<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Navistar International Corporation
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
NAVISTAR INTERNATIONAL CORPORATION
455 NORTH CITYFRONT PLAZA DRIVE
CHICAGO, ILLINOIS 60611
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
TO BE HELD
MARCH 24, 1998
TO THE SHAREOWNERS:
The Annual Meeting of Shareowners of Navistar International Corporation, a
Delaware corporation (the "Corporation"), will be held at the Arthur Rubloff
Auditorium of the Art Institute of Chicago, Monroe Street and Columbus Drive,
Chicago, Illinois 60603, on March 24, 1998, at 10:15 a.m., Central Standard
Time, for the following purposes:
1. To elect three directors to serve for three year terms until the 2001
Annual Meeting of Shareowners (the Board of Directors of the Corporation
recommends a vote FOR the nominees named in the Corporation's Proxy
Statement); and
2. To transact such other business as may properly come before the
meeting and any adjournments or postponements thereof.
Shareowners of record of the Common Stock of the Corporation at the close of
business on January 27, 1998 are entitled to notice of and to vote at this
meeting.
PLEASE SIGN AND RETURN PROMPTLY THE ACCOMPANYING PROXY in the enclosed
envelope which does not require postage if mailed in the United States or
Canada.
By order of the Board of Directors,
Steven K. Covey
Secretary
February 2, 1998
<PAGE>
PROXY STATEMENT
NAVISTAR INTERNATIONAL CORPORATION
455 NORTH CITYFRONT PLAZA DRIVE
CHICAGO, ILLINOIS 60611
ANNUAL MEETING OF SHAREOWNERS: MARCH 24, 1998
PROXY
This Proxy Statement is being mailed on or about February 2, 1998 to holders
of voting Common Stock ("Common Stock") of Navistar International Corporation
("Navistar" or the "Corporation") in connection with the solicitation of
proxies by Navistar's Board of Directors (the "Board of Directors" or the
"Board"). The Annual Meeting of Shareowners will be held at the Arthur Rubloff
Auditorium of the Art Institute of Chicago, Monroe Street and Columbus Drive,
Chicago, Illinois 60603, on March 24, 1998 at 10:15 a.m., Central Standard
Time. To assure greatest representation at the Annual Meeting of Shareowners,
and any adjournments or postponements thereof (the "Annual Meeting"), the Board
requests that all shareowners sign and return promptly the enclosed proxy. The
proxy is solicited by the Board of Directors. Only shareowners of record at the
close of business on January 27, 1998 will be entitled to vote at the Annual
Meeting. The persons named as proxies were selected by the Board of Directors
and are either directors or officers of the Corporation or both. Shareowners
may have their votes kept confidential by so indicating in the designated place
on the proxy card. If a shareowner is a participant in the Corporation's 401(k)
Retirement Savings Plan, the proxy card will represent the number of shares
allocated to the participant's account under the plan and will serve as a
direction to the plan's trustee as to how the shares in the account are to be
voted.
Any shareowner giving a proxy has the power to revoke it before it is voted
by (i) delivering a written revocation to the Secretary of the Corporation,
(ii) submitting a duly executed new proxy bearing a later date, or (iii)
attending the Annual Meeting and voting in person. If not revoked, the shares
represented by the proxy will be voted by the persons named as proxies, in
accordance with the specifications marked thereon. If no such specification is
made, the shares will be voted in accordance with the Board of Directors'
recommendation. The Board of Directors recommends that shareowners vote FOR
Proposal 1. Director nominees receiving the greatest number of votes will be
elected directors. Abstentions will be included, but broker non-votes will not
be included, in the calculation of the number of holders who are considered
present and entitled to vote at the Annual Meeting.
VOTING SECURITIES OF THE CORPORATION
As of January 15, 1998, there were outstanding 49,226,327 shares of Common
Stock. Holders of Common Stock are entitled to one vote per share, exercisable
in person or by proxy, with respect to all matters to come before the Annual
Meeting. Under the Corporation's By-laws, shareowners holding at least one-
third ( 1/3) of the outstanding shares of Common Stock entitled to vote must be
present in person or by proxy at the Annual Meeting to constitute a quorum. In
addition to the 49,226,327 shares of voting Common Stock outstanding as of
January 15, 1998, the Corporation has outstanding 19,894,103 shares of Class B
Common Stock (the "Class B Stock") which are not entitled to vote at the Annual
Meeting. All shares of Class B Stock are held by the Supplemental Benefit
Trust, a retiree trust created in 1993 pursuant to a restructuring of retiree
health care and life insurance programs (the "Supplemental Trust"). On July 1,
1998, the non-voting Class B Stock automatically converts into an equal number
of shares of voting Common Stock.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
The Corporation has three classes of directors, with the members of each
class serving a three year term on the Board. At this Annual Meeting, the terms
of the Class II directors will expire.
1
<PAGE>
The Board's retirement policy provides for directors' retirement prior to the
first annual meeting of shareowners which is held after the date they attain
age 70. Under the Corporation's Certificate of Incorporation, any vacancies on
the Board resulting from the resignation of a director or other cause shall be
filled by the members of the Board elected by the holders of Common Stock.
The Class II nominee directors are Mr. John R. Horne, Mr. Michael N. Hammes,
and Mr. William F. Patient. These persons have been nominated by the Board for
election to three year terms expiring in 2001, and until their successors are
elected or appointed and qualified. Nominations by shareowners for election of
a director may be made in accordance with the Corporation's By-laws which
require that advance notice be given to the Corporation and require certain
additional information. Any shareowner interested in making such a nomination
should request a copy of the By-laws provisions from the Secretary of the
Corporation.
All of the Class II nominees are now directors of the Corporation and have
served continuously since their first election or appointment. Current Class I
and Class III directors will continue in office for the remainder of their
terms or until their retirement, whichever is earlier. If any nominee is unable
to accept the office of director, or will not serve, which is not anticipated,
the Board may choose another nominee, and the shares represented by the proxies
will then be voted for that nominee.
DIRECTORS' BIOGRAPHIES
NOMINEES FOR ELECTION AS CLASS II DIRECTORS CONTINUING IN OFFICE UNTIL 2001
JOHN R. HORNE, 59, director since 1990. He is Chairman of the Board of
Directors since 1996, and President and Chief Executive Officer since 1995. He
was President and Chief Operating Officer from 1990 to 1995. Prior to that
assignment, he served as Group Vice President-General Manager, Engine and
Foundry Group from March, 1990 to November, 1990; Vice President and General
Manager, Engine and Foundry Group from 1983 to 1990; Manager, Engine
Engineering from 1980 to 1983; and Manager, Diesel Engine Engineering from 1977
to 1980. Mr. Horne serves on the Board of Directors of the American Trucking
Association Foundation, the National Association of Manufacturers (NAM),
Intermet Corporation, and Junior Achievement of Chicago; is a member of the
Board of Trustees of Taylor University in Upland, Indiana; serves on the
Mechanical Engineering Advisory Board for Purdue University; and is a member of
the Conference Board. Committee: Executive (Chair).
