Short Term and Long Term Disability Benefit

Appendix B

PART I

DISABILITY BENEFITS (the "Plan") FOR HOURLY EMPLOYEES

ARTICLE I

WEEKLY DISABILITY BENEFITS (also known as Short-Term Disability)

Section 1 - Effective Dates and Plan Overview

The effective date of the Plan shall be October 18, 2013.

IC Bus of Oklahoma, LLC's Disability Income Plan (the "Plan") is designed to provide a source of income during times when an employee is unable to work due to a qualifying absence. The Plan applies exclusively to active regular full-time employees represented by UAW Local 5010 working at IC Bus of Oklahoma, LLC.

The Plan is sponsored by Navistar Inc. (the "Company'). Navistar Inc. reserves the right to amend or terminate the Plan at any time. While Navistar Inc. currently provides short-term and long-term disability benefits under the Plan to eligible employees, nothing in the Plan creates a vested right to such benefits. Navistar Inc. may suspend, terminate, reduce, amend, or modify the benefits provided to any participant under the Plan at any time, without prior notice. Navistar Inc., as the Plan Administrator, and each of its authorized delegates shall have discretionary authority to determine eligibility for benefits under the Plan and to construe the terms of the Plan. Benefits under this Plan will be paid only if the Plan Administrator (or its authorized delegate) decides in its sole discretion that the applicant is entitled to them.

Coverage under the Plan begins on an employee's first day as an active regular full-time employee. The Plan provides short-term disability benefits, which replaces an employee's base hourly wage at the time he or she becomes disabled for a period of time.

After an employee has exhausted his or her short-term disability benefits, the Plan offers long-term disability benefits. Such long-term disability benefits replace a portion of an employee's base salary for a period of time. Long-term disability benefits will generally continue until an employee recovers from his or her disability; however, such benefits may be discontinued as of an earlier date based on the terms and conditions of the Plan.

Section 2 - Weekly Disability Benefits Qualifications for Benefits

Active regular full-time employees represented by UAW Local 5010 working at IC Bus of Oklahoma, LLC are eligible to receive short-term disability benefits if the following conditions are met, subject to the limitations and exclusions provided below.

If an employee is totally disabled because of pregnancy, illness or accidental injury and his or her condition, as determined by the Plan Administrator, prevents he or she from working for pay or profit for any duration of time at any job or occupation within the Company for which he or she is reasonably suited, he or she may be eligible for short-term disability benefits. For purposes of the Plan, an accidental injury is defined as an unforeseeable, unintended, and unplanned event or circumstance causing physical or mental injury.

Short-term disability benefits are not payable for weeks in which an employee receives vacation pay. Weeks in which an employee receives vacation pay count against the duration of his or her short-term disability payment period. Subject to other terms and conditions of the Plan, employees cannot receive vacation and disability benefits for a period that would exceed 26 weeks.

If an employee is eligible, short-term disability benefits will begin after the seventh consecutive calendar day of a qualifying absence under terms of the Plan, except such benefits may be payable from the first day if he or she is hospitalized as an inpatient and under the regular care of a physician. Benefits may also be payable following seven nonconsecutive calendar days if the absences are related to the same condition.

Weekly Benefit

60 percent of base hourly wage as defined below to a maximum of $400.00 per week. "Base hourly wage" means an employee's base hourly wage not counting overtime, premium pay, sales incentives, profit sharing payments, bonuses, or other special compensation.

Following the applicable waiting period as written above, short-term disability benefits are payable for a maximum of 6 weeks following the date the employee delivers a child (8 weeks if delivered by Caesarian section) if the employee is otherwise eligible under the terms of the Plan, but does not pay beyond that unless the employee qualifies for additional short-term disability benefits based on the terms of the Plan.

Maximum Benefit Period

Subject to other terms and conditions of the Plan, short term disability benefits are payable for a maximum of 26 weeks.

