EXHIBIT 10.52
NAVISTAR INTERNATIONAL CORPORATION

NON-EMPLOYEE DIRECTOR STOCK OPTION AGREEMENT SUPPLEMENT

1.
This option is granted under the terms of the Navistar International Corporation
2004 Performance Incentive Plan (the "Plan"), as indicated in the Non-Employee
Director Stock Option Award Agreement (the "Award Agreement"). The term of the
option shall be for a period of ten years from the date of grant, or such
shorter period as is prescribed in paragraphs 3, 4, and 5 hereof. The option
shall be exercisable to the extent of the number of shares specified in the
Award Agreement as exercisable one year after the date of grant, to the extent
of the number of shares specified in the Award Agreement as exercisable two
years after the date of grant, and to the extent of the number of shares
specified in the Award Agreement as exercisable three years after the date of
grant. The option may be exercised, at any time or from time to time during said
term, as to all full shares that have become so purchasable. Except as provided
in paragraphs 3, 4, and 6 hereof, the option may not be exercised unless the
optionee shall, at the time of exercise, be a Non-Employee Director (the
"Director" or "Optionee") of the Corporation or a subsidiary. The Director 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.
   
2.
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 Director, only by the Director. 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.
In the event of the termination of service of the Director otherwise than by
reason of death, total and permanent disability or a Qualified Retirement as set
forth in paragraph 4 hereof, the Director may (subject to the provisions of
paragraph 5 hereof) exercise the option to the extent that the Director was
entitled to do so pursuant to the provisions of paragraph 1 hereof at the time
of such termination, at any time within three (3) months after such termination,
but not after ten (10) years from the date hereof.
   
4.
Except as provided in the last two sentences of this paragraph, in the event of
a Qualified Retirement, which means a retirement under a retirement policy of
the Board for Non-Employee Directors (a "Qualified Retirement"), the Director
may exercise the option to the extent the option is exercisable or becomes
exercisable under its terms at any time during the term of the option grant. In
the event of termination for total and permanent disability as defined in
Navistar International Corporation’s (the "Corporation") long term disability
programs, the Optionee may exercise the option, to the extent the option is
exercisable or becomes exercisable under its terms, at any time within three (3)
years after termination for total and permanent disability, or, if later, within
three (3) years after the date on which the option becomes exercisable with
respect to such shares, but not after the term of the option. In the event of
the death of the Director while the option is outstanding, the option may be
exercised by a legatee or legatees of the Optionee under the Director’s last
Will, or by the personal representatives or distributees of the Director, at any
time within a period of two (2) years after the death of the Director, but not
after the term of the grant. If death occurs while the Director is performing
services for the Corporation, or after a Qualified Retirement, or during the
three-year period following termination for total and permanent disability, the
option may be exercised to the extent of the remaining shares covered by the
option, whether or not such shares were exercisable at the date of death. If
death occurs during the three-month period provided by paragraph 3 following
termination for other than death, total and permanent disability or Qualified
Retirement, the option subject to such three-month period may be exercised to
the extent of the number of shares that were exercisable at the date of death.
Notwithstanding the other provisions of this paragraph 4, no option which is not
exercisable at the time of a Qualified Retirement shall become exercisable after
such Qualified Retirement if, without the written consent of the Corporation,
the Optionee engages in a business, whether as owner, partner, officer, employee
or otherwise, which is in

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EXHIBIT 10.52 (continued)

 
competition with the Corporation or one of its affiliates, and if the Optionee’s
participation in such business is deemed by the Corporation to be detrimental to
the best interests of the Corporation. Thedetermination as to whether such
business is in competition with the Corporation or any of its affiliates, and
whether such participation by such person is detrimental to the best interests
of the Corporation, shall be made by the Corporation in its absolute discretion,
and the decision of the Corporation with respect thereto, including its
determination as to when the participation in such competitive business
commenced, shall be conclusive.
   
