Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
HOUSEHOLD INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3121988
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
2700 Sanders Road, Prospect Heights, Illinois 60070
(Address of Principal Executive Offices) (Zip Code)
HOUSEHOLD INTERNATIONAL LONG TERM EXECUTIVE
INCENTIVE COMPENSATION PLAN
(Full title of the plan)
PATRICK D. SCHWARTZ
Associate General Counsel - Corporate Finance
Household International, Inc.
2700 Sanders Road, Prospect Heights, Illinois 60070
(Name and address of agent for service)
847-564-6301
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION> CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Title of Proposed Proposed
securities Amount maximum maximum Amount of
to be to be offering price aggregate registration
registered registered per interest offering price fee
<F1> share<F2> <F2>
- ---------- ---------- -------------- -------------- ------------
Household 4,000,000 $67.4375 $269,750,000 $93,017.25
International,
Inc. Common
Stock, $1 par
value...
<FN>
<F1>In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this registration statement also
covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefit plan
described herein.
<F2>Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c) and
(h) on the basis of the average of the high and low prices of the Common Stock as reported on the New York Stock
Exchange on May 9, 1996.
</FN>
/TABLE
<PAGE>
<PAGE> 2
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
included in this Registration Statement also covers securities registered
pursuant to Registration Statement No. 33-45454.
Household International, Inc.
CROSS REFERENCE SHEET
to
Form S-8 Registration Statement
Caption or Location
Item in Form S-8 in Prospectus
1. Plan Information Cover Page
Introductory Statement
1996 Long-Term Executive
Incentive Compensation
Plan
Federal Income Tax
Consequences of the
Plan
Other Important
Information
2. Registrant Information and Introductory Statement
Employee Plan Annual Available Information
Information
<PAGE>
<PAGE> 3
Prospectus
HOUSEHOLD INTERNATIONAL, INC.
Common Stock
$1 Par Value
_______________
Pursuant to the Household International 1996 Long-Term Executive
Incentive Compensation Plan (the "Incentive Plan"), shares of
Common Stock ($1 par value) of Household International, Inc. (the
"Stock") or options therefore may be awarded from time to time. As
of the date of this Prospectus, 4,806,537 shares of Stock are
available for issuance under the Incentive Plan.
The Stock is listed on the New York and Chicago Stock Exchanges.
The trading symbol of the Stock is "HI".
_______________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
_______________
The date of this Prospectus is May 14, 1996<PAGE>
<PAGE> 4
TABLE OF CONTENTS
Page
Introductory Statement ................................... 2
Available Information .................................... 2
1996 Long-Term Executive Incentive Compensation Plan...... 3
Federal Income Tax Consequences of the Incentive Plan.....10
Other Important Information ..............................11
Incorporation of Certain Documents by Reference ..........13
Legal Opinions ...........................................13
Experts ..................................................14
INTRODUCTORY STATEMENT
In this Prospectus, Household International, Inc. is referred
to as "Household" or the "Corporation". The address of Household's
principal executive office is 2700 Sanders Road, Prospect Heights,
Illinois 60070 (Telephone: 847-564-5000). A copy of the
Corporation's latest Annual Report to Shareholders will be
delivered to all employees who have not previously received a copy
and have been granted stock options or other awards under the
Incentive Plan. The Corporation will promptly send, without
charge, an additional Annual Report and/or a copy of the Incentive
Plan in effect to any employee at his or her request.
Additional updating information with respect to the securities
and the Plan covered herein may be provided in the future to plan
participants by means of appendices to this Prospectus.
AVAILABLE INFORMATION
Household is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and in accordance therewith files reports and other information
with the Securities and Exchange Commission (the "Commission").
Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and
the Commission's Regional Offices at Northwestern Atrium Center,
500 West Madison Street, Chicago, Illinois 60661; and Seven World
Trade Center, New York, New York 10048. Copies of such material
can also be obtained at prescribed rates by writing to the Public
Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. In addition, reports, proxy statements and
other information concerning Household can be inspected at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005 and the Chicago Stock Exchange, 440 South
LaSalle Street, Chicago, Illinois 60605 on which the Stock and
certain other securities of the Corporation are listed.
Household will provide without charge to each person to whom
this Prospectus is delivered, on the written or oral request of
such person, a copy of any or all of the documents incorporated
herein by reference (other than exhibits to such documents) and
such additional information pertaining to the Incentive Plan and
its administration, as desired. See "Introductory Statement" and
"Incorporation of Certain Documents by Reference". Requests should
be directed to: Household International, Inc., 2700 Sanders Road,
Prospect Heights, IL 60070, Attention: Office of the Secretary
(Telephone: 847-564-6989).
1996 LONG-TERM EXECUTIVE INCENTIVE COMPENSATION PLAN
General
The Incentive Plan was approved by the shareholders of
Household on May 8, 1996, on the recommendation of Household's
Board of Directors. The purpose of the Incentive Plan is to
further the long-term growth of Household by strengthening its
ability to attract and retain employees of outstanding ability, to
provide an effective means for employees to acquire and maintain
ownership of Household Stock, to motivate such employees to achieve
long-range performance goals and objectives, and to provide
incentive compensation opportunities competitive with those of
other major corporations. Selected employees of Household and its<PAGE>
<PAGE> 5
subsidiaries may be chosen to receive awards under the Incentive
Plan. In addition, the Incentive Plan provides for the issuance of
options to purchase Household Stock to non-employee Directors of
Household in order to facilitate ownership and to more fully align
the interests of Household's Directors with that of its
stockholders.
The Incentive Plan is administered by the Compensation
Committee of the Board of Directors. The Compensation Committee
determines which employees will receive awards and the amounts,
types, terms and restrictions of such awards, and is also
authorized to interpret the Incentive Plan, to establish rules and
regulations thereunder, and to make all other determinations
necessary or advisable for administering the Incentive Plan.
Committee members hold their position at the discretion of the
Board. The address of the Compensation Committee is 2700 Sanders
Road, Prospect Heights, Illinois 60070.
The Compensation Committee may grant any type of award
permitted under the terms of the Incentive Plan, which at the
present time includes stock options and Restricted Stock Rights.
The specific terms of any award, including vesting provisions, if
any, shall be determined by the Compensation Committee and set
forth in the notice and the agreement for such award (the "Grant"),
which Grant shall constitute a part of this Prospectus. As of the
date of this Prospectus, Household may issue up to 4,806,537 shares
(including 806,537 shares remaining under the Household
International Long-Term Executive Incentive Compensation Plan
approved by the shareholders in May 1984 and amended thereafter,
(the "1984 Plan") of its Stock pursuant to the Incentive Plan,
which may consist of either authorized and unissued shares,
treasury shares or stock purchased by Household, or an agent
thereof, in the open market. If any award granted under the
Incentive Plan or the 1984 Plan terminates or lapses for any
reason, any shares of Stock subject to such award will again be
available for grant under the Incentive Plan. The maximum number
of shares or share equivalents that may be granted to any one
participant in one year is 400,000 shares.
Stock options and other awards issued under the Incentive Plan
may be adjusted due to changes in the capital structure of
Household (including, stock dividends, stock splits,
recapitalizations, reorganizations, mergers, consolidations, or
other changes in capitalization). Such adjustments may include
changes to the price, number and kind of shares of stock or other
consideration subject to an award, so as to prevent dilution or
enlargement of rights under the award.
