<PAGE>   1
                                                                   EXHIBIT 10-E










                              EMPLOYMENT AGREEMENT

                                     BETWEEN

                                DANA CORPORATION

                                       AND

                             JOSEPH M. MAGLIOCHETTI


                             DATED DECEMBER 12, 1998



<PAGE>   2




                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
         SECTION                                                                      PAGE
         -------                                                                      ----
<S>                                                                                  <C>
Recitals................................................................................1

1.       Employment and Term............................................................1

2.       Position and Duties of the Executive...........................................2
         (a)  Position..................................................................2
         (b)  Duties....................................................................3
         (c)  Location of Office........................................................4

3.       Compensation...................................................................4
         (a)  Salary....................................................................4
         (b)  Additional Compensation...................................................4
         (c)  Incentive, Stock and Savings Plans........................................5
         (d)  Retirement and Welfare Benefit Plans......................................5
         (e)  Expenses..................................................................6
         (f)  Fringe Benefits...........................................................6
         (g)  Office and Support Staff..................................................6
         (h)  Vacation and Other Absences...............................................7
         (i)  Benefits Shall Not Be Reduced Under Certain Circumstances.................7
         (j)  Supplemental Retirement Annuity...........................................8

4.       Termination of Employment.....................................................12
         (a)  Death or Disability......................................................12
         (b)  Cause....................................................................12
         (c)  Good Reason..............................................................14
         (d)  Notice of Termination....................................................15
         (e)  Date of Termination......................................................16

5.       Obligations of the Corporation Upon Termination...............................16
         (a)  Termination Other Than for Cause.........................................16
         (b)  Termination On or After Change of Control................................19
         (c)  Cause; Other Than for Good Reason........................................20
         (d)  Death or Disability......................................................20
         (e)  Resolution of Disputes...................................................21
                  (i)  Right of Election by Executive to Arbitrate or Sue..............21
                  (ii)  Third-Party Stakeholder........................................21
         (f)  Benefits are in Addition to Supplemental Retirement Annuity..............23

6.       Non-exclusivity of Rights.....................................................23

7.       Full Settlement...............................................................23

8.       Golden Parachute Tax Payments.................................................24
</TABLE>


                                       i
<PAGE>   3

<TABLE>
<CAPTION>
         SECTION                                                                      PAGE
         -------                                                                      ----
<S>                                                                                  <C>
9.       Confidential Information......................................................25

10.      Competition...................................................................26

11.      Successors....................................................................28

12.      Certain Definitions...........................................................28
         (a)  Beneficiary..............................................................28
         (b)  Change of Control........................................................29
         (c)  Change of Control Date...................................................30
         (d)  Change of Control Period.................................................31

13.       Amendment or Modification; Waiver............................................31

14.      Miscellaneous.................................................................31

Exhibit A..............................................................................35
</TABLE>




                                       ii
<PAGE>   4




<TABLE>
<CAPTION>
                                  DEFINED TERMS
                                  -------------
DEFINED TERMS*                                            SECTION                      PAGE
--------------                                            -------                      ----
<S>                                                     <C>                          <C>
Accounting Firm                                           8(b)                         24
Accrued Obligation                                        5(a)(i)(3)                   17
ACP                                                       3(b)                         5
Affiliate                                                 2(a)                         3
Affiliated Company                                        3(a)                         4
Agreement                                                 Introduction                 1
Annual Base Salary                                        3(a)                         4
Annual Bonus                                              3(b)                         4

Beneficiary                                               12(a)                        29
Board                                                     3(a)                         4

Cause                                                     4(b)                         12
Change of Control                                         12(b)                        29
Change of Control Date                                    12(c)                        31
Change of Control Period                                  12(d)                        31
Code                                                      5(a)(ii)                     18
Competition                                               10(c)                        27
Corporation                                               Introduction                 1
                                                          11(b)                        29
                                                          14(e)                        32

Date of Termination                                       4(e)                         16
Disability                                                4(a)(ii)                     12
Disability Effective Date                                 4(a)(ii)                     12

Employment Period                                         1(a)                         1
Excise Tax                                                8(a)                         24
Executive                                                 Introduction                 1
</TABLE>

--------
*  Each listed term is intended to include both the singular and plural form of
   the term.



                                      iii
<PAGE>   5



<TABLE>
<CAPTION>
                                  DEFINED TERMS
                                  -------------
DEFINED TERMS*                                            SELECTION                    PAGE
-------------                                             ---------                    ----
<S>                                                     <C>                          <C>
Gross-Up Payment                                          8(a)                         24

Highest Average Monthly Compensation                      3(j)(vi)                     11

Notice of Termination                                     4(d)                         16

Other Benefits                                            5(a)(v)                      20

Payment                                                   8(a)                         24
Pension and Retirement Program of the                     3(j)(vii)                    11
Corporation

Renewal Date                                              1(c)                         2

Service                                                   3(j)(viii)                   12
Subsidiary                                                2(a)                         3

Target Annual Bonus                                       3(b)                         5
Terminal Date                                             1(b)                         1
Termination                                               5(a)                         17
Termination Period                                        5(a)(ii)                     18

Welfare Benefit Continuation                              5(a)(iii)                    19
</TABLE>

-------------
*  Each listed term is intended to include both the singular and plural form of
   the term.



                                       iv
<PAGE>   6


              AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") made
and entered into as of this 12th day of December, 1998, by and between DANA
CORPORATION, a Virginia corporation whose principal place of business is located
at 4500 Dorr Street, Toledo, Ohio (the "Corporation"), and Joseph M.
Magliochetti (the "Executive");

              WHEREAS, the Executive is a principal executive officer of the
Corporation and an integral part of its management; and

              WHEREAS, the Corporation wishes to assure itself of the continuing
services of the Executive and to assure the Executive of continued employment
during the period of employment hereunder; and

              WHEREAS, the Executive is willing to commit himself to remain in
the employ of the Corporation during such period on terms and conditions
substantially similar to those on which other senior executive officers of the
Corporation are employed, and to forego opportunities elsewhere during such
period; and

              WHEREAS, the parties have entered into an Agreement dated December
14, 1992, as amended from time to time thereafter (the "Prior Agreement"); and

              WHEREAS, the parties wish to amend and restate the Prior Agreement
(as it had been amended from time to time thereafter)in its entirety;

              NOW, THEREFORE, IN CONSIDERATION of the mutual promises, covenants
and agreements set forth below, it is hereby agreed as follows:

         1.   Employment and Term.
              -------------------

                  (a) The Corporation agrees to continue the employment of the
Executive, and the Executive agrees to remain in the employ of the Corporation,
in accordance with the terms and provisions of this Agreement, for the period
set forth below (the "Employment Period").

                  (b) The Employment Period under this Agreement shall commence
as of December 12, 1998, and, subject only to the provisions of Section 4 below
relating to termination of employment, shall continue until (i) the close of
business on December 31, 2001 or (ii) such later date as shall result from the
operation of subparagraph (c) below (the "Terminal Date").


<PAGE>   7

                  (c) Commencing on December 31, 1998, and on each anniversary
of such date (such date and each such annual anniversary thereof, the "Renewal
Date") the Terminal Date set forth in subparagraph (b) above shall be extended
so as to occur three (3) years from the Renewal Date unless either party shall
have given notice to the other party that the Terminal Date is not to be
extended or further extended.

         2.   Position and Duties of the Executive.
              ------------------------------------

                  (a) Position. It is contemplated that during the Change of
Control Period (as defined in Section 12(d), below), the Executive will continue
to serve as a principal officer of the Corporation and as a member of its Board
of Directors if serving as a member of the Board of Directors immediately prior
to the Change of Control Date, with the office(s) and title(s), reporting
responsibility, and duties and responsibilities of the Executive immediately
prior to the Change of Control Date. The Executive hereby agrees that at any
time prior to the Change of Control Date, the Board of Directors of the
Corporation (or the individual to whom the Executive reports) may, without the
Executive's consent, change the Executive's office(s), title(s), reporting
responsibility, and duties or responsibilities.

                  The office(s), title(s), reporting responsibility, duties and
responsibilities of the Executive on the date of this Agreement, as the same may
be changed from time to time after the date of this Agreement in accordance with
the provisions of the previous paragraph, shall be summarized in Exhibit A to
this Agreement, it being understood and agreed that if, as and when the
office(s), title(s), reporting responsibility, duties or responsibilities of the
Executive shall be so changed after the date of this Agreement, Exhibit A shall
be deemed to be, and shall be updated by the parties to reflect such change;
provided, however, that Exhibit A is intended only as a memorandum for the
convenience of the parties and shall be disregarded if, and to the extent that,
Exhibit A shall fail to reflect accurately the office(s), title(s), reporting
responsibility, duties or responsibilities of the Executive as so changed after
the date of this Agreement because the parties shall have failed to update
Exhibit A as aforesaid.

