UNITED STATES
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, 2002
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
INDEX
Page
I. REQUIRED INFORMATION
Report of Independent Auditors 3
Financial Statements
Statement of Assets Available for Benefits
as of December 31, 2002 and 2001 4
Statement of Changes In Assets Available for Benefits,
for the Years Ended December 31, 2002 and 2001 5
Notes to Financial Statements 6-10
Supplemental Information*
Schedule of Assets (Held at End of Year)
Schedule H, line 4i 11
II. SIGNATURE 12
III. EXHIBITS
Exhibit 23 -- Consent of Independent Auditors 13
Exhibit 99.1 -- Certification Pursuant to 18 U.S.C. Section 1350 14
*Other schedules required by Section 2520.103-10 of the Department of Labor's
Rules and Regulations for Reporting and Disclosure under ERISA have been omitted
because they are not applicable.
2
REQUIRED INFORMATION
REPORT OF INDEPENDENT AUDITORS
To the Participants and Administrator of the
Dana Corporation Employee Incentive and
Savings Investment Plan
In our opinion, the accompanying statement of assets available for benefits and
the related statement of changes in assets available for benefits present
fairly, in all material respects, the assets available for benefits of the Dana
Corporation Employee Incentive and Savings Investment Plan (the "Plan") at
December 31, 2002 and 2001, and the changes in assets available for benefits for
the years then ended in conformity with accounting principles generally accepted
in the United States of America. 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 of America, 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 our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
at end of year is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is 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. This
supplemental schedule is the responsibility of the Plan's management. This
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Toledo, Ohio
June 27, 2003
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DANA CORPORATION
EMPLOYEE INCENTIVE AND SAVINGS INVESTMENT PLAN
STATEMENT OF ASSETS AVAILABLE FOR BENEFITS
(AMOUNTS IN THOUSANDS)
--------------------------------------------------------------------------------
DECEMBER 31,
2002 2001
Assets:
Investments, at fair value $ 75,686 $ 95,382
Investments, at contract value 43,067 40,963
------------- -------------
Total investments 118,753 136,345
Employee contributions receivable 665 691
Employer contributions receivable 112 111
------------- -------------
Assets available for benefits $ 119,530 $ 137,147
============= =============
The accompanying notes are an integral part of the financial statements.
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DANA CORPORATION
EMPLOYEE INCENTIVE AND SAVINGS INVESTMENT PLAN
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
(AMOUNTS IN THOUSANDS)
--------------------------------------------------------------------------------
YEAR ENDED
DECEMBER 31,
2002 2001
Investment income/(loss):
Interest and dividend income $ 2,914 $ 5,254
Net depreciation of investments (20,286) (20,447)
Interest on employee loans 382 526
------------- -------------
(16,990) (14,667)
Contributions:
Employee contributions 9,149 10,674
Employer contributions 1,502 1,654
------------- -------------
Total additions 10,651 12,328
------------- -------------
Deductions:
Benefit payments (11,196) (13,027)
Administrative expenses (5) --
------------- -------------
Total deductions (11,201) (13,027)
------------- -------------
Net transfers in/(out) (77) 166
-------------- -------------
Net decrease (17,617) (15,200)
Net assets available for benefits
at beginning of year 137,147 152,347
------------- -------------
Net assets available for benefits
at end of year $ 119,530 $ 137,147
============= ============
The accompanying notes are an integral part of the financial statements.
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NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
GENERAL
The Dana Corporation Employee Incentive and Savings Investment Plan (the
"Plan") is a contributory defined contribution employee benefit plan that
was established on March 1, 1984 to provide benefits for all eligible
employees of the participating divisions of Dana Corporation as identified
in the Plan agreement. The Plan is sponsored by Dana Corporation (the
"Company"). It is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). The following is a
brief description of the Plan. Participants should refer to the Plan
agreement for more complete information.
ADMINISTRATION
The administrator of the Plan is the Dana Corporation Investment Committee
which has delegated responsibility for day to day administration of the
Plan to Dana Benefits and Payroll Services. The Company has entered into a
trust agreement with The Vanguard Fiduciary Trust Co. (the "Trustee").
