UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

 

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.  )

 

Filed by the Registrant þ

 

Filed by a Party other than the Registrant o

 

Check the appropriate box:

 

o  Preliminary Proxy Statement

o  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

þ  Definitive Proxy Statement

o  Definitive Additional Materials

o  Soliciting Material Pursuant to Section 240.14a-11c or Section 240.14a-12

 

DANA HOLDING CORPORATION

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement)

 

Payment of Filing Fee (Check the appropriate box):

 

 

 

 

 

 

 

 

 

 

 

 

Dana Holding Corporation

 

Important Notice Regarding the Availability of Proxy

Materials for the Annual Meeting of

Shareholders to be Held on May 4, 2011

 

Proxy Statement and Notice of

2011 Annual Meeting of Shareholders

 

Our Proxy Statement and Annual Report

are Available at www.dana.com/2011proxy

 

Dana Holding Corporation

3939 Technology Drive

Maumee, Ohio 43537

 

April 4, 2011

 

Dear Fellow Shareholder:

 

It is our pleasure to invite you to attend the 2011 Annual Meeting of Shareholders of Dana Holding Corporation at 8:30 a.m., Eastern Time, on Wednesday, May 4, 2011 at The Westin Detroit Metropolitan Airport, 2501 Worldgateway Place, Romulus, Michigan 48242. Registration will begin at 7:30 a.m., Eastern Time. A map showing the location of the Annual Meeting is on the back cover of the accompanying proxy statement.

 

The annual report, which is included in this package, summarizes Dana’s major developments and includes our consolidated financial statements.

 

Whether or not you plan to attend the 2011 Annual Meeting of Shareholders, please either sign and return the accompanying proxy card in the postage-paid envelope or instruct us by telephone or via the Internet indicating how you would like your shares voted. Instructions on how to vote your shares by telephone or via the Internet are on the proxy card enclosed with this proxy statement.

 

Sincerely,

 

 

John M. Devine

Executive Chairman & Interim Chief Executive Officer

 

PROXY STATEMENT

 

Table of Contents

 

 

Dana Holding Corporation

Notice of Annual Meeting of Shareholders

May 4, 2011

 

 

 

 

We invite you to attend the Dana Holding Corporation 2011 Annual Meeting of Shareholders to:

 

1. Elect five Directors for a one-year term expiring in 2012 or upon the election and qualification of their successors;

 

2. Act on an advisory vote on executive compensation;

 

3. Act on an advisory vote on the frequency of the advisory vote on executive compensation;

 

4. Ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2011; and

 

5. Transact any other business that is properly submitted before the Annual Meeting or any adjournments or postponements of the Annual Meeting.

 

In addition to the items above, the 4.0% Series A Preferred Convertible Holders (Series A Preferred Holders) will vote separately as a class to elect three Directors for a one-year term expiring in 2012 or upon the election and qualification of their successors.

 

The record date for the Annual Meeting is March 7, 2011 (the Record Date). Only shareholders of record at the close of business on the Record Date can vote at the Annual Meeting. Dana mailed this Notice of Annual Meeting to those shareholders. Action may be taken at the Annual Meeting on any of the foregoing proposals on the date specified above or any date or dates to which the Annual Meeting may be adjourned or postponed.

 

Dana will have a list of shareholders who can vote at the Annual Meeting available for inspection by shareholders at the Annual Meeting and, for 10 days prior to the Annual Meeting, during regular business hours at Dana’s Law Department, 3939 Technology Drive, Maumee, Ohio 43537.

 

If you plan to attend the Annual Meeting, but are not a shareholder of record because you hold your shares in street name, please bring evidence of your beneficial ownership of your shares (e.g., a copy of a recent brokerage statement showing the shares) with you to the Annual Meeting. You also must bring the proxy card your broker provided to you if you intend to vote at the meeting. See the “Questions and Answers” section of the proxy statement for a discussion of the difference between a shareholder of record and a street name holder.

Whether or not you plan to attend the Annual Meeting and whether you own a few or many shares of stock, the Board of Directors urges you to vote promptly. Registered holders may vote by signing, dating and returning the enclosed proxy card, by using the automated telephone voting system, or by using the Internet voting system. You will find instructions for voting by telephone and by the Internet on the proxy card and in the “Questions and Answers” section of the proxy statement.

 

By Order of the Board of Directors,

 

 

Marc S. Levin

Senior Vice President, General Counsel,

and Corporate Secretary

 

April 4, 2011

 

Dana Holding Corporation

 

3939 Technology Drive

Maumee, Ohio 43537

 

2011 PROXY STATEMENT

 

QUESTIONS AND ANSWERS

 

The Board of Directors is soliciting proxies to be used at the Annual Meeting of Shareholders to be held on Wednesday, May 4, 2011, beginning at 8:30 a.m., Eastern Time, at The Westin Detroit Metropolitan Airport, 2501 Worldgateway Place, Romulus, Michigan 48242. This proxy statement and the enclosed form of proxy are being made available to shareholders beginning April 4, 2011.

 

 

What is a proxy?

 

A proxy is your authorization for someone else to vote for you in the way that you want to vote. When you complete and submit a proxy card or use the automated telephone voting system or the Internet voting system, you are submitting a proxy. Dana’s Board of Directors is soliciting this proxy. All references in this proxy statement to “you” will mean you, the shareholder, and to “yours” will mean the shareholder’s or shareholders’, as appropriate.

 

 

What is a proxy statement?

 

A proxy statement is a document the United States Securities and Exchange Commission (the SEC) requires to explain the matters on which you are asked to vote on by proxy and to disclose certain related information. This proxy statement and the accompanying proxy card were first mailed to the shareholders on or about April 4, 2011.

 

 

What is the purpose of the Annual Meeting?

 

At our Annual Meeting, shareholders will act upon the matters outlined in the notice of meeting, including i) the election of directors; ii) an advisory vote on executive compensation; iii) an advisory vote on the frequency of the advisory vote on executive compensation; and iv) ratification of the selection of Dana’s independent registered public accounting firm. Also, management will report on the state of Dana and respond to questions from shareholders.

 

What is the record date and what does it mean?

 

The record date for the Annual Meeting is March 7, 2011 (the Record Date). The Record Date was established by the Board of Directors as required by Delaware law. Holders of common stock and holders of 4.0% Series A Preferred Convertible Stock (Series A Preferred) and 4.0% Series B Preferred Convertible Stock (Series B Preferred, and together with Series A Preferred, Preferred Stock) at the close of business on the Record Date are entitled to receive notice of the meeting and to vote at the meeting and any adjournments or postponements of the meeting.

 

Who is entitled to vote at the Annual Meeting?

 

Holders of our common stock and holders of our Preferred Stock at the close of business on the Record Date may vote at the meeting.

 

On March 7, 2011, 146,263,284 shares of our common stock, 2,500,000 shares of Series A Preferred and 5,221,199 shares of Series B Preferred were outstanding, and accordingly, are eligible to be voted. Pursuant to our Restated Certificate of Incorporation, the holders of our Preferred Stock vote their Preferred Stock on an as-if-converted basis based on a conversion price of $11.93. As of March 7, 2011, the outstanding Series A Preferred was convertible into approximately 20,955,574 shares of common stock, and the outstanding Series B Preferred was convertible into approximately 43,765,288 shares of common stock.

 

 

What are the voting rights of the holders of common stock and Preferred Stock?

 

Each outstanding share of common stock will be entitled to one vote on each matter to be voted upon.

 

The number of votes for each share of Preferred Stock is calculated in accordance with Dana’s Restated Certificate of Incorporation. At this year’s meeting, each outstanding share of Preferred Stock will be entitled to approximately 8.382 votes on each matter to be voted upon. As a result, the holders of our Series A Preferred will have approximately 20,955,574 shares of common stock on an as-if-converted basis to vote and the holders of our Series B Preferred will have approximately 43,765,288 shares of common stock on an as-if-converted basis to vote. The holders of Preferred Stock are permitted to vote on this as-if-converted basis along with the holders of common stock on (i) the election of directors, (ii) an advisory vote on executive compensation, (iii) an advisory vote on the frequency of the advisory vote on executive compensation and (iv) the ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered accounting firm and for all other matters that properly come before the meeting.

 

 

Who elects the Series A Preferred Directors?

 

Our Restated Certificate of Incorporation and the Shareholders Agreement dated January 31, 2008 give the holders of our Series A Preferred the right to elect three directors at our Annual Meeting. Only the holders of our Series A Preferred will be entitled to vote to elect these three directors to our Board. Currently, Centerbridge Capital Partners, L.P. and certain of its affiliates (collectively, Centerbridge) are the only holders of our Series A Preferred.

