Navistar International (NAV) PRER14APreliminary revised proxy

On behalf of the board of directors (the “Board”) of Navistar International Corporation (the “Company” or “Navistar”), you are cordially invited to attend our 2021 Annual Meeting of Stockholders (the “Annual Meeting”). The Annual Meeting will be held virtually on [•], [•], 2021, at [•] [a.m.], Central Time.

In light of the ongoing coronavirus (“COVID-19”) pandemic, for the safety of our stockholders and in accordance with federal, state and local guidance limiting group gatherings, the Annual Meeting will be held in a virtual meeting format only, and there will not be a physical meeting location. You will be able to attend, vote and submit questions during the virtual Annual Meeting online by visiting www.virtualshareholdermeeting.com/NAV2021.

On November 7, 2020, the Company, Parent and Merger Sub entered into the Merger Agreement. The Merger Agreement provides for, among other things, the acquisition by Parent of the Company through the merger of Merger Sub with and into the Company (the “Merger”), with the Company continuing as the surviving corporation and a wholly owned indirect subsidiary of Parent.

If the Merger is completed, you will be entitled to receive $44.50 in cash, without interest, for each share of the Company’s common stock owned by you, which represents a premium of approximately 84.88% to the closing price of the Company’s common stock as of January 30, 2020, the last trading day prior to the announcement by Parent of its unsolicited offer to acquire the Company for $35.00 per share, and a 58.14% premium to the volume-weighted average price of shares of the Company’s common stock for the 30 trading days ended January 30, 2020, a premium of approximately 24.16% to the closing price of the Company’s common stock as of September 9, 2020, the last trading day prior to the Company’s confirmation of a revised proposal from Parent to acquire the Company for $43.00 per share and a premium of approximately 2.6% to the closing price of the Company’s common stock as of November 6, 2020, the last trading day prior to the public announcement of the execution of the Merger Agreement.

Concurrently with the execution of the Merger Agreement, certain stockholders of the Company affiliated with Carl C. Icahn (collectively, the “Icahn Stockholders”), and certain stockholders of the Company affiliated with Mark H. Rachesky (collectively, the “MHR Stockholders”) entered into voting and support agreements with Parent and Merger Sub (the “Voting Agreements”), pursuant to which the Icahn Stockholders and the MHR Stockholders have agreed to, among other things, vote in favor of the adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement. As of December 17, 2020, the Icahn Stockholders collectively own approximately 16.8% of the outstanding shares of the Company’s common stock, and the MHR Stockholders collectively own approximately 16.4% of the outstanding shares of the Company’s common stock. Additionally, as of December 17, 2020, Parent and its affiliates collectively own approximately 16.7% of the outstanding shares of the Company’s common stock which, pursuant to the Merger Agreement, Parent has committed to vote in favor of the adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement.

Approval of the proposal to adopt the Merger Agreement requires the affirmative vote of a majority of the shares of our common stock outstanding and entitled to vote on such proposal. The affirmative vote of a majority of the shares present virtually or represented by proxy at the Annual Meeting and entitled to vote on the non-binding advisory vote on certain compensation arrangements for the Company’s named executive officers in connection with the Merger will constitute the stockholders’ non-binding advisory approval of the Merger Compensation Proposal. The approval of each of the director nominees named in the accompanying proxy statement requires the affirmative vote of a plurality of the shares present virtually or represented by proxy at the Annual Meeting and entitled to vote on each director nominee in such proposal. The affirmative vote of a majority of shares present virtually or represented by proxy at the Annual Meeting and entitled to vote on the non-binding, advisory vote on executive compensation as disclosed in the accompanying proxy statement will constitute the stockholders’ non-binding advisory approval of such proposal. The approval to ratify the appointment of the Company’s independent registered public accounting firm requires the affirmative vote of a majority of the shares present virtually or represented by proxy at the Annual Meeting and entitled to vote on such proposal.

If your shares of our common stock are held in “street name” by your bank, brokerage firm or other nominee, your bank, brokerage firm or other nominee will be unable to vote your shares of our common stock without instructions from you except for with respect to “routine” matters. You should instruct your bank, brokerage firm or other nominee to vote your shares of our common stock in accordance with the procedures provided by your bank, brokerage firm or other nominee. If your shares are held in “street name” by your bank, brokerage firm or other nominee and you fail to instruct your bank, brokerage firm or other nominee to vote your shares of common stock, your shares of our common stock will still be counted for purposes of determining whether a quorum is present at the Annual Meeting and will have the same effect as a vote “AGAINST” approval of the proposal to adopt the Merger Agreement. If your shares are held in “street name” by your bank, brokerage firm or other nominee and you fail to instruct your bank, brokerage firm or other nominee to vote your shares of common stock, your shares of our common stock will not have an effect on the Merger Compensation Proposal, the Election of Directors Proposal, the Say-On-Pay Proposal and the Adjournment Proposal.

The accompanying proxy statement provides you with detailed information about the Annual Meeting, the Merger Agreement and each of the proposals to be voted upon by our stockholders. The Merger cannot be completed unless the Merger Agreement is adopted by the affirmative vote of the holders of a majority of the outstanding shares of Navistar common stock entitled to vote on the proposal to adopt the Merger Agreement. A copy of the Merger Agreement is attached as Annex A to the proxy statement and is incorporated by reference therein, and copies of the Voting Agreements are attached as Annex B and Annex C to the proxy statement and are incorporated by reference therein. We encourage you to read the entire proxy statement and its annexes, including the Merger Agreement and the Voting Agreements, carefully. You may also obtain additional information about Navistar from documents we have filed with the Securities and Exchange Commission.

The Board has fixed the close of business on [•], 2021 as the record date for determination of stockholders entitled to receive notice of, and to vote at, the Annual Meeting and any adjournments or postponements thereof. Only stockholders of record as of the close of business on the record date are entitled to receive notice of, and to vote at (electronically or by proxy), the Annual Meeting and at any adjournment or postponement thereof. You will be entitled to one vote for each share of the Company’s common stock that you owned on the record date. A complete list of our stockholders of record entitled to vote at the Annual Meeting will be available for inspection at our principal executive offices at 2701 Navistar Drive, Lisle, Illinois 60532 at least ten days prior to the date of the Annual Meeting and continuing through the Annual Meeting for any purpose germane to the meeting. A stockholder may send a written request to our Corporate Secretary at corporate.secretary@navistar.com for an electronic copy of the list of our stockholder of record for inspection prior to the Annual Meeting. The list will also be available in electronic form at the Annual Meeting for inspection by any stockholder present virtually at the Annual Meeting.

Only stockholders of record (including “street name” stockholders who can show that they beneficially owned our common stock on the record date), their duly appointed proxy holders and our guests may attend the virtual Annual Meeting. If you are a stockholder of record, you will need your assigned 16-digit control number provided in your Notice of Internet Availability of Proxy Materials, your proxy card, voting instruction form, or other applicable proxy notices to attend and vote your shares electronically at the virtual Annual Meeting. If you hold your shares in “street name” through a bank, brokerage firm or other nominee, your assigned 16-digit control number should be included with the voting instructions received from your bank, brokerage firm or other nominee. If your bank, brokerage firm or other nominee has not provided you with a 16-digit control number, please contact them for instructions on how to attend the virtual Annual Meeting and vote your shares.

If you have any questions or need assistance voting your shares of Navistar common stock, please contact Alliance Advisors LLC, our proxy solicitor, by calling toll-free at 833-550-0986. Banks and brokers should also contact Alliance Advisors by calling toll-free at 833-550-0986. We look forward to seeing you at the Annual Meeting.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE MERGER, PASSED UPON THE MERITS OR FAIRNESS OF THE MERGER AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE MERGER, OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE INFORMATION CONTAINED IN THE ACCOMPANYING PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

This proxy statement is being furnished to the stockholders of Navistar International Corporation, a Delaware corporation, (“we”, “our”, the “Company” or “Navistar”) in connection with the solicitation of proxies by our board of directors (the “Board”), for use at a virtual annual meeting of stockholders and at any adjournments thereof (the “Annual Meeting”). Stockholders will be asked:

A copy of the Merger Agreement is attached as Annex A to this proxy statement. Pursuant to the Merger Agreement, Merger Sub will be merged with and into the Company (the “Merger”), with the Company continuing as the surviving corporation and a wholly owned indirect subsidiary of Parent.

Navistar International Corporation, incorporated under the laws of the State of Delaware in 1993, is a holding company whose principal operating entities are Navistar, Inc. and Navistar Financial Corporation (“NFC”). Navistar’s fiscal year ends October 31 and as such all references to a year refer to the applicable fiscal year unless stated otherwise.

This proxy statement is being furnished to our stockholders as part of the solicitation of proxies by the Board for use at the Annual Meeting, which will be held virtually, without a physical meeting location, on [•], 2021 at [•] [a.m.], Central Time.

At the Annual Meeting, holders of our common stock, $0.10 par value of the Company (the “common stock”) will be asked to approve each of the following: the Merger Proposal, the Merger Compensation Proposal, each director nominee in the Election of Directors Proposal, the Say-On-Pay Proposal, the Ratification of Independent Accounting Firm Proposal and the Adjournment Proposal.

You are entitled to receive notice of, and to vote at, the Annual Meeting if you owned shares of our common stock at the close of business on [•], 2021, which the Board has set as the record date for the Annual Meeting. As of the close of business on the record date, there were [•] shares of common stock outstanding. Each holder of our common stock is entitled to cast one vote per such share. The presence at the Annual Meeting, virtually or represented by proxy, of the holders of one-third of the shares of our common stock issued and outstanding and entitled to vote at the Annual Meeting, constitutes a quorum for the transaction of business at the Annual Meeting. Abstentions and broker non-votes (as defined in the section entitled “The Annual Meeting—Vote Required” beginning on page 53) are counted as present for the purpose of determining whether a quorum is present.

As of the record date, the directors and executive officers of the Company beneficially owned and were entitled to vote, in the aggregate, [•] shares of our common stock (not including any shares of our common stock deliverable upon exercise or conversion of any options, stock appreciation rights, or restricted shares), representing approximately [•]% of the outstanding voting power of our common stock. The directors and officers have informed the Company that they currently intend to vote all such shares of our common stock “FOR” approval of the Merger Proposal, “FOR” approval of the Merger Compensation Proposal, “FOR” approval of the Say-On-Pay Proposal, “FOR” approval of the Ratification of Independent Accounting Firm Proposal and “FOR” the approval of the Adjournment Proposal. See the sections entitled “The Voting Agreements” beginning on page 110; see also the sections entitled “Persons Owning more than Five Percent of Company Common Stock” and “Company Common Stock Owned by Executive Officers and Directors” beginning on pages 183 and 184, respectively.

Any stockholder of record entitled to vote at the Annual Meeting may vote virtually by attending the virtual Annual Meeting or submitting a proxy over the Internet, scanning your QR Code, by telephone, or by mail using the enclosed postage paid envelope. If you are a beneficial owner of our common stock and your shares are held in street name, you should instruct your bank, brokerage firm or other nominee on how to vote your shares of our common stock using the instructions provided by your bank, brokerage firm or other nominee. Banks, brokerage firms or other nominees who hold shares in street name for customers have the authority to vote on “routine” proposals when they have not received instructions from beneficial owners, such as the Ratification of Independent Accounting Firm Proposal. However, banks, brokerage firms and other nominees are precluded from exercising their voting discretion with respect to approving non-routine matters, such as the Merger Proposal, the Merger Compensation Proposal, the Election of Directors Proposal, the Say-On-Pay Proposal and the Adjournment Proposal, and, as a result, absent specific instructions from the beneficial owner of such shares of our common stock, banks, brokerage firms or other nominees are not empowered to vote those shares of our common stock on those non-routine matters. With respect to the Merger Proposal, if you fail to submit a proxy or to vote virtually at the Annual Meeting, or do not provide your bank, brokerage firm or other nominee with instructions, as applicable, your shares of our common stock will not be voted on the Merger Proposal, which will have the same effect as a vote “AGAINST” approval of the respective proposal. With respect to the Merger Compensation Proposal, the Election of Directors Proposal, the Say-On-Pay Proposal and the Adjournment Proposal, if you fail to submit a proxy or to vote virtually at the Annual Meeting, or do not provide your bank, brokerage firm or other nominee with instructions, as applicable, and your shares of our common stock will not have an effect on the respective proposal.

You have the right to revoke a proxy. If your shares are registered directly in your name, you may revoke your proxy or change your vote at any time before the Annual Meeting, by voting over the Internet, scanning your QR Code or by telephone, signing a new proxy and mailing it, by attending the virtual Annual Meeting and voting your shares virtually, or by requesting that your proxy be revoked. If you hold shares in “street name” through a bank, brokerage firm or other nominee, you may submit a new, later-dated voting instruction form or contact your bank, brokerage firm or other nominee or vote virtually at the Annual Meeting if you obtain a legal proxy, as described in the section entitled “The Annual Meeting—Vote Required” beginning on page 53.

Navistar is an international manufacturer of International brand commercial trucks, proprietary diesel engines, and IC Bus^® brand school and commercial buses, as well as a provider of service parts for trucks and diesel engines. The Company also provides retail, wholesale, and lease financing services for its trucks and parts. The Company operates as four principal industry segments: Trucks, Parts, Global Operations and Financial Services.

TRATON SE, which we refer to as “Parent” or “TRATON” in this proxy statement, is a Societas Europaea, whose shares are listed for trading on the Frankfurt Stock Exchange, and Nasdaq Stockholm, each under the symbol “8TRA”. As of December 17, 2020, Parent beneficially owns approximately 16.7% of the issued and outstanding shares of Company common stock. Parent is an indirect subsidiary of Volkswagen Aktiengesellschaft (“Volkswagen AG”) and its principal business purpose is the holding of investments in companies whose business purpose is the manufacturing and distribution of vehicles and engines of any kind, as well as such items’ ancillary equipment and all plants, machinery, tools, and other technical products.

Dusk Inc., a Delaware corporation and a wholly owned indirect subsidiary of Parent, which we refer to as “Merger Sub” in this proxy statement, was formed solely for the purposes of effecting the Merger. Merger Sub has not carried on any activities or operations to date, except for those activities incidental to its formation and undertaken in connection with the transactions contemplated by the Merger Agreement and the Voting Agreements.

The Merger Agreement provides that Merger Sub will merge with and into the Company. Upon the filing of the certificate of merger with the Delaware Secretary of State, at which time the Merger shall become effective (the “Effective Time”), Merger Sub will cease to exist and the Company will continue as the surviving corporation following the Merger. As a result of the Merger, the Company will cease to be a publicly traded company and will become a wholly owned indirect subsidiary of Parent. You will not own any shares of the capital stock of the surviving corporation.

In the Merger, each outstanding share of our common stock will automatically be converted into the right to receive an amount in cash equal to $44.50 (the “Common Merger Consideration”), without interest, other than shares of our common stock (i) owned by (x) Parent or any of its subsidiaries; or (y) the Company as treasury stock, which shares in clauses (x) and (y) we refer to as “excluded shares”; and (ii) stockholders who have not voted in favor of the Merger and properly and validly perfected their statutory rights of appraisal in accordance with Section 262 of the Delaware General Corporation Law (the “DGCL”), which shares we refer to as “dissenting shares,” which shares will be canceled without payment of any consideration therefor and will cease to exist.

The sole share of Series B Nonconvertible Junior Preference Stock, $1.00 par value (the “Series B Stock”), issued and outstanding immediately prior to the Effective Time, will be unaffected by the Merger and will remain outstanding as one share of Series B Stock of the surviving corporation with the same rights, powers, preferences and privileges attributable to the sole share of Series B Stock immediately prior to the Effective Time.

Each share of Series D Convertible Junior Preference Stock, $1.00 par value (the “Series D Stock”) outstanding immediately prior to the Effective Time will be converted into an amount in cash, without interest, equal to the portion of the Common Merger Consideration that would have been payable in respect of such share of Series D Stock had such share converted into our common stock pursuant to the terms of the certificate of incorporation of the Company immediately prior to the Effective Time (together with the Common Merger Consideration, the “Merger Consideration”).

After careful consideration of various factors described in the section entitled “The Merger—Reasons for the Merger; Recommendation of the Company’s Board of Directors” beginning on page 68, the Board has determined that the Merger and the other transactions contemplated by the Merger Agreement are fair to, and in the best interests of, the Company and the Company’s stockholders and approved and declared advisable the Merger Agreement and the Merger and the other transactions contemplated by the Merger Agreement. The Board has also resolved that the Merger Agreement be submitted for consideration by the stockholders of the Company at the Annual Meeting and recommended that the stockholders of the Company vote to adopt the Merger Agreement. The Board consulted with the Company’s outside financial and legal advisors and senior management at various times and considered a number of factors that the Board believes support its decision.

In considering the recommendation of the Board with respect to the Merger Proposal, you should be aware that our directors and executive officers have interests in the Merger that are different from, or in addition to, yours. The Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement and the Merger, and in recommending that the Merger Agreement be adopted by the stockholders of the Company. See “The Merger—Interests of Certain Persons in the Merger” beginning on page 87.

The “Purchaser Group Members” means (i) Parent, (ii) Merger Sub, (iii) Volkswagen AG and (iv) TRATON US Inc., a Delaware corporation and indirect wholly owned subsidiary of Parent. In the course of reaching its decision to approve the Merger Agreement and the transactions contemplated thereby, including the Merger, the executive board of Parent (“Parent’s Executive Board”) and the supervisory board of Parent (“Parent’s Supervisory Board”, and together with Parent’s Executive Board, “Parent’s Boards”), the management board of Volkswagen AG (the “Volkswagen Management Board”) and the supervisory board of Volkswagen AG (the “Volkswagen Supervisory Board”) and the Purchaser Group Members considered a number of factors in its deliberations. Those factors are described in “Special Factors—Purchaser Group Members’ Purposes and Reasons for the Merger” beginning on page 24.

It is expected that the Company’s operations will be conducted after the Merger substantially as they currently are being conducted, except that it will cease to be a publicly traded company and will instead be a privately held indirect subsidiary of Parent as further described in “Special Factors—Plans for the Company After the Merger” beginning on page 68.

The Purchaser Group Members believe that the Merger is substantively and procedurally fair to the Company’s unaffiliated stockholders. However, none of the Purchaser Group Members nor any of their respective affiliates (other than the Board) has performed, or engaged a financial advisor to perform, any valuation or other analysis for purposes of assessing the fairness of the Merger to the Company and the Company’s unaffiliated stockholders. The belief of the Purchaser Group Members as to the procedural and substantive fairness of the Merger is based on the factors discussed in “Special Factors—Position of the Purchaser Group Members as to the Fairness of the Merger” beginning on page 26.

