Exhibit 10.h(i)
METRIS COMPANIES INC.
LONG-TERM INCENTIVE AND STOCK OPTION PLAN
Non-Qualified Stock Option Agreement
This Non-Qualified Stock Option Agreement is made and
entered into as of [date1] by and between [name] (the
"Optionee") and Metris Companies Inc., a Delaware
corporation, with its principal business office located in
St. Louis Park, Minnesota (the "Company").
WHEREAS, the Compensation Committee (the "Committee")
of the Board of Directors of the Company (the "Board")
desires to provide Optionee with an option to purchase
shares of common stock of the Company pursuant to the
provisions of the Metris Companies Inc. Long-Term Incentive
and Stock Option Plan (the "Plan") and this Non-Qualified
Stock Option Agreement (the "Agreement"), and Optionee
desires to acquire such option.
NOW, THEREFORE, for and in consideration of the mutual
covenants and promises contained herein, and for other
valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
1. Grant of Option. The Company hereby grants to
Optionee effective as of [date1] (the "Date of Grant"), the
option (the "Option") to purchase an aggregate of[date1]
[no]) shares (the "Shares") of common stock of the Company
(the "Common Stock"), subject to the terms and conditions
set forth herein and in the Plan.
2. Option Price. The purchase price of the Shares
subject to the Option (the "Option Price") shall be
$[price] per share, subject to adjustment as provided
herein.
3. Term of Option; Time of Exercise.
3.1 The term of the Option shall be for a period of
ten (10) years from the Date of Grant. The Option shall be
exercisable with respect to fifty percent (50%) of the
Shares on [date2] and with respect to fifty percent (50%)
of the Shares on [date3].
3.2 This Option shall not under any circumstances be
exercisable after, and this Agreement and Option shall
terminate as to all unexercised Shares at, 5:00 p.m.
(Minnesota time) on the date that is ten (10) years from
the Date of Grant (the "Expiration Date"), unless
terminated prior thereto pursuant to the provisions of
Section 5 hereof.
3.3 Notwithstanding the vesting provisions contained
in Section 3.1 hereof, but subject to the other terms and
conditions set forth herein, the Option may be exercised in
full immediately following the date of a "Change in
Control" (as hereinafter defined). For purposes of this
Agreement, the following terms shall have the definitions
set forth below:
(a) "Change in Control" shall mean:
(i) a change in control of a nature that would be
required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), whether or not the Company is then subject to such
reporting requirement; or
(ii) the public announcement (which, for purposes of
this definition, shall include, without limitation, a
report filed pursuant to Section 13(d) of the Exchange Act)
by the Company or any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) other than
Fingerhut Companies, Inc. ("Fingerhut") or any of
Fingerhut's affiliates that such person has become the
"beneficial owner" (as defined in Rule 13d-3 promulgated
under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding
securities at any time when Fingerhut beneficially owns
less than 30% of the combined voting power of the Company's
then outstanding securities; provided, however, that
notwithstanding the foregoing, no Change of Control shall
be deemed to have occurred for purposes of this Agreement
by reason of ownership of 50% or more of the total voting
capital stock of the Company then issued and outstanding by
any subsidiary of the Company or any employee benefit plan
of the Company or of any subsidiary of the Company or any
entity holding shares of the Common Stock organized,
appointed or established for, or pursuant to the terms of,
any such plan (any such person or entity described in this
proviso is referred to herein as a "Company Entity"); or
(iii) the announcement of a tender offer by any
person or entity (other than a Company Entity) for 30% or
more of the Company's voting capital stock then issued and
outstanding at any time when Fingerhut beneficially owns
less than 50% of the Company's voting capital stock, which
tender offer has not been approved by the Board, a majority
of the members of which are Continuing Directors (as
hereinafter defined), and recommended to the shareholders
of the Company; or
(iv) the Continuing Directors (as hereinafter defined)
cease to constitute a majority of the Company's Board of
Directors; or
(v) the shareholders of the Company approve (x) any
consolidation or merger of the Company in which the Company
is not the continuing or surviving corporation or pursuant
to which shares of Company stock would be converted into
cash, securities or other property, other than a merger of
the Company in which shareholders immediately prior to the
merger have the same proportionate ownership of stock of
the surviving corporation immediately after the merger; (y)
any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of the Company; or (z) any
plan of liquidation or dissolution of the Company; or
(vi) a Fingerhut Change of Control at any time
Fingerhut beneficially owns 30% or more of the combined
voting power of the Company's then outstanding securities.