                  At all times during the Change of Control Period, the
Executive shall hold a position of responsibility and importance and a position
of scope, with the functions, duties and responsibilities attached thereto, at
least equal in responsibility and importance and in scope to and commensurate
with his position described in general terms above in this Section 2(a) and
intended to be summarized in Exhibit A to this Agreement.


                                       2
<PAGE>   8

                  During the Employment Period the Executive shall, without
compensation other than that herein provided, also serve and continue to serve,
if and when elected and re-elected, as an officer or director, or both, of any
United States Subsidiary, division or Affiliate of the Corporation.

                  For all purposes of this Agreement, (i) a Subsidiary shall
mean a corporation or other entity, of which 50% or more of the voting
securities or other equity interests is owned directly, or indirectly through
one or more intermediaries, by the Corporation, and (ii) an Affiliate shall mean
a corporation or other entity which is not a Subsidiary and which directly, or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, the Corporation. For the purpose of this
definition, the terms "control," "controls" and "controlled" mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a corporation or other entity, whether through
the ownership of voting securities, by contract, or otherwise.

                  (b) DUTIES. Throughout the Employment Period the Executive
shall devote his full time and undivided attention during normal business hours
to the business and affairs of the Corporation except for reasonable vacations
and except for illness or incapacity, but nothing in this Agreement shall
preclude the Executive from devoting reasonable periods required for:

                           (i) serving as a director or member of a committee or
                  any organization involving no conflict of interest with the
                  interests of the Corporation;

                           (ii) delivering lectures, fulfilling speaking
                  engagements, teaching at educational institutions;

                           (iii) engaging in charitable and community
                  activities; and

                           (iv) managing his personal investments;

provided that such activities do not materially interfere with the regular
performance of his duties and responsibilities under this Agreement.





                                       3
<PAGE>   9



                  (c) LOCATION OF OFFICE. During the Change of Control Period,
the office of the Executive shall be located at the principal offices of the
Corporation, within the greater Toledo, Ohio area, and the Executive shall not
be required to locate his office elsewhere without his prior written consent,
nor shall he be required to be absent therefrom on travel status or otherwise
more than thirty (30%) of the working days in any calendar year nor for more
than ten (10) consecutive days at any one time.

         3.   Compensation.
              ------------

              The Executive shall receive the following compensation for his
services:

                  (a) SALARY. So long as the Executive is employed by the
Corporation, he shall be paid an annual base salary, payable not less often than
monthly, at the rate of not less than $58,333.33 per month with such increases
as shall be awarded from time to time in accordance with the Corporation's
regular administrative practices of other salary increases applicable to
executives of the Corporation, subject to any and all required withholdings and
deductions for Social Security, income taxes and the like (the "Annual Base
Salary"). The Board of Directors of the Corporation (the "Board") may from time
to time direct such upward adjustments to Annual Base Salary as the Board deems
to be necessary or desirable; provided, however, that during the Change of
Control Period (as defined in Section 12(d) below), the Annual Base Salary shall
be reviewed at least annually and shall be increased at any time and from time
to time but not less often than annually and shall be substantially consistent
with increases in base salary generally awarded in the ordinary course of
business to other senior executives of the Corporation and its Affiliated
Companies (a term which, as used in this Agreement, shall mean a Subsidiary or
Affiliate of the Corporation) and, in addition, shall be adjusted effective as
of January lst of each calendar year commencing in the Change of Control Period
to reflect increases in the cost of living during the preceding calendar year.
Annual Base Salary shall not be reduced after any increase thereof pursuant to
this Section 3(a). Any increase in Annual Base Salary shall not serve to limit
or reduce any other obligation of the Corporation under this Agreement.

                  (b) ADDITIONAL COMPENSATION. So long as the Executive is
employed by the Corporation, he shall be eligible to receive annual short-term
incentive awards or bonuses (such award or bonus is hereinafter referred to as
"Short-Term Award" or "Annual Bonus") from the Dana Corporation Additional
Compensation Plan, and from any successor or replacement plan (the Dana
Corporation Additional




                                       4
<PAGE>   10

Compensation Plan and such successor or replacement plans being referred to
herein collectively as the "ACP"), in accordance with the terms thereof;
provided, however, that, with respect to each fiscal year of the Corporation
ending during the Change of Control Period, the Executive shall be awarded
(whether under the terms of the ACP or otherwise) an Annual Bonus in an amount
that shall not be less than fifty percent (50%) of his Annual Base Salary rate
in effect on the last day of such fiscal year (which amount shall be prorated if
such fiscal year shall be less than 12 months) (the "Target Annual Bonus"). Each
Annual Bonus shall be paid no later than the end of the third month of the
fiscal year next following the fiscal year for which the Annual Bonus is
awarded, unless the receipt of such Annual Bonus is deferred in accordance with
the terms of the ACP.

                  (c) INCENTIVE, STOCK AND SAVINGS PLANS. So long as the
Executive is employed by the Corporation, he shall be and continue to be a full
participant in the Dana Corporation 1997 Stock Option Plan, the ACP (providing
for Short-Term Awards) and in any and all other incentive, stock, savings or
retirement plans, practices or policies in which executives of the Corporation
participate that are in effect on the date hereof and that may hereafter be
adopted, including, without limitation, any stock option, stock purchase or
stock appreciation plans, or any successor plans that may be adopted by the
Corporation with, except in the case of the ACP after the commencement of the
Change of Control Period, at least the same reward opportunities, if any, that
have heretofore been provided to the Executive. Nothing in this Agreement shall
preclude improvement of reward opportunities in such plans or other plans in
accordance with the practice of the Corporation on or after the date of this
Agreement. Any provision of the ACP or of this Agreement to the contrary
notwithstanding, any Short-Term Awards made to the Executive during the Change
of Control Period (whether for services rendered prior to or after the Change of
Control Date) shall be paid wholly in cash as soon as practicable after the
awards are made.

                  (d) RETIREMENT AND WELFARE BENEFIT PLANS. The Executive, his
dependents and Beneficiary, including, without limitation, any beneficiary of a
joint and survivor or other optional method of payment applicable to the payment
of benefits under the Pension and Retirement Program of the Corporation, as
defined in Section 3(j)(vii) below, shall be entitled to all payments and
benefits and service credit for benefits during the Employment Period to which
other senior executives of the Corporation, their dependents and their
beneficiaries are entitled under the terms of employee retirement




                                       5
<PAGE>   11

and welfare benefit plans and practices of the Corporation, including, without
limitation, the Pension and Retirement Program of the Corporation (as defined in
Section 3(j)(vii) below), the Corporation's Savings and Investment Plan, its
Stock Purchase Plan, its Stock Award Plan, its Income Protection Plan for
Management and Certain Other Employees providing layoff and severance benefits,
its 1989 Restricted Stock Plan, its Excess Benefits Plan, its Supplemental
Benefits Plan, its death benefit plans (consisting of its Group Insurance Plan
for Management Employees providing life insurance, accidental death and
dismemberment insurance, and travel accident insurance), its disability benefit
plans (consisting of its salary continuation, sickness and accident and
long-term disability benefits programs), its medical, dental and health and
welfare plans and other present or equivalent successor plans and practices of
the Corporation, its Subsidiaries and divisions, for active and retired
employees, for which officers, their dependents and beneficiaries, are eligible,
and to all payments or other benefits under any such plan or practice subsequent
to the Employment Period as a result of participation in such plan or practice
during the Employment Period.

                  (e) EXPENSES. So long as the Executive is employed by the
Corporation, he shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in accordance with the polices,
practices and procedures of the Corporation and its Affiliated Companies from
time to time in effect, commensurate with his position and on a basis at least
comparable to that of other senior executives of the Corporation.

                  (f) FRINGE BENEFITS. So long as the Executive is employed by
the Corporation, he shall be entitled to fringe benefits, including, without
limitation, the business and personal use of an automobile, and payment or
reimbursement of club initiation fees and dues, in accordance with the plans,
practices, programs and policies of the Corporation and its Affiliated Companies
from time to time in effect, commensurate with his position and at least
comparable to those received by other senior executives of the Corporation.

