Truck maker Navistar International Corp. said Monday (Oct. 8) it will replace two board members as part of an agreement with its largest shareholders to avoid a proxy fight.
According to the Chicago Tribune, the announcement comes a month after billionaire investor Carl Icahn made public a letter calling the Lisle-based company a poster child for abysmal business decisions and poor corporate governance and demanding four board seats for the company’s largest shareholders.
“I am glad to have reached an agreement that provides strong shareholder representation on the board and look forward to working diligently with the board to enhance value at Navistar,” Icahn said in a statement.
Navistar appointed Vincent J. Intrieri and Mark H. Rachesky to its 10-member board. They will replace Eugenio Clariond and Steven J. Klinger, who will retire.
Intrieri has worked for entities related to Icahn since October 1998. Rachesky is the president of MHR Fund Management LLC, an investment firm that he founded in 1996.
The three directors will stand for election at the company’s 2013 annual meeting of shareholders.
“We are pleased to have reached an agreement with Icahn and MHR as we believe it is in the best interest of the company and all of its shareholders,” said Michael N. Hammes, Navistar’s independent lead director.
Navistar troubles stem from an engine technology that cost Navistar $700 million to develop since 2001 but failed to reduce levels of smog-causing nitrogen oxide enough to meet 2010 federal standards.
Icahn, hedge fund manager Mark Rachesky and Franklin Resources Inc. together own about 50 percent of Navistar.