MICHAEL N. HAMMES, 56, director since 1996. He was Chairman and Chief
Executive Officer of The Coleman Company, Inc., a manufacturer and distributor
of camping and outdoor recreational products and hardware/home products, from
1993 to 1997. From 1990 to 1993, he was Vice Chairman of the Black & Decker
Corporation and President of its Power Tool and Home Products Group. From 1986
to 1990, Mr. Hammes was President--International Operations for Chrysler
Corporation and a Vice President of the company. He is a director of Johns
Manville Corporation and a member of the Board of Visitors of Georgetown
University's School of Business. Committees: Finance and Public Policy.
WILLIAM F. PATIENT, 63, director since 1996. He is Chairman of the Board,
President and Chief Executive Officer of The Geon Company, since 1993. The Geon
Company manufactures polyvinyl chloride (PVC) resins and compounds, which are
used in a wide variety of applications, including household appliances,
business machines and construction products. From 1989 to 1993, Mr. Patient
served as Senior Vice President and President of B. F. Goodrich Company's Geon
Vinyl Division. From 1962 to 1989, Mr. Patient served as Vice President of
sales and marketing; Vice President of manufacturing; and President of Borg-
Warner Chemicals Europe. He serves on the Board of The Vinyl Institute, a
division of The Society of the Plastics Industry. He is a director of National
City Bank in Cleveland, and serves on the Board of Trustees for Cleveland State
University and on the Board of Cleveland Tomorrow. Committees: Audit and
Organization.
2
<PAGE>
CLASS III DIRECTORS CONTINUING IN OFFICE UNTIL 1999
WILLIAM F. ANDREWS, 66, director since 1984. He is Chairman of Schrader,
Inc., a manufacturer of tire valves and automotive accessories, since 1995. He
is also Chairman of Scovill Fasteners, Inc., a manufacturer of apparel and
industrial fasteners, since 1995. From 1992 to 1995 he served as President and
Chief Executive Officer at Amdura Corporation, a manufacturer of products for
construction and agricultural machinery. From 1990 to 1992, he was President
and Chief Executive Officer of UNR Industries, Inc., a manufacturer of steel
products. He was President of Massey Investment Company from 1989 to 1990. He
was Chairman, President and Chief Executive Officer of Singer Sewing Machines,
Inc. from 1986 to 1989. From 1979 to 1986, Mr. Andrews served as Chairman,
President and Chief Executive Officer of Scovill, Inc. He is a director of
Johnson Controls, Inc., Katy Industries, Inc., Southern New England Telephone
Company, Corrections Corp. of America, Northwestern Steel & Wire, Black Box
Corp., and Dayton Superior Corp. Committees: Executive, Organization and
Finance (Chair).
JOHN D. CORRENTI, 50, director since 1994. He is Chief Executive Officer,
President and Vice Chairman of Nucor Corporation, one of the largest steel
manufacturers in the U.S., since 1996. Mr. Correnti joined Nucor as
Construction Manager in Utah in 1980, and in 1982 became General Manager of the
company's mill in Brigham City, Utah. In 1991, he became President and Chief
Operating Officer and a director of Nucor. He is a director of Harnischfeger,
Inc., Steel Manufacturers Association, and CEM Corporation. Committees: Audit
and Organization.
ALLEN J. KROWE, 65, director since October, 1997. He retired as Vice Chairman
from Texaco Inc., a global energy company, in 1997, a position he held since
1993. From 1988 to 1995 he served as Chief Financial Officer, and from 1988 to
1993 as Senior Vice President of Texaco Inc. From 1960 to 1988, Mr. Krowe was
employed by International Business Machines Corporation (IBM) where he held
positions of increasing responsibility, including Vice President and Chief
Financial Officer, Senior Vice President and a member of the Corporate
Management Board and the Business Operations Committee. In 1986, he was elected
Senior Vice President responsible for worldwide development and U.S.
manufacturing for IBM's Information Systems and Communication Group,
Information Systems and Products Group, Real Estate and Construction Division,
and the Rolm Corporation, an IBM subsidiary, and a director of IBM, and in
1988, was elected Executive Vice President. He is a director of the University
of Maryland Foundation, PPG Industries, Inc., Informant, IBJ Schroder Bank and
Trust Company, The Business Council of New York State, American Council for
Capital Formation and Westchester-Putnam Council of the Boy Scouts of America.
Committees: Audit and Finance.
CLASS I DIRECTORS CONTINUING IN OFFICE UNTIL 2000
JERRY E. DEMPSEY, 65, director since 1984. He is the retired Chairman of the
Board and Chief Executive Officer of PPG Industries, Inc., a diversified global
manufacturer of glass, protective coatings and chemicals, a position he held
from 1993 to 1997. From 1991 until 1993, Mr. Dempsey was Chairman of the Board
and a director of Chemical Waste Management, Inc., and Senior Vice President of
WMX Technologies, Inc. From 1985 to 1991, he was President and Chief Executive
Officer and a director of Chemical Waste Management, Inc. From 1984 to 1988, he
was Vice Chairman of the Board of WMX Technologies. From 1980 to 1984, Mr.
Dempsey was President and Chief Operating Officer of Borg-Warner Corporation.
He is a director of Waste Management, Inc. and Eastman Chemicals. He is a
member of the Dean's Advisory Board for Clemson University's School of
Engineering, Chairman of the President's Advisory Council, and Co-Chairman of
the Commission on the Future of Clemson University. Committees: Executive,
Finance and Organization (Chair).
ROBERT C. LANNERT, 57, director since 1990. He is Executive Vice President
and Chief Financial Officer since 1990. Prior to his present assignment, he
served as Vice President and Treasurer from 1979 to 1990 and Assistant
Treasurer from 1976 to 1979. He is President of the Des Plaines Valley Council
of the Boy Scouts of America.
3
<PAGE>
JOHN F. FIEDLER, 59, director since 1995. He is Chairman and Chief Executive
Officer since 1996 and a director since 1994 and from 1994 to 1995 he was
President and Chief Executive Officer of Borg-Warner Automotive, Inc., a
supplier of engineered components and systems, primarily for automotive drive
train applications. From 1965 to 1994, he was employed by The Goodyear Tire
and Rubber Company, where he held positions of increasing responsibilities,
including the position of Executive Vice President--North America. Committees:
Organization and Public Policy.