 

 

What is the difference between a shareholder of record and a “street name” holder?

 

If your shares are registered directly in your name, you are considered the shareholder of record with respect to those shares.

 

If your shares are held in a stock brokerage account or by a bank or other nominee, then the brokerage firm, bank or other nominee is considered to be the shareholder of record with respect to those shares. However, you still are considered the beneficial owner of those shares, and your shares are said to be held in “street name.” Street name holders generally cannot vote their shares directly and must instead instruct the brokerage firm, bank or other nominee how to vote their shares. See “How do I vote my shares?” below.

 

 

How do I vote my shares?

 

If you are a shareholder of record as of March 7, 2011, as opposed to a street name holder, you will be able to vote in four ways: In person, by telephone, by the Internet, or by proxy card.

To vote by proxy card, sign, date and return the enclosed proxy card. To vote by using the automated telephone voting system or the Internet voting system, the instructions for shareholders of record are as follows:

 

TO VOTE BY TELEPHONE: 800-560-1965

 

 

(OR)

 

TO VOTE BY THE INTERNET: www.ematerials.com/dan

 

 

If you submit a proxy to Dana before the Annual Meeting, the persons named as proxies will vote your shares as you directed. If no instructions are specified, the proxy will be voted: i) “FOR” all of the listed director nominees; ii) “FOR” approval of the advisory vote on executive compensation; iii) “FOR” approval of an annual advisory vote on executive compensation; and iv) “FOR” ratification of PricewaterhouseCoopers LLP as the independent registered public accounting firm.

 

You may revoke a proxy at any time before the proxy is exercised by:

 

 

(2) submitting another properly completed proxy card that is later dated;

 

(3) voting by telephone at a subsequent time;

 

(4) voting by Internet at a subsequent time; or

 

(5) voting in person at the Annual Meeting.

 

If you hold your shares in “street name,” you must provide voting instructions for your shares in the manner prescribed by your brokerage firm, bank or other nominee. Your brokerage firm, bank or other nominee has enclosed or otherwise provided a voting instruction card for you to use in directing the brokerage firm, bank or other nominee how to vote your shares. If you hold your shares in street name and you want to vote in person at the Annual Meeting, you must obtain a legal proxy from your broker and present it at the Annual Meeting. You will also need to provide to us a brokerage statement if you intend to attend the Annual Meeting.

 

What is a quorum?

 

There were 210,984,146 shares of Dana’s common stock, including Preferred Stock on an as-if-converted basis for voting purposes, issued and outstanding on the Record Date. A majority of the issued and outstanding

shares, on an as-if-converted basis, or 105,492,073 shares, present or represented by proxy, constitutes a quorum. A quorum must exist to conduct business at the Annual Meeting.

 

 

Will my shares be voted if I do not provide my proxy?

 

For shareholders of record:  If you are the shareholders of record and you do not vote by proxy card, by telephone or via the Internet or in person at the Annual Meeting, your shares will not be voted at the Annual Meeting.

 

For holders in street name:  If your shares are held in street name, your shares may be voted even if you do not provide the brokerage firm with voting instructions. Under New York Stock Exchange (the NYSE) rules, your broker may vote shares held in street name on certain “routine” matters. The NYSE rules consider the ratification of the appointment of our independent registered public accounting firm to be a routine matter. As a result, your broker is permitted to vote your shares on this matter at its discretion without instruction from you.

 

When a proposal is not a routine matter, such as the election of directors, the advisory vote on executive compensation and the advisory vote on the frequency of the advisory vote on executive compensation, and you have not provided voting instructions to the brokerage firm with respect to that proposal, the brokerage firm cannot vote the shares on that proposal. The missing votes for these non-routine matters are called “broker non-votes.” Broker non-votes will be treated as shares that are present and entitled to vote for purposes of determining the presence of quorum, but not as shares present and voting on a specific proposal.

 

 

What vote is required?

 

Proposal I — Election of Directors:  If a quorum exists, the election requires a plurality vote of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote, meaning that the director nominees with the most affirmative votes are elected to fill the available seats. As outlined in our Bylaws, any director who receives more “withheld” votes than “for” votes in an uncontested election is required to tender his or her resignation to the Board for consideration in accordance with the procedures set forth in the Bylaws. Our Nominating and Corporate Governance Committee will then evaluate the best interests of Dana and its shareholders and will recommend to the Board the action to be taken with respect to the tendered resignation. Following the Board’s determination, Dana will promptly publicly disclose the Board’s decision of whether or not to accept the resignation and an explanation of how the decision was reached, including, if applicable, the reasons for rejecting the resignation.

 

Proposal II — Advisory Vote on Executive Compensation:  If a quorum exists, the proposal represents an advisory vote and the results will not be binding on the Board or Dana. The affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the matter will constitute the shareholders’ non-binding approval with respect to our executive compensation programs. The Board will review the voting results and take them into consideration when making future decisions regarding executive compensation.

 

Proposal III — Advisory Vote on the Frequency of the Advisory Vote on Executive Compensation:  If a quorum exists, the proposal represents an advisory vote and the results will not be binding on the Board or Dana. While the proposal requires the affirmative vote of the majority of the shares present in person or represented by proxy at the Annual Meeting for approval, the affirmative vote of a plurality of the shares present or represented at the Annual Meeting and entitled to vote on the matter will be considered the shareholders’ non-binding approval as to the frequency of submission to shareholders of executive compensation proposals. Shareholders will be deemed to have approved the alternative (either one, two or three years) that receives the most votes, even if that alternative receives less than a majority of the votes cast. The Board will review the voting results and take them into consideration when making future decisions regarding the frequency of the advisory vote on executive compensation.

Proposal IV — Ratify the Appointment of the Independent Registered Public Accounting Firm:  If a quorum exists, the proposal to ratify the appointment of the independent registered public accounting firm must receive the affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal. Therefore, abstentions will have the same effect as voting “Against” the proposal. Brokers will have discretionary voting power to vote this proposal so we do not anticipate any broker non-votes (described above).

 

Dana will vote properly completed proxies it receives prior to the Annual Meeting in the way you direct. If you do not specify how you want your shares voted, they will be voted in accordance with management’s recommendations. If you hold shares in more than one account, you must vote each proxy and/or voting instruction card you receive to ensure that all shares you own are voted. No other matters are currently scheduled to be presented at the Annual Meeting. An independent third party, Wells Fargo Bank, N.A., will act as the inspector of the Annual Meeting and the tabulator of votes.

 

 

Who pays for the costs of the Annual Meeting?

 

Dana pays the cost of preparing and printing the proxy statement and soliciting proxies. Dana will solicit proxies primarily by mail, but may also solicit proxies personally and by telephone, the Internet, facsimile or other means. Dana will use the services of D.F. King & Co., Inc., a proxy solicitation firm, at a cost of $9,500 plus out-of-pocket expenses and fees for any special services. Officers and regular employees of Dana and its subsidiaries may also solicit proxies, but they will not receive additional compensation for soliciting proxies. Dana also will reimburse banks, brokerage houses and other custodians, nominees and fiduciaries for their out-of-pocket expenses for forwarding solicitation materials to beneficial owners of Dana’s common stock and Preferred Stock.

 

 

How can shareholders nominate individuals for election as directors or propose other business to be considered by the shareholders at the 2012 Annual Meeting of Shareholders?

 

All shareholder nominations of individuals for election as directors or proposals of other items of business to be considered by shareholders at the 2012 Annual Meeting of Shareholders must comply with applicable laws and regulations, including SEC Rule 14a-8, as well as Dana’s Restated Certificate of Incorporation, Bylaws, and Shareholders Agreement, and must be submitted in writing to our Corporate Secretary, Dana Holding Corporation, 3939 Technology Drive, Maumee, Ohio 43537.

 

Under Dana’s Bylaws, our shareholders must provide advance notice to Dana if they wish to nominate individuals for election as directors or propose an item of business to be considered by shareholders at the 2012 Annual Meeting of Shareholders. For the 2012 Annual Meeting of Shareholders, notice must be received by Dana’s Corporate Secretary no later than the close of business on February 4, 2012 and no earlier than the close of business on January 5, 2012.

 

If Dana moves the 2012 Annual Meeting of Shareholders to a date that is more than 30 days before or more than 70 days after the date which is the one year anniversary of this year’s Annual Meeting date (i.e., May 4, 2012), Dana must receive your notice no earlier than the close of business on the 120th day prior to the meeting date and no later than the close of business on the later of the 90th day prior to the meeting date or the 10th day following the day on which Dana first makes a public announcement of the meeting date. In no event will a public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a shareholder’s notice as described above.