                  (g) OFFICE AND SUPPORT STAFF. So long as the Executive is
employed by the Corporation, he shall be entitled to an office or offices of a
size and with furnishings and other appointments, and to exclusive personal
secretarial and other assistance, commensurate with his position and at least
comparable to those received by other senior executives of the Corporation.



                                       6
<PAGE>   12

                  (h) VACATION AND OTHER ABSENCES. So long as the Executive is
employed by the Corporation, he shall be entitled to paid vacation and such
other paid absences whether for holidays, illness, personal time or any similar
purposes, in accordance with the plans, policies, programs and practices of the
Corporation and its Affiliated Companies in effect from time to time,
commensurate with his position and at least comparable to those received by
other senior executives of the Corporation.

                  (i) BENEFITS SHALL NOT BE REDUCED UNDER CERTAIN CIRCUMSTANCES.
Nothing in this Agreement shall preclude the Corporation from amending or
terminating any employee benefit or welfare plan or practice, but, it being the
intent of the parties that the Executive shall continue to be entitled during
the Employment Period to perquisites as set forth in this Section 3 and to
benefits and service credit for benefits under Section 3(d) above at least equal
to those attached to his position on December 10, 1990, the date of the original
agreement between the parties (except that, in converting a monthly retirement
benefit, which is payable under any plan that is a component of the Pension and
Retirement Program of the Corporation, into a lump sum payment, the lump sum
conversion basis to be used shall be the basis that is described in Section
3(j)(iii) below, regardless of whether such basis is more favorable or less
favorable than the one in effect on December 10, 1990), and except as provided
in the last sentence of this Section 3(i), nothing in this Agreement shall
operate or be construed to reduce, or authorize a reduction without the
Executive's written consent in, the level of such perquisites, benefits or
service credit for benefits; in the event of any such reduction, by amendment or
termination of any plan or practice or otherwise, the Executive, his dependents
and Beneficiary, shall continue to be entitled to perquisites, benefits and
service credit for benefits at least equal to the perquisites, benefits and
service credit for benefits under such plans or practices that he or his
dependents and Beneficiary would have received if such reduction had not taken
place. If and to the extent that such perquisites, benefits and service credits
are not payable or provided under any such plans or practices by reason of such
amendment or termination thereof, the Corporation itself shall pay or provide
therefor. Notwithstanding the foregoing provisions of this Section 3(i), the
Executive hereby waives the benefit of the foregoing minimum benefit protection
only as it applies to the Dana Corporation Savings and Investment Plan, and to
its medical, dental and health plans for active and retired employees. The
Executive expressly does not waive the application of the foregoing minimum
benefit protection to any of the other benefit plans, programs or practices
enumerated in




                                       7
<PAGE>   13

Section 3 above, including, without limitation, the Pension and Retirement
Program of the Corporation, its death benefit plans, its disability benefit
plans, and its Income Protection Plan for Management and Certain Other
Employees. The Executive reserves the right to cancel the above waiver,
prospectively, at any future time by giving written notice to the Corporation of
such cancellation. Nothing in this Section 3(i) shall be construed to prohibit
the Corporation from amending or terminating any employee benefit or welfare
plan or practice to reduce benefits, so long as such reduction applies to all
salaried Corporation employees covered by such plan or practice equally and such
reduction is adopted prior to the commencement of the Change of Control Period.

                  (j)  SUPPLEMENTAL RETIREMENT ANNUITY.

                           (i) If the Service of the Executive, including,
         without limitation, the period set forth in Section 5(a)(iv)(2) below,
         relating to the period between the Date of Termination and the end of
         the Termination Period, shall terminate other than for Cause as defined
         in Section 4(b) below, and if the Executive shall have a total of not
         less than fifteen (15) years of Service, as defined in subparagraph
         (viii) of this Section 3(j), whether or not consecutive, the Executive,
         subject to compliance with the provisions of Sections 9 and 10 below,
         relating to confidential information and Competition, respectively, and
         after the Executive's death, his Beneficiary shall be entitled to the
         supplemental retirement annuity provided by this Section 3(j) in
         addition to all other benefits to which the Executive (or his
         Beneficiary), may be entitled including, without limitation, benefits
         under the Pension and Retirement Program of the Corporation.

                  Such supplemental retirement annuity shall be payable by the
Corporation on a straight life annuity basis commencing on the first day of the
month coinciding with or next following the latest of

                  (1)      termination of Service;

                  (2)      attainment by the Executive of age 55; and

                  (3)      if the Executive had not previously retired with
                           15 years or more of Service, the expiration of the
                           Employment Period;

and continuing on the first day of each month thereafter during his lifetime.



                                       8
<PAGE>   14

                           (ii) The monthly payment provided for in Section
         3(j)(i) above shall be equal to fifty percent (50%) (or if higher, the
         percentage which is the product of 1.6% multiplied by the Executive's
         Credited Service at retirement, as such Credited Service is determined
         by application of the definition of Credited Service under the Dana
         Corporation Retirement Plan), of the Executive's Highest Average
         Monthly Compensation, as defined in Section 3(j)(vi), less the sum of

                  (1)      commencing at the earliest date that it could be
                           payable on or after termination of Service, the
                           aggregate monthly retirement benefit payable to the
                           Executive for life on a straight life annuity basis
                           under the Pension and Retirement Program of the
                           Corporation to the extent attributable to
                           contributions of the Corporation, its Subsidiaries
                           and Affiliates;

                  (2)      commencing at the earliest date that it could be
                           payable on or after termination of Service, the
                           aggregate monthly retirement or disability benefit
                           payable to the Executive for life on a straight life
                           annuity basis following his retirement or termination
                           from employment by the Corporation, its Subsidiaries
                           and Affiliates, to the extent attributable to
                           contributions other than by the Executive under
                           pension or retirement plans of all corporations,
                           organizations or entities other than the Corporation,
                           its Subsidiaries and Affiliates;

                  (3)      commencing at the earliest date payable on or after
                           termination of Service, 50% of the monthly primary
                           Social Security benefit that would be or would have
                           been payable to the Executive in the absence of any
                           compensation that may at the time be or have been
                           earned by him; and

                  (4)      commencing at the earliest date payable on or after
                           termination of Service and continuing until no longer
                           payable, the aggregate monthly disability benefit
                           payable to the Executive under disability benefit
                           plans and pension plans of the Corporation, its
                           Subsidiaries and Affiliates to the extent
                           attributable to contributions of the Corporation, its
                           Subsidiaries and Affiliates.



                                       9
<PAGE>   15

                           (iii) The Executive may elect to receive payment of
         the supplemental retirement annuity provided by this Section 3(j),
         under a joint and survivor or any other optional method of payment
         available under the Dana Corporation Retirement Plan, including,
         without limitation, any deferment in the time of payment thereof. The
         amount of the benefit payable pursuant to any form of payment under
         this Section 3(j) shall be determined by applying the mortality
         assumptions, interest rates, and other factors contained in the Dana
         Corporation Retirement Plan that would be applicable to the form of
         payment elected by the Executive; provided that, if a lump sum
         distribution is made hereunder, the amount of the lump sum distribution
         shall be actuarially equivalent to the monthly benefit prescribed by
         Section 3(j)(ii), calculated using the basis described in subparagraph
         (1) or (2), below, whichever produces the larger lump sum amount:

                  (1)      the lump sum amount calculated on the basis of the
                           "applicable interest rate" (as in effect for the
                           November preceding the calendar year in which the
                           calculation is made) and the "applicable mortality
                           table," both as defined in Section 417(e) of the
                           Internal Revenue Code; or

                  (2)      the lump sum amount calculated on the basis of the
                           actuarial equivalent factor used to convert the
                           Executive's Earned Benefit Account into a life
                           annuity under the Dana Corporation Retirement Plan at
                           the time the calculation is made.

         If it is determined that the Executive is subject to federal income
         taxation on an amount in respect of the supplemental retirement annuity
         prior to the distribution of all of such amount to him, the Corporation
         shall forthwith pay to the Executive all (or the balance) of such
         amount as is includable in the Executive's federal gross income and
         correspondingly reduce future payments, if any, of the supplemental
         retirement annuity.

                           (iv) In the event the Executive should die prior to
         terminating Service with the Corporation, the Executive's surviving
         spouse to whom he is then married, or if no such surviving spouse is
         then living, his Beneficiary, shall be entitled to receive a lump
         benefit equal to 100% of the benefit to which the Executive would have
         been entitled under this Section 3(j), as if the Executive had retired
         on the date of his death and elected a lump sum benefit hereunder.


