8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 1, 2017 (February 28, 2017)

NAVISTAR INTERNATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-9618	36-3359573
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(I.R.S. Employer Identification No.)

2701 Navistar Drive

Lisle, Illinois

60532

(Address of principal executive offices, including Zip Code)

(331) 332-5000

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS

As previously disclosed in the Current Report on Form 8-K of Navistar International Corporation (the “Company”) filed on September 6, 2016 (the “September 6, 2016 Form 8-K”), the Stockholder Agreement, dated as of September 5, 2016, by and among the Company and Volkswagen Truck & Bus GmbH (“VW T&B”), previously filed as Item 10.2 of the September 6, 2016 Form 8-K, provides for the appointment of two individuals designated by VW T&B (the “Investor Nominees”) to the Company’s Board of Directors (the “Board”), subject to the approval of the Company.

Pursuant to the Stockholder Agreement, the Company appointed Andreas Renschler and Matthias Gründler, the Investor Nominees, to fill the vacancies created by the retirement of Michael N. Hammes and James H. Keyes, effective as of February 28, 2017. Mr. Renschler was appointed a member of the Board’s Compensation Committee and the Nominating and Governance Committee and Mr. Gründler was appointed a member of the Board’s Finance Committee.

As a director of the Company, each of Messrs. Renschler and Gründler will receive compensation as a non-employee director in accordance with the Company’s non-employee director compensation practices described in the Company’s Annual Proxy Statement filed with the Securities and Exchange Commission on December 21, 2016. This compensation generally consists of an annual retainer in the amount of $120,000 ($20,000 which is to be paid in the form of restricted stock) and an annual stock option grant of 5,000 options. The initial cash and stock award to be received by each of Messrs. Renschler and Gründler will be pro-rated accordingly.

Also in connection with Messrs. Renschler and Gründler’s appointment, the Board ratified several related person transactions. The Company and its subsidiaries have historically had a series of commercial relationships with VW T&B and its affiliates, and the parties expect to enter into future transactions. The total aggregate value of these transactions amounted to approximately $113 million during fiscal year 2016 and is estimated to amount to approximately $119 million in fiscal year 2017. As of February 28, 2017, VW T&B holds a 16.6% stake in the Company and is therefore a related person under the Company’s Policy and Procedures with Respect to Related Person Transactions (the “Policy”). Messrs. Renschler and Gründler, as the Chief Executive Officer and Chief Financial Officer, respectively, of VW T&B, are each a related person under the Policy and are deemed to have an indirect material interest in the transactions of VW T&B’s by virtue of their positions as officers of VW T&B. For each related person transaction, the Board’s Audit Committee and the Board considered the relevant factors and the Board, upon the recommendation of the Board’s Audit Committee, ratified the transaction on the basis that the relationship was in the best interest of the Company. Such approved transactions are related person transactions under Item 404(a) of Regulation S-K and include, without limitation, purchases and sales of goods and services, payments of royalties, and a sourcing joint venture.

ITEM 8.01 OTHER EVENTS

On March 1, 2017, the Company issued a press release announcing the election of two new directors and the closing of the previously disclosed issuance of 16,242,012 shares of common stock of the Company (the “Share Issuance”) for a purchase price of $15.76 per share and an aggregate purchase amount of $255,974,109 to VW T&B. The Share Issuance was consummated pursuant to the terms of the Stock Purchase Agreement, dated as of September 5, 2016, by and among the Company and VW T&B. The Share Issuance was previously reported by the Company in the September 6, 2016 Form 8-K and the full text of the Stock Purchase Agreement was filed as Exhibit 10.1 thereto. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 8.01 by reference.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

Exhibit No.	Description
99.1	Press Release, dated March 1, 2017, “Navistar and Volkswagen Truck & Bus Close Strategic Alliance”

Forward Looking Statements

Information provided and statements contained in this report that are not purely historical are forward-looking statements within the meaning of the federal securities laws. Such forward-looking statements only speak as of the date of this report and the company assumes no obligation to update the information included in this report. Such forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business strategy. These statements often include words such as believe, expect, anticipate, intend, plan, estimate, or similar expressions. These statements are not guarantees of performance or results and they involve risks, uncertainties, and assumptions. For a further description of these factors, see the risk factors set forth in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the fiscal year ended October 31, 2016. Although we believe that these forward-looking statements are based on reasonable assumptions, there are many factors that could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. All future written and oral forward-looking statements by us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. Except for our ongoing obligations to disclose material information as required by the federal securities laws, we do not have any obligations or intention to release publicly any revisions to any forward looking statements to reflect events or circumstances in the future or to reflect the occurrence of unanticipated events.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	NAVISTAR INTERNATIONAL CORPORATION
	(Registrant)
By:	/s/ Walter G. Borst
Name: Title:	Walter G. Borst Executive Vice President and Chief Financial Officer