 

If Dana increases the number of directors to be elected to the Board of Directors at the 2012 Annual Meeting of Shareholders and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors at least 100 days prior to the one year anniversary of this year’s Annual Meeting date (i.e., May 4, 2012), then Dana will consider your notice timely (but only with respect to nominees for any new positions created by such increase) if Dana receives your notice no later than the close of business on the 10th day following the day on which Dana first makes the public announcement of the increase in the number of directors.

Notice Requirements to Nominate Individuals for Election to the Board of Directors

 

A shareholder’s notice to nominate individuals for election to the Board of Directors must provide: (A) all information relating to each individual that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to and in accordance with Section 14(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act) and the rules and regulations promulgated thereunder, and (B) such person’s written consent to being named in the proxy statement as a nominee and to serve as a director if elected.

 

Notice Requirements for Shareholder Proposals

 

A shareholder’s notice to propose other business to be considered by the 2012 Annual Meeting of Shareholders must provide a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws, the language of the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such shareholder and the beneficial owner, if any, on whose behalf the proposal is made

 

Additional Notice Requirements — Shareholder/Beneficial Owner Disclosures

 

Any shareholder or beneficial owner, if any, on whose behalf the nomination or proposal is to be made at the 2012 Annual Meeting of Shareholders must provide (A) the name and address of the shareholder or beneficial owner, (B) the class or series and number of shares of capital stock of Dana which are owned beneficially and of record by the shareholder or beneficial owner, (C) a description of any agreement, arrangement or understanding with respect to the nomination or proposal between or among the shareholder and/or beneficial owner, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, (D) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the shareholder’s notice by, or on behalf of, the shareholder and beneficial owners, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, the shareholder or beneficial owner, whether or not such instrument or right will be subject to settlement in underlying shares of capital stock of Dana, with respect to shares of stock of Dana, (E) a representation that the shareholder is a holder of record of stock of Dana entitled to vote at the 2012 Annual Meeting of Shareholders and intends to appear in person or by proxy at the meeting to propose such business or nomination, (F) a representation whether the shareholder or the beneficial owner, if any, intends or is part of a group which intends (1) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of Dana’s outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (2) otherwise to solicit proxies from shareholders in support of such proposal or nomination, and (G) any other information relating to the shareholder and beneficial owner, if any, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in an election contest pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder.

 

The notice requirements above will be deemed satisfied by a shareholder with respect to business other than a director nomination if the shareholder has notified Dana of his, her or its intention to present a proposal at the 2012 Annual Meeting of Shareholders in compliance with applicable rules and regulations promulgated under the Exchange Act and the shareholder’s proposal has been included in a proxy statement that has been prepared by Dana to solicit proxies for the 2012 Annual Meeting of Shareholders. For the 2012 Annual Meeting of Shareholders, notice must be received by Dana’s Corporate Secretary no later than the close of business on February 4, 2012 and no earlier than the close of business on January 5, 2012. Dana may require any proposed nominee to furnish such other information as it may reasonably require in determining the eligibility of the proposed nominee to serve as a director of Dana.

Dana’s Bylaws specifying the advance notice and additional requirements for shareholder nomination and shareholder proposal requirements are available on Dana’s website at www.dana.com.

 

 

How many of Dana’s directors are independent?

 

Dana’s Board of Directors has determined that seven of Dana’s eight current directors, or 87.5%, are independent. For a discussion of the Board of Directors’ basis for this determination, see the section of this proxy statement entitled “Director Independence and Transactions of Directors with Dana.”

 

 

Does Dana have a Code of Ethics?

 

Yes, Dana has Standards of Business Conduct for Employees, which applies to employees and agents of Dana and its subsidiaries and affiliates, as well as Standards of Business Conduct for Members of the Board of Directors. The Standards for Business Conduct for Employees and Standards of Business Conduct for Members of the Board of Directors are available on Dana’s website at www.dana.com.

 

 

Is this year’s proxy statement available electronically?

 

Yes. You may view this proxy statement, and the proxy card as well as the 2010 annual report, electronically by going to our website at www.dana.com/2011proxy and clicking on the document you wish to view, either the proxy statement and proxy card or annual report.

 

 

How can I find the results of the Annual Meeting?

 

Preliminary results will be announced at the Annual Meeting. Final results will be published in a Current Report on Form 8-K to be filed with the SEC within four business days after the Annual Meeting. If the official results are not available at that time, we will provide preliminary voting results in the Form 8-K and will provide the final results in an amendment to the Form 8-K as soon as they become available.

 

 

A copy of Dana’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010, as filed with the Securities and Exchange Commission, may be obtained without charge upon written request to the Corporate Secretary, Dana Holding Corporation, 3939 Technology Drive, Maumee, Ohio 43537.

 

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 4, 2011.

 

The proxy statement and Dana’s annual report to security holders are available on our website at www.dana.com/2011proxy.

 

Following are the names and ages of the executive officers of Dana, their positions with Dana and summaries of their backgrounds and business experience. For purposes of this proxy statement, we have identified our executive officers as those individuals who serve on Dana’s Strategy Board. All executive officers are elected or appointed by the Board of Directors and hold office until the annual meeting of the Board of Directors following the annual meeting of shareholders in each year.

 

 

COMPENSATION DISCUSSION AND ANALYSIS

 

Executive Summary

 

This Compensation Discussion and Analysis describes the key principles and approaches used to determine the elements of compensation awarded to, earned by and paid to each of our named executive officers. This discussion provides information and context to the compensation disclosures included in accompanying compensation tables and corresponding narrative discussion and footnotes below, and this discussion should be read in conjunction with those disclosures.

 

We believe that our compensation program objectives outlined below have resulted in decisions on executive compensation that have appropriately encouraged the achievement of financial goals that, despite recent challenging economic conditions, have benefited our shareholders and are expected to drive long term shareholder value. We had an outstanding 2010 fiscal year, meeting or exceeding all of our financial goals. Summarized below are some key highlights of our financial performance for fiscal 2010:

 

 

These achievements represent the continuation of a strong growth trend. We achieved positive net income after several years of losses, increased our revenues and free cash flow, as well as provided strong shareholder returns through an increased market price per share of our common stock.

 

Objectives and Elements of Our Compensation Program

 

The overall objectives of our executive compensation program are to attract, motivate, reward and retain talent. We believe that in order to achieve our objectives, our compensation and benefits must be competitive with executive compensation arrangements generally provided to executive officers at similar levels at other companies where we compete for talent. The various components of Dana’s executive compensation program are designed to:

 

 

The principal elements of our executive compensation program are:

 

 

Certain executives, including some of our named executive officers, have executive employment agreements, supplemental executive retirement plans (SERPs), and change in control agreements, as described in the “Executive Agreements” section below.

 

Administration

 

The Compensation Committee of the Board of Directors assists the Board in fulfilling its obligations related to the compensation of Dana’s executive officers, and in general, with respect to compensation and benefits programs relating to all employees. Our current Compensation Committee consists of a chairman and independent directors who are appointed annually by the Board. Under its Charter, the Compensation Committee must have a minimum of three members who must meet the requirements for independence as set forth by the SEC, the New York Stock Exchange and our Standards of Director Independence. Members of the Committee must also qualify as “non-employee directors” within the meaning of Exchange Act Rule 16b-3 and as “outside directors” for purposes of Section 162(m) of the Internal Revenue Code.

 

The Compensation Committee members during 2010 were: Keith E. Wandell (Chairman), Mark A. Schulz, David P. Trucano and Joseph C. Muscari (since May 2010). Jerome B. York was a member of this committee until his unexpected death in March 2010.

 

The Compensation Committee’s responsibilities include, but are not limited to, reviewing our executive compensation philosophy and strategy, participating in the performance evaluation process for our President and Chief Executive Officer (CEO), setting base salary and incentive opportunities for our Executive Chairman, CEO and other senior executives, establishing the overarching pay philosophy for Dana’s management team, establishing incentive compensation and performance goals and objectives for our executive officers and other eligible executives and management, and determining whether performance objectives have been achieved. The Compensation Committee also recommends to the Board, employment, consulting and severance agreements for key senior executives designated by our CEO with the assistance of our Chief Administrative Officer (CAO) and Senior Vice President, Human Resources. These executives are not members of the Compensation Committee, but review and prepare materials for the Committee and attend portions of committee meetings. Executive sessions are held without the participation of any member of executive management, including the named executive officers.