The Company retained J.P. Morgan Securities LLC (“J.P. Morgan”) as a financial advisor in connection with the proposed Merger. In connection with the engagement, the Board requested that J.P. Morgan evaluate the fairness, from a financial point of view, of the consideration to be paid in the Merger to holders of the Company’s common stock.

In connection with the Merger, at the meeting of the Board on November 7, 2020, J.P. Morgan rendered its oral opinion to the Board that, as of such date and based upon and subject to the factors and assumptions set forth in its opinion, the Merger Consideration to be paid to the holders of the Company’s common stock in the proposed Merger was fair, from a financial point of view, to such stockholders. J.P. Morgan subsequently confirmed its November 7, 2020 oral opinion by delivering its written opinion to the Board, dated November 7, 2020.

The Company retained PJT Partners LP (“PJT Partners” and together with J.P. Morgan, the “Financial Advisors”) as a financial advisor to the Company in connection with the proposed Merger. In connection with the engagement, the Board requested that PJT Partners evaluate the fairness, from a financial point of view, of the consideration to be paid in the Merger to holders of the Company’s common stock.

At a meeting of the Board on November 7, 2020, PJT Partners rendered its oral opinion, subsequently confirmed in its written opinion dated November 7, 2020, that, as of the date thereof and based upon and subject to, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations of the review undertaken by PJT Partners in connection with the opinion (which are stated in its written opinion), the Merger Consideration to be received by the holders of Company common stock was fair to such holders from a financial point of view.

In connection with the Merger, Bank of America Europe DAC (“BofA Securities”), TRATON’s financial advisor, delivered to Parent’s Supervisory Board and Parent’s Executive Board a written opinion, dated November 7, 2020, as to the fairness, from a financial point of view and as of the date of the opinion, to Parent of the consideration to be paid by Parent in the Merger. The full text of the written opinion, dated November 7, 2020, of BofA Securities, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex G to this proxy statement and is incorporated by reference herein in its entirety.

Goldman Sachs Bank Europe SE delivered its opinion to Parent’s Executive Board and Parent’s Supervisory Board that, as of November 7, 2020 and based upon and subject to the factors and assumptions set forth therein, the $44.50 in cash per share of the Company’s common stock to be paid by Parent pursuant to the Merger Agreement was fair from a financial point of view to Parent. The full text of the written opinion of Goldman Sachs Bank Europe SE, dated November 7, 2020, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex H. The summary of Goldman Sachs Bank Europe SE’s opinion contained in this proxy statement is qualified in its entirety by reference to the full text of Goldman Sachs Bank Europe SE’s written opinion.

Goldman Sachs Bank Europe SE provided advisory services and its opinion for the information and assistance of Parent’s Executive Board and Parent’s Supervisory Board in connection with their consideration of the Merger. The Goldman Sachs Bank Europe SE opinion is not a recommendation as to how any holder of shares of Navistar’s common stock should vote with respect to the Merger, or any other matter. Pursuant to an engagement letter between Parent and Goldman Sachs Bank Europe SE, Parent has agreed to pay Goldman Sachs Bank Europe SE a transaction fee of €12,500,000, all of which is contingent upon consummation of the Merger.

The Company and Parent estimate that the total amount of funds required to complete the Merger and related transactions and pay related fees and expenses will be approximately $3,800,000,000. The Merger is not subject to any financing condition, however, to finance the Merger Consideration and ancillary costs, Volkswagen International Luxemburg S.A., a wholly owned indirect subsidiary of Volkswagen AG, agreed to provide to Parent an unsecured committed loan in a maximum aggregate amount of EUR 3,300,000,000. No new loan agreement has been entered into with any third party to finance the Merger Consideration.

In considering the recommendation of the Board that you vote to adopt the Merger Agreement, you should be aware that aside from their interests as Company stockholders, the Company’s directors and executive officers have interests in the Merger that are different from, or in addition to, those of Company stockholders generally. These interests include, among others:

Members of the Board were aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement and the Merger, and in recommending to our stockholders that the Merger Agreement be adopted. For additional information, see the sections entitled “The Merger—Background of the Merger” beginning on page 58 and “The Merger—Reasons for the Merger; Recommendation of the Company’s Board of Directors” beginning on page 68. These interests are described in more detail below, and certain of them are quantified in the narrative and in the section entitled “Proposal 2—Merger Compensation Proposal—Golden Parachute Compensation” beginning on page 112.

The exchange of shares of our common stock for cash pursuant to the Merger generally will be a taxable transaction to U.S. holders (as defined in “The Merger—Material U.S. Federal Income Tax Consequences of the Merger” on page 89) for U.S. federal income tax purposes. Stockholders who are U.S. holders will generally recognize gain or loss in an amount equal to the difference, if any, between the amount of cash received with respect to such shares and their adjusted tax basis in their shares of our common stock. Under U.S. federal income tax law, U.S. holders may be subject to information reporting on cash received in the Merger. Backup withholding may also apply to the cash payments paid to a non-corporate U.S. holder pursuant to the Merger unless the U.S. holder or other payee provides a taxpayer identification number, certifies that such number is correct and otherwise complies with the backup withholding rules. You should read “The Merger—Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 89 for a more detailed discussion of the U.S. federal income tax consequences of the Merger. You should also consult your tax advisor for a complete analysis of the effect of the Merger on your federal, state and local and/or foreign taxes. If you are not a U.S. holder, the Merger will generally not result in tax to you under U.S. federal income tax laws unless you have certain connections to the United States, and the Company encourages you to seek tax advice regarding such matters.

Under the terms of the Merger Agreement, the Merger cannot be completed until (i) the waiting period applicable to the consummation of the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”) has expired or been terminated, (ii) the required filings, consents, approvals or other actions under any other required governmental approvals in the following jurisdictions outside of the United States: Brazil, Canada, Colombia, Costa Rica, Germany, Honduras, Mexico, Saudi Arabia, South Africa, Taiwan, Trinidad & Tobago, Tunisia and Uruguay, as well as jurisdictions identified in writing prior to March 31, 2021, solely as a result of either a change in law after the signing of the Merger Agreement or applicable financial metrics of the parties or their affiliates meeting or exceeding filing thresholds under applicable laws for any applicable measurement period ending after the date of the Merger Agreement, shall have been made, obtained or taken, and any applicable approvals and waiting periods thereunder shall have been received and remain in effect

The Company has also agreed to cooperate with Parent and ND Holdings, LLC, a company in which the Company holds a 30% equity interest (“Navistar Defense”) in relation to certain filings with, and use efforts in certain matters relating to, the Defense Counterintelligence and Security Agency of the Department of Defense (“DCSA”). DCSA approval is not a condition to consummation of the Merger.

On January 12, 2021 and January 13, 2021, the Company and Parent, respectively, filed notifications of the proposed Merger with the Department of Justice and Federal Trade Commission under the HSR Act.

The required filings to be made in Brazil, Colombia, Costa Rica, Germany, Mexico, Tunisia and Uruguay have been made. On January 8, 2021, the Merger was unconditionally cleared in Germany. The other required filings to be made in the jurisdictions outside of the United States, identified above, have yet to be filed and are in process.

On November 24, 2020, Parent and the Company jointly notified CFIUS in writing that the parties do not intend to file a CFIUS notice in connection with the transactions contemplated by the Merger Agreement.

The consummation of the Merger is not conditioned on any regulatory approvals in the United States or in any other jurisdiction, other than those described above.

On January 7, 2021, purported stockholders of the Company filed actions in the United States District Court for the District of Delaware, captioned Stein v. Navistar International Corporation, et al., Case No. 21-cv-00013 (D. Del.), and Lafrance v. Navistar International Corporation, et al., Case No. 21-cv-00016 (D. Del.), respectively, and on January 19, 2021, a purported stockholder of the Company filed an action in the United States District Court for the Southern District of New York, captioned Anderson v. Navistar International Corporation, et al., Case No. 21-cv-00453 (S.D.N.Y), alleging that a preliminary version of this proxy statement was materially incomplete and therefore misleading in certain respects. All three actions name the Company and the members of the Board as defendants. The Anderson action also names Parent and Merger Sub as defendants. The Company believes the allegations in these actions are without merit.

For additional information regarding the pending litigation, please see the section entitled “The Merger-Legal Proceedings Related to the Merger” beginning on page 92.

The Merger Agreement provides that the Company is not permitted to, directly or indirectly, initiate, solicit, knowingly facilitate or encourage the submission of any Acquisition Proposal (as defined in the section entitled “The Merger Agreement—Solicitation of Acquisition Proposals; Board Recommendation Changes” beginning on page 100), enter into or participate in any discussions or negotiations with, furnish any information relating to the Company or its subsidiaries or afford access to the business, properties, books or records of the Company and its subsidiaries or otherwise knowingly cooperate, assist or encourage any effort by any third party that is seeking to make, or has made, an Acquisition Proposal. In addition, the Company may not fail to make, withdraw or modify in a manner adverse to Parent the Company Board Recommendation, which we define as the Board’s recommendation that it has (i) determined that the Merger Agreement and the transactions contemplated thereby are fair to and in the best interests of the Company’s stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, (iii) approved and adopted any approvals or waivers necessary to render the stockholder agreement by and between the Company and Parent dated as of September 5, 2016 and the agreement relating to certain provisions of Section 203 of the DGCL by and between the Company and Parent dated as of September 5, 2016 inapplicable to the transactions contemplated by the Merger Agreement and (iv) resolved to recommend approval and adoption of the Merger Agreement by the stockholders of the Company (“Company Board Recommendation”) or recommend an Acquisition Proposal, fail to enforce or grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of the Company or any of its subsidiaries, approve any transaction under, or any person becoming an “interested stockholder” under, Section 203 of the DGCL or enter into any agreement in principle, letter of intent, term sheet, Merger Agreement, acquisition agreement, option agreement or other similar instrument relating to an Acquisition Proposal.

Notwithstanding these restrictions, under certain circumstances, the Company may, prior to the time the Merger Agreement is adopted by our stockholders, provide information (which may include non-public information pursuant to a confidentiality agreement) with respect to certain unsolicited written Acquisition Proposals, or engage in discussions or negotiations with a person with respect to certain unsolicited written Acquisition Proposals, which the Board reasonably believes could result in a Superior Proposal (as defined in the section entitled “The Merger Agreement—Solicitation of Acquisition Proposals; Board Recommendation Changes” beginning on page 100); provided that all such information provided to such third party is also made available to Parent as promptly as practicable but in any event within 24 hours to the extent such information has not been previously provided to Parent.

Notwithstanding the foregoing, as provided in the Merger Agreement, at any time before the stockholders of the Company adopt the Merger Agreement, the Board may make a change of recommendation or recommend an Acquisition Proposal following receipt of a Superior Proposal that did not result from a material breach of the Merger Agreement or in response to a material event, change, occurrence or effect arising after the Effective Time that was not known by the Board, in each case if and only if the Board determines in good faith, after consultation with its outside legal counsel, that the failure to effect a change of recommendation would reasonably be expected to be inconsistent with the directors’ fiduciary duties under the DGCL.

The respective obligations of the Company, Parent and Merger Sub to consummate the Merger are subject to the satisfaction or waiver of certain customary conditions, including the adoption of the Merger Agreement by the Company’s stockholders, receipt of certain regulatory approvals, the absence of any legal prohibitions, the accuracy of the representations and warranties of the parties, compliance by the parties with their respective obligations under the Merger Agreement and the absence of a material adverse effect on the Company. See “The Merger Agreement—Conditions to the Merger” beginning on page 105.

The Company and Parent may, by mutual written consent, terminate the Merger Agreement and abandon the Merger at any time prior to the Effective Time of the Merger.

The Merger Agreement may also be terminated and the Merger abandoned at any time prior to the Effective Time of the Merger as follows:

In certain circumstances, the Company may be required to pay Parent the Termination Fee if the Merger Agreement is terminated. The Termination Fee would be payable in the following circumstances:

In the case of the first bullet above, Company shall pay Parent the Termination Fee within three business days after such termination.

In the case of the second bullet above, the Company must pay Parent the Termination Fee concurrently with such termination of the Merger Agreement.

In the case of the third bullet above, the Company must pay Parent the Termination Fee concurrently with the applicable event described in clause ‎(iii) of the third bullet.

The Company will reimburse Parent and its affiliates within three business days after termination, if the Company’s stockholders’ approval of the transactions contemplated by the Merger Agreement is not obtained at the stockholder meeting, for 100% of Parent and its affiliates’ documented out-of-pocket fees and expenses (including reasonable fees and expenses of Parent’s counsel) up to $25,000,000 actually incurred by Parent and its affiliates in connection with the Merger Agreement (the “Expense Reimbursement”) and the transactions contemplated thereby including the arrangement of, obtaining the commitment to provide or obtaining any financing for such transactions.

No termination of the Merger Agreement will relieve any party to the Merger Agreement of any liability or damages incurred or suffered by the other party resulting from willful breach of such party, which we define as an intentional action or omission by a party that causes such party to be in breach of such representation, warranty, agreement or covenant and where such party knew, or reasonably should have known, at the time such intentional action or omission is or would constitute a breach, or would reasonably be expected to result in a breach, of such representation, warranty, agreement or covenant of the Merger Agreement (“willful breach”).

The parties agree that if the Merger Agreement is terminated and a Termination Fee becomes due and payable and is paid by the Company, the Termination Fee will be Parent’s and Merger Sub’s sole and exclusive remedy against the Company with respect to the Merger Agreement, except in the case of willful breach by the Company, provided that Parent will have the right to refund the Termination Fee in its entirety within 15 business days after receipt of the Termination Fee upon written notice to the Company, and if the Company receives a full refund within two business days of such written notice, Parent will be entitled to seek all post-termination remedies available as contemplated by the Merger Agreement. In no event will the Company be required to pay the Termination Fee or Expense Reimbursement on more than one occasion. If the Termination Fee becomes payable to Parent, and an Expense Reimbursement has been paid, the amount of such Expense Reimbursement actually paid by the Company shall be deducted from the total amount of such Termination Fee payable by the Company, so that the Company will not be required to pay any amount in excess of the Termination Fee.

Concurrently with the execution of the Merger Agreement, certain stockholders affiliated with Carl Icahn and certain stockholders affiliated with MHR Fund Management entered into voting and support agreements with Parent and Merger Sub, in which the Icahn Stockholders (as defined in the section “The Voting Agreements—Summary” beginning on page 110) and the MHR Stockholders (as defined in the section “The Voting Agreements—Summary” beginning on page 110) agreed, on the terms and subject to the conditions set forth in the voting and support agreements, among other things, to vote in favor of the adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement. As of December 17, 2020, the Icahn Stockholders and the MHR Stockholders have the power to vote in the aggregate approximately 33.2% of the voting power of the shares of common stock issued and outstanding.

As required by Section 14A of the Exchange Act and the applicable SEC rules issued thereunder, the Company is required to submit a proposal to the Company’s stockholders for a non-binding advisory vote to approve the Merger-related compensation.

The compensation that the Company’s named executive officers may be entitled to receive from the Company in connection with the Merger is summarized and included under the heading “Proposal 2—Merger Compensation Proposal—Golden Parachute Compensation” beginning on page 112. That summary includes all compensation and benefits that may be paid or become payable to the Company’s named executive officers by the Company in connection with the Merger.

Pursuant to Section 14A of the Exchange Act and Rule 14a-21(c) thereunder, the Company is seeking a non-binding, advisory stockholder approval of the compensation of the Company’s named executive officers that is based on or otherwise relates to the Merger as disclosed above in this section. The proposal gives the Company’s stockholders the opportunity to express their views on the Merger-related compensation of the Company’s named executive officers.

Accordingly, the Company is asking Company stockholders to vote in favor of the adoption of the following resolution, on a non-binding, advisory basis:

“RESOLVED, that the compensation that will or may be paid or become payable to the Company’s named executive officers, in connection with the Merger, and the agreements or understandings pursuant to which such compensation will or may be paid or become payable, in each case as disclosed pursuant to Item 402(t) of Regulation S-K in ‘Proposal 2—Merger Compensation Proposal—Golden Parachute Compensation’ are hereby APPROVED.”

The vote on this proposal is a vote separate and apart from the vote to adopt the Merger Agreement. Accordingly, you may vote not to approve this proposal on Merger-related named executive officer compensation and vote to adopt the Merger Agreement and vice versa. Because the vote is advisory in nature, it will not be binding on the Company, regardless of whether the Merger Agreement is adopted. Approval of the non-binding, advisory proposal with respect to the compensation that may be received by the Company’s named executive officers in connection with the Merger is not a condition to completion of the Merger, and failure to approve this advisory matter will have no effect on the vote to adopt the Merger Agreement. Because the Merger-related named executive officer compensation to be paid in connection with the Merger is based on contractual arrangements with the named executive officers, such compensation may be payable, regardless of the outcome of this advisory vote, if the Merger Agreement is adopted (subject only to the contractual conditions applicable thereto).

Approval, by non-binding advisory vote, of the Merger Compensation Proposal requires the affirmative vote of the holders of a majority of the shares of the Company’s common stock that are present virtually or by proxy at the Annual Meeting and entitled to vote on such proposal. Abstentions will have the same effect as a vote “AGAINST” approval of this compensation proposal, and broker non-votes will have no effect on the outcome of the vote.

The closing price of our common stock on the New York Stock Exchange (the “NYSE”) on November 6, 2020, the last trading day prior to the public announcement of the execution of the Merger Agreement, was $43.37 per share of our common stock. If the Merger is completed, you will be entitled to receive $44.50 in cash, without interest, for each share of the Company’s common stock owned by you, which represents a premium of approximately 84.88% to the closing price of the Company’s common stock as of January 30, 2020, the last trading day prior to the announcement by Parent of its unsolicited offer to acquire the Company for $35.00 per share, and a 58.14% premium to the volume-weighted average price of shares of the Company’s common stock for the 30 trading days ended January 30, 2020, a premium of approximately 24.16% to the closing price of the Company’s common stock as of September 9, 2020, the last trading day prior to the Company’s confirmation of a revised proposal from Parent to acquire the Company for $43.00 per share and a premium of approximately 2.6% to the closing price of the Company’s common stock as of November 6, 2020, the last trading day prior to the public announcement of the execution of the Merger Agreement.

