EXHIBIT 10.6
HOUSEHOLD INTERNATIONAL, INC.
1996 LONG-TERM EXECUTIVE INCENTIVE COMPENSATION PLAN
----------
NON-TAX QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, between HOUSEHOLD INTERNATIONAL, INC., a Delaware
corporation (the "Company"), and the employee referenced on the cover sheet to
this Agreement (the "Employee"), is made pursuant to the Household International
1996 Long-Term Executive Incentive Compensation Plan (the "Incentive Plan").
The terms of such agreement are as follows:
1. The Company hereby grants to the Employee an option, for a period
of 10 years and one day from the grant date, to purchase, on these terms and
conditions and also subject to the Incentive Plan, shares of the common stock of
the Company as set forth in the cover sheet to this Agreement.
2. No shares may be purchased under this option for one year from the
grant date. After one year, this option may, unless sooner terminated under the
provisions hereof, be exercised in numbers of shares not to exceed 25 percent of
the aggregate number of shares under option on and after each of the first,
second, third and fourth anniversaries of the grant date, provided that 100% of
the shares in this option may be exercised (a) on the last day of employment in
the case of an Employee who is retirement-eligible under the terms of a pension
plan of the Company or a subsidiary, or (b) if so determined by the Compensation
Committee of the Board of Directors (the "Committee") during the Employee's
employment. An Employee may exercise all or a portion of a vested option during
the option term.
To exercise an option you must give the Company ten days written
notice of exercise specifying the number of shares to be purchased, which must
be a minimum of twenty-five (25) shares, and include payment for the shares.
Payment for the option may be made by cash or check to the order of the Company,
and also may be made with shares of common stock of the Company valued at the
then fair market value of such shares or by a combination of cash and shares of
common stock pursuant to such Committee or Board of Directors rules in effect at
the time the option is exercised. The Committee or Board of Directors may, at
any time, rescind the right to use common stock of the Company in payment for
shares purchased through the option.
3. The option may not be transferred except by will or the laws of
descent and distribution. The option may be exercised during the lifetime of
the Employee only by the Employee and only while he or she is an employee of the
Company (or a subsidiary thereof) and shall have been continuously so employed
from the grant date, except that: (i) in the event of termination of employment
of the Employee and the Employee is retirement-eligible under the terms of a
pension plan of the Company or a subsidiary, the option may be exercised within
five years of the date of termination of employment; (ii) in the event of
termination of employment due to permanent and total disability of the Employee
and the Employee is not retirement-eligible under the terms of a pension plan of
the Company or a subsidiary, the option may be exercised within twelve months
following the date of such termination of employment; (iii) in the event of
death during employment, the option may be exercised by the executor,
administrator, or other personal representative of the Employee within five
years succeeding death if such Employee was retirement-eligible under the terms
of a pension plan of the Company or a subsidiary, or twelve months if such
Employee was not retirement-eligible under the terms of a pension plan of the
Company or a subsidiary; (iv) in the event of 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, except for
termination for cause; (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 Employee, notwithstanding
the time periods 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
-1-
option, whichever period is longer. If the Committee determines that the
termination is for cause, the option will not under any circumstances be
exercisable following termination of employment. Notwithstanding anything herein
to the contrary, the 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. The option will expire in all events and for all
purposes 10 years and one day from the grant date.
4. If it is determined that the Employee or former Employee, while
employed by the Company or any subsidiary or otherwise associated with the
Company 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 the Company or any subsidiary or inimical, contrary or harmful to the
interests of the Company or any subsidiary including, but not limited to: (i)
conduct related to the Employee's position for which either criminal or civil
penalties against the Employee may be sought, (ii) violation of the Company's
policies, notwithstanding the Company's decision or inability to, or not to,
terminate the Employee 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 the Company or any
subsidiary, including employing or recruiting any present employee of the
Company or any subsidiary for such competitor, (iv) disclosing or misusing any
confidential information or material concerning the Company or any subsidiary,
or (v) participating in a hostile takeover attempt of the Company, then the
Committee, in its sole discretion, may cancel any outstanding option at any
time.