Employee Options
Under the Incentive Plan, the Compensation Committee may grant
employees any type of option to purchase shares of Stock that is
permitted by law at the time of grant. No option will be
exercisable less than one year nor more than ten years and one day
from the date of grant; provided, however, the Compensation
Committee may extend the expiration date of an option to no more
than 15 years from the date of the grant. The option price per
share will not be less than the fair market value of one share of
Stock on the date of grant. Options previously granted under the
1984 Plan are exercisable at the rate of 25% of the shares under
option on or after each of the first, second, third, and fourth
anniversaries of the date of grant, on a cumulative basis, and must
generally be exercised in units of at least 25 shares. It is
expected the same vesting schedule will be utilized for grants
under the Incentive Plan.
At the Compensation Committee's discretion, Household will pay
or credit to a participant's account an amount of cash (or
additional shares or share equivalents of Stock based upon the then
fair market value of the Stock) equal to the cash dividends
declared on Stock for each share of Stock subject to an option
award. The Committee may, in its discretion, adopt rules
permitting employees to satisfy all or part of the tax withholding
obligations in connection with an award by electing to have
Household withhold shares otherwise deliverable to the employee or
by delivering shares previously owned by such employee for at least
six months. Payment for shares purchased through options may be
made in cash or, at the discretion of the Compensation Committee,<PAGE>
<PAGE> 6
in shares of Stock valued at the then fair market value of such
shares or a combination of cash and Stock. Any shares of Stock
surrendered by an employee in full or partial payment of the
exercise price of an option must have been held by the employee at
least six months prior to the date such shares are surrendered in
payment.
As of the date of this Prospectus, options issued under the
Incentive Plan may be exercised only by the employee and may not be
transferred except by will or the laws of descent and distribution.
However, if Exchange Act rules no longer restrict transferability
and the Compensation Committee establishes rules for transfer of
employee options, the Office of the Secretary will notify affected
participants of the terms under which an award may be transferred.
Upon termination of employment by Household and its subsidiaries,
all rights under the Incentive Plan terminate except as follows, or
as otherwise reflected in the Grant:
(i) in the event of termination of employment (a) as a
result of a material change in the employee position following
a Change-in-Control as described herein under "Change-in-
Control", or (b) and the employee is retirement-eligible under
the terms of a pension plan of Household or a subsidiary, the
option may be exercised within five years of the date of
termination of employment or as otherwise provided in the
Grant;
(ii) in the event of termination of employment due to
permanent and total disability of the holder and the employee
is not retirement-eligible under the terms of a pension plan
of Household or a subsidiary, the option may be exercised
within twelve months following the date of such termination of
employment or as otherwise provided in the Grant;
(iii) in the event of death during employment, the option
may be exercised by the executor, administrator, or other
personal representative of the holder within five years
succeeding death if such holder was retirement-eligible under
the terms of a pension plan of Household or a subsidiary, or
twelve months if such holder was not retirement-eligible under
the terms of a pension plan of Household or a subsidiary or as
otherwise provided in the Grant;
(iv) except in the event of termination of employment for
cause, following termination of employment other than as set
forth in (i), (ii) or (iii) above, the option may be exercised
within three months following the date of termination, or
prior to the expiration of the option, whichever period is
shorter; and
(v) in the event of death of the employee following
termination of employment, the option may be exercised by the
executor, administrator, or other personal representative of
the holder, notwithstanding the time period specified in (i),
(ii), (iii) or (iv) above, within a) twelve months following
death or b) the remainder of the period in which the employee
was entitled to exercise the option, whichever period is
longer.
In all such cases, however, the option may not be exercised after
the expiration of the original term of such option and, except as
previously noted, may only be exercised to the extent it was
exercisable on the date of termination of employment. Also, if the
Compensation Committee determines that the termination is for
cause, the option will not under any circumstances be exercisable
following termination of employment.
Restricted Stock Rights
The Incentive Plan also authorizes the Compensation Committee
to grant Restricted Stock Rights ("RSRs"). RSRs entitle an
employee to receive a stated number of shares of Stock if the
employee remains continuously employed by Household for the time
period (the "restricted period") specified by the Compensation
Committee. However, the Compensation Committee in its sole
discretion may specify other restrictions to be satisfied for
shares of Stock to be issued pursuant to a RSR, or accelerate the
payment of Stock prior to the termination of the restricted period<PAGE>
<PAGE> 7
if the holder of the RSR achieves certain performance levels
established at the time the RSR is granted by the Compensation
Committee. The Committee may revise such performance levels as it
deems appropriate to reflect significant, unforeseen events or
changes. A holder of RSRs will not be entitled to any of the
rights of a holder of Stock prior to the payment of such shares;
however, at the discretion of the Compensation Committee, Household
will pay or credit to a participant's account an amount in cash (or
additional shares or share equivalents of Stock based upon the then
fair market value of the Stock) equal to the cash dividends
declared on Stock for each share of Stock subject to an RSR. RSR's
are not transferable except by will or the laws of descent or
distribution. In the event of termination of employment due to
death or permanent and total disability or as a result of a
material change in the employee's position following a Change-in-
Control as described herein under "Change-in-Control", the holder
of the RSR or his estate will be entitled to receive the number of
shares subject to the RSR prorated on the basis of the number of
full months elapsed in the restricted period.
Non-Employee Director Options
Under the Incentive Plan each non-employee director will be
granted an option for 1,500 shares of Stock on the date of each
Annual Meeting of Stockholders at which such Director is elected to
the Board of Directors, beginning with the 1997 Annual Meeting of
Stockholders. The Committee will have no discretion to select
which non-employee Directors will be granted options or to
determine the number of option shares, price, vesting schedule or
any other term of the options granted to non-employee Directors.
All options granted to non-employee Directors will be non-qualified
stock options. The per share purchase price of Stock which may be
acquired pursuant to a non-employee Director option shall be 100%
of the fair market value of one share of Stock on the date the
option is granted. For purposes of establishing the fair market
value of Stock on any day for non-employee Director options, such
value shall be the average of the highest and lowest sales prices
per share of the Stock as reported in the NYSE-Composite
Transactions in The Wall Street Journal for such date. However, if
the NYSE is not open for trading on a given day, the fair market
value will be the average of the highest and lowest sales prices
per share on the next succeeding business day.
Each option granted to a non-employee Director will vest and
shall be fully exercisable beginning six months from the date the
option was granted. Each such option will expire ten years and one
day from the date of the grant. However, if a non-employee
Director ceases to be a Director of Household, outstanding vested
options are exercisable as follows:
(i) in the event service on the Board of Directors
terminates due to permanent and total disability, outstanding
options may be exercised within twelve months following the
date such service terminates or prior to the expiration of the
outstanding options, whichever period is shorter;
(ii) if a non-employee Director dies, whether during
service as a Director of Household or after such service,
outstanding options may be exercised by the executor,
administrator, or other personal representative of such
Director within twelve months after the Director's death or
prior to the expiration of the outstanding options, whichever
period is longer;
(iii) in the event a non-employee Director's service on
the Board of Directors terminates because such Director has
reached the mandatory retirement age of 70 (or age 72 if a
Director was serving on the Board as of January 1, 1989) or if
a non-employee Director retires from the Board prior to
reaching the mandatory retirement age but after having served
on the Board of Directors continuously for at least fifteen
years, outstanding options may be exercised at any time prior
to the expiration of the outstanding options; and
(iv) in the event service on the Board of Directors
terminates other than as set forth in subsections (i), (ii) or
(iii) above, outstanding options may be exercised within three
months following the date such service terminates or prior to<PAGE>
<PAGE> 8
the expiration of the outstanding options, whichever period is
shorter.