Filing a Claim

To file a claim for disability benefits under the Plan, an employee must comply with all of the following steps:

The employee must notify both his or her supervisor and disability claims manager of his or her absence immediately after the occurrence or commencement of any disability and, if the employee is having a planned medical treatment that will require time away from work, he or she must notify both his or her supervisor and disability claims manager in advance of such planned absence from work, The employee will be provided an Employee Statement of Claim for Disability and Attending Physicians Statement, which must be correctly completed by both he or she and his or her physician and submitted to his or her disability claims manager within two weeks of the day he or she receives it. Satisfactory proof of disability must be provided to the Company's Medical and claim handling staff within 45 days of the commencement of his or her disability, and

The employee must promptly respond to all requests for information from the Company's Medical or claim handling staff. It is the employee's responsibility to keep his or her disability claims manager up-to-date regarding his or her condition and treatment plan and to inform his or her supervisor of his or her work status.

A decision regarding the employee's eligibility to receive disability benefits will be made within 45 days by the disability claims manager assigned to his or her facility, unless special circumstances require an extension of time for processing.

If an employee's claim for disability benefits under the Plan is approved, he or she may subsequently be asked by the Plan Administrator from time to time to verify his or her disability. This may include an examination by a physician appointed by the Company.

Excluded Disabilities and Losses

Employees cannot receive short-term disability benefits under the Plan:

During a period while he or she is not under the regular care of a physician or, in the case of a disability related to a "mental illness" (as defined in the Plan), a psychiatrist or PhD level psychologist,

"Regular care" means:

The employee personally visits a physician as is medically required, according to generally accepted medical standards, to effectively manage and treat his or her disabling condition(s), and
The employee is receiving the most appropriate treatment and care, which conforms to generally accepted medical standards, for his or her disabling condition(s) by a physician whose specialty and experience is the most appropriate for his or her disabling condition(s).

For any disability related to a mental illness (as defined in the Plan), an employee must be under the regular care of a psychiatrist or PhD level psychologist within two weeks of an initial visit to a physician to be eligible for benefits under the Plan.

For purposes of the Plan, the term "physician" means:

A person who is performing tasks that are within his or her medical license, and
Is licensed to practice medicine and prescribe and administer drugs or to perform surgery.

The employee, his or her spouse, or any of the employee's or his or her spouse's relatives, including, but not limited to a child, brother, sister, or parent, will not be recognized as a physician, psychiatrist, or PhD level psychologist for any claim an employee submits under the Plan.

During a period while the employee is receiving any treatment that is not "medically necessary/' or for any disability where the contributing cause resulted while the employee was receiving any treatment that was not "medically necessary," as determined by the Plan Administrator,

For purposes of the Plan, treatment will be deemed "medically necessary" only if all of the following criteria are met:

The treatment is for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body member and not for the restoration or reconstruction of body structures directed toward altering or aesthetically enhancing one's physical appearance,

The treatment is rendered, ordered or prescribed by a physician,

The treatment is effective in that a reasonable physician would conclude that: A sufficient body of scientific peer reviewed literature exists to demonstrate that a substantial medical benefit would be expected from using the treatment for the condition for which it is being rendered, ordered, or prescribed, or

The treatment for the condition for which it is being rendered, ordered, or prescribed is consistent with an existing national standard of care, as established by consensus of a United States governmental agency or national college or association of specialists in the generally recognized health specialty involved;

The treatment is individualized whereby a reasonable physician would predict the treatment would provide demonstrable medical benefit to the individual for whom the treatment is being rendered, ordered, or prescribed, given the current status of that individual, and

The treatment is consistent with efficiency and quality of care in that:

It is the only effective treatment for the condition for which it is being prescribed, or

It is the alternative among two or more effective quality treatments that a reasonable physician would predict would produce a substantially more beneficial medical outcome, given the condition for which it is being rendered, ordered, or prescribed given the current status of that individual.