5. The Company shall not be required to issue or deliver any
certificate or certificates for shares of stock purchased upon the exercise of
the option herein granted prior to the listing of such shares on all stock
exchanges on which the Company's stock shall then be listed. Upon any exercise
of said option, the Company shall take the steps required for listing.
6. Neither the Employee nor his personal representative shall have
any of the rights or privileges of a stockholder with respect to any shares
subject to this option unless and until certificates evidencing such shares
shall have been delivered.
7. Notice to the Company shall be addressed to the Company in care of
the Shareholder Services Department at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and notice to the Employee shall be addressed to him or her at
the address as set forth on the cover sheet of this Agreement, or at such other
address as either party may hereafter designate in writing to the other.
8. Anything herein to the contrary notwithstanding, this option
agreement shall be subject to amendment by the Company from time to time to the
extent permitted by the Incentive Plan and is subject to the provisions of the
Incentive Plan.
-2-
HOUSEHOLD INTERNATIONAL, INC.
1996 LONG-TERM EXECUTIVE INCENTIVE COMPENSATION PLAN
----------
NON-TAX QUALIFIED STOCK OPTION AGREEMENT
FOR SENIOR MANAGEMENT TEAM
THIS AGREEMENT, between HOUSEHOLD INTERNATIONAL, INC., a Delaware
corporation (the "Company"), and the employee referenced on the cover sheet to
this Agreement (the "Employee"), is made pursuant to the Household International
1996 Long-Term Executive Incentive Compensation Plan (the "Incentive Plan").
The terms of such agreement are as follows:
1. The Company hereby grants to the Employee an option, for a period of
10 years and one day from the grant date, to purchase, on these terms and
conditions and also subject to the Incentive Plan, shares of the common stock of
the Company as set forth in the cover sheet to this Agreement.
2. No shares may be purchased under this option for one year from the
grant date. After one year, this option may, unless sooner terminated under the
provisions hereof, be exercised in numbers of shares not to exceed 25 percent of
the aggregate number of shares under option on and after each of the first,
second, third and fourth anniversaries of the grant date, provided that 100% of
the shares in this option may be exercised (a) on the last day of employment in
the case of an Employee who is retirement-eligible under the terms of a pension
plan of the Company or a subsidiary, or (b) if so determined by the Compensation
Committee of the Board of Directors (the "Committee") during the Employee's
employment. An Employee may exercise all or a portion of a vested option during
the option term.
To exercise an option you must give the Company ten days written
notice of exercise specifying the number of shares to be purchased, which must
be a minimum of twenty-five (25) shares, and include payment for the shares.
Payment for the option may be made by cash or check to the order of the Company,
and also may be made with shares of common stock of the Company valued at the
then fair market value of such shares or by a combination of cash and shares of
common stock pursuant to such Committee or Board of Directors rules in effect at
the time the option is exercised. The Committee or Board of Directors may at
any time rescind the right to use common stock of the Company in payment for
shares purchased through the option.
3. The option may not be transferred except by will or the laws of
descent and distribution, unless the Company has notified you to the contrary.
The option may be exercised during the lifetime of the Employee only by the
Employee and only while he or she is an employee of the Company (or a subsidiary
thereof) and shall have been continuously so employed from the grant date,
except that: (i) in the event of termination of employment of the Employee and
the Employee is retirement-eligible under the terms of a pension plan of the
Company or a subsidiary, the option may be exercised at any time before the
expiration date of the option; (ii) in the event of termination of employment
due to permanent and total disability of the Employee and the Employee is not
retirement-eligible under the terms of a pension plan of the Company or a
subsidiary, the option may be exercised within twelve months following the date
of such termination of employment; (iii) in the event of death during
employment, the option may be exercised by the executor, administrator, or other
personal representative of the Employee within five years succeeding death if
such Employee was retirement-eligible under the terms of a pension plan of the
Company or a subsidiary, or twelve months if such Employee was not retirement-
eligible under the terms of a pension plan of the Company or a subsidiary; (iv)
in the event of 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, except for termination for cause; (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 Employee, notwithstanding the time periods
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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. If the Committee determines
that the termination is for cause, the option will not under any circumstances
be exercisable following termination of employment. Notwithstanding anything
herein to the contrary, the 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. The option will expire in all events and for all
purposes 10 years and one day from the grant date.