 

Compensation Consultant

 

The Compensation Committee retained Mercer for 2010 as an independent advisor to the Compensation Committee. Our management utilized Towers Watson (Towers) and, in later 2010, Pay Governance for compensation and benefits advice. On a limited basis in 2010, our Board consulted with Pay Governance related to CEO pay. In addition to its services for the Compensation Committee, separate and distinct from executive and director compensation consulting services, as described above, Mercer provided select services for Dana in various other capacities in 2010. Those services included international pooling consulting, and other global compensation consulting where Mercer data was most prevalent in a given country, employee benefits reviews and administration.

 

Our Peer Group and Use of Competitive Market Data

 

Our executive management as well as the Compensation Committee reviews competitive market data to assist in decision-making regarding Dana’s compensation and benefits programs. Both reviewed market pay data among comparably-sized general industrial companies, as provided by Towers. The market pay data were gathered from Towers’ 2010 U.S. CDB General Industry Executive Database which contains compensation data from over 750 participating companies in the U.S.

 

Our management and the Compensation Committee review the pay and performance of each named executive officer and, in the process, use survey pay data to establish appropriate compensation levels. In the latter part of 2010, the Compensation Committee engaged Mercer to develop a peer group for use in

establishing executive pay levels. The Compensation Committee revised Dana’s peer group based on the following considerations:

 

 

 

Our revised peer group includes the following companies: Eaton Corporation, TRW Automotive Holdings, Navistar International Corp, Cummins Inc., Parker-Hannifin Corp, Lear Corp, Federal-Mogul Corp, Oshkosh Corp, Tenneco Inc, ArvinMeritor Inc, BorgWarner Inc, Manitowoc Co, Joy Global Inc, Exide Technologies and Timken Co.

 

As part of the normal year-end review process, our management worked with both Pay Governance and Mercer, utilizing survey data and peer group data to perform an annual review of our competitiveness in relation to base pay, annual and long term incentives and retirement benefits. External data is used to develop a competitive range considering market median levels of total compensation and benefits. From time to time, Dana may choose to exceed the market median pay range to attract the right talent or as individual performance dictates, but it is our general policy to target the 50th percentile.

 

Base Salaries

 

Base salaries are intended to be market-competitive and to provide a minimum level of guaranteed compensation. The base salaries of the executive officers, including our named executive officers, were determined when they first joined Dana, when they were promoted from within Dana or after other significant changes in an executive’s responsibilities. Dana’s philosophy is to target a range of +/-15% of the 50th percentile for senior executives. From time to time, when recruiting key talent from other companies both within and outside of the automotive industry or promoting from within Dana, base salaries could exceed the range, based on the candidate’s current salary or other factors. Our Executive Chairman, CEO, CAO, and Senior Vice President, Human Resources are responsible for making salary recommendations to the Compensation Committee for executive officers, other than with respect to their own salary. Our named executive officers received an average base salary increase of approximately 3% for 2010. Messrs. Devine and Sweetnam did not receive merit increases.

 

Mr. Devine’s base salary was increased from $1,000,000 to $1,040,000 as a result of assuming the additional role of Interim CEO in November 2010, when he succeeded Mr. Sweetnam.

 

Annual Incentive Program

 

Dana maintains an Annual Incentive Program for approximately 1,000 employees, including our named executive officers, that provides cash incentives driven by Dana’s performance. Each year, the Compensation Committee reviews and approves an annual cash bonus target for the named executive officers, as a percentage of base salary. Effective 2011, the named executive officers may earn from 0% to 200% of their individual target depending on actual corporate financial performance compared to the pre-established goals set by the Compensation Committee. The Compensation Committee also establishes the performance metrics and goals that are used for determining AIP payouts.

 

The 2010 AIP was designed around achieving certain financial target performance goals, which were Earnings Before Interest, Taxes, less Restructuring and certain other adjustments or “EBIT-R” (60% weighted) of $114 million and Free Cash Flow or “FCF” of $100 million defined as cash flow from operations less capital expenditures and reorganization-related claim payments (40% weighted). We believe utilizing EBIT-R

as a component of short-term compensation was important because this metric measures our operational profitability without discouraging the pursuit of restructuring and other actions that are expected to provide long-term value. Additionally, the Compensation Committee believed that FCF was a fundamental metric to use to determine short term incentive because of the significance of maintaining sufficient capital in industries such as ours. The initially established AIP goals for 2010 were subject to certain adjustments as approved by the Compensation Committee relating to higher sales volumes, exchange rate movements and the sale of the Structural Products business. After consideration of these effects, the revised AIP goal was $223 million for EBIT-R and $122 million for FCF. Our 2010 actual results for EBIT-R were $202 million and for FCF were $242 million. This performance by Dana in 2010 resulted in a payout of 147% of the established targets.

 

The value of annual incentive award payable based on annual base salary for reaching 2010 performance goals under the 2010 AIP at threshold, target and maximum for each of our named executive officers is set forth below in the table titled “Grants of Plan-Based Awards”. The actual award paid is set forth in the Non-Equity Incentive Plan Compensation column of the “Summary Compensation Table”.

 

Individual Discretionary Award

 

Our Compensation Committee determined that the 2010 contribution of certain executive officers should be further recognized and as a result made discretionary awards to these individuals. Messrs. Yost, Wallace and Bryant each received cash awards in recognition of taking on additional responsibilities during 2010. The actual award paid is set forth in the Bonus column of the “Summary Compensation Table”.

 

Long Term Incentive Awards and 2010 Long Term Incentive Program

 

We believe that our long term incentive awards serve an important role by balancing short term goals with long term shareholder value creation and minimizing risk taking behaviors that could negatively affect long term results. All long term incentive awards are made pursuant to the 2008 Dana Holding Corporation Omnibus Incentive Plan (the Plan). These awards are provided to achieve the following objectives:

 

 

2010 Long Term Incentive Award (LTIP)

 

Approximately 140 senior management employees designated by Dana, including our named executive officers, participated in the 2010 LTIP (excluding Mr. Devine). For 2010, Dana utilized market data as described in the annual review mentioned above to create a long term incentive compensation structure for the management team, including our named executive officers. Each of our named executive officers receives an LTIP award based on a target dollar value assigned to his or her position based on our market comparison for similar positions, utilizing both peer and market data. For 2010, our senior executives, including our named executive officers, were eligible for long term incentive awards consisting of 1/3 stock options, 1/3 performance shares and 1/3 performance cash.

 

We believe it is important to provide our senior executives, including the named executive officers, with both stock options and performance-based awards because the awards serve different purposes. Stock options, in particular, encourage executives to achieve long term goals because they only have value to the recipient if there are gains in the stock price that would also create value for our shareholders. Since the executive receives value from the stock option grants only in the event of stock appreciation, stock options are a strong incentive to (i) improve long term financial performance, (ii) focus on longer horizon decisions as well as short term decisions and (iii) to increase shareholder value. Stock option awards under the 2010 LTIP have a contractual term of 10 years and vest ratably over 3 years.

 

Performance-based awards encourage the executive to achieve Dana’s long-term goals, while being rewarded only if certain financial objectives are achieved. In addition, awards paid over time in our LTIP are intended to have a retentive effect. Performance-based awards under the 2010 LTIP are based on two key metrics; Return On Invested Capital (“ROIC”) (75% weighted) and Net New Business Wins (25% weighted). Our 2010 results for ROIC were 8.3% and $846 million for Net New Business Wins. Dana believes these two metrics are significant in that ROIC ensures management uses the company’s capital in an effective manner which drives shareholder returns and Net New Business Wins which also has a profitability threshold, ensures profitable growth in the future and that we are pursuing the right business. Our performance-based awards also include performance shares and performance cash.

 

Performance shares granted in 2010 cover three performance cycles (2010, 2011 and 2012). Each cycle is measured independently using metrics that are aligned to each year’s annual operating plan goals. Each year has the potential to be earned at, below, or above target but the award vests at the end of the performance period in early 2013. Each metric has a payout ranging from twenty five percent (25%) to two hundred percent (200%) of target. In the event performance exceeds 100% in total, the Compensation Committee has discretion to pay the portion in excess of 100% in either shares or cash.

 

Performance cash granted in 2010 covers the same three performance cycles as performance shares (2010, 2011 and 2012). Each year has the potential to be earned at, below, or above target with the award paying out shortly after completion of each annual performance cycle. Performance cash for the 2010 LTIP is paid annually to bridge the gap which existed in the absence of an LTIP prior to 2008. Each metric has a payout ranging from twenty five percent (25%) to two hundred fifty percent (250%) of target.

