Exhibit 10.1

EXECUTION COPY

AGREEMENT

This Agreement, dated November 14, 2011 (this “Agreement”), is by and among the
persons and entities listed on Schedule A (collectively, the “Icahn Group”, and
individually a “member” of the Icahn Group) and Navistar International
Corporation (the “Company”). In consideration of and reliance upon the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

1. Declassification of Board. The Company agrees that it will hold its 2012
annual meeting of stockholders (the “2012 Annual Meeting”) not later than
March 31, 2012. In connection with the 2012 Annual Meeting, the Company agrees
to and shall: (i) submit a resolution (in a form reasonably acceptable to the
Icahn Group) to its stockholders at the 2012 Annual Meeting to amend the
Company’s restated certificate of incorporation, as amended, to declassify the
Company’s board of directors (the “Board”) and provide for the annual election
of all directors (the “Declassification Proposal”) and (ii) if the
Declassification Proposal is approved by the stockholders, amend such restated
certificate of incorporation effective prior to the vote provided for in the
following sentence to reflect the approval of such Declassification Proposal. If
the Declassification Proposal is approved by the Company’s stockholders at the
2012 Annual Meeting, then the first of such annual elections shall take place at
the 2012 Annual Meeting, at which directors shall be elected for a one-year
term, and at all subsequent annual meetings, directors will be elected to a
one-year term. The Company agrees that if the Declassification Proposal is
approved by the Company’s stockholders at the 2012 Annual Meeting, then at least
six (6) directorships will be vacant to be filled at the 2013 Annual Meeting (as
defined below) and the Board will be composed of not more than a total of eleven
(11) directorships. The Company agrees that its 2013 Annual Meeting will be held
no later than March 31, 2013. The Company shall include the Declassification
Proposal in its notice of meeting and its proxy statement for the 2012 Annual
Meeting and shall recommend to stockholders that they approve and adopt the
Declassification Proposal.

2. 2012 Annual Meeting and Other Matters.

(a) So long as the Company has complied and is complying with its obligations
set forth in this Agreement, from and after the date hereof, no member of the
Icahn Group shall, directly or indirectly, and each member of the Icahn Group
shall cause each Affiliate (as such term is defined below) of any such members
(such Affiliates, collectively and individually, the “Icahn Affiliates”) not to,
directly or indirectly, (i) solicit proxies or written consents of stockholders,
or conduct any other type of referendum (binding or non-binding) with respect to
the Voting Securities (as defined below), or from the holders of the Voting
Securities, any time prior to or at the 2012 Annual Meeting or become a
“participant” (as such term is defined in Instruction 3 to Item 4 of Schedule
14A promulgated under the Securities Exchange

 

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Act of 1934, as amended (the “Exchange Act”)) in or assist any third party in
any “solicitation” of any proxy, consent or other authority (as such terms are
defined under the Exchange Act) to vote any shares of the Voting Securities for
use at any time prior to or at the 2012 Annual Meeting, (ii) encourage, advise
or influence any other person or assist any third party in so encouraging,
assisting or influencing any person with respect to the giving or withholding of
any proxy, consent or other authority to vote or in conducting any other type of
referendum at any time prior to or at the 2012 Annual Meeting, (iii) form or
join in a partnership, limited partnership, syndicate or other group, including
without limitation a group as defined under Section 13(d) of the Exchange Act,
with respect to the Voting Securities, or otherwise support or participate in
any effort by a third party with respect to the matters set forth in clause
(i) above any time prior to or at the 2012 Annual Meeting, (iv) present any
proposal for consideration for action by stockholders or propose any nominee for
election to the Board at any time prior to or at the 2012 Annual Meeting,
(v) grant any proxy, consent or other authority to vote with respect to any
matters at any time prior to or at the 2012 Annual Meeting (other than to the
named proxies included in the Company’s proxy card for the 2012 Annual Meeting)
or deposit any of the Voting Securities held by the Icahn Group or the Icahn
Affiliates in a voting trust or subject them to a voting agreement or other
arrangement of similar effect with respect to the 2012 Annual Meeting except as
provided in Section 2(b) below, (vi) make any request under Section 220 of the
Delaware General Corporation Law at any time prior to the 2012 Annual Meeting or
(vii) at any time prior to the 2012 Annual Meeting, unless the Company makes,
announces or proposes a material change in its business or strategies, make, or
cause to be made, any statement or announcement that constitutes an ad hominem
attack on, or otherwise disparages or is critical of, the Company, its officers
or its directors. The Icahn Group’s obligations set forth in this Section 2(a)
shall be null and void and shall terminate immediately if the Company announces
any proposals to be considered by stockholders at the 2012 Annual Meeting, other
than the Annual Meeting Proposals (as defined below), or if the 2012 Annual
Meeting is not held on or prior to March 31, 2012. As of the date hereof, the
only proposals known to the Company to be considered by stockholders at the 2012
Annual Meeting are the Annual Meeting Proposals. As used in this Agreement:
(A) the term “Affiliate” shall have the meaning set forth in Rule 12b-2
promulgated by the SEC under the Exchange Act, (B) the terms “person” or
“persons” shall mean any individual, corporation (including not-for-profit),
general or limited partnership, limited liability or unlimited liability
company, joint venture, estate, trust, association, organization or other entity
of any kind or nature and (C) the term “Voting Securities” shall mean the common
stock, par value $0.10 per share, of the Company (the “Common Stock”) and any
other securities of the Company entitled to vote in the election of directors,
or securities convertible into, or exercisable or exchangeable for Common Stock
or other securities, whether or not subject to the passage of time or other
contingencies.

