Navistar International Corp. said Tuesday it reached an agreement with activist investor Carl Icahn to allow its shareholders to vote on whether to begin electing its directors annually for one-year terms, instead of having a staggered board of directors.
In turn, Icahn agreed not to nominate his own slate of directors for the U.S. truck and engine maker, in which he holds about a 10 percent stake, the company said.
The billionaire investor earlier this month named a group of six directors to run for the board of truck-maker Oshkosh Corp, in which he also holds a roughly 10 percent stake. His investments in the two companies have sparked speculation that he could seek to steer them into a merger.
Icahn has a history of nominating his own directors to companies in which he investors, with an eye toward pressure management and increasing stock prices.
Navistar's proposal, on which its shareholders would vote at its 2012 annual meeting, would phase out its current board structure, with three classes of directors each serving for three years, in phases. By 2014 all directors of the Warrenville, Illinois-based company would stand for election each year.
Navistar shares were up 3 cents at $41.15 in early trading.
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