 

Based on 2010 company performance, the Compensation Committee certified that we achieved 103% of target for the 2010 cycle. The value of stock option awards and performance shares granted to each of our named executive officers in 2010 is set forth in the “Summary Compensation Table” below.

 

2008 Performance Share Award

 

As previously disclosed in the Proxy Statements for 2008 and 2009, Dana granted performance shares in 2008. These grants were scheduled to vest in 25% increments in 2008 and 2009 and the final 50% in 2010 based on meeting or exceeding certain financial performance goals. The 2008 tranche for all awards was forfeited because Dana did not meet the performance goals set by the Compensation Committee. The 2009 tranche for all awards was earned and issued at 100% target-level based on performance. The 2010 tranche will vest at 100% of target based on achieving the same goals established for the 2010 AIP. Messrs. Devine and Sweetnam did not participate in this award. The actual award paid is provided in the “Option Exercises and Stock Vested During 2010 Fiscal Year Table” below.

 

2010 Award to Mr. Devine

 

In November 2010, Mr. Devine became Interim CEO in addition to remaining our Executive Chairman as a result of Mr. Sweetnam’s resignation as CEO. As part of Mr. Devine’s compensation package, he received a long term incentive grant consisting of stock options. This award was made as an inducement to Mr. Devine to assume the additional role of Interim CEO.

 

Equity awards granted for each of our named executive officers are set forth in the “Grants of Plan-Based Awards” table below.

Equity-Based Grant Practices

 

Under our equity-based granting practices, we make regular equity-based grants to eligible employees, including named executive officers, in the first quarter of the calendar year at a regularly scheduled meeting of the Compensation Committee. Under our current practice, the exercise price, in the case of stock options, is the closing price of our common stock on the New York Stock Exchange on the day of the grant. We also may award equity-based grants during the year to newly hired executive officers as part of their compensation package or to executives based on a promotion during the year. In the case of equity-based grants to newly hired employees who may be executive officers within the meaning of Section 162(m) of the Internal Revenue Code (Covered Employees), or officers subject to Section 16 of the Exchange Act (Section 16 Officers), including named executive officers, the grants are authorized by the Compensation Committee.

 

Mitigation of Potential Risk in Pay Programs

 

The Compensation Committee has reviewed our compensation policies and practices and determined that none are reasonably likely to have a material adverse effect on Dana. In order to avoid excessive risk taking behaviors, Dana has put into place several mechanisms, including, but not limited to, stock ownership guidelines, caps on annual incentive payouts, financial performance-based annual incentive programs, long term incentive awards (which are delivered primarily in the form of equity), practice of using a mix of multiple types of awards, and a practice of using multiple metrics to determine annual and long term incentive payouts. Stock ownership guidelines, as discussed below, encourage our executives to maintain a certain level of company ownership, thus encouraging them to have an interest in the long term success of the company. Long term incentive awards such as restricted stock units or performance shares or equity acquired externally, count toward our stock ownership guidelines. Annual incentive payouts are capped to avoid decisions that may lead to an exorbitant payout in one year to the detriment of performance in following years. In addition, our 2008 Omnibus Incentive Plan has a “clawback” provision related to incentive payments in the event of financial restatements.

 

We believe it is important to align the interests of its senior officers with those of our shareholders through ongoing stock ownership. Our Compensation Committee adopted stock ownership guidelines to encourage senior officers to own a significant number of shares of our common stock. The stock ownership guidelines are calculated based on a multiple of the senior officer’s annual base salary. We encourage our senior officers to achieve the targeted stock ownership levels within 5 years of being promoted or named to the applicable senior officer position.

		Minimum Investment
Title		(Multiple of base salary)
Chief Executive Officer			5
Members of the Executive Committee			3
Vice Presidents			1

 

Employment Agreements

 

Our Compensation Committee determined it was necessary to offer executive employment agreements in certain limited circumstances to attract senior executives or encourage them to remain with us and forego retirement or other opportunities. As a result, we entered into executive employment agreements with Messrs. Sweetnam, Yost and Marcin on the terms discussed under the “Executive Agreements” section below.

 

Severance Arrangements

 

Under limited circumstances, we provide severance benefits to senior executives who separate from the Company. These arrangements provide certainty to both Dana and the former executive as to their rights and obligations to each other, including restrictive covenants, non-compete agreements and consulting services.

Severance Plan/Change in Control

 

We adopted an executive severance and change in control plan (the Executive Severance Plan) in 2008. Each of our current named executive officers (except Mr. Devine) participates in the Executive Severance Plan. Mr. Marcin waived change in control severance in his employment agreement.

 

The Executive Severance Plan was adopted in order to provide severance pay to eligible executives whose employment is terminated (i) prior to or within a specified period of time following a change in control or (ii) for a reason other than cause, death, total disability or voluntary resignation. We believe that such a plan helps to both attract and retain executives by reducing the personal uncertainty that arises from the possibility of a future business combination or restructuring. Moreover, the Executive Severance Plan is designed to offset the uncertainty of executives regarding their own futures if a change in control or termination actually occurs. Dana believes that the Executive Severance Plan helps to increase shareholder value by encouraging the executives to consider change in control transactions that are in the best interest of Dana and its shareholders, even if the transaction may ultimately result in their termination of employment.

 

As mentioned in our 2010 proxy statement, all of our named executive officers who were eligible for the change in control severance benefit voluntarily waived the excise tax gross up provision of this plan excluding Mr. Yost, whose severance benefit is outlined in his executive employment agreement. As a result, any eligible executive officers would receive the better of the following change in control payments on an after-tax basis: i) change in control payment less excise tax (paid by executive), if the payment is deemed to be an excess parachute payment, and less other applicable income taxes or ii) change in control payment reduced to an amount such that an excise tax payment is not in effect, less other applicable income tax. If the excess parachute amount is not triggered, the change in control payment is not affected by any excise tax.

 

For more information on the terms and conditions of the change in control payments to certain of our named executive officers under the Executive Severance Plan, see the section entitled “Potential Payments and Benefits upon Termination or Change in Control.”

 

Perquisites and Other Benefits

 

Executive Perquisites Plan

 

We have adopted an Executive Perquisites Plan that provides for an annual cash allowance to eligible employees (including our named executive officers) in lieu of individual executive perquisites. We determined that it was in our best interest to provide a cash allowance, in lieu of an administratively burdensome and costly perquisite program, as part of a competitive pay package, which assists in recruiting and retaining talented executives from other companies that offer similar benefits. A fixed cash allowance also reduces our costs to administer the various components of a perquisites program. A cash-based program is preferred in lieu of programs such as car allowances, club memberships, tax and financial planning, etc. typically provided in a company-managed executive perquisite program. In addition, our cash perquisite program is a taxable benefit, and unlike some managed perquisite programs, we do not provide tax gross-up payments to cover applicable taxes on the allowance. Our Executive Chairman receives $75,000 per year. As part of Mr. Sweetnam’s employment agreement, he received a perquisite allowance of $100,000 annually. The remaining named executive officers are each entitled to $35,000 annually.

 

Commercial Air Travel

 

We provide commercial air travel for Mr. Devine to and from his home in California. This arrangement was made to encourage Mr. Devine to continue service with Dana while his residence and family remained in California and in lieu of relocation and home purchase assistance. For 2010, this benefit was treated as taxable compensation for which Dana reimbursed Mr. Devine for the amount of the tax obligation. This arrangement is more economical to Dana compared to using private aircraft. Mr. Devine elected to discontinue this tax reimbursement benefit for 2011.

 

The aggregate cost to Dana of this benefit for Mr. Devine is described further under the “Summary Compensation Table” and related footnotes below.

Automotive Transportation

 

We provide our Executive Vice President and Chief Financial Officer, Mr. Yost, with periodic access to automotive transportation service between his home located in the Detroit metropolitan area and our corporate headquarters in Maumee. We provide this benefit to Mr. Yost in lieu of relocation to the Toledo area. This benefit allows Mr. Yost to more efficiently and effectively conduct company business and to do it in a safer manner while commuting approximately three hours a day. Our former CEO, Mr. Sweetnam, also utilized automotive transportation services to and from his home in the Cleveland, Ohio metropolitan area, while he was utilizing temporary living quarters as a part of his relocation efforts.