(b) So long as the Company has complied and is complying with its obligations
set forth in this Agreement, each member of the Icahn Group shall (1) cause, in
the case of all Voting Securities owned of record, and (2) instruct the record
owner, in the case of all shares of Voting Securities beneficially owned but not
owned of record, directly or indirectly, by it, or by any Icahn Affiliate, as of
the record date for the 2012 Annual Meeting, in each case that are entitled to
vote at the 2012 Annual Meeting, to be present for quorum purposes and to be
voted, at the 2012 Annual Meeting or at any adjournments or postponements
thereof (but not later than March 31, 2012), (i) for up to three (3) directors
nominated by the Board for election at

 

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the 2012 Annual Meeting and (ii) shall vote (or cause to be voted) in accordance
with the recommendation of the Board for (x) the ratification of the appointment
of the Company’s independent public accounting firm and (y) the Declassification
Proposal; the Icahn Group may vote at its discretion with respect to the
Company’s say-on-pay proposal (clauses (i) and (ii) collectively, the “Annual
Meeting Proposals”).

(c) From the date hereof through the date of the Company’s 2013 annual meeting
of stockholders (the “2013 Annual Meeting”):

(i) So long as the Company has complied and is complying with its obligations
set forth in this Agreement, each member of the Icahn Group agrees (and agrees
to cause each Icahn Affiliate to comply with the provisions of this
Section 2(c)(i)) that, prior to acquiring (in the aggregate with all other
members of the Icahn Group and all Icahn Affiliates) direct or indirect
Beneficial Ownership of Voting Securities that would exceed 14.99% of the then
total outstanding Voting Securities (the “Ownership Limit”), the Icahn Group
shall provide at least ten (10) days’ prior written notice to the Company of its
bona fide intention to acquire, or actual acquisition of, Voting Securities in
excess of the Ownership Limit. For purposes of this Section 2(c), acquisition of
“Beneficial Ownership of Voting Securities” means acquisition of: (i) Voting
Securities, (ii) rights or options to own or acquire any Voting Securities
(whether such right or option is exercisable immediately or only after the
passage of time or upon the satisfaction of one or more conditions (whether or
not within the control of such person), compliance with regulatory requirements
or otherwise) and (iii) any other economic exposure to Voting Securities,
including, without limitation, through any derivative transaction that gives any
such person or any of such person’s Affiliates the economic equivalent of
ownership of an amount of Voting Securities due to the fact that the value of
the derivative is explicitly determined by reference to the price or value of
Voting Securities, or which provides such person or any of such person’s
Affiliates an opportunity, directly or indirectly, to profit, or to share in any
profit, derived from any change in the value of Voting Securities, in any case
without regard to whether (x) such derivative conveys any voting rights in
Voting Securities to such person or any of such person’s Affiliates, (y) the
derivative is required to be, or capable of being, settled through delivery of
Voting Securities, or (z) such person or any of such person’s Affiliates may
have entered into other transactions that hedge the economic effect of such
Beneficial Ownership of Voting Securities; provided, however, that a person
shall not acquire Beneficial Ownership of Voting Securities as a result of a
revocable proxy given to such person in response to a public proxy or consent
solicitation; and

(ii) The Company shall not adopt any stockholder rights agreement, commonly
known as a “poison pill”, or other device, that restricts or limits, or has the
effect of restricting or limiting (including, without limitation, as the result
of dilution), the Beneficial Ownership of Voting Securities by the Icahn Group
(together with the Icahn Affiliates) at or below the Ownership Limit.