Payment for shares purchased upon exercise of a non-employee
Director option shall be made in cash, in shares of Stock valued at
the then fair market value of such shares or by a combination of
cash and shares of Stock. Any shares of Stock surrendered in full
or partial payment of the exercise price of an option must have
been held by such Director at least six months prior to the date
such shares are surrendered. A non-employee Director may also
satisfy, in whole or in part, income tax obligations incurred in
connection with the exercise of an option by (i) electing to have
Household withhold shares of Stock (otherwise deliverable to the
Director in connection with the exercise of an option) in payment
for such income tax obligation or (ii) by delivering shares of
Stock owned by such Director in payment for such income tax
obligation. Any shares of Stock surrendered in full or partial
payment of income tax obligations must have been held by such
Director at least six months prior to the date such shares are
surrendered. Non-employee Director options are not transferable
other than by will and the laws of descent and distribution.
Forfeiture
If it is determined that an employee or former employee, while
employed by Household or any subsidiary or otherwise associated
with Household or any subsidiary as a consultant, advisor or in
another similar capacity, engaged at any time in any activity in
competition with any activity of Household or any subsidiary or
harmful to the interests of Household or any subsidiary including,
but not limited to: (i) conduct related to the participant's
position for which either criminal or civil penalties against the
participant may be sought, (ii) violation of Household policies,
notwithstanding Household's decision or inability to, or not to,
terminate the participant for such violation, (iii) accepting
employment with or serving as a consultant, advisor or in any other
capacity to an employer that is in competition with or acting
against the interests of Household or any subsidiary, including
employing or recruiting any present employee of Household or any
subsidiary for such competitor, (iv) disclosing or misusing any
confidential information or material concerning Household or any
subsidiary, or (v) participating in a hostile takeover attempt of
Household, then the Compensation Committee, in its sole discretion,
may cancel any unexpired or unpaid award at any time.
Change-in-Control
In order to protect participants in the Incentive Plan in the
event (i) any person becomes the beneficial owner, directly or
indirectly, of Stock representing ten percent (10%) or more of the
total voting power of Household's then outstanding Stock, (ii) a
tender offer is made for thirty percent (30%) or more of the
outstanding Stock, which tender offer has not been approved by the
Board of Directors of Household, or (iii) a solicitation subject to
Rule 14a-11 under the Exchange Act (or any successor Rule) relating
to the election or removal of 50% or more of the Board of Directors
is made by any person other than Household or less than 50% of the
members of the Household Board of Directors are "Continuing
Directors" (as defined below) (each of (i), (ii) or (iii) being
deemed a "Change-in-Control"), then (a) all outstanding options
will immediately vest and will become fully exercisable and (b) the
Compensation Committee, in its sole discretion, may:
(i) accelerate the time period for exercising or
realizing any award under the Incentive Plan, notwithstanding
any minimum holding or restricted period set forth in the
Incentive Plan or the applicable Grant;
(ii) provide for the purchase by Household of all awards
outstanding under the Incentive Plan in cash equal to the
amount that could have been received upon exercise or
realization of such awards had the awards been currently
exercisable or payable;
(iii) make such adjustments to awards granted under the
Incentive Plan, including the granting of additional awards,
as deemed appropriate; and
<PAGE>
<PAGE> 9
(iv) cause all outstanding awards under the Incentive
Plan to be assumed, or new rights of equal value to be
substituted therefor, by any successor to Household.
For purposes of the Incentive Plan, a "Continuing Director"
means a Director of Household who either (i) was a Director on May
8, 1996, or (ii) is an individual whose election, or nomination for
election, was approved by at least two-thirds of the Directors then
in office who are continuing in office (other than a Director whose
initial assumption of office is in connection with an election
contest or threatened election contest relating to the election of
Directors of Household which would be subject to Rule 14a-11 of the
Exchange Act).
In addition, if any participant in the Incentive Plan has
his/her position materially changed (as defined in the Incentive
Plan) within twenty-four months after a Change-in-Control, said
participant shall be deemed to be involuntarily terminated without
cause from Household and shall be entitled to exercise or receive
payment for outstanding awards under the Incentive Plan previously
granted to him/her in accordance with the terms of the Incentive
Plan.
FEDERAL INCOME TAX CONSEQUENCES OF THE INCENTIVE PLAN
Under present federal income tax laws, awards of Stock under
the Incentive Plan will have the following tax consequences:
Generally, the recipient of a non-statutory stock option under
the Incentive Plan will realize no income for federal income tax
purposes upon the grant of such stock option. However, at the time
the participant exercises a non-statutory stock option, he/she will
realize income, taxable as personal service income, to the extent
that the fair market value of the shares acquired pursuant to the
option, as of the exercise date, exceeds the stock option price.
Household will be entitled to a corresponding deduction for federal
income tax purposes in the year in which the stock option is
exercised. The fair market value of the shares of Stock acquired
pursuant to the option on the exercise date will be the cost basis
for such shares to the employee. The employee will be required to
provide funds to Household to cover the necessary withholding of
taxes.
In lieu of providing cash to Household to pay withholding tax
liability upon exercises of stock options, an employee may
authorize Household to withhold shares to be issued pursuant to the
option exercise in payment for such tax liability. Alternatively,
an employee can tender Stock owned by him/her prior to the exercise
of the option in payment of the tax withholding amount due;
however, use of such shares may result in the recognition of gain
or loss to the employee for tax purposes on such shares delivered
to Household to satisfy the employee's tax liability. Shares
withheld or otherwise delivered to Household in payment for
withholding tax liabilities will be valued at their fair market
value as of the date on which the amount of tax to be withheld is
determined. Elections to have shares withheld to satisfy
withholding tax obligations are irrevocable.
If an employee is awarded an RSR, the grant of such award is
not taxable for federal income tax purposes at the time of grant to
the employee. However, at the time he/she receives payment for an
RSR, the employee will realize income, taxable as personal service
income, to the extent of the cash or fair market value of the
property received. Household will be entitled to a corresponding
deduction for federal income tax purposes in the year in which such
award is exercised or such payment is received. The employee will
be required to provide funds to Household covering the necessary
withholding taxes.
OTHER IMPORTANT INFORMATION
The following information applies to the Incentive Plan:
The Incentive Plan is not qualified under Section 401(a) of
the Internal Revenue Code of 1986, as amended, and is not subject
to any of the provisions of the Employee Retirement Income Security
Act of 1974, as amended.<PAGE>
<PAGE> 10
Stock acquired as a result of options granted pursuant to the
Incentive Plan may be acquired from Household. Household shall not
charge any fee, commission or other charge for any of the costs or
expenses incurred in issuing such Stock. All payments for Stock to
be purchased pursuant to the Incentive Plan shall be made to
Household prior to said Stock's issuance. Other than the Grant
pursuant to the Incentive Plan, Household is not required to
provide any report to any participant on a regular basis detailing
said participant's interest in the Incentive Plan.
In certain instances special rules with respect to the
purchase or sale of Stock and tax withholding will apply to holders
of stock options who are subject to Section 16(b) of the Exchange
Act (the "Section 16 Persons"). Prior to the exercise of any stock
option granted pursuant to the Incentive Plan, the Section 16
Person should consult with the Section 16 Compliance Coordinators
in the Office of the Secretary of Household.