If the employee does not cooperate with the Company's medical or claim handling staff in providing timely and satisfactory evidence of his or her inability to work, during days the employee receives unemployment insurance benefits,

During a period of disciplinary suspension,

For days the employee receives vacation pay or any other compensation from the Company,

For any period of time the employee is working for pay or profit at any other employment,

For disabilities resulting from self-inflicted injuries,

For any disability where a contributing cause was the employee's commission of any illegal act,

For any disability caused by, contributed to, or resulting from a pre-existing condition. For purposes of the Plan, a "pre-existing condition" means a physical or mental condition, whether or not diagnosed or misdiagnosed, which was discovered or suspected at any routine or other medical examination during the 12-month period before the employee's effective date of hire, or for which he or she (or a reasonably prudent person would have) consulted a physician or other licensed medical professional, received medical treatment, services, or advice, undergone diagnostic procedures, including self-administered procedures, or taken prescribed drugs or medications at any time during the 12-month period before his or her effective date of hire.

For any disability occurring either while the employee served in the armed forces or while working for pay or profit at any other employment,

For a disability due to war, declared or undeclared, or any act of war or terrorism,

For any injury or illness deemed compensable under applicable workers' compensation laws or alleged by the employee to have been in the course and scope of employment, for treatment of alcoholism or drug dependency, unless the employee is participating in an intensive outpatient program (IOP) or higher standard of care, in which case the maximum period of short term disability under the Plan shall be a total of 28 treatment days during the employee's lifetime. An IOP is a freestanding or hospital-based program that encompasses greater than four hours per day participation, for a minimum of 20 hours per week. IOP's must be used to treat Substance-Use Disorders or can specialize in the treatment of co-occurring Substance Use Disorders and mental health conditions, or

For disabilities covered under any other disability plan.

The time during which an employee's short-term disability benefits would otherwise have been payable to you under the terms of the Plan, but are suspended or offset (wholly or partially) due to one or more of the preceding exclusions, is still counted toward the maximum period of short-term disability benefits under the Plan.

ARTICLE II

LONG TERM DISABILITY BENEFITS

Qualifications for Benefits

Active regular full-time employees represented by UAW Local 5010 working at IC Bus of Oklahoma, LLC are eligible to receive long-term disability benefits if the following conditions are met, subject to the limitations and exclusions provided below.

Employees with less than one year of Company service at the time they become disabled from work are not eligible for LTD benefits under the Plan.

If an employee is totally disabled because of pregnancy, illness or accidental injury as defined in the Plan and his or her condition, as determined by the Plan Administrator, prevents he or she from working for pay or profit at any job or occupation for which he or she is reasonably suited, not just within the Company, he or she may be eligible for long term disability (LTD) benefits under the Plan. LTD benefits begin on the first day after an employee has exhausted his or her short-term disability benefits under the Plan.

Amount of Benefits

60 percent of the employee's base hourly wage (as defined in the Plan) to a maximum of $2,500 monthly, subject to any suspension or offset otherwise required under the Plan. Long-term disability benefits will generally continue until the employee recovers from his or her disability, unless such payments cease earlier based on the terms of the Plan (as described below).

Maximum Benefit Period

Subject to other terms and conditions of the Plan, long term disability benefits are payable for a maximum of 15 years minus the 26 weeks an employee previously received short term disability benefits under the Plan.

If the employee is unable to care for his or her own affairs, the Company may pay the benefit to someone appointed by a court to handle his or her affairs.

Excluded Disabilities and Losses

Employees cannot receive long-term disability benefits:

During a period while he or she is not under the regular care of a physician or, in the case of a disability related to a mental illness, a psychiatrist or PhD level psychologist (as defined in the Plan),

During a period while the employee is receiving any treatment that is not "medically necessary' or for any disability where the contributing cause resulted while he or she was receiving any treatment that was not "medically necessary," as determined by the Plan Administrator (see definition of "medically necessary/' above),

During a period of disciplinary suspension,

For days the employee receives vacation pay or any other compensation from the

Company,

For disabilities resulting from self-inflicted injuries,

For any disability where a contributing cause was the employee's commission of any illegal act,

For any disability caused by, contributed to, or resulting from a pre-existing condition (see definition of "pre-existing condition" above).