PARTICIPATION
Each employee who is in a covered class of employees within a
participating division as stipulated in the Plan agreement is eligible to
participate in the Plan.
EMPLOYEE CONTRIBUTIONS
An eligible 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 (the "Code"), contributed to his or her account.
Contributions for some participants may be further limited as a result of
other Code requirements.
EMPLOYER CONTRIBUTIONS
The Company contributes to the Plan thirty percent on the first three
percent of the employee's compensation contributed to the Plan and ten
percent on the next three percent contributed to the Plan.
VESTING
Participants are fully vested at all times in both the employee and
employer contributions and earnings thereon, in their individual accounts.
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.
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Upon termination, 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
70-1/2.
Upon a participant's death, the participant's account balance will be paid
to the beneficiary in a 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 vested 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 at a rate equal to 1%
above the "Prime Rate" quoted by The Wall Street Journal under the Money
Rates section.
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. At December 31, 2002, such loans bore
interest rates ranging from 3% to 10%.
PLAN TERMINATION
Although it has not expressed any intention to do so, the Company 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,
participant accounts will be distributed in accordance with the Plan
agreement.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan have been prepared on the accrual
basis of accounting in accordance with accounting principles generally
accepted in the United States of America.
EXPENSES OF THE PLAN
Generally, the Company pays a significant portion of the expenses
associated with the administration of the Plan.
VALUATION OF INVESTMENTS
The Plan's investments in mutual funds are stated at quoted market value.
Investments in guaranteed investment contracts are stated at contract
value, which approximates market value. In determining fair value, the
Board of Directors of the Trustee considers such factors as the benefit
responsiveness of each of the investment contracts. Participant loans
receivable are stated at estimated fair values, consisting of outstanding
principal and any related accrued
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interest. The Plan's investment in the stock fund is based on units which
are recorded at fair 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.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets available for benefits at the date of the financial
statements and reported changes in assets available for benefits during
the reporting period. Actual results could differ from those estimates.
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds, and other investment
securities. Investment securities are exposed to various risks, such as
interest rate, market and credit. Due to the level of risk associated with
certain investment securities and the level of uncertainty related to
changes in the value of investment securities, it is at least reasonably
possible that changes in risks in the near term would materially affect
participants' account balances and the amounts reported in the Statement
of Assets Available for Benefits and the Statement of Changes in Assets
Available for Benefits.
RECLASSIFICATIONS
Certain previously reported 2001 amounts have been reclassified to conform
to the 2002 presentation.
3. INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated April 3, 2002, that the Plan and related trust are
tax-qualified in accordance with applicable sections of the Code.
Therefore, no provision for income taxes has been included in the Plan's
financial statements.
4. PARTIES-IN-INTEREST
Investments in the Dana Stock Fund consisted of 755,983 and 821,362
shares of Dana Corporation common stock at December 31, 2002 and 2001,
respectively. Shares for this fund are purchased in the open market at
fair
8
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 Code and ERISA.
Certain Plan investments are shares of mutual funds or collective
investment funds managed by The Vanguard Group, a company related to the
Trustee. Fees paid by the Plan for the investment management services
amounted to $4,640 for the year ended December 31, 2002.
5. INVESTMENTS
The following presents investments that represent five percent or more of
the Plan's net assets.
