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                                                                    Exhibit 10.5

                            HOUSEHOLD INTERNATIONAL
              1996 LONG-TERM EXECUTIVE INCENTIVE COMPENSATION PLAN
                         (as amended November 13, 2000)

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) 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

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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 24,000,000, 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 1,200,000 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 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

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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, or (iii) obtaining an
extension of credit from Household 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.

     (h) 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 award granted under this Plan (including an employee who is an
officer or director of Household) to assist the employee in exercising an option
or settling withholding tax obligations on Awards. 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

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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.

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
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.

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
Committee has established rules concerning the transferability of

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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 following termination of
employment.  Notwithstanding the

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foregoing, in the case where the employee is a party to an employment,
termination protection or similar agreement with Household or a subsidiary which
is in effect at the time of termination of employment that defines "cause" (or
words of similar import), the Committee shall not determine such termination of
employment to be for "cause" unless a "cause" termination would be permitted
under such agreement at that time.

     (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
8,000 shares of Household Common Stock annually on the same date grants are made
to employees. 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;

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         (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 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.

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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 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.

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     (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.

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

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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 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 Awards will immediately vest or the Restricted Period with respect
thereto shall lapse and such Awards shall become exercisable or payable in full
notwithstanding any minimum holding period set forth in the Plan or established
by the Committee at the time of the grant of the Award, (ii) Household shall
require that this Plan, and the Awards issued hereunder, be assumed by the
entity causing the Change in Control or the public company parent thereof (the
`Acquiror') and, if appropriate, new rights of equal value with substantially
similar terms be substituted for such Awards by the Acquiror, and (iii) the
Committee, in its sole discretion (notwithstanding any contrary provision in
Section 3(f)), may:

          (i)   provide for the purchase by Household or the Acquiror 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;

          (ii)  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

          (iii) take such other action deemed appropriate by the Committee to
     ensure that the rights of participants and the Awards are not adversely
     affected by the Change in Control.

     (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 involuntarily 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 subsection 5(a)(i) with respect to Options or 7(e) of the Plan with respect
to any RSRs with respect to which the Restricted Period has not lapsed, without
any action by the Committee or Board of Directors.

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     (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 "person" (as defined in Section 13(d) and 14(d) of the
                    Securities Exchange Act of 1934, as amended (the "Exchange
                    Act")), excluding for this purpose Household or any
                    subsidiary of Household, or any employee benefit plan of
                    Household, or any subsidiary of Household, or any person or
                    entity organized, appointed or established by Household for
                    or pursuant to the terms of such plan which acquires
                    beneficial ownership of voting securities of Household, is
                    or becomes the "beneficial owner" (as defined in Rule 13d-3
                    under the Exchange Act) directly or indirectly of securities
                    of Household representing twenty percent (20%) or more of
                    the combined voting power of Household's then outstanding
                    securities; provided, however, that no Change in Control
                    shall be deemed to have occurred as the result of an
                    acquisition of securities of Household by Household which,
                    by reducing the number of voting securities outstanding,
                    increases the direct or indirect beneficial ownership
                    interest of any person to twenty percent (20%) or more of
                    the combined voting power of Household's then outstanding
                    securities, but any subsequent increase in the direct or
                    indirect beneficial ownership interest of such person in
                    Household shall be deemed a Change in Control; and provided
                    further that if the Board of Directors of Household
                    determines in good faith that a person who has become the
                    beneficial owner directly or indirectly of securities of
                    Household representing twenty percent (20%) or more of the
                    combined voting power of Household's then outstanding
                    securities has inadvertently reached that level of ownership
                    interest, and if such person divests as promptly as
                    practicable a sufficient amount of securities of Household
                    so that the person no longer has a direct or indirect
                    beneficial ownership interest in twenty percent (20%) or
                    more of the combined voting power of Household's then
                    outstanding securities, then no Change in Control shall be
                    deemed to have occurred;

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               (2)  during any period of two (2) consecutive years (not
                    including any period prior to November 9, 1998) individuals
                    who at the beginning of such two-year period constitute the
                    Board of Directors of Household and any new director or
                    directors (except for any director designated by a person
                    who has entered into an agreement with Household to effect a
                    transaction described in subparagraph (1), above, or
                    subparagraph (3), below) whose election by the Board or
                    nomination for election by Household's stockholders was
                    approved by a vote of at least two-thirds of the directors
                    then still in office who either were directors at the
                    beginning of the period or whose election or nomination for
                    election was previously so approved, cease for any reason to
                    constitute at least a majority of the Board (such
                    individuals and any such new directors being referred to as
                    the "Incumbent Board");

               (3)  consummation of (x) an agreement for the sale or disposition
                    of Household or all or substantially all of Household's
                    assets, (y) a plan of merger or consolidation of Household
                    with any other corporation, or (z) a similar transaction or
                    series of transactions involving Household (any transaction
                    described in parts (x) through (z) of this subparagraph (3)
                    being referred to as a "Business Combination"), in each case
                    unless after such a Business Combination (I) the
                    stockholders of Household immediately prior to the Business
                    Combination continue to own, directly or indirectly, more
                    than sixty percent (60%) of the combined voting power of the
                    then outstanding voting securities entitled to vote
                    generally in the election of directors of the new (or
                    continued) entity (including, but not by way of limitation,
                    an entity which as a result of such transaction owns
                    Household, or all or substantially all of Household's former
                    assets either directly or through one or more subsidiaries)
                    immediately after such Business Combination, in
                    substantially the same proportion as their ownership of
                    Household immediately prior to such Business Combination,
                    (II) no person (excluding any entity resulting from such
                    Business Combination or any employee