For any disability occurring either while the employee served in the armed forces or while working for pay or profit at any other employment,

For a disability due to war, declared or undeclared, or any act of war or terrorism,

With regard to any disability that occurs on or before age 60, any time after the employee attains age 65,

With regard to any disability that occurs after age 60, for more than five years after the employee became disabled,

For any injury or illness deemed compensable under applicable Workers' Compensation laws or alleged by the employee to have been in the course and scope of employment, For treatment of alcoholism or drug dependency, or

For disabilities covered under any other disability plan.

The time during which an employee's LTD benefits would otherwise have been payable to him or her under the terms of the Plan, but are suspended or offset (wholly or partially) due to one or more of the preceding exclusions, is still counted toward the maximum period of LTD benefits under the Plan.

General Plan Provisions Physical Examinations

The disability claims manager may consult with and rely upon the opinion of third parties, such as a health care professional who has appropriate training and experience in the field of medicine, in determining whether an employee is eligible to receive disability benefits under the plan. The disability claims manager is permitted to credit the opinion of the Company's appointed physician or other expert, or other reliable evidence, over the opinion of the employee's treating physician if it is reasonable to do so based on the facts presented in the claim.

Coordination with Certain Other Benefits

Disability benefits under the Plan (including short-term and long-term disability benefits) are suspended or offset (wholly or partially) by other sources of income. An employee must notify his or her disability claims manager within thirty (30) days to verify any benefits or changes in benefits he or she is receiving from such other sources.

The time during which an employee's Plan benefits are suspended or offset (wholly or partially) by such other sources is still counted toward the maximum period of Plan benefits.

Disability benefits under the Plan will be offset by other sources of income, including but not limited to the following other sources of income:

Disability benefits (including any future adjustments) provided either through a plan financed by another employer, under State or Federal law, including dependent's benefits under a State disability plan, or otherwise,

Social Security disability, old age benefits, or dependent benefits the employee is eligible to receive. The offset will be based on the initial amount of the award and may be adjusted for any increase from Social Security.

LTD payments will be offset by an estimated Social Security benefit amount unless the employee is denied Social Security benefits and provide the Plan Administrator with a copy of the denial,

Other income from the Company, and

The amount the employee receives or is eligible to receive from a Company defined benefit pension plan, including any future adjustments.

Employees will be asked from time to time to verify any benefits or changes in benefits he or she is receiving from these sources.

If an employee qualifies for long-term disability benefits under the Plan, he or she must also show evidence of his or her application for these benefits, even if they are denied, before full long-term disability benefits can be paid.

Sources of income that do not affect disability benefits under the Plan include: The amount the employee receives or is eligible to receive from a Company 401 (k) plan,

The amount the employee receives or is eligible to receive from individually purchased life or health insurance policies, or

The amount an employee receives or is eligible to receive from a veteran's disability pension, if it is based on a disability that began before his or her coverage under this Plan took effect.

Recurrent Disability

If the employee has a "recurrent disability," as determined by the Plan Administrator, his or her disability will be considered part of his or her prior disability claim under the Plan if: He or she did not incur a break in employment, and

The employee's most recent disability occurs within six months of the end of his or her prior disability claim under the Plan.

"Recurrent disability/' means a disability that is caused by a worsening in the employee's condition and due to the same cause(s) as his or her prior disability for which he or she were originally covered by the Plan.

Concurrent Disability

If a new disabling condition occurs while benefits are payable for an existing disability claim under this Plan, it will be treated as part of the same period of disability as the original claim. Benefits will continue while the employee remains disabled and will be subject to both of the following:

The Maximum Benefit Duration from the original date of disability; and

All limitations, exclusions and other Plan terms and conditions that apply to the new cause of disability.