On [•], 2021, the most recent practicable date before this proxy statement was mailed to our stockholders, the closing price for our common stock on the NYSE was $[•] per share of common stock. You are encouraged to obtain current market quotations for our common stock in connection with voting your shares of common stock.

The Company has not paid any dividends on its common stock or Series D Stock since 1980. The Series D Stock ranks senior to common stock as to dividends and receives dividends at a rate of 120% of the cash dividends on common stock, as declared on an as-converted basis. Our sole share of Series B Stock is not entitled to receive dividends. Certain debt instruments of the Company include limitations on the issuance of dividends. Additionally, under the terms of the Merger Agreement, the Company cannot declare, set aside or pay any dividend or make any other distribution in respect of our capital stock or other equity interests, without Parent’s written consent, prior to the termination of the Merger Agreement or the consummation of the Merger.

If the Merger is completed, the Company’s stockholders who do not vote in favor of the adoption of the Merger Agreement are entitled to appraisal rights under Section 262 of the DGCL, but only if they fully comply with all of the applicable legal requirements of Section 262 of the DGCL, which are summarized in this proxy statement in the section entitled “Appraisal Rights” beginning on page 197 and set forth in their entirety in Section 262 of the DGCL (attached to this proxy statement as Annex D). This means that you may be entitled to have the fair value of your shares of our common stock determined by the Delaware Court of Chancery and to receive payment based on that valuation in lieu of the per share Merger Consideration if you follow exactly the procedures set forth in Section 262 of the DGCL. The ultimate amount you may receive in an appraisal proceeding may be less than, equal to or more than the amount you would have received under the Merger Agreement.

To exercise your appraisal rights, you must, among other things, submit a written demand for appraisal to the Company before the vote is taken on the adoption of the Merger Agreement (and must not fail to perfect or effectively withdraw your demand or otherwise waive or lose your right to appraisal) and you must not vote (either virtually or by proxy) in favor of the adoption of the Merger Agreement. If you fail to follow exactly the procedures set forth in Section 262 of the DGCL, you will lose your appraisal rights. The requirements for exercising appraisal rights are further described in the section entitled “Appraisal Rights” beginning on page 197 and the text of the DGCL appraisal rights statute reproduced in its entirety as Annex D to this proxy statement. We encourage you to read these provisions carefully and in their entirety. If you hold your shares of our common stock through a bank, brokerage firm or other nominee and you wish to exercise your appraisal rights, you should consult with your bank, brokerage firm or other nominee to determine the appropriate procedures for the making of a demand for appraisal by your bank, brokerage firm or other nominee. In view of the complexity of the DGCL relating to appraisal rights, stockholders who may wish to pursue appraisal rights should consult their legal and financial advisors promptly. The discussion of appraisal rights in this proxy statement is not a full summary of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262 of the DGCL, a copy of which is attached to this proxy statement as Annex D.

If the Merger is completed, our common stock will be delisted from the NYSE and deregistered under the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder (the “Exchange Act”), and we will no longer file periodic reports with the Securities and Exchange Commission (the “SEC”) on account of our common stock.

Our Board recommends that you vote “for” all of the director nominees listed below. Set forth below is summary information about each director nominee, with more detailed information about the qualifications and experience of each director nominee contained under “Proposal 3 - Election of Directors” beginning on page 115 of this proxy statement.

The Company has a robust stockholder outreach and engagement program. We engage in regular contact with our stockholders throughout the year. As of December 17, 2020, approximately 57.0% of our stock is held by four of our stockholders. Three of these stockholders have representation on our Board as discussed in Proposal 3—Election of Directors. These stockholders, through their representation on our Board, and two of whom also have representation on our Compensation Committee, are integrally involved in our compensation decisions and policies. We also engage in regular dialogue with our two remaining largest stockholders without representation on our Board. We maintain open lines of communication with corporate governance advisory institutions and with all of our stockholders in order to inform them of Company updates and solicit their feedback. We continuously work to improve our stockholder engagement efforts and place importance on the feedback provided to us during this process.

The overall objective of our executive compensation program is to maintain a close link between pay and performance, both long-term and short-term. We believe that the compensation of our executives should be closely tied to the performance and growth of the Company, so their interests are aligned with the long-term interests of our stockholders.

We continue to focus on, and are aware of, investor concerns regarding the link between pay and performance. In 2019, the results against our annual incentive metrics resulted in our awards being paid at 134.7% of target. For the 2020 annual incentive plan, Navistar was below threshold for three performance metrics, slightly above target for one metric and at threshold for one metric, which will yield an overall payout percentage of 5.5% of target.

For a summary of our commitment to best practices in executive compensation and changes made in 2020, please see the Executive Overview section of the section entitled “Say-On-Pay—Compensation Discussion & Analysis” beginning on page 141 of this proxy statement.

Consistent with pay-for-performance principles, base salary performance increases are based upon named executive officer (“NEO”) and Company performance. As a result of the COVID-19 pandemic and economic environment, the Company did not provide base salary performance increases in 2020. In addition, the Company instituted a Non-elective Deferred Compensation Plan for all U.S.-based, salaried exempt, non-represented employees, including all NEOs. NEOs had a percentage of pay temporarily deferred beginning April 20, 2020 and ending August 31, 2020. The deferral was repaid in November of 2020 with 6% annual interest.

The CEO makes base salary recommendations for the NEOs and Section 16 Officers to the Compensation Committee. The CEO does not participate in decisions regarding his own compensation. The Compensation Committee reviews the salary for the CEO and reviews, approves and/or adjusts the CEO’s base salary recommendations for the other NEOs and Section 16 Officers included in the CEO’s recommendation. The Compensation Committee then recommends, and the independent members of the Board approve or adjust, the salary recommendation for the CEO.

The Board is asking our stockholders to ratify the Audit Committee’s appointment of KPMG as the Company’s independent registered public accounting firm for the fiscal year ending October 31, 2021. KPMG has been the Company’s auditors since 2006. For additional information regarding the Company’s relationship with KPMG, please refer to the Report of the Audit Committee and the Fees of Independent Registered Public Accounting Firm contained below.

If the appointment of KPMG as our independent registered public accounting firm for 2021 is not ratified by our stockholders, the adverse vote will be considered a direction to the Audit Committee to consider other auditors for next year. However, because of the difficulty in making any substitution of auditors after the beginning of the current year, the appointment for 2021 will stand, unless the Audit Committee finds other good reason for making a change.

Representatives of KPMG will be present at the virtual Annual Meeting and will have the opportunity to make a statement if they desire to do so. The representatives will also be available to respond to virtual questions at the Annual Meeting.

The vote on the Adjournment Proposal relates to the Merger Proposal and, if adopted, will allow the Company, if necessary or appropriate, to adjourn the Annual Meeting in order to solicit additional proxies, including if there are not sufficient votes to approve the Merger Proposal in accordance with the requisite stockholder vote.

Notwithstanding the inclusion or approval of the Adjournment Proposal, whether or not a quorum is present at the Annual Meeting, the chair of the Annual Meeting may adjourn or postpone the Annual Meeting to another place, if applicable, date or time, in accordance with the Company’s Amended and Restated By-Laws (the “By-Laws”), effective as of October 6, 2020.

This section of the proxy statement describes certain material aspects of the proposed Merger. This section may not contain all of the information that is important to you. You should carefully read this entire proxy statement and the documents incorporated herein by reference, including the full text of the Merger Agreement, for a more complete understanding of the Merger. A copy of the Merger Agreement is attached as Annex A to this proxy statement. In addition, important business and financial information about the Company is included in or incorporated into this proxy statement by reference. See “Where You Can Find More Information” beginning on page 202.

The Merger is a “going-private” transaction under SEC rules and the Exchange Act. Accordingly, Rule 13e-3 and related rules under the Exchange Act require that the Company and the Purchaser Group Members make certain disclosures regarding the Merger. This “Special Factors” section contains various information that you should read carefully. For example, the section entitled “—Plans for the Company After the Merger” explains the plans for the surviving entity after the completion of the Merger. The section entitled “—Purchaser Group Members’ Purposes and Reasons for the Merger” explains, among other things, Parent’s purposes for the Merger. The sections entitled “The Merger—Reasons for the Merger; Recommendation of the Company’s Board of Directors” and “Special Factors—Position of the Purchaser Group Members as to the Fairness of the Merger” respectively explain why the Board, on the one hand, and the Purchaser Group Members, on the other hand, believe the Merger is fair and reasonable to, and in the best interests of, the Company and the Company’s unaffiliated stockholders. The sections entitled “—Opinion of Bank of America Europe DAC” beginning on page 28 and “—Opinion of Goldman Sachs Bank Europe SE” beginning on page 34 respectively summarize the process and methodologies followed by Bank of America Europe DAC and Goldman Sachs Bank Europe SE in rendering their respective opinions to the Parent’s Executive Board and Parent’s Supervisory Board. You are encouraged to carefully read this “Special Factors” section and this entire proxy statement, along with the documents incorporated herein by reference.

Under the SEC rules governing “going private” transactions, each of the Purchaser Group Members is an affiliate of the Company that is engaged in the “going private” transaction and, therefore, each is required to express its purposes and reasons for the Merger to the Company’s “unaffiliated security holders,” as defined under Rule 13e-3 of the Exchange Act. The Purchaser Group Members are making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act.

Parent’s key strategic priority leading up to its initial public offering in June 2019 was the preparation for and execution of such initial public offering. Parent’s consideration of other strategic opportunities, including the Merger, resumed thereafter. The Purchaser Group Members have undertaken to pursue the transaction at this time in light of the opportunities they perceive to enhance Parent’s financial performance and competitive position by means of acquiring the Company through the Merger. For the Purchaser Group Members, the purpose of the Merger is to enable them to acquire control of the Company, through a transaction in which the stockholders of the Company (other than the Purchaser Group Members and their affiliates) will be cashed out for $44.50 per share of the Company’s common stock, and Parent will bear the rewards and risks of the ownership of the Company after completion of the Merger. In the opinion of the Purchaser Group Members, the Merger will provide a number of benefits to the Purchaser Group Members and the Company that would follow from the Company becoming a wholly owned indirect subsidiary of Parent, including, but not limited to:

Parent also considered the opinion of Goldman Sachs Bank Europe SE, dated November 7, 2020, to Parent’s Boards that, as of such date and based upon and subject to the factors and assumptions set forth in its opinion, the Merger Consideration to be paid by Parent was fair, from a financial point of view, to Parent, as more fully described below in the section entitled “—Opinion of Goldman Sachs Bank Europe SE” beginning on page 34.

Although the Purchaser Group Members believe that there will be opportunities associated with their investment in the Company, the Purchaser Group Members realize that there are also substantial risks (including the risks and uncertainties relating to the prospects of the Company) and that such opportunities may never be fully realized. Further, following the Merger, there will be no trading market for the equity securities of the Company, making Purchaser Group Members’ investment in the Company illiquid.

The Purchaser Group Members believe that structuring the transaction as a merger is preferable to other transaction structures because (i) it will enable the Purchaser Group Members to acquire all of the outstanding shares of common stock of the Company at the same time and (ii) it represents an opportunity for the Company’s holders of common stock and Series D Stock (except Parent and its affiliates) to receive a premium for their shares, representing an approximate 84.88% premium to the closing price of shares of the Company’s common stock of $24.07 on January 30, 2020, the last trading day prior to the announcement by Parent of its unsolicited offer to acquire the Company for $35.00 per share, and a 58.14% premium to the volume-weighted average price of shares of the Company’s common stock for the 30 trading days ended January 30, 2020.

Further, the Purchaser Group Members believe that structuring the transaction as a merger provides a prompt and orderly transfer of ownership of the Company in a single step, without the necessity of financing separate purchases of shares of the Company’s common stock in a tender offer and implementing a second-step merger to acquire any shares of the Company’s common stock not tendered into any such tender offer, and without incurring any additional transaction costs associated with such activities.

As of November 5, 2020, Parent beneficially owns approximately 16.7% of the issued and outstanding shares of Company common stock. Following consummation of the Merger, Parent will own 100% of the shares of Company common stock and will have a corresponding interest in the Company’s net book value and net earnings or losses. The Company’s net income (loss) for the fiscal year ended October 31, 2020 was approximately $(347,000,000) and the Company’s net book value per share of Company common stock as of October 31, 2020 was approximately ($38.38). Net book value per share of Company common stock as of October 31, 2020 was computed by dividing the total equity of $(3,822,000,000) by the total shares of Company common stock outstanding on October 31, 2020 of 99,576,093.

Parent’s beneficial interest in the Company’s net book value as of October 31, 2020 was approximately ($638,292,000), equal to 16.7% of the Company’s net book value. If the Merger is completed, Parent’s beneficial interest in the net book value of the Company will increase to (3,822,000,000), equal to 100% of the Company’s net book value (based on the Company’s net book value as of October 31, 2020).

Parent’s ownership interest in the Company resulted in the attribution of $(58,000,000) of the Company’s net income to Parent, equal to approximately 16.7% of the Company’ net income for the fiscal year ended October 31, 2020. If the Merger is completed, Parent’s beneficial interest in the Company’ net income will increase to $(347,000,000), equal to 100% of the Company’s net income (based upon the Company’s net income for the fiscal year ended October 31, 2020).

It is expected that the Company’s operations will be conducted after the Merger substantially as they currently are being conducted, except that it will cease to be a publicly traded company and will instead be a privately held indirect subsidiary of Parent. Following the completion of the Merger, the Company will no longer be subject to the Exchange Act and New York Stock Exchange compliance and reporting requirements and the related direct and indirect costs and expenses, and may experience positive effects on profitability as a result of the elimination of such costs and expenses.

The directors of the Company upon the consummation of the Merger will consist of (i) the persons serving as directors of Merger Sub as of immediately prior to the Effective Time and (ii) the director elected by the holder of the Series B Nonconvertible Junior Preference Stock, $1.00 par value, of the Company as of immediately prior to the Effective Time, and

The Purchaser Group Members do not have any current plans or proposals to cause the Company to engage in any of the following:

Nevertheless, as part of integration planning and following consummation of the Merger, the surviving corporation’s management and board of directors expect to conduct a review of the Company and its assets, corporate and capital structure, capitalization, operations, business, properties and personnel to determine what changes, if any, would be desirable following the Merger to enhance the business and operations of the Company and may cause the Company to engage in the types of transactions set forth above if the management or the board of directors decides that such transactions are in the best interest of the Company upon such review. The Purchaser Group Members expressly reserve the right to make any changes to the Company operations after consummation of the Merger that they deem appropriate in light of such evaluation and review or in light of future developments.

Under the SEC rules governing “going private” transactions, each of the Purchaser Group Members is an affiliate of the Company that is engaged in the “going private” transaction and, therefore, is required to express its position as to the fairness of the Merger to the Company’s unaffiliated security holders. The Purchaser Group Members are making the statements included in this section solely for the purposes of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The views of the Purchaser Group Members as to the fairness of the Merger (which is the Rule 13e-3 transaction for which a Schedule 13E-3 was filed with the SEC) should not be construed as a recommendation to any of the Company’s unaffiliated security holders, as to how such stockholder should vote on the proposal to approve the Merger Agreement.

The Purchaser Group Members believe that the Merger (which is the Rule 13e-3 transaction for which the Schedule 13E-3 was filed with the SEC) is fair to the Company’s unaffiliated security holders on the basis of the factors described below.

The Purchaser Group Members, including Parent’s designated directors on the Board, did not participate in the deliberations of the Board, regarding, or receive advice from the Company’s or the Board’s legal or financial advisors as to, the fairness of the Merger. The Purchaser Group Members have not performed, or engaged a financial advisor to perform, any valuation or other analysis for the purpose of assessing the fairness of the Merger to the Company’s unaffiliated security holders. Based on the knowledge and analysis by the Purchaser Group Members of available information regarding the Company, and the factors considered by, and the analysis and resulting conclusions of, the Parent’s Boards, the Volkswagen Management Board and the Volkswagen Supervisory Board and the Purchaser Group Members discussed in “Special Factors—Purchaser Group Members’ Purposes and Reasons for the Merger,” the Purchaser Group Members believe that the Merger is substantively and procedurally fair to the Company’s unaffiliated security holders. In particular, the Purchaser Group Members believe that the Merger is both procedurally and substantively fair to the Company’s unaffiliated holders of common stock based on their consideration of the following factors, among others, which are not presented in any relative order of importance:

The Purchaser Group Members did not find it practicable to assign, nor did they assign, specific relative weights to the individual factors considered in reaching their conclusion as to fairness. The Purchaser Group Members also did not consider the liquidation value of the Company’s assets, and did not perform a liquidation analysis, because they consider the Company to be a viable going concern. Therefore, no appraisal of liquidation value was sought for purposes of valuing the shares of the Company’s common stock, and the Purchaser Group Members believe that the liquidation value of the shares of the Company’s common stock is irrelevant to a determination as to whether the proposed Merger is fair to the Company’s unaffiliated security holders.

The Purchaser Group Members believe that the Merger is both procedurally and substantively fair to the Company’s holders of shares of Series D Stock, because the Series D Stock is convertible into common stock (as to which the views of the Purchaser Group Members are set out above), and the Series D Stock will be converted into the portion of the per share Merger Consideration that would have been payable in respect of such share of Series D Stock had such share converted into common stock pursuant to the terms of the certificate of incorporation of the Company. The Purchaser Group Members believe that the Merger is both procedurally and substantively fair to the holder of the Company’s sole share of Series B Stock because the Series B Stock will remain outstanding as one share of Series B Stock of the surviving corporation.

The Purchaser Group Members did not consider net book value, which is an accounting concept, for purposes of determining the fairness of the Merger Consideration to the Company’s unaffiliated security holders because, in the Purchaser Group Members’ view, net book value is neither indicative of the Company’s market value nor its value as a going concern, but rather is an indicator of historical costs.

While the Purchaser Group Members considered the trading history of the shares of the Company’s common stock and noted that at various times, this trading history reflected prices above the $44.50 to be paid for each share of Company common stock held by the Company’s stockholders as part of the Merger Consideration, the Purchaser Group Members concluded that these factors were not important in determining the value of the shares of the Company’s common stock as of the date of the proposed Merger. In the Purchaser Group Members’ judgment, the historical trading prices for the Company’s common stock are not indicative of the value of the shares of the Company’s common stock as of the date of the proposed Merger in light of the Company’s current business operations and future prospects.