There are generally no restrictions on resale of the Stock
acquired pursuant to the Incentive Plan except for persons who are
deemed to be "affiliates" of the Corporation or Section 16 Persons.
An affiliate may resell the securities acquired under the Incentive
Plan either pursuant to a registration statement or pursuant to
Rule 144 or another applicable exemption under the Securities Act
of 1933, as amended (the "Securities Act"). For purposes of
reselling, an affiliate is defined as a control person or one who,
directly or indirectly, has the power to direct or cause the
direction of the management and policies of Household. Under
Section 16 of the Exchange Act, any profit realized by a Section 16
Person of Household through the purchase and sale or any sale and
purchase of any equity security of Household within a period of six
months may be recoverable by Household regardless of the intention
of said person entering into the transaction. For purposes of
Section 16 of the Exchange Act, the exercise of a stock option is
not a purchase. Provided the Section 16 Person has held the option
for at least six months, any sale of the Stock acquired pursuant to
the exercise of that option will not be matched against the option
price. However, such a sale will be matched against any other
purchase (except for additional grants of options pursuant to the
Incentive Plan) of Stock six months prior to and six months after
the date of said sale. If an employee believes that he or she may
be an affiliate of Household, or subject to the provisions of
Section 16 of the Exchange Act, an attorney should be consulted to
determine what steps should be taken to accomplish any such resale
under the federal securities laws.
In case of corporate changes affecting the Stock, the
Incentive Plan, or awards granted thereunder, the Board of
Directors of Household or an authorized committee may make
appropriate adjustments to such awards in order to prevent dilution
or enlargement of rights and in the aggregate number or remaining
number of shares which may be issued under the Incentive Plan (if
any) to reflect any change or changes affecting the Stock of the
Corporation, such as stock dividends, stock splits, or similar
changes.
The Board of Directors or the Compensation Committee of
Household may from time to time amend the Incentive Plan or awards
granted thereunder except that the Board or Compensation Committee
may not, without stockholder approval, change the option price of
any option or increase the number of shares of Stock under the
Incentive Plan (except as permitted pursuant to the preceding
paragraph) or make any other amendment which is required by law to
be approved by Household's stockholders. The Incentive Plan will
expire on May 8, 2006. The Board may terminate the Incentive Plan
at any time by resolution, but such resolution shall not affect
awards previously granted under the Incentive Plan.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are
incorporated herein by reference:
(a) The Corporation's latest annual report filed pursuant to
Section 13(a) or 15(d) of the Exchange Act or the latest prospectus
filed pursuant to Rule 424(b) under the Securities Act which
contains, either directly or by incorporation by reference, audited
financial statements for the Corporation's latest fiscal year for
which such statements have been filed.<PAGE>
<PAGE> 11
(b) All other reports filed pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the fiscal year covered by the
annual report or prospectus incorporated pursuant to (a) above.
(c) The Corporation's definitive proxy statement or
information statement, if any, filed pursuant to Section 14 of the
Exchange Act in connection with the latest annual meeting of its
shareholders, and any definitive proxy or information statements so
filed in connection with any subsequent special meetings of its
shareholders.
(d) The description of any class of securities to be offered
herein which is contained in any registration statement filed under
Section 12 of the Exchange Act, including any amendments or reports
filed for the purpose of updating such description.
All reports and other documents subsequently filed by the
Corporation pursuant to Sections 13, 14 and 15(d) of the Exchange
Act, prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or
which deregisters all securities remaining unsold, shall be deemed
to be incorporated by reference herein and to be a part hereof from
the date of the filing of such reports and documents.
LEGAL OPINIONS
The validity of the Stock to be issued pursuant to the
Incentive Plan will be passed upon by John W. Blenke, Vice
President-Corporate Law and Assistant Secretary of Household. As
of the date of this Prospectus, Mr. Blenke is a full-time employee
and an officer of the Corporation, a participant in the Incentive
Plan, and owns Stock, and holds employee stock options to purchase
shares of Stock.
EXPERTS
The financial statements and schedules of the Corporation and
its subsidiaries incorporated by reference in this Prospectus to
the extent and for the periods indicated in its reports, have been
audited by Arthur Andersen LLP independent public accountants, and
are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving such reports.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. Incorporation of Documents by Reference.
The information set forth under "Incorporation of Certain Documents
By Reference" in the Prospectus included as a part of this
Registration Statement is hereby incorporated herein by reference.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
The information set forth under "Legal Opinions" and "Experts" in
the Prospectus included as a part of this Registration Statement is
hereby incorporated herein by reference.
Item 6. Indemnification of Directors and Officers.
The General Corporation Law of Delaware (Section 102) allows a
corporation to eliminate the personal liability of directors of a
corporation to the corporation or to any of its stockholders for
monetary damage for a breach of his fiduciary duty as a director,
except in the case where the director breached his duty of loyalty,
failed to act in good faith, engaged in intentional misconduct or
knowingly violated a law, authorized the payment of a dividend or
approved a stock repurchase in violation of Delaware corporate law<PAGE>
<PAGE> 12
or obtained in improper personal benefit. Household International,
Inc.'s (the "Corporation") Restated Certificate of Incorporation,
as amended, contains a provision which eliminates directors'
personal liability as set forth above.
The General Corporation Law of Delaware (Section 145) gives
Delaware corporations broad powers to indemnify their present and
former directors and officers and those of affiliated corporations
against expenses incurred in the defense of any lawsuit to which
they are made parties by reason of being or having been such
directors or officers, subject to specified conditions and
exclusions; gives a director or officer who successfully defends an
action the right to be so indemnified; and authorizes the Delaware
corporation to buy directors' and officers' liability insurance.
Such indemnification is not exclusive of any other right to which
those indemnified may be entitled under any bylaw, agreement, vote
of stockholders or otherwise.
The Corporation's Restated Certificate of Incorporation, as
amended, provides for indemnification to the fullest extent as
expressly authorized by Section 145 of the General Corporation Law
of Delaware for directors, officers and employees of the
Corporation and also to persons who are serving at the request of
the Corporation as directors, officers or employees of other
corporations (including subsidiaries). This right of
indemnification is not exclusive of any other right which any
person may acquire under any statute, bylaw, agreement, contract,
vote of stockholders or otherwise.
The Corporation has purchased liability policies which indemnify
its officers and directors against loss arising from claims by
reason of their legal liability for acts as officers and directors,
subject to limitations and conditions as set forth in the policies.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
4.1 Form of certificate for shares of Common Stock of the
Corporation. (Incorporated herein by reference to
Exhibit 4(a) of Household International, Inc.'s
registration statement on Form S-3, No. 33-39327).
4.2 Household International 1996 Long-Term Executive Incentive
Compensation Plan.
5 Opinion of John W. Blenke, Esq., Vice President-Corporate
Law and Assistant Secretary of Household International,
Inc.
23.1 Consent of Arthur Andersen LLP, Certified Public
Accountants.
23.2 Consent of John W. Blenke, Esq., Vice President-Corporate
Law and Assistant Secretary of Household International,
Inc. is contained in his opinion (Exhibit 5).
Item 9. Undertakings.
The Corporation hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement: (i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933; (ii) To reflect in the
prospectus any facts or events arising after the effective date of
the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; and (iii) to include any material
information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to<PAGE>
<PAGE> 13
such information in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule
424(b) of the Securities Act of 1933, as amended (the "Act") if, in
the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement.
