Dana Holding Corporation 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 16, 2008
Dana Holding Corporation
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of incorporation)
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1-1063
(Commission File Number)
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26-1531856
(IRS Employer Identification Number)
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4500 Dorr Street, Toledo, Ohio 43615
(Address of principal executive offices) (Zip Code)
(419) 535-4500
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Chief Executive Officer and President
On April 16, 2008, the Board of Directors of Dana Holding Corporation (Dana) appointed Gary L.
Convis, 65, Chief Executive Officer and President, succeeding John M. Devine who has served as
Acting Chief Executive Officer of Dana since January 2008. Mr. Devine will continue to serve as
Executive Chairman of the Board of Directors of Dana. In connection with Mr. Convis appointment
as Chief Executive Officer and President, he resigned as a member of Danas Nominating & Corporate
Governance Committee. Mr. Convis will remain a member of the Board of Directors; however, he will
no longer receive compensation in connection with his service on the Board of Directors.
Mr. Convis retired in 2007 as the Chairman of Toyota Motor Manufacturing, Kentucky (TMMK), a
position he had held since 2006. Mr. Convis became President of TMMK in 2001. He also was
Executive Vice President of Toyota Motor Engineering & Manufacturing North America, Inc., where he
had served since 2003. Prior to serving in these roles, Mr. Convis spent sixteen years at New
United Motor Manufacturing, Inc., a joint venture between General Motors Corporation (GM) and
Toyota. Mr. Convis also spent more than twenty years in various roles with GM and Ford Motor
Company. In addition to Dana, Mr. Convis is also a board member of Cooper-Standard Automotive Inc.
and Compass Automotive Group, Inc.
In connection with his appointment as Chief Executive Officer and President, Dana will execute an
executive employment agreement with Mr. Convis. Under the terms of the executive employment
agreement, Mr. Convis will be entitled to the following:
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$1,200,000 annual base salary; |
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An annual target bonus of two hundred percent (200%) of his annual base salary; |
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An initial grant of options under Danas 2008 Omnibus Incentive Plan to purchase
766,900 shares of Dana common stock with an exercise price of $10.00 based on the
closing stock price on the April 16 grant date, vesting ratably over a three (3) year period
with a ten (10) year term; |
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A one-time payment of $765,356 to compensate Mr. Convis for forfeited
compensation from his prior employer; |
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Payment or reimbursement for reasonable temporary living expenses and access to
one of Danas guest houses; |
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Payment or reimbursement for use of a private corporate aircraft for up to
thirty (30) round trips from his residence in California; |
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Benefits under Dana-sponsored employee welfare benefit plans, programs and
arrangements; and |
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Other usual and customary benefits in which senior executives participate and
other fringe benefits and perquisites as may be made available to senior |
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executives (including but not limited to inclusion in any change in control plan or
agreement adopted by Dana). |
Mr. Convis executive employment agreement also provides for severance payments in the event that
his position with Dana is involuntarily terminated by Dana without cause at any time during the
initial term of his employment, and if renewed, during the first six (6) months of the second term.
Thereafter, he would be entitled to severance benefits under any severance plan then in effect.
Mr. Convis is prohibited from competing against Dana or soliciting its employees to work for a
competitor for a period of twelve (12) months following his termination of employment. Mr. Convis
has also agreed that he will not disclose Danas confidential information. The executive
employment agreement is for an initial term of one year, subject to renewal for additional one-year
terms.
The preceding summary of Mr. Convis executive employment agreement is qualified in its entirety by
reference to the text of his agreement.
A copy of Danas press release related to Mr. Convis appointment is being furnished as Exhibit
99.1 to this report.
Marcin Employment Agreement
Dana will execute an executive employment agreement with our Chief Administrative Officer, Robert
H. Marcin. Certain terms of Mr. Marcins executive employment agreement were previously described
in the Current Report on Form 8-K filed on February 6, 2008 by Dana. In addition to those terms
previously disclosed, pursuant to Mr. Marcins executive employment agreement, Mr. Marcin will also
be entitled to the following:
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Participation in any annual bonus, stock equity participation and long-term
incentive programs generally applicable to senior executives; |
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An initial grant under Danas 2008 Omnibus Incentive Plan of options to purchase
255,000 shares of Dana common stock with an exercise price of $10.00 based on the
closing stock price on the April 16 grant date, vesting ratably over a three (3) year period
with a ten (10) year term; |
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Payment or reimbursement for reasonable temporary living expenses and access to
one of Danas guest houses; relocation assistance; and |
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Participation in all benefit plans, perquisites, allowances and other
arrangements generally applicable to senior executives, including (without
limitation) life and disability insurance, bonus pools, stock options and stock
ownership programs. Mr. Marcin will not be entitled to participate in Danas
health care benefit plans. |
Mr. Marcins executive employment agreement also provides for severance payments in the event that
his position with Dana is involuntarily terminated by Dana without cause, he terminates the
executive employment agreement for good reason, or a change in control during
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the first eighteen (18) months of his employment. Thereafter, he would be entitled to severance
benefits under any severance plan then in effect. Mr. Marcin has also agreed that he will not
disclose Danas confidential information.
