EXHIBIT 10.34
NAVISTAR NON-EMPLOYEE
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DIRECTORS' DEFERRED FEE PLAN
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(Adopted on August 14, 1995, amended as of June 16, 1997)
SECTION 1
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PURPOSE
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1.1 Navistar Non-Employee Directors' Deferred Fee Plan (hereinafter referred to as the "Plan")
has been established by Navistar International Corporation (hereinafter referred to as the "Company") to attract
and retain as members of the Board of Directors of the Company (hereinafter referred to as the "Board") persons
who are not full-time employees of the Company or any of its subsidiaries, but whose business experience and
judgment are a valuable asset to the Company and its subsidiaries.
SECTION 2
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DIRECTORS COVERED
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2.1 As used in the Plan, the term "Director" means any person who: (A) is now a member of the
Board or is hereafter elected to the Board and (B) is not a full-time employee of the Company or any of its
subsidiaries.
SECTION 3
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DEFERRED DIRECTORS' FEES
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3.1 Subject to obtaining the mutual consent of the Company and the Director at the
time a fee deferral election is made, the Director may elect to have part or all of the cash fees otherwise
payable for attendance at regular or special meetings (including executive sessions) of the Board or its
committees and/or the cash part of the annual Director retainer fees, including retainer fees for chairing a
Board committee, deferred in cash and paid as hereinafter provided. Any such election shall be made by filing a
form of election with the secretary of the Company not later than December 31 of a calendar year and shall be
effective with respect to any Directors' fees earned in all subsequent calendar years; provided, however, that
such election may be changed from time to time by filing a new form of election with the secretary or on before
December 31 of the year prior to the year for which such change is to be effective.
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EXHIBIT 10.34 (CONTINUED)
3.2 All deferred Directors' fees shall be credited to a cash account for the Director at the
time such deferred Directors' fees would otherwise have been payable to such Director. Such cash account shall
bear interest, compounded quarterly at the end of each calendar quarter, from the date amounts are credited
thereto to the date of payment at the rate equivalent to the rate of interest as published on the first day of
such quarter by The Wall Street Journal as the "prime" rate or the equivalent thereof.
3.3 A Director may elect to deferred all or any portion of the fee that would otherwise be
payable in common stock of Navistar International Corporation for service as a Director in any year after 1997.
Such deferral shall be subject to mutual agreement between the Corporation and the Director, and the making of an
election in the time and manner set forth in Section 3.1.
3.4 For each year for which an election under Section 3.3 is in effect, there shall be credited
to a deferred stock account for the Director the number of shares of Navistar common stock for which the election
is effective. Any shares of Navistar common stock for which the election is not effective (determined by
rounding up to the nearest whole share) shall be transferred to the Director and subject to such restriction as
otherwise provided by the Restricted Shares Directors' Fees arrangement.
Each Directors' deferred stock account shall be credited with an amount equivalent to the dividend that
would have been paid on an equal number of outstanding shares, which amount shall be credited in the equivalent
number of shares determined based on the average of the high and low price of the shares on the date the dividend
would have been paid on outstanding stock. The amount in the deferred stock account shall be adjusted for stock
splits, stock dividends and similar transactions. No interest shall be paid on the deferred stock account.
The amount in each year's deferred stock account shall be paid to the Director on the date or event
specified in the agreement and election pursuant to Section 3.3, or paid to another person as specified in such
agreement or election. The amount shall be paid in shares of common stock of Navistar International Corporation
to be transferred to the Director. The Corporation may pay amounts less than 100 shares in cash. Any shares
paid to a Director shall be subject to such restriction as otherwise provided by the Restricted Shares Directors'
Fees arrangement. Prior to the shares being transferred to the Director, the Director shall not be a
shareholder, and shall have no rights of a shareholder, with respect to any amounts credited to the deferred
stock account. A Director's interest in a deferred stock account is not assignable.
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EXHIBIT 10.34 (CONTINUED)
SECTION 4
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PAYMENT OF DEFERRED DIRECTORS' FEES
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4.1 Subject to the provisions of Section 4.2, Director's deferred fee earned and credited to the
Director's cash account, including accrued interest, shall be paid as follows: prior to January 1 of any year
with respect to which the Director has elected to defer fees pursuant to Section 3.1, the Director shall elect
the time of payment of the fees so deferred, which election shall be irrevocable, and which shall be one of the
following:
(a) a lump sum payment at any time in any year following the year with respect to which the
fees are being deferred; or
(b) annual installments beginning on the first day of the month following the Director's
retirement from the Board and continuing for a period not exceeding ten years.