The foregoing discussion of the information and factors considered is not intended to be exhaustive but includes the material factors considered by the Purchaser Group Members. The Purchaser Group Members’ views as to the fairness of the proposed Merger should not be construed as a recommendation to Company’s stockholders to approve the Merger Agreement. The Purchaser Group Members do not make any recommendation as to how the Company’s stockholders should vote their shares of Company common stock on the Merger.

Total fees and expenses incurred or to be incurred by the Company in connection with the Merger are estimated at this time to be as follows:

Parent has retained BofA Securities to act as Parent’s financial advisor in connection with the Merger. BofA Securities is an internationally recognized investment banking firm which is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. Parent selected BofA Securities to act as Parent’s financial advisor in connection with the Merger on the basis of BofA Securities’ experience in transactions similar to the Merger, its reputation in the investment community and its familiarity with Parent and its business.

On November 7, 2020, at a meeting of Parent’s Boards held to evaluate the Merger, BofA Securities delivered to Parent’s Boards an oral opinion, which was confirmed by delivery of a written opinion dated November 7, 2020, to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations described in its opinion, the Merger Consideration to be paid by Parent was fair, from a financial point of view, to Parent.

In arriving at its opinion, BofA Securities assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with it and relied upon the assurances of the managements of Parent and Navistar that they were not aware of any facts or circumstances that would make such information or data inaccurate or misleading in any material respect. With respect to the Navistar Forecasts, BofA Securities was advised by Navistar, and assumed, with the consent of Parent, that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of Navistar as to the future financial performance of Navistar. With respect to the Parent-Navistar Forecasts, the Synergies and the Balance Sheet Adjustments, BofA Securities assumed, at the direction of Parent, that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of Parent as to the future financial performance of Navistar and the other matters covered thereby and, based on the assessments of the management of Parent as to the relative likelihood of achieving the future financial results reflected in the Navistar Forecasts and the Parent-Navistar Forecasts, BofA Securities relied, at the direction of Parent, on the Parent-Navistar Forecasts for purposes of its opinion. BofA Securities relied, at Parent’s direction, on the assessments of the management of Parent as to Parent’s ability to achieve the Synergies and was advised by Parent, and assumed, that the Synergies will be realized in the amounts and at the times projected. BofA Securities did not make and was not provided with any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of Navistar or Parent, nor did it make any physical inspection of the properties or assets of Navistar or Parent, and it relied, at the direction of Parent, on the Balance Sheet Adjustments for purposes of its opinion. BofA Securities did not evaluate the solvency or fair value of Navistar or Parent under any laws relating to bankruptcy, insolvency or similar matters. BofA Securities assumed, at the direction of Parent, that the Merger would be consummated in accordance with its terms, without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents,

BofA Securities expressed no view or opinion as to any terms or other aspects of the Merger (other than the consideration to the extent expressly specified in its opinion), including, without limitation, the form or structure of the Merger and the entry into the Voting Agreements. BofA Securities’ opinion was limited to the fairness, from a financial point of view, to Parent of the consideration to be paid in the Merger and no opinion or view was expressed with respect to any consideration received in connection with the Merger by the holders of any class of securities, creditors or other constituencies of any party. In addition, no opinion or view was expressed with respect to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to any of the officers, directors or employees of any party to the Merger, or class of such persons, relative to the consideration. Furthermore, no opinion or view was expressed as to the relative merits of the Merger in comparison to other strategies or transactions that might be available to Parent or in which Parent might engage or as to the underlying business decision of Parent to proceed with or effect the Merger. In addition, BofA Securities expressed no opinion or recommendation as to how any stockholder should vote or act in connection with the Merger or any related matter.

BofA Securities’ opinion was necessarily based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and the information made available to BofA Securities as of, the date of its opinion. At the time of BofA Securities’ opinion, the credit, financial and stock markets were experiencing unusual volatility and BofA Securities expressed no opinion or view as to any potential effects of such volatility on Parent, Navistar or the Merger. It should be understood that subsequent developments may affect its opinion, and BofA Securities does not have any obligation to update, revise or reaffirm its opinion. The issuance of BofA Securities’ opinion was approved by the Bank of America Europe DAC Fairness Opinion Review Committee. Except as described in this summary, Parent imposed no other limitations on the investigations made or procedures followed by BofA Securities in rendering its opinion.

The discussion set forth below in the sections entitled “Bank of America Europe DAC Financial Advisor Materials” represents a brief summary of the material financial analyses presented by BofA Securities to Parent’s Boards in connection with its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by BofA Securities, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by BofA Securities. Considering the data set forth in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by BofA Securities.

A copy of BofA Securities’ opinion, dated November 7, 2020, to Parent’s Boards is attached as Annex G to this proxy statement. A copy of BofA Securities’ financial presentation, dated November 7, 2020, to Parent’s Boards, referred to as the November 7, 2020 financial presentation, is attached as an exhibit to the Schedule 13E-3 filed with the SEC in connection with the Merger and incorporated herein by reference. BofA Securities’ opinion and the November 7, 2020 financial presentation will be made available for inspection and copying at the Company’s principal executive offices during its regular business hours by any interested Company stockholder or its representative who has been so designated in writing to the Company’s Secretary.

The November 7, 2020 financial presentation provided to the Parent’s Boards included the following material financial analyses:

BofA Securities reviewed publicly available financial and stock market information for Navistar and the following eight publicly traded companies in the Truck OEM industry (the “Truck OEM Selected Companies”), the Capital Goods industry (the “Capital Goods Selected Companies”) and the CV Supply industry (the “CV Supply Selected Companies” and together with the Truck OEM Selected Companies and the Capital Goods Selected Companies, the “Selected Companies”):

BofA Securities reviewed, among other things, enterprise values of the Selected Companies, calculated as equity values based on closing stock prices on November 6, 2020, less industrial cash and cash equivalents, plus industrial debt, plus preferred shares, plus minority/non-controlling interest, less investments in unconsolidated subsidiaries and affiliates, less book value of financial services businesses, and adjusted for after-tax pension liabilities, as applicable, as a multiple of the Selected Companies’ industrial businesses’ fiscal year 2022, a period consistent with the Company’s fiscal year 2022, estimated earnings before interest, taxes, depreciations and amortization, commonly referred to as EBITDA, adjusted for pension liabilities and associated carrying costs and for capitalized development costs under International Financial Reporting Standards (“Ind. Pen. Adj. EBITDA”, and such multiple, “2022 Ind. Pen. Adj. EBITDA”). The overall low to high fiscal year 2022 Ind. Pen. Adj. EBITDA multiples observed for the Selected Companies were 3.5x to 14.8x (with an average of 8.5x and a median of 7.7x). BofA Securities then applied fiscal year 2022 Ind. Pen. Adj. EBITDA multiples of 7.0x to 8.0x derived from the Selected Companies, based on its professional judgment and experience, to the Company’s fiscal year 2022 Ind. Pen. Adj. EBITDA. Estimated financial data of the Selected Companies were based on publicly available research analysts’ estimates, and estimated financial data of the Company were based on the Parent-Navistar Forecasts. This analysis indicated the following approximate implied per share equity value reference ranges for the Company, rounded to the nearest $0.25, as compared to the Merger Consideration:

No company used in this analysis is identical or directly comparable to the Company. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the public trading or other values of the companies to which the Company was compared.

BofA Securities reviewed, to the extent publicly available, financial information relating to the following four selected announced transactions involving Truck OEM manufacturers:

No company, business or transaction used in this analysis is identical or directly comparable to the Company or the Merger. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the acquisition or other values of the companies, business segments or transactions to which the Company and the Merger were compared.

BofA Securities performed a discounted cash flow analysis of the Company to calculate the estimated present value of the standalone unlevered, after-tax free cash flows that the Company was forecasted to generate from the fourth fiscal quarter of 2020 through fiscal year 2025 based on the Parent-Navistar Forecasts, in which the terminal year assumes mid-cycle Industrial Revenue, 6% Ind. Pen. Adj. EBIT margin without Synergies and 8% Ind. Pen. Adj. EBIT margin with Synergies, normalized capital expenditures equal to 3% of Industrial Revenue, depreciation equal to 99% of capital expenditures, no changes in net working capital, a tax rate of 26% and certain Balance Sheet Adjustments estimated by Parent management to be in the amount of $621,000,000 (i) with and without the Synergies and (ii) with and without the value of net operating loss (“NOL”) tax attributes of the Company. As used in this section, “Ind. Pen. Adj. EBIT” means Ind. Pen. Adj. EBITDA less depreciation and amortization. In each case, BofA Securities calculated terminal values for the Company by extrapolating the Company’s equity value per share at perpetuity growth rates of 0.75% to 1.25%, which perpetuity growth rates were selected based on BofA Securities’ professional judgment and experience as well as guidance from Parent management. In each case, the cash flows and terminal values were then discounted to present value as of July 31, 2020 using discount rates ranging from 7.0% - 9.0%, which were based on an estimate of the Company’s weighted average cost of capital. From the resulting enterprise values, BofA Securities adjusted for net debt, tax adjusted pension liabilities, minority interest, and book value of financial services as well as other customary adjustments as identified by Parent management as of July 31, 2020 to derive equity values. This analysis indicated the following approximate implied per share equity value reference ranges for the Company, rounded to the nearest $0.25, as compared to the Merger Consideration:

BofA Securities also noted certain additional factors that were not considered part of BofA Securities’ material financial analyses with respect to its opinion but were referenced for informational purposes, including, among other things, the following:

As noted above, the discussion set forth above in the section entitled “Bank of America Europe DAC Financial Advisor Materials” is a summary of the material financial analyses presented by BofA Securities to the Boards in connection with its opinion and is not a comprehensive description of all analyses undertaken or factors considered by BofA Securities in connection with its opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description. BofA Securities believes that its analyses summarized above must be considered as a whole. BofA Securities further believes that selecting portions of its analyses and the factors considered or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying BofA Securities’ analyses and opinion. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that such analysis was given greater weight than any other analysis referred to in the summary.

In performing its analyses, BofA Securities considered industry performance, general business and economic conditions and other matters, many of which are beyond the control of Parent and the Company. The estimates of the future performance of Parent and the Company in or underlying BofA Securities’ analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by BofA Securities’ analyses. These analyses were prepared solely as part of BofA Securities’ analysis as to the fairness, from a financial point of view and as of the date of the opinion, to Parent of the Merger Consideration to be paid by Parent in the Merger and were provided to the Boards in connection with the delivery of BofA Securities’ opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the estimates used in, and the ranges of valuations resulting from, any particular analysis described above are inherently subject to substantial uncertainty and should not be taken to be BofA Securities’ view of the actual values of Parent or the Company.

The type and amount of consideration payable in the Merger was determined through negotiations between Parent and the Company, rather than by any financial advisor, and was approved by the Parent’s Boards. The decision to enter into the Merger Agreement was solely that of the Parent’s Boards. As described above, BofA Securities’ opinion and analyses were only one of many factors considered by the Parent’s Boards in their evaluation of the proposed Merger and should not be viewed as determinative of the views of Parent’s Boards or management with respect to the Merger or the Merger Consideration.

Parent has agreed to pay BofA Securities for its services in connection with the Merger an aggregate fee of EUR 10,800,000, a portion of which was payable upon delivery of its opinion and a significant portion of which is contingent upon consummation of the Merger. Parent also has agreed to reimburse BofA Securities for its expenses incurred in connection with BofA Securities’ engagement and to indemnify BofA Securities, any controlling person of BofA Securities and each of their respective directors, officers, employees, agents and affiliates against specified liabilities, including liabilities under the federal securities laws.

BofA Securities and its affiliates comprise a full service securities firm and commercial bank engaged in securities, commodities and derivatives trading, foreign exchange and other brokerage activities, and principal investing as well as providing investment, corporate and private banking, asset and investment management, financing and financial advisory services and other commercial services and products to a wide range of companies, governments and individuals. In the ordinary course of their businesses, BofA Securities and its affiliates may invest on a principal basis or on behalf of customers or manage funds that invest, make or hold long or short positions, finance positions or trade or otherwise effect transactions in equity, debt or other securities or financial instruments (including derivatives, bank loans or other obligations) of Parent, the Company and certain of their respective affiliates.

BofA Securities and its affiliates in the past have provided, currently are providing, and in the future may provide investment banking, commercial banking and other financial services to Parent and certain of its affiliates as well as its major stockholder and have received or in the future may receive compensation for the rendering of these services, including (i) having acted or acting as financial advisor to Parent in connection with a merger and acquisitions transaction and (ii) having acted or acting as

In addition, BofA Securities and its affiliates currently are providing and in the future may provide investment banking, commercial banking and other financial services to the Company and may receive compensation for the rendering of these services, including having acting as lender under, certain credit facilities and other credit arrangements of the Company (including acquisition financing and having provided or providing certain treasury and management services and products). From November 1, 2018 through October 31, 2020, BofA Securities and its affiliates derived aggregate revenues from the Company and its affiliates of approximately $18,000,000 for investment and corporate banking services.

Goldman Sachs Bank Europe SE rendered its opinion to Parent’s Executive Board and Parent’s Supervisory Board that, as of November 7, 2020 and based upon and subject to the factors and assumptions set forth therein, the $44.50 in cash per share of the Company’s common stock to be paid by Parent pursuant to the Merger Agreement was fair from a financial point of view to Parent. At Parent’s direction, Goldman Sachs Bank Europe SE also orally described for the Volkswagen Management Board and the Volkswagen Supervisory Board on November 7, 2020 the opinion Goldman Sachs Bank Europe SE had orally rendered to Parent’s Executive Board and Parent’s Supervisory Board to the effect that the $44.50 per share of the Company’s common stock to be paid by Parent pursuant to the Merger Agreement was fair from a financial point of view to Parent, and provided an overview of the financial analyses summarized in this section, in each case on a non-reliance basis and solely for informational purposes of Volkswagen AG in connection with its internal corporate approval as majority stockholder of Parent of Parent’s acquisition of the Company.

In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs Bank Europe SE reviewed, among other things:

Goldman Sachs Bank Europe SE also held discussions with members of the senior management of Parent regarding their assessment of the past and current business operations, financial condition and future prospects of Parent and the Company and the strategic rationale for, and the potential benefits of, the Merger; reviewed the reported price and trading activity for the ordinary bearer shares with no par value (auf den Inhaber lautende Stammaktien ohne Nennbetrag) of Parent, which is referred to in this section as “Parent Common Stock”, and the shares of the Company’s common stock; compared certain financial and stock market information for the Company with similar information for certain other companies the securities of which are publicly traded; and performed such other studies and analyses, and considered such other factors, as Goldman Sachs Bank Europe SE deemed appropriate.

For purposes of rendering this opinion, Goldman Sachs Bank Europe SE, with Parent’s consent, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by, it, without assuming any responsibility for independent verification thereof. In that regard, Goldman Sachs Bank Europe SE assumed with Parent’s consent that the Business Forecasts, including the Synergies and Tax Forecasts, were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of Parent and that Parent will retain its investment grade rating profile following the consummation of the Merger, facilitated by the support of Volkswagen as the corporate parent of Parent. Goldman Sachs Bank Europe SE did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities, and any liabilities resulting from actual or potential arbitration, litigation, claims, investigations or other proceedings) of Parent or the Company or any of their respective subsidiaries and was not furnished with any such evaluation or appraisal. Goldman Sachs Bank Europe SE assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Merger will be obtained without any adverse effect on Parent or the Company or on the expected benefits of the Merger in any way meaningful to its analysis. Goldman Sachs Bank Europe SE has also assumed that the Merger will be consummated on the terms set forth in the Merger Agreement, without the waiver or modification of any term or condition the effect of which would be in any way meaningful to its analysis.

Goldman Sachs Bank Europe SE’s opinion does not address the underlying business decision of Parent to engage in the Merger, or the relative merits of the Merger as compared to any strategic alternatives that may be available to Parent; nor does it address any legal, regulatory, tax or accounting matters. Goldman Sachs Bank Europe SE’s opinion addresses only the fairness from a financial point of view to Parent, as of the date of the opinion, of the $44.50 in cash per share of the Company’s common stock to be paid by Parent pursuant to the Merger Agreement. Goldman Sachs Bank Europe SE’s opinion does not express any view on, and does not address, any other term or aspect of the Merger Agreement or the Merger or any term or aspect of any other agreement or instrument contemplated by the Merger Agreement or entered into or amended in connection with the Merger, including for the purpose of financing the Merger, the fairness of the Merger to, or any consideration received in connection therewith by, the holders of any class of securities, creditors, including providers of financing, or other constituencies of Parent; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the stockholders, officers, directors or employees of the Company, or any class of such persons, in connection with the Merger, whether relative to the $44.50 in cash per share of the Company’s common stock to be paid by Parent pursuant to the Merger Agreement or otherwise. Goldman Sachs Bank Europe SE’s opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Goldman Sachs Bank Europe SE as of, the date of the opinion and Goldman Sachs Bank Europe SE assumes no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of its opinion. In addition, Goldman Sachs Bank Europe SE does not express any opinion as to the prices at which shares of Parent Common Stock and shares of the Company’s common stock will trade at any time, as to the potential effects of volatility in the credit, financial and stock markets on Parent or the Company or the Merger, or as to the impact of the Merger on the solvency or viability of Parent or the Company or the ability of Parent or the Company to pay their respective obligations when they come due. Goldman Sachs Bank Europe SE’s advisory services and its opinion were provided for the information and assistance of Parent’s Executive Board and Parent’s Supervisory Board in connection with their consideration of the Merger and such opinion does not constitute a recommendation as to how any holder of shares of the Company’s common stock should vote with respect to the Merger or any other matter. Goldman Sachs Bank Europe SE’s opinion was approved by a fairness committee of Goldman Sachs Bank Europe SE and its affiliates.

The following is a summary of the material financial analyses delivered by Goldman Sachs Bank Europe SE to Parent’s Executive Board and Parent’s Supervisory Board in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs Bank Europe SE, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs Bank Europe SE. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs Bank Europe SE’s financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before November 6, 2020, the last completed trading day before the public announcement of the Merger, and is not necessarily indicative of current or future market conditions.