(b) "Continuing Director" shall mean any person who
is a member of the Board of Directors of the Company, while
such person is a member of the Board of Directors, who is
not an Acquiring Person (as defined below) or an Affiliate
or Associate (as defined below) of an Acquiring Person, or
a representative of an Acquiring Person or of any such
Affiliate or Associate, and who (x) was a member of the
Board of Directors on the date of this Agreement as first
written above or (y) subsequently becomes a member of the
Board of Directors, if such person's initial nomination for
election or initial election to the Board of Directors is
recommended or approved by a majority of the Continuing
Directors. For purposes of this subparagraph (ii),
"Acquiring Person" shall mean any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act) who
or which, together with all Affiliates and Associates of
such person, is the "beneficial owner" (as defined in Rule
13d-3 promulgated under the Exchange Act), directly or
indirectly of securities of the Company representing 30% or
more of the combined voting power of the Company's then
outstanding securities, but shall not include any Company
Entity; and "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2
promulgated under the Exchange Act.
(c) "Fingerhut Change in Control" shall mean:
(i) a change in control of Fingerhut of a nature that
would be required to be reported in response to Item 6(e)
of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), whether or not Fingerhut is then subject to such
reporting requirement; or
(ii) the public announcement (which, for purposes of
this definition, shall include, without limitation, a
report filed pursuant to Section 13(d) of the Exchange Act)
by Fingerhut or any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) that such
person has become the "beneficial owner" (as defined in
Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of Fingerhut representing 30% or
more of the combined voting power of Fingerhut's then
outstanding securities; provided, however, that
notwithstanding the foregoing, no Fingerhut Change of
Control shall be deemed to have occurred for purposes of
this Agreement by reason of ownership of 30% or more of the
total voting capital stock of Fingerhut then issued and
outstanding by any subsidiary of Fingerhut or any employee
benefit plan of Fingerhut or of any subsidiary of Fingerhut
or any entity holding shares of the Common Stock organized,
appointed or established for, or pursuant to the terms of,
any such plan (any such person or entity described in this
proviso is referred to herein as a "Fingerhut Entity"); or
(iii) the announcement of a tender offer by any
person or entity (other than a Fingerhut Entity) for 30% or
more of Fingerhut's voting capital stock then issued and
outstanding, which tender offer has not been approved by
the Fingerhut Board of Directors, a majority of the members
of which are Fingerhut Continuing Directors (as hereinafter
defined), and recommended to the shareholders of Fingerhut;
or
(iv) the Fingerhut Continuing Directors (as
hereinafter defined) cease to constitute a majority of
Fingerhut's Board of Directors; or
(v) the shareholders of Fingerhut approve (x) any
consolidation or merger of Fingerhut in which Fingerhut is
not the continuing or surviving corporation or pursuant to
which shares of Fingerhut stock would be converted into
cash, securities or other property, other than a merger of
Fingerhut in which shareholders immediately prior to the
merger have the same proportionate ownership of stock of
the surviving corporation immediately after the merger; (y)
any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of Fingerhut; or (z) any
plan of liquidation or dissolution of Fingerhut.
(vi) "Fingerhut Continuing Director" shall mean any
person who is a member of the Board of Directors of
Fingerhut, while such person is a member of the Fingerhut
Board of Directors, who is not a Fingerhut Acquiring Person
(as defined below) or an Affiliate or Associate (as defined
below) of a Fingerhut Acquiring Person, or a representative
of a Fingerhut Acquiring Person or of any such Affiliate or
Associate, and who (x) was a member of the Fingerhut Board
of Directors on the date of this Agreement as first written
above or (y) subsequently becomes a member of the Fingerhut
Board of Directors, if such person's initial nomination for
election or initial election to the Fingerhut Board of
Directors is recommended or approved by a majority of the
Fingerhut Continuing Directors. For purposes of this
subparagraph (ii), "Fingerhut Acquiring Person" shall mean
any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) who or which, together with all
Affiliates and Associates of such person, is the
"beneficial owner" (as defined in Rule 13d-3 promulgated
under the Exchange Act), directly or indirectly of
securities of Fingerhut representing 30% or more of the
combined voting power of Fingerhut's then outstanding
securities, but shall not include any Fingerhut Entity; and
"Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 promulgated
under the Exchange Act.
