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1
[DANA - LOGO]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1997 Commission file number 1-1063
- ------------------------------------------- -------
DANA CORPORATION
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(Exact name of registrant as specified in its charter)
Virginia 34-4361040
- ----------------------------- -------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
4500 Dorr Street, Toledo Ohio 43615
- ------------------------------- -------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (419) 535-4500
--------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------------------------ ------------------------------------
Common Stock, $1 par value New York, Pacific, London Stock Exchanges
Securities registered pursuant to Section 12(g) of the Act:
None
-------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be flied by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or Information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ____
The aggregate market value of the voting stock held by non-affiliates of the
registrant at February 13, 1998, was approximately $5,809,669,000.
---------------
The number of shares of registrant's Common Stock, $1 Par Value, outstanding at
February 13, 1998, was 105,445,427 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Document Where Incorporated
-------------------------------------- ------------------------------
1. Proxy Statement dated February 27, 1998 Part III (Items 10, 11, 12, 13)
for Annual Meeting of Shareholders
to be held on April 1, 1998.
Part I (Item 1)
2. Annual Report to Shareholders Part II (Items 5, 6, 7, 8)
for year ended December 31, 1997. Part IV (Item 14)
- -------------------------------------------------------------------------------
The Exhibit Index is located at pages 25-27 of the sequential numbering system.
1
2
INDEX
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DANA CORPORATION - FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1997
10-K Pages
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Cover 1
Index 2
Part 1
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Item 1 - Business 3-10
-----------------
Geographical Areas, Markets, Customer Dependence,
Products, Material Source and Supply, Seasonality, Backlog,
Competition, Strategy, Patents and Trademarks, Research
and Development, Employment, Environmental
Compliance, and Executive Officers
of the Registrant
Item 2 - Properties 11
-------------------
Item 3 - Legal Proceedings 11
--------------------------
Item 4 - Submission of Matters to a Vote of
--------------------------------------------
Security Holders 11
----------------
Part II
- -------
Item 5 - Market for Registrant's Common Equity and
--------------------------------------------------
Related Stockholder Matters 12
---------------------------
Item 6 - Selected Financial Data 12
---------------------------------
Item 7 - Management's Discussion and Analysis of
------------------------------------------------
Financial Condition and Results of Operations 12
---------------------------------------------
Item 8 - Financial Statements and Supplementary Data 12
----------------------------------------------------
Item 9 - Changes in and Disagreements with Accountants on
----------------------------------------------------------
Accounting and Financial Disclosure 12
------------------------------------
Part III
Item 10 - Directors and Executive Officers of the
-------------------------------------------------
Registrant 13
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Item 11 - Executive Compensation 13
--------------------------------
Item 12 - Security Ownership of Certain Beneficial
--------------------------------------------------
Owners and Management 13
---------------------
Item 13 - Certain Relationships and Related Transactions 13
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Part IV
Item 14 - Exhibits, Financial Statement Schedules,
--------------------------------------------------
and Reports on Form 8-K 14-27
-----------------------
(a)(1) Financial Statements
(2) Financial Statement Schedules
(3) Exhibits
(b) Reports on Form 8-K
Signatures 28-29
- ----------
2
3
PART I
ITEM I - BUSINESS
- -----------------
Dana Corporation, Incorporated in 1905, is a global leader in the
engineering, manufacturing and distribution of components and systems for
worldwide vehicular and industrial manufacturers. Dana also owns Dana Credit
Corporation (DCC), a leading provider of lease financing services in certain
markets.
Dana's Vehicular segment is comprised of components and parts used on
light, medium and heavy trucks, sport utility vehicles, trailers, vans and
automobiles. The Company's products include components for drivetrain systems,
such as axles and driveshafts; engine parts, such as gaskets and sealing
systems, piston rings, and filtration products; structural components, such as
vehicular frames, engine cradles and rails; and chassis products, such as
steering and suspension components. In 1997, sales from this segment accounted
for 76% of Dana's sales.
The Company's Industrial segment products are used in off-highway
vehicle and stationary equipment applications. These products include components
for industrial power transmission products, such as electrical and mechanical
brakes and clutches, drives and motion control devices and fluid power systems,
such as pumps, cylinders and control valves. Sales from this segment amounted to
24% of the Company's 1997 sales.
Dana's Lease Financing segment is almost exclusively comprised of the
operations of DCC which offers lease financing services in the form of capital
markets specialized lease transactions worldwide and customized equipment
financing programs in the United States (U.S.), Canada, the United Kingdom and
continental Europe. The revenue derived from such services is included in
Revenue from Lease Financing and Other Income in Dana's financial statements and
is not considered a component of net sales.
"Note 16. Business Segments" at pages 34 - 36 of Dana's 1997 Annual
Report is incorporated herein by reference.
GEOGRAPHICAL AREAS
- -------------------
The Company maintains four regional structures - North America, Europe,
South America and Asia/Pacific - to facilitate financial and statutory reporting
and tax compliance on a worldwide basis. The regional structures also provide
administrative support to the six Strategic Business Units (SBUs) - Automotive
Components, Engine Components, Heavy Truck Components, Industrial Components,
Off-Highway Components and Leasing Services - established in 1997 to better
serve Dana's global markets.
The Company's operations are located in the following countries:
North America Europe South America Asia/Pacific
------------- ------ ------------- -------------
Canada Austria Poland Argentina Australia Malaysia
Mexico Belgium Spain Brazil China Singapore
United States France Sweden Colombia Hong Kong Taiwan
Germany Switzerland Uruguay Japan Thailand
India United Kingdom Venezuela Korea New Zealand
Italy Netherlands
Dana's international subsidiaries and affiliates manufacture and sell a
number of vehicular and industrial products which are similar to those produced
by Dana in the U.S. In addition to normal business risks, operations outside the
U.S. are subject to other risks including, among others, changing political,
economic and social environments, changing governmental laws and regulations,
currency revaluations and market fluctuations.
