Navistar International announced it has amended agreements with Carl Icahn of Icahn Partners and Mark Rachesky of MHR Fund Management, including the retirement of Jack Pope from the board effective immediately.
Each will have the opportunity to designate two nominees for election to Navistar’s board of directors at the company's annual meeting in February 2014. According to published reports, last year Navistar agreed to add three members to the board of directors that were selected by Icahn and Rachesky.
Icahn and MHR have also agreed that it will not run a proxy contest at the meeting and will support the board's nominees, as well as certain other provisions.
The board also approved an amendment to the company's shareholder rights plan that extends its expiration date from Aug. 31 to June 18, 2015, and allows for an increase in beneficial ownership of common stock from 15% to 19.99% without triggering the rights plan.
To allow for the additional director designated by the amended settlement agreements, John C. (Jack) Pope will retire from the board effective immediately. Pope's retirement leaves nine members on Navistar's board until the company's Annual Meeting of Shareholders in February 2014, at which point the company plans to nominate 10 directors.
"We view the updated agreements with Icahn Partners and MHR, as well as the amendment to the Rights Plan, as positive steps as we continue to execute our turnaround plan and drive the company to restored profitability," said Troy Clarke, Navistar president and chief executive officer.
Clarke has been working to turn Navistar around following huge financial losses with the company being under fire from both Icahn and Rachesky who are among its largest shareholders with Rachesky also on its board of directors.