Household 10-K DEC 03 Part 4b
HSBC Holdings PLC
1 March 2004
152
MANAGEMENT'S REPORT
To the Shareholder of Household International, Inc.
Household's management is responsible for establishing and maintaining
internal and disclosure controls relating to the preparation of its published
financial statements that are designed to provide reasonable assurance of the
integrity and fair presentation of its published financial statements. The
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles in the United States of America and, as
such, include amounts based on judgments and estimates made by management.
Management also prepared other information included in the annual report and is
responsible for its accuracy and consistency with the financial statements.
The consolidated financial statements have been audited by an independent
accounting firm, KPMG LLP, which has been given unrestricted access to all
financial records and related data, including minutes of all meetings of
shareholders, the Board of Directors and committees of the board. Management
believes that representations made to the independent auditors during their
audit were valid and appropriate.
The Board, operating through its audit committee, provides an independent
review and oversight to the financial reporting process, internal controls and
independent auditors. The audit committee includes no Household executives and
one HSBC executive.
Internal auditors monitor the operation of the internal control system and
actions are taken by management to respond to deficiencies as they are
identified. Even effective internal controls, no matter how well designed, have
inherent limitations, and can only provide reasonable assurance with respect to
financial statement presentation. These limitations include, but are not
necessarily limited to, the possibility of human error or of circumvention or
overriding of controls, and the consideration of cost in relation to benefit of
a control. Further, the effectiveness of an internal control can change with
circumstances.
Household's management periodically assesses the internal and disclosure
controls for adequacy relating to the preparation of its published financial
statements. Based upon these assessments, Household's management believes that,
in all material respects, Household maintained an effective internal control
structure and procedures relating to preparation of consolidated financial
statements as of and during the year ended December 31, 2003, and effective
disclosure controls and procedures as of December 31, 2003.
William F. Aldinger
Chairman and
Chief Executive Officer
Simon C. Penney
Senior Executive Vice President and
Chief Financial Officer
March 1, 2004
153
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholder
Household International, Inc.:
We have audited the accompanying consolidated balance sheets of Household
International, Inc. (a Delaware corporation), a wholly-owned subsidiary of HSBC
Holdings plc, and subsidiaries as of December 31, 2003 (successor basis) and
December 31, 2002 (predecessor basis) and the related consolidated statements of
income, changes in preferred stock and common shareholder's(s') equity, and cash
flows for the period January 1, 2003 through March 28, 2003 (predecessor basis),
for the period March 29, 2003 through December 31, 2003 (successor basis), and
for each of the years in the two-year period ended December 31, 2002
(predecessor basis). These consolidated financial statements are the
responsibility of Household International, Inc.'s management. Our responsibility
is to express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the aforementioned consolidated financial statements
present fairly, in all material respects, the financial position of Household
International, Inc. and subsidiaries as of December 31, 2003 (successor basis),
and the results of their operations and their cash flows for the period March
29, 2003 through December 31, 2003 (successor basis), in conformity with
accounting principles generally accepted in the United States of America.
Further, in our opinion, the aforementioned consolidated financial statements
present fairly, in all material respects, the financial position of Household
International, Inc. and subsidiaries as of December 31, 2002 (predecessor
basis), and the results of their operations and their cash flows for the period
January 1, 2003 through March 28, 2003 (predecessor basis) and for each of the
years in the two-year period ended December 31, 2002 (predecessor basis), in
conformity with accounting principles generally accepted in the United States of
America.
As discussed in Note 2 to the consolidated financial statements, effective
March 28, 2003, HSBC Holdings plc acquired all of the outstanding stock of
Household International, Inc. in a business combination accounted for as a
purchase. As a result of the acquisition, the consolidated financial information
for the period after the acquisition is presented on a different cost basis than
that for the periods before the acquisition and, therefore, is not comparable.