4. Exercise of Option.
4.1 Subject to the terms and conditions of the Plan
and this Section 4, this Option may be exercised by
Optionee in whole or in part by written notice to the
Company at its principal executive office addressed to the
attention of its General Counsel. Such notice shall
specify Optionee's election to exercise this Option and the
number of Shares in respect of which it is being exercised,
and shall be signed by Optionee. The Company shall not,
however, be required to sell or issue any Shares pursuant
to this Option if the issuance of such Shares would
constitute a violation by Optionee or the Company of any
applicable law or regulation of any governmental authority.
4.2 Notice of exercise of the Option by Optionee
shall be accompanied by payment of the full Option Price of
the Shares as to which the Option is to be exercised,
together with payment of the amount determined by the
Company to be necessary to satisfy any applicable federal,
state and local tax withholding requirements arising from
the exercise of the Option. The Company shall issue and
deliver a certificate or certificates representing such
Shares as soon as practicable after such notice and
payments are received. Payment of such Option Price shall
be made in cash or check payable to the order of the
Company or, in lieu thereof, if the Committee in its sole
discretion at the time of exercise
so permits, by tendering to the Company shares of common
stock of the Company having a fair market value equal to
the Option Price. Payment by the Optionee of any required
amount of withholding for tax purposes shall be made in
cash or check payable to the order of the Company. The
certificate or certificates for the Shares as to which the
Option shall have been so exercised shall be registered in
the name of Optionee (or Optionee's Representative (as
defined in Section 5)) or at the direction of Optionee or
such Representative and shall be delivered as aforesaid to
or upon the written order of such person or persons. In
the event that the Option shall be exercised by any person
or persons other than Optionee, such notice shall be
accompanied by appropriate proof of the authority and right
of such person or persons to exercise the Option. All
Shares purchased upon the exercise of the Option as
provided herein shall be fully paid and nonassessable.
5. Termination of Option.
(a) This Option shall terminate and may no longer be
exercised if Optionee ceases to be employed by the Company
or one of its subsidiaries (as defined in the Plan) except:
(i) if Optionee's employment shall be terminated for
any reason other than gross and willful misconduct, death,
disability or retirement, Optionee may, at any time before
(x) the expiration of ninety (90) days after such
termination or (y) the Expiration Date, whichever shall
first occur, exercise this Option (A) to the extent that
the Option was exercisable on the date of the termination
of employment in the case of voluntary termination or (B)
to the extent that the Option was or would become
exercisable on or before the expiration of such ninety (90)
day period in the case of involuntary termination;
provided, however, that if, immediately prior to such
termination of
employment, Optionee was an "officer" as defined in Rule
16a1(f) promulgated under the Exchange Act, the periods of
exercisability referred to in clauses (A) and (B) above
(but not the acceleration of vesting referred to in clause
(B)) shall be extended from ninety (90) days to seven (7)
months after the date of such termination;
(ii) if Optionee's employment shall be terminated by
reason of Optionee's gross and willful misconduct during
the course of employment (as may be determined by the
Committee in its sole and absolute discretion), including
but not limited to, wrongful appropriation of funds of the
employer or the commission of a gross misdemeanor or
felony, this Option shall be terminated as of the date of
the misconduct and Optionee shall have no further rights
hereunder.
(iii) if Optionee's employment shall be terminated
by reason of Optionee's death, this Option will become
fully exercisable and may be exercised, by the Optionee's
Representative (as defined below) at any time before (a)
the expiration of three (3) years after the date of death,
or (b) the Expiration Date, whichever shall first occur;
(iv) (A) if Optionee's employment shall be terminated
by reason of Optionee's disability (other than Total
Disability), as may be determined by the Committee in its
sole and absolute discretion, this Option may be exercised,
to the extent that the Option was exercisable on the date
of disability, by Optionee or Optionee's guardian or legal
representative, at any time before (x) the expiration of
one
(1) year after the date Optionee's employment was
terminated by reason of such disability or (y) the
Expiration Date, whichever shall first occur; or (B) if
Optionee's employment shall be terminated by reason of
Optionee's Total Disability, this Option will become fully
exercisable and may be exercised by Optionee or Optionee's
guardian or legal representative at any time before (x)
the expiration of three (3) years after the date
Optionee's employment was terminated by reason of such
disability or (y) the Expiration Date, whichever shall
first occur;
(v) if the Optionee's employment shall be terminated
by the Optionee's Retirement (as defined below), this
Option will become fully exercisable and may be exercised
by Optionee before (x) the expiration of three years after
such date, or (y) the Expiration Date, whichever shall
first occur; or
(vi) if Optionee dies or becomes disabled (as may be
determined by the Committee in its sole and absolute
discretion) during the time of exercisability after
termination of employment provided in clause (i) of this
Section 5(a), this Option may be exercised, to the extent
that the Option was exercisable on the date of death or
disability: (x) in the case of death, by the Optionee's
Representative or (y) in the case of disability, by
Optionee or Optionee's guardian or legal representative,
before (A) the expiration of one year after the date of
death or the onset of such disability, or (B) the
Expiration Date, whichever shall first occur.