(2) That, for purposes of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) That, for purposes of determining any liability under the
Act, each filing of the Corporation's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended, that is incorporated by reference in the Registration
Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of
such securities shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons of
the Corporation pursuant to the provisions set forth or described
in Item 6 of this Registration Statement, or otherwise, the
Corporation has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the Corporation of expenses
incurred or paid by a director, officer or controlling person in
the successful defense of any action, suit or proceeding) is
asserted against the Corporation by such director, officer or
controlling person, in connection with the securities registered
hereby, the Corporation will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
<PAGE>
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Prospect Heights,
and State of Illinois, on the 14th day of May, 1996.
HOUSEHOLD INTERNATIONAL, INC.
By /s/ William F. Aldinger
William F. Aldinger
Chairman and
Chief Executive Officer
Each person whose signature appears below constitutes and appoints
J. W. Blenke, L. S. Mattenson and P. D. Schwartz and each or any of them
(with full power to act alone), as his/her true and lawful attorney-in-
fact and agent, with full power of substitution and resubstitution, for
him/her in his/her name, place and stead, in any and all capacities, to
sign and file, with the Securities and Exchange Commission, any and all
amendments (including post-effective amendments) to the Registration
Statement, granting unto each such attorney-in-fact and agent full power
and authority to do and perform each and every act and thing requisite
and necessary to be done, as fully to all intents and purposes as he/she
might or could do in person, hereby ratifying and confirming all that
such attorney-in-fact and agent or their substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities indicated and on the 14th day of May, 1996.
Signature Title
/s/ William F. Aldinger Chairman, Chief Executive
(William F. Aldinger) Officer, and Director (as
Principal Executive Officer)
/s/ Robert J. Darnall Director
(Robert J. Darnall)
/s/ Gary G. Dillon Director
(Gary G. Dillon)
/s/ John A. Edwardson Director
(John A. Edwardson)
/s/ Mary Johnston Evans Director
(Mary Johnston Evans)
/s/ Dudley Fishburn, M.P. Director
(Dudley Fishburn, M.P.)
/s/ Cyrus F. Freidheim, Jr. Director
(Cyrus F. Freidheim, Jr.)
/s/ Louis E. Levy Director
(Louis E. Levy)
/s/ George A. Lorch Director
(George A. Lorch)
/s/ John D. Nichols Director
(John D. Nichols)
/s/ James B. Pitblado Director
(James B. Pitblado)
/s/ S. Jay Stewart Director
(S. Jay Stewart)
/s/ Louis W. Sullivan, M.D. Director
(Louis W. Sullivan, M.D.)
/s/ Raymond C. Tower Director
(Raymond C. Tower)<PAGE>
<PAGE> 15
/s/ David A. Schoenholz Executive Vice President-Chief
(David A. Schoenholz) Financial Officer (as
Principal Accounting and
Financial Officer)
<PAGE> 1
HOUSEHOLD INTERNATIONAL
1996 LONG-TERM EXECUTIVE INCENTIVE COMPENSATION PLAN
1. Purpose
-------
The purpose of the Household International 1996 Long-Term
Executive Incentive Compensation Plan (the "Plan") is to further
the long-term growth of Household International, Inc. and its
subsidiaries ("Household") by strengthening the ability of
Household to attract and retain employees of outstanding ability,
to provide an effective means for employees to acquire and
maintain ownership of Household Common Stock, to motivate such
employees to achieve long-range performance goals and objectives,
and to provide incentive compensation opportunities competitive
with those of other major corporations. Household senior
executives, in particular, are charged with enhancing shareholder
value and except under extraordinary circumstances, will only
receive options under this Plan. The options, if granted, to
Household senior executives will comprise a significant portion
of their total annual compensation. In addition, the Plan
provides for the issuance of options to purchase Household Common
Stock to non-employee Directors of Household in order to
facilitate ownership of Household Common Stock by Directors and
to more fully align the interests of Household's Directors with
that of its Common stockholders.
2. Administration
--------------
The Plan shall be administered by the Compensation Committee
of Household's Board of Directors (the "Committee"), a committee
of the Board appointed from time to time by the Board consisting
solely of two or more non-employee directors, each of whom shall
be an "outside director" as defined in Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code") and the
regulations thereunder and a "disinterested person" as defined in
Rule 16b-3 under Section 16(b) of the Securities Exchange Act of
1934 (the "Exchange Act"). The Committee shall have such powers
to administer the Plan as are delegated to it by the Plan and the
Board of Directors, including, to the extent permissible under
the terms of the Plan, the power to interpret the Plan and any
agreements executed thereunder, to prescribe rules and
regulations relating to the Plan, to determine the terms,
restrictions, and provisions of any agreement relating to awards
granted pursuant to the Plan, and to make all other
determinations necessary or advisable for administering the Plan.
Except as required by Rule 16b-3 (or any successor Rule thereto)<PAGE>
<PAGE> 2
with respect to grants of awards to individuals who are subject
to Section 16 of the Exchange Act or as otherwise required for
compliance with Rule 16b-3 or other applicable law, the Committee
may delegate all or any part of its authority under the Plan to
any officer of Household. All decisions made by the Committee,
or (unless the Committee has specified an appeal process to the
contrary) any other person to whom the Committee has delegated
authority pursuant to the provisions hereof, shall be final and
binding on all persons.
3. Grant of Awards; Shares Subject to Plan
---------------------------------------
(a) The Committee may grant any type of award permitted
under the terms of the Plan to employees (all such awards in the
aggregate being hereinafter referred to as "Awards"). Employees
of Household and its subsidiaries may be selected by the
Committee for Awards under the Plan. In addition, non-employee
Directors of Household will receive options pursuant to the
provisions of Section 6.
(b) The number of shares of Common Stock of Household that
may be issued under the Plan is equal to the sum of the number of
shares remaining available under the Household International
Long-Term Executive Incentive Compensation Plan (the "1984 Plan")
plus 4,000,000, all of which shares may be made subject to
options. The shares issued pursuant to an Award may consist of
authorized and unissued shares of Household's Common Stock,
Common Stock held in Household's treasury or Common Stock
purchased on the open market. If any Award granted under the
Plan or the 1984 Plan shall terminate or lapse for any reason,
any shares of Common Stock subject to such Award shall again be
available for grant under the Plan. The maximum number of shares
or share equivalents that may be granted through an Award to any
one participant in one year is 400,000 shares.
(c) In the event of corporate changes affecting Household's
Common Stock, this Plan or Awards granted to employees and
options granted to non-employee Directors hereunder (including,
without limiting the generality of the foregoing, stock
dividends, stock splits, recapitalizations, reorganizations,
mergers, consolidations, or other relevant changes in
capitalization), appropriate adjustments in price, number and
kind of shares of Common Stock or other consideration subject to
such Awards or in the terms of such Awards, shall be made so as
to prevent dilution or enlargement of rights under the Awards.
In addition, the aggregate number or remaining number or kind of
shares which may be issued under the Plan will be adjusted to
equitably reflect any such corporate changes.
