Exhibit 10.5

NAVISTAR INTERNATIONAL CORPORATION

NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

OPTIONEE: Lewis B. Campbell

NUMBER OF SHARES: 500,000

EXERCISE PRICE PER SHARE: $22.98

DATE OF GRANT: August 26, 2012

 

VESTING SCHEDULE:

  Subject to the provisions of the attached Non-Qualified Stock Option Agreement
Supplement (the “Supplement”), the option will be exercisable for 100% of the
Number of Shares on or after the “Exercise Date” (as defined below).

EXPIRATION DATE: Fifth anniversary of the Date of Grant

This is an award agreement (the “Award Agreement”) between Navistar
International Corporation, a Delaware corporation (the “Corporation”), and the
individual named above (the “Optionee”). The Corporation hereby grants to the
Optionee the right and option (this “Option”) to purchase all or any part of an
aggregate of the above-stated number of shares of common stock of the
Corporation (“Common Stock”) as an employment inducement award pursuant to
Section 303A.08 of the NYSE Listed Company Manual.

Subject to the terms and conditions of this Award Agreement, this Option is
exercisable on or after the date set forth above; provided, however, that this
Option shall expire on the Expiration Date set forth above and must be
exercised, if at all, on or before the Expiration Date except as otherwise
provided in the Supplement.

The Corporation and the Optionee hereby agree to the terms and conditions of
this Award Agreement and have executed it as of the Date of Grant set forth
above.

 

 

NAVISTAR INTERNATIONAL

CORPORATION

  By:   

/S/ ANDREW J. CEDEROTH

  Name:        Andrew J. Cederoth   Title:   

    Executive Vice President and

    Chief Financial Officer

Attest:

 

 

     

/S/ LEWIS B. CAMPBELL

  Lewis B. Campbell

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NAVISTAR INTERNATIONAL CORPORATION

NON-QUALIFIED STOCK OPTION AGREEMENT SUPPLEMENT

1. General. This Option shall be treated as a nonqualified stock option. The
option is granted as an employment inducement award pursuant to Section 303A.08
of the NYSE Listed Company Manual, as indicated in the attached Non-Qualified
Stock Option Award Agreement (the “Award Agreement”). All capitalized terms set
forth in this supplement that are not otherwise defined shall have the meanings
ascribed to them under the Award Agreement. The term of the Option shall be for
a period of five (5) years from the Date of Grant, or such shorter period as
prescribed herein. The Option shall be exercisable as to all of the Number of
Shares specified in the Award Agreement on the day that immediately precedes the
first anniversary of the Date of Grant (the “Exercise Date”), subject to the
Optionee providing continued services to the Corporation as either Interim Chief
Executive Officer or Executive Chairman through such date or as otherwise
provided herein. The Optionee shall have none of the rights of a shareowner with
respect to any of the shares of Common Stock subject to the Option until such
shares shall be issued upon the exercise of the Option. Nothing herein contained
shall confer on the Optionee any right to continue in the employ of the
Corporation or any subsidiary thereof or interfere in any way with the right of
the Corporation or any subsidiary thereof to terminate the employment or service
of the Optionee at any time.

2. Transferability. The Option shall not be transferable otherwise than by will
or the laws of descent and distribution, and the Option shall be exercisable,
during the lifetime of the Optionee, only by the Optionee. Without limiting the
generality of the foregoing, the Option may not be assigned, transferred (except
as aforesaid), pledged or hypothecated in any way (whether by operation of law
or otherwise) and shall not be subject to execution, attachment or similar
process. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of the Option contrary to the provisions hereof, and the levy of any
execution, attachment, or similar process upon the Option shall be null and void
and without effect.

3. Period of Exercisability Following a Termination of Employment and Service.
In the event of the termination of the employment and service of the Optionee
for any reason, unless otherwise provided herein or in the Employment and
Services Agreement (as defined in Section 4 hereof), the Optionee (or a
transferee under Section 2) may exercise the Option to the extent that the
Optionee was entitled to do so pursuant to the provisions of paragraph 1 hereof
at the time of such termination of employment and service at any time within
five (5) years from the Date of Grant, and any unexercised portion of the Option
shall expire thereafter.

4. Termination of Employment and Service. The effect on the Option of the
Optionee’s termination of employment and service shall be as set forth in that
certain Employment and Services Agreement entered into on August 26, 2012, by
and among the Corporation, Navistar, Inc. and the Optionee (the “Employment and
Services Agreement”).