Goldman Sachs Bank Europe SE analyzed, for reference only, the $44.50 in cash per share of the Company’s common stock to be paid by Parent pursuant to the Merger Agreement in relation to (i) the closing price per share of the Company’s common stock on January 30, 2020, (ii) the price per share of the Company’s common stock implied by (1) the average trading performance of PACCAR Inc. common stock and Volvo AB B-shares (such companies are referred to in this section as the “selected companies”) for the period from January 30, 2020 to November 6, 2020 and (2) the closing price per share of the Company’s common stock on January 30, 2020, (iii) the volume weighted average price, which is referred to in this section as “VWAP”, per share of the Company’s common stock for the 90-day trading period ended January 30, 2020, (iv) the highest closing price per share of the Company’s common stock for the 52-week period ended January 30, 2020 and (v) the average price per share of the Company’s common stock for the period from January 1, 2005 to November 6, 2020. Although neither of the selected companies is directly comparable to the Company, Goldman Sachs Bank Europe SE selected these companies because they are publicly traded companies that operate in the same sector as the Company with certain operations that for purposes of the analysis may be considered similar to certain operations of the Company.

This analysis indicated that $44.50 in cash per share of the Company’s common stock to be paid by Parent pursuant to the Merger Agreement represented:

Using the Business Forecasts, Goldman Sachs Bank Europe SE performed an illustrative discounted cash flow analysis of the Company on a standalone basis. Using discount rates ranging from 8.0% to 9.0%, reflecting estimates of the Company’s weighted average cost of capital, Goldman Sachs Bank Europe SE discounted to present value as of July 31, 2020 (i) estimates of unlevered industrial free cash flow for the Company for the fourth quarter of 2020, and then annually through 2025, as reflected in the Business Forecasts, and (ii) a range of illustrative industrial terminal values for the Company. The terminal values were calculated by applying (i) perpetuity growth rates ranging from 1.0% to 2.0% to a terminal year estimate of industrial revenue to be generated by the Company as of October 31, 2025, (ii) industrial earnings before interest and taxes, which is referred to in this section as “Ind. EBIT”, margin of 6.0% and (iii) certain other terminal value estimates, each as provided by the management of Parent. The analysis implied multiples of industrial terminal value to last 12 months, which is referred to in this section as “LTM Ind. EBIT”, ranging from 8.8x to 11.8x. Goldman Sachs Bank Europe SE derived the discount rates by application of the Capital Asset Pricing Model, which is referred to in this section as “CAPM”, which requires certain company-specific inputs, including the Company’s target capital structure weightings, the cost of long-term debt, future applicable marginal cash tax rate and an equity beta for the Company, as well as certain financial metrics for the United States financial markets generally. The range of perpetuity growth rates was estimated by Goldman Sachs Bank Europe SE utilizing its professional judgment and experience, taking into account the Business Forecasts and market expectations regarding long-term real growth of gross domestic product and inflation. Goldman Sachs Bank Europe SE derived ranges of illustrative industrial enterprise values for the Company by adding the ranges of present values it derived above. Goldman Sachs Bank Europe SE then subtracted the amount of the Company’s industrial financial debt, industrial cash and cash equivalents and pension underfunding / Other Postemployment Benefits (“OPEB”) liabilities, each as of July 31, 2020, as well as the value of certain other Company enterprise value adjustments, each as provided by the management of Parent, from the range of illustrative industrial enterprise values it derived for the Company to derive a range of illustrative equity values for the Company. Goldman Sachs Bank Europe SE then divided the range of illustrative equity values it derived by the number of fully diluted outstanding shares of the Company’s common stock to derive a range of illustrative present values per share of the Company’s common stock ranging from $24.00 to $42.00, rounded to the nearest dollar. Goldman Sachs Bank Europe SE calculated the number of fully diluted outstanding shares based on total outstanding equity instruments (including potentially dilutive securities) of 101,600,000, as provided by the management of Parent.

Using the Business Forecasts (including the Synergies), Goldman Sachs Bank Europe SE also performed an illustrative discounted cash flow analysis of the Company pro forma for the Merger. Using discount rates ranging from 8.0% to 9.0%, reflecting estimates of the Company’s pro forma weighted average cost of capital, Goldman Sachs Bank Europe SE discounted to present value as of July 31, 2020 (i) estimates of pro forma industrial unlevered free cash flow for the Company pro forma for the Merger for the fourth quarter of 2020, and then annually through 2025, as reflected in the Business Forecasts (including the Synergies), and (ii) a range of illustrative industrial terminal values for the Company pro forma for the Merger. The terminal values were calculated by applying (i) perpetuity growth rates ranging from 1.0% to 2.0% to a terminal year estimate of industrial revenue to be generated by the Company pro forma for the Merger as of October 31, 2025, (ii) Ind. EBIT margin of 8.0% (including the Synergies) and (iii) certain other terminal value estimates, each as provided by the management of Parent. The analysis implied multiples of industrial terminal value to LTM Ind. EBIT ranging from 7.1x to 9.5x. Goldman Sachs Bank Europe SE derived the discount rates by application of CAPM. The range of perpetuity growth rates was estimated by Goldman Sachs Bank Europe SE utilizing its professional judgment and experience, taking into account the Business Forecasts and market expectations regarding long-term real growth of gross domestic product and inflation. Goldman Sachs Bank Europe SE derived ranges of illustrative industrial enterprise values for the Company pro forma for the Merger by adding the ranges of present values it derived above. Goldman Sachs Bank Europe SE then subtracted the amount of the Company’s industrial financial debt, industrial cash and cash equivalents and pension underfunding / OPEB liabilities, each as of July 31, 2020, as well as the value of certain other Company enterprise value adjustments, each as provided by the management of Parent, from the range of illustrative industrial enterprise values it derived for the Company pro forma for the Merger to derive a range of illustrative equity values for the Company pro forma for the Merger. Goldman Sachs Bank Europe SE then divided the range of illustrative equity values it derived by the number of fully diluted outstanding shares of the Company’s common stock to derive a range of illustrative present values per share of the Company’s common stock pro forma for the Merger ranging from $45.00 to $69.00 (including the Synergies), rounded to the nearest dollar. Goldman Sachs Bank Europe SE calculated the number of fully diluted outstanding shares based on total outstanding equity instruments (including potentially dilutive securities) of 101,600,000, as provided by the management of Parent.

Goldman Sachs Bank Europe SE reviewed and analyzed, using publicly available information, the acquisition premia for all-cash acquisition transactions announced during the time period from January 1, 2014 to November 6, 2020 involving targets that were public companies based in the United States and acquirers who held ownership in the targets of less than 50% prior to the transaction and increased such ownership to greater than 75% in connection with the transaction where the disclosed enterprise values for the transactions were greater than $250,000,000(for all deals) and greater than $2,500,000,000 (for large deals). For the entire period, using publicly available information, Goldman Sachs Bank Europe SE calculated the median, 1^st quartile, 3^rd quartile and average premia of the price paid in the transactions relative to the target’s stock price one month prior to announcement of the transaction. For all deals, this analysis indicated a median premium of approximately 32% across the period, a 1^st quartile premium of 19% and 3^rd quartile percentile premium of 50% across the period, and an average premium of 41% across the period. For large deals, this analysis indicated a median premium of approximately 31% across the period, a 1^st quartile premium of 18% and 3^rd quartile percentile premium of 48% across the period, and an average premium of 38% across the period. Using this analysis and Goldman Sachs Bank Europe SE’s professional judgment and experience, Goldman Sachs Bank Europe SE applied the low end of a reference range of illustrative premiums of 30% to 40% to the $28.20 price per share of the Company’s common stock implied by (1) the average trading performance of PACCAR Inc. common stock and Volvo AB B-shares during the time period from January 30, 2020 to November 6, 2020 (as further discussed above under “Historical Stock Trading Analysis”) and (2) the closing price per share of the Company’s common stock on January 30, 2020 of $24.07, and applied the high end of the reference range to the $29.37 volume-weighted average price per share of the Company’s common stock for the 90-day trading day period ended January 30, 2020 and calculated a range of illustrative implied equity values per share of the Company’s common stock of $37.00 to $41.00, rounded to the nearest dollar. January 30, 2020 was the last completed trading day prior to the public announcement of Parent’s initial offer to acquire all of the outstanding shares of the Company’s common stock not already owned by Parent.

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs Bank Europe SE’s opinion. In arriving at its fairness determination, Goldman Sachs Bank Europe SE considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs Bank Europe SE made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to Parent, the Company or the Merger.

Goldman Sachs Bank Europe SE prepared these analyses for purposes of Goldman Sachs Bank Europe SE’s providing its opinion to Parent’s Executive Board and Parent’s Supervisory Board as to the fairness from a financial point of view of the $44.50 in cash per share of the Company’s common stock to be paid by Parent pursuant to the Merger Agreement. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of Parent, the Company, Goldman Sachs Bank Europe SE or any other person assumes responsibility if future results are materially different from those forecast.

The Merger Consideration was determined through arm’s-length negotiations between Parent and the Company and was approved by Parent’s Executive Board and Parent’s Supervisory Board. Goldman Sachs Bank Europe SE provided advice to Parent during these negotiations. Goldman Sachs Bank Europe SE did not, however, recommend any specific amount of consideration to Parent, Parent’s Executive Board or Parent’s Supervisory Board or that any specific amount of consideration constituted the only appropriate consideration for the Merger.

As described above, Goldman Sachs Bank Europe SE’s opinion to Parent’s Executive Board and Parent’s Supervisory Board was one of many factors taken into consideration by Parent’s Executive Board and Parent’s Supervisory Board in making their determination to approve the Merger. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs Bank Europe SE in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs Bank Europe SE attached as Annex H.

Goldman Sachs Bank Europe SE and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman Sachs Bank Europe SE and its affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests or with which they co-invest, may at any time purchase, sell, hold or vote

Goldman Sachs Bank Europe SE acted as financial advisor to Parent in connection with, and participated in certain of the negotiations leading to, the Merger. Goldman Sachs Bank Europe SE and its affiliates have provided certain financial advisory and/or underwriting services to the Company and/or its affiliates from time to time for which the Investment Banking Division of Goldman Sachs Bank Europe SE and its affiliates has received, and may receive, compensation, including having acted as bookrunner in connection with a public offering by the Company of its 9.500% Senior Secured Notes due 2025 (aggregate principal amount $600,000,000) in April 2020. During the two year period ended November 7, 2020, Goldman Sachs Bank Europe SE and its affiliates have recognized compensation for financial advisory and/or underwriting services provided by its Investment Banking Division to the Company and/or its affiliates of approximately $400,000. Further, Goldman Sachs Bank Europe SE and its affiliates have provided certain financial advisory and/or underwriting services to Volkswagen and/or its affiliates from time to time for which the Investment Banking Division of Goldman Sachs Bank Europe SE and its affiliates has received, and may receive, compensation, including having acted as joint global coordinator in connection with the initial public offering of 51,376,275 shares of common stock of Parent in July 2019; having acted as joint lead manager in connection with a public offering by Volkswagen International Finance NV, an affiliate of Volkswagen, of its Floating Rate Notes due 2024, 2.625% Notes due 2026, 3.250% Notes due 2030, 4.125% Notes due 2038, 3.375% Notes due 2026, and 4.125% Notes due 2031 (aggregate principal amount €4,250,000,000 and £800,000,000) in November 2018; as bookrunner in connection with a public offering by Volkswagen Bank GmbH, an affiliate of Volkswagen, of its 0.375% Senior Unsecured Notes due 2022 (aggregate principal amount €500,000,000) in June 2019; as financial advisor to Volkswagen in connection with the pending acquisition of 50% of Anhui Jianghuai Automobile Group Holdings Ltd. and 25% of JAC Volkswagen Automotive Co. Ltd. announced in February 2020; and as joint bookrunner in connection with a public offering by Volkswagen Group of America Finance LLC, an affiliate of Volkswagen, of 2.900% Unsecured Notes due 2022 (aggregate principal amount $1,500,000,000), 3,125% Unsecured Notes due 2023 (aggregate principal amount $1,000,000,000), 3,350% Unsecured Notes due 2025 (aggregate principal amount $1,000,000,000), and 3,750% Unsecured Notes due 2030 (aggregate principal amount $500,000,000) in May 2020. During the two year period ended November 7, 2020, Goldman Sachs Bank Europe SE has advised Parent and Volkswagen that Goldman Sachs Bank Europe SE and its affiliates have recognized compensation for financial advisory and/or underwriting services provided by its Investment Banking Division to Parent, Volkswagen and/or Volkswagen’s affiliates, other than the Company as described separately above, of approximately $10,600,000. Goldman Sachs Bank Europe SE and its affiliates may also in the future provide financial advisory and/or underwriting services to Parent, Volkswagen, the Company, MHR, and their respective affiliates and, as applicable, portfolio companies, for which the Investment Banking Division of Goldman Sachs Bank Europe SE and its affiliates may receive compensation. Affiliates of Goldman Sachs Bank Europe SE and its affiliates also may have co-invested with affiliates of the Company and their respective affiliates from time to time and may have invested in limited partnership units of affiliates of the Company from time to time and may do so in the future.

Parent’s Executive Board and Parent’s Supervisory Board selected Goldman Sachs Bank Europe SE as their financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the Merger. Pursuant to a letter agreement dated April 21, 2020, as amended by the letter agreement, dated November 5, 2020, Parent engaged Goldman Sachs Bank Europe SE to act as its financial advisor in connection with the Merger. The engagement letter between Parent and Goldman Sachs Bank Europe SE provides for a transaction fee of €12,500,000, all of which is contingent upon consummation of the Merger. In addition, Parent has agreed to reimburse Goldman Sachs Bank Europe SE for certain of its expenses, including attorneys’ fees and disbursements, and to indemnify Goldman Sachs Bank Europe SE against various liabilities, including certain liabilities under the federal securities laws.

A copy of Goldman Sachs Bank Europe SE’s written presentation made to Parent’s Executive Board and Parent’s Supervisory Board on November 7, 2020 has been attached as an exhibit to the Schedule 13E-3 filed with the SEC in connection with the Merger and will be available to any interested stockholder of the Company (or any representative of a stockholder who has been so designated in writing) to inspect and copy at the Company’s principal executive offices during regular business hours.

This proxy statement and the other documents referenced herein, including, without limitation, statements relating to the Merger, may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, each as amended. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the consummation of the Merger and the anticipated benefits thereof. Forward-looking statements provide current expectations of future events and include any statement that does not directly relate to any historical or current fact. Words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “projects,” or other similar expressions may identify such forward-looking statements.

These and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those discussed in forward-looking statements, including, as a result of factors, risks and uncertainties over which we have no control. The inclusion of such statements should not be regarded as a representation that any plans, estimates or expectations will be achieved. You should not place undue reliance on such statements. Important factors, risks and uncertainties that could cause actual results to differ materially from such plans, estimates or expectations include, but are not limited to, the following: (i) conditions to the completion of the Merger, including stockholder approval of the Merger Proposal, may not be satisfied or the regulatory approvals required for the Merger may not be obtained, in each case, on the terms expected or on the anticipated schedule; (ii) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement between the parties to the Merger or affect the ability of the parties to recognize the benefits of the Merger; (iii) the effect of the announcement or pendency of the Merger on the Company’s business relationships, operating results and business generally; (iv) risks that the Merger disrupts the Company’s current plans and operations and potential difficulties in the Company’s employee retention as a result of the Merger; (v) risks related to diverting management’s attention from the Company’s ongoing business operations; (vi) potential litigation that may be instituted against the Company or its directors or officers related to the Merger or the Merger Agreement between the parties to the Merger and any adverse outcome of any such potential litigation; (vii) the amount of the costs, fees, expenses and other charges related to the Merger, including in the event of any unexpected delays; (viii) any adverse effects on the Company by other general industry, economic, business and/or competitive factors; (ix) other risks to consummation of the Merger, including the risk that the Merger will not be consummated within the expected time period, or at all, which may affect the Company’s business and the price of the Company’s common stock; and (x) such other factors as are set forth in the Company’s periodic public filings with the SEC, including, but not limited to, those described under the headings “Risk Factors” and “Forward Looking Statements” in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2020 and in its other filings made with the SEC from time to time, which are available via the SEC’s website at www.sec.gov. The consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on the Company’s financial condition, results of operations, credit rating or liquidity.

Forward-looking statements reflect the views and assumptions of management as of the date of this communication with respect to future events. The Company does not undertake, and hereby disclaims, any obligation, unless required to do so by applicable securities laws, to update any forward-looking statements as a result of new information, future events or other factors. The inclusion of any statement in this communication does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

This proxy statement is being furnished to our stockholders as part of the solicitation of proxies by the Board for use at the Annual Meeting to be held virtually on [•], 2021 at [•] [a.m.], Central Time, or at any adjournment or postponement thereof.

The Company’s stockholders must approve the Merger Proposal in order for the Merger to occur. If the Company’s stockholders fail to approve the Merger Proposal, the Merger will not occur. A copy of the Merger Agreement is attached as Annex A to this proxy statement, which we encourage you to read carefully and in its entirety.

The vote on the Merger Compensation Proposal is a vote separate and apart from the vote on the Merger Proposal. Accordingly, a stockholder may vote to approve the Merger Proposal and vote not to adopt the Merger Compensation Proposal, and vice versa. Because the vote on the Merger Compensation Proposal is advisory in nature only, it will not be binding on the Company, Parent or the surviving corporation in the Merger. Accordingly, if the Merger Agreement is adopted by the Company’s stockholders and the Merger is completed, the Merger-related compensation may be paid to the Company’s named executive officers to the extent payable in accordance with the terms of their compensation agreements and arrangements even if the stockholders do not approve the Merger Compensation Proposal.

The Board has fixed the close of business on [•], 2021 as the record date for the determination of stockholders entitled to receive notice of, and to vote virtually at, the Annual Meeting, and any adjournments or postponements thereof. Only holders of record of our common stock as of the close of business on the record date are entitled to receive notice of, and to vote (virtually or by proxy) at, the Annual Meeting and at any adjournment or postponement thereof.

As of the close of business on the record date, there were [•] shares of common stock outstanding. Each holder of our common stock is entitled to cast one vote per such share on each matter properly brought before the Annual Meeting for each share of our common stock that such holder owned as of the record date.

Under the By-Laws, the presence at the Annual Meeting, virtually or represented by proxy, of the holders of one-third of the shares of our common stock issued and outstanding as of the close of business on the record date constitutes a quorum for the transaction of business at the Annual Meeting. Once a share is represented at the Annual Meeting, it will be counted for the purpose of determining a quorum at the Annual Meeting. Shares of our common stock represented at the Annual Meeting but not voted, including shares of our common stock for which proxies have been received but for which stockholders have abstained, will be treated as present at the Annual Meeting for purposes of determining the presence or absence of a quorum for the transaction of all business. Broker non-votes will be treated as present at the Annual Meeting for purposes of determining the presence or absence of a quorum. Your vote is very important, regardless of the number of shares of our common stock you own. Because stockholders cannot take any action at the Annual Meeting unless one-third of the shares of our common stock issued and outstanding and entitled to vote is represented, it is important that you attend the Annual Meeting virtually or are represented by proxy at the Annual Meeting.