ADDITIONAL DIRECTORS
In July, 1993, the Corporation restructured its postretirement health care
and life insurance benefits pursuant to a settlement agreement which required,
among other things, the addition of three seats on Navistar's Board of
Directors. These three directors are not part of the classes referred to above
and are not standing for election by shareowners at the Annual Meeting.
WALTER J. LASKOWSKI, 57, director since 1995. He is International Vice
President of the UAW since 1995. Mr. Laskowski heads the UAW's Chrysler
Department and is in charge of the UAW's Navistar, Mack, Volvo, Freightliner
and General Dynamics Departments. As an International Representative on the
staff of Region 1D from 1971 until he was elected assistant director of Region
1D in 1986, Mr. Laskowski serviced the General Motors, Independent, and Parts
Supplier plants in the Saginaw, Bay City and northern lower peninsula area in
Michigan. He is a member of the NAACP, the Coalition of Labor Union Women, and
the Delta Dental Board. Mr. Laskowski was appointed to the Board of Directors
by the UAW, the holder of all the Series B preference shares, for a term
extending through July 31, 1998. Committees: Audit, Executive and Finance.
WILLIAM C. CRAIG, 58, director since 1993. He served as Executive Vice
President of Mack Trucks from 1989 to 1992. Prior to this, Mr. Craig served as
Vice President of Human Resources of Volkswagen of America from 1982 to 1989,
and Plant Manager, Volkswagen Stamping Plant from 1977 to 1982. Mr. Craig also
served as General Superintendent of Production, Chevrolet Buffalo Gear and
Axle, and in various other capacities for General Motors from 1960 to 1977.
Mr. Craig was appointed to the Board of Directors by the Supplemental Trust,
holder of all the Series A preference shares, for a term extending through
July 31, 1998. Committees: Executive, Finance and Organization.
JOHN T. GRIGSBY, JR., 57, director since December, 1997. He is founder and
President of John T. Grigsby Associates, Inc., a firm that provides strategic
and operational consulting assistance to companies in financial distress. He
has been a Vice Chairman of the Board and Executive Vice President of Allis-
Chalmers Corporation, a farm machinery manufacturer, since 1989; Chief
Financial Officer since 1996; served as Chairman and Chief Executive Officer
since 1988. He was also employed by the company as Managing Director,
Restructure Project since 1987. He is a director of Allis-Chalmers
Corporation, First Southern Bank, and First Florida Industries, Inc. Mr.
Grigsby was appointed to the Board of Directors by the Supplemental Trust,
holder of all the Series A preference shares, for a one year term beginning in
December, 1997. Committees: Audit and Public Policy.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers to file reports of beneficial
ownership and change of ownership of the Corporation's equity securities with
the U.S. Securities and Exchange Commission and the New York Stock Exchange.
To the Corporation's knowledge, based solely on review of the copies of such
reports furnished to the Corporation and written representation that no
reports were required, all of its directors and executive officers made all
required filings on time, except that Mr. Patient filed a Form 4 to report a
sale of 1,000 shares of the Corporation's Common Stock 1 day after the date by
which it should have been filed.
4
<PAGE>
The following table sets forth information concerning the Common Stock
ownership of each director and director nominee, the Corporation's Chief
Executive Officer, each of the four most highly compensated executive officers,
and the directors and executive officers as a group as of December 31, 1997.
Each individual owns less than 1% of the Corporation's Common Stock. As a
group, the directors and officers own or have the right to acquire 3.7% of the
Common Stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES
-----------------------------------
OBTAINABLE
THROUGH
STOCK OPTION
NAME/GROUP OWNED (1)(2) EXERCISE TOTAL
- ---------- ------------ ------------ ---------
<S> <C> <C> <C>
William F. Andrews......................... 2,400 6,250 8,650
Robert A. Boardman......................... 47,018 19,600 66,618
Andrew F. Brimmer.......................... 2,217 6,250 8,467
John D. Correnti........................... 1,600 4,500 6,100
William C. Craig........................... 1,770 4,750 6,520
Donald D. DeFosset, Jr..................... 75,937 89,262 165,199
Jerry E. Dempsey........................... 2,300 6,250 8,550
John F. Fiedler............................ 2,300 4,000 6,300
Mary Garst................................. 2,210 6,250 8,460
John T. Grigsby............................ 3,000 0 3,000
Michael N. Hammes.......................... 1,080 2,000 3,080
John R. Horne.............................. 185,135 238,320 423,455
Allen J. Krowe............................. 1,500 0 1,500
Robert C. Lannert.......................... 119,657 187,900 307,557
Walter J. Laskowski........................ 0 4,000 4,000
William F. Patient......................... 1,680 2,000 3,680
Daniel C. Ustian........................... 39,093 55,890 94,983
Directors and Executive Officers as a Group
(3)....................................... 846,664 994,002 1,840,666
</TABLE>
- --------
(1) Includes shares over which there is shared investment power as follows: Mr.
Patient--1,680 shares; Mr. Andrews--2,400 shares; Directors and Executive
Officers as a Group--4,130 shares.
(2) Includes shares over which there is shared voting power as follows: Mr.
Patient--1,680 shares; Directors and Executive Officers as a Group--1,730
shares.
(3) Of the 22,462 shares owned by an executive officer who is not also a
director or nominee, 30 shares are owned by his wife, as to which he may be
deemed to share voting or investment power, but as to which he disclaims
beneficial ownership.
COMMITTEES OF THE BOARD OF DIRECTORS
There are five standing committees which assist the Board of Directors in
discharging its responsibilities. Committee membership is noted for each
director next to the director's name in the biographical section above.
Functions of the various committees are set forth below:
EXECUTIVE COMMITTEE--The Executive Committee is composed of 7 directors, a
majority of whom are not current employees of the Corporation. The Committee
represents the Board between meetings for the purpose of consulting with
officers, considering matters of importance and either taking action or making
recommendations to the Board. The Committee held no meetings in fiscal year
1997.
