Household International Corporate Executive Bonus Plan (2000)

Summary

This agreement outlines the Household International Corporate Executive Bonus Plan for 2000, which provides annual incentive bonuses to key executives based on individual and company performance. Executives are grouped, and bonus targets are set as a percentage of base salary or as fixed amounts. Awards depend on meeting financial and individual goals, with management retaining discretion to adjust or discontinue the plan. Bonuses may be paid in cash or stock, and participation does not guarantee continued employment or future awards. The plan also details how bonuses affect benefits and how awards are handled upon promotion, termination, or retirement.

EX-10.2 3 0003.txt CORPORATE EXECUTIVE BONUS PLAN EXHIBIT 10.2 Household International Corporate Executive Bonus Plan 2000 Summary The Household International Executive Bonus Plan is a short-term, annual incentive plan. The purpose of the annual bonus is to place a significant part of pay at risk and reward executives for the achievements of individual, business unit and corporate financial and operational goals. Performance goals and award opportunities will be communicated to plan participants at the beginning of each calendar year. Participation Participation in the Plan will be restricted to key line and staff executives. For purposes of the Plan, participants will be divided into groups. (See attached list). Any changes in the group of executives participating in the Plan will be made by the Chief Executive Officer, subject to the approval of the Compensation Committee in the case of any participant whose base salary must be determined by the Committee. Level of Awards The corporate measurement of performance is company-wide earnings per share, return on equity, core receivables growth, revenue growth, equity to managed assets ratio and products per customer ratio. Household's performance will be measured against pre-established minimum, target and maximum levels. Individual performance is also measured and the percentage attributed to any particular performance objective varies by executive and may change from year- to-year as circumstances warrant. Management may reduce bonus awards in light of overall business conditions or other exceptional circumstances. Target/Maximum Awards Target awards will be paid for fully satisfactory financial and individual performance in a given year. The target award percentage for each group will approximate the guideline percentage shown below of the executive's base salary at the end of the plan year. Guideline % of Annual Base Salary Determined by Group Target Bonus Maximum Bonus --------------------------------------------------- A 100% 200% B 100% 125% C 75% 150% D 75% 125% E $62,500 $125,000 F 50% 100% G $50,000 $100,000 H 40% 80% I $40,000 $ 80,000 J 40% 60% K $37,500 $ 93,750 L 30% 60% M 30% 50% N 25% 50% O $25,000 $ 50,000 P 20% 50% Q 20% 40% R 20% 30% Detailed information relating to the assignment and weighing of goals is available by individual and is maintained by the business unit and/or corporate. Determination of Awards - ----------------------- A. Financial Performance Awards A portion of each executive's annual bonus will be determined by meeting specific financial performance objectives. An award will be paid out if achieved results are at the pre-established minimum, target or maximum financial results levels. B. Individual Performance Awards Early in each plan year, goals for individual performance for that year will be established for each participant. The goals should require the level of performance that is expected of a 2 fully satisfactory incumbent and must be agreed to by the immediate superior. The Compensation Committee of the Board of Directors must approve the goals for those executives whose salaries are determined by the Committee. These goals will be the primary criteria for measuring individual performance and determining the individual performance portion of the bonus for that year. The Chief Executive Officer will recommend the awards for participants whose salaries are determined by the Compensation Committee of the Board of Directors. The Compensation Committee will then determine the awards for all such participants. The Chief Executive Officer will determine the awards for all participants whose salaries are not determined by the Compensation Committee. The CEO's direct reports, in consultation with their appropriate subordinates, will recommend to the Chief Executive Officer the awards for all other participants. Payment of Awards Awards will be paid as soon as practical at the end of the plan period, subject to all required tax withholdings. Awards may be paid in cash, shares of