4.2 The Board may, in its sole discretion, begin the payment of the Director's deferred fees
prior to the Director's retirement from the Board. If the death of the Director occurs after termination of
service as a Director, the Board may, in its sole discretion, accelerate the time of payment of the Director's
deferred fees.
4.3 In the event of a "Change in Control" in the Company as defined below, any and all fees,
including accrued interest, which have been deferred pursuant to Section 3 of this Agreement will be immediately
paid to the Director.
4.4 For purposes of the Plan, a "Change in Control" shall be deemed to have occurred, if (A) 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 Company or Navistar
International Transportation Corp. ("NITC") 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 Company representing 25% or
more of the combined voting power of the Company's then outstanding securities, (B) 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 (a "Control Transaction"),
the members of the Board of Directors of the Company immediately prior to the first public announcement relating
to such Control Transaction shall immediately thereafter, or within two years, cease to constitute a majority of
the Board of Directors of the Company, (C) any dissolution or liquidation of the Company or NITC or an agreement
for the sale or disposition of all or substantially all (more than 50%) of the assets of the Company or of NITC
occurs. 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.
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EXHIBIT 10.34 (CONTINUED)
MISCELLANEOUS
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5.1 The Plan does not give the Director any right to be nominated or re-elected to the Board.
5.2 When a person entitled to a payment under the Plan is under legal disability or, in the
Company's opinion, is in any way incapacitated so as to be unable to manage such person's financial affairs, the
Company may direct that payment be made to such person's legal representative, or to a relative or friend of such
person for such person's benefit. Any payment made in accordance with the preceding sentence shall be in
complete discharge of the Company's obligation to make such payment under the Plan.
5.3 Any action required or permitted to be taken by the Company under the terms of the Plan
shall be by affirmative vote of a majority of the members of the Board of Directors then in office.
5.4 Any controversy or claim arising out of or relating to the Plan or the breach hereof shall
be settled by arbitration in the City of Chicago in accordance with the laws of the State of Illinois by three
arbitrators, of whom one shall be appointed by the Company, one by the Director and one by the first two
arbitrators. If the first two arbitrators cannot agree on the appointment of a third arbitrator, then the third
arbitrator shall be appointed by the Chief Judge of the United States Court of Appeals for the Seventh Circuit.
The arbitration shall be conducted in accordance with the rules of the American Arbitration Association except
with respect to the selection of arbitrators which shall be as provided in this Section 5.4. Judgment upon any
award rendered by the arbitrators may be entered in any court having jurisdiction thereof and will include
interest on any amounts due and payable to the Director from the date of the breach of the Plan calculated for
each month at the rate equal to the prime rate as published in The Wall Street Journal on the first date of its
publication in the then current year. In the event that it shall be necessary or desirable for the Director to
retain legal counsel and/or incur other costs and expenses in connection with the enforcement of any or all of
the Director's rights under the Plan, the Company shall pay (or the Director shall be entitled to recover from
the Company, as the case may be) reasonable attorney's fees and costs and expenses in connection with the
enforcement of said rights (including the enforcement of any arbitration award in court), unless they determine
that the Director's request to arbitrate was frivolous.
5.5 Any notices, requests, demands or other communications provided for by the Plan shall be
sufficient if in writing and if sent by registered or certified mail, return receipt requested, to the Director
at the last address filed in writing with the Company or, in the case of the Company, to the Company at its
principal executive offices, attention Chairman.
5.6 The provisions of the Plan shall be construed in accordance with the internal law of the
State of Illinois.
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EXHIBIT 10.34 (CONTINUED)
5.7 The Plan may be amended or canceled by mutual agreement of the parties in writing without
the consent of any other person, and, no person, other than the parties hereto, shall have any rights under or
interest in the Plan or the subject matter hereof.
5.8 All provisions of the Plan shall inure to the benefit of and be binding upon the successors
and assigns of the Company (including any successor to, or assignee of, the assets or business of the Company or
any subsidiary pursuant to a transaction constituting a change in control (as defined herein)), and the term
"Company" as used herein shall include Navistar International Corporation and all such successors and assigns.
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Navistar International (NAV)
Filed: 11 Mar 02, 12:00am