<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 17, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
NAVISTAR INTERNATIONAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
DELAWARE 36-3359573
(STATE OR OTHER (I.R.S.
JURISDICTION OF EMPLOYER
INCORPORATION OR IDENTIFICATION
ORGANIZATION) NO.)
455 NORTH CITYFRONT PLAZA
CHICAGO, ILLINOIS 60611
TELEPHONE: (312) 836-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL OFFICES)
----------------
ROBERT A. BOARDMAN
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
455 NORTH CITYFRONT PLAZA
CHICAGO, ILLINOIS 60611
TELEPHONE: (312) 836-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPY TO:
MICHAEL H. KERR, ESQ.
KIRKLAND & ELLIS
200 EAST RANDOLPH DRIVE
CHICAGO, ILLINOIS 60601
(312) 861-2000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C>
Common Stock, par value $.10
per share...................... $99,187,500 $29,261
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</TABLE>
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(1) Reflects the average of the high and low prices on the New York Stock
Exchange Composite Tape on March 10, 1998 pursuant to Rule 457(c) under
the Securities Act of 1933, as amended.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MARCH 17, 1998
3,000,000 SHARES
NAVISTAR INTERNATIONAL
CORPORATION
COMMON STOCK
($.10 PAR VALUE)
This Prospectus relates to 3,000,000 shares of Common Stock, par value $.10
per share (the "Common Stock"), of Navistar International Corporation, a
Delaware corporation ("Navistar" or the "Company"),which may be offered from
time to time by Navistar (the "Offering"). Net proceeds from the sale of shares
by Navistar will be used to fund the purchase by Navistar of Class B Common
Stock from the Navistar Supplemental Benefit Trust (the "Supplemental Trust")
established under Navistar's Retiree Supplemental Benefit Program (such funding
to be accomplished either contemporaneously with, or before or after
consummation of the purchase of shares from the Supplemental Trust). Navistar
may, from time to time, as determined by market conditions, offer shares in
ordinary brokerage transactions on the New York Stock Exchange, Inc., by means
of one or more block trades, secondary distributions, exchange distributions or
special offerings, through a broker-dealer who purchases such shares as
principal and resells them for its own account, or in other transactions to be
determined at the time of sale. Such sales may be consummated using one or more
broker-dealers. See "Plan of Distribution".
The Common Stock is listed on the New York Stock Exchange ("NYSE") under the
symbol "NAV". On March 13, 1998, the last reported sales price of the Common
Stock on the NYSE was $34.0625 per share.
------------
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION
WITH AN
INVESTMENT IN COMMON STOCK, SEE "RISK FACTORS" BEGINNING ON PAGE 4 HEREIN.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
Prospectus dated , 1998
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (the "Registration
Statement," which term shall encompass all amendments, exhibits, annexes and
schedules thereto) pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations promulgated thereunder,
covering the Offering contemplated hereby. This Prospectus does not contain
all the information set forth in the Registration Statement. For further
information with respect to the Company and the Offering, reference is made to
the Registration Statement. Statements made in this Prospectus as to the
contents of any contract, agreement or other document referred to are not
necessarily complete. With respect to each such contract, agreement or other
document filed as an exhibit to the Registration Statement, reference is made
to the exhibit for a more complete description of the document or matter
involved, and each such statement shall be deemed qualified in its entirety by
such reference. The Company files periodic reports and other information
pursuant to the requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The Registration Statement, including the
exhibits thereto, and periodic reports and other information filed by the
Company with the Commission can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and inspected at the Commission's
regional offices at 7 World Trade Center, Suite 1300, New York, New York 10048
and Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, Illinois
60601. Copies of such materials can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The address of such
site is http://www.sec.gov. The Company's Common Stock is listed on the New
York, Chicago and Pacific Stock Exchanges. Reports and other information can
be inspected at the offices of the New York Stock Exchange, 20 Broad Street,
New York, New York 10005; the Chicago Stock Exchange at One Financial Plaza,
440 South LaSalle Street, Chicago, Illinois 60605; and the Pacific Exchange at
301 Pine Street, San Francisco, California 94104.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT
CHARGE TO EACH PERSON TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED,
UPON WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY OR ALL OF THE
DOCUMENTS INCORPORATED BY REFERENCE. THESE DOCUMENTS ARE AVAILABLE UPON
REQUEST FROM CORPORATE TREASURER, NAVISTAR INTERNATIONAL CORPORATION, 455
NORTH CITYFRONT PLAZA, CHICAGO, ILLINOIS 60611, TELEPHONE: (312) 836-2000.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission pursuant to
the Exchange Act (File No. 1-9618) are incorporated herein by reference:
1. Current Report on Form 8-K, filed July 9, 1993.
2. Annual Report on Form 10-K for the fiscal year ended October 31, 1997.
3. Proxy Statement, dated February 2, 1998.
4. Current Report on Form 8-K, filed March 6, 1998.
5. Quarterly Report on Form 10-Q, for the quarterly period ended January
31, 1998.
All reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination or completion of the Offering, shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of the filing of such reports and documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein (or in any other subsequently filed document which also is incorporated
or deemed to be incorporated by reference herein) modifies or supersedes such
previous statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, or constitute a part of this
Registration Statement.
2
<PAGE>
Unless the context otherwise requires, all references herein to "Navistar"
or the "Company" refer to Navistar International Corporation and its
subsidiaries, including its principal operating subsidiary, Navistar
International Transportation Corp. ("Transportation"). The fiscal years of the
Company end on October 31. Fiscal years are identified herein according to the
calendar year in which they end. For example, the fiscal year ended October
31, 1997 is referred to as "fiscal 1997."
THE COMPANY
Navistar manufactures and markets medium and heavy duty trucks, including
school buses, mid-range diesel engines and service parts primarily in the
United States and Canada as well as in selected export markets. The Company
offers a full line of diesel-powered products under the "International" brand
name in the common carrier, private carrier, government/service, leasing,
construction, energy/petroleum and student transportation markets. In
addition, Navistar builds a family of mid-range diesel engines for use in its
medium trucks, school buses and selected heavy truck models and for sale to
original equipment manufacturers ("OEMs") in the United States and Canada. The
Company offers a full line of mid-range diesel engines and is the leading
supplier of such engines in the 160-300 horsepower range. In fiscal 1997, the
Company had consolidated sales and revenues of $6,371 million and net income
of $150 million.
Navistar markets its truck products and service parts through the largest
retail organization in North America specializing in medium and heavy trucks,
which at October 31, 1997, included 992 dealers and retail outlets. Service
and customer support are also supplied at these locations. In the United
States and Canada, Navistar operates seven regional parts distribution centers
which allow 24-hour availability and same day shipment of parts most
frequently requested by dealers and customers. To better serve the growing
Mexican market, the Company established a Mexican distribution network in 1996
and began construction of a new truck assembly facility located near
Monterrey, Mexico in 1997. Through Navistar Financial Corporation ("NFC"), the
Company provides wholesale, retail and, to a lesser extent, lease financing in
the United States for sales of new and used trucks sold by the Company and
Navistar's dealers. NFC also finances wholesale accounts and selected retail
accounts receivable of the Company.