(d) The Committee may, in its discretion and subject to
such rules as it may adopt, permit an employee to satisfy, in<PAGE>
<PAGE> 3
whole or in part, withholding tax obligations incurred in
connection with Awards: (i) by electing to have Household
withhold shares of Household Common Stock (otherwise deliverable
to the employee in connection with an Award) in payment for such
withholding tax obligation or (ii) by delivering shares of
Household Common Stock owned by such employee in payment for such
withholding tax obligation. Any shares of Common Stock
surrendered by an employee in full or partial payment of
withholding tax obligations must have been held by such employee
at least six months prior to the date such shares are surrendered
in payment.
(e) The Committee may provide that any Award to employees
under the Plan earn dividend equivalents. Such dividend
equivalents may be paid currently or may be credited to a
participant's account, including during any deferral period. Any
crediting of dividend equivalents may be subject to such
restrictions and conditions as the Committee may establish,
including reinvestment in additional shares or share equivalents.
However, the payment of dividend equivalents will not be
conditioned upon the employee exercising an option.
(f) Except as may be provided in the agreement for any
specific employee Award or otherwise limited in this Plan, the
Committee may, in its sole discretion, in whole or in part, waive
any restrictions or conditions applicable to, or accelerate the
vesting of, any Award to an employee.
(g) To the extent the Committee deems it necessary,
appropriate or desirable to comply with foreign law or practice
and to further the purpose of this Plan, the Committee may,
without amending this Plan, (i) establish special rules
applicable to Awards granted to employees who are foreign
nationals, are employed outside the United States, or both,
including rules that differ from those set forth in this Plan and
(ii) grant Awards to such employees in accordance with those
rules.
4. Employee Options
----------------
(a) The Committee may grant to employees any type of
statutory or non-statutory option to purchase shares of Household
Common Stock as is permitted by law at the time the option is
granted. The term of the initial grant of each option shall not
be more than ten years and one day from the date of grant and may
be exercised at the rate set by the Committee or as stated
herein; provided, however, that no option shall be exercised less
than one year from the date of grant, except as provided herein.
The Committee may, in its discretion, extend the expiration date
of certain outstanding employee options, provided no expiration
date of any option may exceed fifteen years from the date of the<PAGE>
<PAGE> 4
grant of that option.
(b) The per share purchase price of Household Common Stock
which may be acquired pursuant to an employee option shall be at
least 100% of the fair market value of one share of Common Stock
of Household on the date on which the option is granted. Within
this limitation, such price shall be determined by the Committee.
(c) Payment for shares purchased upon the exercise of an
employee option shall be made in cash or, in the discretion of
the Committee, in shares of Common Stock of Household valued at
the then fair market value of such shares or by a combination of
cash and shares of Common Stock. Any shares of Common Stock
surrendered by an employee in full or partial payment of the
exercise price of an option must have been held by such employee
at least six months prior to the date such shares are surrendered
in payment.
(d) The Committee may, in its discretion and subject to
such rules as it may adopt, authorize an extension of credit from
Household to an employee holding an option granted under this
Plan (including an employee who is an officer or director of
Household) to assist the employee in exercising the option.
Household may extend or guarantee loans under this provision.
Loans extended under the Plan will bear interest at a variable
rate that is adjusted annually to equal the greater of the
average annual rate for three-year U.S. Treasury notes for the
calendar year immediately preceding the year in which the
adjustment is to be made and the applicable rate in effect under
Section 1274(d) of the Internal Revenue Code on the day the loan
is made. Payment terms will be established by the Committee and
may or may not require periodic payments of interest and/or
principal. The term of loans will be established by the
Committee, as well as provisions governing the acceleration of
maturity upon termination of employment or default. Loans
financed or guaranteed by Household will be secured by retention
of the issued stock certificates by Household and execution of an
agreement with respect to such shares. To the extent necessary
to satisfy the provisions of Regulation G or another similar
regulatory restriction, other security may be required by the
Committee.
5. Transfer of Employee Options; Exercise of Employee Options
Following Termination of Employment
----------------------------------------------------------
(a) Options may be exercised only by the employee and shall
not be transferable other than by will or the laws of descent and
distribution. These restrictions on transferability shall not
apply to the extent (i) such restrictions are not at the time
required for the Plan to continue to meet the requirements of
Rule 16b-3 of the Exchange Act, or any successor Rule, (ii) the<PAGE>
<PAGE> 5
Committee has established rules concerning the transferability of
employee options and (iii) the agreement relating to an Award so
specifies or the holder has received notice from the Office of
the Secretary of Household that such restrictions are no longer
applicable. If the holder of an option shall cease to be an
employee of Household or a subsidiary, and unless otherwise
provided by the Committee, all rights under such option shall
immediately terminate, except:
(i) in the event of termination of employment of a
holder to which Section 11(b) hereof applies, or of a holder
who is retirement-eligible under the terms of a pension plan
of Household or a subsidiary, the option may be exercised
within five years of the date of termination of employment
or as otherwise provided in the agreement for the Award;
(ii) in the event of termination of employment due to
permanent and total disability, and the holder is not
retirement-eligible under the terms of a pension plan of
Household or a subsidiary, the option may be exercised
within twelve months following the date of such termination
of employment or as otherwise provided in the agreement for
the Award;
(iii) in the event of death during employment, the
option may be exercised by the executor, administrator, or
other personal representative of the holder within five
years succeeding death if such holder was
retirement-eligible under the terms of a pension plan of
Household or a subsidiary, or twelve months if such holder
was not retirement-eligible under the terms of a pension
plan of Household or a subsidiary or as otherwise provided
in the agreement for the Award;
(iv) except in the event an employee is terminated for
cause, following termination of employment other than as set
forth in subsections (i), (ii) or (iii) above, the option
may be exercised within three months following the date of
termination, or prior to the expiration of the option,
whichever period is shorter; or
(v) in the event of death of a holder of an option
following termination of employment, the option may be
exercised by the executor, administrator, or other personal
representative of the holder, notwithstanding the time
period specified in (i), (ii), (iii) or (iv) above, within
a) twelve months following death or b) the remainder of the
period in which the holder was entitled to exercise the
option, whichever period is longer.
If the Committee determines that the termination is for
cause, the option will not under any circumstances be exercisable<PAGE>
<PAGE> 6
following termination of employment.
(b) An option may not be exercised pursuant to this Section
after the expiration of the term of such option and may be
exercised only to the extent that the holder was entitled to
exercise such option on the date of termination of employment.
6. Non-Employee Director Options
-----------------------------
(a) Each non-employee Director of Household will be granted
an option for 1,500 shares of Household Common Stock on the date
of each Annual Meeting of Stockholders at which such Director is
elected to the Board of Directors, beginning with the 1997 Annual
Meeting of Stockholders. The Committee will have no discretion
to select which non-employee Directors will be granted options or
to determine the number of
option shares, price, vesting schedule or any other term of the
options granted to non-employee Directors. All options granted
to non-employee Directors will be non-qualified stock options.
(b) The per share purchase price of Common Stock which may
be acquired pursuant to a non-employee Director option shall
be 100% of the fair market value of one share of Common Stock on
the date the option is granted. For purposes of establishing the
fair market value of Household's Common Stock on any day under
Section 6 of this Plan, such value shall be the average of the
highest and lowest sales prices per share of the Common Stock as
reported in the NYSE-Composite Transactions in The Wall Street
Journal for such date. However, if the NYSE is not open for
trading on a given day, the fair market value will be the average
of the highest and lowest sales prices per share on the next
succeeding business day.