4. If it is determined that the Employee or former Employee, while
employed by the Company or any subsidiary or otherwise associated with the
Company 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 the Company or any subsidiary or inimical, contrary or harmful to the
interests of the Company or any subsidiary including, but not limited to: (i)
conduct related to the Employee's position for which either criminal or civil
penalties against the Employee may be sought, (ii) violation of the Company's
policies, notwithstanding the Company's decision or inability to, or not to,
terminate the Employee 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 the Company or any
subsidiary, including employing or recruiting any present employee of the
Company or any subsidiary for such competitor, (iv) disclosing or misusing any
confidential information or material concerning the Company or any subsidiary,
or (v) participating in a hostile takeover attempt of the Company, then the
Committee, in its sole discretion, may cancel any outstanding option at any
time.
5. The Company shall not be required to issue or deliver any certificate
or certificates for shares of stock purchased upon the exercise of the option
herein granted prior to the listing of such shares on all stock exchanges on
which the Company's stock shall then be listed. Upon any exercise of said
option, the Company shall take the steps required for listing.
6. Neither the Employee nor his personal representative shall have any of
the rights or privileges of a stockholder with respect to any shares subject to
this option unless and until certificates evidencing such shares shall have been
delivered.
7. Notice to the Company shall be addressed to the Company in care of the
Shareholder Services Department at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ and notice to the Employee shall be addressed to him or her at the address
as set forth on the cover sheet of this Agreement, or at such other address as
either party may hereafter designate in writing to the other.
8. Anything herein to the contrary notwithstanding, this option agreement
shall be subject to amendment by the Company from time to time to the extent
permitted by the Incentive Plan and is subject to the provisions of the
Incentive Plan.
-4-
HOUSEHOLD INTERNATIONAL, INC.
1996 LONG-TERM EXECUTIVE INCENTIVE COMPENSATION PLAN
----------
U.K. NON-TAX QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, between HOUSEHOLD INTERNATIONAL, INC., a Delaware
corporation (the "Company"), and the employee referenced on the cover sheet to
this Agreement (the "Employee"), is made pursuant to the Household International
1996 Long-Term Executive Incentive Compensation Plan (the "Incentive Plan").
The terms of such agreement are as follows:
1. The Company hereby grants to the Employee an option, for a period of
10 years from the grant date, to purchase, on these terms and conditions and
also subject to the Incentive Plan, shares of the common stock of the Company as
set forth in the cover sheet to this Agreement.
2. No shares may be purchased under this option for one year from the
grant date. After one year, this option may, unless sooner terminated under the
provisions hereof, be exercised in numbers of shares not to exceed 25 percent of
the aggregate number of shares under option on and after each of the first,
second, third and fourth anniversaries of the grant date, provided that 100% of
the shares in this option may be exercised (a) on the last day of employment in
the case of an Employee who is retirement-eligible under the terms of a pension
plan of the Company or a subsidiary, or (b) if so determined by the Compensation
Committee of the Board of Directors (the "Committee") during the Employee's
employment. An employee may exercise all or a portion of a vested option during
the option term.
To exercise an option you must give the Company ten days written
notice of exercise specifying the number of shares to be purchased, which must
be a minimum of twenty-five (25) shares, and include payment for the shares.
Payment for the option may be made by cash or check to the order of the Company,
and also may be made with shares of common stock of the Company valued at the
then fair market value of such shares or by a combination of cash and shares of
common stock pursuant to such Committee or Board of Directors rules in effect at
the time the option is exercised. The Committee or Board of Directors may, at
any time, rescind the right to use common stock of the Company in payment for
shares purchased through the option.