                                       10
<PAGE>   16


                           (v) In the event that the Corporation defaults in
         payment of all or any part of the supplemental retirement annuity
         provided above in this Section 3(j) and fails to remedy such default
         within thirty days after having received notice from the Executive or
         his Beneficiary, the Corporation shall thereupon pay to the Executive
         or his Beneficiary, as the case may be, in full discharge of its
         obligations under this Section 3(j), (1) a lump sum amount actuarially
         equivalent (based on the same assumptions and discount factors as would
         be applicable under the Dana Corporation Retirement Plan as then in
         effect) to the future payments otherwise payable under this Section
         3(j), and (2) an amount equal to any and all past due payments under
         this Section 3(j).

                           (vi) The term "Highest Average Monthly Compensation"
         shall mean the sum of (1) one-twelfth (1/12) of the Annual Base Salary
         provided in Section 3(a) at the rate being paid at the time the
         Executive's termination of employment occurred, and (2) one-twelfth
         (1/12) of the average of the highest Annual Bonuses payable to the
         Executive for any three (3) consecutive full or partial fiscal years
         during his employment by the Corporation, provided, however, that,
         solely for purposes of this Section 3(j), and for no other purposes
         under this Agreement, with respect to 1994 and subsequent years' Annual
         Bonuses, only that portion of the Employee's Annual Bonus as does not
         exceed 125% of his Annual Base Salary will be considered.

                           (vii) The term "Pension and Retirement Program of the
         Corporation" shall mean the Dana Corporation Retirement Plan, the Dana
         Corporation Excess Benefits Plan, the Dana Corporation Supplemental
         Benefits Plan, and any other supplemental, early retirement and similar
         plan or plans of the Corporation, its Subsidiaries and Affiliates,
         providing for pension or retirement benefits that may be applicable to
         the Executive and that are in effect on the date hereof or may
         hereafter be adopted or substituted for any such plan, but exclusive of
         the Dana Corporation Savings and Investment Plan and any similar plan
         or plans.

                           (viii) The term "Service" shall mean employment as an
         employee by the Corporation, any Subsidiary or Affiliate thereof or any
         corporation the capital stock or assets of which have been acquired by,
         or which has been merged into or consolidated with the Corporation or
         any Subsidiary or Affiliate thereof.



                                       11
<PAGE>   17

         4    Termination of Employment.
              -------------------------

                  (a)  DEATH OR DISABILITY.

                           (i) The Executive's employment shall terminate
                  automatically upon the Executive's death during the Employment
                  Period.

                           (ii) If the Corporation determines in good faith that
                  the Disability (as defined below) of the Executive has
                  occurred during the Employment Period, it may give to the
                  Executive written notice in accordance with Section 14(b)
                  below of its intention to terminate the Executive's
                  employment. In such event, the Employment Period shall
                  terminate effective on the 30th day after receipt of such
                  notice by the Executive (the "Disability Effective Date"),
                  provided, that within the 30 days after such receipt, the
                  Executive shall not have returned to full-time performance of
                  the Executive's duties. For purposes of this Agreement,
                  "Disability" shall mean the absence of the Executive from the
                  Executive's duties with the Corporation on a full-time basis
                  for 180 consecutive business days as a result of incapacity
                  due to mental or physical illness which is determined to be
                  total and permanent by a physician selected by the Corporation
                  or its insurers and acceptable to the Executive or the
                  Executive's legal representative (such agreement as to
                  acceptability not to be withheld unreasonably).

                  (b)  CAUSE.  The Corporation may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, the termination of the Executive's employment shall be deemed to have
been for "Cause" only

                           (i) if termination of his employment shall have been
                  the result of his conviction of, or plea of guilty or nolo
                  contendere to, the charge of having committed a felony
                  (whether or not such conviction is later reversed for any
                  reason), or

                           (ii) if there has been a breach by the Executive
                  during the Employment Period of the provisions of Section
                  2(b), relating to the time to be devoted to the affairs of the
                  Corporation, or of Section 9, relating to confidential
                  information, and such





                                       12
<PAGE>   18

                  breach results in demonstrably material injury to the
                  Corporation, and, with respect to any alleged breach of
                  Section 2(b) hereof, the Executive shall have either failed to
                  remedy such alleged breach within thirty days from his receipt
                  of written notice from the Secretary of the Corporation
                  pursuant to resolution duly adopted by the Board of Directors
                  of the Corporation after notice to the Executive and an
                  opportunity to be heard demanding that he remedy such alleged
                  breach, or shall have failed to take all reasonable steps to
                  that end during such thirty-day period and thereafter;

provided, that there shall have been delivered to the Executive a certified copy
of a resolution of the Board of Directors of the Corporation adopted by the
affirmative vote of not less than three-fourths of the entire membership of the
Board of Directors called and held for that purpose and at which the Executive
was given an opportunity to be heard, finding that the Executive was guilty of
conduct set forth in subparagraph (i) or (ii) above, specifying the particulars
thereof in detail.

         Anything in this Section 4(b) or elsewhere in this Agreement to the
contrary notwithstanding, the employment of the Executive shall in no event be
considered to have been terminated by the Corporation for Cause if termination
of his employment took place

                           (1)      as the result of bad judgment or negligence
                                    on the part of the Executive, or

                           (2)      because of an act or omission believed by
                                    the Executive in good faith to have been
                                    in or not opposed to the interests of
                                    the Corporation, or

                           (3)      for any act or omission in respect of which
                                    a determination could properly be made that
                                    the Executive met the applicable standard of
                                    conduct prescribed for indemnification or
                                    reimbursement or payment of expenses under
                                    (A) the Bylaws of the Corporation, or (B)
                                    the laws of the State of Virginia, or (C)
                                    the directors' and officers' liability
                                    insurance of the Corporation, in each case
                                    either as in effect at the time of this
                                    Agreement or in effect at the time of such
                                    act or omission, or




                                       13
<PAGE>   19


                           (4)      as the result of an act or omission which
                                    occurred more than twelve calendar months
                                    prior to the Executive's having been given
                                    notice of the termination of his employment
                                    for such act or omission unless the
                                    commission of such act or such omission
                                    could not at the time of such commission or
                                    omission have been known to a member of the
                                    Board of Directors of the Corporation (other
                                    than the Executive, if he is then a member
                                    of the Board of Directors), in which case
                                    more than twelve calendar months from the
                                    date that the commission of such act or such
                                    omission was or could reasonably have been
                                    so known, or

                           (5)      as the result of a continuing course of
                                    action which commenced and was or could
                                    reasonably have been known to a member of
                                    the Board of Directors of the Corporation
                                    (other than the Executive, if he is then a
                                    member of the Board of Directors) more than
                                    twelve calendar months prior to notice
                                    having been given to the Executive of the
                                    termination of his employment.


                  (c) GOOD REASON. Following a Change of Control (as defined in
Section 12(b) below), the Executive may terminate his employment for Good
Reason. For purposes of this Agreement, "Good Reason" shall mean the occurrence
after the Change of Control Date of any of the following events:

                           (i) Failure to elect or reelect the Executive to the
                  Board of Directors of the Corporation, if the Executive shall
                  have been a member of the Board of Directors on the date of
                  this Agreement or at any time thereafter during the Employment
                  Period, or failure to elect or reelect the Executive to, or
                  removal of the Executive from, the office(s) described in
                  Section 2(a) above and intended to be summarized in Exhibit A
                  to this Agreement.

                           (ii) A significant change in the nature or scope of
                  the authorities, powers, functions or duties attached to the
                  position described in Section 2 above and intended to be
                  summarized in Exhibit A to this Agreement, or a reduction in
                  compensation, which is not remedied within 30 days after
                  receipt




                                       14
<PAGE>   20

                  by the Corporation of written notice from the Executive.

                           (iii) A determination by the Executive made in good
                  faith that as a result of a Change of Control, and a change in
                  circumstances thereafter and since the date of this Agreement
                  significantly affecting his position, he is unable to carry
                  out the authorities, powers, functions or duties attached to
                  his position and contemplated by Section 2 of this Agreement
                  and the situation is not remedied within 30 days after receipt
                  by the Corporation of written notice from the Executive of
                  such determination.

                           (iv) A breach by the Corporation of any provision of
                  this Agreement not embraced within the foregoing clauses (i),
                  (ii) and (iii) of this Section 4(c) which is not remedied
                  within 30 days after receipt by the Corporation of written
                  notice from the Executive.