(d) From and after the date hereof until the completion of the 2013 Annual
Meeting and the installation of the Board elected at such meeting, the Company
agrees that it

 

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shall take no action and no action shall be taken to increase the size of the
Board above eleven (11) directors, each having one vote on all matters.

(e) If the Declassification Proposal is not approved by the requisite number of
stockholders at the 2012 Annual Meeting held on or prior to March 31, 2012, then
the obligations of the Company and the Icahn Group set forth in this Section 2
shall be null and void and of no further force or effect.

3. Public Announcement. The Company shall announce this Agreement and the
material terms hereof by means of a press release in the form attached hereto as
Exhibit A (the “Press Release”) as soon as practicable on or after the date
hereof. Neither the Company nor the Icahn Group shall make any public
announcement or statement that is inconsistent with or contrary to the
statements made in the Press Release, except as required by law or the rules of
any stock exchange or with the prior written consent of the other party. The
Company acknowledges that the Icahn Group will comply with its obligations under
Section 13(d) of the Exchange Act and intends to file this Agreement as an
exhibit to its Schedule 13D.

4. Representations and Warranties of All Parties. Each of the parties represents
and warrants to the other party that:

(a) Such party has all requisite company power and authority to execute and
deliver this Agreement and to perform its obligations hereunder;

(b) This Agreement has been duly and validly authorized, executed and delivered
by it and is a valid and binding obligation of such party, enforceable against
such party in accordance with its terms;

(c) This Agreement will not result in a violation of any terms or conditions of
any agreements to which such person is a party or by which such party may
otherwise be bound or of any law, rule, license, regulation, judgment, order or
decree governing or affecting such party.

5. Representations and Warranties of Icahn Group. Each member of the Icahn Group
jointly represents and warrants that, as of the date of this Agreement, (i) they
collectively beneficially own and/or have an economic exposure to, including
without limitation, through derivative transactions described in Section 2(c)
above, an aggregate of 7,251,426 shares of Common Stock and (ii) except for such
ownership or exposure, no member of the Icahn Group, individually or in the
aggregate with all other Icahn Members and Icahn Affiliates, has any other
direct or indirect beneficial ownership of, and/or economic exposure to, any
Voting Securities (or rights or options to own or acquire any Voting Securities
(as described in Section 2(c) above), including, without limitation, through any
derivative transaction described in Section 2(c) above.

 

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6. Representation and Warranties of the Company. As of the date of this
Agreement, the Company represents and warrants to the Icahn Group that the Board
is composed of ten (10) directors and there are no vacancies.

7. Miscellaneous. The parties hereto recognize and agree that if for any reason
any of the provisions of this Agreement are not performed in accordance with
their specific terms or are otherwise breached, immediate and irreparable harm
or injury would be caused for which money damages would not be an adequate
remedy. Accordingly, each party agrees that in addition to other remedies the
other party shall be entitled to at law or equity, the other party shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement
exclusively in the Court of Chancery or other federal or state courts of the
State of Delaware. In the event that any action shall be brought in equity to
enforce the provisions of this Agreement, no party shall allege, and each party
hereby waives the defense, that there is an adequate remedy at law. Furthermore,
each of the parties hereto (a) consents to submit itself to the personal
jurisdiction of the Court of Chancery or other federal or state courts of the
State of Delaware in the event any dispute arises out of this Agreement or the
transactions contemplated by this Agreement, (b) agrees that it shall not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court, (c) agrees that it shall not bring any action
relating to this Agreement or the transactions contemplated by this Agreement in
any court other than the Court of Chancery or other federal or state courts of
the State of Delaware, and each of the parties irrevocably waives the right to
trial by jury, (d) agrees to waive any bonding requirement under any applicable
law, in the case any other party seeks to enforce the terms by way of equitable
relief and (e) each of the parties irrevocably consents to service of process by
a reputable overnight mail delivery service, signature requested, to the address
of such parties’ principal place of business or as otherwise provided by
applicable law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING
WITHOUT LIMITATION VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE
OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY WITHIN
SUCH STATE WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH STATE.

8. No Waiver. Any waiver by any party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.

9. Entire Agreement. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and may be amended only by an
agreement in writing executed by the parties hereto.