 

Relocation Assistance

 

On a limited basis, we offer relocation benefits to our employees and new hires. The benefits under this program generally include some or all of the following benefits as needed: pre-commitment visits, miscellaneous expense allowances, tax assistance, home sale assistance, home purchase closing costs, household goods shipping, and temporary living expenses. Dana provides relocation benefits to encourage employees to relocate and to sell their homes in order to help ease and accelerate the transition time for the employee and the family and to help employees remain focused on our business rather than on personal relocation issues. Our former CEO and President, Mr. Sweetnam, utilized the relocation program during 2010.

 

For more information on the benefits provided to our former CEO, Mr. Sweetnam, see the “Summary Compensation Table” and related footnotes below.

 

Additional Benefits

 

We maintain a “safe harbor” 401(k) plan for our employees, including the named executive officers. We match 100% of the employee’s contributions up to 3% of compensation and 50% of the employee’s contributions from 3% to 5% of compensation; providing a maximum employer match of 4% of compensation to an employee. Matching contributions are credited to participating employees whose compensation exceeds IRS limits in the 401(k) plan.

 

We provide Supplemental Executive Retirement Plans (SERPs) to certain executives as part of their initial terms of employment. In most cases, the SERP benefit was offered to replace a retirement benefit that was forfeited when the executive joined Dana. For more information regarding SERPs, see the narrative following the “Nonqualified Deferred Compensation” table below.

 

Clawback Provisions

 

In order to mitigate risk to Dana of paying either annual or long term incentives based on faulty financial results, we have a policy (Clawback Policy) regarding adjustment of performance-based compensation in the event of a restatement of our financial results that provides for the Compensation Committee to review all bonuses and other compensation paid or awarded to our executive officers based on the achievement of corporate performance goals during the period covered by a restatement. If the amount of such compensation paid or payable to any executive officer based on the originally reported financial results differs from the amount that would have been paid or payable based on the restated financial results, the Compensation Committee makes a recommendation to the independent members of the Board as to whether to seek recovery from the officer of any compensation exceeding that to which he or she would have been entitled based on the restated results or to pay to the officer additional amounts to which he or she would have been entitled based on the restated results, as the case may be.

 

Impact of Accounting and Tax Treatments

 

Deductibility of Executive Compensation

 

Our objective is to comply with Section 162(m) of the Internal Revenue Code (Code) (which generally disallows deductions for compensation payable to certain named executive officers in excess of $1,000,000 per year per officer, unless the compensation is performance-based), unless the Compensation Committee

determines that it is in our best interest in unique circumstances to provide compensation that is not tax-deductible. From time to time, the Compensation Committee approves compensation that does not meet the Section 162(m) requirements in order to ensure competitive levels of compensation for our senior executives or to recognize unique contributions and accomplishments. For 2010, a portion of the compensation shown in the Summary Compensation Table for Messrs. Devine, Sweetnam, Marcin, Wallace and Bryant in excess of $1,000,000 was not deductible for federal income tax purposes.

 

Accounting for Stock-Based Compensation

 

We account for stock-based payments under our equity-based plans in accordance with the requirements of FASB ASC Topic 718 (formerly SFAS No. 123(R)). Further information about this accounting treatment can be found in Note 9 to the Consolidated Financial Statements in Dana’s Annual Report on Form 10-K for the year ended December 31, 2010.

 

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis (CD&A) with management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the CD&A be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K.

 

Compensation Committee

 

Keith E. Wandell, Chairman

Joseph C. Mucari

Mark A. Schulz

David P. Trucano

 

February 23, 2011

The following table summarizes the compensation of our Executive Chairman and Interim CEO, Executive Vice President and CFO, and our three other most highly compensated executive officers serving at the end of the fiscal year ended December 31, 2010 as well as our former President and CEO for which disclosure is required for the 2010 fiscal year (collectively, the named executive officers) for services rendered during the years in all capacities to Dana and our subsidiaries.

 

																										Change in
																										Nonqualified
																						Non-Equity				Deferred
														Stock				Option				Incentive Plan				Compensation				All Other
Name and						Salary				Bonus				Awards				Awards				Compensation(7)				Earnings(10)				Compensation				Total
Principal Position(1)		Year(3)				($)				($)(4)				($)(5)				($)(6)				($)				($)				($)(8)(9)				($)
John M. Devine(2)			2010				1,006,061				27,000				0				493,513				2,205,000				0				154,380				3,885,954
Executive Chairman			2009				1,298,077				500,000				0				0				0				0				790,412				2,588,489
and Interim Chief Executive Officer			2008				916,667				1,500,000				950,000				5,092,000				0				0				1,208,078				9,666,745
James A. Yost			2010				618,000				62,000				510,000				510,000				870,064				178,586				66,249				2,814,899
Executive Vice			2009				576,923				125,000				0				97,500				0				114,199				69,080				982,702
President and Chief Financial Officer			2008				365,909				651,440				1,092,725				1,197,014				0				66,282				172,880				3,546,250
Robert H. Marcin			2010				552,150				10,800				405,000				405,000				756,433				16,286				49,422				2,195,091
Executive Vice			2009				519,231				225,000				0				0				0				0				92,151				836,382
President and Chief Administrative Officer			2008				458,333				125,000				681,250				1,771,897				0				0				82,364				3,118,844
Mark E. Wallace			2010				461,813				59,000				300,000				300,000				585,862				12,673				47,461				1,766,809
President — Heavy Vehicle Group			2009				390,384				100,000				0				40,500				0				0				404,518				935,402
Martin D. Bryant			2010				461,813				59,000				300,000				300,000				585,862				12,673				45,628				1,764,976
President — Light Vehicle Group

 

SUMMARY COMPENSATION TABLE FOR FORMER EXECUTIVE OFFICER

 

																										Nonqualified
																						Non-Equity				Deferred
														Stock				Option				Incentive Plan				Compensation				All Other
Name and						Salary				Bonus				Awards				Awards				Compensation(7)				Earnings				Compensation				Total
Principal Position(1)		Year(3)				($)				($)(4)				($)(5)				($)(6)				($)				($)				($)(8)(9)				($)
James E. Sweetnam(11)			2010				848,485				1,010,000	(12)			1,333,328				1,340,237				1,382,973				0				607,927				6,522,950
Former President and			2009				480,769				2,175,000				274,000				1,230,000				0				0				185,264				4,345,033
Chief Executive Officer

 

Footnotes:

 

 

 

 

 

 

 

 

 

 

The following table contains information on grants of awards to named executive officers in the fiscal year ended December 31, 2010 under Dana’s Plan.

 

																														All Other
																														Option								Grant
																														Awards:				Exercise				Date Fair
																		Estimated Future Payouts												Number of				or Base				Value of
						Estimated Future Payouts Under												Under Equity Incentive Plan												Securities				Price of				Stock and
						Non-Equity Incentive Plan Awards(1)(2)												Awards(3)												Underlying				Option				Option
		Grant				Threshold				Target				Maximum				Threshold				Target				Maximum				Options				Awards				Awards
Name		Date				($)				($)				($)				(#)				(#)				(#)				(#)(4)				($/Sh)(5)				($)(6)
John M. Devine			11/05/10																												54,054(7	)			15.02				493,513
			AIP				150,000				1,500,000				3,750,000
James A. Yost			3/02/10																2,828				45,252				90,504												510,000
			3/02/10																												73,487				11.27				510,000
			AIP				46,800				468,000				1,170,000
			Performance Cash				31,875				510,000				1,275,000
Robert H. Marcin			3/02/10																2,246				35,936				71,872												405,000
			3/02/10																												58,357				11.27				405,000
			AIP				41,715				417,150				1,042,875
			Performance Cash				25,313				405,000				1,012,500
Mark E. Wallace			3/02/10																1,663				26,619				53,238												300,000
			3/02/10																												43,227				11.27				300,000
			AIP				32,602				326,025				815,063
			Performance Cash				18,750				300,000				750,000
Martin D. Bryant			3/02/10																1,663				26,619				53,238												300,000
			3/02/10																												43,227				11.27				300,000
			AIP				32,602				326,025				815,063
			Performance Cash				18,750				300,000				750,000
James E. Sweetnam			4/28/10																6,645				106,326(8	)			212,652												1,333,328
			4/28/10																												172,711(8	)			12.54				1,340,237
			AIP				120,000				1,200,000(8	)			3,000,000
			Performance Cash				83,333				1,333,333(8	)			3,333,333

 

Footnotes:

 

 

 

2008 Dana Holding Corporation Omnibus Incentive Plan.  The 2008 Dana Holding Corporation Omnibus Incentive Plan (the Plan) is administered by the Compensation Committee. The Compensation Committee may grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other stock-based and non-stock based awards under the Plan.