                           (v) The liquidation, dissolution, consolidation or
                  merger of the Corporation or transfer of all or a significant
                  portion of its assets unless a successor or successors (by
                  merger, consolidation or otherwise) to which all or a
                  significant portion of its assets have been transferred shall
                  have assumed all duties and obligations of the Corporation
                  under this Agreement but without releasing the corporation
                  that is the original party to this Agreement;

provided, that in any event set forth in this Section 4(c), the Executive shall
have elected to terminate his employment under this Agreement, upon not less
than ten and not more than ninety days' advance written notice to the
Corporation, attention of the Secretary, given, except in the case of a
continuing breach, within three calendar months after (A) failure to be so
elected or reelected, or removal, (B) expiration of the thirty-day cure period
with respect to such event, or (C) the closing date of such liquidation,
dissolution, consolidation, merger or transfer of assets, as the case may be.

         An election by the Executive to terminate his employment given under
the provisions of this Section 4(c) shall not be deemed a voluntary termination
of employment by the Executive for the purpose of this Agreement or any plan or
practice of the Corporation.

                  (d) NOTICE OF TERMINATION. Any termination by the Corporation
for Cause, or by the Executive for Good Reason,




                                       15
<PAGE>   21

shall be communicated by Notice of Termination to the other party hereto given
in accordance with Section 14(b) below. For purposes of this Agreement, a
"Notice of Termination" means a written notice which

                           (i)  indicates the specific termination provision in
                  this Agreement relied upon,

                           (ii) to the extent applicable, sets forth in
                  reasonable detail the facts and circumstances claimed to
                  provide a basis for termination of the Executive's employment
                  under the provision so indicated and

                           (iii) if the Date of Termination (as defined in
                  Section 4(e) below) is other than the date of receipt of such
                  notice, specifies the termination date (which date shall be
                  not more than fifteen days after the giving of such notice).

                  (e)  DATE OF TERMINATION.  "Date of Termination" means

                           (i) if the Executive's employment is terminated by
                  the Corporation for Cause, or by the Executive for Good
                  Reason, the date of receipt of the Notice of Termination or
                  any later date specified therein, as the case may be,

                           (ii) if the Executive's employment is terminated by
                  the Corporation other than for Cause or Disability, the Date
                  of Termination shall be the date on which the Corporation
                  notifies the Executive of such termination and

                           (iii) if the Executive's employment is terminated by
                  reason of death or Disability, the Date of Termination shall
                  be the date of death of the Executive or the Disability
                  Effective Date, as the case may be.

         5    Obligations of the Corporation Upon Termination.
              -----------------------------------------------

                  (a) TERMINATION OTHER THAN FOR CAUSE. If, during the
Employment Period, the Corporation shall terminate the Executive's employment
other than for Cause or the Executive shall terminate his employment following a
Change of Control for Good Reason (termination in any such case referred to as
"Termination"):



                                       16
<PAGE>   22

                           (i)  the Corporation shall pay the Executive in a
                           lump sum in cash within 30 days after the Date of
                           Termination the sum of

                           (1)      the Executive's Annual Base Salary through
                                    the Date of Termination to the extent not
                                    theretofore paid,

                           (2)      the product of (x) the Target Annual Bonus
                                    and (y) a fraction, the numerator of which
                                    is the number of days in the current fiscal
                                    year through the Date of Termination, and
                                    the denominator of which is 365, and

                           (3)      any compensation previously deferred by the
                                    Executive (together with any accrued
                                    interest or earnings thereon) and any
                                    accrued vacation pay, in each case to the
                                    extent not theretofore paid (the sum of the
                                    amounts described in clauses (1), (2), and
                                    (3) shall be hereinafter referred to as the
                                    "Accrued Obligations"); and

                           (ii) at the end of the month next following the
                  Termination, and at the end of each month thereafter until the
                  earliest of the end of the Employment Period, three years
                  following the Date of Termination, or until the Executive
                  shall attain the age of 65 years, but in no event beyond the
                  end of the month in which the death of the Executive shall
                  have occurred or the end of the sixth month following the
                  Disability Effective Date (such period to be called the
                  "Termination Period"), the Corporation shall pay to the
                  Executive an amount equal to the Highest Average Monthly
                  Compensation; provided, however, that such amount shall be
                  reduced by any other amounts payable to the Executive in
                  respect of salary or bonus continuation to be received by the
                  Executive under any severance plan, policy or arrangement of
                  the Corporation; and, provided, further, that if the Date of
                  Termination occurs on or after the occurrence of a Change of
                  Control, such amount shall be paid as a lump-sum within 30
                  days following the Date of Termination, such lump-sum
                  calculated based upon the present value (within the meaning of
                  Section 28OG(d)(4) of the Internal Revenue Code of 1986 as
                  amended (the "Code")) of the payments which would be made
                  absent the Change of Control; and


                                       17
<PAGE>   23


                           (iii) During the Termination Period, or such longer
                  period as any plan, program, practice or policy may provide,
                  the Corporation shall continue benefits to the Executive
                  and/or the Executive's family at least equal to those which
                  would have been provided to them in accordance with the plans,
                  programs, practices and policies described in Section 3(d)
                  above if the Executive's employment had not been terminated in
                  accordance with the most favorable plans, practices, programs
                  or policies of the Corporation and its Affiliated Companies as
                  in effect and applicable generally to other senior executives
                  of the Corporation and its Affiliated Companies and their
                  families during the 90-day period immediately preceding the
                  Date of Termination or, if more favorable to the Executive, as
                  in effect at any time thereafter or, if more favorable to the
                  Executive, as in effect generally at any time thereafter with
                  respect to other senior executives of the Corporation and its
                  Affiliated Companies and their families, provided, however,
                  that if the Executive becomes reemployed with another employer
                  and is eligible to receive medical or other welfare benefits
                  under another employer-provided plan, the medical and other
                  welfare benefits described herein shall be secondary to those
                  provided under such other plan during such applicable period
                  of eligibility (such continuation of such benefits for the
                  applicable period herein set forth shall be hereinafter
                  referred to as "Welfare Benefit Continuation"). For purposes
                  of determining eligibility of the Executive for retiree
                  benefits pursuant to such plans, practices, programs and
                  policies, the Executive shall be considered to have remained
                  employed until the end of the Termination Period and to have
                  retired on the date of the end of the Termination Period. To
                  the extent that any benefits referred to in this Section
                  5(a)(iii) shall not be payable or provided under any such plan
                  by reason of the Executive's no longer being an employee of
                  the Corporation as the result of Termination, the Corporation
                  shall itself pay, or provide for payment of, such benefits and
                  the service credit for benefits provided for in Section
                  5(a)(iv) below, to the Executive, his dependents and
                  Beneficiary; and

                           (iv) The period from the Date of Termination until
                  the end of the Termination Period shall be considered:



                                       18
<PAGE>   24

                           (1)      Service with the Corporation for the purpose
                                    of continued credits under the employee
                                    benefit plans referred to in Section 3(d)
                                    above and all other benefit plans of the
                                    Corporation applicable to the Executive or
                                    his Beneficiary as in effect immediately
                                    prior to Termination but prior to any
                                    reduction of benefits thereunder as the
                                    result of amendment or termination during
                                    the Employment Period;

                           (2)      Service within the meaning of
                                    Section 3(j)(viii) above for purposes of
                                    Section 3(j) above; and

                           (3)      Employment with the Corporation for purposes
                                    of determining payments and other rights in
                                    respect of awards made or accrued and award
                                    opportunities granted prior to Termination
                                    under the executive incentive plans referred
                                    to in Section 3(c) above and all other
                                    incentive plans of the Corporation in which
                                    the Executive was a participant prior to
                                    Termination; and

                           (v) to the extent not theretofore paid or provided,
                  the Corporation shall timely pay or provide to the Executive
                  and/or the Executive's family any other amounts or benefits
                  required to be paid or provided or which the Executive and/or
                  the Executive's family is eligible to receive pursuant to this
                  Agreement and under any plan, program, policy or practice or
                  contract or agreement of the Corporation and its Affiliated
                  Companies as in effect and applicable generally to other
                  senior executives of the Corporation and its Affiliated
                  Companies and their families during the 90-day period
                  immediately preceding the Date of Termination or, if more
                  favorable to the Executive, as in effect generally thereafter
                  with respect to other senior executives of the Corporation and
                  its Affiliated Companies and their families (such other
                  amounts and benefits shall be referred to below as the "Other
                  Benefits").

                  (b) TERMINATION ON OR AFTER CHANGE OF CONTROL. If Termination
shall have occurred coincidental with a Change of Control or during the Change
of Control Period, any provision of Section 5(a)(iv) above or of the ACP to the
contrary notwithstanding, upon such Termination, the Corporation shall



                                       19
<PAGE>   25


pay or distribute to the Executive on an accelerated basis, to the extent, if
any, not theretofore accelerated, any and all outstanding Short-Term Awards, or
installments thereof, under the ACP that shall have been awarded to the
Executive prior to Termination and deferred for payment subsequent to
termination of employment, with any such accelerated payment based on the value,
determined in accordance with such plan (or successor plan), of such awards or
installments (and any increments thereon) on the Termination Date, and such
accelerated payment or distribution shall constitute a complete discharge of the
Corporation's obligation in respect of the Short-Term Awards so paid or
distributed.

                  (c) CAUSE; OTHER THAN FOR GOOD REASON. If the Executive's
employment shall be terminated for Cause during the Employment Period, the
Corporation shall have no further obligations to the Executive under this
Agreement other than the obligation to pay the Executive's Annual Base Salary,
any compensation previously deferred by the Executive (together with any accrued
interest or earnings thereon), and accrued vacation pay through the Date of
Termination, in each case to the extent not theretofore paid, and any other
amounts or benefits to which the Executive and/or the Executive's family is
otherwise entitled under the terms of any employee benefit or incentive plan of
the Corporation. If the Executive terminates employment during the Employment
Period, excluding a termination for Good Reason following a Change of Control,
the Corporation shall have no further obligations to the Executive, other than
to pay the Executive's Annual Base Salary, any compensation previously deferred
by the Executive (together with any accrued interest or earnings thereon), and
accrued vacation pay through the termination date, in each case to the extent
not theretofore paid, any other benefits to which the Executive and/or the
Executive's family is otherwise entitled under the terms of any employee benefit
or incentive plan of the Corporation, and, if the Executive is otherwise
eligible under the provisions of Section 3(j) of this Agreement, he shall also
be entitled to receive the supplemental retirement annuity described in such
Section 3(j).

                  (d)  DEATH OR DISABILITY.

                           (i) In the event of the death of the Executive during
                  the Employment Period, the legal representative of the
                  Executive shall be entitled to the compensation provided for
                  in Sections 3(a) and 3(b) above for the month in which death
                  shall have taken place, at the rate being paid at the time of
                  death, and the Employment Period shall be deemed to have ended
                  as of the close of business on the last day of





                                       20
<PAGE>   26

                  the month in which death shall have occurred but without
                  prejudice to any payments due in respect of the Executive's
                  death. Further, in the event the Executive should die prior to
                  terminating Service with the Corporation, the Executive's
                  surviving spouse or Beneficiary, as the case may be, shall be
                  entitled to receive the supplemental retirement annuity
                  pursuant to Section 3(j)(iv).

                           (ii) In the event of the Disability of the Executive
                  during the Employment Period, the Executive shall be entitled
                  to the compensation provided for in Sections 3(a) and 3(b)
                  above, at the rate being paid on the Disability Effective
                  Date, for the period of such Disability but not in excess of
                  six months. The amount of any payments due under this Section
                  5(d)(ii) shall be reduced by any payments to which the
                  Executive may be entitled for the same period because of
                  disability under any disability or pension plan of the
                  Corporation or of any Subsidiary or Affiliate thereof.

                  (e)  RESOLUTION OF DISPUTES.

                           (i) RIGHT OF ELECTION BY EXECUTIVE TO ARBITRATE OR
                  SUE. In the event that the Executive's employment shall be
                  terminated by the Corporation during the Employment Period and
                  such termination is alleged to be for Cause, or the
                  Executive's right to terminate his employment under Section
                  4(c) above shall be questioned by the Corporation, or the
                  Corporation shall withhold payments or provision of benefits
                  for any other reason, the Executive shall have the right, in
                  addition to all other rights and remedies provided by law, at
                  his election either to seek arbitration within the Toledo,
                  Ohio area under the rules of the American Arbitration
                  Association by serving a notice to arbitrate upon the
                  Corporation or to institute a judicial proceeding, in either
                  case within ninety days after having received notice of
                  termination of his employment or notice in any form that the
                  termination of his employment under Section 4(b) above is
                  subject to question or that the Corporation is withholding or
                  proposes to withhold payments or provision of benefits.

                           (ii) THIRD-PARTY STAKEHOLDER. In the event that the
                  Corporation defaults on any obligation set forth in Section
                  5(a) above, relating to Termination, and shall have failed to
                  remedy such default within thirty (30) days after having
                  received written





                                       21
<PAGE>   27

                  notice of such default from the Executive, in addition to all
                  other rights and remedies that the Executive may have as a
                  result of such default, the Executive may demand and the
                  Corporation shall thereupon be required to deposit, with the
                  third-party stakeholder hereinafter described, an amount equal
                  to the undiscounted value of any and all undischarged, future
                  obligations of the Corporation under Section 5(a) above and
                  such amount shall thereafter be held, paid, applied or
                  distributed by such third-party stakeholder for the purpose of
                  satisfying such undischarged, future obligations of the
                  Corporation when and to the extent that they become due and
                  payable. Any interest or other income on such amount shall be
                  retained by the third-party stakeholder and applied, if
                  necessary, by it to satisfy such obligations, provided,
                  however, that any interest or other income that is earned on
                  such undischarged, future obligations after the date that the
                  third-party stakeholder determines, in its sole discretion,
                  that such obligations are due and owing to the Executive,
                  shall be paid to the Executive as earned. To the extent not
                  theretofore expended, such amount (including any remaining
                  unexpended interest or other income) shall be repaid to the
                  Corporation at such time as the third-party stakeholder, in
                  its sole discretion, reasonably exercised, determines, upon
                  the advice of counsel and after consultation with the
                  Corporation and the Executive or, in the event of his death,
                  his Beneficiary, that all obligations of the Corporation under
                  Section 5(a) above have been substantially satisfied.

                           Such amount shall, in the event of any question, be
                  determined jointly by the firm of certified public accountants
                  regularly employed by the Corporation and a firm of certified
                  public accountants selected by the Executive, in each case
                  upon the advice of actuaries to the extent the certified
                  public accountants consider necessary, and, in the event such
                  two firms of accountants are unable to agree on a resolution
                  of the question, such amount shall be determined by an
                  independent firm of certified public accountants selected
                  jointly by both firms of accountants.

                           The third-party stakeholder, the fees and expenses of
                  which shall be paid by the Corporation, shall be a national or
                  state bank or trust company




                                       22
<PAGE>   28

                  having a combined capital, surplus and undivided profits and
                  reserves of not less than Ten Million Dollars ($10,000,000)
                  which is duly authorized and qualified to do business in the
                  state in which the Executive resides at the time of such
                  default.

                  (f) BENEFITS ARE IN ADDITION TO SUPPLEMENTAL RETIREMENT
ANNUITY. Any provision of this Agreement to the contrary notwithstanding, the
payments, benefits, service credit for benefits and other matters provided by
this Section 5, including without limitation Section 5(a) above, in the event of
a Termination, are in addition to any payments, benefits, service credit for
benefits and other matters provided by Section 3(j) above relating to a
supplemental retirement annuity that may apply in such event.

         6    Non-exclusivity of Rights.
              -------------------------

         Except as provided in Sections 5(a)(ii), 5(b) and 5(c) above, nothing
in this Agreement shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided by the
Corporation or any of its Affiliated Companies and for which the Executive may
qualify, nor shall anything herein limit or otherwise affect such rights as the
Executive may have under any contract or agreement entered into after the date
hereof with the Corporation or any of its Affiliated Companies. Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan, policy, practice or program of, or any contract or agreement
entered into after the date hereof with, the Corporation or any of its
Affiliated Companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.

         7    Full Settlement.
              ---------------

         The Corporation's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Corporation may have against the Executive or others. In no
event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement and, except as provided in Section
5(a)(iii) above, such amounts shall not be reduced whether or not the Executive
obtains other employment.




                                       23
<PAGE>   29

         8    Golden Parachute Tax Payments.
              -----------------------------

                  (a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution involving a change of control of the Corporation, by the
Corporation or any other person or entity, to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 8) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code (or any successor
provision) or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") from the Corporation in an amount such that, after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.

                  (b) All calculations and determinations required to be made
under this Section 8, including whether and when a Gross-Up Payment is required
and the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by Price Waterhouse (or any
successor thereto by merger or operation of law) (the "Accounting Firm"). In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the change of control, the Executive shall
appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Corporation. Any Gross-Up Payment, as determined pursuant
to this Section 8, shall be paid by the Corporation to the Executive within five
days of the receipt of the Accounting Firm's determination. If the Accounting
Firm determines that no Excise Tax is payable by the Executive, it shall furnish
the Executive with a written opinion that failure to report the Excise Tax on
the Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Corporation and the Executive.



                                       24
<PAGE>   30

                  (c) The Executive shall promptly notify the Corporation in
writing of any claim by the Internal Revenue Service that, if successful, would
require the payment by the Corporation of the Gross-Up Payment.

         The Corporation shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such
claim and shall indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of costs
and expenses. Without limitation on the foregoing provisions of this Section
8(c), the Corporation shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and sue for a refund or to contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Corporation
shall determine; provided, however, that if the Corporation directs the
Executive to pay such claim and sue for a refund, the Corporation shall advance
the amount of such payment to the Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance. Furthermore, the Corporation's control of the contest
shall be limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and the Executive shall be entitled to settle or contest, as
the case may be, any other issue raised by the Internal Revenue Service or any
other taxing authority.

         9    Confidential Information.
              ------------------------

                  (a) The Executive agrees not to disclose, either while in the
Corporation's employ or at any time thereafter, to any person not employed by
the Corporation, or not engaged to render services to the Corporation, except
with the prior written consent of an officer authorized to act in the matter by
the Board of Directors of the Corporation, any confidential information obtained
by him while in the employ of the Corporation, including, without limitation,
information relating to any of the Corporation's inventions, processes,
formulae, plans, devices, compilations of information, methods of




                                       25
<PAGE>   31

distribution, customers, client relationships, marketing strategies or trade
secrets; provided, however, that this provision shall not preclude the Executive
from use or disclosure of information known generally to the public or of
information not considered confidential by persons engaged in the business
conducted by the Corporation or from disclosure required by law or Court order.
The agreement herein made in this Section 9(a) shall be in addition to, and not
in limitation or derogation of, any obligations otherwise imposed by law upon
the Executive in respect of confidential information and trade secrets of the
Corporation, its Subsidiaries and Affiliates.

                  (b) The Executive also agrees that upon leaving the
Corporation's employ he will not take with him, without the prior written
consent of an officer authorized to act in the matter by the Board of Directors
of the Corporation, and he will surrender to the Corporation any record, list,
drawing, blueprint, specification or other document or property of the
Corporation, its Subsidiaries and Affiliates, together with any copy and
reproduction thereof, mechanical or otherwise, which is of a confidential nature
relating to the Corporation, its Subsidiaries and Affiliates, or, without
limitation, relating to its or their methods of distribution, client
relationships, marketing strategies or any description of any formulae or secret
processes, or which was obtained by him or entrusted to him during the course of
his employment with the Corporation.

         10   Competition.
              -----------

                  (a) Subject to the provisions of Section 5(e) above relating
to resolution of disputes, there shall be no obligation on the part of the
Corporation to make any further payments provided for in Section 3(j) above
relating to payment of a supplemental retirement annuity, if the Executive
shall, during the period that such payments are being made or benefits provided,
engage in Competition with the Corporation as hereinafter defined, provided all
of the following shall have taken place:

                           (i) the Secretary of the Corporation, pursuant to
                  resolution of the Board of Directors of the Corporation, shall
                  have given written notice to the Executive that, in the
                  opinion of the Board of Directors, the Executive is engaged in
                  such Competition, specifying the details;

                           (ii) the Executive shall have been given a reasonable
                  opportunity upon reasonable notice to





                                       26
<PAGE>   32

                  appear before and to be heard by the Board of Directors prior
                  to the determination of the Board evidenced by such
                  resolution;

                           (iii) the Executive shall neither have ceased to
                  engage in such Competition within thirty days from his receipt
                  of such notice nor diligently taken all reasonable steps to
                  that end during such thirty-day period and thereafter.

         Notwithstanding any provision to the contrary contained herein, in the
event of a Termination, as defined in Section 5(a) above, this Section 10(a)
shall not apply following a Change of Control.

                  (b) The Executive agrees in addition to the provisions
relating to Competition set forth in Section 10(a) above that he will not engage
in Competition at any time (i) during the Employment Period, and (ii) except in
the event of a Termination, during the thirty-six (36) months immediately
following the termination of his employment with the Corporation.

                  (c) The word "Competition" for the purposes of this Agreement
shall mean

                           (i) taking a management position with or control of a
                  business engaged in the design, development, manufacture,
                  marketing or distribution of products, which constituted 15%
                  or more of the sales of the Corporation and its Subsidiaries
                  and Affiliates during the last fiscal year of the Corporation
                  preceding the termination of the Executive's employment, in
                  any geographical area in which the Corporation, its
                  Subsidiaries or Affiliates is at the time engaging in the
                  design, development, manufacture, marketing or distribution of
                  such products; provided, however, that in no event shall
                  ownership of less than 5% of the outstanding capital stock
                  entitled to vote for the election of directors of a
                  corporation with a class of equity securities held of record
                  by more than 500 persons, standing alone, be deemed
                  Competition with the Corporation within the meaning of this
                  Section 10,

                           (ii) soliciting any person who is a customer of the
                  businesses conducted by the Corporation, or any business in
                  which the Executive has been engaged on behalf of the
                  Corporation and its Subsidiaries or Affiliates at any time
                  during the term of this




                                       27
<PAGE>   33

                  Agreement on behalf of a business described in clause (i) of
                  this Section 10,

                           (iii) inducing or attempting to persuade any employee
                  of the Corporation or any of its Subsidiaries or Affiliates to
                  terminate his employment relationship in order to enter into
                  employment with a business described in clause (i) of this
                  Subsection 10(c), or

                           (iv) making or publishing any statement which is, or
                  may reasonably be considered to be, disparaging of the
                  Corporation or any of its Subsidiaries or Affiliates, or
                  directors, officers, employees or the operations or products
                  of the Corporation or any of its Subsidiaries or Affiliates,
                  except to the extent the Executive, during the Employment
                  Period, makes the statement to employees or other
                  representatives of the Corporation or any of its Subsidiaries
                  or Affiliates in furtherance of the Corporation's business and
                  the performance of his services hereunder.

         11.  Successors.
              ----------

         Except as otherwise provided herein,

                  (a) This Agreement shall be binding upon and shall inure to
the benefit of the Executive, his heirs and legal representatives, and the
Corporation and its successors as provided in this Section 11.

                  (b) This Agreement shall be binding upon and inure to the
benefit of the Corporation and any successor of the Corporation, including,
without limitation, any corporation or corporations acquiring, directly or
indirectly, 50% or more of the outstanding securities of the Corporation, or all
or substantially all of the assets of the Corporation, whether by merger,
consolidation, sale or otherwise (and such successor shall thereafter be deemed
embraced within the term "the Corporation" for the purposes of this Agreement),
but shall not otherwise be assignable by the Corporation.

         12.  Certain Definitions.
              -------------------

         The following defined terms used in this Agreement shall have the
meanings indicated:

                  (a) BENEFICIARY. The term "Beneficiary" as used in this
Agreement shall, in the event of the death of the Executive,



                                       28
<PAGE>   34

mean an individual or individuals and/or an entity or entities, including,
without limitation, the Executive's estate, duly designated on a form filed with
the Corporation by the Executive to receive any amount that may be payable after
his death or, if no such individual, individuals, entity or entities has or have
been so designated, or is at the time in existence or able to receive any such
amount, the Executive's estate.