AUDIT COMMITTEE--The Audit Committee is composed of 7 directors, none of whom
is a current employee of the Corporation. The Committee oversees the
Corporation's financial reporting process on behalf of the Board. During 1997,
the Committee reviewed the 1997 audit plans of Deloitte & Touche LLP and of the
Corporation's internal audit staff, reviewed the audit of the Corporation's
accounts with the independent public accountants
5
<PAGE>
and the internal auditors, considered the adequacy of audit scope and, in its
overview role, reviewed and discussed with the auditors and management the
auditors' reports. The Committee recommended to the Board the selection of the
Corporation's independent public accountants. The Committee also reviewed
environmental surveys and compliance activities for the Corporation's
facilities, compliance with the Corporation's Conflicts of Interest and Ethical
Business Conduct Policies and the expense accounts of principal executives. The
independent public accountants, the internal auditors and the Committee have
unrestricted access to each other, without management present, to discuss the
results of audit work and opinions on the adequacy of internal accounting
controls, the quality of financial reporting and any other matter deemed
appropriate. The Committee held 4 meetings in fiscal year 1997, reported the
results of those meetings and made recommendations to the Board.
FINANCE COMMITTEE--The Finance Committee is composed of 7 directors, none of
whom is a current employee of the Corporation. The Committee reviews the
Corporation's financing requirements, custody and management of assets which
fund the pension and retirement savings plans of the Corporation's
subsidiaries, procedures by which projections and estimates of revenues,
expenses, earnings and cash flow are developed, dividend policy and operating
and capital expenditure budgets. The Committee also monitors the Corporation's
relationship and communications with its lenders and the Corporation's
financial disclosure policy. In fiscal year 1997, the Committee held 6
meetings, reported the results of those meetings and made recommendations to
the Board.
COMMITTEE ON ORGANIZATION--The Committee on Organization is composed of 6
directors, none of whom is a current employee of the Corporation. The Committee
fulfills its compensation and management oversight role by considering and
recommending to the Board the election, title changes, structure,
responsibilities and compensation of all executive officers. The Committee also
has responsibilities for the organization of the Board of Directors. The
Committee reviews and makes recommendations to the Board concerning nominees
for election as directors. The Committee also reviews and recommends to the
Board the compensation, committee membership and tenure policy for directors.
In recommending to the Board the nominees to be proposed for election as
director, the Committee will consider the qualifications of nominees proposed
by shareowners in writing to the Secretary of the Corporation in accordance
with the Corporation's By-laws. Upon management's recommendation, the Committee
also reviews and acts upon basic changes to non-represented employees' base
compensation and incentive and benefit plans. The Committee held 7 meetings in
fiscal year 1997, reported the results of those meetings and made
recommendations to the Board.
PUBLIC POLICY COMMITTEE--The Public Policy Committee is composed of 5
directors, none of whom is a current employee of the Corporation. The Committee
reviews, advises management and makes recommendations to the Board on corporate
policy in areas of public responsibility, such as conflict of interest, product
integrity and protection of the environment. The Committee held 2 meetings in
fiscal year 1997, reported the results of those meetings and made
recommendations to the Board.
MEETINGS OF DIRECTORS
Pursuant to the Board's corporate governance guidelines, in addition to the
regular and any special meetings of the Board of Directors, the Board's non-
employee directors meet in an executive session at regular intervals to
evaluate the performance of the Chief Executive Officer and the Board itself.
In fiscal year 1997, the Board of Directors held 9 meetings, two of which were
executive sessions for non-employee directors only. The number of meetings held
by the committees of the Board of Directors are noted above. Each Director of
the Corporation attended at least 75% of the aggregate meetings required to be
attended by such Director and held by the Board and by the committees on which
such Director served, except that, because of conflicts in schedules, Mr.
Correnti attended 68.2% of the aggregate meetings.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends a vote FOR the election of the nominees
listed above as directors of the Corporation.
6
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS' COMPENSATION
Directors who are full-time employees of the Corporation or any of its
subsidiaries are not compensated for their service on the Board or any
committee. Directors who are not employees of the Corporation or any of its
subsidiaries receive an annual retainer of $26,000. In addition, the Company
pays each such director a fee of $1,000 for each directors' meeting and each
committee meeting he or she attends. A non-employee director who serves as
chair of a committee receives an additional annual fee of $3,000. One-fourth of
the annual retainer to non-employee directors is paid in the form of restricted
shares of Common Stock. Directors may elect to receive all or any part of the
remaining retainer and fees in restricted shares of Common Stock and to defer
payment of fees in cash or in restricted shares of Common Stock. At the request
of the UAW (the organization which elected Mr. Laskowski to the Board), all but
$1,500 of the cash portion of Mr. Laskowski's annual retainer, together with a
cash amount equal to the value of the restricted shares of Common Stock which
otherwise would be payable to Mr. Laskowski as part of his annual retainer, is
contributed to the Supplemental Trust.
Non-employee directors are eligible to receive retirement fees if they serve
on the Board for at least five years. The annual retirement fee is equal to a
percentage of the annual retainer at the time of the director's retirement.
Directors who joined the Board prior to 1994 and who retire with five years of
service receive 100% of the annual retainer. Directors who joined the Board
after that time and who retire with five years of service receive 50% of the
annual retainer, which increases by 10% for each additional year of service,
with a maximum retirement fee of 100% of the annual retainer for ten years of
service. Retirement fees are paid to the director and, upon his or her death,
to the director's spouse. Payment of retirement fees begins on the later of the
director's retirement or age 65. Retirement fees continue for a period equal to
the number of years the director served on the Board. However, in the event of
the death of the director (or the director's spouse, if the director is
survived by his or her spouse), retirement fees automatically terminate. A
director's right to receive retirement fees will vest automatically in the
event of a change in control of the Corporation as defined in the retirement
agreement.
The Navistar 1988 Non-Employee Director Stock Option Plan provides that every
year each non-employee director will be granted an option to purchase 2,000
shares of Common Stock at a price equal to the fair market value of the Common
Stock on the first business day after the day the option is granted. Directors
may exercise the option at any time after one year following the date of grant.
The options expire ten years after the date of grant.