5.
Any option which did not become exercisable and which cannot become exercisable
under the terms of the option, and any option that ceased to be exercisable and
cannot again become exercisable under the terms of the option shall terminate.
   
6.
In the event of a Change in Control, all outstanding options will immediately
become exercisable and shall be exercisable for a period of three (3) years from
the date of Change in Control regardless of the original term or service status
or the Director. Change in Control shall be deemed to have occurred if (i) any
"person" or "group" (as such terms are used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934), other than employee or retiree benefit plans
or trusts sponsored or established by the Corporation or International Truck and
Engine Corporation, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of
securities of the Corporation representing 25% or more of the combined voting
power of the Corporation's then outstanding securities, (ii) the following
individuals cease for any reason to constitute more than three-fourths of the
number of directors then serving on the Board of Directors of the Corporation:
individuals who, on the date hereof, constitute the Board and any new director
(other than a director whose initial assumption of office is in connection with
an actual or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Corporation) whose
appointment or election by the Board or nomination for election by the
Corporation's stockholders was approved by the vote of at least two-thirds (2/3)
of the directors then still in office or whose appointment, election or
nomination was previously so approved or recommended; (iii) any dissolution or
liquidation of the Corporation or International Truck and Engine Corporation or
sale or disposition of all or substantially all (more than 50%) of the assets of
the Corporation or of International Truck and Engine Corporation occurs; or (iv)
as the result of, or in connection with, any cash tender offer, exchange offer,
merger or other business combination, sale of assets, proxy or consent
solicitation, contested election or substantial stock accumulation (each a
"Control Transaction"), the members of the Board of Directors of the Corporation
immediately prior to the first public announcement relating to such Control
Transaction shall immediately thereafter, or within two (2) years, cease to
constitute a majority of the Board of Directors of the Corporation.
Notwithstanding the foregoing, the sale or disposition of any or all of the
assets or stock of Navistar Financial Corporation shall not be deemed a Change
in Control.
   
7.
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 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,

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EXHIBIT 10.52 (continued)

 
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
Director’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.
   
8.
Subject to the terms and conditions contained herein, in the Award Agreement and
the Plan, the option may be exercised by giving notice as provided in
instructions issued by the Secretary for the exercise of options, 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 4201 Winfield
Road, Warrenville, Illinois 60555. 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 a check payable to the order of the Corporation for any
amount required pursuant to the Secretary’s instructions, or, if not covered by
such instructions, for payment of the full purchase price of said shares or by
delivery of Common Stock already owned by the Director, for six months or more
if acquired from the Corporation, at fair market value determined under the
Plan, or by any combination of cash and Common Stock, and in either case, by
payment to the Corporation of any withholding tax due with respect to any
Director who is a citizen or resident of a foreign country or is otherwise then
imposed effective as of the date of exercise by then applicable law. 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 any such
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 4 hereof, by any person or persons other than
the Director, 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. All shares that shall be purchased upon the
exercise of the option as provided herein shall be fully paid and
non-assessable.
   
9.
[Reserved]
   
10.
The Corporation shall at all times during the term of the option reserve and
keep available such number of shares of Common Stock as will be sufficient to
satisfy the requirements contained herein, in the Award Agreement and in the
Plan, shall pay all original issue and/or transfer taxes with respect to the
issue and/or transfer of shares pursuant hereto and all other fees and expenses
necessarily incurred by the Corporation in connection therewith and will from
time to time use its best efforts to comply with all laws and regulations which,
in the opinion of counsel for the Corporation, shall be applicable thereto. If
the Plan pursuant to which the option is exercised provides that only treasury
stock will be used to satisfy the requirements of the option, only treasury
stock that has been listed on the exchange will be used.
   
11.
As used herein, the term "Common Stock" shall mean the class of stock designated
"Common Stock" in the Restated Certificate of Incorporation of the Corporation.
   
12.
The terms and conditions contained herein and in the Award Agreement shall be
subject to and governed by the terms of the Plan, a copy of which is being
delivered herewith to the Director.

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