10. Notices. All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall
be in writing and

 

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shall be deemed validly given, made or served, if (a) given by telecopy and
email, when such telecopy and email is transmitted to the telecopy number set
forth below and sent to the email address set forth below and the appropriate
confirmation is received or (b) if given by any other means, when actually
received during normal business hours at the address specified in this
subsection:

 

if to the Company:

 

Navistar International Corporation

 

4201 Winfield Road

 

Warrenville, Illinois 60555

 

Attention: Curt Kramer

 

Facsimile: (630) 753-3186

  With a copy to (which shall not constitute notice):  

Skadden, Arps, Slate, Meagher & Flom LLP

 

155 N. Wacker Drive

 

Suite 2700

 

Chicago, Illinois 60606

 

Facsimile: (312) 407-0411

 

Attention:   Charles W. Mulaney, Jr.

 

Richard C. Witzel, Jr.

if to the Icahn Group:

 

Icahn Associates Corp.

 

767 Fifth Avenue, 47th Floor

 

New York, New York 10153

 

Attention: Keith Cozza

 

Facsimile: (212) 688-1158

  With a copy to (which shall not constitute notice):  

Icahn Associates Corp.

 

767 Fifth Avenue, 47th Floor

 

New York, New York 10153

 

Attention: Keith Schaitkin

 

Facsimile: (212) 688-1158

11. Severability. If at any time subsequent to the date hereof, any provision of
this Agreement shall be held by any court of competent jurisdiction to be
illegal, void or unenforceable, such provision shall be of no force and effect,
but the illegality or unenforceability of such provision shall have no effect
upon the legality or enforceability of any other provision of this Agreement.

12. Counterparts. This Agreement may be executed in two or more counterparts
which together shall constitute a single agreement.

 

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13. Successors and Assigns. This Agreement shall not be assignable by any of the
parties to this Agreement. This Agreement, however, shall be binding on
successors of the parties hereto.

14. No Third Party Beneficiaries. This Agreement is solely for the benefit of
the parties hereto and is not enforceable by any other persons.

15. Fees and Expenses. Neither the Company, on the one hand, nor the Icahn
Group, on the other hand, will be responsible for any fees or expenses of the
other in connection with this Agreement.

16. Interpretation and Construction. Each of the parties hereto acknowledges
that it has been represented by counsel of its choice throughout all
negotiations that have preceded the execution of this Agreement, and that it has
executed the same with the advice of said independent counsel. Each party and
its counsel cooperated and participated in the drafting and preparation of this
Agreement, and any and all drafts relating thereto exchanged among the parties
shall be deemed the work product of all of the parties and may not be construed
against any party by reason of its drafting or preparation. Accordingly, any
rule of law or any legal decision that would require interpretation of any
ambiguities in this Agreement against any party that drafted or prepared it is
of no application and is hereby expressly waived by each of the parties hereto,
and any controversy over interpretations of this Agreement shall be decided
without regards to events of drafting or preparation. The section headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or
caused the same to be executed by its duly authorized representative as of the
date first above written.

 

NAVISTAR INTERNATIONAL CORPORATION   By:   /s/ Daniel C. Ustian   Name:   Daniel
C. Ustian   Title:   Chairman, President and Chief Executive Officer

[Signature Page to Settlement Agreement]

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ICAHN PARTNERS MASTER FUND LP ICAHN PARTNERS MASTER FUND II LP ICAHN PARTNERS
MASTER FUND III LP ICAHN OFFSHORE LP ICAHN PARTNERS LP ICAHN ONSHORE LP BECKTON
CORP. HOPPER INVESTMENTS LLC BARBERRY CORP. HIGH RIVER LIMITED PARTNERSHIP   By:
Hopper Investments LLC, general partner   By:   /s/ Edward E. Mattner   Name:  
Edward E. Mattner   Title:   Authorized Signatory

 

ICAHN CAPITAL LP   By: IPH GP LLC, its general partner   By: Icahn Enterprises
Holdings L.P., its sole member   By: Icahn Enterprises G.P. Inc., its general
partner IPH GP LLC   By: Icahn Enterprises Holdings L.P., its sole member   By:
Icahn Enterprises G.P. Inc., its general partner ICAHN ENTERPRISES HOLDINGS L.P.
  By: Icahn Enterprises G.P. Inc., its general partner ICAHN ENTERPRISES G.P.
INC.   By:   /s/ Dominick Ragone   Name:   Dominick Ragone   Title:   Chief
Financial Officer   /s/ Carl C. Icahn   Carl C. Icahn

[Signature Page to Settlement Agreement]

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SCHEDULE A

 

 

Barberry Corp.

Beckton Corp.

Carl C. Icahn

Icahn Capital LP

Icahn Enterprises Holdings L.P.