(b) Notwithstanding the provisions contained in
Section 5(a) above, but subject to the other terms and
conditions set forth herein, in the event that, within one
year following a Change in Control, Optionee's employment
is terminated for any reason other than for gross and
willful misconduct (including Optionee's voluntary
termination), Optionee shall have the right to exercise
the Option in whole or in part at any time before (i) the
expiration of one year after the date of such termination
of employment, or (ii) the Expiration Date, whichever
shall first occur.
(c) For purposes of this Agreement, the following
terms shall be defined as follows:
(i) "Retirement" shall mean any termination other
than by death or gross and willful misconduct after (A)
the Optionee has attained at least age fifty-five (55) and
(B) the Optionee's age plus completed continuous years of
service equals sixty (60) or more; provided, however, that
if Optionee is less than age sixty-five (65) on the date
of termination of employment, Optionee must have completed
at least five (5) years of service.
(ii) "Representative" shall mean the person or
persons to whom Optionee's rights under this Agreement
shall pass upon death, whether by will or by the
applicable laws of descent and distribution.
(iii) "Total Disability" shall have the meaning
given to "permanent and total disability" in Section
22(e)(3) of the Code (as defined in the Plan) and shall be
determined by the Committee in its sole and absolute
discretion.
(d) Notwithstanding the foregoing provisions of
Section 5(a), the Committee shall have the authority, on a
case by case basis, in its sole and absolute discretion to
extend for up to a period of two (2) years following the
termination of employment of Optionee the period of
vesting referred to in Section 3.1 and the period of
exercisability, provided such extension does not exceed
the Expiration Date.
6. Leave of Absence; Related Employment. A leave
of absence granted in accordance with the Company's usual
procedure which does not operate to interrupt continuous
employment for other benefits granted by the Company shall
not be considered a termination of employment under this
Agreement. A period of related employment during which
Optionee is not employed by the Company nor a subsidiary
(as defined in the Plan) shall not be considered a
termination of employment under this Agreement if (i) such
employment is undertaken by Optionee at the request of the
Company or a subsidiary, (ii) immediately prior to the
undertaking of such employment Optionee was an officer or
employee of the Company or a subsidiary or was engaged in
related employment, and (iii) such employment is
recognized by the Committee, in its sole discretion, as
related employment. The death or disability of Optionee
during a period of related employment shall be treated,
for purposes of this agreement, as if such death or the
onset of such disability had occurred while Optionee was
an officer or employee of the Company.
7. Adjustments for Changes in Common Stock.
7.1 In the event that the outstanding shares of
Common Stock (other than shares held by dissenting
shareholders) shall be changed into, or exchanged for, a
different number or kind of shares of Common Stock or
other securities of the Company, or, if further changes or
exchanges of any Common Stock or other securities into
which the Common Stock shall have been changed, or for
which it shall have been exchanged, shall be made (whether
by reason of merger, consolidation, reorganization,
recapitalization, stock dividend, reclassification, split-
up, combination of shares or otherwise), then for each
Share subject to the Option, there shall be substituted
and exchanged therefor the number and kind of shares of
Common Stock or other securities into or for which each
outstanding share of Common Stock (other than shares held
by dissenting shareholders) shall be so changed or
exchanged. If in the event of any such changes or
exchanges in order to prevent dilution or enlargement of
rights under this Agreement, it is necessary to make an
adjustment in the number, kind, or option exercise price
of the Shares then subject to the Option, such adjustment
shall be made by the Committee and shall be effective and
binding for all purposes of this Agreement.
7.2 All adjustments made pursuant to the provision
of this Section 7 shall be made by the Committee, whose
determination as to which adjustments shall be made, and
the extent thereof, shall be final, binding and
conclusive.
