609 Putnam Investments Putnam Voyager Fund 6,136 3,584 6,136 2,552 Chase Manhattan Bank VISTA Money Market Fund 10,554 10,554 10,554 Chase Manhattan Bank VISTA Money Market Fund 10,437 10,437 10,437 Participant Participant Notes Receivable 4,357 4,357 4,357 Participant Participant Notes Receivable 3,902 3,902 3,902 *Transactions or series of transactions in excess of 5 percent of the current value of the Plan's assets as of December 31, 1998 as defined in section 2520.103-6 of the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA. This schedule was prepared from data certified by The Chase Manhattan Bank, the trustee of the Plan.
13 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator of the Dana Corporation Employee Incentive and Savings Investment Plan has duly caused this annual report to be signed by the undersigned thereunto duly authorized. Dana Corporation Employee Incentive and Savings Investment Plan Date: June 30, 2000 /s/ Armand T. Flynn ------------------------- Armand T. Flynn Director of Compensation and Benefits
1 EXHIBIT 23 ---------- CONSENT OF INDEPENDENT ACCOUNTANTS ---------------------------------- We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-69449) of Dana Corporation of our report dated June 21, 2000 relating to the financial statements of the Dana Corporation Employee Incentive and Savings Investment Plan, which appears in this Form 11-K. /s/ PricewaterhouseCoopers LLP -------------------------- PricewaterhouseCoopers LLP Toledo, Ohio June 30, 2000