Icahn Enterprises G.P. Inc.

Icahn Offshore LP

Icahn Onshore LP

Icahn Partners LP

Icahn Partners Master Fund LP

Icahn Partners Master Fund II LP

Icahn Partners Master Fund III LP

IPH GP LLC

High River Limited Partnership

Hopper Investments LLC

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EXHIBIT A

[PRESS RELEASE]

NAVISTAR ANNOUNCES AGREEMENT WITH INVESTOR CARL ICAHN

 

  •  

Company to destagger board to provide for the annual election of directors

 

  •  

Majority of Board to be elected to one-year terms at the 2013 Annual Meeting

 

  •  

Icahn will not seek board representation and will vote for company nominees in
2012

WARRENVILLE, IL – November 15, 2011 – Navistar International Corporation (NYSE:
NAV) today announced that it entered into an agreement with investor Carl Icahn
and certain of his affiliates to submit a proposal to its shareholders at its
2012 Annual Meeting of Shareholders to destagger the Board to elect directors on
an annual basis. With this agreement, Mr. Icahn agreed not to seek Board
representation at the Company’s 2012 Annual Meeting and agreed to vote in favor
of the Company’s nominees for election at the 2012 Annual Meeting

“Navistar’s Board and management team are committed to acting in the best
interests of the Company and all its shareholders, and we believe that the
annual election of our directors, without a staggered board, further strengthens
our corporate governance practices,” said Dan Ustian, Navistar’s chairman,
president and chief executive officer. “We also are pleased to have reached an
agreement with Mr. Icahn that includes his support for our Board nominees for
election at our upcoming shareholders meeting.”

If approved by the shareholders, Navistar will begin the annual election process
starting with the class of three directors up for election at the 2012 Annual
Meeting of Shareholders. Instead of three-year terms, each nominee would be
elected to a one-year term at the 2012 Annual Meeting and subsequent annual
meetings with a majority of the board being elected to a one-year term at the
2013 Annual Meeting, and all nominees being elected on an annualized cycle as of
the 2014 Annual Meeting of Shareholders.

“We have demonstrated a proven ability to deliver solid earnings, and our future
growth prospects are strong in large part due to the strategy and vision of
current management and the Board,” Ustian said. “We remain intensely focused on
delivering value for all shareholders by executing on our strategy, including
building a differentiated product offering, enhancing our already strong North
American business, growing our global truck and engine businesses, sustaining
our global military business, and expanding our parts business.”

About Navistar:

Navistar International Corporation (NYSE: NAV) is a holding company whose
subsidiaries and affiliates produce International® brand commercial and military
trucks, MaxxForce® brand diesel engines, IC Bus™ brand school and commercial
buses, Monaco RV brands of recreational vehicles, and Workhorse® brand chassis
for motor homes and step vans. It also is a private-label designer and
manufacturer of diesel engines for the pickup truck, van and SUV markets. The
company also provides truck and diesel engine

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service parts. Another affiliate offers financing services. Additional
information is available at www.Navistar.com/newsroom.

Cautionary Statement Regarding Forward-Looking Statements

Information provided and statements contained in this report that are not purely
historical are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, Section 21E of the Securities Exchange
Act of 1934, as amended, and the Private Securities Litigation Reform Act of
1995. Such forward-looking statements only speak as of the date of this report
and the Company assumes no obligation to update the information included in this
report. Such forward-looking statements include information concerning our
possible or assumed future results of operations, including descriptions of our
business strategy. These statements often include words such as “believe,”
“expect,” “anticipate,” “intend,” “plan,” “estimate,” or similar expressions.
These statements are not guarantees of performance or results and they involve
risks, uncertainties, and assumptions. For a further description of these
factors, see Item 1A, Risk Factors of our Form 10-K for the fiscal year ended
October 31, 2010, which was filed on December 21, 2010 , and Part II, Item 1A,
Risk Factors, included within our Form 10-Q for the period ended July 31, 2011,
which was filed on September 7, 2011. Although we believe that these
forward-looking statements are based on reasonable assumptions, there are many
factors that could affect our actual financial results or results of operations
and could cause actual results to differ materially from those in the
forward-looking statements. All future written and oral forward-looking
statements by us or persons acting on our behalf are expressly qualified in
their entirety by the cautionary statements contained or referred to above.
Except for our ongoing obligations to disclose material information as required
by the federal securities laws, we do not have any obligations or intention to
release publicly any revisions to any forward-looking statements to reflect
events or circumstances in the future or to reflect the occurrence of
unanticipated events.