The Company's principal executive office is located at 455 North Cityfront
Plaza Drive, Chicago, Illinois 60611, and its telephone number is (312) 836-
2000.
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by the Company................................ 3,000,000
Common Stock and Class B Common Stock to be outstanding after the
Offering:
Common Stock..................................................... 52,113,774
Class B Common Stock (1)......................................... 16,894,103
----------
Total.......................................................... 69,007,877
==========
</TABLE>
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(1) All outstanding shares of Class B Common Stock are held by the
Supplemental Trust. The Class B Common Stock is identical to the Common
Stock, except with respect to voting rights and transferability. See
"Description of Capital Stock." In January 1998, the Company repurchased
approximately 3.2 million shares of its Class B Common Stock from the
Supplemental Trust. The number of outstanding shares of Class B Common
Stock has been adjusted to give effect to the sale of 3,000,000 shares of
Class B Common Stock by the Supplemental Trust to Navistar in connection
with this Offering. Any shares of Class B Common Stock sold by the
Supplemental Trust to Navistar will automatically convert into Common
Stock. All of the remaining Class B Common Stock will automatically
convert into Common Stock on July 1, 1998.
3
<PAGE>
RISK FACTORS
Potential investors in the Common Stock offered hereby should carefully
consider the following factors in addition to the other information contained
in this Prospectus.
MARKET AND GENERAL ECONOMIC CONDITIONS
Navistar's ability to be profitable depends in part on the varying
conditions in the medium and heavy truck, mid-range diesel engine and service
parts markets. The truck markets in which the Company competes are subject to
considerable volatility. Such markets move in response to cycles in the
overall business environment and are particularly sensitive to the industrial
sector, which generates a significant portion of the freight tonnage hauled.
Truck and engine demand also depend on general economic conditions, interest
rate levels and fuel costs.
COMPETITION
The North American truck market, in which Navistar competes, is highly
competitive. Navistar's major domestic competitors include PACCAR, Ford and
General Motors, as well as foreign-controlled domestic manufacturers, such as
Freightliner, Mack and Volvo GM. In addition, well-capitalized manufacturers
from Japan (Hino, Isuzu, Nissan, Mitsubishi) are attempting to increase their
North American sales levels. The intensity of this competition, which is
expected to continue, results in price discounting and margin pressures
throughout the industry and adversely affects Navistar's ability to increase
or maintain vehicle prices. Many of Navistar's competitors have greater
financial resources, which may place Navistar at a competitive disadvantage in
responding to substantial industry changes, such as changes in governmental
regulations that require major additional capital expenditures. In addition,
certain of Navistar's competitors may have lower overall labor costs.
FUTURE CAPITAL REQUIREMENTS
Navistar has announced plans for approximately $350 million in capital
spending over the next six years for its next generation vehicle program (such
program, formerly referred to as the next generation truck program, is herein
the "NGV Program"). Capital expenditures for fiscal 1998 are expected to be
approximately $370 million, of which $25 million is to be spent for the NGV
Program. Additional capital expenditures are planned for the completion of the
truck assembly facility in Mexico, increased manufacturing capacity at the
Indianapolis engine plant, commencement of truck operations in Brazil and
improvements to existing facilities and products. Navistar's investment in the
NGV Program will also include $300 million in development expense over the
next six years, of which approximately $50 million is planned for 1998.
The Company will be required to make substantial cash expenditures over the
next several years to implement its NGV Program and to meet its other capital
expenditure and development objectives. Historically, Navistar has relied on
cash balances and cash provided by operations to meet its funding
requirements. The amount of cash generated by Navistar's business varies with
industry volumes in the medium and heavy truck markets. No assurance can be
given that Navistar will have the cash balances necessary to implement its NGV
Program and to meet its other capital requirements or that financing will be
available or, if available, that it will be available on satisfactory terms.
The future availability of financing will depend on many factors, including
Navistar's earnings, credit ratings, the outlook for truck industry demand and
the capital resources of financial institutions. If adequate funds are not
available, the Company may be required to cut back or discontinue the NGV
Program or other product development or capital improvement programs.
From and after July 1, 1998, the Settlement Agreement in respect of
Navistar's postretirement healthcare and life insurance benefits (the
"Settlement Agreement") gives the Supplemental Trust established thereunder
the exclusive right, subject to certain limited exceptions, to conduct public
offerings of Common Stock for a period of 5 years (the "Window Period"),
subject to earlier termination at such time as the Supplemental Trust has
received net proceeds of $500 million from qualifying sales of Common Stock.
During this period, Navistar will be prohibited from conducting public
offerings of equity securities for working capital or other purposes
4
<PAGE>
unless the Supplemental Committee (as defined) under the Supplemental Trust
otherwise consents. To date, the Supplemental Trust has received approximately
$78 million in net proceeds from qualifying sales of Common Stock. Any net
proceeds received by the Supplemental Trust from the repurchase by Navistar of
up to 3,000,000 shares of Common Stock from the Supplemental Trust in
connection with this Offering will be applied against the $500 million early
termination amount. See "--Potential Influence of Supplemental Trust."
RELIANCE ON MAJOR CUSTOMER
Ford accounted for approximately 14% of the Company's revenues during fiscal
1997 and fiscal 1996 and approximately 12% for fiscal 1995. Although the
Company has contracts with Ford that continue through 2012, such contracts
provide for supplying Ford's requirements for particular models, rather than
for manufacturing a specific quantity of products. The loss of Ford as a
customer or a significant decrease in demand for the models or a group of
related models that utilize the Company's products could have a material
adverse effect on the Company.
IMPACT OF GOVERNMENT REGULATION
Truck and engine manufacturers continue to face increasing governmental
regulation of their products, especially in the areas of environment and
safety. As a diesel engine manufacturer, Navistar has incurred research and
tooling costs to redesign its engine product lines to meet the United States
Environmental Protection Agency ("U.S. EPA") and California Air Resources
Board ("CARB") emission standards effective for the 1998 model year. In
addition, Navistar expects to continue to incur research, design and tooling
costs to: (i) achieve further reductions in ozone-causing exhaust emissions by
2004 in accordance with the voluntary agreement entered into by Navistar,
along with other engine manufacturers, with the U.S. EPA and CARB and (ii)
satisfy the 1998 Clean Fuel Fleet Vehicle requirements and California's
emission standards in 2002 for engines used in medium-size vehicles. Navistar
expects that its diesel engines will be able to meet all of these standards
within the required time frames.