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                    benefit plan (or related trust) of Household or of such
                    entity resulting from such Business Combination)
                    beneficially owns, directly or indirectly, twenty percent
                    (20%) or more of the then combined voting power of the then
                    outstanding voting securities of such entity, except to the
                    extent that such ownership existed prior to the Business
                    Combination, and (III) at least a majority of the members of
                    the board of directors of the entity resulting from such
                    Business Combination were members of the Incumbent Board at
                    the time of the execution of the initial agreement, or of
                    the action of the Board, providing for such Business
                    Combination;

               (4)  approval by the stockholders of Household of a complete
                    liquidation or dissolution of Household;

               (5)  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

               (6)  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 members of the Incumbent Board is made
                    by any person other than Household.

         (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, or termination by the employee within the
                    special 60-day window period which begins 6 months after a
                    Change in Control as provided in the employee's employment
                    agreement;

               (2)  the employee was assigned to a position of lesser rank or
                    status;

               (3)  the employee's annual target bonus or targeted performance
                    unit awards were

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                    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 uniformly 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" (1) in the case of an employee who is a party to an
     employment, termination protection or similar agreement that defines
     "cause" (or words of similar import), means "cause" (or words of similar
     import) as defined in such agreement, and (2) in the case of any other
     employee, means willful and deliberate misconduct, which is detrimental in
     a significant way to the interests of Household or any subsidiary thereof.

     (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.

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.

                                      -14-
<PAGE>

     (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.

                                      -15-
<PAGE>

                                AMENDMENT TO THE
                          HOUSEHOLD INTERNATIONAL, INC.
              1996 LONG-TERM EXECUTIVE INCENTIVE COMPENSATION PLAN
                                NOVEMBER 11, 1997

On November 11, 1997 the Household International Board of Directors, upon the
recommendation of the Board's Compensation Committee, adopted an amendment to
the 1996 Long-Term Executive Incentive Compensation Plan (the "Plan") relating
to the transferability of options granted under the Plan.

Transferability of Options Granted to Nonemployee Directors and Senior Managers
-------------------------------------------------------------------------------

This amendment only applies to Nonemployee Directors and Senior Managers
(defined under this amendment as the Chief Executive Officer and employees with
a direct reporting relationship to the Chief Executive Officer) who have
received or in the future receive options to purchase Household Common Stock
under the Plan.  This section modifies Plan Section 5(a) as regards the
transferability of options granted to Nonemployee Directors and Senior Managers;
all other provisions continue to apply.

Who is Eligible

This provision only applies to Nonemployee Directors and Senior Managers
("Eligible Persons").

Transfer of Options; Minimum Number

Options granted under the Plan may be transferred by will or through the laws of
descent and distribution.  In addition, Eligible Persons may transfer their
options only to family members, family trusts, and family partnerships
(collectively, "Transferees").  Transferees may not retransfer any options
except by will or through the laws of descent and distribution.  Any option
transferred to a single Transferee must represent the right to purchase a
minimum of 100 shares.

Which Options May be Transferred

Eligible Persons may transfer any option, including vested and unvested portions
of any award granted under the Plan.  Options granted under previous benefit
plans are not covered by this amendment.

Exercise

Options will vest in accordance with applicable Plan provisions. A Transferee
may only exercise vested options, and only as provided in the Plan.

                                      -16-
<PAGE>

Taxation of Options

The Eligible Person remains liable for any income tax related to the exercise of
transferred options.  Income tax will be calculated as of the exercise date.
The Eligible Person is solely responsible for tax liability related to any
options gifted to a Transferee.

Law and Regulation

In addition to laws and regulations that apply to the Plan, the Transfer of
options must be completed in accordance with securities registration and
disclosure regulations applicable at the time of transfer.  Eligible Persons and
Transferees may be subject to certain waiting periods limiting transfer or
exercise. Eligible Persons, or their agents agree to notify the Corporation at
least five days before any option they own or control is exercised.

                                      -17-<PAGE>

                                                                    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-
<PAGE>

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 2700 Sanders Road, Prospect Heights,
Illinois 60070 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-
<PAGE>

                         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

                                      -3-
<PAGE>

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 2700 Sanders Road, Prospect Heights, Illinois
60070 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-
<PAGE>

                         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-
<PAGE>

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 2700 Sanders Road, Prospect Heights, Illinois
60070 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-
<PAGE>

                         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-
<PAGE>

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 2700 Sanders Road, Prospect Heights, Illinois
60070 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-
<PAGE>

                         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-
<PAGE>

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 2700 Sanders Road, Prospect Heights, Illinois
60070 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.

                                      -10-
<PAGE>

                         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 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.

                                      -11-
<PAGE>

     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 2700 Sanders Road, Prospect Heights, Illinois
60070 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.

                                      -12-

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