Consolidated international sales were $2.3 billion, or 28% of the
Company's 1997 sales. Including U.S. exports of $697 million, international
sales accounted for 36% of 1997 consolidated sales. International operating
income was $109 million, or 17% of consolidated 1997 operating income. In
addition, there was $27 million of equity in earnings of international
affiliates in 1997.
"Note 6. International Operations" at page 30 of Dana's 1997 Annual
Report is incorporated herein by reference. See also "Note 16. Business
Segments" at pages 34-36 of Dana's 1997 Annual Report.
3
4
MARKETS
- -------
During the past three years, Dana's sales to Vehicular and Industrial
original equipment (OE) manufacturers and the related service parts markets were
as follows:
Market Analysis by Business Segment*
Percentage of Consolidated Sales
-------------------------------------
1995 1996 1997
---- ---- ----
Vehicular Products-
OE Manufacturers 58% 58% 58%
Service Parts 22% 22% 18%
---- ---- ----
Total 80% 80% 76%
Industrial Products-
OE Manufacturers 10% 10% 14%
Service parts 10% 10% 10%
---- ---- ----
Total 20% 20% 24%
*Note: End use of products is not always identifiable but these are reasonable
estimates derived from expected customer usages.
Sales in the Lease Financing segment consisted of real estate sales and
did not exceed 1% of consolidated sales for 1995, 1996 or 1997. Lease financing
revenues (amounting to less than 5% of Dana's consolidated 1997 total revenues)
have been excluded from this market analysis.
CUSTOMER DEPENDENCE
- -------------------
The Company has thousands of customers around the world and has
developed long-standing business relationships with many of these customers. The
Company's attention to cost, as well as quality, delivery and service, has been
recognized by numerous customers who have awarded the Company supplier quality
awards. Ford Motor Company (Ford) and Chrysler Corporation (Chrysler) were the
only customers accounting for more than 10% of the Company's consolidated sales
in 1997. The Company has been supplying product to Ford, Chrysler and their
subsidiaries for many years. Sales to Ford, as a percentage of the Company's
sales, were 17%, 16% and 17% in 1995, 1996 and 1997, respectively. Sales to
Chrysler, as a percentage of sales, were 13%, 14% and 14% in 1995, 1996 and
1997, respectively. Loss of all or a substantial portion of the Company's sales
to Ford, Chrysler or other large volume customers would have a significant
adverse effect on the Company's financial results until this lost sales volume
could be replaced.
4
5
PRODUCTS
- --------
The major groups of products within the Vehicular segment are as
follows:
Major Product Groups - Vehicular Segment
Percentage of Consolidated Sales
----------------------------------------
1995 1996 1997
---- ---- ----
Types of Products
- -----------------
Vehicular products for highway vehicles,
primarily trucks
Front and rear axles 30% 30% 29%
Engine parts and accessories 13% 12% 15%
Driveshafts and universal joints 10% 11% 12%
Frames and other structural components 8% 9% 10%
Other Vehicular products 19% 18% 10%
-- -- --
Total 80% 80% 76%
No product or product group within the Industrial or Lease Financing
segments exceeded 10% of consolidated sales during these periods.
5
6
MATERIAL SOURCE AND SUPPLY
- --------------------------
Most raw materials (such as steel) and semi-processed or finished items
(such as forgings and castings) are purchased from long-term suppliers located
within the geographic regions of the Dana operating units. Generally, these
materials are available from numerous sources in quantities needed by the
Company. Temporary shortages of a particular material or part occasionally
occur, but the overall availability of materials is not considered to be a
significant risk factor by the Company.
SEASONALITY
- ------------
Dana's businesses are not considered to be seasonal, but the OE
vehicular businesses are closely related to the vehicle manufacturers'
production schedules.
BACKLOG
- -------
The majority of Dana's products are not on a backlog status. They are
produced from readily available materials and have a relatively short
manufacturing cycle. Each operating unit of the Company maintains its own
inventories and production schedules, and many products are available from more
than one facility. Production capacity is adequate to handle current
requirements; anticipated growth in Dana's product lines is regularly reviewed
to determine when additional capacity may be needed.
COMPETITION
- -----------
In its Vehicular and Industrial segments, the Company competes worldwide
with a number of other manufacturers and distributors which produce and sell
similar products. These competitors include vertically-integrated units of the
Company's major vehicular OE customers and a number of independent U.S. and
international suppliers. The Company's traditional U.S. OE customers, in
response to substantial international competition in the past few years, have
expanded their worldwide sourcing of components while reducing their overall
number of suppliers. The Company has established operations throughout the world
to enable Dana to be a strong global supplier of its core products.
In the Lease Financing segment, the Company's primary focus is on
leasing activities. The Company's competitors include national and regional
leasing and finance organizations.
STRATEGY
- --------
The Company is actively pursuing two broad strategies, focused around
Dana's six customer and market-focused, global SBUs.
The first strategy is to significantly reduce the effects of the
economic cycle by diversifying the Company's products and reducing its
dependence on highway vehicle OE production. Dana's long-term goal is to obtain
50% of sales from highway vehicle OE customers and 50% from distribution,
off-highway, service and industrial markets. In 1997, sales from highway
vehicle OE customers were 58% of Dana's total, while distribution, off-highway,
service and industrial sales were 42%. The Company continues to seek expansion
in its off-highway and distribution businesses by increasing market penetration
and broadening its product offerings through internal growth and acquisition.
The second strategy focuses on obtaining a balance between U.S. and
international sales. Dana has well-defined regional organizations in North
America, South America, Europe and Asia/Pacific in support of this initiative.