For model year 1998, the U.S. EPA has issued conditional certification of
conformance for all electronically-controlled diesel engines while it
investigates whether these engines fully comply with regulations concerning
nitrogen oxide emissions. In particular, the U.S. EPA is focusing on whether
certain electronics strategies used to maintain fuel economy have an adverse
impact on nitrogen oxide emissions. Navistar believes the diesel engines
manufactured by it are in compliance with all applicable U.S. EPA standards
and is cooperating with the U.S. EPA's investigation. It is possible that the
U.S. EPA investigation could result in some buyers deferring their purchases
of trucks pending the outcome of the investigation, and that future U.S. EPA
action could impact the fuel economy of trucks.
Truck manufacturers are also subject to various noise standards imposed by
federal, state and local regulations, and to the National Traffic and Motor
Vehicle Safety Act and Federal Motor Vehicle Safety Standards promulgated by
the National Highway Traffic Safety Administration. Navistar believes it is in
compliance with such standards.
Complying with such laws and regulations has added and will continue to add
to the cost of Navistar's products, and increases the capital-intensive nature
of Navistar's business. If the present level of price competition continues,
it may become increasingly difficult for manufacturers of engines and trucks
to recover these costs and, accordingly, lower margins may result.
PENSION AND POSTRETIREMENT HEALTH CARE OBLIGATIONS
Navistar has significant underfunded pension obligations. At October 31,
1997, the unfunded portion of accumulated benefit obligation of Navistar's
pension plans was approximately $445 million, compared to $607 million at
October 31, 1996. In November 1997, Navistar contributed $100 million to the
hourly pension plan. Navistar's long-term objective is to fund its entire
accumulated pension benefit obligation over the next 5 to 8 years with funds
that are principally generated by operations.
5
<PAGE>
In the event Navistar's pension plans were terminated for any reason and
plan assets were insufficient to meet guaranteed liabilities, the Pension
Benefit Guaranty Corporation ("PBGC") may have a right to take over these
plans as their administrator and trustee. In this event, the actual present
value of guaranteed pension liabilities may be determined in a manner
different from that used by Navistar to determine its unfunded vested pension
liability. Subject to certain limitations, the PBGC would have a claim against
Navistar to the extent that plan assets were not sufficient to meet the
actuarial present value of guaranteed liabilities.
In addition to providing pension benefits, Navistar provides health care and
life insurance for a majority of its retired employees and their spouses and
certain dependents and will provide retiree health care and life insurance
benefits for most of its existing employees hired before July 1, 1993. In
1993, a trust (the "Base Trust") was established under the Navistar Retiree
Health Benefit and Life Insurance Program (the "Base Program") to partially
fund this post-retirement health care liability. In November 1997, Navistar
contributed $200 million to the Base Trust satisfying the balance of its $500
million prefunding obligation, although Navistar will remain obligated to make
future contributions to the Base Trust on a pay-as-you-go basis. These
benefits are provided as part of the Settlement Agreement.
POTENTIAL INFLUENCE OF SUPPLEMENTAL TRUST
In July 1993, Navistar restructured its postretirement health care and life
insurance benefits pursuant to the Settlement Agreement that resolved
litigation between Navistar and a class of its employees, retirees and
collective bargaining organizations, including the United Automobile,
Aerospace & Agricultural Implement Workers of America (the "UAW"), as lead
class plaintiff. The Settlement Agreement provides, among other things, that
Navistar establish a Supplemental Trust for the purpose of funding certain
retiree and health benefits under a Supplemental Benefit Program. The
Supplemental Trust currently holds approximately 19.9 million shares of
Navistar's non-voting Class B Common Stock. On July 1, 1998, the non-voting
Class B Common Stock held by the Supplemental Trust will convert into voting
Common Stock, which is the same class of stock held by Navistar's other
shareowners. Based upon the 49.1 million shares of Common Stock currently
outstanding, the Supplemental Trust would hold approximately 29% of Navistar's
voting stock upon conversion (such percentage would be reduced to 24.5% if
3,000,000 shares are repurchased by the Company from the Supplemental Trust
with the proceeds of this Offering). As a result of such stock ownership, it
is likely that the Supplemental Trust will be able to have a significant
influence over those matters submitted to a vote of Navistar's shareowners,
including the election of directors and approval of certain significant
corporate transactions, following such conversion. A committee of five members
acts as administrator of the Supplemental Benefit Program (the "Supplemental
Committee") and as such has the power to direct the voting of the Common Stock
held by the Supplemental Trust. Two of the members of the Supplemental
Committee are designees of the UAW, one is a retired management employee and
two are independent from either Navistar or the UAW. In addition, the
Settlement Agreement provides for the addition of three seats to Navistar's
Board of Directors, one of which is elected by the UAW and two of which are
elected by the Supplemental Committee on behalf of the Supplemental Trust.
Navistar's Board of Directors is currently comprised of 14 persons.
RISK OF LOSS OF TAX BENEFITS AND RESTRICTIONS ON STOCK TRANSFER
If, as a result of any transaction involving Navistar's equity securities,
an "ownership change" occurs for federal income tax purposes, the Company's
ability to use its substantial net operating losses (the "NOLs") to offset
taxable income, and thereby reduce Navistar's tax liability, would be severely
limited, requiring an adjustment to Navistar's deferred tax asset reflected in
its Statement of Financial Condition. The Settlement Agreement requires that
Navistar not sell or acquire Common Stock or other securities or take other
actions if to do so would put Navistar at risk of an "ownership change" or
would limit the ability of the Supplemental Trust to sell on or after July 1,
1998 Common Stock up to an amount equal to $500 million less proceeds from
prior sales of Common Stock (which amount is currently approximately $372
million, subject to being further reduced by any proceeds received by the
Supplemental Trust in connection with this Offering) without putting
Navistar's NOLs at risk.
6
<PAGE>
As part of the Settlement Agreement, a provision (the "Prohibited Transfer
Provision") was added to Navistar's Certificate of Incorporation to protect
against certain transfers of equity securities which could cause an "ownership
change." Although the Prohibited Transfer Provision is intended to prevent
transfers which could cause an "ownership change," Navistar may not be able to
prevent every transaction that could cause an "ownership change." By its
terms, the Prohibited Transfer Provision will expire on June 30, 2001.
Under the Prohibited Transfer Provision, if a shareowner transfers or agrees
to transfer stock, the transfer will be prohibited to the extent that it (i)
would cause the transferee to hold a "Prohibited Ownership Percentage" (as
defined in Navistar's Certificate of Incorporation) or (ii) would result in
the transferee's ownership increasing if the transferee already holds (or has
held within the three prior years) a Prohibited Ownership Percentage. A
"Prohibited Ownership Percentage" is defined under Navistar's Certificate of
Incorporation by reference to complex federal tax laws and regulations, but
generally means direct and indirect ownership of 4.5% or more (based on value)
of Navistar's stock. The Prohibited Transfer Provision does not prevent
transfers of stock between persons who do not hold a Prohibited Ownership
Percentage. See "Description of Capital Stock--Prohibited Transfer Provision."
ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER AND STATUTORY PROVISIONS
As a result of the Settlement Agreement, the Company's Certificate of
Incorporation provides that the affirmative vote of 85% of the Common Stock
and Class B Common Stock present at a meeting and voting together as a single
class is required to approve certain mergers and consolidations or a sale of
all or substantially all of the Company's assets (a "Supermajority
Transaction"). The Supplemental Committee, subject to its fiduciary
responsibilities to enrolled participants, will be able to block Supermajority
Transactions for so long as the Supplemental Trust holds 15% of the aggregate
outstanding Common Stock and Class B Common Stock represented at any meeting
of shareowners. The Company's Certificate of Incorporation and By-laws also
contain provisions which (i) permit the Company to issue so-called "flexible"
preferred stock, (ii) provide for a classified Board of Directors, (iii) limit
the filling of Board vacancies to the remaining directors and (iv) prohibit
shareowners from taking action by written consent or calling special meetings.
The Company also is subject to Section 203 of the Delaware General Corporation
Law, which restricts the Company from engaging in certain business
combinations with "interested stockholders."
Although not intended, the foregoing provisions, as well as the Prohibited
Transfer Provision, may adversely affect the marketability of the Common Stock
by discouraging potential investors from acquiring stock of the Company. In
addition, these provisions could delay or frustrate the removal of incumbent
directors and could make more difficult a merger, tender offer or proxy
contest involving the Company, or impede an attempt to acquire a significant
or controlling interest in the Company, even if such events might be
beneficial to the Company and its shareowners.
FUTURE SALES OF COMMON STOCK
No prediction can be made as to the effect, if any, that the substantial
holdings of Common Stock to be acquired by the Supplemental Trust upon
conversion of the Class B Common Stock, the future public offerings of Common
Stock or the availability of Common Stock for future sale will have on the
market price of the Common Stock prevailing from time to time. The
Supplemental Trust was established for the purpose of funding certain retiree
and health benefits under a Supplemental Benefit Program and as a fiduciary is
required under ERISA to diversify its investments in a prudent manner. Sales
of substantial amounts of Common Stock, or the perception that such sales may
occur, could adversely affect prevailing market prices. On July 1, 1998, the
approximately 19.9 million shares of the Company's Class B Common Stock (less
any shares repurchased by the Company from the Supplemental Trust with the
proceeds of this Offering) held by the Supplemental Trust will convert into
Common Stock. At that time, the Supplemental Trust will be entitled to have
its shareholdings registered for sale under the Securities Act and may sell
its holdings in registered offerings from time to time thereafter. Although
the Supplemental Trust is generally restricted to underwritten offerings in
connection with such registrations and has agreed to limitations on the
spacing of such offerings, any such registrations and/or sales of any or all
of such shares could have a material adverse effect on the market price of the
Common Stock.
7
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of shares offered hereby by the Company will
be used to fund the purchase by the Company of up to 3,000,000 shares of the
Company's Class B Common Stock from the Supplemental Trust (such funding to be
accomplished either contemporaneously with, or before or after the
consummation of the purchase of shares from the Supplemental Trust). Any
amount by which the purchase price for shares of Class B Common Stock
purchased by the Company from the Supplemental Trust exceeds the net proceeds
of the Offering received by the Company will be made up from the general funds
of the Company; and any amount by which the net proceeds of the Offering
received by the Company exceeds the purchase price for shares of Class B
Common Stock purchased from the Supplemental Trust will be added to the
working capital of the Company.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 176 million shares, of
which 110 million shares are designated as Common Stock, with a par value of
$.10 per share, 26 million shares are designated as Class B Common, with a par
value of $.10 per share (the "Class B Common Stock"), 30 million shares are
designated as Preferred Stock, with a par value of $1.00 per share, and 10
million shares are designated as Preference Stock, with a par value of $1.00
per share. The following summary of the Company's capital stock is qualified
in its entirety by reference to the Company's Certificate of Incorporation
(the "Certificate of Incorporation"), which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part.
COMMON STOCK
The authorized Common Stock consists of 110 million shares, of which
49,235,671 shares were outstanding at December 31, 1997 and were held by
approximately 57,409 holders of record as of such date.
Dividend Rights and Restrictions. Holders of Common Stock are entitled to
receive dividends when and as declared by the Board of Directors out of funds
legally available therefor, provided that, so long as any shares of Preferred
Stock and Preference Stock are outstanding, no dividends (other than dividends
payable in Common Stock) or other distributions (including purchases) may be
made with respect to the Common Stock unless full cumulative dividends on the
shares of Preferred Stock and Preference Stock have been paid. Under the
General Corporation Law of the State of Delaware (the "DGCL"), dividends may
only be paid out of surplus or out of net profits for the fiscal year in which
the dividend is declared and/or the preceding fiscal year, and no dividend may
be paid on Common Stock at any time during which the capital of outstanding
Preferred Stock or Preference Stock exceeds the net assets of the Company.
Voting Rights. Holders of shares of Common Stock are entitled to one vote
for each share for the election of directors and on any question arising at
any shareowners meeting. The Supplemental Trust, as holder of the Series A
Preference Stock, and the UAW, as holder of the Series B Preference Stock, are
entitled to elect two and one members to the Company's Board of Directors,
respectively. See "--Preferred Stock and Preference Stock."
Liquidation Rights. In the event of the voluntary or involuntary
dissolution, liquidation or winding up of the Company, holders of Common Stock
are entitled to receive, pro rata with the holders of Class B Common Stock,
after satisfaction in full of the prior rights of creditors (including holders
of the Company's indebtedness) and holders of Preferred Stock and Preference
Stock, all the remaining assets of the Company available for distribution.
Miscellaneous. The Common Stock is subject to certain transfer restrictions
imposed by the Prohibited Transfer Provision. See "Risk Factors--Risk of Loss
of Tax Benefits and Restrictions on Stock Transfer" and "Description of
Capital Stock--Prohibited Transfer Provision." The holders of Common Stock are
not entitled to preemptive, redemption or subscription rights. Harris Trust
and Savings Bank is the Transfer Agent and the Registrar for the Common Stock.
8
<PAGE>
CLASS B COMMON STOCK
As of December 31, 1997, 23,090,905 shares of the Company's Class B Common
Stock were outstanding and held by the Supplemental Trust. In January 1998,
the Company repurchased approximately 3.2 million shares of its Class B Common
Stock from the Supplemental Trust. The Class B Common Stock is identical to
the Common Stock, except with respect to voting rights and transferability.
The Class B Common Stock is not entitled to vote on any matters submitted to
shareowners, except with respect to certain mergers, consolidations and asset
sales requiring a supermajority vote and with respect to changes in the
Company's Certificate of Incorporation which could adversely affect the Class
B Common Stock. The Certificate of Incorporation limits the circumstances
under which the Supplemental Trust can transfer the Class B Common Stock, but
provides that any Class B Common Stock transferred in conformity with such
limitations will convert automatically into Common Stock. On the "Event Date,"
which in the absence of an event of default will be July 1, 1998, all
remaining Class B Common Stock will convert automatically into Common Stock.