 

The maximum number of shares of Dana’s common stock available under the Plan is 16,090,000 shares. Any shares related to awards that terminate or are forfeited are added back to the pool. The aggregate number of shares of common stock actually issued or transferred by Dana upon the exercise of incentive stock options may not exceed 4,000,000 shares. We have not granted any incentive stock options under the Plan. Further, no participant may be granted option rights or appreciation rights for more than 2,000,000 shares of common stock during any calendar year, subject to adjustments as provided in the Plan. In no event may any participant receive restricted shares, restricted stock units or performance shares in the aggregate for more than 1,000,000 shares of common stock during any calendar year, or receive an award of performance units having an aggregate maximum value as of their respective dates of grant in excess of $10,000,000. The maximum number of shares that may be granted under the Plan is subject to adjustment in the event of stock dividends, stock splits, combinations of shares, recapitalizations, mergers, consolidations, spin-offs, reorganizations, liquidations, issuances of rights or warrants, and similar events. No grants may be made under the Plan after December 25, 2017.

 

Under the Plan, the Board of Directors may also, in its discretion, authorize the granting to non-employee directors of option rights and appreciation rights and may also authorize the grant of other types of awards. Upon a change in control of Dana, except as otherwise provided in the terms of the award or as provided by the Compensation Committee, to the extent outstanding awards are not assumed, converted or replaced by the resulting entity, all outstanding awards that may be exercised will become fully exercisable, all restrictions with respect to outstanding awards will lapse and become fully vested and non-forfeitable, and any specified performance measures with respect to outstanding awards will be deemed to be satisfied at target levels.

The following table provides information on stock option, restricted stock unit and performance share unit grants awarded pursuant to the Plan for each named executive officer and as outstanding as of December 31, 2010. Each outstanding award is shown separately. The market value of the stock awards is based on the closing market price of Dana common stock on December 31, 2010 of $17.21 per share.

 

		Option Awards																	Stock Awards
																											Equity Incentive				Equity Incentive
		Number																									Plan Awards:				Plan Awards:
		of				Number of																	Market Value				Number of				Market or
		Securities				Securities													Number of				of Shares or				Unearned				Payout Value of
		Underlying				Underlying													Shares or				Units of				Shares,				Unearned Shares,
		Unexercised				Unexercised				Option									Units of Stock				Stock That				Units or Other				Units or Other
		Options				Options				Exercise				Option					That Have				Have Not				Rights That				Rights That
		(#)				(#)				Price				Expiration					Not Vested				Vested				Have Not				Have Not
Name		Exercisable				Unexercisable				($)				Date					(#)				($)				Vested (#)				Vested ($)
John M. Devine			800,000	(1)							12.75				2/4/18
							333,334	(2)			1.90				10/31/18(2	)				83,334	(12)			1,434,178				83,334	(13)			1,434,178
							54,054	(3)			15.02				11/5/20
James A. Yost			85,781								12.25				5/13/18
			94,972				47,486	(4)			12.25				5/13/18
							216,667	(5)			.51				3/18/19
							73,487	(6)			11.27				3/2/20													45,252	(14)			778,787
Robert H. Marcin			255,616				127,808	(7)			10.00				4/16/18
			41,667				41,667	(2)			1.90				10/31/18(2	)				10,417	(12)			179,277				10,417	(13)			179,277
							58,357	(6)			11.27				3/2/20													35,936	(14)			618,459
Mark E. Wallace							12,834	(8)			2.09				11/3/18
							90,000	(5)			.51				3/18/19
							43,227	(6)			11.27				3/2/20													26,619	(14)			458,113
Martin D. Bryant			10,629				5,315	(9)			11.44				5/9/18
							90,000	(5)			.51				3/18/19
							43,227	(6)			11.27				3/2/20													26,619	(14)			458,113
James E. Sweetnam			500,000	(10)							1.37				5/5/11(10	)				0	(15)			0
							0	(11)			12.54				4/28/20													29,535	(16)			508,297

 

Footnotes:

 

 

 

The following table provides information concerning the exercise of stock options and the vesting of performance share units and restricted stock units, during the fiscal year ended December 31, 2010, for each of the named executive officers.

 

 

		Option Awards									Stock Awards
		Number of									Number of
		Shares									Shares
		Acquired				Value Realized					Acquired				Value Realized
		on Exercise				on Exercise					on Vesting				on Vesting
Name		(#)				($)					(#)				($)
John M. Devine			666,666	(1)			7,832,072					83,333	(5)			1,180,829	(10)
												83,333	(6)			1,180,829	(10)
James A. Yost			108,333	(2)			1,221,999					31,225	(7)			588,904	(11)
Robert H. Marcin			41,666	(1)			504,259					10,417	(5)			147,609	(10)
												10,417	(6)			147,609	(10)
												28,125	(7)			530,438	(11)
Mark E. Wallace			25,666	(3)			311,596					5,000	(8)			72,650	(12)
			45,000	(2)			634,658					8,500	(7)			160,310	(11)
Martin D. Bryant			45,000	(2)			580,757					3,540	(7)			66,764	(11)
James E. Sweetnam			1,000,000	(4)			12,395,935					200,000	(9)			3,004,000	(13)

 

Footnotes:

 

 

 

The following table contains information with respect to the plans that provide for payments or other benefits to our named executive officers at, following, or in connection with retirement. The number of years of credited service and the actuarial present values in the table are computed as of December 31, 2010, the measurement date used for reporting purposes with respect to our Consolidated Financial Statements in Dana’s Annual Report on Form 10-K for the year ended December 31, 2010.

 

		Dana				Aggregate				Aggregate
		Contributions				Earnings				Balance on
		in 2010				in 2010				12/31/10
Name		($)				($)				($)
James A. Yost			148,600	(1)(2)			10,066				339,147(2	)
Robert H. Marcin			16,286	(1)			0				16,286
Mark E. Wallace			12,673	(1)			0				12,673
Martin D. Bryant			12,673	(1)			0				12,673

 

Footnotes:

 

 

 

Mr. Yost is eligible to receive a non-qualified supplement retirement benefit under his supplemental executive retirement plan that was created when he became our Executive Vice President and Chief Financial Officer in May 2008. Under the terms of Mr. Yost’s supplemental executive retirement plan, Dana created a notional defined contribution account that is unfunded and subject to the claims of Dana’s general creditors. Dana credits Mr. Yost’s account as follows: (a) 20% of Mr. Yost’s annual base pay; and (b) 20% of Mr. Yost’s annual incentive plan award; less (c) the basic credit provided to Mr. Yost under Dana’s Retirement Savings Plan (401(k)) plan (without regard to any matching contributions). Dana credits the accumulated balance in his account with an annualized return of 5% compounded annually. Once Mr. Yost satisfies a three-year vesting requirement, he will be eligible to receive the accumulated balance of his account when his employment with Dana ceases. Additionally, after three years of service with Dana, or when, if earlier, while employed by Dana, Mr. Yost: (a) dies; (b) becomes disabled; (c) is terminated without cause; or (d) resigns for good reason, Mr. Yost’s interest in his account will vest and the accumulated balance will be payable to him (or his beneficiary in the event of death) in a lump sum amount on his termination of employment.

 

We entered into initial executive employment agreements with Messrs. Devine and Marcin in April 2008. As described above in the “Compensation Discussion and Analysis” section, we extended and amended these agreements by executing new executive employment agreements with Messrs. Devine and Marcin effective January 1, 2009. On January 1, 2010, Dana and Mr. Devine extended his executive employment agreement for an additional term. We entered into an executive employment agreement with Mr. Sweetnam in July 2009 and Mr. Yost in May 2008.

 

John Devine

 

In connection with Mr. Devine’s service as Executive Chairman, Dana executed an executive employment agreement effective January 1, 2010 which expired on December 31, 2010. Our Board of Directors approved the following compensation arrangement:

 

 

As described in the “Compensation Discussion and Analysis” section above, our Board of Directors approved the following compensation for Mr. Devine in connection with his appointment as Interim CEO in November 2010:

 

 

Robert Marcin

 

Under the terms of his January 2009 executive employment agreement approved by our Board of Directors, Mr. Marcin is entitled to the following:

 

 

James Yost

 

In connection with Mr. Yost’s appointment as Executive Vice President and Chief Financial Officer, Dana executed an executive employment agreement in May 2008 with Mr. Yost approved by the Board of Directors. Under the terms of the executive employment agreement, Mr. Yost is entitled to the following:

 

 

James Sweetnam

 

Mr. Sweetnam resigned from Dana effective November 4, 2010. Under the terms of his July 2009 executive employment agreement approved by our Board of Directors, Mr. Sweetnam, our former CEO, was entitled to the following:

 

 

 

As discussed in the “Compensation Discussion and Analysis” section above, Dana adopted an Executive Severance Plan that applies to certain senior executives, including our named executive officers. During 2008, Messrs. Devine and Marcin waived change in control payments they might be entitled to under the Executive Severance Plan described below. As discussed above under the caption “Executive Agreements”, these two executives were parties to executive employment agreements during 2010 with Dana containing the potential payments and benefits they are eligible for upon termination or change in control which are discussed below.