3. The option may not be transferred except by will or the laws of
descent and distribution. The option may be exercised during the lifetime of
the Employee only by the Employee and only while he or she is an employee of the
Company (or a subsidiary thereof) and shall have been continuously so employed
from the grant date, except that: (i) in the event of termination of employment
of the Employee and the Employee is retirement-eligible under the terms of a
pension plan of the Company or a subsidiary, the option may be exercised within
five years of the date of termination of employment; (ii) in the event of
termination of employment due to permanent and total disability of the Employee
and the Employee is not retirement-eligible under the terms of a pension plan of
the Company or a subsidiary, the option may be exercised within twelve months
following the date of such termination of employment; (iii) in the event of
death during employment, the option may be exercised by the executor,
administrator, or other personal representative of the Employee within five
years succeeding death if such Employee was retirement-eligible under the terms
of a pension plan of the Company or a subsidiary, or twelve months if such
Employee was not retirement-eligible under the terms of a pension plan of the
Company or a subsidiary; (iv) in the event of 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, except for
termination for cause; (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 Employee, notwithstanding
the time periods 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
-5-
option, whichever period is longer. If the Committee determines that the
termination is for cause, the option will not under any circumstances be
exercisable following termination of employment. Notwithstanding anything herein
to the contrary, the 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. The option will expire in all events and for all
purposes 10 years from the grant date.
4. If it is determined that the Employee or former Employee, while
employed by the Company or any subsidiary or otherwise associated with the
Company 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 the Company or any subsidiary or inimical, contrary or harmful to the
interests of the Company or any subsidiary including, but not limited to: (i)
conduct related to the Employee's position for which either criminal or civil
penalties against the Employee may be sought, (ii) violation of the Company's
policies, notwithstanding the Company's decision or inability to, or not to,
terminate the Employee 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 the Company or any
subsidiary, including employing or recruiting any present employee of the
Company or any subsidiary for such competitor, (iv) disclosing or misusing any
confidential information or material concerning the Company or any subsidiary,
or (v) participating in a hostile takeover attempt of the Company, then the
Committee, in its sole discretion, may cancel any outstanding option at any
time.
5. The Company shall not be required to issue or deliver any certificate
or certificates for shares of stock purchased upon the exercise of the option
herein granted prior to the listing of such shares on all stock exchanges on
which the Company's stock shall then be listed. Upon any exercise of said
option, the Company shall take the steps required for listing.
6. Neither the Employee nor his personal representative shall have any of
the rights or privileges of a stockholder with respect to any shares subject to
this option unless and until certificates evidencing such shares shall have been
delivered.
7. Notice to the Company shall be addressed to the Company in care of the
Shareholder Services Department at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ and notice to the Employee shall be addressed to him or her at the address
as set forth on the cover sheet of this Agreement, or at such other address as
either party may hereafter designate in writing to the other.
8. Anything herein to the contrary notwithstanding, this option agreement
shall be subject to amendment by the Company from time to time to the extent
permitted by the Incentive Plan and is subject to the provisions of the
Incentive Plan.
-6-
HOUSEHOLD INTERNATIONAL, INC.
1996 LONG-TERM EXECUTIVE INCENTIVE COMPENSATION PLAN
----------
NON-TAX QUALIFIED STOCK OPTION AGREEMENT
FOR NON-EMPLOYEE DIRECTORS
THIS AGREEMENT, between HOUSEHOLD INTERNATIONAL, INC., a Delaware
corporation (the "Company"), and the Non-Employee Director referenced on the
cover sheet to this Agreement (the "Director"), is made pursuant to the
Household International 1996 Long-Term Executive Incentive Compensation Plan
(the "Incentive Plan"). The terms of such agreement are as follows:
1. The Company hereby grants to the Director an option, for a period of
10 years and one day from the grant date, to purchase, on these terms and
conditions and also subject to the Incentive Plan, shares of the common stock of
the Company as set forth in the cover sheet to this Agreement.
2. No shares may be purchased under this option for six months from the
grant date. After six months, 100% of the shares in this option may be
exercised. A Director may exercise all or a portion of a vested option during
the option term.
3. To exercise an option you must give the Company written notice of
exercise specifying the number of shares to be purchased, which must be a
minimum of twenty-five (25) shares, and include payment for the shares. Payment
for the option may be made by cash or check to the order of the Company, and
also may be made with shares of common stock of the Company valued at the then
fair market value of such shares or by a combination of cash and shares of
common stock pursuant to the Compensation Committee or Board of Directors rules
in effect at the time the option is exercised. The Compensation Committee or
Board of Directors may at any time rescind the right to use common stock of the
Company in payment for shares purchased through the option.