After the Event Date, the Supplemental Trust will not be subject to any
restrictions on the voting or transfer of its Common Stock, except as imposed
by law and, in the case of public offerings, by the registration rights
agreement.
REGISTRATION RIGHTS
After the Event Date, the Supplemental Trust will have certain rights under
a registration rights agreement to register under the Securities Act the offer
and sale of the Common Stock it will receive upon conversion of its Class B
Common Stock. Except for the Company's right to register offers and sales of
debt securities and equity securities issued in connection with acquisitions
and in certain other limited circumstances, the Supplemental Trust will have
the exclusive right to register offers and sales of Common Stock during the
Window Period. See "Risk Factors--Future Capital Requirements." After the
Window Period, both the Company and the Supplemental Trust will have the right
to register the offer and sale of shares of Common Stock, and until such time
as the Supplemental Trust's ownership of Common Stock is reduced below 5% (or
the Company earlier delivers an opinion of counsel to the effect that the
Supplemental Trust is not an "affiliate" of the Company, as such term is used
under the Securities Act), each will have the right to participate in any
offering initiated by the other up to one-half of the total number of shares
offered (or more if there is available capacity and the initiator of the
offering chooses to avail itself of less than one-half of such capacity). The
Company will pay the Supplemental Trust's expenses in up to five such
registrations.
PREFERRED STOCK AND PREFERENCE STOCK
The Company is authorized to issue Preferred Stock and Preference Stock,
which may be issued from time to time in one or more series upon authorization
by the Company's Board of Directors. The Board of Directors, without further
approval of the shareowners, is authorized to fix the dividend rights and
terms, conversion rights, voting rights, redemption rights and terms,
liquidation preferences, and any other rights, preferences, privileges and
restrictions applicable to each series of Preferred Stock and Preference
Stock. The issuance of Preferred Stock and Preference Stock, while providing
flexibility in connection with possible acquisitions and other corporate
purposes could, among other things, adversely affect the voting power of the
holders of Common Stock and, under certain circumstances, make it more
difficult for a third party to gain control of the Company, discourage bids
for the Common Stock at a premium or otherwise adversely affect the market
price of the Common Stock. The Company has no present plans to issue any
additional series of Preferred Stock or Preference Stock.
Three series of Preference Stock are currently outstanding. Three million
shares of Convertible Junior Preference Stock, Series D (the "Series D
Preference Stock") are authorized, of which 174,568 shares were outstanding as
of December 31, 1997. One share of Nonconvertible Junior Preference Stock,
Series A (the "Series A Preference Stock") is authorized and held by the
Supplemental Trust, and one share of Nonconvertible Junior Preference Stock,
Series B (the "Series B Preference Stock") is authorized and held by the UAW.
Series D Preference Stock. Holders of shares of Series D Preference Stock
are entitled to receive accrued dividends, if any, if and when declared by the
Board of Directors, in the amount of 120 percent of the dividend
9
<PAGE>
(on a Common Stock equivalent basis) declared on Common Stock, other than a
dividend payable solely in shares of Common Stock. Holders of Series D
Preference Stock have the right at their option to convert shares of the
Series D Preference Stock into shares of Common Stock at any time at a
conversion rate of 0.3125 of a share of Common Stock for each share of Series
D Preference Stock, subject to adjustment in certain events. The Series D
Preference Stock is redeemable at any time, in whole or in part, at the option
of the Company upon at least 30 days' advance written notice at the price of
$25 per share plus accrued dividends. Generally, holders of Series D
Preference Stock do not have any voting powers, except as provided by law and
except that holders of at least two-thirds of the number of shares outstanding
must approve any adverse amendment, alteration or repeal of the preferences,
special rights or powers of Series D Preference Stock. Before any distribution
to holders of Common Stock or of any other stock of the Company ranking junior
upon liquidation to the Series D Preference Stock upon any liquidation,
dissolution or winding up of the Company, holders of the Series D Preference
Stock are entitled to receive $25 per share plus accrued dividends.
Series A Preference Stock. As the holder of the Series A Preference Stock,
the Supplemental Trust is entitled to elect two members of the Company's Board
of Directors at any time when the Supplemental Trust holds at least 20% of the
outstanding Common Stock (including the Class B Common Stock) and one member
of the Company's Board of Directors at any time when the Supplemental Trust
holds at least 10% of the outstanding Common Stock (including the Class B
Common Stock). The Series A Preference Stock contains certain transitional
provisions concerning the timing of directors going on and off the Board when
the holdings of the Supplemental Trust are within a 1% range of the 20% and
10% thresholds described above. The Series A Preference Stock is not
transferable by the Supplemental Trust, does not have any voting rights other
than as described above or as required by the law, does not have the right to
receive dividends or distributions and is redeemable for a nominal price upon
the earlier of (i) the passage of 12 consecutive calendar months in which the
Supplemental Trust holds less than 5% of the outstanding Common Stock
(including the Class B Common Stock) and (ii) the date on which the Company is
entitled to cease its profit sharing contributions to the Supplemental Trust.
Series B Preference Stock. As the holder of the Series B Preference Stock,
the UAW is entitled to elect one member of the Company's Board of Directors
(the "UAW Director") until such time as the Company has fully funded its
liability under the Base Program (subject to such right revesting if such
funding falls below 85% of the fully funded amount). The Series B Preference
Stock is not transferable by the UAW, does not have any voting rights other
than as described above or as required by the law, does not have the right to
receive dividends or distributions and is redeemable for a nominal price at
such time as the UAW has not been entitled to elect a director for five
consecutive years.
PROHIBITED TRANSFER PROVISION
The Prohibited Transfer Provision contained in Article Eleventh of
Navistar's Certificate of Incorporation applies to transfers of Common Stock
and Class B Common Stock (collectively, "Stock"). Under the Prohibited
Transfer Provision, if a shareowner transfers or agrees to transfer Stock, the
transfer will be prohibited and void to the extent that it would cause the
transferee to hold a "Prohibited Ownership Percentage" (as defined in the
Certificate of Incorporation) or if the transfer would result in the
transferee's ownership increasing if the transferee had held a Prohibited
Ownership Percentage within the three prior years or if the transferee's
ownership percentage already exceeds the Prohibited Ownership Percentage under
applicable federal income tax rules.
A "Prohibited Ownership Percentage" is defined under the Certificate of
Incorporation by reference to complex federal tax laws and regulations, but
generally means direct and indirect ownership of 4.5% or more (based on value)
of the Stock or any other percentage that would cause a transferee to be
considered to be a 5-percent shareholder under applicable federal income tax
rules. This transfer restriction is intended to prevent any person or group of
persons from becoming a "5-percent shareholder" of Navistar and to prevent an
increase in the percentage stock ownership of any existing person or group of
persons that constitutes a 5-percent shareholder. The use of a 4.5% limitation
rather than a 5% limitation is intended to provide a margin of safety for
market value fluctuations in avoiding an "ownership change."