5. Adjustments. If all or any portion of the option is exercised subsequent to
any stock dividend, stock split, recapitalization, combination or exchange of
shares, reorganization (including, but not limited to, merger or consolidation),
liquidation or other event occurring after the date hereof, as a result of which
any shares or other securities of the Corporation or any other entity
(including, but not limited to, any subsidiary of the Corporation) shall be
issued in respect of the outstanding shares of Common Stock, or shares of Common
Stock shall be changed into the same or a different number of shares or other
securities of the same or any other class or

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classes, the person or persons so exercising the Option shall receive, for the
aggregate price paid upon such exercise, the class and aggregate number of
shares or other securities which, if shares of Common Stock (as authorized at
the date hereof) had been purchased on the date hereof for the same aggregate
price (on the basis of the price per share) and had not been disposed of, such
person or persons would be holding at the time of such exercise as a result of
such purchase any and all such stock dividends, stock splits, recapitalizations,
combinations or exchanges of shares, reorganizations, liquidations or other
events. In the event of any corporate reorganization, separation or division
(including, but not limited to, split-up, split off, spin-off or sale of assets)
as a result of which any cash or shares or other securities of any entity other
than the Corporation (including, but not limited to, any subsidiary of the
Corporation), shall be distributed in respect of the outstanding shares of
Common Stock, a committee of the Board shall make such adjustments in the terms
of the option (including, but not limited to, the number of shares covered and
the purchase price of such shares) as it may deem appropriate to provide
equitably for the Optionee’s interest in the Option. Upon any adjustment as
aforesaid, the minimum number of full shares that may be purchased upon any
exercise of the Option as specified in paragraph 1 shall be adjusted
proportionately. No fractional shares shall be issued upon any exercise of the
Option, and the aggregate price paid shall be appropriately reduced on account
of any fractional share not issued. In the event of a Change in Control, the
Option may be assumed or an equivalent award may be substituted by the acquiror.
In the event that the Option is not so assumed or substituted therefor in a
Change in Control, the Option may be terminated in exchange for a cash payment
equal to (i) the excess (if any) of the value per share of Common Stock provided
to stockholders of the Corporation generally in connection with the Change in
Control (or, if none, the fair market value of a share of Common Stock on the
date of the Change in Control or, if not a trading day, on the last trading day
preceding the date of the Change in Control) over the exercise price of the
Option multiplied by (ii) the number of shares of Common Stock subject to the
Option.

6. Change of Control. “Change in Control” shall have the same definition as in
the Employment and Services Agreement.

7. Manner of Exercise. Subject to the terms and conditions contained herein and
in the Award Agreement, the Option may be exercised by giving notice as provided
in instructions issued by the Secretary of the Corporation for the exercise of
options generally, which instructions may provide for the use of agents,
including stock brokers, to effect exercise of options, or in the absence of
such instructions, by written notice to the Secretary of the Corporation at the
location of its principal office at the time of exercise, which is currently
located at 2706 Navistar Drive, Lisle, Illinois 60532. Such notice shall state
the election to exercise the Option and the number of shares in respect of which
it is being exercised, shall be signed by the person or persons so exercising
the Option and shall be accompanied by instructions to the Secretary to
exercise, in whole or in part, through a cashless exercise, net-exercise or
other arrangements through agents, including stockbrokers, under arrangements
established by the Corporation for the exercise of the Option, or, if not
covered by such instructions, for payment of the full purchase price of said
shares by cash, including a personal check made payable to the Corporation, or
by delivering at fair market value on the date of exercise unrestricted Common
Stock already owned by the Optionee, or by any combination of cash and Common
Stock, and in either case, by payment to the Corporation of any withholding tax.
Shares which otherwise would be delivered to the holder of an option may be
delivered, at the election of the holder, to the Corporation in payment of
Federal, state and/or local

 

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withholding taxes due in connection with an exercise. In no event may successive
simultaneous pyramiding be used to exercise an option. A certificate or
certificates representing said shares shall be delivered as soon as practicable
after the notice shall be received by the Corporation. The certificate or
certificates for the shares as to which the Option shall have been so exercised
shall be registered in the name of the person or persons so exercising the
Option and shall be delivered as aforesaid to or upon the written order of the
person or persons exercising the Option. In the event the Option shall be
exercised, pursuant to paragraph 2 hereof, by any person or persons other than
the Optionee, such notice shall be accompanied by appropriate proof of the right
of such person or the persons to exercise the Option. The date of exercise of
the Option shall be the date on which the aforesaid written notice, properly
executed and accompanied as aforesaid, is received under the Secretary’s
instructions or by the Secretary. The payment due to the Optionee upon exercise
of the Option will be settled solely in Common Stock. All shares that shall be
purchased upon the exercise of the Option as provided herein shall be fully paid
and non-assessable.

8. Entire Agreement. This Supplement, the Award Agreement and the Employment and
Services Agreement constitute the entire understanding of the parties with
respect to the Option. The terms of this Supplement and the Award Agreement may
not be altered, modified or amended except by a written instrument signed by the
relevant parties.

9. Choice of Law. The terms and conditions contained herein and in the Award
Agreement shall be governed by and interpreted pursuant to the laws of the State
of Delaware, without giving effect to the principles of conflict of laws

 

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