Only stockholders who owned shares as of the record date, or their duly appointed proxies, and our guests may virtually attend the Annual Meeting. To enter the meeting, you will need your assigned 16-digit control number. The 16-digit control number will be included in the Notice, or on your proxy card, voting instruction form or other applicable proxy notices. If you hold your shares in “street name” through a bank, brokerage firm or other nominee, your assigned 16-digit control number should be included with your voting instructions received from your bank, brokerage firm or other nominee. If your bank, brokerage firm or other nominee has not provided you with your assigned 16-digit control number, please contact them for instructions on how to attend the virtual Annual Meeting.

Approval of the Merger Proposal requires the affirmative vote of the holders of a majority of the shares of our common stock outstanding as of the close of business on the record date. For the Merger Proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Abstentions will not be counted as votes cast in favor of the Merger Proposal, but will count for the purpose of determining whether a quorum is present. Your vote is very important, regardless of the number of shares of our common stock you own. Because stockholders cannot take any action at the Annual Meeting unless the holders of a majority of the shares of our common stock issued and outstanding and entitled to vote thereat is represented, it is important that you attend the Annual Meeting virtually or are represented by proxy at the Annual Meeting. If you fail to return your proxy card, submit your proxy by telephone, QR Code or the Internet or vote virtually at the Annual Meeting, or if your shares are held in “street name” by your bank, brokerage firm or other nominee and you fail to instruct your bank, brokerage firm or other nominee to vote your shares of common stock, your shares will have the same effect as a vote “AGAINST” approval of the Merger Proposal.

If your shares of our common stock are registered directly in your name with our Transfer Agent, you are considered, with respect to those shares of our common stock, the stockholder of record. This proxy statement and proxy card have been sent directly to you by the Company. As the stockholder of record, you have the right to vote virtually at the Annual Meeting or to grant your voting rights directly to the Company or to a third party by a proxy duly executed or transmitted in a manner in accordance with applicable law.

If your shares of our common stock are held in “street name” through a bank, brokerage firm or other nominee, you are considered the beneficial owner of those shares. In that case, this proxy statement has been forwarded to you by your bank, brokerage firm or other nominee who is considered, with respect to those shares of our common stock, the stockholder of record. As the beneficial owner, you have the right to direct your bank, brokerage firm or other nominee how to vote your shares by following their instructions for voting. Your bank, brokerage firm or other nominee should send you, as the beneficial owner, a package describing the procedure for voting your shares. Banks, brokerage firms or other nominees who hold shares in “street name” for customers generally have the authority to vote on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokerage firms and other nominees are precluded from exercising their voting discretion with respect to approving non-routine matters, such as the Merger Proposal, the Merger Compensation Proposal, the Election of Directors Proposal, the Say-On-Pay Proposal and the Adjournment Proposal, and, as a result, absent specific instructions from the beneficial owner of such shares of our common stock, banks, brokerage firms or other nominees are not empowered to vote those shares of our common stock on those non-routine matters.

Approval of the Merger Compensation Proposal requires the affirmative vote of the holders of a majority of the shares of our common stock that are present virtually or by proxy at the Annual Meeting and entitled to vote on such proposal. The Merger Compensation Proposal is an advisory vote and the results will not be binding on the Board or the Company. For this proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” For purposes of the Merger Compensation Proposal, if you virtually attend the

Approval of each of the director nominees in the Election of Directors Proposal requires the affirmative vote of a plurality of the shares present virtually or represented by proxy at the Annual Meeting and entitled to vote on each director nominee in the Election of Directors Proposal. With respect to the Election of Directors Proposal, you may vote “FOR” all nominees, “WITHHOLD” your vote as to all nominees, or “FOR” all nominees except those specific nominees from whom you “WITHHOLD” your vote. A properly executed proxy card marked “WITHHOLD” with respect to the election of one or more directors will not be voted with respect to the director or directors indicated. Proxies may not be voted for more than nine directors and stockholders may not cumulate votes in the election of directors. Abstentions and broker non-votes will not have an effect on this Election of Directors Proposal.

Approval of the Say-On-Pay Proposal requires the affirmative vote of the holders of a majority of the shares of our common stock that are present virtually or represented by proxy at the Annual Meeting and entitled to vote on such proposal. The Say-On-Pay Proposal is an advisory vote and the results will not be binding on the Board or the Company. With respect to the Say-On-Pay Proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” If you abstain from voting on the Say-On-Pay Proposal, the abstention will have the same effect as an “AGAINST” vote. Broker non-votes will not have an effect on this Say-on-Pay Proposal.

Approval of the Ratification of Independent Accounting Firm Proposal requires the affirmative vote of the holders of a majority of the shares of our common stock present virtually or represented by proxy at the Annual Meeting and entitled to vote on the Ratification of Independent Accounting Firm Proposal. With respect to the Ratification of Independent Accounting Firm Proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” If you abstain from voting on the Ratification of Independent Accounting Firm Proposal, the abstention will have the same effect as an “AGAINST” vote. Broker non-votes will not have an effect on this proposal.

Approval of the Adjournment Proposal requires the affirmative vote of the holders of a majority of the shares of our common stock present virtually or represented by proxy at the Annual Meeting and entitled to vote on the Adjournment Proposal. With respect to the Adjournment Proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” If you abstain from voting on the Adjournment Proposal, the abstention will have the same effect as an “AGAINST” vote. Broker non-votes will not have an effect on this proposal.

Any stockholder of record entitled to vote at the Annual Meeting may submit a proxy via the Internet, by scanning your QR Code, by telephone or by returning the enclosed proxy card in the accompanying postage-paid reply envelope, or may vote by attending the Annual Meeting virtually. If you are a stockholder of record, you will need your assigned 16-digit control number to vote your shares virtually at the Annual Meeting. The control number can be found on the Notice, your proxy card, voting instruction form, or other applicable proxy notices. If your shares of our common stock are held in “street name” through a bank, brokerage firm or other nominee, you should instruct your bank, brokerage firm or other nominee on how to vote your shares of our common stock using the instructions provided by your bank, brokerage firm or other nominee. If you are a beneficial owner and wish to vote virtually at the Annual Meeting, your assigned 16-digit control number should be included with your voting instructions received from the bank, brokerage firm or other nominee. If your bank, brokerage firm or other nominee has not provided you with a 16-digit control number, please contact them for instructions on how to attend the virtual Annual Meeting and vote your shares. If you fail to vote virtually at the Annual Meeting or fail to return your proxy card or fail to submit your proxy via the Internet, scanning your QR Code or by telephone, your shares of common stock will NOT be counted for purposes of determining whether a quorum is present at the Annual Meeting and will have the same effect as a vote “AGAINST” the Merger Proposal. If your shares are held in “street name” by your bank, brokerage firm or other nominee and you fail to instruct your bank, brokerage firm or other nominee to vote, your shares of our common stock will be counted for purposes of determining whether a quorum is present at the Annual Meeting and will have the same effect as a vote “AGAINST” approval of the Merger Proposal. If you fail to vote virtually at the Annual Meeting or fail to return your proxy card or fail to submit your proxy by telephone, scanning your QR Code or the Internet, your shares of our common stock will not have an effect on the Merger Compensation Proposal, the Election of Directors Proposal, the Say-On-Pay Proposal and the Adjournment Proposal.

If you hold shares in “street name” through a bank, brokerage firm or other nominee, you may submit a new, later-dated voting instruction form or contact your bank, brokerage firm or other nominee for specific directions to revoke your voting instructions. You may also vote virtually at the Annual Meeting if you obtain a legal proxy.

Although it is not currently expected, the Annual Meeting may be adjourned or postponed. The Company retains full authority, to the extent set forth in its By-Laws, for the chair of each meeting of the stockholders to, amongst other items, adjourn the meeting and/or as permitted under the DGCL to adjourn the Annual Meeting for any purpose, or to postpone the Annual Meeting before it is convened, without the consent of any stockholder of the Company, provided that the Merger Agreement includes certain limitations on the Company’s ability to postpone or adjourn the Annual Meeting. If there are not sufficient votes at the time of the Annual Meeting to approve the Merger Proposal in accordance with the requisite stockholder vote, then the stockholders of the Company may be asked to vote on the Adjournment Proposal. In the event that the Adjournment Proposal is not approved by the Company’s stockholders at such time, the chair of the Annual Meeting may nevertheless adjourn or postpone the Annual Meeting to another place, if applicable, date or time, in accordance with the By-Laws.

If the Annual Meeting is adjourned, we are not required to give notice of the time and place of the adjourned meeting if announced at the Annual Meeting at which the adjournment is taken, unless the adjournment is for more than 30 days or the Board fixes a new record date for the Annual Meeting. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting. All proxies will be voted in the same manner as they would have been voted at the original convening of the Annual Meeting, except for any proxies that have been effectively revoked or withdrawn prior to the time the proxy is voted at the reconvened meeting.

We are working towards completing the Merger as soon as possible, although we have agreed that Parent is not required to consummate the Merger prior to July 1, 2021. Assuming timely receipt of required regulatory approvals and satisfaction of other closing conditions, including the approval by our stockholders of the Merger Proposal, we anticipate that the Merger will be completed mid-2021. If our stockholders vote to approve the Merger Proposal, the Merger will become effective as promptly as practicable following the satisfaction or waiver of the other conditions to the Merger, subject to the terms of the Merger Agreement. See “The Merger Agreement—Closing and Effective Time of the Merger” beginning on page 86.

If the Merger is completed, the Company’s stockholders who do not vote in favor of the adoption of the Merger Agreement are entitled to appraisal rights under Section 262 of the DGCL in connection with the Merger, but only if they fully comply with all the applicable legal requirements for Section 262 of the DGCL, which are summarized in this proxy statement in the section entitled “Appraisal Rights” beginning on page 197 and set forth in their entirety in Section 262 of the DGCL (attached to this proxy statement as Annex D). This means you may be entitled to have the fair value of your shares of our common stock determined by the Delaware Court of Chancery and to receive payment based on that valuation in lieu of the per share Merger Consideration if you follow exactly the procedures set forth in Section 262 of the DGCL. The ultimate amount you may receive in an appraisal proceeding may be less than, equal to or more than the amount you would have received under the Merger Agreement.

We will bear the costs of solicitation of proxies for the Annual Meeting. In addition to solicitation by mail, directors, officers and our regular employees may solicit proxies from stockholders by telephone, personal interview or otherwise. These directors, officers and employees will not receive additional compensation, but may be reimbursed for out-of-pocket expenses in connection with this solicitation. In addition to solicitation by our directors, officers and employees, we have engaged Alliance Advisors to assist in the solicitation of proxies and provide related advice and informational support, for a fee of $16,000 and telephone charges. The Company has agreed to reimburse Alliance Advisors for certain out-of-pocket fees and expenses and will also indemnify Alliance Advisors, its subsidiaries and their respective directors, officers, employees and agents against certain claims, liabilities, losses, damages and expenses. The Company may advance monies to Alliance Advisors to pay on the Company’s behalf charges rendered by banks, brokers or their agents for their expenses in forwarding proxy materials to beneficial owners of our common stock.

If you have more questions about the Merger, the Annual Meeting or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact Alliance Advisors, our proxy solicitor, by calling toll-free at 833-550-0986. Banks and brokers should also contact Alliance Advisors by calling toll-free at 833-550-0986.

The Company, a Delaware corporation, is an international manufacturer of International^® brand commercial trucks, proprietary diesel engines, and IC Bus^® brand school and commercial buses, as well as a provider of service parts for trucks and diesel engines. The Company also provides retail, wholesale, and lease financing services for its trucks and parts. The Company operates in four principal industry segments: Trucks, Parts, Global Operations and Financial Services. The Company’s core business is the truck and parts markets for the U.S. and Canada, where the Company participates primarily in the Class 6 through 8 vehicle markets and, this year, expanded into the Class 4/5 market with our International^® CV™ product. The Company has one of the largest commercial vehicle parts distribution networks in the U.S. and a captive finance company. Further, this year the Company expanded its service network in North America to approximately 1,000 locations, one of the largest networks in North America. Outside of the Company’s core markets, International^® is one of the leading truck brands in Mexico and much of Latin America; the Company is the largest independent diesel engine company in Brazil. The Company also exports trucks, buses, and engines to niche markets around the world. The Company, formerly known as International Harvester Company, was originally formed in 1847 by Cyrus McCormick as the McCormick Harvesting Machine Company to manufacture and market the McCormick horse-drawn reaper for which he had received a patent in 1834.

Parent is a Societas Europaea, whose shares are listed for trading on the Frankfurt Stock Exchange, and Nasdaq Stockholm, each under the symbol “8TRA”. Parent is an indirect subsidiary of Volkswagen AG and its principal business purpose is the holding of investments in companies whose business purpose is the manufacturing and distribution of vehicles and engines of any kind, as well as such items’ ancillary equipment and all plants, machinery, tools, and other technical products.

Merger Sub, a Delaware corporation and a wholly owned indirect subsidiary of Parent, was formed solely for the purposes of effecting the Merger. Merger Sub has not carried on any activities or operations to date, except for those activities incidental to its formation and undertaken in connection with the transactions contemplated by the Merger Agreement and the Voting Agreements.

The Merger Agreement provides that Merger Sub will merge with and into the Company. The Company will be the surviving corporation in the Merger. As a result of the Merger, the Company will cease to be a publicly traded company and will become a wholly owned indirect subsidiary of Parent. Other than the holder of the sole share of Series B Stock, you will not own any shares of the capital stock of the surviving corporation.

In the Merger, each outstanding share of our common stock will automatically be converted into the right to receive the Common Merger Consideration, without interest, other than shares of our common stock (i) owned by (x) Parent or any of its subsidiaries; or (y) the Company as treasury stock (x) and (y), which we refer to as “excluded shares”; and (ii) stockholders who have not voted in favor of the Merger and properly and validly perfected their statutory rights of appraisal in accordance with Section 262 of the DGCL, which we refer to as “dissenting shares”, which shares will be canceled without payment of any consideration therefor and will cease to exist. Each share of Series D Stock outstanding immediately prior to the Effective Time will be converted into an amount in cash, without interest, equal to the portion of the Common Merger Consideration that would have been payable in respect of such share of Series D Stock had such share converted into our common stock pursuant to the terms of the certificate of incorporation of the Company.

From time to time, the Board, together with senior management of the Company, reviewed and evaluated the Company’s business strategies, opportunities and challenges as part of its consideration and evaluation of the Company’s prospects and stockholder value. These reviews and evaluations focused on a diverse array of topics, including among others, internal growth strategies, potential divestitures, corporate restructurings, commercial collaborations with third parties, potential strategic partnerships and potential acquisitions by the Company. The Board also periodically reviewed with senior management and external advisors the landscape of the trucking industry and discussed the possibility of an acquisition of the Company by a strategic buyer. Except as otherwise described below, none of these discussions progressed beyond the initial stages to a specific proposal for a potential merger with, or acquisition of, the Company.

In September 2016, TRATON (including its predecessor entities) and the Company entered into an agreement for the issuance of and sale to TRATON of shares of the Company’s common stock that represented approximately 16.6% of the Company’s then-outstanding common stock on a pro forma basis. In connection with TRATON’s investment in the Company, TRATON and the Company also entered into a strategic alliance in the form of certain license, technology and procurement arrangements (the “Strategic Alliance”) and the Stockholder Agreement, which includes certain commitments from each of TRATON and the Company related to TRATON’s ownership of the Company’s common stock, including customary standstill provisions, which, among other things, prohibit TRATON from, without the Company’s prior written consent, soliciting proxies with respect to the voting of any securities of the Company, acquiring additional securities of the Company and making public proposals relating to the Company (collectively, the “Standstill Provisions”), registration rights and board representation rights.

Since September 2016, TRATON and the Company developed a strong business relationship through the Strategic Alliance and the appointment of Mr. Andreas Renschler, TRATON’s then Chief Executive Officer, and Mr. Matthias Gründler, TRATON’s then Chief Financial Officer, to the Board on February 28, 2017. On August 14 2018, Mr. Christian Schulz, TRATON’s Chief Financial Officer replaced Mr. Gründler, now TRATON’s Chief Executive Officer, as one of TRATON’s appointees to the Board (such directors, during the terms of their respective service on the Board, the “TRATON Directors”). On July 15, 2020, Mr. Renschler resigned from the Board in connection with his resignation as the Chief Executive Officer of TRATON and from the Executive Board of TRATON.

On February 14, 2017, during a joint meeting of the Board and the nominating and governance committee of the Board, the Board discussed, among other things, the formation of an ad hoc committee of the Board to (i) review, oversee, monitor and act as a liaison for the Strategic Alliance between the Company and TRATON and any other strategic alliance, collaboration or acquisition involving the Company and (ii) report its findings and make recommendations to the Board with respect thereto

From time to time in connection with the Strategic Alliance, representatives of the Company and TRATON had a number of discussions, but no specific proposals or agreements for a potential business combination were made, negotiated or drafted between the Company and TRATON as part of those discussions except as otherwise described herein. At any meetings of the Board at which any transaction with TRATON or actions or decisions with respect to the Strategic Alliance, TRATON’s proposals described below or the Merger were discussed, the TRATON Directors recused themselves from such meeting or portion thereof.

During October, November and December of 2019, TRATON consulted certain external advisors, including Davis Polk & Wardwell LLP (“Davis Polk”), BofA Securities and Goldman Sachs Bank Europe SE, in connection with its preliminary exploratory consideration regarding the possibility of pursuing a transaction to acquire the equity in the Company not owned by it, including with respect to potential structures for a transaction, legal matters and TRATON’s obligations under the Stockholders Agreement.

On January 9, 2020, Curt Kramer, the Company’s Senior Vice President and General Counsel, met with Mr. Schulz and Dr. Klaus Schartel, TRATON’s General Counsel, in Germany to discuss general business matters relating to the Strategic Alliance. During those meetings, Mr. Schulz and Dr. Schartel indicated to Mr. Kramer that TRATON may potentially seek a waiver of certain portions of the Standstill Provisions that restricted the making of public proposals in connection with a potential offer for the Company in light of the fact that under applicable legal requirements any such offer would need to be publicly disclosed.