10
<PAGE>
The Prohibited Transfer Provision will expire on June 30, 2001, subject to
such expiration date being extended or accelerated in the event of a change in
law upon a determination by the Board of Directors that such action is
reasonably necessary to preserve the tax benefits, in the case of an
extension, or that the restrictions are no longer reasonably necessary for the
preservation of the tax benefits, in the case of an acceleration. The
Prohibited Transfer Provision does not prevent transfers of Stock between
persons who do not hold a Prohibited Ownership Percentage, and contains
certain exceptions.
The acquisition of Stock from an individual or entity that owns directly 5%
of the Stock would be deemed to result in the identification of a separate,
segregated "public group" which is a new 5-percent shareholder. Consequently,
the Prohibited Transfer Provision will prohibit certain transfers of equity
interests by, and other actions involving, persons having a Prohibited
Ownership Percentage, unless the transfer or other action is approved by
Navistar's Board of Directors in advance or permitted by a Navistar Board
resolution. Although the Prohibited Transfer Provision is intended to prevent
transfers which could cause an "ownership change," the Company may not be able
to prevent every transaction that could cause an "ownership change." See "Risk
Factors--Risk of Loss of Tax Benefits and Restrictions on Stock Transfer."
The Prohibited Transfer Provision does not apply to any transfer that has
been approved in advance by Navistar's Board of Directors, which is made in
compliance with certain exceptions set forth in the Prohibited Transfer
Provision or exceptions established from time to time by resolution of
Navistar's Board of Directors. The Board may permit an otherwise prohibited
transfer if it reasonably and in good faith determines that a waiver would be
in the best interests of the Company.
PLAN OF DISTRIBUTION
The Company may sell shares of Common Stock registered hereunder from time
to time in one or more transactions on or after the date hereof. The aggregate
proceeds to the Company from sales of the Common Stock offered hereby will be
the purchase price of such Common Stock, less any commissions, discounts or
other compensation of the Broker-Dealer (as defined).
Sales of Common Stock by the Company may be made from time to time, as
market conditions permit, by any of the following means, or any combination
thereof, using such broker-dealer or broker-dealers as may enter into
arrangements with the Company from time to time (herein referred to as the
"Broker-Dealer"): (i) ordinary brokerage transactions on the New York Stock
Exchange and transactions in which the Broker-Dealer solicits purchasers; (ii)
block trades in accordance with the rules of the New York Stock Exchange in
which the Broker-Dealer may attempt to sell the shares as agent but may
position and resell all or a portion of the block as principal to facilitate
the transactions; (iii) "off-board" secondary distributions, exchange
distributions or special offerings in accordance with the rules of the New
York Stock Exchange in which the Broker-Dealer may act as principal or agent;
(iv) sales to the Broker-Dealer in which such Broker-Dealer purchases the
shares as principal and resells such shares for its own account pursuant to a
Prospectus Supplement; (v) sales "at the market" or to or through a market
maker or into an existing trading market, on an exchange or otherwise, for
such shares; and (vi) sales in other ways not involving market makers or
established trading markets, including direct sales to institutions or
individual purchasers. The shares of Common Stock are expected to be sold at
prices prevailing at the time of sale, and it is anticipated that the offering
prices will not exceed the last reported sale price for the Common Stock of
the Company on the New York Stock Exchange immediately prior to the
determination thereof. The Broker-Dealer will receive such brokerage
commissions or other compensation as may be negotiated with the Company
immediately prior to the sale. Such commissions or other compensation are not
expected to exceed those customary in the types of transactions involved. The
Broker-Dealer may also receive compensation from purchasers of the shares
which is not expected to exceed that customary in the types of transactions
involved.
In connection with the sale of Common Stock offered hereby, the Broker-
Dealer may be deemed to be an underwriter within the meaning of the Securities
Act, in which event the brokerage commissions or discounts received by it may
be deemed to be underwriting compensation. To the extent required by the
Securities Act, additional information relating to the specific shares
offered, the price at which such shares are offered and the
11
<PAGE>
particular selling arrangements, if any, made with any Broker-Dealer in
connection therewith (including any applicable commissions or discounts) will
be set forth in an accompanying Prospectus Supplement or, if appropriate, a
post-effective amendment to the Registration Statement of which this
Prospectus is a part. The Company under arrangements which it may enter into
with the Broker-Dealer may agree to indemnify the Broker-Dealer against
certain liabilities, including liabilities under the Securities Act of 1933,
as amended, or to contribute to payments that the Broker-Dealer may be
required to make in respect thereof.
LEGAL MATTERS
Certain legal matters with regard to the validity of the Common Stock will
be passed upon for the Company by Kirkland & Ellis (a partnership including
professional corporations), Chicago, Illinois.
EXPERTS
The consolidated financial statements of Navistar International Corporation
from the Company's Annual Report on Form 10-K for the year ended October 31,
1997 incorporated by reference in this Prospectus and elsewhere in the
Registration Statement have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports with respect thereto, and are included
herein in reliance upon the authority of said firm as experts in accounting
and auditing.
12
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY SINCE SUCH DATE.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Information by Reference.......................... 2
The Company................................................................ 3
The Offering............................................................... 3
Risk Factors............................................................... 4
Use of Proceeds............................................................ 8
Description of Capital Stock............................................... 8
Plan of Distribution....................................................... 11
Legal Matters.............................................................. 12
Experts.................................................................... 12
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
3,000,000 SHARES
NAVISTAR
INTERNATIONAL
CORPORATION
COMMON STOCK
($.10 PAR VALUE)
----------------
PROSPECTUS
----------------
, 1998
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses of the Registrant in connection
with the issuance and distribution of the securities being registered, other
than underwriting discounts and commissions. All such amounts are estimates,
other than the fees payable to the Commission.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............... $29,261
Legal fees and expenses........................................... 15,000
Accounting fees and expenses...................................... 15,000
Miscellaneous..................................................... 16,000
-------
Total........................................................... $75,261
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant is incorporated under the laws of the State of Delaware.
Section 145 of the General Corporation Law of the State of Delaware provides
that a Delaware corporation may indemnify any persons who are, or are
threatened to be made, parties to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation), by reason of
the fact that such person is or was an officer, director, employee or agent of
such corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceedings, provided such person
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the corporation's best interests and, with respect to any criminal
action or proceedings, had no reasonable cause to believe that his conduct was
illegal. A Delaware corporation may also indemnify any persons who are, or are
threatened to be made, a party to any threatened, pending or completed action
or suit by or in the right of the corporation by reason of the fact that such
person was a director, officer, employee or agent of such corporation, or is
or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or enterprise. The indemnity may
include expenses (including attorneys' fees) actually and reasonably incurred
by such person in connection with the defense or settlement of such action or
suit, provided such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the corporation's best interests except
that no indemnification is permitted without judicial approval if the officer
or director is adjudged to be liable to the corporation. To the extent that an
officer or director is successful on the merits or otherwise in the defense of
any action referred to above, the corporation must indemnify him against the
expenses which such officer or director has actually and reasonably incurred
in connection with such defense.