Household common stock, or some combination thereof. Neither eligible participation in the plan, nor award payments thereunder shall guarantee an employee, any right to continued employment. The plan does not give any employee right or claim to an award under the program. Management reserves the right to change or discontinue the plan at any time. Administrative Matters A. Promotions/New Plan Participants Normally awards will be pro-rated according to the portion of the plan year that an incumbent is eligible for the bonus. B. Effect on Benefits Payments made under this plan shall be included in an employee's income for purposes of determining pension benefits, life insurance, long-term disability, and participation in the TRIP plan. C. Termination of Employment Normally awards will be pro-rated in the case of death, permanent and total disability, or retirement under one of the Corporation's pension plans during a plan year. If a participant terminates employment for any other reason prior to the last working day of a plan year, he will normally forfeit any right to an award for the plan year. 3 The Goal Setting Process Before the beginning of the plan year, the manager and subordinate will meet in a goal setting session. The purpose of the session is to discuss areas where goals will be established and agree on their priority and establish the number of points that will be earned based upon various levels of achievement during the plan period. Preparation for the Goal Setting Meeting To prepare for the goal setting session with the bonus eligible subordinate, the manager should have a clear idea of function or department goals and objectives for the plan year, priorities for the subordinate's unit or area, and three or four possible objectives to suggest as appropriate. During the session, the manager's role will be to direct the discussion and ensure that its results are jointly understood. The subordinate will prepare for the session by establishing a list of priorities for the unit or area during the plan year, and developing four to eight potential goals for discussion. The subordinate's role during the session will be to actively discuss goals and expected levels of achievement with the manager. This is to ensure that the final agreement is realistic and achievable and that there is a clear understanding of expected performance and the amount of bonus associated with various levels of achievement. Guidelines for Setting Goals For the purpose of establishing goals for the plan year, the following criteria should apply: . Goals should be consistent and supportive of goals reflected in the Company's strategic business plans. . Goals should be primarily job or task oriented. They must be realistic and achievable yet challenging with built in "stretch" to test individual capabilities. They should clearly specify action, tasks or results to be accomplished as well as a clear understanding of how the accomplishment will be evaluated. . Goals must be understood and agreed to by both the manager and the subordinate. Setting goals for staff positions is somewhat more difficult than for line-type positions because staff performance is usually not measured numerically and rarely lends itself to quantitative measurement. Staff responsibilities tend to be contributory, interpretive and are more easily measured qualitatively. Frequently, the goals may include completion of specific projects. Non- quantitative goals should clearly state the criteria that will be used for evaluating successful achievement. The results of the goal setting process will be documented in the format of the Executive Bonus Plan Goal Setting Form and approved by the appropriate level of management. 4 GROUP/TITLE - -------------------------------------- Group A - 100%/200% - ------------------- Director Personal Bank Group Director-Business Development Managing Director CEO HAF Managing Director, HFCPS Managing Director-HFS Managing Director, Consumer Finance Sales Regional General Manager Group B - 100%/125% - ------------------- National Sales Director Group C - 75%/150% - ------------------ Managing Director-CEO HRS USA Managing Director-Operations Group D - 75%/125% - ------------------ Managing Director-Canada Group E - $62,500/$125,000 - -------------------------- VP-Collections Group F - 50%/100% - ------------------ Chief Credit Officer Director-Sales HH Direct Division General Manager Group Director of Sales - HIG Group Director-Business Development & Marketing Managing Director - Commercial Finance Managing Director-HTMI Managing Director Equipment Finance National Director, Sales Finance National Director-Business Development & Client Relations President - Decision One Senior VP - Credit Senior VP - Finance