/s/ KPMG LLP
Chicago, Illinois
March 1, 2004
154
HOUSEHOLD INTERNATIONAL, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
Three Three Three Three Three
Months Months Months Mar. 29 Jan. 1 Three Months Three Months
Ended Ended Ended through through Months Ended Months Ended
Dec. 31, Sept. 30, June 30, Mar. 31, Mar. 28, Ended Sept. 30, Ended Mar. 31,
2003 2003 2003 2003 2003 Dec. 31, 2002 2002 Jun. 30, 2002 2002
---------- --------- ---------- --------- ---------- --------------- ---------- ------------ -----------
(Successor)(Successor)(Successor)(Successor)(Predecessor)(Predecessor)(Predecessor)(Predecessor)(Predecessor)
(In millions)
Finance and $ 2,637.8 $ 2,575.5 $ 2,504.1 $ 74.5 $ 2,470.5 $ 2,669.1 $ 2,710.9 $ 2,609.9 $ 2,535.7
other interest
income
Interest 593.9 556.5 558.8 14.6 897.4 952.6 999.0 980.9 938.8
expense
------- ------- ------- ---- ------- ------- ------- ------- -------
Net interest 2,043.9 2,019.0 1,945.3 59.9 1,573.1 1,716.5 1,711.9 1,629.0 1,596.9
margin
Provision for 916.7 1,001.3 1,039.3 33.5 976.1 985.1 973.0 850.9 923.0
credit losses
on owned
receivables
------- ------- ------- ---- ------- ------- ------- ------- -------
Net interest 1,127.2 1,017.7 906.0 26.4 597.0 731.4 738.9 778.1 673.9
margin after
provision for
credit losses
------- ------- ------- ---- ------- ------- ------- ------- -------
Securitization 334.7 381.9 282.6 8.5 432.6 536.0 556.3 523.4 518.3
revenue
Insurance 192.4 192.7 183.3 5.7 171.6 188.0 180.8 177.5 170.1
revenue
Investment 44.2 37.0 33.2 1.3 80.0 44.2 47.6 44.0 46.2
income
Fee income 314.0 299.5 259.7 8.8 288.3 279.9 261.7 190.3 216.5
Other income 126.4 35.1 131.5 5.1 238.7 158.3 101.8 95.3 188.0
Loss on - - - - - (378.2 ) - - -
disposition of
Thrift
------- ------- ------- ---- ------- ------- ------- ------- -------
Total other 1,011.7 946.2 890.3 29.4 1,211.2 828.2 1,148.2 1,030.5 1,139.1
revenues
------- ------- ------- ---- ------- ------- ------- ------- -------
Salaries and 507.4 493.3 488.6 17.3 491.3 462.1 456.6 453.0 445.3
fringe
benefits
Sales 64.6 76.6 83.2 1.4 37.7 73.6 60.6 67.6 54.1
incentives
Occupancy and 103.6 95.0 100.0 3.5 97.7 91.5 94.1 93.3 92.2
equipment
expense
Other 141.3 128.1 135.2 4.7 138.8 121.7 135.4 133.5 140.4
marketing
expenses
Other 279.6 282.3 263.7 9.2 313.7 253.8 199.3 204.1 231.7
servicing and
administrative
expenses
Amortization 82.8 82.4 78.3 2.0 12.3 12.7 12.7 12.6 19.8
of acquired
intangibles
and goodwill
Policyholders' 89.5 95.0 98.4 3.0 91.0 96.2 101.2 87.4 84.0
benefits
HSBC - - - - 198.2 - - - -
acquisition
related costs
incurred by
Household
Settlement - - - - - - 525.0 - -
charge and
related
expenses
------- ------ ------- ---- ------- ------- ------- ------- -------
Total costs 1,268.8 1,252.7 1,247.4 41.1 1,380.7 1,111.6 1,584.9 1,051.5 1,067.5
and expenses
------- ------- ------- ---- ------- ------- ------- ------- -------
Income before 870.1 711.2 548.9 14.7 427.5 448.0 302.2 757.1 745.5
income taxes
Income taxes 295.8 239.7 184.9 5.0 181.8 109.8 81.0 249.7 254.5
------- ------- ------- ---- ------- ------- ------ ------- -------
Net income $ 574.3 $ 471.5 $ 364.0 $ 9.7 $ 245.7 $ 338.2 $ 221.2 $ 507.4 $ 491.0
------- ------- ------- ---- ------- ------- ------- ------- -------
155
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
We maintain a system of internal and disclosure controls and procedures
designed to provide reasonable assurance as to the reliability of our published
financial statements and other disclosures included in this report. Our Board of
Directors, operating through its audit committee, which, with one exception, is
composed entirely of independent outside directors, provides oversight to our
financial reporting process.
Within the 90-day period prior to the date of this report, we evaluated
the effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Rule 13a-14 of the Exchange Act. Based upon that
evaluation, our Chief Executive Officer and our Chief Financial Officer
concluded that our disclosure controls and procedures are effective in timely
alerting them to material information relating to Household International, Inc.
(including its consolidated subsidiaries) required to be included in this Annual
Report on Form 10-K.
There have been no significant changes in our internal and disclosure
controls or in other factors which could significantly affect internal and
disclosure controls subsequent to the date that we carried out our evaluation.
PART III
Item 10. Directors and Executive Officers of the Registrant.
In accordance with the requirements of Form 10-K, we are filing this
report using the reduced disclosure format and therefore are not required to
provide information pursuant to this Item 10. However, we are providing the
following information to provide disclosure concerning our corporate governance
practices and specifically with respect to the audit committee of our Board of
Directors.
The primary purpose of the audit committee is to assist the Board of
Directors in fulfilling its oversight responsibilities relating to Household's
accounting, auditing and financial reporting practices. The audit committee is
currently comprised of the following independent Directors (as defined by the
standards of the New York Stock Exchange): Gary G. Dillon; Robert K. Herdman;
Louis E. Levy; and Larree M. Renda. In addition, Alan W. Jebson, Chief Operating
Officer of HSBC, is a member of the Committee. The Board has determined that
each of these individuals is financially literate. The Board of Directors has
determined that both Louis E. Levy and Robert K. Herdman qualify as audit
committee financial experts.
Code of Ethics
Household's Board of Directors has adopted a Code of Ethics for Senior
Financial Officers. That Code of Ethics is included as Exhibit 14 to this Annual
Report on Form 10-K. Household also has a general code of ethics applicable to
all employees that is referred to as its Statement of Business Principles. That
document is available on our website at www.household.com or upon written
request made to Household International, Inc., 2700 Sanders Road, Prospect
Heights, Illinois 60070, Attention: Corporate Secretary.
156
Item 11. Executive Compensation.
Omitted.
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Matters.
Omitted.
Item 13. Certain Relationships and Related Transactions.
Omitted.
Item 14. Principal Accountant Fees and Services.
Audit Fees The aggregate amount billed by our principal accountant, KPMG
LLP, for audit services performed during the fiscal years ended December 31,
2003 and 2002 was $5,587,000 and $4,479,000, respectively. Audit services
include the auditing of financial statements, quarterly reviews, statutory
audits and the preparation of comfort letters, consents and review of
registration statements.
Audit Related Fees The aggregate amount billed by KPMG LLP in connection
with audit related services performed during the fiscal years ended December 31,
2003 and 2002 was $1,250,000 and $1,406,000, respectively. Audit related
services include employee benefit plan audits, due diligence assistance,
internal control review assistance and audit or attestation services not
required by statute or regulation.
Tax Fees Total fees billed by KPMG LLP for tax related services for the
fiscal years ended December 31, 2003 and 2002 were $779,000 and $540,000,
respectively. These services include tax related research and general tax
services in connection with transactions and legislation.
All Other Other than those fees described above, there were no other fees
billed for services performed by KPMG LLP during the fiscal years ended December
31, 2003 and December 31, 2002.
All of the fees described above were approved by Household's audit
committee.
Audit Committee Pre-Approval Policies and Procedures Household's audit
committee pre-approves the audit and non-audit services performed by KPMG LLP,
our principal accountants, in order to assure that the provision of such
services does not impair KPMG LLP's independence. Unless a type of service to be
provided by KPMG LLP has received general pre-approval, it will require specific
pre-approval by the audit committee. In addition, any proposed services
exceeding pre-approval cost levels will require specific pre-approval by the
audit committee.
The term of any pre-approval is 12 months from the date of pre-approval,
unless the audit committee specifically provides for a different period. The
audit committee will periodically revise the list of pre-approved services,
based on subsequent determinations, and has delegated pre-approval authority to
the Chairman and Vice Chairman of the audit committee. In the event the Chairman
or Vice Chairman exercise such delegated authority, they shall report such
pre-approval decisions to the audit committee at its next scheduled meeting. The
audit committee does not delegate its responsibilities to pre-approve services
performed by the independent auditor to management.
PART IV
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) Financial Statements.