Under Article Ninth of the Registrant's Restated Certificate of
Incorporation and Article XII of its By-Laws, as amended, the Registrant shall
indemnify any person who was or is made a party or is threatened to be made
party to or is otherwise involved in any action, suit or proceedings, whether
civil, criminal, administrative or investigative, by reason of the fact that
he or she is or was a director or officer of the Registrant (including any
predecessor corporation of the Registrant), or is or was serving at the
request of the Registrant as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, against all
expenses, liability and loss (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid in settlement) reasonably
incurred or suffered by such person in connection therewith to the fullest
extent authorized by the General Corporation Law of the State of Delaware.
Such right of indemnification shall be a contract right and shall not be
exclusive of any other right which such directors, officers or representatives
may have or hereafter acquire under any statute, the Registrant's Restated
Certificate of Incorporation, the Registrant's By- Laws, agreement, vote of
stockholders or disinterested directors or otherwise.
II-1
<PAGE>
In addition, Section 102 of the General Corporation Law of the State of
Delaware allows a corporation to eliminate the personal liability of a
director of a corporation to the corporation or to any of its stockholders for
monetary damages for a breach of fiduciary duty as a director, except in the
case where the director (i) breaches his duty of loyalty, (ii) fails to act in
good faith, engages in intentional misconduct or knowingly violates a law,
(iii) authorized the payment of a dividend or approves a stock repurchase in
violation of the General Corporation Law of the State of Delaware or (iv)
obtains an improper personal benefit. Article Eighth of the Registrant's
Restated Certificate of Incorporation includes a provision which eliminates
directors' personal liability to the full extent permitted under the General
Corporation Law of the State of Delaware.
The Registrant maintains a policy of directors and officers liability
insurance covering certain liabilities incurred by its directors and officers
in connection with the performance of their duties.
ITEM 16. EXHIBITS.
The following exhibits are filed pursuant to Item 601 of Regulation S-K:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S> <C>
4.1 Specimen certificate for shares of Common Stock, incorpo-
rated by reference to Registration No. 33-50327.
4.2 Restated Certificate of Incorporation of the Company, in-
corporated by reference to Exhibit 3.2 of the Company's
Annual Report on Form 10-K, dated October 31, 1993, which
was filed on January 27, 1994, Commission File No. 1-9618.
4.3 By-Laws of the Company, incorporated by reference to Ex-
hibit 3.2 of the Company's Annual Report on Form 10-K,
dated October 31, 1995, which was filed with the Commis-
sion on January 26, 1996, Commission File No. 1-9618.
5.1 Opinion of Kirkland & Ellis regarding legality of securi-
ties being registered.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Kirkland & Ellis--included in Exhibit 5.1.
24.1 Form of Powers of Attorney.
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE IT MEETS ALL
THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF CHICAGO, ILLINOIS, AS OF MARCH 17, 1998.
Navistar International Corporation
/s/ Robert C. Lannert
By: _________________________________
Robert C. Lannert
Executive Vice President and
Chief Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND AS OF THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman, President and March 17, 1998
____________________________________ Chief Executive Officer and
John R. Horne Director (Principal
Executive Officer)
/s/ Robert C. Lannert Executive Vice President and March 17, 1998
____________________________________ Chief Financial Officer and
Robert C. Lannert Director (Principal
Financial Officer)
* Vice President and March 17, 1998
____________________________________ Controller (Principal
J. Steven Keate Accounting Officer)
* Director March 17, 1998
____________________________________
William F. Andrews
* Director March 17, 1998
____________________________________
Andrew F. Brimmer
* Director March 17, 1998
____________________________________
John D. Correnti
* Director March 17, 1998
____________________________________
William C. Craig
* Director March 17, 1998
____________________________________
Jerry E. Dempsey
Director March , 1998
____________________________________
John F. Fiedler
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Director March , 1998
____________________________________
Mary Garst
* Director March 17, 1998
____________________________________
John T. Grigsby, Jr.
Director March , 1998
____________________________________
Michael N. Hammes
Director March , 1998
____________________________________
Allen J. Krowe
Director March , 1998
____________________________________
Walter J. Laskowski
* Director March 17, 1998
____________________________________
William F. Patient
</TABLE>
* The undersigned, by signing his name hereto, does hereby execute the
Registration Statement on behalf of the above-named officers and/or
directors of the Registrant pursuant to Powers of Attorney being
concurrently filed with the Commission.
/s/ Robert C. Lannert
_____________________________________
Robert C. Lannert, Attorney-in-
Fact
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S> <C>
4.1 Specimen certificate for shares of Common Stock, incorporated
by reference to Registration No.
33-50327.
4.2 Restated Certificate of Incorporation of the Company, incorpo-
rated by reference to Exhibit 3.2 of the Company's Annual Re-
port on Form 10-K, dated October 31, 1993, which was filed on
January 27, 1994, Commission File No. 1-9618.
4.3 By-Laws of the Company, incorporated by reference to Exhibit
3.2 of the Company's Annual Report on Form 10-K, dated October
31, 1995, which was filed with the Commission on January 26,
1996, Commission File No. 1-9618.
5.1 Opinion of Kirkland & Ellis regarding legality of securities
being registered.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Kirkland & Ellis--included in Exhibit 5.1.
24.1 Form of Powers of Attorney.
</TABLE>
<PAGE>
EXHIBIT 5.1
[KIRKLAND & ELLIS LETTERHEAD]
March 17, 1998
Navistar International Corporation
455 North Cityfront Plaza Drive
Chicago, Illinois 60611
Re: Navistar International Corporation
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We are acting as special counsel to Navistar International
Corporation, a Delaware corporation (the "Company"), in connection with the
proposed registration by the Company of 3,000,000 shares (the "Shares") of its
Common Stock, par value $.10 per share (the "Common Stock"), to be issued and
sold by the Company pursuant to a Registration Statement on Form S-3, filed with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Act") (such Registration Statement, as amended or
supplemented, is hereinafter referred to as the "Registration Statement"). We
have been advised by the Company that, from time to time, as determined by
market conditions, it may offer and sell the Shares in ordinary brokerage
transactions on the New York Stock Exchange, Inc., by means of one or more block
trades, secondary distributions, exchange distributions or special offerings,
through a broker-dealer who purchases such shares as principal and resells them
for its own account, or in other transactions to be determined by the Company at
the time of sale.
In that connection, we have examined such corporate proceedings,
documents, records and matters of law as we have deemed necessary to enable us
to render this opinion.