(c) Subject to Section 11 of this Plan, each option granted
to a non-employee Director vests and shall be fully exercisable
beginning six months from the date the option was granted. Each
such option expires ten years and one day from the date of the
grant. However, if a non-employee Director ceases to be a
Director of Household, outstanding vested options are exercisable
as follows:
(i) in the event service on the Board of Directors
terminates due to permanent and total disability,
outstanding options may be exercised within twelve months
following the date such service terminates or prior to the
expiration of the outstanding options, whichever period is
shorter;
(ii) in the event of death of a non-employee Director
whether during service as a Director of Household or after
ceasing such service, outstanding options may be exercised<PAGE>
<PAGE> 7
by the executor, administrator, or other personal
representative of such Director within twelve months after
the death of the Director or prior to the expiration of the
outstanding options, whichever period is longer;
(iii) in the event a non-employee Director's service
on the Board of Directors terminates because such Director
has reached the mandatory retirement age of 70 (or age 72 if
a Director was serving on the Board as of January 1, 1989)
or if a non-employee Director retires from the Board prior
to reaching the mandatory retirement age but after having
served on the Board of Directors continuously for at least
fifteen years, outstanding options may be exercised at any
time prior to the expiration of the outstanding options; and
(iv) in the event service on the Board of Directors
terminates other than as set forth in subsections (i),
(ii) or (iii) above, outstanding options may be exercised
within three months following the date such service
terminates or prior to the expiration of the outstanding
options, whichever period is shorter.
(d) Payment for shares purchased upon exercise of a
non-employee Director option shall be made in cash, in shares of
Household Common Stock valued at the then fair market value of
such shares or by a combination of cash and shares of Common
Stock. Any shares of Common Stock surrendered in full or partial
payment of the exercise price of an option must have been held by
such Director at least six months prior to the date such shares
are surrendered in payment.
A non-employee Director may also satisfy, in whole or in
part, income tax obligations incurred in connection with the
exercise of an option by (i) electing to have Household withhold
shares of Common Stock (otherwise deliverable to the Director in
connection with the exercise of an option) in payment for such
income tax obligation or (ii) by delivering shares of Household
Common Stock owned by such Director in payment for such income
tax obligation. Any shares of Common Stock surrendered in full
or partial payment of income tax obligations must have been held
by such Director at least six months prior to the date such
shares are surrendered.
(e) Non-employee Director options are not transferable
other than by will and the laws of descent and distribution.
7. Restricted Stock Rights
-----------------------
(a) Upon such terms as it deems appropriate, the Committee
from time to time may grant Restricted Stock Rights ("RSRs") to
any employee selected by the Committee, which entitle such<PAGE>
<PAGE> 8
employee to receive a stated number of shares of Common Stock of
Household. The RSRs are subject to forfeiture if the employee
fails to remain continuously employed by Household or any
subsidiary for the period(s) stipulated by the Committee (each, a
"Restricted Period").
(b) RSRs shall be subject to the following restrictions and
limitations: (i) the RSRs may not be transferred except by will
or the laws of descent and distribution; and (ii) except as
otherwise provided in Paragraphs (d) and (e) of this Section 7,
an RSR and the shares subject to an RSR shall be forfeited and
all rights of a holder of an RSR shall terminate without any
payment of consideration by Household if such employee fails to
remain continuously employed by Household or any subsidiary for
the Restricted Period. A holder of an RSR shall remain
continuously employed if such holder leaves the employ of
Household or any subsidiary for immediate reemployment with
Household or any subsidiary.
(c) Other than as may be specified pursuant to
Section 3(e), the holder of an RSR shall not be entitled to any
of the rights of a holder of the Common Stock with respect to the
shares subject to such RSR prior to the issuance of such shares
pursuant to the Plan.
(d) The Committee in its sole discretion may accelerate the
payment of Household Common Stock under an RSR prior to the
termination of the Restricted Period if the holder of an RSR has
achieved certain performance levels established by the Committee
at the time an RSR is granted. The Committee in its sole
judgment may revise such performance levels as it deems
appropriate to reflect significant, unforeseen events or changes.
(e) In the event that the employment of a holder of an RSR
terminates by reason of death or permanent and total disability
or as a result of Section 11(b) hereof, such holder shall be
entitled to receive the number of shares subject to the RSR
multiplied by a fraction (x) the numerator of which shall be the
number of full months between the date of grant of each such RSR
and the date of such termination of employment, and (y) the
denominator of which shall be the number of full months in the
respective Restricted Period; provided, however, no fractional
share shall be awarded. A holder of an RSR whose employment
terminates for reasons other than those listed in this paragraph
will forfeit all rights under any outstanding RSR. This
automatic forfeiture may be waived in whole or in part by the
Committee in its sole discretion.
(f) When a holder shall be entitled to receive shares
pursuant to an RSR, Household shall issue the appropriate number
of shares registered in the name of the holder.<PAGE>
<PAGE> 9
8. Other Stock-Based Awards
------------------------
The Committee may make awards of unrestricted shares of
Household Common Stock to eligible employees in recognition of
outstanding achievements.
9. Forfeiture
----------
If it is determined that an employee or former employee,
while employed by Household or any subsidiary or otherwise
associated with Household or any subsidiary as a consultant,
advisor or in another similar capacity, engaged at any time in
any activity in competition with any activity of Household or any
subsidiary or inimical, contrary or harmful to the interests of
Household or any subsidiary including, but not limited to:
(i) conduct related to the participant's position for which
either criminal or civil penalties against the participant may be
sought, (ii) violation of Household policies, notwithstanding
Household's decision or inability to, or not to, terminate the
participant for such violation, (iii) accepting employment with
or serving as a consultant, advisor or in any other capacity to
an employer that is in competition with or acting against the
interests of Household or any subsidiary, including employing or
recruiting any present employee of Household or any subsidiary
for such competitor, (iv) disclosing or misusing any confidential
information or material concerning Household or any subsidiary,
or (v) participating in a hostile takeover attempt of Household,
then the Committee, in its sole discretion, may cancel any
unexpired or unpaid Award at any time.
10. Amendment and Termination of the Plan
-------------------------------------
This Plan will expire on May 8, 2006. However, the Board of
Directors may terminate the Plan at any time except as provided
in Section 11(d), but such termination shall not affect Awards
previously granted under the Plan. During the Plan term, the
Committee may amend the Plan or any Award granted to an employee
under the Plan at any time, except (i) the Plan may not be
amended or terminated in the circumstances set forth in
Section 11(d), (ii) the Committee may not, without shareholder
approval, and except as permitted by Section 3(c), increase the
number of shares of Common Stock of Household which may be issued
pursuant to the Plan, change the purchase price of an Option, and
(iii) the Committee may not make any other amendment to the Plan
which is required by law to be approved by the shareholders of
Household.
Notwithstanding the preceding paragraph, the provisions of
Section 6 of the Plan relating to non-employee Directors may not
be amended more than once every six months, except to comply with<PAGE>
<PAGE> 10
changes to the Code or the rules and regulations thereunder.