In no event will the new disabling condition extend the duration of short term disability benefits for a period beyond 26 weeks from the date of the occurrence of the original disabling condition.

Certain Disabilities Have a Limited Maximum Pay Period

Disabilities due to a sickness or injury which, as determined by the Plan Administrator, are primarily based on "self-reported symptoms" or "mental illness," as defined below, have a maximum pay period of 24 total months during an employee's lifetime.

Self-Reported Symptoms

For purposes of the Plan, "self-reported symptoms" mean the manifestations of an employee's condition, which he or she tells his or her physician, but are not verifiable using tests, procedures, and clinical examinations generally accepted in the practice of medicine by an existing national standard of care, as established by consensus of a United States governmental agency or national college or association of specialists in the generally recognized heath specialty involved. Examples of self-reported symptoms include, but are not limited to, headache, pain, fatigue, stiffness, soreness, ringing in ears, dizziness, numbness, and loss of energy.

Mental Illness

For purposes of the Plan, "mental illness" means psychiatric or psychological condition regardless of cause. Mental illness includes, but is not limited to, schizophrenia, depression, manic depressive or bipolar illness, obsessive-compulsive or anxiety disorders. These conditions are treated by a psychiatrist or clinical psychologist using psychotherapy, psychotropic drugs, consistent with an existing national standard of care, as established by consensus of a United States governmental agency or national college or association of specialists in the generally recognized heath specialty involved.

Mental illness does not include irreversible dementia resulting from stroke, trauma, viral infection or Alzheimer's disease.

Other Disability Benefits You May Be Entitled to Receive

In addition to Company-provided disability benefits, an employee may be eligible for disability benefits from Social Security.

Social Security disability benefits can begin after an employee has been disabled for a specified period of time. The disability benefits an employee and his or her family receive are generally the same benefits he or she would be eligible for if he or she retired at age 65. For more information, contact the nearest Social Security Administration office.

Allsup, Inc. is an independent specialized Social Security disability claims adviser whose services are paid for by the Company to assist employees in applying for Social Security disability benefits. An employee may contact his or her disability claims manager for a referral.

Family Medical Leave Act

Periods of absence approved under this Plan and taken for reason(s) that also qualify for leave under the Company's FMLA Policy will be counted against any available FMLA leave entitlement.

Overpayments and Other Administrative Errors

If a benefit is paid to an employee under the Plan that is larger than the amount allowed by the Plan, the Plan has a right to recover such excess amount. Erroneous benefit statements will neither change the rights or obligations under the terms of the Plan nor operate to grant any additional benefit or coverage that is not otherwise provided under the terms of the Plan.

If an employee is paid wages by the Company during a period of time when he or she was also receiving short-term disability benefits under the Plan and not working, then the amount of any overpaid wages will reduce the employee's total short-term disability payment amount to prevent a double payment to the employee.

Recovery of Benefits Paid

As a condition to payment of benefits under the Plan for expenses incurred by the employee due to injury or illness for which a third party may be liable:

The employee agrees that the Plan shall, to the extent benefits have been paid to him or her or on his or her behalf, be subrogated to (has the right to pursue) all of the employee's rights of recovery against such third party or his or her own insurance carrier, including, but not limited to, in the event of a claim under the uninsured or underinsured automobile coverage provision of the employee's automobile insurance policy.

The employee agrees that the Plan shall, to the extent of benefits have been paid to him or her on his or her behalf, have the additional right to reimbursement from the employee of all recoveries from such third party or the employee's own insurance carrier (whether by lawsuit, settlement, or otherwise).

The employee (or person authorized by law to represent the employee if he or she is legally incapable) agree to promptly advise the Plan Administrator whenever a claim is made against a third party or the employee's own insurance carrier, execute and deliver any documents (including, but not limited to, assignments or liens) requested by the Plan Administrator, and to cooperate with the Plan Administrator, as necessary, in order to secure its right to subrogation and reimbursement.