The summary of Mr. Marcins executive employment agreement is qualified in its entirety by
reference to the text of his agreement.
2008 Incentive Programs
2008 Annual Incentive Program
On April 16, 2008, upon the recommendation of the Compensation Committee, the Board of Directors of
Dana approved the 2008 Annual Incentive Program (the 2008 AIP). The 2008 AIP is being
implemented pursuant to the terms and conditions of the Dana Holding Corporation 2008 Omnibus
Incentive Plan. Below is a summary of the key terms of the 2008 AIP.
Certain eligible employees designated by Dana, including our named executive officers, may
participate in the 2008 AIP. The 2008 AIP is based on a calendar year performance period
commencing January 1, 2008 and ending on December 31, 2008. All earned awards will be paid in cash
during the first quarter of 2009.
An award
under the 2008 AIP is based on certain target performance goals. Dana has chosen EBITDAR
(50% weighted) and free cash flow (50% weighted) as its financial measurements for establishing its
2008 AIP target performance goals. Awards for executive officers, including the named executive
officers, are based on a range beginning at fifty percent (50%) of the target performance award
(threshold) to two hundred fifty percent (250%) of the target performance award (maximum). Dana
will set for each participant a percentage of his or her annual base salary payable at threshold,
target and maximum. A minimum level of EDITDAR must be achieved by
Dana in order for any award to
be earned.
There is individual performance recognition through discretionary award adjustments within
specified guidelines. Employees must perform at a minimum level to be eligible to earn any award.
There is a maximum upside and downside adjustment of twenty percent (20%), subject to a zero sum
overall impact.
The percentage of annual incentive award payable based on annual base salary for reaching 2008
performance goals under the 2008 AIP at threshold, target and maximum for each of the following
executives who are or may be deemed named executive officers is as follows:
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Percentage of Annual Base |
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Percentage of Annual Base |
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Percentage of Annual Base |
Name |
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Salary at Threshold Payout |
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Salary at Target Payout |
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Salary at Maximum Payout |
John M. Devine |
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75 |
% |
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150 |
% |
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375 |
% |
Gary L. Convis |
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100 |
% |
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200 |
% |
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500 |
% |
Robert H. Marcin |
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35 |
% |
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70 |
% |
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175 |
% |
Paul E. Miller |
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30 |
% |
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60 |
% |
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150 |
% |
Ralf Goettel |
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30 |
% |
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60 |
% |
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150 |
% |
Thomas R. Stone |
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30 |
% |
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60 |
% |
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150 |
% |
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Mr. Hiltz does not participate in our annual incentive plans.
2008 Long Term Incentive Program
On April 16, 2008, upon the recommendation of the Compensation Committee, the Board of Directors of
Dana approved the 2008 Long Term Incentive Program (the 2008 LTIP). The 2008 LTIP is being
implemented pursuant to the terms and conditions of the Dana Holding Corporation 2008 Omnibus
Incentive Plan. Below is a summary of the key terms of the 2008 LTIP.
Employees designated by Dana, including our named executive officers, may participate in the 2008
LTIP. The target award is determined based upon the annualized expected value calculated at the
date of grant. The 2008 LTIP provides for three different mixes of long-term incentives. First,
certain executives, including the named executive officers, are eligible for long-term incentive
awards consisting of fifty percent (50%) stock options and fifty percent (50%) performance shares.
The next group of employees is eligible for long-term incentive awards consisting of fifty percent
(50%) performance shares and fifty percent (50%) restricted stock units. Finally, other key
employees are eligible for restricted stock unit awards from a discretionary pool.
Stock option awards under the 2008 LTIP have a contractual term of ten (10) years and vest ratably
over three (3) years. The restricted stock unit awards cliff vest one hundred percent (100%) after
three (3) years and will be settled in shares of Dana common stock, except for certain
international employees who may receive cash-settled awards.
With respect to performance share awards, each participant will receive notional shares equal to
the number of shares of Dana common stock that would be payable based on the target performance
goals. An award under the 2008 LTIP is based on certain target
performance goals. Dana has chosen
EBITDAR (34% weighted), free cash flow (33% weighted) and return on invested capital (ROIC) (33%
weighted) as its financial measurements for establishing its 2008
LTIP target performance goals.