 

Set forth below is a description of our Executive Severance Plan (applicable to eligible executive officers, including named executive officers, but excluding Messrs. Devine and Marcin as to “change in control” provisions) as well as a description of the severance agreement with Mr. Sweetnam. This is followed by tables relating to Messrs. Devine, Yost, Marcin, Wallace and Bryant.

 

Executive Severance

 

Change in Control.  All eligible executive officers, except our CEO, who incur a qualifying termination will be entitled to receive two years of salary and twice his or her target bonus for the year in which termination occurs. Our CEO (excluding Mr. Devine as Interim CEO) is entitled to receive three years of salary and three times his target bonus for the year in which termination occurs. In addition, each named executive officer will be entitled to: (1) the full amount of any earned but unpaid base salary through the date of termination plus a cash payment for all unused vacation time accrued as of the termination date; (2) a pro rata portion of his or her annual bonus for the year in which termination occurs; (3) all equity awards which will vest in full and become fully exercisable as of the termination date; (4) any actual award credited to an eligible employee in connection with Dana’s performance awards all of which vest in full as of date of termination; (5) a lump sum cash amount to allow, but not require, the employee to purchase additional coverage equal to a total of two years (three years for our CEO) of subsidized COBRA; (6) the employee assistance program; (7) reasonable costs of outplacement services not to exceed $25,000 ($50,000 for our CEO).

 

Our Executive Severance Plan included a conditional excise tax gross-up provision such that if the executive incurred any excise tax by reason of his or her receipt of any payment that constituted an excess parachute payment, as defined in Section 280G of the Internal Revenue Code, the executive would be entitled to a gross-up payment only if the aggregate excess parachute payments exceeded 120% of the respective Section 280G limit. The amount of the gross-up payment would place the executive in the same after-tax position he or she would have been in had no excise tax applied. Under the plan, Dana is required to reduce the executive’s change in control benefits by up to 20% of the Section 280G limit if doing so avoids imposition of the Section 280G excise tax for the executive.

 

In July 2009, executives who were eligible for the change in control benefit voluntarily waived the excise tax gross up provision. All named executive officers who were eligible for the benefit voluntarily waived the gross up provision with the exception of Mr. Yost whose terms of employment include this benefit. As a result, any eligible executive officers (other than Mr. Yost) would receive the better of the following change in control payments on an after-tax basis: i) change in control payment less excise tax (paid by executive), if the

payment is deemed to be an excess parachute payment, and less other applicable income taxes or ii) change in control payment reduced to an amount such that an excise tax payment is not in effect, less other applicable income taxes. If the excess parachute amount is not triggered, the change in control payment is not affected by any excise tax.

 

Regular Severance Pay.  In the event any eligible executive officer, except our CEO, is involuntarily terminated by Dana without cause and such termination occurs prior to a change in control date, Dana will pay the executive an amount based on his or her annual base salary in effect on the date of termination for a period of 12 months. Our CEO (excluding Mr. Devine as Interim CEO) is entitled to receive an amount based on his annual base salary in effect on the date of termination for a period of 24 months. The Executive Severance Plan contains an offset provision to prevent executives with severance provisions under an employment agreement from receiving double benefits.

 

Additionally, the executive, except our CEO, for a period of 12 months beginning on the employment termination date will continue to participate in or receive reimbursement for (i) the employee assistance program; and (ii) reasonable costs of outplacement services, subject to a maximum amount of $25,000. Our CEO (excluding Mr. Devine as Interim CEO) will continue to participate in or receive reimbursement for (i) the employee assistance program; and (ii) reasonable costs of outplacement services, subject to a maximum amount of $50,000 for a period of 24 months beginning on the employment termination date.

 

In addition to the benefits provided above, the executive will receive a lump sum cash amount to allow, but not require, the employee to purchase additional coverage equal to a total of one year (two years for our CEO (excluding Mr. Devine as Interim CEO)) of subsidized COBRA.

 

James Sweetnam 2010 Severance

 

In connection with his departure in November 2010, Mr. Sweetnam was entitled to the following benefits under the term of his executive employment agreement:

 

 

The following tables set forth the potential payments which would have been due to our named executive officers upon termination or a change of control as of December 31, 2010.

 

John Devine

 

The following table describes potential termination and change in control payments to Mr. Devine, Dana’s Executive Chairman and Interim CEO:

 

						Change in																Voluntary				Voluntary
		Change in				Control and												Termination				Termination				Termination
		Control and				Not												Without				with Good				w/o Good
Pay Element		Terminated				Terminated				Death				Disability				Cause				Reason				Reason
Cash Compensation
Base Salary(1)		$	0			$	0			$	0			$	0			$	0			$	0			$	0
Annual Incentive Award(2)		$	2,205,000			$	2,205,000			$	2,205,000			$	2,205,000			$	2,205,000			$	2,205,000			$	2,205,000
Long term Incentive
Stock Options		$	8,789,722	(3)		$	8,789,722	(3)		$	8,789,722	(3)		$	8,789,722	(3)		$	8,789,722	(4)		$	8,789,722	(4)		$	8,789,722	(4)
Restricted Stock Units		$	1,434,178	(5)		$	1,434,178	(5)		$	1,434,178	(5)		$	1,434,178	(5)		$	1,434,178	(6)		$	1,434,178	(6)		$	1,434,178	(6)
Performance Share Units		$	1,434,178	(7)		$	1,434,178	(7)		$	1,434,178	(7)		$	1,434,178	(7)		$	1,434,178	(8)		$	1,434,178	(8)		$	1,434,178	(8)
Benefits and Perquisites
Health Insurance(9)		$	0			$	0			$	0			$	0			$	0			$	0			$	0
Life Insurance Benefits										$	1,040,000	(10)
Accrued Vacation(11)		$	86,667			$	0			$	86,667			$	86,667			$	86,667			$	86,667			$	86,667
Total		$	13,949,745			$	13,863,078			$	14,989,745			$	13,949,745			$	13,949,745			$	13,949,745			$	13,949,745

 

Footnotes:

 

 

 

James Yost

 

The following table describes the potential termination and change in control payments to Mr. Yost, Dana’s Executive Vice President and Chief Financial Officer, under a variety of circumstances.

 

						Change in																Voluntary
		Change in				Control and																Termination
		Control				Not												Termination				with Good
Pay Element		and Terminated(1)				Terminated				Death				Disability				Without Cause				Reason
Cash Compensation
Base Salary		$	0			$	0			$	624,000	(8)		$	624,000	(8)		$	624,000	(8)		$	624,000	(8)
Annual Incentive Award(2)		$	687,960			$	687,960			$	687,960			$	687,960			$	687,960			$	687,960
Performance Cash Award(2)		$	182,104			$	182,104			$	182,104			$	182,104			$	182,104			$	182,104
Separation Payment		$	1,454,391	(3)
Long term Incentive
Stock Options		$	5,186,917	(4)		$	5,186,917	(4)		$	5,186,917	(4)		$	5,186,917	(4)		$	5,186,917	(4)		$	5,186,917	(4)
Performance Shares		$	1,316,169	(5)		$	1,316,169	(5)		$	1,316,169	(5)		$	1,316,169	(5)		$	1,316,169	(5)		$	1,316,169	(5)
Benefits and Perquisites
Health, insurance, etc.(6)		$	264			$	0			$	0			$	0			$	132			$	132
Life Insurance Benefits		$	0			$	0			$	624,000	(10)		$	0			$	0			$	0
SERP(7)		$	339,147			$	0			$	339,147			$	339,147			$	339,147			$	339,147
Perquisites		$	35,000			$	0			$	35,000	(11)		$	35,000	(11)		$	35,000	(11)		$	35,000	(11)
Accrued Vacation(9)		$	52,000			$	0			$	52,000			$	52,000			$	52,000			$	52,000
Other
Outplacement		$	25,000	(12)		$	0			$	0			$	0			$	25,000	(12)		$	0
Total		$	9,278,952			$	7,373,150			$	9,047,297			$	8,423,297			$	8,448,429			$	8,423,429