The Plan may withhold (or reduce) benefits if the employee does not fully comply with the subrogation and reimbursement provisions of this section or if he or she fails to return any benefit payments paid to him or her in error.

The Plan's right to subrogation, reimbursement, and reduction is not subject to the employee's first being made whole, that is, the "make whole" rule (or such other similar rule) shall not apply to the Plan. In addition, the Plan's right to subrogation, reimbursement, and reduction is not subject to the common fund doctrine (or such other similar rule).

Denied Claims and Appeal Process

If a claim is wholly or partially denied, the employee will receive notice of the decision within 45 days after receipt of his or her claim, unless special circumstances require an extension of time for processing. In this case, a decision will be given as soon as possible, but not later than 30 days after the expiration of the initial 45-day period, and the employee will be notified in advance of the expiration of the initial 45-day period of the circumstances requiring the extension of time and the date by which the Plan expects to render a decision. If, prior to the end of the first 30-day extension period, the Plan Administrator determines that due to matters beyond the control of the Plan, a decision cannot be rendered within that extension period, an additional 30-day extension may be required. In this case, the employee will be notified in advance of the expiration of the first 30-day extension period of the circumstances requiring the extension and the date as of which the Plan expects to render a decision.

If an employee's claim is denied, the notice of decision will be in writing and will set forth:

The specific reason or reasons for the denial,

Specific reference to pertinent Plan provisions on which the denial is based,

A description of any additional material or information necessary for the employee to perfect his or her claim and an explanation of why such material or information is necessary,

An explanation of the Plan's claim review procedure and the time limits applicable to such procedures, including a statement of the employee's right to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act (the federal law commonly referred to as "ERISA") following an adverse benefit determination on appeal, If applicable, any internal rule, guideline, protocol, or other similar criterion relied upon in making the denial, or a statement that such rule, guideline, protocol, or other similar criterion was relied upon in making the denial and that a copy of it will be provided to the employee free of charge upon request, and

If the claim denial was based on a medical necessity or experimental treatment or similar exclusion or limit, an explanation of the scientific or clinical judgment for the determination, or a statement that such explanation will be provided to the employee free of charge upon request.

In the event of such an appeal for review, the employee or his or her authorized representative:

May review documents, records, and other information relevant to the employee's claim for benefits, and

May submit written comments, documents, records, and other information relating to his or her claim for benefits.

A decision on review shall be made promptly, but not later than 45 days after receipt of the appeal, unless special circumstances require an extension of time for processing. In this case, a decision will be given as soon as possible, but not later than 45 days after the expiration of the initial 45-day period, and the employee will be notified in advance of the expiration of the initial 45-day period of the circumstances requiring the extension of time and the date by which the Plan expects to render a decision on appeal. If the appeal is denied, the notice of decision will be in writing and will set forth:

The specific reason or reasons for the denial,

Specific reference to pertinent Plan provisions on which the denial is based,

A statement that the employee is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to his or her claim for benefits (as determined under ERISA),

If applicable, any internal rule, guideline, protocol, or other similar criterion relied upon in making the denial, or a statement that such rule, guideline, protocol, or other similar criterion was relied upon in making the denial and that a copy of it will be provided to the employee free of charge upon request,

If the appeal denial was based on a medical necessity or experimental treatment or similar exclusion or limit, an explanation of the scientific or clinical judgment for the determination, or a statement that such explanation will be provided to the employee free of charge upon request, and

A statement of the employee's right to bring an action under Section 502(a) of ERISA. The Plan shall be administered and construed, and claims for benefits shall be decided, according to the laws of the State of Illinois, except to the extent superseded by ERISA or any other federal law. The situs of the Plan is in DuPage County, Illinois. Legal actions must be brought in the United States District Court for the Northern District of Illinois.