In 1997, international sales, including exports from the U.S., totaled 36% of
consolidated sales. The Company's long-term goal is to derive 50% of its sales
(including exports) from customers outside the U.S. Although this strategy is
subject to certain risks, the Company believes broadening its sales base will
enable it to offset effects of economic downturns in specific countries, source
materials from the areas of the world which offer the lowest cost, and provide
access to markets which have the greatest growth potential. To accomplish this
objective, the Company is focusing on meeting OE customers' needs in each of the
local markets in which those customers operate, both through exports and by
locating manufacturing or assembly facilities in markets where key OE customers
have assembly plants.
As part of the continuing efforts to focus on its core businesses, the Company
in 1997 announced or completed nine divestitures of businesses with annual
sales of nearly $900 million. The Company also completed the acquisitions of
the piston ring and cylinder liner operations of SPX Corporation and the assets
of Clark-Hurth Components from Ingersoll-Rand. The Company also announced the
acquisition of the global axle and brake business of Eaton Corporation which
was completed in January 1998. Refer to "Note 21, Acquisitions" for additional
information related to these activities.
6
7
PATENTS AND TRADEMARKS
- ----------------------
Dana's proprietary drivetrain, engine parts, chassis, structural
components, fluid power systems, and industrial power transmission product
lines have strong identities in the Vehicular and Industrial markets which Dana
serves. Throughout these product lines, Dana also owns or is licensed to
manufacture and sell its products under a number of patents and licenses, which
have been obtained over a period of years and expire at various times, Dana
considers each of them to be of value and agressively protects its rights
throughout the world against infringement. Because the Company is involved with
many product lines, the loss or expiration of any particular patent or license
would not materially affect the sales and profits of the Company.
Dana owns numerous trademarks which are registered in many countries
enabling Dana to market its products worldwide. The Dana(R), Spicer(R),
Parish(R), Perfect Circle(R), Victor Reinz(R), Wix(R), Weatherhead(R), Warner
Electric(R) and Gresen(R) trademarks, among others, are widely recognized in
their respective industries.
RESEARCH AND DEVELOPMENT
- ------------------------
Dana's facilities engage in engineering, research and development, and
quality control activities to improve the reliability, performance and
cost-effectiveness of Dana's products and to design and develop new products for
existing and anticipated applications. The Company employs advanced technology
and methods to achieve these improvements. To promote efficiency and reduce
development costs, Dana's research and engineering people work closely with OE
manufacturing customers on special products and systems designs. Dana's
consolidated worldwide expenditures for engineering, research and development,
and quality control programs were $149 million in 1995, $164 million in 1996 and
$193 million in 1997.
EMPLOYMENT
- -----------
Dana's worldwide employment (including consolidated subsidiaries) was
approximately 47,900 at December 31, 1997.
ENVIRONMENTAL COMPLIANCE
- ------------------------
The Company makes capital expenditures in the normal course of business,
as necessary to ensure that its facilities are in compliance with
applicable environmental laws and regulations. Costs of environmental compliance
did not have a materially adverse effect on the Company's capital expenditures,
earnings or competitive position in 1997, and the Company currently does not
anticipate future environmental compliance costs will be material.
"Environmental Compliance and Remediation" under "Note 1. Summary of Significant
Accounting Policies" on page 28 of Dana's 1997 Annual Report is incorporated
herein by reference.
7
8
EXECUTIVE OFFICERS OF THE REGISTRANT
- ------------------------------------
The Company's executive officers and their ages, present positions and
other positions within the past five years are as follows. Except as otherwise
indicated, all positions are with Dana. The first five officers listed are the
members of Dana's Policy Committee.
Name Present Position(s) Other Positions
and Age with the Registrant During the Past 5 Years
- ------- ------------------- ------------------------
S. J. Morcott Chairman of the Board of Chief Operating Officer, 1986-97; President,
(59) Directors since 1990; Chief 1986-95; Director since 1985; Chairman of the
Executive Officer since 1989 Board of Hayes-Dana Inc., 1987-95 (1)
J. M. Magliochetti Chief Operating Officer since President - Dana North American Operations,
(55) 1997; Director and President 1992-95
since 1996
J. S. Simpson Chief Financial Officer since Treasurer, 1996-97; President - Dana Asia
(56) 1997; Vice President of Finance Pacific Operations, 1992-95
since 1996
W. J. Carroll President - Automotive President - Diversified Products & Distribution,
(53) Components Group since 1997 1996-97; President - Dana Distribution Service
Group, 1995-97; President - DTF Trucking,
1985-97; Chairman of the Board of Dana
Canada Inc., 1995-97; President of Dana
Canada Inc., 1993-97 (1)
M. A. Franklin, III President - Dana International President - Dana Europe, 1993-97
(50) since 1997
R. L. Clayton Vice President - Heavy Truck Vice President and General Manager - Spicer
(37) Components Group since 1997 Heavy Axle & Brake Division, 1996-97;
General Manager - Spicer Clutch Division,
1995-96; Director of Planning and
Development - Reinz-Dichtungs GmbH, 1993-
95 (2)
B. N. Cole President - Off-Highway President - Structural Components Group,
(55) Components Group since 1997 1995-97; Vice President - Heavy Vehicle -
Dana North American Operations, 1991-95
T. A. Dattilo Vice President - Sealing President - Victor Products Division, 1993-97
(46) Products and Distribution since
January 1998
C. J. Eterovic President - Dana South America
(63) since 1993
H.E. Ferreira Vice President- Engine Group Vice President - Perfect Circle Engine
(58) Products since 1996 Products Group, 1995-96; Vice President,
Mercosur-Dana South America, 1994-95;
Chairman - Administration Council of Albarus
S.A., 1992-95 (3)
8
9
Name Present Position(s) Other Positions
and Age with the Registrant During the Past 5 Years