4. The option may not be transferred except by will or the laws of
descent and distribution, unless the Company has notified you to the contrary.
The option may be exercised during the lifetime of the Director only by the
Director and only while he or she is a non-employee director of the Company and
shall have been continuously so retained from the grant date, except that: (i)
in the event the Director's service terminates because such Director has reached
the Company's mandatory retirement age for Directors, or if a Director retires
from the Board prior to reaching the mandatory retirement age but after having
served on the Board continuously for at least fifteen years, outstanding options
may be exercised at any time prior to the expiration of the outstanding options;
(ii) in the event service on the Board 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; (iii) in the event of death of a Director
whether during service as a Director or after ceasing such service, outstanding
options may be exercised by the executor, administrator, or other personal
representative of the Director within twelve months succeeding death if such
Director or prior to the expiration of the outstanding options, whichever period
is longer; (iv) in the event service on the Board 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.
Notwithstanding anything herein to the contrary, the 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 service. The option will expire in all
events and for all purposes 10 years and one day from the grant date.
5. The Company shall not be required to issue or deliver any certificate
or certificates for shares of stock purchased upon the exercise of the option
herein granted prior to the listing of such
-7-
shares on all stock exchanges on which the Company's stock shall then be listed.
Upon any exercise of said option, the Company shall take the steps required for
listing.
6. Neither the Director nor his or her personal representative shall have
any of the rights or privileges of a stockholder with respect to any shares
subject to this option unless and until certificates evidencing such shares
shall have been delivered.
7. Notice to the Company shall be addressed to the Company in care of the
Shareholder Services Department at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ and notice to the Director shall be addressed to him or her at the address
as set forth on the cover sheet of this Agreement, or at such other address as
either party may hereafter designate in writing to the other.
8. Anything herein to the contrary notwithstanding, this option agreement
shall be subject to amendment by the Company from time to time to the extent
permitted by the Incentive Plan and is subject to the provisions of the
Incentive Plan.
-8-
HOUSEHOLD INTERNATIONAL, INC.
1996 LONG-TERM EXECUTIVE INCENTIVE COMPENSATION PLAN
----------
RESTRICTED STOCK RIGHTS AGREEMENT
THIS AGREEMENT, between HOUSEHOLD INTERNATIONAL, INC., a Delaware
corporation (the "Company"), and the employee referenced on the cover sheet to
this Agreement (the "Employee"), is made pursuant to the Household International
1996 Long-Term Executive Incentive Compensation Plan (the "Incentive Plan").
The terms of such agreement are as follows:
1. The Company hereby grants to the Employee Restricted Stock Rights (the
"RSRs"), which shall fully vest five (5) years from the date hereof (the
"Restricted Period"), pursuant to the terms and conditions set forth herein and
subject to the provisions set forth in the Incentive Plan. The RSRs entitle the
Employee to receive the number of shares of Common Stock of the Company as set
forth in the cover sheet to this Agreement.
2. No shares may be issued under RSRs for one year from the date hereof.
After said one-year period, shares subject to RSRs will vest one-third on each
of the third, fourth and fifth anniversaries (the "Vesting Dates") from the
grant date. On each Vesting Date an Employee shall be entitled to receive shares
representing the vested RSRs, and the Company shall issue the appropriate number
of vested shares (rounded down to the nearest whole share) registered in the
name of the Employee or his or her estate or administrator, as deemed
appropriate by the Company, provided the Employee has satisfied all tax
obligations with respect to such shares as required herein. The unvested shares
subject to such RSRs shall be forfeited and all rights of a holder of such RSRs
and shares shall terminate without any payment of consideration by the Company
if the Employee fails to remain continuously as an Employee of the Company or
any subsidiary for the Restricted Period, except (i) in the case of an Employee
who is retirement-eligible under the terms of a pension plan of the Company or a
subsidiary, the Employee will receive either (1) 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 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 Restricted Period; provided however, that any fractional
share shall not be awarded; and provided further, the Compensation Committee of
the Board of Directors (the "Committee"), in its sole discretion, may determine
that full vesting is appropriate under the circumstances or (2) 100% of the
shares subject to RSRs on his or her last day of employment if retirement occurs
on or after age 65, and (ii) in the event that the employment of a holder of
RSRs terminates by reason of death or permanent and total disability, 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 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 Restricted Period; provided however, that any fractional share shall not
be awarded. Any shares that the Employee is entitled to receive in accordance
with the preceding sentence will be reduced by any shares that the Employee has
already received because of vesting on the third, fourth and fifth anniversaries
of the grant date. An Employee shall not be deemed to have terminated his or
her period of continuous employment with the Company if he or she leaves the
employ of the Company or any subsidiary for immediate reemployment with the
Company or any subsidiary. A holder of RSRs whose employment terminates for
reasons other than those listed in this paragraph 2 (other than a change-in-
control of the Company) will forfeit his or her unvested rights under any
outstanding RSRs. This automatic forfeiture may be waived in whole or in part by
the Committee in its sole discretion.