The consolidated financial statements listed below, together with an
opinion of KPMG LLP dated March 1, 2004 with respect thereto, are included
in this Form 10-K pursuant to Item 8. Financial Statements and
Supplementary Data of this Form 10-K.
157
Household International, Inc. and Subsidiaries:
Consolidated Statements of Income
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Statements of Changes in Preferred Stock and Common
Shareholder's(s') Equity
Notes to Consolidated Financial Statements
Independent Auditors' Report
Selected Quarterly Financial Data (Unaudited)
(b) Reports on Form 8-K.
For the three months ended December 31, 2003, Household filed Current
Reports on Form 8-K dated November 14 and November 25, 2003.
(c) Exhibits.
3(i) Restated Certificate of Incorporation of Household International,
Inc. as amended.
3(ii) Bylaws of Household International, Inc. as amended (incorporated
by reference to Exhibit 3 (ii) of our Quarterly Report on Form
10-Q for the period ended June 30, 2003).
4(a) Standard Multiple-Series Indenture Provisions for Senior Debt
Securities of Household Finance Corporation dated as of June 1,
1992 (incorporated by reference to Exhibit 4(b) to the
Registration Statement on Form S-3 of Household Finance
Corporation, No. 33-48854).
4(b) Indenture dated as of December 1, 1993 for Senior Debt Securities
between Household Finance Corporation and The Chase Manhattan
Bank (National Association), as Trustee (incorporated by
reference to Exhibit 4(b) to the Registration Statement on Form
S-3 of Household Finance Corporation, No. 33-55561 filed on
September 20, 1994).
4(c) The principal amount of debt outstanding under each other
instrument defining the rights of Holders of our long-term senior
and senior subordinated debt does not exceed 10 percent of our
total assets. Household agrees to furnish to the Securities and
Exchange Commission, upon request, a copy of each instrument
defining the rights of holders of our long-term senior and senior
subordinated debt.
10.1 Household International, Inc. 1998 Key Executive Bonus Plan
(incorporated by reference to Exhibit 10.1 of our Annual Report
on Form 10-K for the fiscal year ended December 31, 2001).
10.2 Household International, Inc. Corporate Executive Bonus Plan
(incorporated by reference to Exhibit 10.2 of our Annual Report
on Form 10-K for the fiscal year ended December 31, 2001).
10.3 Household International, Inc. Long-Term Executive Incentive
Compensation Plan, as Amended incorporated by Reference to
Exhibit 10.3 of our Annual Report on Form 10-K for the fiscal
year ended December 31, 2002).
10.4 Forms of stock option and restricted stock rights agreements
under the Household International, Inc. Long-Term Executive
Incentive Compensation Plan (incorporated by Reference to Exhibit
10.4 of our Annual Report on Form 10-K for the fiscal year ended
December 31, 1995).
10.5 Household International, Inc. 1996 Long-Term Executive Incentive
Compensation Plan, as amended (incorporated by Reference to
Exhibit 10.5 of our Annual Report on Form 10-K for the fiscal
year ended December 31, 2002).
10.6 Forms of stock option and restricted stock rights agreements
under the Household International, Inc. 1996 Long-Term Executive
Incentive Compensation Plan (incorporated by Reference to Exhibit
10.6 of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2002).
10.7 Household International, Inc. Deferred Fee Plan for Directors.
10.8 Household International, Inc. Deferred Phantom Stock Plan for
Directors.
10.9 Household International, Inc. Non-Qualified Deferred Compensation
Plan for Executives, as amended.
10.10 Household International, Inc. Non-Qualified Deferred Compensation
Plan for Stock Option Exercises, as amended.
158
10.11 Household International, Inc. Non-Qualified Deferred Compensation
Plan for Restricted Stock Rights, as amended.
10.12 (a) Executive Employment Agreement, dated March 1, 2002, between
Household International, Inc. and W.F. Aldinger (incorporated by
Reference to Exhibit 10.12(a) of our Annual Report on Form
10-K for the fiscal year ended December 31, 2002).
10.12(b) Executive Employment Agreement, dated November 14, 2002, between
Household International, Inc. and W.F. Aldinger (incorporated by
Reference to Exhibit 10.12(b) of our Annual Report on Form 10-K
for the fiscal year ended December 31, 2002).