7
<PAGE>
EXECUTIVE OFFICERS' COMPENSATION
The following table shows the compensation of the Chief Executive Officer and
the four most highly compensated executive officers of the Corporation and of
Navistar International Transportation Corp. ("Transportation"), the
Corporation's wholly owned subsidiary, for fiscal year 1997:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
---------------------
ANNUAL
COMPENSATION RESTRICTED SECURITIES
------------------ STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL SALARY BONUS AWARDS OPTIONS/ COMPENSATION
POSITION YEAR ($) ($)(6)(7) ($)(1)(2) SARS (#) ($)(3)
- ------------------ ---- ------ --------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
John R. Horne(4)........ 1997 $650,000 $480,000 $452,575 73,800 $11,893
Chairman, President and 1996 $650,000 0 $ 29,931 40,000 $ 7,067
Chief Executive Officer 1995 $544,166 $425,000 $762,244 50,000 $10,458
Robert C. Lannert(5).... 1997 $425,000 $300,000 $334,922 47,900 $ 7,071
Executive Vice President 1996 $425,000 0 $ 19,656 25,700 $ 4,557
and Chief Financial
Officer 1995 $367,083 $275,000 $420,875 47,700 $ 6,135
Donald D. DeFosset,
Jr.(8)................. 1997 $400,000 $217,580 $185,867 50,000 $ 3,179
Executive Vice President
and 1996 $ 20,290 $250,000 0 50,000 0
President, Truck Group
Daniel C. Ustian........ 1997 $250,000 $259,557 $ 86,967 18,900 $ 2,236
Group Vice
President/General 1996 $245,000 0 $ 7,788 10,100 $ 1,715
Manager, Engine and
Foundry 1995 $237,500 $104,603 $ 8,794 9,600 $ 1,554
Robert A. Boardman...... 1997 $255,000 $181,000 $114,442 18,900 $ 2,838
Senior Vice President
and 1996 $247,500 0 $ 7,788 10,100 $ 2,052
General Counsel 1995 $238,750 $126,719 $ 8,794 9,600 $ 1,897
</TABLE>
- --------
(1) The number and value of the aggregate restricted stock holdings at October
31, 1997 for each of the persons named above is as follows: Mr. Horne
57,241 shares with a value of $1,327,276 ($838,205 of which represents the
value of shares which will be forfeited if performance goals are not met);
Mr. Lannert, 32,150 shares with a value of $745,478 ($586,644 of which
represents the value of shares which will be forfeited if performance goals
are not met); Mr. Ustian, 13,567 shares with a value of $314,584 ($297,588
of which represents the value of shares which will be forfeited if
performance goals are not met); and Mr. Boardman, 13,567 shares with a
value of $314,584 ($297,588 of which represents the value of shares which
will be forfeited if performance goals are not met). Mr. DeFosset held no
aggregate restricted stock as of October 31, 1997. Holders of restricted
stock will receive dividends at the same time and at the same rate as other
Common Stock owners.
(2) The amounts shown include the dollar value of units representing shares of
Common Stock awarded in fiscal year 1997 under the Corporation's Stock
Ownership Program based on the attainment of certain stock ownership
thresholds by the named executive officer.
(3) The amounts listed under the All Other Compensation Column represent life
insurance premiums paid by the Corporation for the persons named in the
Summary Compensation Table.
(4) The Corporation granted Mr. Horne 54,825 restricted shares of Common Stock
on April 18, 1995 for purposes of retention under the Corporation's 1994
Performance Incentive Plan. Such shares vest ratably over 3 years.
(5) The Corporation granted Mr. Lannert 30,000 restricted shares of Common
Stock on April 18, 1995 for purposes of retention under the Corporation's
1994 Performance Incentive Plan. 15,000 shares vested on May 18, 1995 and
the balance of such shares vest ratably over 3 years.
(6) The amounts shown include the dollar value of bonuses earned in fiscal
year 1997 but deferred under the Corporation's Stock Ownership Program at
the election of the named executive officer.
(7) The amounts shown do not include the dollar value of units representing
shares of Common Stock that will be awarded for fiscal year 1997 under the
Corporation's Stock Ownership Program based on the election of the named
executive officer to defer a portion of his future annual incentive
payments. The amount of units earned are not calculable through the latest
practicable date and, in accordance with the Securities and Exchange
Commission regulations, will be reported in the proxy statement for the
Corporation's 1999 annual meeting of shareowners.
(8) Mr. DeFosset joined the Corporation in October, 1996.
8
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
GRANT DATE
INDIVIDUAL GRANTS VALUE
-------------------------------------------------- ------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS/SARS EMPLOYEES IN OR BASE PRICE EXPIRATION PRESENT
NAME GRANTED (#) FISCAL YEAR ($/SH)(3) DATE VALUE ($)(4)
- ---- ------------ ------------ ------------- ---------- ------------
<S> <C> <C> <C> <C> <C>
John R. Horne........... 9,564(1) 1.09 9.56 12-16-06 41,881
64,236(2) 7.33 9.56 12-17-06 281,289
Robert C. Lannert....... 9,564(1) 1.09 9.56 12-16-06 41,881
38,336(2) 4.37 9.56 12-17-06 167,873
Donald D. DeFosset, Jr.. 50,000(2) 5.70 9.56 12-17-06 218,950
Daniel C. Ustian........ 9,564(1) 1.09 9.56 12-16-06 41,881
9,336(2) 1.06 9.56 12-17-06 40,882
Robert A. Boardman...... 9,564(1) 1.09 9.56 12-16-06 41,881
9,336(2) 1.06 9.56 12-17-06 40,882
</TABLE>
- --------
(1) Incentive Stock Options
(2) Non-Qualified Options
(3) All options become exercisable one year after the date of grant.
(4) The Black-Scholes model was used to calculate the grant date present value
of the options granted, discounted by 20% for non-transferability, the risk
of forfeiture and non-exercisability for the first year.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-
UNEXERCISED MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY END (#) AT FY END ($)
SHARES -------------- -----------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ---- ------------ ------------ -------------- -----------------
<S> <C> <C> <C> <C>
John R. Horne........... 0 0 164,520/73,800 1,267,456/993,997
Robert C. Lannert....... 0 0 140,000/47,900 1,127,752/645,155
Donald D. DeFosset, Jr.. 0 0 50,000/50,000 685,940/673,440
Daniel C. Ustian........ 4,800 45,750 36,990/18,900 163,785/254,560
Robert A. Boardman...... 0 0 39,300/18,900 223,635/254,560
</TABLE>
9
<PAGE>
PENSION PLAN TABLE
ESTIMATED ANNUAL RETIREMENT BENEFIT OBJECTIVE
UPON NORMAL RETIREMENT AT AGE 65
(ASSUMING ALL SERVICE IS EARNED PRIOR TO JANUARY 1, 1989)
<TABLE>
<CAPTION>
FINAL YEARS OF SERVICE
AVERAGE --------------------------------------------------------------
ANNUAL 35 AND
EARNINGS 15 20 25 30 OVER
---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 200,000 $ 72,000 $ 96,000 $120,000 $120,000 $120,000
300,000 108,000 144,000 180,000 180,000 180,000
400,000 144,000 192,000 240,000 240,000 240,000
500,000 180,000 240,000 300,000 300,000 300,000
600,000 216,000 288,000 360,000 360,000 360,000
700,000 252,000 336,000 420,000 420,000 420,000
800,000 288,000 384,000 480,000 480,000 480,000
900,000 324,000 432,000 540,000 540,000 540,000
1,000,000 360,000 480,000 600,000 600,000 600,000
1,100,000 396,000 528,000 660,000 660,000 660,000
1,200,000 432,000 576,000 720,000 720,000 720,000
1,300,000 468,000 624,000 780,000 780,000 780,000
1,400,000 504,000 672,000 840,000 840,000 840,000
</TABLE>
ESTIMATED ANNUAL RETIREMENT BENEFIT OBJECTIVE
UPON NORMAL RETIREMENT AT AGE 65
(ASSUMING ALL SERVICE IS EARNED AFTER DECEMBER 31, 1988)
<TABLE>
<CAPTION>
FINAL YEARS OF SERVICE
AVERAGE --------------------------------------------------------------
ANNUAL 35 AND
EARNINGS 15 20 25 30 OVER
---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 200,000 $ 51,000 $ 68,000 $ 85,000 $102,000 $120,000
300,000 76,500 102,000 127,500 153,000 180,000
400,000 102,000 136,000 170,000 204,000 240,000
500,000 127,500 170,000 212,500 255,000 300,000
600,000 153,000 204,000 255,000 306,000 360,000
700,000 178,500 238,000 297,500 357,000 420,000
800,000 204,000 272,000 340,000 408,000 480,000
900,000 229,500 306,000 382,500 459,000 540,000
1,000,000 255,000 340,000 425,000 510,000 600,000
1,100,000 280,500 374,000 467,500 561,000 660,000
1,200,000 306,000 408,000 510,000 612,000 720,000
1,300,000 331,500 442,000 552,500 663,000 780,000
1,400,000 357,000 476,000 595,000 714,000 840,000
</TABLE>
The number of years of credited service as of October 31, 1997 for Mr. Horne
is 31.3; Mr. Lannert is 34.6; Mr. Ustian is 24.7; and Mr. Boardman is 8.0. Mr.