- -------- --------------------- -------------------------
R.B. Forde Vice President - Marketing - Group Vice President - Wix Filtration Products
(61) Engine Components Group Group, 1995-97; Vice President and General
since January 1998 Manager - Wix Division, 1987-95
M. F. Greene Vice President - Structural Group Vice President - Parish Structural
(49) Products since 1997 Components Group, 1997; Vice President and
General Manager - Parish Light Vehicle
Structures Division, 1991-97
F. J. Hawes Controller - North American Vice President and Corporate Controller -
(51) Operations since 1996 Dana Canada, Inc., 1995-96; Corporate
Controller - Hayes-Dana Inc., 1992-95 (1)
C. F. Heine President - Dana Asia Pacific Vice President - Asia Pacific
(45) since 1996 Operations, 1995; General Manager - Spicer
Off-Highway Axle Division, 1993-94
C. W. Hinde Vice President and Chief
(59) Accounting Officer since 1992;
Assistant Treasurer since 1986
J. M. Laisure Vice President - Modular Group Vice President - Spicer Modular
(46) Systems since 1997 Systems Group, 1994-97: Vice President and
General Manager - Spicer Transmission
Division, 1991-94
W. M. Lasky Vice President - Filtration Vice President and General Manager - Wix
(50) Products since January 1998 Filtration Products Division, 1995-97; Vice
President and General Manager - Spicer
Clutch Division, 1993-95
C. J. McNamara President - Engine Components President - Victor Reinz Sealing Products
(59) Group since 1997 Group, 1995-97; Vice President - Automotive -
Dana North American Operations, 1993-95
J. I. Melgar Vice President - Driveshaft Executive President - Metalmecanica
(50) Products since 1997 Consolidada, C.A., 1993-97 (4)
E. Mendoza Chairman- Spicer, S.A. since General Director - Spicer, S.A., 1981-93(5)
(60) 1994(5)
W. L. Myers President - Automotive Axle President - Spicer Driveshaft Group 1995-97;
(57) Products since 1997 Vice President and General Manager - Spicer
Driveshaft Division, 1986-95
K. A. Nitsch President - Dana Europe since Vice President and General Manager - Dana
(47) 1997 World Trade, 1996-97; General Manager -
Dana World Trade, 1994-96; Director - Dana
World Trade, 1991-94
A. G. Paton Vice President - Treasurer Vice President - Corporate Planning, 1995-97;
(50) since 1997 Senior Vice President - Finance and
Corporate Secretary, Hayes-Dana Inc., 1995;
Vice President - Finance, Hayes-Dana Inc.,
1987-95 (1)
9
10
Name Present Position(s) Other Positions
and Age with the Registrant During the Past 5 Years
- ------- ------------------- -----------------------
M. A. Plumley Vice President - Industrial Group Vice President - Dana Industrial 1996-
(47) Components Group since 1997 97; General Manager - Plumley Companies,
Inc., 1995-96; Chairman and Chief Executive
Officer - Plumley Companies, Inc., 1988-95 (6)
J. H. Reed Vice President - Manufacturing President - Spicer Axle Group, 1995-97;
(65) since 1997 President - Light Truck Dana North American
Operations, 1995-97; Vice President - Light
Vehicle Dana North American Operations,
1992-95; President and General Manager -
Spicer Axle Division, 1991-95
R. C. Richter Vice President - Administration General Manager - Perfect Circle Sealed
(46) since 1997 Power Europe, 1997; Vice President and
General Manager - Perfect Circle Europe,
1994-97; Dana Corporate Controller, 1989-94;
Dana Vice President - Administration, 1987-94
A. J. Shelbourn President - Dana World Trade Group Vice President - Dana Distribution,
(52) since January 1998 North American Operations, 1996-97; Vice
President and General Manager - Dana
Distribution U.K., 1994-96; General Manager -
Dana Distribution U.K., 1991-94
E. J. Shultz Chairman and President - Dana President - Lease Financing, 1994-95;
(53) Credit Corporation since 1995 President - Financial Services, 1990-94
M. J. Strobel Vice President since 1976;
(57) General Counsel since 1970;
and Secretary since 1982
J. H. Woodward, Jr. Vice President and Corporate Controller - Dana North American Operations,
(45) Controller since 1996 1994-96; Division Controller - Spicer Heavy
Axle & Brake Division, 1992-94
Notes:
(1) Hayes-Dana Inc., formerly a majority-owned Dana subsidiary located in
Canada, is now a wholly-owned subsidiary and has been renamed Dana Canada Inc.
(2) Reinz-Dichtungs GmbH is a wholly-owned Dana subsidiary located in Germany.
(3) Albarus S.A. is a majority-owned Dana subsidiary located in Brazil.
(4) Metalmecanica Consolidada, C.A. is a Dana affiliate located in Venezuela.
(5) Spicer, S.A. is a Dana affiliate located in Mexico.
(6) Plumley Companies, Inc., formerly a wholly-owned Dana subsidiary located in
the U.S., is now a Dana division.
The Company's officers are elected annually by the Board of Directors
at its first meeting after the Annual Meeting of Shareholders. None of the
officers has a family relationship with any other Dana officer or director or an
arrangement or understanding with any Dana officer or other person pursuant to
which he was elected as an officer of the Company.
10
11
ITEM 2 - PROPERTIES
- -----------------
Dana owns the majority of the manufacturing facilities and the larger
distribution facilities for its Vehicular and Industrial products. Several
manufacturing facilities and many of the Company's smaller distribution outlets,
service branches, and offices are leased. The facilities, in general, are
well-maintained and adapted to the operations for which they are being used, and
their productive capacity is adjusted as required by market and customer growth.
On a geographic basis, Dana's facilities (including those of
consolidated subsidiaries) are located as follows:
Dana Facilities by Geographic Region
------------------------------------
Type of North South Asia/
Facility America Europe America Pacific Total
- -------- ------- ------ --------------- -----
Manufacturing 110 56 23 9 198
Distribution 25 2 9 22 58
Service Branches, Offices 46 9 5 13 73
--- -- -- -- ---
Total 181 67 37 44 329
=== == == == ===
ITEM 3 - 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 the Company's business and are required to be reported in the
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
- -------------------------------------------------------------
- - None -
11
12
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
- -----------------------------------------------------------------------------
Dana's common stock is listed on the New York, Pacific, and London Stock
Exchanges. On February 13, 1998, there were 32,137 shareholders of record.