On January 9, 2020, after meeting with Mr. Schulz and Dr. Schartel, Mr. Kramer updated Mr. Clarke on the meeting, including that Mr. Clarke should expect to receive a call from Mr. Renschler regarding a potential waiver of certain portions of the Standstill Provisions in connection with a potential offer for the Company.

On January 10, 2020, Mr. Schulz called Mr. Clarke and confirmed what Mr. Kramer had told Mr. Clarke the night before, i.e., to expect to soon receive a call from Mr. Renschler.

On or about January 13, 2020, the Company contacted its outside legal counsel, Sullivan & Cromwell LLP (“Sullivan & Cromwell”), to discuss the recent discussions with TRATON and the possibility of a business combination with TRATON.

Between, on or about January 13 and January 17, 2020, Mr. Clarke informed Walter Borst, the Company’s Executive Vice President and Chief Financial Officer, Persio Lisboa, the Company’s then Executive Vice President and Chief Operating Officer, and the other members of the Chairman’s Committee, that representatives of TRATON had indicated that TRATON had not made any final decision and was evaluating seeking a waiver of certain portions of the Standstill Provisions and considering whether to make a proposal to acquire the Company.

On or around January 16, 2020, Mr. Renschler called Mr. Clarke to discuss a waiver of certain portions of the Standstill Provisions.

On or around January 16, 2020, Dr. Schartel called Mr. Kramer to discuss a waiver of certain portions of the Standstill Provisions. Mr. Kramer asked Dr. Schartel to request the waiver of such Standstill Provisions in writing per the procedures set out in the Stockholder Agreement.

On January 16, 2020, a representative of Sullivan & Cromwell received a communication from a representative of TRATON’s outside legal counsel, Davis Polk, indicating that if TRATON were to wish to make an offer to acquire the Company, it would request that the Company waive certain portions of the Standstill Provisions, which request Sullivan & Cromwell communicated to Mr. Kramer. Later that same day, Mr. Kramer received an email from a representative of Davis Polk explaining that if TRATON were to decide to make an offer it would need to amend its Schedule 13D filing with respect to the Company and make an “ad hoc” filing under European disclosure requirements and discussing the format that a possible waiver of certain portions of the Standstill Provisions might take in light of the foregoing requirements.

On January 16, 2020, the Chairman’s Committee met telephonically, with Mr. Kramer in attendance. Mr. Clarke advised the Chairman’s Committee of recent discussions with TRATON regarding the possibility of TRATON making a proposal to acquire the Company. The Chairman’s Committee also discussed the process for retaining financial advisors to advise the Company in connection with such a proposal and advising the full Board of discussions with TRATON regarding the possibility of receiving a proposal to acquire the Company.

Between on or about January 20 and January 24, 2020, Mr. Clarke informed the members of the Board who are not members of the Chairman’s Committee of the possibility of a proposal by TRATON to acquire the Company.

On January 23, 2020, Messrs. Clarke and Renschler discussed Mr. Clarke’s upcoming trip to Sweden for regularly scheduled Strategic Alliance meetings with representatives of TRATON.

On January 23, 2020, Mr. Kramer sent a representative of Davis Polk an email confirming the Company’s waiver of certain portions of the Standstill Provisions which would otherwise have restricted TRATON from making any public disclosure of any proposal it made to acquire the Company.

On or about January 24, 2020, the Company contacted Brunswick Group LLC (“Brunswick”) to discuss the possibility of Brunswick providing the Company with public relations agency services in connection with a potential business combination with TRATON.

On January 25, 2020, the Chairman’s Committee met telephonically with certain members of the Company’s senior management in attendance. Mr. Borst provided an update on discussions with J.P. Morgan and PJT Partners regarding retaining them as financial advisors in connection with a potential business combination with TRATON, and recommended that both J.P. Morgan and PJT Partners be engaged by the Company subject to the negotiation and approval of satisfactory engagement terms and a satisfactory review of the relationship disclosures provided by each financial advisor. The Chairman’s Committee also discussed Mr. Clarke’s January 23, 2020 conversation with Mr. Renschler and Mr. Clarke’s upcoming trip to Sweden for regularly scheduled Strategic Alliance meetings with representatives of TRATON.

On January 27, 2020, Mr. Clarke met with representatives of TRATON in Sweden during regularly scheduled Strategic Alliance meetings. During those meetings, Mr. Renschler informed Mr. Clarke that TRATON’s Executive Board had discussed a potential business combination between the Company and TRATON and to expect a proposal for an acquisition of the Company by the end of January 2020.

On or about January 28 to January 29, 2020, Mr. Schulz called Mr. Clarke and informed him that TRATON was still considering making an offer to acquire the Company, and that TRATON could potentially make such an offer by the end of the week.

On January 30, 2020, the Executive Board and the Supervisory Board of TRATON and the Management Board and the Supervisory Board of Volkswagen AG provided their approval for TRATON to submit a non-binding proposal to acquire all of the issued and outstanding shares of the Company’s common stock not already owned by it for a price of $35.00 per share in cash (the “$35 proposal”).

Immediately after the Executive Board and the Supervisory Board of TRATON and the Management Board and the Supervisory Board of Volkswagen AG provided their approval and on the same day, Mr. Clarke received a letter from Messrs. Renschler and Schulz containing the $35 proposal. Shortly after Mr. Clarke’s receipt of the $35 proposal, TRATON and Volkswagen AG each made an ad-hoc announcement mandatorily required under European and German capital market regulations and issued a joint press release announcing that TRATON had submitted the $35 proposal to the Company. Shortly thereafter on the same day, TRATON filed an amendment to its Schedule 13D, including its offer letter to the Company.

Also on January 30, 2020, the Chairman’s Committee met telephonically, with certain members of the Company’s senior management in attendance. Mr. Clarke informed the Chairman’s Committee of the receipt of the $35 proposal, and the Chairman’s Committee discussed the $35 proposal and the public announcement thereof, retaining financial advisors and the need to hold a meeting with the Board to discuss the $35 proposal and related matters. Around the same time as the Chairman’s Committee meeting, the Company issued a press release confirming receipt of the $35 proposal.

On January 31, 2020, the Chairman’s Committee met telephonically, with certain members of the Company’s senior management in attendance. Mr. Clarke updated the Chairman’s Committee of further discussions with TRATON regarding the $35 proposal, and the Chairman’s Committee continued to discuss the $35 proposal and the retention of financial advisors in connection therewith.

On January 31, 2020, Davis Polk circulated an initial draft of the form of Voting Agreement to certain representatives of TRATON.

On February 3, 2020, PJT Partners provided the Board with a relationship disclosure letter describing relationships with various entities associated with the potential transaction.

On February 4, 2020, PJT Partners and the Company entered into an indemnification agreement pursuant to which the Company agreed to indemnify PJT Partners for any losses arising out of or in connection with financial advisory services provided by PJT Partners.

On February 5, 2020, J.P. Morgan provided the Board with a relationship disclosure letter describing relationships with various entities associated with the potential transaction.

On February 5, 2020, the Board of Directors met telephonically, with certain members of the Company’s senior management and a representative of Sullivan & Cromwell in attendance. Mr. Borst presented a report on the Company’s historical stock price. Mr. Clarke discussed possible preliminary feedback to TRATON on the $35 proposal which would signal that, while the Company was not rejecting the proposal, the offer price was insufficient for a sale of the Company to TRATON and that any request to begin due diligence would be premature. After discussion, the Board expressed support for providing such preliminary feedback to TRATON. Mr. Clarke also provided an update on discussions regarding retaining financial advisors to the Company in connection with a potential transaction and reviewed certain relationship disclosures provided by J.P. Morgan and PJT Partners with the Board.

On February 6, 2020, Mr. Clarke contacted Mr. Schulz and explained that the Company and the Board believed that the $35 proposal was below the price at which discussions regarding a potential acquisition of the Company by TRATON could occur.

On February 13, 2020, the Chairman’s Committee met telephonically, with a member of the Company’s senior management in attendance. The Chairman’s Committee reviewed the status of discussions with PJT Partners and J.P. Morgan and approved resolutions to retain PJT Partners and J.P. Morgan as co-financial advisors to the Company in connection with a potential transaction.

On February 18, 2020, at the direction of TRATON and the Company, respectively, representatives of TRATON’s financial advisors, Goldman Sachs Bank Europe SE and BofA Securities met with representatives of J.P. Morgan and PJT Partners to discuss the attractiveness of the $35 proposal, methodologies to approach the valuation of the Company and potential next steps.

On February 25, 2020, the Board met telephonically, with certain members of the Company’s senior management and representatives of J.P. Morgan, PJT Partners and Sullivan & Cromwell in attendance. The Company’s senior management provided an update on the Company’s business and operations. Mr. Borst presented, and the Board discussed, the Company’s senior management’s assessment of estimated synergy opportunities from a potential business combination between the Company and TRATON, including, among other things, (1) cost synergies in procurement, manufacturing, engineering and selling, general and administrative expenses, (2) revenue synergies through the introduction of new products in North America, (3) captive finance synergies leading to market share growth, and (4) cost of capital synergies by refinancing Navistar’s debt.

On March 23, 2020, TRATON issued an ad-hoc announcement mandatorily required under European and German capital market regulations and a press release in conjunction with the release of its Annual Report 2019 indicating that the COVID-19 pandemic prevented it from providing any reliable guidance regarding TRATON’s business performance in 2020.

On or after March 23, 2020, Messrs. Renschler and Schulz informed Mr. Clarke that, due to uncertainty relating to COVID-19, TRATON would pause negotiations in connection with the $35 proposal, but that TRATON’s offer to acquire the Company would not be withdrawn.

On June 16, 2020, Mr. Renschler and Mr. Clarke spoke telephonically to discuss TRATON’s $35 proposal. During the call, Mr. Renschler informed Mr. Clarke that TRATON would not increase its $35 per share offer price, unless the Company agreed to allow TRATON to conduct due diligence on certain matters. Mr. Clarke informed Mr. Renschler that the $35 proposal was insufficient to warrant TRATON commencing due diligence on the Company, and indicated that the Company would need to receive an offer above $40 per share of common stock to consider allowing TRATON to commence due diligence.

On June 22, 2020, Mr. Renschler called Mr. Clarke, and asked if the Company would allow TRATON to commence full due diligence of the Company if TRATON would be willing to increase its offer price to $38 per share of common stock. Mr. Clarke informed Mr. Renschler that an offer of $38 per share would be insufficient to form the basis for TRATON to conduct due diligence.

On or around July 15, 2020, Messrs. Clarke and Borst each spoke with Mr. Gründler to congratulate him on his appointment as CEO of TRATON, and encouraged him to contact them if and when TRATON was ready to continue discussions relating to a potential transaction.

On July 27, 2020, Mr. Clarke spoke with Mr. Gründler regarding Mr. Clarke’s discussion with Mr. Renschler on June 22, 2020 and informed Mr. Grundler that he would be the lead negotiator for the Company with respect to TRATON’s potential acquisition of the Company, if negotiation resumed.

On July 28, 2020, the Chairman’s Committee met telephonically, with certain members of the Company’s senior management and representatives of J.P. Morgan, PJT Partners and Sullivan & Cromwell in attendance. Mr. Clarke provided an update on his discussion with Mr. Gründler from the preceding day, and advised that the purpose of the meeting was to review certain preliminary financial analyses of TRATON’s proposal prepared by J.P. Morgan and PJT Partners. Following discussions, the Chairman’s Committee asked J.P. Morgan and PJT Partners to perform further analysis of the transaction. The Chairman’s Committee agreed to discuss next steps at its next meeting, scheduled for July 31, 2020.

On July 31, 2020, the Chairman’s Committee met telephonically, with certain members of the Company’s senior management and representatives of J.P. Morgan, PJT Partners and Sullivan & Cromwell in attendance. Mr. Clarke reported that he had not had further discussions with Mr. Gründler regarding TRATON’s proposal for a potential transaction, and that he did not anticipate further discussions until after the German summer holiday in August 2020. Representatives of J.P. Morgon and PJT Partners presented a preliminary illustrative combination analysis report, which analyzed, from their understanding of TRATON’s perspective, a potential acquisition of the Company by TRATON and also reviewed certain capital markets observations about TRATON, including its historical share price and certain events since its initial public offering. Following discussion, it was determined that the Company’s senior management and the Chairman’s Committee, with the assistance of J.P. Morgan and PJT Partners, would continue to refine their analysis and strategy with respect to a potential business combination between TRATON and the Company.

On or around August 24, 2020, Messrs. Gründler and Schulz requested a meeting with Messrs. Clarke and Borst to discuss TRATON’s proposal.

On August 24, 2020, Mr. Do Young Kim, a representative of TRATON, sent the Company a preliminary list of due diligence requests to be addressed through disclosures by the Company in a virtual data room or interviews with Company management.

On August 28, 2020, Messrs. Clarke and Borst spoke with Messrs. Rachesky and Intrieri to discuss the status of negotiations with TRATON regarding its proposal for a potential transaction.

On September 2, 2020, Messrs. Clarke and Borst spoke telephonically with Messrs. Gründler and Schulz, to discuss the potential business combination between TRATON and the Company. Messrs. Gründler and Schulz indicated that TRATON may send the Company a revised offer in the near future.

On September 10, 2020, the Executive Board and the Supervisory Board of TRATON and the Management Board and the Supervisory Board of Volkswagen AG provided their approval for TRATON to deliver a revised non-binding proposal to acquire all of the issued and outstanding shares of the Company’s common stock, not already owned by TRATON, for $43.00 per share in cash (the “$43 proposal”).

On September 10, 2020, Mr. Clarke received a letter from Messrs. Gründler and Schulz, which included the $43 proposal. Shortly thereafter on the same day, TRATON and Volkswagen AG each made an ad-hoc announcement mandatorily required under European and German capital markets regulations and TRATON issued a press release announcing its revised $43 proposal to acquire the Company. Shortly thereafter on the same day, TRATON filed an amendment to its Schedule 13D including its revised offer letter to the Company. On the same day, the Company issued a press release confirming receipt of TRATON’s $43 proposal.

Also on September 10, 2020, Messrs. Clarke and Borst spoke with Messrs. Rachesky and Intrieri to discuss TRATON’s $43 proposal.

Also on September 10, 2020, multiple media outlets reported that TRATON made a revised proposal with an increased offer price to acquire the Company.

On September 11, 2020, the Board met telephonically, with certain members of the Company’s senior management and a representative of Sullivan & Cromwell in attendance. Mr. Clarke informed the Board that the purpose of the meeting was to discuss matters relating to the $43 proposal received from TRATON. Mr. Clarke outlined the terms of the $43 proposal and informed the Board of the Chairman’s Committee related to the proposal and the Chairman’s Committee’s recommendation to allow TRATON to commence due diligence. Mr. Borst reviewed a draft press release relating to the $43 proposal. A representative of Sullivan & Cromwell reminded the directors of their fiduciary duties. Mr. Clarke outlined next steps and a proposed timeline. Following discussion, the Board unanimously determined that while the $43 proposal undervalued the Company, it represented an acceptable point for further exploring a potential combination with TRATON. The Board unanimously determined that the best way for TRATON to appreciate the true value of a potential combination was to allow it to conduct due diligence and engage in further synergy discussions between TRATON and with the Company. The Board determined to proceed as outlined by Mr. Clarke.

On September 14, 2020, the Board issued a statement regarding the $43 proposal expressing the Board’s view that while the proposal significantly undervalued the Company, it did represent a starting point for further exploring the possibility of a transaction. The Board expressed publicly its belief that TRATON could appreciate the true value of the Company by conducting due diligence and engaging in further synergy discussions with the Company.

On September 15, 2020, representatives of the Company, TRATON and their respective legal advisors spoke via telephone to discuss the due diligence process.

On September 17, 2020, at the direction of Mr. Kramer, Sullivan & Cromwell sent a draft confidentiality agreement to Davis Polk. Between September 17 and September 23, 2020, the parties and their respective legal advisors exchanged drafts of the confidentiality agreement, and on September 23, 2020 the parties executed the confidentiality agreement.

On September 24, 2020, Messrs. Borst, Clarke and Renier met via video conference with Messrs. Gründler, Schulz and Kim, and presented an analysis of potential transaction synergies, which included an estimate of potentially achievable incremental cost and revenue synergies (in addition to the synergies currently achieved by the companies through their existing Strategic Alliance) from a full combination.

Also on September 24, 2020, the Company opened a virtual data room to TRATON and its advisors. The due diligence process continued through November 6, 2020. The scope of due diligence conducted by TRATON and its advisors included, among other things, financial, operational, legal, compliance, environmental, intellectual property and information technology, labor and human resources, litigation, real property, tax and other due diligence matters.

On October 7, 2020, the Board met via video conference, with certain members of the Company’s senior management and representatives of J.P. Morgan, PJT Partners and Sullivan & Cromwell in attendance. Mr. Borst provided an update on the Company’s December 2019 strategic plan, and the Company’s current outlook as described in the Base Case and Upside Case management projections, as further described in the section entitled “The Merger—Certain Company Forecasts” beginning on page 80. A representative of J.P. Morgan presented certain preliminary valuation analyses, based on the Base Case and Upside Case management projections provided by Company management. A representative of PJT Partners presented the $43 proposal and a preliminary, illustrative pro forma analysis. The Board discussed the financial presentations as well as the upcoming meetings between representatives of the Company and TRATON scheduled for October 9 and 10, 2020. Mr. Clarke stated that the Board may need to convene for a telephonic meeting over the weekend depending on how the meetings between TRATON and the Company progressed.