DeFosset is not a participant in the RPSE or the MRO Plan.
The Navistar International Transportation Corp. Retirement Plan for Salaried
Employees ("RPSE"), which covers substantially all of the salaried employees
first hired before January 1, 1996, of the Corporation and of Transportation,
including officers, provides annual retirement benefits based upon age,
credited service and "final
10
<PAGE>
average annual earnings" computed on the basis of the individual's highest
consecutive five years of base salary out of the ten years immediately
preceding retirement, reduced by a portion of the Social Security benefits to
which it is estimated the participant will be entitled. Benefits accrue at a
lower rate for service after December 31, 1988, than for service prior to that
date. Maximum benefits which may be provided to an employee under the RPSE are
subject to the annual pension limitation ($130,000 in 1998, indexed for
inflation) imposed for qualified plans under The Employee Retirement Income
Security Act ("ERISA"). Such benefits may be subject to further limitation
under ERISA because of participation in any defined contribution plan of the
Corporation or of Transportation. In addition, these benefits are subject to a
requirement that annual compensation in excess of an annual limit ($160,000 in
1998, indexed for inflation) is not taken into account. Employees who are first
hired on or after January 1, 1996, are not eligible to participate in the RPSE.
With respect to eligible upper level employees who retire at or after age 55
with at least 10 years of credited service, the Corporation and Transportation
also have a Managerial Retirement Objective ("MRO") Plan. The MRO Plan
currently provides a retirement benefit objective based upon age, credited
service and "final average annual earnings" computed on the basis of the
individual's highest consecutive five years of base salary plus certain cash
incentive compensation out of the ten years immediately preceding retirement.
Benefits accrue at a lower rate for service after December 31, 1988, than for
service prior to that date. If the annual retirement benefits of any eligible
employee from all sources from both the Corporation and/or Transportation
contributions and employee contributions (including benefits under the RPSE and
a portion of the Social Security benefits to which it is estimated the
individual will be entitled, but not including the Navistar International
Transportation Corp. 401(k) Retirement Savings Plan or any individual deferred
compensation agreements) do not equal the retirement benefit objective under
the MRO Plan, the Corporation and/or Transportation will pay the difference to
the employee. Employees who are first hired on or after January 1, 1996, are
not eligible to participate in the MRO Plan.
Substantially all of the salaried employees of the Corporation and of
Transportation, including officers, who are first hired on or after January 1,
1996, are covered by the Navistar Retirement Accumulation Plan (RAP), which is
a defined contribution plan that provides for an annual contribution to be
allocated to each participant's retirement account based on an age-weighted
percentage of the participant's eligible compensation for the calendar year.
The RAP also contains a 401(k) feature and provides for a company match,
currently 50% of the first 6% of pre-tax salary reduction contributions made on
behalf of the participant.
In recognition of the need to provide a retirement benefit for executives
who, as a result of commencing employment with the Corporation or
Transportation late in their careers, are unable to attain the age and service
requirements necessary to qualify for retirement benefits under the above
plans, the Corporation and Transportation also have a Supplemental Executive
Retirement Plan ("SERP"). The SERP covers certain members of executive
management who have attained age 55, and provides annual retirement income
objectives to such members of executive management who have at least five years
of credited service, based upon age, credited service and "final average
earnings" (as defined above for purposes of the MRO Plan). SERP objectives
range from 30% to 50% of "final average earnings", and are reduced by benefits,
if any, under the RPSE and the MRO Plan, by the actuarial equivalent of the
executive's retirement account (but not the 401(k) or company match accounts)
under the RAP, by 50% of the participant's social security benefit and by
retirement benefits from prior employers. It is estimated that the annual
benefits payable under the SERP upon normal retirement (at age 65) to Mr.
DeFosset (without regard to the reduction by the actuarial equivalent of his
retirement account under the RAP) would be approximately 48% of his "final
average earnings" and to Mr. Boardman, would be approximately 11% of his
individual "final average earnings." It is estimated that Messrs. Horne,
Lannert and Ustian would derive no benefit from the SERP. Payments under the
SERP in fiscal 1997 were $288,524.
In the event of a termination of employment by the Corporation or by
Transportation following a change in control of the Corporation, as defined,
certain benefits will become contractual rights and not subject to change which
is adverse to employees without their consent under the MRO Plan and the SERP
with respect to eligible employees who have accrued at least five years of
credited service as of the date of such termination.
11
<PAGE>
TERMINATION ARRANGEMENTS
To assure stability and continuity of management, the Corporation has
entered into agreements with each of the executive officers named in the
Summary Compensation Table and with each other executive officer. Each
agreement provides that if the officer's employment is terminated by the
Corporation for any reason other than for cause, as defined in the agreement,
the officer will receive a lump sum payment varying in amounts from 200% of
the annual base salary plus annual target bonus, for the Chief Executive
Officer, to 150% of annual base salary plus annual target bonus, for the other
executive officers. However, if the officer's employment is terminated by the
Corporation within three years after a change in control of the Corporation,
the officer will receive a lump sum payment of an amount equal to the greater
of (i) 300% of the officer's current annual base salary plus annual target
bonus and: (ii) 295% of the officer's average annual compensation during the
previous five years. The agreements' definition of a change in control of the
Corporation includes the acquisition by any person or group of securities of
the Corporation representing 25% or more of the combined voting power of the
Corporation's then outstanding securities. Each agreement expires June 30,
2000 and is then renewed automatically for successive one year periods unless
the Board of Directors, six months prior to the renewal date, elects not to
renew it.
TRANSACTIONS WITH MANAGEMENT
The Corporation established the Navistar International Corporation Stock
Ownership Program ("Stock Ownership Program") in 1997 to more closely align
the interests of shareowners and the Corporation's senior management. Under
the Stock Ownership Program all executive officers and certain senior managers
of the Corporation are required to acquire and hold a specified amount of the
Corporation's Common Stock equal to a multiple of the participant's annual
base salary. During 1997, certain executive officers received full-recourse,
interest-bearing loans for the purchase price of the Common Stock they
purchased from the Corporation pursuant to the terms of the Stock Ownership
Program. The loans have a five year term and accrue interest at the applicable
federal rate (as determined by Section 1274(d) of the Internal Revenue Code)
on the purchase date for loans of such maturity, compounded annually. The
loans are unsecured.
Principal and accrued interest is due at maturity in a balloon payment. The
payment of the loan will be accelerated if a participant's employment is
terminated for cause or for certain other reasons prior to or following a
change of control. In the event of retirement, there is no loan acceleration.
The loan may be prepaid at any time at the participant's option.
The executive officers of the Corporation listed in the table below had
outstanding loans under the Stock Ownership Program. The table indicates the
largest amount of the indebtedness outstanding during fiscal year 1997, the
interest rate charged, and the aggregate amount of all loan principal and
accrued interest outstanding as of December 31, 1997:
<TABLE>
<CAPTION>
MAXIMUM INDEBTEDNESS LOAN PRINCIPAL AND
DURING ACCRUED INTEREST AS OF
NAME FISCAL YEAR 1997 DECEMBER 31, 1997 INTEREST RATE (%)
- ---- -------------------- ---------------------- -----------------
<S> <C> <C> <C>
Robert A. Boardman...... $ 314,283.69 $ 317,701.21 6.65
John R. Horne........... 1,132,553.84 1,144,869.21 6.65
Thomas M. Hough......... 54,343.13 53,125.75 6.80
35,617.21 35,017.50 6.65
David J. Johanneson..... 286,454.48 289,572.16 6.65
J. Steven Keate......... 83,516.51 84,429.23 6.65
Robert C. Lannert....... 514,985.89 520,594.84 6.65
517,955.75 523,405.14 6.39
James T. O'Dare......... 355,723.63 359,609.77 6.65
Thomas E. Rigsby........ 179,368.26 181,322.88 6.65
James L. Simonton....... 120,402.55 118,375.25 6.65
Joseph V. Thompson...... 362,375.66 366,319.64 6.65
Daniel C. Ustian........ 218,406.16 220,786.20 6.65
Dennis W. Webb.......... 136,434.49 137,923.12 6.65
Brian B. Whalen......... 204,255.92 206,478.18 6.65
</TABLE>
12
<PAGE>
COMMITTEE ON ORGANIZATION EXECUTIVE COMPENSATION REPORT
The Board's Committee on Organization ("Committee") makes the compensation
decisions with respect to the Corporation's executive officers and makes
recommendations to the Board regarding the compensation of the President and
Chief Executive Officer and the Executive Vice President and Chief Financial
Officer.
The Committee believes that the compensation program for senior executives
has been designed to provide competitive compensation if the Corporation meets
or exceeds performance criteria established by the Committee. The performance
criteria are designed to link compensation and performance and to promote an
alignment of interests between shareowners and senior executives. The
compensation program is designed to vary compensation significantly based on
performance. The Committee reviews the compensation program each year. The
Internal Revenue Code provides that a public corporation generally may not
deduct the amount of annual compensation paid to certain executive officers
which is more than $1 million. The provision does not apply to certain
performance based compensation which meets the requirements contained in IRS
regulations. Performance based compensation can include income from stock
options, restricted stock, and certain formula driven compensation that meets
the IRS requirements. The Committee has considered the effect of this Internal
Revenue Code limitation, and has concluded that the limitation will not have
any significant effect on the Corporation's income tax liability.
The principal elements of the Corporation's executive compensation program
include base salary, annual incentive and long-term incentive.
BASE SALARY
The Committee reviews the salaries of the Corporation's executive officers
on an annual basis. The goal of the Committee is to set executive officers'
base salaries at the 50th percentile of a peer group of companies. The
Committee uses three different surveys to determine competitive base salary
levels. The three surveys are as follows: one survey is composed of the peer
companies included in the performance graph on page 15, another consists of
manufacturing companies of a similar size in sales to Navistar in the
metallurgical/fabricating industries; and a third one consists of all
manufacturing companies with sales of $5 to $10 billion.
ANNUAL INCENTIVE
Annual incentive payments are made in cash based upon the attainment of
certain performance goals established by the Committee prior to the beginning
of each fiscal year. Approximately 450 participants are eligible for annual
incentive payments. The target annual incentive varies by organization level,
from 25% of base salary for managers to 50% of base salary for the Chief
Executive Officer. The formula used for the 1997 goal was based on the
Corporation's return on equity. The goal was met and annual incentive payments
were made in accordance with the provisions of the plan. Mr. Horne received a
payment of $480,000.
LONG-TERM INCENTIVE
Until 1997, long term incentive payments consisted of a combination of stock
options and restricted stock.
Previously issued shares of restricted stock were awarded subject to
forfeiture based on certain contingencies. One-sixth of the shares are
forfeitable if the executive officer did not remain an employee during a
defined period. Five sixths of the shares are performance based, that is, they
are forfeitable if the Corporation's stock performance goals are not achieved.
The performance goals set by the Committee are based on the stock performance
of the Corporation against the stock performance of a peer group of companies
made up of Cummins, Dana, Eaton and PACCAR which, along with Navistar, are the
companies that make up the Standard and Poor's Heavy Duty Truck and Parts
Index. None of the performance based restricted shares will be forfeited if
the Corporation's stock price performance exceeds the peer group's
performance. All of the performance based restricted shares will be forfeited
if the Corporation's stock price performance is not at least equal to the peer
group's performance.
13
<PAGE>
In 1997 the Committee decided that all future long term incentive payments to
executive officers would consist entirely of stock options. Stock options are
valued pursuant to the Black-Scholes formula (less a 20% discount). Stock
options are issued at current market value on the date of grant and are not
exercisable during the first year.
Committee on Organization
Jerry E. Dempsey, Chairperson
William F. Andrews
John D. Correnti
William C. Craig
John F. Fiedler
William F. Patient
14
<PAGE>
PERFORMANCE GRAPH
A line graph comparing the yearly percentage change in the Corporation's
cumulative total shareowner return on its Common Stock is set forth below.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
NAVISTAR COMMON STOCK, S&P 500 INDEX AND S&P TRUCKS & PARTS INDEX
<TABLE>
<CAPTION>
92 93 94 95 96 97
<S> <C> <C> <C> <C> <C> <C>
Navistar 100.00 114.7 70.0 54.7 50.0 123.7
S&P 500 100.00 111.7 112.8 138.9 168.5 218.5
S&P Trucks & Parts 100.00 138.9 115.3 107.8 131.0 221.5
</TABLE>
ASSUMES $100 INVESTED ON OCTOBER 31, 1992 IN NAVISTAR COMMON STOCK,
S&P 500 INDEX AND S&P TRUCKS & PARTS INDEX.
FISCAL YEAR ENDING OCTOBER 31/ASSUMES REINVESTMENT OF DIVIDENDS
15
<PAGE>
GENERAL
ANNUAL REPORTS
A copy of the Annual Report, which includes the Corporation's Consolidated
Financial Statements for the three years ended October 31, 1997, was mailed to
all shareowners of record as of January 27, 1998. The Annual Report is not to
be regarded as proxy soliciting materials.
PROXY SOLICITATION
The cost of the solicitation of proxies will be paid by the Corporation. In
addition to the use of the mails, proxies may be solicited personally, or by
telephone or by telegraph, by employees of the Corporation or its subsidiaries.
The Corporation will reimburse brokers and other persons holding stock in their
names, or in the names of nominees, for their expenses for sending proxy
materials to principals and obtaining their proxies.
PROPOSALS OF SHAREOWNERS
Proposals of shareowners intended to be included in next year's proxy
statement must be received by the Secretary of the Corporation at the principal
executive offices of Navistar International Corporation, 455 North Cityfront
Plaza Drive, Chicago, Illinois 60611, no later than the close of business on
October 5, 1998. The Corporation's policy is to include the name, mailing
address and number of shares held by any shareowner whose proposal is included
in the proxy statement. In addition, the Corporation's By-laws provide that any
shareowner wishing to bring any matter before the Annual Meeting must give
written notice to the Corporation not less than 120 days nor more than 180 days
in advance of the Annual Meeting and the notice must meet certain other
requirements.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Deloitte & Touche LLP, Two Prudential Plaza, 180 N. Stetson
Avenue, Chicago, Illinois 60601, has examined the financial statements of the
Corporation for many years and has been selected to perform this function for
the current fiscal year ending October 31, 1998. Representatives of the firm
will attend the Annual Meeting and will have the opportunity to make a
statement if they desire to do so. They will be available to respond to
appropriate questions.
FURTHER BUSINESS
The only business to come before the Annual Meeting of which the Board of
Directors is presently aware is set forth in this Proxy Statement. If any
further business is properly presented at the Annual Meeting, it is intended
that discretionary authority to vote the proxies shall be exercised in respect
thereof in accordance with the best judgment of the proxy holders.
By order of the Board of Directors,
Steven K. Covey
Secretary
February 2, 1998
16
<PAGE>
NOTES
<PAGE>
SM-101-69
<PAGE>
NAVISTAR INTERNATIONAL CORPORATION
PLEASE MARK WOTEIN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY
1. Election of Directors -
01 John R. Horne 02 Michael N. Hammes For All _________________
03 William F. Patient For Withheld Except
MARK HERE TO HAVE YOUR
VOTE REMAIN CONFIDENTIAL
A VOTE FOR PROPOSAL 1 IS RECOMMENDED BY THE BOARD OF DIRECTORS
---
NOTE: Please sign exactly as name
appears hereon. For joint
accounts both owners should sign.
When signing as executor,
administrator, attorney, trustee
or guardian, etc., please sign
your full title.
Dated:
________________________________,1998
x_________________________________
Signature
x_________________________________
Signature
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH SPECIFICATION MADE.
IF NO CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED FOR PROPOSAL 1.
SM-101-69
- --------------------------------------------------------------------------------
.FOLD AND DETACH HERE.
CONTROL NUMBER
- --------------
- --------------
VOTE BY TELEPHONE
QUICK***EASY***IMMEDIATE
Call***Toll Free***On a Touch Tone Telephone
1-888-776-5652 - ANYTIME
There is No Charge to you for this call.
Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card.
You will be asked to enter a Control Number which is located in the Box to the
left of this form.
To vote FOR ALL nominees, Press 1; to WITHHOLD FOR ALL nominees, Press 9.
To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and
listen to the instructions.
If you wish your vote held confidential Press 0 for yes or Press 1 for no.
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1 - THANK YOU FOR VOTING
If you vote by telephone, DO NOT mail back your proxy
THANK YOU FOR VOTING
<PAGE>
PROXY
NAVISTAR INTERNATIONAL CORPORATION
PROXY FOR ANNUAL MEETING TO BE HELD MARCH 24, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED HEREBY APPOINTS JOHN R. HORNE, ROBERT C. LANNERT, AND ROBERT A.
BOARDMAN, AND EACH OF THEM, PROXIES, WITH POWER OF SUBSTITUTION, TO VOTE ALL
STOCK OF THE UNDERSIGNED, AT THE ANNUAL MEETING OF NAVISTAR INTERNATIONAL
CORPORATION TO BE HELD MARCH 24, 1998, AND AT ANY ADJOURNMENT OR POSTPONEMENTS
THEREOF, ON ANY BUSINESS THAT MAY PROPERLY COME BEFORE THE MEETING. IN THEIR
DISCRETION, THE PROXIES ARE HEREBY AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENTS OR POSTPONEMENTS
THEREOF.
(Continued, and to be marked, dated and signed, on the other side)
- --------------------------------------------------------------------------------
Dear Shareholder:
On the reverse side of this card are instructions on how to vote for the
election of directors by telephone. Please consider voting by telephone. Your
vote is recorded as if you mailed in your proxy card. We believe voting this way
is convenient and it also saves the Company money.
Thank you for your attention to these matters.