10.13 (a) Executive Employment Agreement, dated March 1, 2002, between
Household International, Inc. and D.A. Schoenholz (incorporated
by Reference to Exhibit 10.13(a) of our Annual Report on Form
10-K for the fiscal year ended December 31, 2002).
10.13 (b) Executive Employment Agreement, dated November 14, 2002, between
Household International, Inc. and D.A. Schoenholz (incorporated
by Reference to Exhibit 10.13(b) of our Annual Report on Form
10-K for the fiscal year ended December 31, 2002)
10.14 (a) Executive Employment Agreement, dated March 1, 2002, between
Household International, Inc. and S.N. Mehta (incorporated by
Reference to Exhibit 10.14(a) of our Annual Report on Form 10-K
for the fiscal year ended December 31, 2002).
10.14 (b) Executive Employment Agreement, dated November 14, 2002, between
Household International, Inc. and S.N. Mehta (incorporated by
Reference to Exhibit 10.14(b) of our Annual Report on Form 10-K
for the fiscal year ended December 31, 2002).
10.15 (a) Executive Employment Agreement, dated March 1, 2002, between
Household International, Inc. and K.M. Harvey (incorporated by
Reference to Exhibit 10.15(a) of our Annual Report on Form
10-K for the fiscal year ended December 31, 2002).
10.15 (b) Executive Employment Agreement, dated November 14, 2002, between
Household International, Inc. and K.M. Harvey (incorporated by
Reference to Exhibit 10.15(b) of our Annual Report on Form 10-K
for the fiscal year ended December 31, 2002).
10.16 (a) Executive Employment Protection Agreement, dated March 1, 2002,
between Household International, Inc. and S.L. Derickson
(incorporated by Reference to Exhibit 10.16(a) of our
Annual Report on Form 10-K for the fiscal year ended December 31,
2002).
10.16 (b) Executive Employment Agreement, dated November 14, 2002, between
Household International, Inc. and S.L. Derickson (incorporated by
Reference to Exhibit 10.16(b) of our Annual Report on Form 10-K
for the fiscal year ended December 31, 2002).
10.17 Amended and Restated Supplemental Executive Retirement Plan for
W.F. Aldinger (incorporated by reference to Exhibit 10.16 of our
Form 10-K for the fiscal year ended December 31, 2000).
10.18 Beneficial Corporation 1990 Non-qualified Stock Option Plan
(incorporated by reference to Exhibit 4.4 of Beneficial
Corporation's Form S-8 filed on April 23, 1996, File No.
333-02737).
10.19 Amendment to Beneficial Corporation 1990 Non-qualified Stock
Option Plan (incorporated by reference to Exhibit 4.2 of
Beneficial Corporation's Form S-8 filed July 1, 1998, File No.
333-58291).
12 Statement of Computation of Ratio of Earnings to Fixed Charges
and to Combined Fixed Charges and Preferred Stock Dividends.
14 Code of Ethics for Senior Financial Officers.
23 Consent of KPMG LLP, Certified Public Accountants.
24 Power of Attorney (included on page 160 of this Form 10-K).
31 Certification of Chief Executive Officer and Chief Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32 Certification of Chief Executive Officer and Chief Financial
Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
99.1 Ratings of Household International, Inc. and its significant
subsidiaries.
Upon receiving a written request, we will furnish copies of the exhibits
referred to above free of charge. Requests should be made to Household
International, Inc., 2700 Sanders Road, Prospect Heights, Illinois 60070,
Attention: Corporate Secretary.
159
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Household International, Inc. has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized on
this, the 1st day of March, 2004.
HOUSEHOLD INTERNATIONAL, INC.
By: /s/ W.F. ALDINGER
---------------------------------------
W.F. Aldinger
Chairman and Chief Executive Officer
Each person whose signature appears below constitutes and appoints P.D.
Schwartz 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, this Form 10-K and any and all amendments and exhibits
thereto, and all documents in connection therewith, 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 Exchange Act of 1934, this
report has been signed below by the following persons on behalf of Household
International, Inc. and in the capacities indicated on the 1st day of March,
2004.