8. Non-transferability of Option.
(a) Except as provided in subsection 8(b) below, the
Option granted under this Agreement shall not be
transferable by Optionee, either voluntarily or
involuntarily, except by will or the laws of descent and
distribution. This Option may not be transferred,
assigned, pledged or hypothecated, whether by operation of
law or
otherwise, or be subject to attachment, execution or
similar process. Any attempt to do so shall void this
Option. During the lifetime of Optionee, this Option may
be exercised only by the Optionee (or by Optionee's
guardian or legal representative in the case of
disability) or by a permitted transferee pursuant to a
transfer as described below.
(b) To the extent such transfers are permitted under
the Plan and are not restricted by Rule 16b-3 promulgated
under the Exchange Act, the Committee, in its sole
discretion, may establish, as permitted by applicable law,
rules and conditions under which an Optionee may transfer
this Option to any member of Optionee's "immediate family"
(as such term is defined in Rule 16a-1(e) promulgated
under the Exchange Act).
9. Rights as a Shareholder. No rights of a
shareholder of the Company shall attach to Optionee with
respect to any of the Shares until this Option shall be
duly exercised as to such Shares and Optionee shall have
become the holder of record of such Shares. No
adjustments shall be made for cash dividends or other
distributions or rights as to which there is a record date
preceding the date that Optionee becomes the holder of
record of such Shares.
10. Securities Law Compliance. The exercise of all
or any portion of this Option shall only be effective at
such time that the sale of Common Stock issued pursuant to
such exercise will not violate any state or federal
securities or other laws. The Company is under no
obligation to effect any registration of the stock subject
to the Option under the Securities Act of 1933 or to
effect any state registration or qualification of such
Common Stock. The Company may, in its sole discretion,
defer the effectiveness of any full or partial exercise of
the Option in order to ensure that the issuance of stock
upon exercise will be in compliance with federal or state
securities laws and the rules of the New York Stock
Exchange or any other exchange upon which the Company's
Common Stock is traded.
11. Limitation of Liability. Nothing in this
Agreement shall be construed to:
(a) limit in any way the right of the Company or a
subsidiary to terminate the employment of Optionee; or
(b) be evidence of any agreement or understanding,
express or implied, that the Company or a subsidiary shall
employ Optionee in any particular position at any
particular rate of compensation or for any particular
period of time.
12. Severability. It is intended that each
provision of this Agreement shall be viewed as separate
and divisible. In the event that any provision hereof
shall be held to be invalid or unenforceable, the
remaining provisions of this Agreement shall continue to
be in full force and effect.
13. Governing Law. This Agreement shall be
construed in accordance with and governed by the laws of
the State of Minnesota.
14. Further Assurances. Upon the exercise of the
option by Optionee or at such subsequent date as either
the Company or Optionee may reasonably request, each party
hereto agrees to execute and deliver such further
instruments and to take such other action as shall be
reasonably required to carry out the intent and purposes
of this Agreement.
15. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed
an original, but all of which together shall constitute
one and the same document.
16. Notices. All notices that are required or may
be given pursuant to the terms of this Agreement shall be
in writing and delivered personally or by registered or
certified mail, return receipt requested, postage prepaid,
addressed as follows and shall be deemed to have been
given upon delivery to the addressee:
To the Company:
Metris Companies Inc.
000 Xxxxx Xxxxxxx 000, Xxxxx 0000
Xx. Xxxxx Xxxx, XX 00000
Attention: General Counsel
To Optionee:
At Optionee's residence address listed in
the Company's personnel records.
Notice of a change in address of one of the parties hereto
shall be given in writing to the other party as provided
above, but shall be effective only upon actual receipt.
17. Amendment. This Agreement may not be amended or
modified by the parties hereto in any manner, except by a
written instrument signed by both parties hereto.
18. Binding Effect: Assignment. This Agreement
shall be binding upon the heirs, successors and assigns of
the parties hereto, subject to shareholder approval of the
Plan. This Agreement shall not be assigned by either party
hereto without the express written consent of the other
party.
19. Entire Agreement. The Plan, the rules adopted
by the Committee from time to time and this Agreement
constitute, except as to any written agreement between the
parties hereto which specifically references this Section
19, the entire understanding between the parties hereto
with respect to the matters covered herein and supersede
all previous written, oral or implied understandings
between the parties hereto with respect to the subject
matter hereof.
IN WITNESS WHEREOF, the Company and Optionee have
executed this Agreement as of the day and year first above
written.
METRIS COMPANIES INC.
By
Xxxxxx X. Xxxxxx
OPTIONEE SIGNATURE
[name]
Social Security #: [ssn]
Date:
