SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): April 20, 1999
Navistar International Corporation
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(Exact name of registrant as specified in its charter)
Delaware 1-9618 36-3359573
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
455 North Cityfront Plaza Drive, Chicago, IL 60611
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 836-2000
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The Exhibit Index is located on page 7.
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Item 5. Other Events.
On April 20, 1999, the Board of Directors of Navistar
International Corporation (the "Company") authorized the issuance of one
preferred share purchase right (a "Right") for each outstanding share of common
stock, par value $.10 per share (the "Common Shares"), of the Company. The
distribution is payable to stockholders of record at the close of business on
May 3, 1999 (the "Record Date"), and with respect to all Common Shares that
become outstanding after the Record Date and prior to the earliest of the
Distribution Date (as defined below), the redemption of the Rights, the exchange
of the Rights, and the expiration of the Rights (and, in certain cases,
following the Distribution Date). Each Right entitles the registered holder to
purchase from the Company one one-thousandth of a share of Junior Participating
Preferred Stock, Series A, par value $1.00 per share, of the Company (the
"Preferred Shares") at a price of $175 per one one-thousandth of a Preferred
Share (the "Purchase Price"), subject to adjustment. The description and terms
of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and Harris Trust and Savings Bank, as Rights Agent (the
"Rights Agent").
The Rights will be evidenced by Common Share certificates and
not by separate certificates until the earlier to occur of (i) the tenth day
after the date it is publicly announced that a person or group other than
certain exempt persons (an "Acquiring Person"), together with persons affiliated
or associated with such Acquiring Person, has acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the outstanding Common Shares (a
"Triggering Event") and (ii) the tenth business day after the commencement or
public disclosure of an intention to commence a tender offer or exchange offer
by a person other than an exempt person if, upon consummation of the offer, such
person could acquire beneficial ownership of 15% or more of the outstanding
Common Shares (the earlier of such dates being called the "Distribution Date").
Until the Distribution Date (or earlier redemption, exchange
or expiration of the Rights), the Rights will be transferred with and only with
the Common Shares, and the surrender for transfer of any certificate for Common
Shares will also constitute the transfer of the Rights associated with such
Common Shares. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date, and such separate Right Certificates alone will evidence the
Rights.
The Rights will first become exercisable after the
Distribution Date (unless sooner redeemed or exchanged). Until a Right is
exercised, the holder thereof, as such, will have no rights as a stockholder of
the Company, including, without limitation, the right to vote or to receive
dividends. The Rights will expire at the close of business on May 3, 2009 (the
"Expiration Date"), unless earlier redeemed or exchanged by the Company as
described below.
In the event that a person becomes an Acquiring Person, each
Right (other than Rights that are or were beneficially owned by the Acquiring
Person and certain related persons and transferees, which will thereafter be
void) shall thereafter be exercisable not for Preferred Shares, but for a number
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of Common Shares (or, in certain cases, common equivalent shares) having a
market value of two times the exercise price of the Right. In the event that, at
the time or after a person becomes an Acquiring Person, the Company is involved
in a merger or other business combination in which (i) the Company is not the
surviving corporation, (ii) Common Stock is changed or exchanged, or (iii) 50%
or more of the Company's consolidated assets or earning power are sold, then
each Right (other than Rights that are or were owned by the Acquiring Person and
certain related persons and transferees, which will thereafter be void) shall
thereafter be exercisable for a number of shares of common stock of the
acquiring company having a market value of two times the exercise price of the
Right.
In addition, at any time after a person has become an
Acquiring Person, but before a person has acquired beneficial ownership of 50%
or more of the outstanding Common Shares, the Company may elect to exchange all
or part of the Rights (excluding void Rights held by an Acquiring Person and
certain related persons and transferees) for Common Shares on a one-for-one
basis.
The Purchase Price payable, and the number and kind of
securities, cash or other property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend or distribution on, or a subdivision or combination of, the
Common Shares, (ii) upon the grant to holders of the Common Shares of rights,
options or warrants to subscribe for Common Shares or securities convertible
into Common Shares at less than the current market price, (iii) upon the
distribution to holders of the Common Shares of securities, cash, evidences of
indebtedness or assets (excluding regular periodic cash dividends out of
earnings or retained earnings) and (iv) in connection with recapitalizations of
the Company or reclassifications of the Common Shares.
No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading date prior to the date
of exercise.
At any time prior to the earlier of (i) the occurrence of a
Triggering Event and (ii) the Expiration Date, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price"). The Redemption Price will be payable in cash,
shares (including fractional shares) of Common Stock or any other form of
consideration deemed appropriate by the Board of Directors. Immediately upon
action of the Board of Directors ordering redemption of the Rights, the ability
of holders to exercise the Rights will terminate and the only rights of such
holders will be to receive the Redemption Price.
At any time prior to the occurrence of a Triggering Event, the
Board of Directors of the Company may amend or supplement the Rights Agreement
without the approval of the Rights Agent or any holder of the Rights.
Thereafter, the Rights Agreement may not be amended or changed in any manner
which would adversely affect the interests of the holders of the Rights (other
than an Acquiring Person or an affiliate or associate thereof).
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The Preferred Shares purchasable upon exercise of the Rights
will not be redeemable. Each Preferred Share will be entitled to a minimum
preferential quarterly dividend payment equal to the greater of $25 per share
and 1,000 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment equal to the greater of $100 per share and
1,000 times the payment made per Common Share. Each Preferred Share will have
1,000 votes per share, voting together with the Common Shares. In the event of
any merger, consolidation or other transaction in which Common Shares are
exchanged, each Preferred Share will be entitled to receive 1,000 times the
amount received per Common Share.