Signature Title
------------------------------------------------- ----------------------------------------------------------------
/s/ W. F. ALDINGER Chairman and Chief Executive Officer and
------------------------------------------------- Director (as principal executive officer)
(W. F. Aldinger)
/s/ W. R. P. DALTON Director
-------------------------------------------------
(W. R. P. Dalton)
/s/ R. J. DARNALL Director
-------------------------------------------------
(R. J. Darnall)
/s/ A. DISNEY Director
-------------------------------------------------
(A. Disney)
/s/ G. G. DILLON Director
-------------------------------------------------
(G. G. Dillon)
/s/ J. A. EDWARDSON Director
-------------------------------------------------
(J. A. Edwardson)
/s/ J. D. FISHBURN Director
-------------------------------------------------
(J. D. Fishburn)
/s/ C. F. FREIDHEIM, JR. Director
-------------------------------------------------
(C. F. Freidheim, Jr.)
160
Signature Title
-------------------------------------------------- ---------------------------------------------------------------
/s/ R. K. HERDMAN Director
--------------------------------------------------
(R. K. Herdman)
/s/ A. W. JEBSON Director
--------------------------------------------------
(A. W. Jebson)
/s/ L. E. LEVY Director
--------------------------------------------------
(L. E. Levy)
/s/ G. A. LORCH Director
--------------------------------------------------
(G. A. Lorch)
/s/ J. D. NICHOLS Director
--------------------------------------------------
(J. D. Nichols)
/s/ L. M. RENDA Director
--------------------------------------------------
(L. M. Renda)
/s/ S. J. STEWART Director
--------------------------------------------------
(S. J. Stewart)
/s/ S. L. MCDONALD Senior Vice President and
-------------------------------------------------- Chief Financial Officer (as Principal Accounting Officer)
(S. L. McDonald)
/s/ S. C. PENNEY Senior Executive Vice President and
-------------------------------------------------- Chief Financial Officer (as Principal Financial Officer)
(S. C. Penney)
161
EXHIBIT INDEX
3(i) Restated Certificate of Incorporation of Household
International, Inc. as amended.
3(ii) Bylaws of Household International, Inc. as amended
(incorporated by reference to Exhibit 3(ii) of our
Quarterly Report on Form 10-Q for the period ended June
30, 2003).
4(a) Standard Multiple-Series Indenture Provisions for Senior
Debt Securities of Household Finance Corporation dated as
of June 1, 1992 (incorporated by reference to Exhibit 4(b)
to the Registration Statement on Form S-3 of Household
Finance Corporation, No. 33-48854).
4(b) Indenture dated as of December 1, 1993 for Senior Debt
Securities between Household Finance Corporation and The
Chase Manhattan Bank (National Association), as Trustee
(incorporated by reference to Exhibit 4(b) to the
Registration Statement on Form S-3 of Household Finance
Corporation, No. 33-55561 filed on September 20, 1994).
4(c) The principal amount of debt outstanding under each other
instrument defining the rights of Holders of our long-term
senior and senior subordinated debt does not exceed 10
percent of our total assets. Household agrees to furnish
to the Securities and Exchange Commission, upon request, a
copy of each instrument defining the rights of holders of
our long-term senior and senior subordinated debt.
10.1 Household International, Inc. 1998 Key Executive Bonus
Plan (incorporated by reference to Exhibit 10.1 of our
Annual Report on Form 10-K for the fiscal year ended
December 31, 2001).
10.2 Household International, Inc. Corporate Executive Bonus
Plan (incorporated by reference to Exhibit 10.2 of our
Annual Report on Form 10-K for the fiscal year ended
December 31, 2001).
10.3 Household International, Inc. Long-Term Executive
Incentive Compensation Plan, as Amended (incorporated by
Reference to Exhibit 10.3 of our Annual Report on Form
10-K for the fiscal year ended December 31, 2002).
10.4 Forms of stock option and restricted stock rights
agreements under the Household International, Inc.
Long-Term Executive Incentive Compensation Plan
(incorporated by Reference to Exhibit 10.4 of our Annual
Report on Form 10-K for the fiscal year ended December 31,
1995).
10.5 Household International, Inc. 1996 Long-Term Executive
Incentive Compensation Plan, as amended (incorporated by
Reference to Exhibit 10.5 of our Annual Report on Form
10-K for the fiscal year ended December 31, 2002).
10.6 Forms of stock option and restricted stock rights
agreements under the Household International, Inc. 1996
Long-Term Executive Incentive Compensation Plan
(incorporated by Reference to Exhibit 10.6 of our Annual
Report on Form 10-K for the fiscal year ended December 31,
2002).