Dated: March 1, 2017

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated March 1, 2017, “Navistar and Volkswagen Truck & Bus Close Strategic Alliance”

EX-99.1

Exhibit 99.1

Media contact:	Lyndi McMillan, Lyndi.McMillan @Navistar.com, 331-332-5833
Investor contact:	Martin Ketelaar, Marty.Ketelaar@Navistar.com, 331-332-2706
Web site:	www.Navistar.com/newsroom

NAVISTAR AND VOLKSWAGEN TRUCK & BUS CLOSE STRATEGIC ALLIANCE

• Terms finalized for procurement joint venture and strategic technology and supply collaboration

• Volkswagen Truck & Bus takes 16.6% stake in Navistar; $256 million equity investment in Navistar effective as of February 28, 2017

• Volkswagen Truck & Bus executives Renschler and Gründler join Navistar Board of Directors

• Navistar continues to expect cumulative synergies of $500 million over first five years

LISLE, Ill. — March 1, 2017 — Navistar International Corporation (NYSE: NAV) today announced the closing of its wide-ranging strategic alliance with Volkswagen Truck & Bus, which includes an equity investment in Navistar by Volkswagen Truck & Bus and framework agreements for a procurement joint venture and strategic technology and supply collaboration. The closing of the alliance follows receipt of all necessary regulatory approvals, finalization of agreements relating to the procurement joint venture and the technology and supply collaboration, and satisfaction of other customary closing conditions.

“This alliance with Volkswagen Truck & Bus marks a significant milestone in our company’s history, and we expect it will create multiple benefits for both companies in both the near and long term,” said Troy Clarke, Chairman, President and CEO, Navistar. “Now that the transaction has closed, we will move quickly to collaborate with an industry-leading, strategic partner to increase our global scale, strengthen our competitiveness, and provide our customers with expanded access to cutting-edge products, technology and services.”

“The authorities have given our strategic alliance with Navistar the green light. Our newly-founded purchasing cooperation will begin work immediately. This puts both partners in a stronger position for the future. The strategic alliance provides Volkswagen Truck & Bus with access to the all-important North American market. This is a major step toward becoming a global champion,” said Andreas Renschler, CEO of Volkswagen Truck & Bus.

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Equity Investment

With the closing of the alliance, Volkswagen Truck & Bus acquired approximately 16.2 million newly issued shares in Navistar, representing 16.6% of post-transaction undiluted common stock (or 19.9% of pre-transaction outstanding common stock), effective February 28, 2017. As a result, Navistar receives $256 million to be used for general corporate purposes.

As part of the alliance agreement and in line with Volkswagen Truck & Bus’s ownership stake, Mr. Renschler and Matthias Gründler, Chief Financial Officer of Volkswagen Truck & Bus, are joining Navistar’s board of directors.

“We are excited to welcome Andreas Renschler and Matthias Gründler to the Navistar Board, and are confident that we will benefit from their deep industry knowledge and fresh perspectives,” said Clarke. “Their expertise in commercial vehicle production will be invaluable as we strive to become the North American champion in our industry.”

Procurement Joint Venture

Global Truck & Bus Procurement LLC, the procurement joint venture created by Navistar and Volkswagen Truck & Bus, will start work effective immediately. As part of the alliance, it will create new opportunities for quality improvement and cost reduction, and will enable both companies to benefit from increased global scope and scale. The joint venture is operating out of Navistar’s headquarters in Lisle, Illinois, and comprises representatives from both companies who will be combining the demand of five brands, including Volkswagen Truck & Bus’s Scania, MAN and Volkswagen Caminhões e Ônibus, in addition to Navistar’s own International^® and IC Bus™ brands.

Technology Sharing

The companies’ ongoing technology and supply collaboration, which operates out of Stockholm, Sweden, is intended to facilitate collaboration on several aspects of commercial vehicle development, including advanced powertrain technology solutions. Ultimately, it is expected to optimize research and development spend and expand the technology options both companies will be able to offer customers.