Also on October 7, 2020, Sullivan & Cromwell sent Davis Polk a revised draft of the Merger Agreement. From October 7, 2020 until the execution of the Merger Agreement on November 7, 2020, the parties and their respective legal advisors exchanged several drafts of, and engaged in numerous discussions and negotiations concerning the terms of, the Merger Agreement. Primary areas of discussion and negotiation included the scope and terms of the interim operating restrictions on the Company with respect to employee matters and financing matters, the inclusion of certain exclusions to the “Material Adverse Effect” provision, including an exclusion for COVID-19 and COVID-19 Measures, the Termination Fee, TRATON’s obligation to obtain regulatory approval, the End Date and the closing condition relating to required regulatory approvals. The parties also had extensive discussions and negotiations with respect to the “deal protection” provisions, particularly the “force the vote” provisions which, as initially proposed by TRATON, would allow the Board to negotiate with third parties who made an unsolicited and bona fide Superior Proposal, from a financial point of view to its stockholders, subject to customary restrictions, and change its recommendation to support the Merger Agreement in connection with such Superior Proposal or an Intervening Event but would not allow the Company to terminate the Merger Agreement in order to enter into a definitive agreement in connection with a Superior Proposal or in connection with an Intervening Event prior to the Company’s stockholders voting on the approval and adoption of the Merger Agreement. In connection with the “force the vote” provisions, TRATON proposed that the Voting Agreements would remain in effect following a change in the Board’s recommendation; provided, however, that a reduced portion of each of the MHR Stockholders and the Icahn Stockholders shares of common stock would remain subject to the Voting Agreements. After extensive discussion and negotiation between the Company, TRATON, Sullivan & Cromwell, Davis Polk, and the MHR Stockholders and Icahn Stockholders’ legal advisors, on October 28, 2020, TRATON agreed to permit the termination of the Merger Agreement in circumstances involving a Superior Proposal without a stockholder vote and to limit the application of the force the vote provisions to a change in the Board’s recommendation in connection with an Intervening Event, and on November 6, 2020, agreed that the Voting Agreements would terminate upon a change in the Board’s recommendation in the event of both a Superior Proposal and an Intervening Event.

Between October 9 and 11, 2020, representatives of the Company and representatives of TRATON met in Boston, Massachusetts, to discuss open diligence matters and negotiate, among other items, the terms of the $43 proposal, including the price.

On October 12, 2020, the Board met via video conference, with certain members of the Company’s senior management and representatives of J.P. Morgan, PJT Partners and Sullivan & Cromwell in attendance. The Board continued to discuss a potential response to TRATON following the Company’s senior management’s meeting with TRATON’s senior management on October 9 and 10, 2020. After lengthy discussion, it was agreed that Company management would approach TRATON with a $50 per share counter proposal and, if necessary, introduce the concept of a contingent value right, with an upside and a downside (the “$50 counter proposal”), and request that TRATON’s stated acceptance deadline of October 14, 2020 be extended.

On October 13, 2020, Messrs. Clarke and Borst spoke with Messrs. Gründler and Schulz to discuss the $50 counter proposal and the possibility of including contingent value rights in the Merger Agreement. Messrs. Gründler and Schulz rejected the $50 counter proposal.

On October 14, 2020, Mr. Borst contacted Mr. Gründler and asked if TRATON was interested in considering using contingent value rights to acquire the Company based on the $50 counter proposal. Mr. Gründler rejected the proposal.

On October 14, 2020, the Board met via video conference, with certain members of the Company’s senior management and representatives of J.P. Morgan, PJT Partners and Sullivan & Cromwell in attendance. Mr. Clarke advised the Board of TRATON’s response to the $50 counter proposal. He stated that TRATON rejected the $50 counter proposal and the request for extension of the acceptance deadline and noted that the $43 proposal would expire at 11:00 a.m. Central Time on such date.

Later on October 14, 2020, Messrs. Gründler and Schulz sent Mr. Clarke a letter stating that TRATON’s $43 proposal would automatically expire if not accepted by 6:00 p.m. Central European Time on Friday, October 16, 2020, thereby extending the acceptance deadline. Shortly thereafter on the same day, TRATON publicly disclosed the October 16, 2020 deadline for the Company to accept TRATON’s $43 proposal and filed an amendment to its Schedule 13D.

Following the public disclosure of TRATON’s letter on October 14, 2020, the Company was contacted by several stockholders encouraging the Company to accept TRATON’s $43 proposal.

On October 14 and 15, 2020, Messrs. Clarke and Borst spoke telephonically several times with Mr. Gründler to discuss increasing the offer price.

On October 15, 2020, each of Messrs. Icahn and Rachesky individually spoke with Mr. Gründler telephonically to discuss TRATON’s $43 proposal.

On October 15, 2020, the Board met telephonically to discuss making a formal counteroffer to TRATON of $44.50 per share in cash, subject to the completion of negotiation of definitive documentation (the “$44.50 counter proposal”).

On October 16, 2020, Messrs. Gründler, Schulz, Schartel and Kim had a telephone conversation with Messrs. Clarke, Borst and Kramer to further discuss the $44.50 counter proposal.

On October 16, 2020, the Board met via video conference, with certain members of the Company’s senior management and a representative from Sullivan & Cromwell in attendance, to review a draft response letter to TRATON formally making the $44.50 counter proposal. The Board approved the making of the $44.50 counter proposal and the sending of the letter. After the Board meeting, Mr. Clarke, on behalf of the Board, sent the letter to Mr. Gründler, making the $44.50 counter proposal in writing as a basis for finalizing definitive agreements in connection with a potential business combination between the Company and TRATON. The Company’s letter also stated that the $44.50 counter proposal had the support of the Company’s two largest stockholders, affiliates of Messrs. Icahn and Rachesky.

On October 16, 2020, after TRATON’s Executive Board and the Supervisory Board’s Executive Committee had granted approval, Messrs. Gründler and Schulz sent Mr. Clarke a letter confirming that the $44.50 counter proposal was an acceptable basis to TRATON for finalization of definitive agreements and stating that TRATON would make a public announcement confirming that its previously announced deadline for the Company’s acceptance of its $43 proposal was no longer in effect. Shortly thereafter on the same day, TRATON made an ad-hoc announcement mandatorily required under European and German capital markets regulations and issued a press release confirming that its previously announced deadline was no longer in effect.

On October 19, 2020, Sullivan & Cromwell sent revised drafts of the Merger Agreement and Voting Agreements to Messrs. Icahn and Rachesky’s respective legal advisors.

On October 19, 2020, Davis Polk sent Sullivan & Cromwell LLP a draft amendment to the confidentiality agreement for the purpose of expanding the scope of the definition of TRATON’s “Representatives” to include actual and potential debt financing sources or hedge counterparties in connection with the potential business combination between the Company and TRATON. Between October 19 and October 28, 2020, the parties and their respective legal advisors exchanged drafts of the amendment to the confidentiality agreement, and on October 28, 2020 the parties executed the amendment to the confidentiality agreement.

On October 19, 2020, Sullivan & Cromwell sent Davis Polk a revised draft of the Merger Agreement, and on October 22, 2020, Sullivan & Cromwell sent Davis Polk a further revised draft of the Merger Agreement.

On October 25, 2020, Sullivan & Cromwell sent Davis Polk a revised draft of the Voting Agreements. From October 25, 2020 until the execution of the Voting Agreements on November 7, 2020, the Icahn Stockholders, the MHR Stockholders, the Company and TRATON and their respective legal advisors exchanged several drafts of and engaged in numerous discussions and negotiations concerning the terms of, the Voting Agreements. The Company and Sullivan & Cromwell served as a liaison between the Icahn Stockholders, the MHR Stockholders and their respective counsel, and TRATON and Davis Polk with respect to such negotiations. Extensive areas of discussion and negotiation included the requirements to vote for and against certain proposals put forth by the Company and TRATON at the Annual Meeting, the restrictions on the transfers of common stock and the continued effectiveness of the Voting Agreements in the case of an adverse recommendation change by the Board. Following such discussions and negotiations, TRATON agreed to limit the Icahn Stockholders and MHR Stockholders voting obligations to certain proposals made by the Company and agreed to terminate the Voting Agreements upon an adverse recommendation change by the Board in connection with the Merger Agreement force the vote provision negotiations. The Icahn Stockholders and MHR Stockholders agreed to support the Merger due to (i) the premium on the Company’s stock price as described in the section “The Merger—Reasons for the Merger; Recommendation of the Company’s Board of Directors” beginning on page 68, (ii) TRATON’s agreement to terminate the Voting Agreement upon an adverse recommendation by the Board as described above, and (iii) the Company’s prospects as an independent company.

Between approximately October 13, 2020 and November 6, 2020, members of TRATON’s management team provided an update to members of TRATON’s Supervisory Board on the status of the acquisition process, including with respect to due diligence findings, valuation and negotiations of the Merger Agreement and Voting Agreements.

On October 29, 2020, at TRATON’s direction, representatives of Goldman Sachs and BofA Securities, on behalf of TRATON, sent representatives of J.P. Morgan and PJT Partners, on behalf of the Company, TRATON’s proposal for a $150,000,000 termination fee, which represents approximately 3.36% of the total estimated diluted equity value of the Company, as calculated based on common stock issued and outstanding as of August 31, 2020. Promptly following the receipt of such proposal, representatives from J.P. Morgan and PJT Partners forwarded such proposal to Messrs. Borst and Kramer at the Company.

Between November 2 and 6, 2020, representatives of the Company and TRATON, together with representatives of Sullivan & Cromwell and Davis Polk, met telephonically to discuss the remaining open items in the Merger Agreement, including the interim operating restrictions, the inclusion of certain exclusions to the “Material Adverse Effect” provision, including an exclusion for COVID-19 and COVID-19 Measures, “deal protection” provisions (including the Termination Fee and the force-the-vote provisions), TRATON’s obligation to obtain regulatory approvals, closing conditions and certain employee-related matters. During the November 3, 2020 negotiations, TRATON agreed to a reduced termination fee of $125,000,000, which represented 2.80% of the total estimated diluted equity value of the Company, as calculated based on common stock issued and outstanding as of November 6, 2020.

On November 4, 2020, PJT Partners provided the Company with a supplemental relationship disclosure letter as an update to its February 3, 2020 letter, describing relationships with various entities associated with the potential transaction.

On November 5, 2020, representatives of Sullivan & Cromwell, Davis Polk and Mr. Icahn’s legal advisors met telephonically to discuss certain key open issues on the Merger Agreement and the Voting Agreement, including the scope of exceptions to the definition of “Material Adverse Effect” and the termination of the Voting Agreements in the case of an adverse recommendation change by the Board.

On November 5, 2020, TRATON and BofA Securities amended the BofA Securities engagement letter to provide for the delivery of a fairness opinion and adjustments to BofA Securities’ fees.

On November 5, 2020, TRATON entered into an amendment to its engagement letter with Goldman Sachs Bank Europe SE, whereby, among other things, TRATON consented to and directed Goldman Sachs Bank Europe SE to disclose to Volkswagen AG, including the Volkswagen Management Board and the Volkswagen Supervisory Board, the fairness opinion that may be rendered to TRATON’s Executive Board and TRATON’s Supervisory Board, together with a summary of Goldman Sachs Bank Europe SE’s financial analyses underlying such fairness opinion summarized under the section entitled “Special Factors—Opinion of Goldman Sachs Bank Europe SE” beginning on page 34, such provision to be subject to the terms of a non-reliance letter agreement entered into on November 4, 2020 between Goldman Sachs Bank Europe SE and Volkswagen AG.

On November 5, 2020, J.P. Morgan provided the Company with an updated relationship disclosure letter describing relationships with various entities associated with the potential transaction. Following review of this information by Mr. Borst and Mr. Kramer, the Company’s senior management determined that based on each of J.P Morgan and PJT Partners updated relationship disclosures, nothing in such disclosures would prevent J.P. Morgan or PJT Partners from delivering their fairness opinions to the Company as financial advisors in connection with the proposed transaction.

On November 6, 2020, Sullivan & Cromwell and Davis Polk exchanged revised drafts of the Merger Agreement and Voting Agreements.

On November 6, 2020, the Board met via video conference with certain members of the Company’s senior management and representatives of J.P. Morgan, PJT Partners and Sullivan & Cromwell in attendance. Mr. Clarke reviewed the status of the Company’s discussions and negotiations with TRATON and a representative from Sullivan & Cromwell reviewed with the Board its fiduciary duties under Delaware law in considering a potential business combination with TRATON. Representatives from J.P. Morgan and PJT Partners reviewed with the Board the financial analyses they performed in connection with the potential business combination with TRATON, as described further in the sections entitled “The Merger—Opinions of the Company’s Financial Advisors—Opinion of J.P. Morgan Securities LLC” beginning on page 74 and “The Merger—Opinions of the Company’s Financial Advisors—Opinion of PJT Partners LP” beginning on page 75 respectively. Representatives from Sullivan & Cromwell reviewed the key terms of the Merger Agreement and the Voting Agreements.

On November 7, 2020, the TRATON Executive Board and TRATON Supervisory Board met with representatives of BofA Securities and Goldman Sachs Bank Europe SE in attendance. Representatives from BofA Securities and Goldman Sachs Bank Europe SE reviewed with the TRATON Management Board and Supervisory Board the financial analyses they performed in connection with the potential business combination with the Company; highlighting certain valuation methods and financial metrics that had been prepared and analyzed as part of BofA Securities and Goldman Sachs Bank Europe SE’s evaluation of the potential business combination, as described further in the sections entitled “Special Factors—Opinion of Bank of America Europe DAC” beginning on page 28 and entitled “Special Factors—Opinion of Goldman Sachs Bank Europe SE” beginning on page 34 respectively. At the request of TRATON’s Executive Board and TRATON’s Supervisory Board, representatives of BofA Securities rendered their oral opinion, which was confirmed by delivery of a written opinion dated November 7, 2020, to the effect that, as of the date thereof and based on and subject to various assumptions and limitations described in its opinion, the Merger Consideration to be paid by TRATON was fair, from a financial point of view, to TRATON. At the request of TRATON’s Executive Board and TRATON’s Supervisory Board, representatives of Goldman Sachs Bank Europe SE then rendered to the TRATON Executive Board and TRATON Supervisory Board an oral opinion, which was subsequently confirmed by delivery of a written opinion dated November 7, 2020, that, as of such date and based upon and subject to the factors and assumptions set forth therein, the $44.50 in cash per share of the Company’s common stock to be paid by TRATON pursuant to the Merger Agreement was fair from a financial point of view to TRATON, as described further in the section entitled “Special Factors—Opinion of Goldman Sachs Bank Europe SE” beginning on page 34. Following further discussion, the TRATON

On November 7, 2020, the Volkswagen Management Board and the Volkswagen Supervisory Board each held a meeting during which they were informed by representatives of TRATON of the results of the due diligence investigation and the negotiations with the Company. At TRATON’s direction, representatives of Goldman Sachs Bank Europe SE orally described for the Volkswagen Management Board and the Volkswagen Supervisory Board the opinion Goldman Sachs Bank Europe SE had orally rendered to TRATON’s Executive Board and TRATON’s Supervisory Board to the effect that the $44.50 per share of the Company’s common stock to be paid by TRATON pursuant to the Merger Agreement was fair from a financial point of view to TRATON, and provided an overview of the financial analyses summarized under the section entitled “Special Factors—Opinion of Goldman Sachs Bank Europe SE” beginning on page 34, in each case on a non-reliance basis and solely for informational purposes of Volkswagen AG in connection with its internal corporate approval as majority stockholder of TRATON of TRATON’s acquisition of the Company. In their meeting the Volkswagen Management Board and the Volkswagen Supervisory Board approved the Merger, the Merger Agreement and the Voting Agreements. The Volkswagen Management Board and the Volkswagen Supervisory Board also approved the grant by Volkswagen International Luxemburg S.A., a wholly owned indirect subsidiary of Volkswagen AG, of an intercompany loan to Parent, as described further in the section entitled “The Merger—Financing of the Merger” beginning on page 85.

On November 7, 2020, the Board met via video conference with certain members of the Company’s senior management and representatives of J.P. Morgan, PJT Partners and Sullivan & Cromwell in attendance. Mr. Clarke reported that the Volkswagen Management Board, Volkswagen Supervisory Board, TRATON’s Executive Board and TRATON’s Supervisory Board approved the transaction and the Merger Agreement earlier that day. A representative of Sullivan & Cromwell reminded the Board of the fiduciary duties discussion from the previous day. At the request of the Board, representatives of each of J.P. Morgan and PJT Partners rendered its respective oral opinion—subsequently confirmed by delivery of written opinions by each of J.P. Morgan and PJT Partners on November 7, 2020—that as of the date thereof and based upon and subject to, among other things, the procedures followed, assumptions made, and qualifications and limitations on the review undertaken by J.P. Morgan and PJT Partners, respectively, in connection with each opinion, the Merger Consideration to be received by the holders of the Company’s common stock pursuant to the Merger Agreement is fair, from a financial point of view, to such holders. For a detailed discussion of J.P. Morgan’s and PJT Partners’ opinions, see the section entitled “The Merger—Opinion of the Financial Advisors to the Company” beginning on page 73. A representative of Sullivan & Cromwell reviewed the resolutions the Board would be adopting if it determined that the transaction was fair to and in the best interest of the Company and the Company’s stockholders and to enter into the transaction. Following further discussion, the Board thereafter (i) determined that the Merger Agreement, the Voting Agreements, the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of the Company and its stockholders; (ii) approved and declared advisable that the Company enter into the Merger Agreement; (iii) adopted the Merger Agreement, the Merger and the transactions contemplated by the Merger Agreement, (iv) directed that the Merger Agreement be submitted to the Company’s stockholders for consideration and adoption at the stockholder meeting; and (v) recommended that the Company’s stockholders vote to adopt the Merger Agreement and to approve and adopt such other matters that are submitted for their approval and/or adoption in connection with the Merger Agreement at the stockholder meeting. All of the Company’s directors voted in favor of these resolutions with the exception of Mr. Schulz, who had recused himself from the meeting due to his affiliation with TRATON.

On November 7, 2020, the Company, TRATON and Merger Subsidiary executed the Merger Agreement, which was announced by an ad-hoc announcement mandatorily required under European and German capital markets regulations and in a joint press release issued by the Company and TRATON thereafter. TRATON, Merger Subsidiary and the Icahn Stockholders and MHR Stockholders entered into the Voting Agreements concurrently with the execution of the Merger Agreement.

The Board, at a meeting held on November 7, 2020, (i) determined that the Merger Agreement, the Voting Agreements, the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of the Company and its stockholders; (ii) approved and declared advisable that the Company enter into the Merger Agreement; (iii) adopted the Merger Agreement, the Merger and the transactions contemplated by the Merger Agreement; (iv) directed

In the course of reaching its determination and recommendation, the Board consulted with and received the advice and assistance of the Company’s outside legal and financial advisors and senior management at various times. See the sections entitled “The Merger—Background of the Merger” beginning on page 58 and “The Merger—Opinions of the Financial Advisors to the Company” beginning on page 73.

In recommending that stockholders vote in favor of adoption of the Merger Agreement, the Board considered a number of factors, including, among others, the following (which factors are not necessarily in order of relative importance) that the Board believes support its decision: