EXHIBIT 10.20
NAVISTAR 1998 NON-EMPLOYEE DIRECTOR
STOCK OPTION PLAN
Adopted as of December 16, 1997
1. Administration
The Navistar 1998 Non-Employee Director Stock Option Plan (the "Plan")
will be administered by the Board of Directors ("Board") of Navistar
International Corporation ("Corporation").
The granting of an option pursuant to the Plan will take place the
business day following the day on which the Board approves the grant of such
option at its regularly scheduled December meeting, provided that, such grant
will expire if a written option agreement is not signed by the optionee and
delivered to the Corporation within thirty (30) days of the date of the grant.
Subject to the express provisions of the Plan, the Board will have
complete authority to interpret the Plan, to prescribe, amend and rescind rules
and regulations relating to it, to determine the terms and provisions of the
respective option agreements (which need not be identical) and to make all other
determinations necessary or advisable for the administration of the Plan. The
Board's determinations on the matters referred to in this paragraph 1 will be
conclusive.
2. Stock Subject to the Plan
Such shares may be in whole or in part, as the Board will from time to
time determine, authorized and unissued shares of Common Stock or issued shares
of Common Stock which shall have been reacquired by the Corporation. If any
option granted under the Plan shall expire or terminate for any reason without
having been exercised or earned in full, the shares subject thereto will again
be available for the purposes of the Plan.
3. Effectiveness of the Plan
The Plan will become effective upon the effective date of its adoption
by the Board.
4. Eligibility
Options may be granted only to non-employee directors of the Board. No
individual who is, at the time of the grant, an employee of the Corporation or
of any subsidiary of the Corporation will be eligible to receive an option under
the Plan.
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5. Number of Shares to Be Granted
At each regularly scheduled December meeting of the Board, an option
will be granted to each non-employee director for two thousand (2,000) shares of
Common Stock.
6. Option Prices
The purchase price of the Common Stock under each option will be 100%
of the fair market value of the Common Stock on the business day following the
day of grant by the Board. Such fair market value will be determined by the
average of the high and low prices of the Common Stock in the New York Stock
Exchange--Composite Transactions listing published in the Midwest Edition of The
Wall Street Journal or equivalent financial publication.
7. Exercise Options
An option granted under the Plan will become exercisable in whole or in
part after the commencement of the second year of the term of the option. The
Board is authorized to establish the manner and the effective date of the
exercise of an option. Each option will become immediately exercisable in the
event of death, total and permanent disability, retirement in accordance with
the Board's policy or a "change in control" of the Corporation. 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 Corporation 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 Corporation representing 25% or more of the combined voting power of the
Corporation'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 Corporation 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 Corporation or (C) any dissolution or liquidation of the Corporation or NITC
or an agreement for the sale or disposition of all or substantially all (more
than 50%) of the assets of the Corporation 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. The
purchase price is to be paid in full to the Corporation upon the exercise of the
option either (i) by cash including a personal check payable to the order of the
Corporation or (ii) by delivering at fair market value Common Stock already
owned by the optionee or any combination of cash and Common Stock. The fair
market value of the Common Stock so delivered will be the average of the high
and low prices of the Common Stock on the day prior to delivery as
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published in the New York Stock Exchange--Composite Transactions listed in the
Midwest Edition of the Wall Street Journal or equivalent financial publication.
An option granted under the Plan will be exercisable for a term of ten (10)
years from the date of the grant, and will be subject to earlier termination as
hereinafter provided. Except as provided in paragraphs 10 and 11 hereof, no
option may be exercised at any time unless the holder thereof is then a director
of the Corporation. The holder of an option will have none of the rights of a
stockholder with respect to the shares subject to option until such shares are
issued upon the exercise of the option. 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 Federal, state and/or local
withholding taxes due in connection with an exercise.
8. Non-Transferability of Options
No option granted under the Plan will be transferable other than by
will or the laws of descent and distribution, and an option may be exercised,
during the life time of the holder thereof, only by the holder.
9. Agreement to Serve
Each individual receiving an option will, as one of the terms of the
option agreement, agree to remain as a director of the Corporation for a period
of at least one (1) year from the date of granting the option except as provided
in the immediately following sentence. In the event of retirement in accordance
with the Board's policy prior to the end of the one year service period, each
holder will, as one of the terms of the option agreement, agree to serve as a
consultant to the Board for any remaining portion of such one year service
period. Such service will (subject to the provisions of paragraph 10 hereof) be
at the pleasure of the Corporation and at such compensation as the Corporation
will reasonably determine from time to time.
10. Termination of Service
In the event of the termination of the service of the holder of any
option, other than by reason of a retirement, permanent and total disability or
death as set forth in paragraph 11, the holder may (unless the option shall have
been previously terminated pursuant to the provisions of paragraph 9 above or
unless otherwise provided in the option agreement) exercise the option at any
time within three (3) months after such termination, but not after the date
identified in the option agreement as the date the options expire. Nothing in
the Plan or in any option granted pursuant to the Plan will confer on any
individual any right to continue in the service of the Corporation or interfere
in any way with the right of the Board to terminate service at any time.
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11. Retirement, Total and Permanent Disability or Death of Holder of Option
In the event of retirement in accordance with the Board's policy or in
the event of total and permanent disability, the holder may exercise the option
at any time within three (3) years after such retirement or such disability but
not after the date identified in the option agreement as the date the options
expire. In the event of the death of an individual to whom an option has been
granted under the Plan, while the option is outstanding, the option theretofore
granted to the holder may be exercised by a legatee or legatees of the option
holder, or by the personal representative or distributees, at any time within a
period of one (1) year after death, but not after the date identified in the
option as the date the options expire.
12. Adjustments upon Changes in Capitalization
Notwithstanding any other provision of the Plan, the option agreements
may contain such provisions as the Board shall determine to be appropriate for
the adjustment of the number and class of shares subject to each outstanding
option and the option prices in the event of changes in, or distributions with
respect to, the outstanding Common Stock by reason of stock dividends,
recapitalizations, mergers, consolidations, split-ups, combinations or exchanges
of shares, spin-offs and the like, and, in the event of any such change in, or
distribution with respect to, the outstanding Common Stock, the aggregate number
and class of shares available under the Plan shall be appropriately adjusted by
the committee, whose determination shall be conclusive.
13. No Loans to Holders of Options
Neither the Corporation, nor any of its subsidiaries, may directly or
indirectly lend money to any individual for the purpose of assisting the
individual to acquire or carry shares of Common Stock issued upon the exercise
of options granted under the Plan.
14. Amendment and Termination
Unless the Plan shall theretofore have been terminated as hereinafter
provided, the Plan will terminate on, and no option will be granted after
December 17, 2007. The Plan may be terminated, modified or amended by the Board.
No termination, modification or amendment of the Plan may, without the consent
of the optionee to whom any option or award shall theretofore have been granted,
adversely affect the rights of such optionee.
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