Dividends have been paid on the common stock every year since 1936.
Quarterly dividends have been paid since 1942.
"Shareholders' Investment" under "Additional Information" at page 50 of
Dana's 1997 Annual Report is incorporated herein by reference.
ITEM 6 - SELECTED FINANCIAL DATA
- --------------------------------
"Financial Highlights" under "Eleven Year History" at page 51 of Dana's
1997 Annual Report is incorporated herein by reference.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- -------------------------------------------------------------------------------
OF OPERATIONS
- -------------
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" at pages 41-45 of Dana's 1997 Annual Report is incorporated
herein by reference.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ----------------------------------------------------
The financial statements, together with the report thereon of Price
Waterhouse LLP dated January 21, 1998, at pages 22-40 of Dana's 1997 Annual
Report and "Unaudited Quarterly Financial Information" under "Shareholders'
Investment" at page 50 of Dana's 1997 Annual Report are incorporated herein by
reference.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- ------------------------------------------------------------------------
FINANCIAL DISCLOSURE
- ---------------------
- - None -
12
13
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- ------------------------------------------------------------
Information regarding Dana's directors and executive officers is set out
in Part I, Item 1 of this Form 10-K and in Dana's Proxy Statement dated February
27,1998, for the Annual Meeting of Shareholders to be held on April 1, 1998 (the
"1998 Proxy Statement"). "Election of Directors" and "Section 16(a) Beneficial
Ownership Reporting Compliance" from the 1998 Proxy Statement are incorporated
herein by reference.
ITEM 11 - EXECUTIVE COMPENSATION
- ---------------------------------
"Compensation" under "The Board and its Committees," "Executive
Compensation," "Compensation Committee Report on Executive Compensation," and
"Comparison of Five-Year Cumulative Total Return" from the 1998 Proxy Statement
are incorporated herein by reference.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ------------------------------------------------------------------------
"Stock Ownership" from the 1998 Proxy Statement is incorporated herein
by reference.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------
"Other Transactions" and "Transactions With Management" from the 1998
Proxy Statement are incorporated herein by reference.
13
14
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- -------------------------------------------------------------------------
Page in
(a) The following documents are incorporated by reference and Annual Report
filed as part of this report: --------------
(1) Financial Statements:
---------------------
Report of Independent Accountants 22
Statement of Income for each of the three years
in the period ended December 31, 1997 23
Balance Sheet at December 31, 1996 and 1997 24
Statement of Cash Flows for each of the three
years in the period ended December 31, 1997 25
Statement of Shareholders' Equity for each of the
three years in the period ended December 31, 1997 26
Notes to Financial Statements 27 - 40
Unaudited Quarterly Financial Information 50
Page in
Form 10-K
-----------
(2) Financial Statement Schedules:
-------------------------------
Report of Independent Accountants on Financial
Statement Schedule for the three
years ended December 31, 1997 15
Valuation and Qualifying Accounts and
Reserves (Schedule II) 16 - 20
Supplementary Information - Stock Plans 21 - 23
Supplementary Information - Commitments and Contingencies 24
All other schedules are omitted because they are not
applicable or the required information is shown in the
financial statements or notes thereto.
(3) Exhibits - The Exhibits listed in the "Exhibit Index" are filed
as part of this report. 25 - 27
(b) Reports on Form 8-K
-------------------
None
14
15
Report of Independent Accountants on
Financial Statement Schedule
To the Board of Directors
of Dana Corporation
Our audits of the consolidated financial statements referred to in our report
dated January 21, 1998 appearing on page 22 of the 1997 Annual Report to
Shareholders of Dana Corporation (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of Financial Statement Schedule II appearing on pages 16
through 20 of this Form 10-K. In our opinion, this Financial Statement Schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
PRICE WATERHOUSE LLP
Toledo, Ohio
January 21, 1998
15
16
DANA CORPORATION AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------
SCHEDULE II(a) - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
---------------------------------------------------------------
ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE
------------------------------------------
Adjustment
Trade accounts arising
receivable from change
Balance at Additions "written off" in currency Balance at
beginning charged net of exchange rates end of
of period to income recoveries and other items period
----------- ---------- ----------- --------------- -----------
Year ended
December 31, 1995 $19,646,000 $9,281,000 $(5,322,000) $ (64,000) $23,541,000
December 31, 1996 $23,541,000 $8,900,000 $(6,315,000) $(151,000) $25,975,000
December 31, 1997 $25,975,000 $9,455,000 $(6,682,000) $ 835,000 $29,583,000
16
17
DANA CORPORATION AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------
SCHEDULE II(b) - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
---------------------------------------------------------------
ALLOWANCE FOR CREDIT LOSSES - LEASE FINANCING
---------------------------------------------
Adjustment
arising
Amounts from change
Balance at Additions "written off" in currency Balance at
beginning charged net of exchange rates end of
of period to income recoveries and other items period
----------- ---------- ----------- --------------- -----------
Year ended
December 31, 1995 $40,789,000 $15,578,000 $ (9,000,000) $ 58,000 $47,425,000
December 31, 1996 $47,425,000 $12,349,000 $ (9,299,000) $ 350,000 $50,825,000
December 31, 1997 $50,825,000 $12,141,000 $ (9,851,000) $(462,000) $52,653,000
17
18
