Navistar International's board of directors say they won't drop a "preferred share purchase rights plan" designed to protect the company against hostile takeovers - sometimes called a "poison pill.

The board adopted the shareowner rights proposal two years ago. A majority of shareowners at the company's annual meeting Feb. 20 voted in favor of a proposal by GAMCO Investors Inc. to request the board to remove it.
John Horne, Navistar chairman, president and CEO, said directors seriously considered the shareowner resolution at the board's regularly scheduled meeting, but felt that it was best to leave the plan in place. "We are in a changing industry that is at the bottom of the business cycle, and our stock price is low relative to our long-term prospects," Horne said. "Particularly under these circumstances, the Navistar board of directors felt the rights plan is in the best long term interests of shareowners because it maintains the board's ability to effectively represent the interests of the company and shareowners in the event of an unforeseen unsolicited takeover attempt."
Horne noted that the board regularly reviews the rights plan and could vote to remove or amend it if future circumstances dictate a change.