EXHIBIT 10.43

[International Truck and Engine letterhead graphics omitted]

August 13, 2003

Mr. Deepak T. Kapur
1125 Arlington Blvd.
Ann Arbor, Michigan 48104

Dear Dee,

On behalf of all of us who have had the pleasure to meet with you, I would like
to extend this opportunity to join the International Truck and Engine
Corporation team. We are confident that your experience and commitment to
excellence will be a tremendous asset to our company’s leadership and to the
Truck Group.

This letter will confirm the details of our offer to you for accepting the
position of President, Truck Group, Organization Level 12, reporting to Dan
Ustian, President and CEO. We have attained approval for your election as
President, Truck Group of International Truck and Engine Corporation at our
Board of Director’s meeting pending acceptance of this offer. Our offer includes
a very competitive salary and benefit plan, as well as career opportunity and
professional growth. Our offer includes:

Salary:
Your base salary of $500,000 a year will be paid at the end of each month.
   
Sign-on Bonus:
A guaranteed sign-on bonus of $150,000 upon employment; $150,000 payable in
December, 2003; $200,000 payable in December, 2004.
   
Annual Bonus
 
Opportunity:
Eligibility to participate in International’s 2003 Performance Incentive Plan.
The ("Plan") begins on your first day of employment. Your 2003 award eligibility
will be pro-rated based on the number of months of plan participation. The 2003
target award for Organization Level 12 is 75% of base salary. Annual incentive
awards are determined in accordance with the achievement of corporate, business
unit and individual performance objectives.
   
Stock Options:
As President, Truck Group, you will be eligible for the Company stock option
program. The number of stock options you would receive based on a hire date of
September 1, 2003, is 12,233 options. The Company will grant you stock options,
exercisable over a three-year period and with a ten-year term, at the market
price, from the date of grant. One-third is exercisable after one year,
one-third after two years; and one-third after three years from the date of
issuance.
   
Additional
 
Long Term Incentive:
You will receive as part of this offer an additional one-time offering of 54,000
restricted shares.
   
Vacation:
You are eligible for four weeks of vacation in calendar year 2003.
   
Holidays:
In 2003, there are fourteen paid holidays, including Holiday shutdown.
   
Defined Contribution Plan:
You will be eligible to participate in the International Retirement Accumulation
Plan ("NRAP") for employees first hired on or after January 1, 1996. This plan
features a discretionary Company contribution, a 401(k) option and a Company
match on 401(k) deferrals. As part of the Company contribution, International
makes annual contributions to your account on a scale that increases according
to age as follows:

E-11

       

--------------------------------------------------------------------------------

 

EXHIBIT 10.43 (continued)

 
YOUR AGE
% of SALARY
 
Under 30
2.0%
 
30 to 39
3.5%
 
40 to 49
5.0%
 
50 and over
6.5%
The vesting schedule is as follows:
     
Full Years Service
Vested %
 
Less than One
0
 
One
20
 
Two
40
 
Three
60
 
Four
80
 
Five
100
       
You may begin participating in the 401(k) Retirement Savings Plan immediately.
You may contribute from 1 to 15% of your salary or (up to the maximum as
designated by the IRS). Additionally, the Company will contribute up to a 3%
match on 401(k) Plan contributions after one year.
   
Life Insurance:
Basic term life insurance equal to five times base salary will be provided at
the Company’s cost. Accidental death and dismemberment insurance equal to one
times your salary will be provided at the Company’s cost. Additional optional
life and accident insurance coverage is available at your cost. This insurance
is effective the first day of employment.
   
Health Coverage:
You are eligible to participate in the Company’s Medical Programs starting on
your first day of employment. There are several options that will be available
to you with various amounts of coverage and differing premiums. The plan options
are an indemnity plan, PPO Plus (with preventive coverage) and an HMO option.
Family premiums range from $63 to $75 monthly. Dental coverage is available
separately, with a monthly premium of $15. An annual executive physical will
also be provided by a physician selected by the Company.
   
Disability:
A Disability Income Protection Program provides continuation of 26 weeks full
salary in the event of your inability to work due to illness or injury.
Additional coverage is provided by the Company’s Long-Term Disability Plan.
   