DANA CORPORATION AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------
SCHEDULE II(c) - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
---------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES
-------------------------
Adjustment
arising
Amounts from change
Balance at Additions "written off" in currency Balance at
beginning charged net of exchange rates end of
of period to income recoveries and other items period
----------- ---------- ----------- --------------- -----------
Year ended
December 31, 1995 $ 5,639,000 $ 1,551,000 $ (3,265,000) $(548,000) $3,377,000
December 31, 1996 $ 3,377,000 $ 994,000 $ (3,161,000) -- $1,210,000
December 31, 1997 $ 1,210,000 $ 1,843,000 $ (70,000) -- $2,983,000
18
19
DANA CORPORATION AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------
SCHEDULE II(d) - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
--------------------------------------------------------------
VALUATION ALLOWANCE - REAL ESTATE
---------------------------------
Additions Amounts
Balance at charged "written off Balance at
beginning (credited) net of Acquisitions end of
of period to income recoveries and other items period
----------- ---------- ----------- --------------- -----------
Year ended
December 31, 1995 $38,918,000 $ 292,000 $ (9,291,000) $ (507,000) $29,412,000
December 31, 1996 $29,412,000 $ 63,000 $(24,984,000) $ (71,000) $ 4,420,000
December 31, 1997 $ 4,420,000 $ (642,000) $ (526,000) -- $ 3,252,000
19
20
DANA CORPORATION AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------
SCHEDULE II(e) - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
---------------------------------------------------------------
VALUATION ALLOWANCE FOR DEFERRED TAX ASSETS
-------------------------------------------
Adjustment
arising
Amounts from change
Balance at Additions "written off" in currency Balance at
beginning charged net of exchange rates end of
of Period to income recoveries and other items period
----------- ---------- ----------- --------------- -----------
Year ended
December 31, 1995 -- -- -- -- --
December 31, 1996 -- $ 4,800,000 -- -- $ 4,800,000
December 31, 1997 $ 4,800,000 $30,400,000 $ (4,800,000) -- $30,400,000
20
21
DANA CORPORATION AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------
SUPPLEMENTARY INFORMATION TO FINANCIAL STATEMENTS
-------------------------------------------------
EMPLOYEE STOCK OPTION PLAN
- ---------------------------
The Company's 1997 Amended Stock Option Plan (1997 Plan) provides for
the granting of options and/or stock appreciation rights (SARs) to key
employees to purchase 13,200,000 shares of common stock at exercise prices that
are no less than 100% of the market value of such stock at date of grant; the
exercise periods may extend for no more than ten years from date of grant.
The number of shares above and all references below to the number of
shares and per share prices have been adjusted for all stock splits and
distributions subsequent to the date the plan was approved.
The number of shares subject to options (by year of grant) at December
31, 1997, and the exercise prices per share were as follows:
Number of Average Price
Shares Per Share Total
---------- ------------ -------------
Year granted-
1988 54,824 $ 18.75 $ 1,028,000
1989 28,650 21.06 602,500
1990 117,044 18.25 2,136,100
1991 84,900 16.38 1,390,200
1992 601,271 20.16 12,119,400
1993 505,748 27.56 13,939,700
1994 830,343 29.06 24,131,800
1995 904,250 31.06 28,084,800
1996 1,316,853 28.13 37,036,500
1997 1,062,900 38.44 40,855,200
---------- ------------
5,506,783 $161,324,200
========== ============
At December 31, 1997, there were 3,478,026 shares available for future
grants under the 1997 Plan, including 350,000 shares which may, at the
discretion of a Committee of the Board of Directors, be issued for stock
distributions under the Company's Additional Compensation Plan. There were no
SARs outstanding at December 31, 1997.
21
22
Options becoming exercisable and options exercised, their exercise
prices and their market prices during the three years ended December 31, 1997,
under the 1997 Plan and former plans were as follows:
Exercise Price Market Price
-------------- --------------
No. Of Avg. Per Avg. Per
Shares Share Aggregate Share Aggregate
--------- ----- ---------- ----- ----------
Options becoming
exercisable
(Market prices
at dates
exercisable):
Year ended
December 31,
1995 814,971 $ 24.32 $ 19,822,000 $ 29.78 $ 24,266,000
1996 1,070,901 27.09 29,016,000 29.08 31,141,000
1997 1,099,888 28.45 31,892,000 36.95 40,638,000
Options exercised
(Market prices
at dates
exercised):
Year ended
December 31,
1995 223,430 $17.93 $ 4,005,000 $28.74 $6,422,000
1996 417,260 19.46 8,119,000 31.53 13,158,000
1997 1,332,210 22.90 30,513,000 41.62 55,447,000
The amount by which proceeds exceeded the par value of shares issued
under options was credited to additional paid-in capital. No amounts were
charged against income either at the time of granting options or issuing shares.
22
23
The following table sets forth (1) the aggregate number of shares of the
Company's common stock subject, at December 31, 1997, to outstanding options,
(2) the average exercise price per share of such options, (3) the aggregate
exercise price of such options, (4) the range of expiration dates of such
options, and (5) the aggregate market value of such shares at February 13, 1998,
based on $55.44 per share, the closing price in the New York Stock Exchange
Composite Transactions Index as reported in THE WALL STREET JOURNAL:
Aggregate Aggregate
No. of Shares Average Market
Covered By Exercise Aggregate Range of Value at
Outstanding Price Exercise Expiration February 13,
Options Per Share Price Dates 1998
------------ --------- ----------- ----------- ------------
1997 Plan 5,506,783 $29.30 $ 161,324,200 7/11/98 $305,282,300
to
7/21/07
At December 31, 1997, 1,079 employees of the Company and its
subsidiaries and affiliates held exercisable options under the 1997 Plan.
EMPLOYEES' STOCK PURCHASE PLAN
- ------------------------------
The Company has an Employees' Stock Purchase Plan which was approved by
the shareholders in 1994. As of December 31, 1997, approximately 37,800
employees of the Company and its subsidiaries were eligible to participate. Of
such employees, approximately 13,500 were participating at December 31, 1997.