The Rights have certain anti-takeover effects. The Rights may
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Board of Directors, except pursuant to an
offer conditioned on a substantial number of Rights being acquired. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors prior to the occurrence of a Triggering Event, because
until such time the Rights may generally be redeemed by the Company at $.01 per
Right.
This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement
attached as Exhibit 4.1, which is hereby incorporated in this Current Report on
Form 8-K by reference.
On April 20, 1999, the Company issued a press release
relating, among other things, to the adoption of the Rights Agreement. A copy
of the press release is filed herewith as Exhibit 99.1 and is incorporated
herein by reference.
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Item 7. Financial Statements and Exhibits.
(a) Not Applicable
(b) Not Applicable
(c) Exhibits
4.1 Rights Agreement dated as of April 20, 1999,
between Navistar International Corporation
and Harris Trust and Savings Bank, as Rights
Agent, including the form of Certificate of
Designation, Preferences and Rights of
Junior Participating Preferred Stock, Series
A attached thereto as Exhibit A, and the
form of Rights Certificate attached thereto
as Exhibit B. (Incorporated by reference to
the Company's Registration Statement on Form
8-A, filed with the Commission on April 20,
1999.)
99.1 Press Release dated April 20, 1999 issued by
the Company.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
NAVISTAR INTERNATIONAL CORPORATION
Dated: April 20, 1999 By: /s/ Robert C. Lannert
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Robert C. Lannert
Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
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EXHIBIT INDEX
Exhibit No. Description
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4.1 Rights Agreement dated as of April 20, 1999 between
Navistar International Corporation and Harris Trust and
Savings Bank, as Rights Agent, including the form of
Certificate of Designation, Preferences and Rights of
Junior Participating Preferred Stock, Series A attached
thereto as Exhibit A, and the form of Rights Certificate
attached thereto as Exhibit B*.
99.1 Press Release dated April 20, 1999 issued by the Company.
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* Incorporated by reference to the Company's Registration Statement
on Form 8-A, filed with the Commission on April 20, 1999.
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Exhibit 99.1
Investor Contact: Carmen Corbett, 312/ 836-2406
Media Contact: Roy Wiley, 312/ 836-2627
NAVISTAR RAISES FORECAST FOR 1999 INDUSTRY TRUCK VOLUME
Considers adjustment to its valuation allowance that would further
boost net income; adopts shareowner rights plan
CHICAGO - April 20, 1999 - Navistar International Corporation (NYSE:
NAV) announced today that, based upon continued strong demand in the United
States and Canada, it has raised its forecast for industry demand for heavy and
medium trucks and school buses to a combined total of 415,000 units from the
380,000 it forecast last December.
The new Navistar forecast for total industry volume in the United
States and Canada breaks out as follows: heavy trucks, 250,000 units, up from
224,700; medium trucks, 133,000 units, up from 124,000; and school buses, 32,000
units up from the previous forecast of 31,300 units.
John R. Horne, Navistar chairman, president and chief executive
officer, said the company is now projecting a significantly stronger 1999
performance. Accordingly, the company has begun to evaluate the impact of this
change on its deferred tax asset valuation allowance, which may result in a
significant reduction to the allowance. The company expects to complete this
evaluation in the third quarter.
The deferred tax asset valuation allowance is related to the
realization of Navistar's net operating loss carryforwards. Any adjustment will
be recorded as a reduction in income tax expense, which will lower Navistar's
effective tax rate and increase net income and earnings per share.
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Page Two/Forecast
Additionally, the company's board of directors has adopted a preferred
share purchase rights plan designed to protect shareowners against unsolicited
abusive takeover tactics. The company is not aware of any such attempt at
present.
Horne said the newly adopted rights plan is designed to maximize
shareowner value by encouraging any potential acquirors to negotiate with the
board of directors rather than launch an unsolicited hostile takeover attempt.
"The Navistar board of directors believes the rights plan is in the
best long term interests of shareowners because it maintains the board's ability
to effectively represent the interests of the company and shareowners in the
event of an unforeseen unsolicited takeover attempt," Horne said. "Abusive
takeover tactics can deprive shareowners of the full value of their shares and
squeeze them out of their investment without giving them any real choice."
Horne said the new rights will only become exercisable if and when the
situation arises for which the rights were created -- namely the acquisition or
tender offer for more than 15 percent of the company's common stock in a
transaction that has not been approved by the Navistar board of directors. Under
the plan, if either event occurs, Navistar shareowners would then have the right
to acquire additional Navistar common stock at a 50 percent discount.
The new rights have been declared as a dividend to shareowners of
record as of the close of business on May 3, 1999. The rights will automatically
accompany and trade with the shares of Navistar common stock on the New York
Stock Exchange. The rights dividend is not taxable and will expire on May 3,
2009 unless redeemed, exercised or exchanged.
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Page Three/Forecast
Navistar International Corporation, with world headquarters in Chicago,
and 1998 sales of $7.9 billion, is a leading North American producer of heavy
and medium trucks and school buses. The company is also a worldwide leader in
the manufacture of mid-range diesel engines, which are produced in a range of
160 to 300 horsepower for the International(R) brand, and a private label
designer and manufacturer of diesel engines for the full-size pickup truck and
van markets and selected industrial and off-highway markets.
Net income for the first fiscal quarter ended January 31, 1999, totaled
$61 million, or $0.91 per diluted common share, compared with net income of $38
million, or $0.42 per diluted common share in the same period last year.
Consolidated sales and revenues from the company's manufacturing and financial
services operations for the first quarter totaled $1.9 billion, compared to $1.7
billion in the first quarter of 1998. Manufacturing gross margin for the quarter
increased 3.1 percentage points to 16.5 percent from the 1998 first quarter
gross margin of 13.4 percent. Improved productivity, improved material costs,
better truck pricing, and added engine volume strengthened quarterly results.
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