3. If it is determined that the Employee or former Employee, while
employed by the Company or any subsidiary or otherwise associated with the
Company 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 the Company or any subsidiary or inimical, contrary or harmful to the
interests of the Company or any
-9-
subsidiary including, but not limited to: (i) conduct related to the Employee's
position for which either criminal or civil penalties against the Employee may
be sought, (ii) violation of the Company's policies, notwithstanding the
Company's decision or inability to, or not to, terminate the Employee 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 the Company or any subsidiary, including employing or
recruiting any present employee of the Company or any subsidiary for such
competitor, (iv) disclosing or misusing any confidential information or material
concerning the Company or any subsidiary, or (v) participating in a hostile
takeover attempt of the Company, then the Committee, in its sole discretion, may
cancel any unexpired or unpaid RSR at any time.
4. The RSRs may not be transferred except by will or the laws of descent
and distribution.
5. The holder of RSRs shall not be entitled to any of the rights of a
holder of the Common Stock with respect to the shares subject to such RSRs prior
to the issuance of such shares pursuant to the Plan. However, during the
Restricted Period, for each unvested share subject to an RSR, the Company will
pay the Employee as additional income, less applicable taxes, an amount in cash
equal to the cash dividend declared on a share of Common Stock of the Company
during the Restricted Period on or about the date the Company pays such dividend
to its stockholders of record.
6. Any and all taxes required to be withheld by the Company as a result
of the issuance of any shares pursuant to the RSRs shall be the sole
responsibility of the Employee.
7. Notice to the Company shall be addressed to the Company in care of the
Shareholder Services Department at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ and notice to the Employee shall be addressed to him or her at the address
as set forth on the cover sheet of this Agreement, or at such other address as
either party may hereafter designate in writing to the other.
8. Anything herein to the contrary notwithstanding, this RSR agreement
shall be subject to amendment by the Company from time to time to the extent
permitted by the Incentive Plan and is subject to the provisions of the
Incentive Plan.
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, INC.
1996 LONG-TERM EXECUTIVE INCENTIVE COMPENSATION PLAN
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RESTRICTED STOCK RIGHTS AGREEMENT
THIS AGREEMENT, between HOUSEHOLD INTERNATIONAL, INC., a Delaware
corporation (the "Company"), and the employee referenced on the cover sheet to
this Agreement (the "Employee"), is made pursuant to the Household International
1996 Long-Term Executive Incentive Compensation Plan (the "Incentive Plan").
The terms of such agreement are as follows:
1. The Company hereby grants to the Employee Restricted Stock Rights (the
"RSRs"), which shall fully vest three(3) years from the date hereof (the
"Restricted Period"), pursuant to the terms and conditions set forth herein and
subject to the provisions set forth in the Incentive Plan but not subject to any
provision of an Employment Agreement which may provide for more accelerated
vesting. The RSRs entitle the Employee to receive the number of shares of
Common Stock of the Company as set forth in the cover sheet to this Agreement.