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
- -----------------------------------------
The Company has a Directors' Stock Option Plan for non-employee
Directors of the Company which was approved by the shareholders in 1993. The
Plan provides for the granting of options to purchase the Company's common stock
at prices equal to the market value of the stock at the date of grant. The
options are exercisable after one year for a period not to exceed ten years from
the date of grant. In 1995, 1996 and 1997, options were granted for 24,000,
21,000 and 24,000 shares, respectively, at per share exercise prices of $24.81
in 1995, $32.25 in 1996 and $31.81 in 1997. The options outstanding under the
plan expire between April 19, 2003 and April 21, 2007. At December 31, 1997,
options for 99,000 shares were outstanding, 75,000 options were exercisable and
there were 22,000 options available for future grant. During 1997, options for
21,000 shares became exercisable, with an aggregate exercise price of $677,250
and an aggregate market price at date of exercisability of $653,625. As of
February 13, 1998, the aggregate exercise price of the 99,000 options
outstanding under the Plan was $2,845,300 and the aggregate market value of
those options was $5,488,300.
23
24
DANA CORPORATION AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------
SUPPLEMENTARY INFORMATION TO FINANCIAL STATEMENTS
-------------------------------------------------
COMMITMENTS AND CONTINGENCIES
- ------------------------------
The Company and its consolidated subsidiaries are parties to various
legal proceedings (judicial and administrative) arising in the normal course of
business, including proceedings which involve environmental and product
liability claims. "Note 20. Commitments and Contingencies" on pages 38 and 39 of
Dana's 1997 Annual Report is incorporated herein by reference.
With respect to environmental claims, the Company is involved in
investigative and/or remedial efforts at a number of locations, including
"on-site" activities at currently or formerly owned facilities and "off-site"
activities at "Superfund" sites where the Company has been named as a
potentially responsible party. "Environmental Compliance and Remediation" under
"Note 1. Summary of Significant Accounting Policies" at page 28 of Dana's 1997
Annual Report is incorporated herein by reference. Reference is also made to
applicable portions of "Management's Discussion and Analysis of Financial
Condition and Results of Operations" at pages 41-45 of Dana's 1997 annual
report.
With respect to product liability claims, from time to time, the
Company is named in proceedings involving alleged defects in its products.
Currently included in such proceedings are a large number of claims (most of
which are relatively small) based on alleged asbestos-related personal injuries.
At December 31, 1997, approximately 41,000 such claims were outstanding, of
which approximately 3,000 were subject to pending settlement agreements. The
Company has agreements with its insurance carriers providing for the payment of
substantially all of the indemnity costs and the legal and administrative
expenses for these claims. The Company is also a party to a small number of
asbestos-related property damage proceedings. The Company's insurance carriers
are paying the major portion of the defense costs in connection with such cases,
and the Company has incurred no indemnity costs to date.
24
25
EXHIBIT INDEX
No. Description Method of Filing
- --- ----------- ----------------
3-A Restated Articles of Incorporation, effective Filed by reference to Exhibit 4 to Registrant's Form
June 1, 1994 8-A/A, Amendment No.3 filed October 4, 1994
3-B Restated By-Laws, effective December 9, Filed by reference to Exhibit 3-B to Registrant's
1996 Form 10-K for the year ended December 31, 1996
4-A Specimen Single Denomination Stock Filed by reference to Exhibit 4-B to Registrant's
Certificate Registration Statement No. 333-18403 filed
December 20, 1996
No class of long-term debt exceeds 10% of
Registrant's total assets. Registrant
will furnish copies of agreements defining
the rights of debt holders to the
Securities and Exchange Commission upon request.
4-B Rights Agreement, dated as of April 25, 1996, Filed by reference to Exhibit 1 to Registrant's Form
between Registrant and ChemicalMellon 8-A filed May 1, 1996
Shareholder Services, L.L.C., Rights Agent
10-A Additional Compensation Plan, effective Filed by reference to Exhibit A to Registrant's Proxy
January 1, 1995 Statement for its Annual Meeting on April 5, 1995
10-A(1) First Amendment to Additional Compensation Filed by reference to Exhibit 10-A(1) to Registrant's
Plan, dated July 17, 1995 Form 10-Q for the quarter ended June 30, 1995
10-A(2) Second Amendment to Additional Filed by reference to Exhibit 10-A(2) to Registrant's
Compensation Plan, effective January 1, 1996 Form 10-K for the year ended December 31, 1995
10-A(3) Third Amendment to Additional Compensation Filed by reference to Exhibit 10-A(3) to Registrant's
Plan, effective October 20, 1996 Form 10-K for the year ended December 31, 1996
10-E 1997 Stock Option Plan Filed by reference to Exhibit A to Registrant's Proxy
Statement for its Annual Meeting on April 2, 1997
10-E(1) First Amendment to 1997 Stock Option Plan, Filed by reference to Exhibit 10-E(2) to Registrant's
dated February 10, 1997 Form 10-Q for the quarter ended June 30, 1997
10-E(2) Second Amendment to 1997 Stock Option Filed with this Report
Plan, dated September 1, 1997
10-F Excess Benefits Plan, amended February 13, Filed by reference to Exhibit 10-F to Registrant's
1995 Form 10-Q for the quarter ended June 30, 1995
10-G Retirement Plan, effective December 13, 1994 Filed by reference to Exhibit 10-G to Registrant's
Form 10-K for the year ended December 31, 1995
10-G(1) First Amendment to Retirement Plan, adopted Filed by reference to Exhibit 10-G(1) to Registrant's
December 19, 1996 Form 10-K for the year ended December 31, 1996
10-G(2) Second Amendment to Retirement Plan, Filed by reference to Exhibit 10-G(2) to Registrant's
effective June 1, 1998 Form 10-Q for the quarter ended June 30, 1997
25
26
No. Description Method of Filing
- --- ----------- ----------------
10-H Directors Retirement Plan, effective December Filed by reference to Exhibit 10-H to Registrant's
31, 1996 Form 10-Q for the quarter ended June 30, 1997
10-I Director Deferred Fee Plan Filed by reference to Exhibit B to Registrant's Proxy
Statement for its Annual Meeting on April 2, 1997
10-J(1) Employment Agreement between Registrant Filed with this Report
and Southwood J. Morcott, dated December 8,
1997
10-J(2) Employment Agreement between Registrant Filed with this Report
and Joseph M. Magliochetti, dated December 8,
1997
10-J(3) Employment Agreement between Registrant Filed with this Report
and Martin J. Strobel, dated December 8,
1997
10-J(4) Change of Control Agreement between Filed with this Report
Registrant and William J. Carroll, dated
December 8, 1997. There are substantially
similar agreements with Messrs. B.N. Cole,
C.J. Eterovic, M.A. Franklin, C.J. McNamara,
W.L Myers, R.C. Richter, E.J. Shultz, and J.S.