DECEMBER 31,
2002 2001
(amounts in thousands except share/unit information)
Dana Corporation Fixed Principal Fund (GIC),
43,067,496 and 40,962,729 shares, respectively $ 43,067 $ 40,963
Dana Stock Fund, 3,419,371 and
3,723,077 units, respectively 8,890 11,430
Putnam Voyager, 1,286,268 and 1,420,628
shares, respectively 16,348 24,577
Putnam New Opportunities, 372,638 and
373,545 shares, respectively 10,594 15,308
Vanguard Primecap Fund, 203,075 and 196,779
shares, respectively 7,851 10,138
Vanguard Wellington Inv, 333,913 and 319,229
shares, respectively 8,201 8,702
Vanguard 500 Index Inv, 136,164 and 127,425
shares, respectively 11,050 13,493
Other investments 12,752 11,734
--------- ---------
Total $ 118,753 $ 136,345
========= =========
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During 2002 and 2001, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) depreciated in
value by $20,286 and $20,447, respectively, as follows:
2002 2001
Mutual funds $18,876 $19,455
Common stock fund 1,410 992
------- -------
$20,286 $20,447
======= =======
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SCHEDULE H, LINE 4i
DANA CORPORATION
EMPLOYEE INCENTIVE AND SAVINGS INVESTMENT PLAN
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2002
(AMOUNTS IN THOUSANDS)
--------------------------------------------------------------------------------
(a) (b) (c) (d) *** (e)
CURRENT
IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT VALUE
* Putnam Investments Putnam New Opportunities $ 10,594
* Putnam Investments Putnam Voyager 16,348
* The Vanguard Group Vanguard 500 Index Inv 11,050
* The Vanguard Group Vanguard IT Treasury Fund 1,536
* The Vanguard Group Vanguard Int'l Growth Fund 2,432
* The Vanguard Group Vanguard LifeSt Conserv Growth 370
* The Vanguard Group Vanguard LifeSt Growth Fund 440
* The Vanguard Group Vanguard LifeSt Income Fund 491
* The Vanguard Group Vanguard LifeSt Moderate Growth Fund 349
* The Vanguard Group Vanguard LT Treasury Inv 941
* The Vanguard Group Vanguard Primecap Fund 7,851
* The Vanguard Group Vanguard Wellington Inv 8,201
* The Vanguard Group Vanguard Windsor Fund 1,464
** AIG Financial Guaranteed Investment Contract
4.17% 2,822
** AIG Financial Guaranteed Investment Contract
5.75%; 9/30/2003 1,890
** AIG Financial Guaranteed Investment Contract
6.86%; 3/31/2004 1,460
** AIG Financial Guaranteed Investment Contract
5.76%; 3/31/2006 1,751
** CDC FA Guaranteed Investment Contract
5.79%; 1/31/2003 133
** CDC FA Guaranteed Investment Contract
5.65%; 2/28/2004 1,491
** CDC FA Guaranteed Investment Contract
6.00%; 3/10/2004 1,985
** CDC FA Guaranteed Investment Contract
3.68%; 9/28/2005 1,187
** CDC FA Guaranteed Investment Contract
5.48%; 12/29/2006 1,298
** CDC FA Guaranteed Investment Contract
5.86%; 3/30/2007 827
** CDC FA Guaranteed Investment Contract
4.03% 803
** Morgan Guaranty Guaranteed Investment Contract
6.04%; 3/31/2006 1,089
** Morgan Guaranty Guaranteed Investment Contract
5.69%; 6/30/2006 2,585
** New York Life Guaranteed Investment Contract
5.93%; 6/30/2005 2,207
** New York Life Guaranteed Investment Contract
5.69%; 7/15/2005 1,655
** Rabobank Guaranteed Investment Contract
4.88%; 9/29/2006 1,578
** Rabobank Guaranteed Investment Contract
5.24%; 6/27/2007 6,468
** Rabobank Guaranteed Investment Contract
4.53% 1,381
** State Street Bank Guaranteed Investment Contract
3.27%; 3/31/2003 491
** State Street Bank Guaranteed Investment Contract
7.07%; 3/31/2004 484
** State Street Bank Guaranteed Investment Contract
6.59%; 9/30/2004 1,224
** UBS Guaranteed Investment Contract
4.46% 6,432
** The Vanguard Group VGI Prime Money Market
1.25% 1,826
* Dana Corporation Dana Stock Fund 8,890
* Participants Participants notes receivable, interest
ranging from 3% to 10% 4,729
--------
$118,753
========
* Parties-in-interest to the Plan.
** Represents the Plan's proportionate share of the investments held within
the Dana Corporation Fixed Principal Fund (GIC).
*** Cost is not required for participant directed investments.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Dana
Corporation Investment Committee, which is the administrator of the Dana
Corporation Employee Incentive and Savings Investment Plan, has duly caused this
annual report to be signed on its behalf by the undersigned thereunto duly
authorized.
Dana Corporation Employee Incentive and
Savings Investment Plan
Date: June 27, 2003 By: /s/ Robert C. Richter
-------------------------------------
Robert C. Richter
Title: Chairman
Dana Corporation Investment Committee
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