For purposes of this opinion, we have assumed the authenticity of all
documents submitted to us as originals, the conformity to the originals of all
documents submitted to us as copies and the authenticity of the originals of all
documents submitted to us as copies. We have also assumed the legal capacity of
all natural persons, the genuineness of the signatures of persons signing all
documents in connection with which this opinion is rendered, the authority of
such persons signing on behalf of the parties thereto other than the Company and
the due authorization, execution and delivery of all documents by the parties
thereto other than the Company. As to any facts material to the opinions
expressed herein, we have relied upon the statements and representations of
officers and other representations of the Company and others. For purposes of
numbered paragraph 1, we have relied exclusively upon certificates issued by
governmental authorities in the relevant jurisdictions and such opinion is not
intended to provide any conclusion or assurance beyond that conveyed by such
certificates.
Our opinion expressed below is subject to the qualifications that we
express no opinion as to the applicability of, compliance with, or effect of any
laws except the internal laws of the State of Illinois, the General Corporation
Law of the State of Delaware (the "DGCL") and the federal law of the United
States of America.
<PAGE>
Navistar International Corporation
March __, 1998
Page 2
Based upon and subject to the foregoing qualifications, assumptions
and limitations and the further limitations set forth below, we hereby advise
you that in our opinion:
(1) The Company is a corporation existing and in good standing under
the laws of the State of Delaware.
(2) The Shares are duly authorized, and, when (i) the Registration
Statement becomes effective under the Act, (ii) the Board of Directors of the
Company has taken all necessary action to approve the issuance and sale of the
Shares, (iii) the Shares have been duly executed and delivered on behalf of the
Company countersigned by the Company's transfer agent/registrar and (iv) the
Company has received the consideration to be paid for the Shares (which amount
is in excess of the par value of the Shares), the Shares will be validly issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 to the Registration Statement. We also consent to the reference to
our firm under the heading "Legal Matters" in the Registration Statement. In
giving this consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission. This opinion and consent may be incorporated by
reference in a subsequent registration statement on Form S-3 filed pursuant to
Rule 462(b) under the Act with respect to the registration of additional
securities for sale in the offering contemplated by the Registration Statement.
We do not find it necessary for the purposes of this opinion, and
accordingly we do not purport to cover herein, the application of the securities
or "Blue Sky" laws of the various states to the issuance and sale of the Shares.
This opinion is limited to the specific issues addressed herein, and
no opinion may be inferred or implied beyond that expressly stated herein. We
assume no obligation to revise or supplement this opinion should the present
laws of the State of Illinois, the DGCL or the federal law of the United States
be changed by legislative action, judicial decision or otherwise.
This opinion is furnished to you pursuant to the applicable rules and
regulations promulgated under the Act in connection with the filing of the
Registration Statement.
Very truly yours,
/s/ Kirkland & Ellis
KIRKLAND & ELLIS
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Navistar International Corporation on Form S-3 of our reports dated
December 15, 1997, appearing and incorporated by reference in the Annual
Report on Form 10-K of Navistar International Corporation for the year ended
October 31, 1997, and to the reference to us under the heading "Experts" in
the Prospectus, which is part of this Registration Statement.
Deloitte & Touche LLP
Chicago, Illinois
March 17, 1998
<PAGE>
EXHIBIT 24.1
NAVISTAR INTERNATIONAL CORPORATION
POWER OF ATTORNEY
REGISTRATION STATEMENT ON FORM S-3
KNOW ALL MEN BY THESE PRESENTS, THAT EACH OF THE UNDERSIGNED OFFICERS AND
DIRECTORS OF NAVISTAR INTERNATIONAL CORPORATION (THE "COMPANY"), HEREBY
APPOINT JOHN R. HORNE, ROBERT C. LANNERT, ROBERT A. BOARDMAN AND J. STEVEN
KEATE, AND EACH OF THEM, AS ATTORNEYS-IN-FACT FOR THE UNDERSIGNED AND FOR EACH
OF THEM (WITH FULL POWER OF SUBSTITUTION AND RESUBSTITUTION), FOR AND IN THE
NAME, PLACE AND STEAD OF EACH OF UNDERSIGNED OFFICERS AND DIRECTORS OF THE
COMPANY, TO SIGN AND FILE WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER
THE SECURITIES ACT OF 1933, A REGISTRATION STATEMENT ON FORM S-3 (THE
"REGISTRATION STATEMENT"), FOR THE PURPOSE OF REGISTERING THE COMPANY'S OFFER
AND SALE OF UP TO 3,000,000 SHARES OF COMMON STOCK OF THE COMPANY, AND ANY AND
ALL AMENDMENTS, SUPPLEMENTS AND EXHIBITS TO ANY SUCH REGISTRATION STATEMENT,
INCLUDING POST-EFFECTIVE AMENDMENTS, AND ANY AND ALL DOCUMENTS REQUIRED TO BE
FILED WITH ANY STATE SECURITIES REGULATING BOARD OR COMMISSION PERTAINING TO
SUCH REGISTRATION STATEMENT OR SECURITIES COVERED THEREBY, HEREBY GRANTING
UNTO SAID ATTORNEYS-IN-FACT, AND EACH OF THEM, FULL POWER AND AUTHORITY TO DO
AND PERFORM EACH AND EVERY ACT AND THING NECESSARY OR DESIRABLE TO BE DONE IN
ORDER TO EFFECTUATE THE SAME AS FULLY AND TO ALL INTENTS AND PURPOSES AS EACH
OF THE UNDERSIGNED MIGHT OR COULD DO IF PERSONALLY PRESENT, HEREBY RATIFYING
AND CONFIRMING ALL THAT SAID ATTORNEYS-IN-FACT AND AGENTS, OR ANY OF THEM, OR
ANY OF THEIR SUBSTITUTES, MAY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ John R. Horne Chairman, President and March 10, 1998
____________________________________ Chief Executive Officer and
John R. Horne Director
(Principal Executive
Officer)
/s/ Robert C. Lannert Executive Vice President and March 10, 1998
____________________________________ Chief Financial Officer and
Robert C. Lannert Director (Principal
Financial Officer)
/s/ J. Steven Keate Vice President and March 13, 1998
____________________________________ Controller (Principal
J. Steven Keate Accounting Officer)
/s/ William F. Andrews Director March 11, 1998
____________________________________
William F. Andrews
/s/ Andrew F. Brimmer Director March 11, 1998
____________________________________
Andrew F. Brimmer
/s/ John D. Correnti Director March 11, 1998
____________________________________
John D. Correnti
/s/ William C. Craig Director March 12, 1998
____________________________________
William C. Craig
/s/ Jerry E. Dempsey Director March 11, 1998
____________________________________
Jerry E. Dempsey
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Director March , 1998
____________________________________
John F. Fiedler
/s/ John T. Grigsby, Jr. Director March 11, 1998
____________________________________
John T. Grigsby, Jr.
Director March , 1998
____________________________________
Mary Garst
Director March , 1998
____________________________________
Michael N. Hammes
Director March , 1998
____________________________________
Allen J. Krowe
Director March , 1998
____________________________________
Walter J. Laskowski
/s/ William F. Patient Director March 11, 1998
____________________________________
William F. Patient
</TABLE>