Navistar continues to expect significant synergies from both the strategic technology collaboration and the procurement joint venture. As previously announced, Navistar expects the alliance to be accretive beginning in the first year, and for cumulative synergies for Navistar to ramp up to at least $500 million over the first five years. By year five, it expects the alliance will generate annual synergies of at least $200 million for Navistar. This annual run rate is expected to grow materially thereafter as the companies continue to introduce technologies from the collaboration.

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About Andreas Renschler

The Supervisory Board of Volkswagen AG appointed Andreas Renschler as member of the Board of Management of Volkswagen AG with responsibility for Commercial Vehicles effective February 1, 2015.

Renschler was born on March 29, 1958 in Stuttgart, Germany. After completing his training as a banker (1979) and graduating with degrees in business engineering (1983) and business administration (1987), Renschler began his career at Daimler-Benz AG in 1988. Following various posts at Daimler-Benz AG, he took charge of the M Class unit, serving as President and CEO of Mercedes-Benz US. He returned to Germany in 1999 as Senior Vice President, Executive Management Development, at the company then known as DaimlerChrysler AG. Renschler was appointed President of smart GmbH in the same year. He was assigned to Mitsubishi Motors in Japan in spring 2004 and subsequently named member of the Daimler AG Board of Management with responsibility for the Daimler Trucks Division. He was appointed member of the Daimler AG Board of Management in charge of Manufacturing and Procurement at Mercedes-Benz Cars & Mercedes-Benz Vans in 2013.

About Matthias Gründler

Effective September 1, 2015, Matthias Gründler was appointed Member of the Board and CFO at Volkswagen Truck & Bus GmbH, Wolfsburg, Germany. Gründler was born September 16, 1965, in Stuttgart, Germany. He studied economics at the IFW in cooperation with the Daimler Academy. In 1986, he joined Daimler Benz AG in Stuttgart, Germany. He took up his first management position in 1993 in Supply Chain Management at DaimlerChrysler, followed by positions in Sales Planning and Controlling at Mercedes-Benz Passenger Cars. From 1999 to 2011, he held various senior positions in Africa and Asia, including CFO at DaimlerChrysler in Bangkok, Thailand, and CFO of Mercedes-Benz South Africa. In 2008 he became a Member of the Management Board at Mitsubishi Fuso in Tokyo, Japan. In 2011, Gründler was appointed Head of Procurement Trucks and Buses and Business Development Powertrain and later that year took up the position of Head of Product Platforms, Sales & Quality Powertrain. In 2012 he became CFO Daimler Trucks & Buses at Daimler AG and in 2013 was appointed Member of the Divisional Board Daimler Trucks & Buses and CFO Daimler Trucks & Buses.

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Navistar International Corporation (NYSE: NAV) is a holding company whose subsidiaries and affiliates produce International brand commercial and military trucks, proprietary diesel engines, and IC Bus brand school and commercial buses. An affiliate also provides truck and diesel engine service parts. Another affiliate offers financing services. Additional information is available at www.Navistar.com.

Volkswagen Truck & Bus houses the MAN, Scania, Volkswagen Caminhões e Ônibus, and RIO brands. The company intends to boost its profitability, customer innovation, and global presence over the next decade to become a leading commercial vehicle group worldwide.

Forward-Looking Statement

This news release contains forward-looking statements and information on, inter alia, the scope of the strategic alliance, ways of collaboration regarding the strategic alliance, descriptions of the business strategy of both companies, and expected benefits and synergies of the strategic alliance. These statements and information may be spoken or written and can be recognized by terms such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” or words with similar meaning. These statements and information are based on assumptions relating to the companies’ business and operations and the development of the economies in the countries in which either company is active, among others. Volkswagen Truck & Bus and Navistar have made such forward-looking statements on the basis of the information available to them and assumptions they believe to be reasonable. The forward-looking statements and information involve significant risks and uncertainties, and actual results may differ materially from those forecast. Such risks and uncertainties include, but are not limited to, the parties inability for any reason to realize anticipated cost savings from the procurement joint venture (including, but not limited to, as a result of any counterparty’s unwillingness to conduct business with the joint venture or take the joint venture’s recommendations), anticipate the outcome of future feasibility studies and collaboration discussions and develop successfully future technologies and products, and the risks and uncertainties associated with Navistar’s adaptations and localizations of VW T&B’s engines and technology.

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If any of these or other risks or uncertainties materialize, or if the assumptions underlying any of these statements prove incorrect, the actual results may significantly differ from those expressed or implied by such forward-looking statements and information.

Navistar will not update the press release, particularly not the forward-looking statements. The press release is valid on the date of publication only.

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