Simpson
10-J(5) Collateral Assignment Split-Dollar Insurance Filed by reference to Exhibit 10J(13) to Registrant's
Agreement for Universal Life Policies between Form 10-K for the year ended December 31, 1992
Registrant and Southwood J. Morcott, dated
April 18, 1989. There are substantially similar
agreements with Messrs. Magliochetti and Strobel.
10-K Supplemental Benefits Plan, effective January Filed by reference to Exhibit 10-K to Registrant's
1, 1996 Form 10-K for the year ended December 31, 1996
10-L(1) 1989 Restricted Stock Plan Filed by reference to Exhibit A of Registrant's Proxy
Statement for its Annual Meeting on April 5, 1989
10-L(2) First Amendment to 1989 Restricted Stock Filed by reference to Exhibit 10-L(2) to Registrant's
Plan, adopted December 10, 1990 Form 10-K for the year ended December 31, 1993
10-L(3) Second Amendment to 1989 Restricted Stock Filed by reference to Exhibit 10-L(3) to Registrant's
Plan, adopted October 18, 1993 Form 10-K for the year ended December 31, 1993
10-L(4) Third Amendment to 1989 Restricted Stock Filed by reference to Exhibit 10-L(4) to Registrant's
Plan, effective October 20, 1996 Form 10-K for the year ended December 31, 1996
10-L(5) Fourth Amendment to 1989 Restricted Stock Filed with this Report
Plan, effective July 21, 1997
10-M Directors' Stock Option Plan Filed by reference to Exhibit B to Registrant's Proxy
Statement for its Annual Meeting on April 7, 1993
10-M(1) First Amendment to Directors' Stock Option Filed by reference to Exhibit 10-M(1) to Registrant's
Plan, effective April 18, 1994 Form 10-K for the year ended December 31, 1995
26
27
No. Description Method of Filing
- --- ----------- ----------------
10-M(2) Second Amendment to the Directors Stock Filed by reference to Exhibit 10-M(2) to Registrant's
Option Plan, effective October 20, 1996 Form 10-K for the year ended December 31, 1996
10-N Supplementary Bonus Plan, effective Filed by reference to Exhibit 10-N to Registrant's
December 12, 1994 Form 10-Q for the quarter ended June 30, 1995
13 The following sections of Registrant's 1997 Filed with this Report
Annual Report to Shareholders, located at
the pages indicated:
"Financial Results," "Financial Statements"
and "Independent Accountant's Report" at
pages 21-40
"Management's Discussion and Analysis of
Financial Condition and Results of Operations"
at pages 41-45 (excluding the charts on these
pages)
"Additional Information - Shareholders'
Investment" at page 50
"Unaudited Quarterly Financial Information"
at page 50
"Eleven Year History - Financial Highlights"
at page 51
21 List of Subsidiaries of Registrant Filed with this Report
23 Consent of Price Waterhouse LLP Filed with this Report
24 Power of Attorney Filed with this Report
27 Financial Data Schedule Filed with this Report
Note: Exhibit Nos. 10-A through 10-N are exhibits required to be filed
- ---- pursuant to Item 14(c) of Form 10-K.
27
28
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
DANA CORPORATION
----------------------------------
(Registrant)
Date: February 27, 1998 By: /s/ Martin J. Strobel
----------------------------- -----------------------------------
Martin J. Strobel, Vice President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
Date: February 27, 1998 /s/ Southwood J. Morcott
----------------------------- -----------------------------------------
Southwood J. Morcott, Chairman of the
Board of Directors and Chief Executive
Officer
Date: February 27, 1998 /s/ John S. Simpson
----------------------------- -----------------------------------------
John S. Simpson, Chief Financial Officer
Date: February 27, 1998 */s/ Charles W. Hinde
----------------------------- -----------------------------------------
Charles W. Hinde, Chief Accounting Officer
Date: February 27, 1998 */s/ B.F. Bailar
----------------------------- -----------------------------------------
B.F. Bailar, Director
Date: February 27, 1998 */s/ E.M. Carpenter
----------------------------- ----------------------------------------
E.M. Carpenter, Director
Date: February 27, 1998 */s/ E. Clark
----------------------------- -----------------------------------------
E. Clark, Director
Date: February 27, 1998 */s/ G.H. Hiner
----------------------------- -----------------------------------------
G.H. Hiner, Director
Date: February 27, 1998 */s/ J.M. Magliochetti
----------------------------- -----------------------------------------
J.M. Magliochetti, Director
28
29
SIGNATURES (Continued)
Date: February 27, 1998 */s/ M.R.Marks
----------------------------- -----------------------------------------
M.R. Marks, Director
Date: February 27, 1998 */s/ R.B. Priory
----------------------------- ----------------------------------------
R. B. Priory, Director
Date: February 27, 1998 */s/ J.D. Stevenson
----------------------------- -----------------------------------------
J.D. Stevenson, Director
Date: February 27, 1998 */s/ T.B. Sumner
----------------------------- -----------------------------------------
T.B. Sumner, Jr., Director
*By: /s/ Martin J. Strobel
--------------------------------------
Martin J. Strobel, Attorney-in-Fact
29