10.7 Household International, Inc. Deferred Fee Plan for
Directors.
10.8 Household International, Inc. Deferred Phantom Stock Plan
for Directors.
10.9 Household International, Inc. Non-Qualified Deferred
Compensation Plan for Executives, as amended.
10.10 Household International, Inc. Non-Qualified Deferred
Compensation Plan for Stock Option Exercises, as amended.
10.11 Household International, Inc. Non-Qualified Deferred
Compensation Plan for Restricted Stock Rights, as amended.
10.12(a) Executive Employment Agreement, dated March 1, 2002,
between Household International, Inc. and W.F. Aldinger
(incorporated by Reference to Exhibit 10.12(a) of our
Annual Report on Form 10-K for the fiscal year ended
December 31, 2002).
10.12(b) Executive Employment Agreement, dated November 14, 2002,
between Household International, Inc. and W.F. Aldinger
(incorporated by Reference to Exhibit 10.12(b) of our
Annual Report on Form 10-K for the fiscal year ended
December 31, 2002).
10.13(a) Executive Employment Agreement, dated March 1, 2002,
between Household International, Inc. and D.A. Schoenholz
(incorporated by Reference to Exhibit 10.13(a) of our
Annual Report on Form 10-K for the fiscal year ended
December 31, 2002).
10.13(b) Executive Employment Agreement, dated November 14, 2002,
between Household International, Inc. and D.A. Schoenholz
(incorporated by Reference to Exhibit 10.13(b) of our
Annual Report on Form 10-K for the fiscal year ended
December 31, 2002).
162
10.14(a) Executive Employment Agreement, dated March 1, 2002, between
Household International, Inc. and S.N. Mehta (incorporated by
Reference to Exhibit 10.14(a) of our Annual Report on Form
10-K for the fiscal year ended December 31, 2002).
10.14(b) Executive Employment Agreement, dated November 14, 2002,
between Household International, Inc. and S.N. Mehta
(incorporated by Reference to Exhibit 10.14(b) of our Annual
Report on Form 10-K for the fiscal year ended December 31,
2002).
10.15(a) Executive Employment Agreement, dated March 1, 2002, between
Household International, Inc. and K.M. Harvey (incorporated
by Reference to Exhibit 10.15(a) of our Annual Report on Form
10-K for the fiscal year ended December 31, 2002).
10.15(b) Executive Employment Agreement, dated November 14, 2002,
between Household International, Inc. and K.M. Harvey
(incorporated by Reference to Exhibit 10.15(b) of our Annual
Report on Form 10-K for the fiscal year ended December 31,
2002).
10.16(a) Executive Employment Protection Agreement, dated March 1,
2002, between Household International, Inc. and S.L.
Derickson (incorporated by Reference to Exhibit 10.16(a) of
our Annual Report on Form 10-K for the fiscal year ended
December 31, 2002).
10.16(b) Executive Employment Agreement, dated November 14, 2002,
between Household International, Inc. and S.L. Derickson
(incorporated by Reference to Exhibit 10.16(b) of our Annual
Report on Form 10-K for the fiscal year ended December 31,
2002).
10.17 Amended and Restated Supplemental Executive Retirement Plan
for W.F. Aldinger (incorporated by reference to Exhibit 10.16
of our Form 10-K for the fiscal year ended December 31, 2000).
10.18 Beneficial Corporation 1990 Non-qualified Stock Option Plan
(incorporated by reference to Exhibit 4.4 of Beneficial
Corporation's Form S-8 filed on April 23, 1996, File No.
333-02737).
10.19 Amendment to Beneficial Corporation 1990 Non-qualified Stock
Option Plan (incorporated by reference to Exhibit 4.2 of
Beneficial Corporation's Form S-8 filed July 1, 1998, File
No. 333-58291).
12 Statement of Computation of Ratio of Earnings to Fixed
Charges and to Combined Fixed Charges and Preferred Stock
Dividends.
14 Code of Ethics for Senior Financial Officers.
23 Consent of KPMG LLP, Certified Public Accountants.
24 Power of Attorney (included on page 160 of this Form 10-K).
31 Certification of Chief Executive Officer and Chief Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
32 Certification of Chief Executive Officer and Chief Financial
Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
99.1 Ratings of Household International, Inc. and its significant
subsidiaries.
163
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