2. No shares may be issued under RSRs for one year from the date hereof,
except in the case of certain terminations following a change in control as
outlined below. After said one-year period, shares subject to RSRs will vest
one-third on the second anniversary and an additional two-thirds on the third
anniversary (the "Vesting Dates") from the grant date. On each Vesting Date an
Employee shall be entitled to receive shares representing the vested RSRs, and
the Company shall issue the appropriate number of vested shares (rounded down to
the nearest whole share) registered in the name of the Employee or his or her
estate or administrator, as deemed appropriate by the Company, provided the
Employee has satisfied all tax obligations with respect to such shares as
required herein. The unvested shares subject to such RSRs shall be forfeited
and all rights of a holder of such RSRs and shares shall terminate without any
payment of consideration by the Company if the Employee fails to remain
continuously as an Employee of the Company or any subsidiary for the Restricted
Period, except (i) the Compensation Committee of the Board of Directors (the
"Committee"), in its sole discretion, may determine that full vesting is
appropriate under the circumstances, (ii) full vesting of the shares subject to
RSRs on his or her last day of employment will also occur if retirement occurs
on or after age 65, and (iii) in the event that the employment of a holder of
RSRs terminates by reason of death or permanent and total disability, 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 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 Restricted Period; provided however, that any fractional share shall not
be awarded. Any shares that the Employee is entitled to receive in accordance
with the preceding sentence will be reduced by any shares that the Employee has
already received because of vesting on the second anniversary of the grant date.
An Employee shall not be deemed to have terminated his or her period of
continuous employment with the Company if he or she leaves the employ of the
Company or any subsidiary for immediate reemployment with the Company or any
subsidiary. A holder of RSRs whose employment terminates for reasons other than
those listed in this paragraph 2 or the following sentence will forfeit his or
her unvested rights under any outstanding RSRs. This automatic forfeiture may be
waived in whole or in part by the Committee in its sole discretion. If there is
a change in control of the Company, no shares shall immediately vest despite any
contrary provision in the Incentive Plan. Instead, unvested shares shall fully
vest if within the 36 month period following a change in control, the Employee
is terminated without cause for a reason other than death or total and permanent
disability or the employee resigns because his or her responsibilities were
substantially diminished, his or her salary (including potential bonus) was
reduced or his or her retirement benefits were reduced and compensation
equivalent in value was not substituted.
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3. If it is determined that the Employee or former Employee, while
employed by the Company or any subsidiary or otherwise associated with the
Company 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 the Company or any subsidiary or inimical, contrary or harmful to the
interests of the Company or any subsidiary including, but not limited to: (i)
conduct related to the Employee's position for which either criminal or civil
penalties against the Employee may be sought, (ii) violation of the Company's
policies, notwithstanding the Company's decision or inability to, or not to,
terminate the Employee 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 the Company or any
subsidiary, including employing or recruiting any present employee of the
Company or any subsidiary for such competitor, (iv) disclosing or misusing any
confidential information or material concerning the Company or any subsidiary,
or (v) participating in a hostile takeover attempt of the Company, then the
Committee, in its sole discretion, may cancel any unexpired or unpaid RSR at any
time.
4. The RSRs may not be transferred except by will or the laws of descent
and distribution.
5. The holder of RSRs shall not be entitled to any of the rights of a
holder of the Common Stock with respect to the shares subject to such RSRs prior
to the issuance of such shares pursuant to the Plan. However, during the
Restricted Period, for each unvested share subject to an RSR, the Company will
pay the Employee as additional income, less applicable taxes, an amount in cash
equal to the cash dividend declared on a share of Common Stock of the Company
during the Restricted Period on or about the date the Company pays such dividend
to its stockholders of record.
6. Any and all taxes required to be withheld by the Company as a result
of the issuance of any shares pursuant to the RSRs shall be the sole
responsibility of the Employee.
7. Notice to the Company shall be addressed to the Company in care of the
Shareholder Services Department at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ and notice to the Employee shall be addressed to him or her at the address
as set forth on the cover sheet of this Agreement, or at such other address as
either party may hereafter designate in writing to the other.
8. Anything herein to the contrary notwithstanding, this RSR agreement
shall be subject to amendment by the Company from time to time to the extent
permitted by the Incentive Plan and is subject to the provisions of the
Incentive Plan.
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