Senior VP Systems Senior VP-Loan Production Senior VP-Operations VP- Lending VP-Marketing VP-Secondary Marketing & Acquisitions Group G - $50,000/$100,000 - -------------------------- VP, Wholesale Servicing Group H - 40%/80% - ----------------- Group Director Sales & Telemarketing Managing Director-Controller HI VP-Corporate Finance VP-Treasurer 5 Group I - $40,000/$80,000 - ------------------------- Director, Collections VP - Flow Business Group J - 40%/60% - ----------------- Assistant General Counsel-Litigation Chief Financial & Credit Policy Officer Chief Financial Officer-HAF Chief Financial Officer-HFC Chief Credit Officer (Group Director) Deputy Managing Director-COO (HRS) Group Director Asset Management Group Director Risk Management Group Director, Operations RCS Group Director-Collections Household Direct Managing Director - HIG Managing Director/CFO Managing Director of Marketing (HCS) Managing Director Credit Policy & Risk Control Managing Director-Operations Managing Director-Networked Systems Managing Director-Strategic Initiatives National Director-Financial Control National Director-Portfolio Management Senior Vice President & CFO VP Data Center Operations VP Portfolio Management VP-Applications Systems VP-Corporate Law & Assistant Secretary VP-Credit Policy VP-Government Relations VP-Human Resources (HFC) VP-Investor Relations VP-Money & Capital Markets VP-Taxes Group K - $37,500/$93,750 - ------------------------- Assistant to the Group Executive Group L - 30%/60% - ----------------- Regional Director - Sales Group M - 30%/50% - ----------------- Assistant Controller Assistant General Counsel-Employee Relations Chief Financial Officer-UK Director Sales Support/MIS Director Asset Backed Financing Director of Operations UK Director/Special Project Consultant Director-Fraud/Operations Director-Processing Services-Canada 6 Group M - 30%/50% (continued) - ----------------------------- Group Director-Customer Relations Management Group Director-HCS Marketing Group Director-Risk Control Group General Counsel Group Director-Information Management National Director-Credit Policy, Pricing ,Profitability National Director-Customer Service VP-Audit VP-Items Processing VP-Portfolio Management VP-Specialty Finance Group N - 25%/50% - ----------------- Director Acquisitions & Relations Management Director-Credit Policy Administration Director-Credit Policy (#1) Group Director-Client Services & Collections Group O - $25,000/$50,000 - ------------------------- Director-Wholesale Acquisition Group P - 20%/50% - ----------------- Director, REN Risk Control Group Q - 20%/40% - ----------------- Chief Financial Officer/Direct Controller Controller-HH Direct Director-ALM Director-Credit Operations Director-Credit Policy (#2) Director-Customer Management Strategy Director-Marketing Director-Project Control Director-Strategy & Development General Counsel Group Q - 20%/40% (continued) - ----------------------------- Group Director Marketing Strategy Group Director - Marketing VP Data Architecture & System VP Human Resources VP-Benefits & Policy VP-Chief Financial Officer-HTS VP-Compensation & HR Administration VP-Facilities Management VP-Finance-Specialty Finance HFC VP-Networked Systems VP-Service Delivery VP-Training & Development & Communications 7 Group R - 20%/30% - ----------------- Actuarial Director Controller-HCS Controller-HRSI Director Information & Decision Analysis Director Reconciliation & Financial Information Systems Director Government. Relations & Regulatory Issues Director-Business Analysis HCS Director-Business Unit Accounting Director-Communications & Distributed Services Director-Compliance Administration Director-Data Center Operations Director Cash Operations Director, Corporate & Treasury Accounting Director/Special Project Consultant Director-ALG Systems & Loan Processes Director-Business Systems Director-Business Treasury Director-Corporate Purchasing Director-Customer Relations Director-Customer Service Director-Federal Tax Audit Director-HCS Marketing Director-Investor Relations Director-Item Processing Director-Operations Services Director-Regulatory Reporting Director-Tax Planning & Tax Counsel Director-Telephone Services Director-Federal & State Tax Compliance Director-HFC Policy & Compliance Support Director-Information Technology Director-Insurance Taxation & Counsel Director-Inter-corporate Risk & Compliance Director-Operations Support Group R - 20%/30% (continued) - ----------------------------- Group Director-Credit Operations Group Director-Customer Service Group Director-Profitability VP Property Management VP, Technical Services VP-Finance & Administration VP-Financial Control VP-HFC Operation Support VP-Insurance & Risk Finance VP-Sales & Marketing 8