11. Change in Control
-----------------
(a) In order to protect participants in the Plan who have
outstanding Awards in the event there is a "Change in Control"
(as defined below), (i) all outstanding Options will immediately
vest and will become fully exercisable and (ii) as to any other
Awards to employees, the Committee, in its sole discretion
(notwithstanding any contrary provision in Section 3(f)), may:
(i) accelerate the time periods for exercising or
realizing any Awards, notwithstanding any minimum holding or
restricted periods set forth in the Plan or established by
the Committee at the time of the grant of the Award;
(ii) provide for the purchase by Household of any
Awards in cash equal to the amount that could have been
received upon the exercise or realization of such Awards had
the Awards been currently exercisable or payable on the day
before said cash payment is made;
(iii) make such adjustments, including the granting
of additional Awards, to any outstanding Award as the
Committee deems appropriate to reflect the Change in
Control; and
(iv) cause outstanding Awards to be assumed, or new
rights of equal value to be substituted therefor, by any
corporation that is the successor to Household.
(b) Any employee whose position with Household or any of
its subsidiaries is "Materially Changed" (as defined below)
within twenty-four (24) months after a Change in Control shall be
deemed to be involuntary terminated without "cause" (as defined
below) from Household and be entitled to exercise or receive the
payment of Awards previously granted to the employee that were
outstanding immediately prior to the event causing such
termination or were awarded subsequent to the event causing such
termination, in each case, in accordance with Sections 5(a)(i) or
7(e) of the Plan, without any action by the Committee or Board of
Directors.
(c) For purposes of this Section and to determine the
rights of any participant who has an outstanding Award, the term:
(i) "Change in Control" means:
(1) any individual, firm, corporation or
other entity (including any successor
of such entity) other than: (x) a<PAGE>
<PAGE> 11
trustee or other fiduciary of securities
held under an employee benefit plan of
Household, or (y) Household or any
subsidiary thereof becomes a beneficial
owner, directly or indirectly, of common
stock of Household representing ten
percent (10%) or more of the total
voting power of Household's then
outstanding Common Stock and Household
acquires actual knowledge thereof;
(2) a tender offer is made for thirty
percent (30%) or more of the common
stock of Household, which tender offer
has not been approved by the Board of
Directors of Household; or
(3) a solicitation subject to Rule 14a-11
under the Exchange Act (or any successor
Rule) relating to the election or
removal of 50% or more of the Board of
Directors is made by any person other
than Household or less than 50% of the
members of the Household Board of
Directors are "Continuing Directors" (as
defined below).
Notwithstanding subsection (c)(i)(1)
above, if the Board of Directors of
Household determines in good faith that
a person who has met the foregoing
definition has done so inadvertently,
and such person divests as promptly
promptly as practicable a sufficient
number of shares to be below the noted
threshold, then such person, in regard
to that event, shall not trigger a
"Change in Control" for purposes of the
Plan.
(ii) "Materially Changed" means the occurrence of one
or more of the following events:
(1) the termination of the employee, without
cause, and other than by reason of
death, permanent and total disability or
retirement under the terms of a pension
plan of Household or any subsidiary;
(2) the employee was assigned to a position
of lesser rank or status;
<PAGE>
<PAGE> 12
(3) the employee's annual target bonus or
targeted performance unit awards were
reduced and compensation equivalent in
aggregate value was not substituted;
(4) the employee's annual salary was
reduced;
(5) the employee's benefits under the
Household Retirement Income Plan or any
successor tax qualified defined benefit
plan were reduced for reasons other than
to maintain its tax qualified status and
such reductions were not supplemented in
the Household Supplemental Retirement
Income Plan ("HSRIP"); or the employee's
benefits under HSRIP, if applicable,
were reduced;
(6) the employee's other benefits or
perquisites were reduced and such
reductions were not uniformally applied
with respect to all similarly situated
employees; or
(7) the employee was reassigned to a
geographical area outside of the
metropolitan area in which the employee
was assigned at the time of the Change
in Control.
(iii) "cause" means willful and deliberate
misconduct, which is detrimental in a significant way to the
interests of Household or any subsidiary thereof;
(iv) "Continuing Director" means a director of
Household who either (i) was a Director of Household on
May 8, 1996, or (ii) is an individual whose election, or
nomination for election, as a Director of Household was
approved by a vote of at least two-thirds of the Directors
then still in office who were Continuing Directors other
than an individual whose initial assumption of office is in
connection with an active or threatened election contest
relating to the election of Directors of Household which
would be subject to Rule 14a-11 under the Exchange Act (or
any successor Rule).
(d) Notwithstanding anything set forth in Section 11
hereof, with the occurrence of a Change in Control the Plan may
not be amended or terminated by the Committee, the Board of
Directors or the stockholders of Household.
<PAGE>
<PAGE> 13
12. Miscellaneous
-------------
(a) The Plan is intended to constitute an "unfunded" plan
for incentive compensation. With respect to any payments or
deliveries of shares of Household Common Stock not yet made to a
participant by Household, nothing contained herein shall give any
rights to a participant that are greater than those of a general
creditor of Household. The Committee may authorize the creation
of trusts or other arrangements to meet the obligations created
under the Plan to deliver shares of Household Common Stock or
payments hereunder consistent with the foregoing.
(b) With respect to participants subject to Section 16 of
the Exchange Act, transactions under this Plan are intended to
comply with all applicable provisions of Rule 16b-3 or its
successor under the Exchange Act. To the extent any provision of
the Plan or action by the Committee or its designee fails to so
comply, it shall be deemed null and void.
(c) This Plan and each agreement with respect to an Award
shall be construed and administered in accordance with the laws
of the State of Delaware without giving effect to principles
relating to conflict of laws.
(d) Neither the adoption of the Plan nor any Award granted
hereunder shall confer upon any participant any right to
continued employment or service with Household or any subsidiary
thereof, nor shall the Plan or any Award interfere in any way
with the right of Household or a subsidiary to terminate the
employment or relationship of any of the participants at any
time.
U:\LAW\EDGAR\96PLAN.AS1 (effective 5/8/96)
Exhibit 5
May 13, 1996
Household International, Inc.
2700 Sanders Road
Prospect Heights, Illinois 60070
RE: Household International Long-Term Incentive Compensation
Plan--Registration Statement on Form S-8
Ladies and Gentlemen:
As Vice President-Corporate Law and Assistant Secretary of
Household International, Inc. (the "Company"), I am generally
familiar with the proceedings in connection with the Company's
Registration Statement on Form S-8 in which shares of the Company's
Common Stock ($1.00 par value per share) offered pursuant to the
Company's Long-Term Incentive Compensation Plan are being
registered under the Securities Act of 1933, as amended (the
"Act"). In accordance with the foregoing, I have examined such
corporate records, certificates, public documents and other
documents, and have reviewed such questions of law, as considered
necessary or appropriate for the purpose of this opinion.
Upon the basis of such examination, it is my opinion that:
1. The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of
Delaware.
2. The shares of Common Stock have been duly authorized by the
Company, and when (i) the registration statement on Form S-8
by the Company with respect to the shares of Common Stock (the
"Registration Statement") shall have been filed with the
Securities and Exchange Commission under the Act and (ii)
shares of the Company's Common Stock are distributed pursuant
to the Plan, such shares will be validly issued, fully paid
and non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving said consent, I do not admit that
I am in the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Securities
and Exchange Commission thereunder.
Very truly yours,
John W. Blenke
u:\law\corp\options\exhibit.5
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Household International, Inc.:
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement relating
to the offering of 4,000,000 shares of Household International,
Inc. Long-Term Executive Incentive Compensation Plan, of our report
dated January 24, 1996, included in Household International,
Inc.,'s Form 10-K for the year ended December 31, 1995, and to all
references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Chicago, Illinois,
May 13, 1996
c:\elink\filing\ex23-1.as1