Awards for executive officers, including the named executive officers, are based on a range
beginning at fifty percent (50%) of the target performance award (threshold) to two hundred fifty
percent (250%) of the target performance award (maximum). Dana will set for each participant a
number of notional shares payable at threshold, target and maximum.
For 2008 performance share awards, there are three distinct performance periods. The first period
covers the 2008 calendar year. It will account for twenty-five percent (25%) of the target award.
The second period covers the two-year period 2008-2009. It accounts for another twenty-five
percent (25%) of the target award. The final period covers the three-year period 2008-2010. It
accounts for the remaining fifty percent (50%) of the target award.
Award payouts, which are based on actual performance, will be made
shortly after the conclusion of the respective performance period.
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The number
of notional shares payable based on reaching
performance goals under the 2008 LTIP for threshold, target and
maximum for each of the following
executives who are or may be deemed named executive officers is as follows:
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Performance Shares |
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Performance Shares |
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Performance Shares |
Name |
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Threshold Payout(#) |
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at Target Payout(#) |
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at Maximum Payout(#) |
Robert H. Marcin |
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28,125 |
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56,250 |
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140,625 |
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Paul E. Miller |
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9,375 |
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18,750 |
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46,875 |
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Ralf Goettel |
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14,529 |
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29,059 |
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72,647 |
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Thomas R. Stone |
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18,150 |
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36,300 |
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90,750 |
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The number
of stock option awards granted pursuant to the 2008 LTIP for each of
the following executives who are or may be deemed named executive
officers is as follows:
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Name |
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Stock
Option Award(#) |
Robert H. Marcin |
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128,424 |
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Paul E. Miller |
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42,808 |
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Ralf Goettel |
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66,345 |
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Thomas R. Stone |
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82,876 |
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Mr. Devine will not participate in our 2008 LTIP pursuant to his executive employment
agreement. Under Mr. Convis executive employment agreement, he may participate in Danas long
term incentive plans; however, he is not currently participating in the 2008 LTIP. Mr. Hiltz does
not participate in our long term incentive plans.
Copies of the Form of Option Agreement, Form of Restricted Stock Unit Agreement and Form of
Performance Share Agreement for grants provided for in the 2008 LTIP under the 2008 Omnibus
Incentive Plan are attached hereto as Exhibits 10.1, 10.2 and 10.3, respectively.
Executive Perquisite Plan
On April 16, 2008, upon the recommendation of the Compensation Committee, the Board of Directors of
Dana approved and adopted an executive perquisite plan (Executive Perquisite Plan). The Executive
Perquisite Plan provides for an annual cash allowance to eligible employees (including our named
executive officers) in lieu of certain executive perquisites effective May 1, 2008. An annual
allowance will be payable as indicated below:
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Title |
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Cash Allowance ($) |
Executive Chairman |
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75,000 |
Chief Executive Officer |
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75,000 |
Other Members of the Executive Committee |
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35,000 |
Vice President |
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20,000 |
The cash
allowance will be excluded from benefit and incentive compensation
calculations under Danas benefit and compensation programs
and will not be eligible for deferral under any Dana plan or arrangement.
The preceding summary of the Executive Perquisite Plan is qualified in its entirety by reference to
the text of the plan, which is filed with this report as Exhibit 10.4.
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Item 9.01 Financial Statements and Exhibits. |
(d) Exhibits. The following exhibits are filed or furnished with this report.
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Exhibit No. |
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Description |
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10.1
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Form of Option Agreement under the Dana Holding Corporation
2008 Omnibus Incentive Plan |
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10.2 |
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Form of Restricted Stock Unit Agreement under the Dana Holding
Corporation 2008 Omnibus Incentive Plan |
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10.3 |
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Form of Performance Share Agreement under the Dana Holding
Corporation 2008 Omnibus Incentive Plan |
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10.4 |
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Dana Holding Corporation Executive Perquisite Plan |
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99.1 |
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Dana Holding Corporation Press Release dated April 17, 2008 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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DANA HOLDING CORPORATION
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Date: April 18, 2008 |
By: |
/s/ Marc S. Levin
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Name: |
Marc S. Levin |
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Title: |
Vice President, General Counsel
and Secretary |
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Exhibit Index
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Exhibit No. |
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Description |
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10.1 |
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Form of Option Agreement under the Dana Holding Corporation
2008 Omnibus Incentive Plan |
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10.2 |
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Form of Restricted Stock Unit Agreement under the Dana Holding
Corporation 2008 Omnibus Incentive Plan |
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10.3 |
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Form of Performance Share Agreement under the Dana Holding
Corporation 2008 Omnibus Incentive Plan |
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10.4 |
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Dana Holding Corporation Executive Perquisite Plan |
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99.1 |
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Dana Holding Corporation Press Release dated April 17, 2008 |
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