                  (b) CHANGE OF CONTROL. A "Change of Control" shall be deemed
to have occurred if the event set forth in any one of the following paragraphs
shall have occurred:

                  (i) any Person is or becomes the Beneficial Owner, directly or
                  indirectly, of securities of the Corporation (not including in
                  the securities Beneficially Owned by such Person any
                  securities acquired directly from the Corporation or its
                  Affiliates) representing 20% or more of the combined voting
                  power of the Corporation's then outstanding securities,
                  excluding any Person who becomes such a Beneficial Owner in
                  connection with a transaction described in clause (1) of
                  paragraph (iii) below; or

                  (ii) the following individuals cease for any reason to
                  constitute a majority of the number of directors then serving:
                  individuals who, on the date hereof, constitute the Board and
                  any new director whose appointment or election by the Board or
                  nomination for election by the Corporation's stockholders was
                  approved or recommended by a vote of at least two-thirds (2/3)
                  of the directors then still in office who either were
                  directors on the date hereof or whose appointment, election or
                  nomination for election was previously so approved or
                  recommended. For purposes of the preceding sentence, any
                  director whose initial assumption of office is in connection
                  with an actual or threatened election contest, including but
                  not limited to a consent solicitation, relating to the
                  election of directors of the Corporation, shall not be
                  counted; or

                  (iii) there is consummated a merger or consolidation of the
                  Corporation or any direct or indirect Subsidiary of the
                  Corporation with any other corporation, other than (1) a
                  merger or consolidation which would result in the voting
                  securities of the Corporation outstanding immediately prior to
                  such merger or consolidation continuing to represent (either
                  by remaining outstanding or by being converted into





                                       29
<PAGE>   35

                  voting securities of the surviving entity or any parent
                  thereof) at least 50% of the combined voting power of the
                  securities of the Corporation or such surviving entity or any
                  parent thereof outstanding immediately after such merger or
                  consolidation, or (2) a merger or consolidation effected to
                  implement a recapitalization of the Corporation (or similar
                  transaction) in which no Person is or becomes the Beneficial
                  Owner, directly or indirectly, of securities of the
                  Corporation (not including in the securities Beneficially
                  Owned by such Person any securities acquired directly from the
                  Corporation or its Affiliates) representing 20% or more of the
                  combined voting power of the Corporation's then outstanding
                  securities; or

                  (iv) the stockholders of the Corporation approve a plan of
                  complete liquidation or dissolution of the Corporation or
                  there is consummated an agreement for the sale or disposition
                  by the Corporation of all or substantially all of the
                  Corporation's assets, other than a sale or disposition by the
                  Corporation of all or substantially all of the Corporation's
                  assets to an entity, at least 50% of the combined voting power
                  of the voting securities of which are owned by stockholders of
                  the Corporation in substantially the same proportions as their
                  ownership of the Corporation immediately prior to such sale.

"Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the
Exchange Act.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from
time to time.

"Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof, except that such term
shall not include (i) the Corporation or any of its Subsidiaries, (ii) a trustee
or other fiduciary holding securities under an employee benefit plan of the
Corporation or any of its Affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities or (iv) a corporation
owned, directly or indirectly, by the stockholders of the Corporation in
substantially the same proportions as their ownership of stock of the
Corporation.

                  (c) CHANGE OF CONTROL DATE. The "Change of Control Date" shall
mean the first date on which a Change of Control occurs. Anything in this
Agreement to the contrary notwithstanding,




                                       30
<PAGE>   36

if a Change of Control occurs and if the Executive's employment with the
Corporation is terminated or the Executive ceases to have the position with the
Corporation set forth in Section 2(a) above prior to the date on which the
Change of Control occurs, and if it is reasonably demonstrated by the Executive
that such termination or cessation (i) was at the request of a third party who
has taken steps reasonably calculated to effect the Change of Control or (ii)
otherwise arose in connection with or anticipation of the Change of Control,
then for all purposes of this Agreement the "Change of Control Date" shall mean
the date immediately prior to the date of such termination or cessation.

                  (d)  CHANGE OF CONTROL PERIOD.  The "Change of Control Period"
shall mean the period commencing on the Change of Control Date and ending on the
last day of the Employment Period.

         13.  Amendment or Modification; Waiver.
              ---------------------------------

         No provision of this Agreement may be amended, modified or waived
unless such amendment, modification or waiver shall be authorized by the Board
of Directors of the Corporation or any authorized committee of the Board of
Directors and shall be agreed to in writing, signed by the Executive and by an
officer of the Corporation thereunto duly authorized. Except as otherwise
specifically provided in this Agreement, no waiver by either party hereto of any
breach by the other party hereto of any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver of a subsequent
breach of such condition or provision or a waiver of a similar or dissimilar
provision or condition at the same time or at any prior or subsequent time.

         14.  Miscellaneous.
              -------------

                  (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, without reference to principles
of conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.

                  (b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:



                                       31
<PAGE>   37

If to the Executive:                        Copy to:
-------------------                         -------
Mr. Joseph M. Magliochetti                  Mr. Joseph M. Magliochetti
c/o Dana Corporation                        3846 Sulphur Springs Road
4500 Dorr Street                            Toledo, Ohio  43606
Toledo, Ohio  43615


If to the Corporation:
---------------------
Dana Corporation
4500 Dorr Street
Toledo, Ohio 43615
Attention: Secretary


or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

                  (c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.

                  (d) The Corporation may withhold from any amounts payable
under this Agreement such Federal, state or local taxes as it determines is
required to be withheld pursuant to any applicable law or regulation.

                  (e) When used herein in connection with plans, programs and
policies relating to the Executive, employees, compensation, benefits,
perquisites, executive benefits, services and similar words and phrases, the
word "Corporation" shall be deemed to include all wholly-owned Subsidiaries of
the Corporation.

                  (f) This instrument contains the entire agreement of the
parties concerning the subject matter, and all promises, representations,
understandings, arrangements and prior agreements concerning the subject matter
are merged herein and superseded hereby, including, without limitation, the
agreements between the parties dated December 10, 1990, December 14, 1992, and
December 8, 1997.

                  (g) No right, benefit or interest hereunder, shall be subject
to anticipation, alienation, sale, assignment, encumbrance, charge, pledge,
hypothecation, or set-off in respect of any claim, debt or obligation, or to
execution, attachment, levy or similar process, or assignment by operation of
law. Any attempt, voluntary or involuntary, to effect any action specified in
the immediately preceding sentence



                                       32
<PAGE>   38

shall, to the full extent permitted by law, be null, void and of no effect.

                  (h) The Executive shall not have any right, title, or interest
whatsoever in or to any investments which the Corporation may make to aid it in
meeting its obligations under this Agreement.

                  (i) Subject to the provisions of Section 5(e) above, all
payments to be made under this Agreement shall be paid from the general funds of
the Corporation and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of amounts payable under
this Agreement.

                  (j) The Corporation and the Executive recognize that each
party will have no adequate remedy at law for breach by the other of any of the
agreements contained in this Agreement and, in the event of any such breach, the
Corporation and the Executive hereby agree and consent that the other shall be
entitled to a decree of specific performance, mandamus or other appropriate
remedy to enforce performance of such agreements.

                  (k) Subject to the provisions of Section 5(e) above, nothing
contained in this Agreement shall create or be construed to create a trust of
any kind, or a fiduciary relationship between the Corporation and the Executive
or any other person.

                  (l) Subject to the provisions of Section 5(e) above, to the
extent that any person acquires a right to receive payments from the Corporation
under this Agreement, except to the extent provided by law such right shall be
no greater than the right of an unsecured general creditor of the Corporation.

                  (m) In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his legal representative or,
where appropriate, to his Beneficiary.

                  (n) If any event provided for in this Agreement is scheduled
to take place on a legal holiday, such event shall take place on the next
succeeding day that is not a legal holiday.



                                       33
<PAGE>   39


         IN WITNESS WHEREOF, the Executive and, pursuant to due authorization
from its Board of Directors, the Corporation have caused this Agreement to be
executed as of the day and year first above written.


                                DANA CORPORATION



                                By  /s/ S. J. Morcott
                                   -----------------------------------
                                Name:   Southwood J. Morcott
                                Title:  Chairman of the Board



                                By /s/ R. B. Priory
                                   -----------------------------------
                                Chairman of the Compensation Committee

Attest:


/s/ Sue A. Griffin
-----------------------
Assistant Secretary


                                /s/ J. M. Magliochetti
                                ------------------------------------
                                Executive



                                       34
<PAGE>   40


              Exhibit A to Agreement made as of December 12, 1998
              between Dana Corporation and Joseph M. Magliochetti


         As of February 18, 1999, for purposes of Section 2(a),

         the office(s) and title(s) of the Executive are President, Chief
Executive Officer and Chief Operating Officer of the Corporation;

         the reporting responsibility of the Executive is to report directly to
the Chairman of the Board of Directors of the Corporation; and

         the duties and responsibilities of the Executive are:

         Through the chairmanship of the World Operating Committee, provides
         direction for the Corporation's worldwide operations. Major activities
         include planning and review of operating results for, and
         organizational development to insure profitability of, worldwide
         operations. The World Operating Committee executes and monitors the
         corporate style, marketing strategies, policies and goals that the
         Corporation's various strategic business units and various world
         regions are responsible for in their performance. Serves as a member of
         the Policy Committee which sets the corporate style, strategies,
         policies and goals that business operations of the Corporation are
         responsible for in their performance. Serves as Co-Chairman of the
         Strategic Operating Committee of the Corporation. Performs such other
         duties as may be prescribed by the Chairman of the Corporation.



                                       35