Relocation Provisions:
International’s relocation policy provides you with the financial and
administrative assistance you will need to relocate to Chicago, Illinois.
Following are highlights of this policy:
 
-
Closing Costs
 
-
Two house hunting trips with up to seven days temporary living expenses.
 
-
Mutually agreed upon temporary living arrangements for a three/four bedroom home
or apartment for up to 12 months at an agreed upon location.
 
-
Movement of household goods through the use of the Company designated moving
company consistent with Company Moving Expense Policy #140.
 
-
Storage of household goods for a maximum period of 60 days.
 
-
Mortgage differential.
     
Executive Severance Agreement:
The Company will enter into an Executive Severance Agreement ("ESA") upon
commencement of employment. This agreement provides that in the event your
employment is terminated for any reason other than cause, the Company will
provide a lump sum payment to you, equal to 250% of your annual salary plus
Target Incentive, until you reach age 55. After reaching age 55 this amount
would revert to 200%. The ESA also provides at this time, a Change of Control
provision; (1) 300% of your annual salary and Target Incentive, with no cap, (2)
a gross-up to cover potential excise tax, (3) accelerated vesting of stock
options, and (4) health and life insurance extended for two years, after the
date of involuntary termination, at no cost to you.
   
Supplemental Executive Retirement Plan:
You will be eligible for the Company’s Supplemental Executive Retirement Plan
("SERP"). A copy of SERP will be forwarded to you. It provides a maximum

E-12

       

--------------------------------------------------------------------------------

 

EXHIBIT 10.43 (continued)

 
benefit of 50% of your final average pay. A participant earns ½% for each year
of age to age 55, and ½% for each year of service prior to age 55 and 1% for
each year of age after age 55. There is a reduction of 0.25% for each month that
benefits commence prior to age 62.
   
Stock Ownership:
We believe that building the stock ownership interest of the senior leadership
team will incent us to act as owners. We have adopted share ownership
guidelines, which for your level is 225% of your base salary, computed on your
date of hire. One-fifth of this requirement is due within 60 days of your hire.
Until the full guideline is attained, shares of Company Common Stock may not be
sold without the consent of the CEO.
   
Personal Liability:
The Company will provide you with an umbrella personal liability insurance
policy of $10,000,000 and the Company will pay the premium. Under current IRS
rules, this is not included as income to you. This coverage requires that you
provide the first $300,000 coverage.
   
Executive Flexible Perquisite Program:
Your Flexible Perquisite allowance is $37,000 annually for level 12. The
allowance will be pro-rated and paid at the next scheduled semi-annual
disbursement date, which is in November of 2003.
   
Contingency Clause:
This offer also is contingent on (1) verification of your references and
educational credentials and (2) completion of a drug test prior to employment.
Please call Andrea Osterkorn, Director Organizational Capabilities and Corporate
HR, at 630-753-3144 who will assist you with scheduling your pre-employment drug
test and physical. She will also be forwarding you an International Application
for Employment, which we ask that you complete, sign and return to us as soon as
possible.
   
First Day of Work:
Within the first three days of employment with the Company, you will be required
to show evidence of your ability to work within the United States. This can also
be handled with Andrea.

International has had record success in the past several years, largely due to
the significant effort of our people. We continue to invest heavily in future
growth, as well as in the leadership of our company. Therefore, we hire people
who will help us build a culture that is based on respect for people,
accountability and high performance. We are confident that you are one of those
people who will go "beyond the expected" to make a contribution to our team.

If you have any questions regarding this offer, please call Andrea Osterkorn,
Director, Organizational Capabilities and Corporate HR at (630) 753-3144 or me
at (630) 753-3107.

Please acknowledge acceptance of our offer by signing below, keeping a copy for
yourself, and returning by August 15, 2003.

Sincerely,

/s/ Pam       
Pamela J. Turbeville
Senior Vice President Human Resources
And Administration

Accepted:

/s/Deepak Kapur       
Deepak T. Kapur

Dated:  8/14/03       

E-13