<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Metris Companies Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
[LOGO OF METRIS COMPANIES]
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders of
Metris Companies Inc., which will be held on Thursday September 14, 2000, at
10:00 a.m., Central Time, at our new headquarters, located at 10900 Wayzata
Boulevard, Minnetonka, Minnesota.
At the Special Meeting, you will be asked to consider and vote upon a
proposal of our Board of Directors to amend our Amended and Restated
Certificate of Incorporation to increase the authorized number of shares of
common stock that we may issue from 100,000,000 to 300,000,000 shares.
The Company's Board of Directors has determined that the amendment to the
Certificate is in the best interests of the Company and its shareholders, has
unanimously approved the amendment and recommends a vote for the Proposal.
You should read carefully the accompanying Notice of Special Meeting of
Shareholders and the Proxy Statement for details of the amendment to the
Certificate and additional related information.
Your vote is important. Whether or not you plan to attend the Special
Meeting, please complete, sign and date the enclosed proxy card and return it
promptly in the enclosed postage-prepaid envelope. Your stock will be voted in
accordance with the instructions you have given in your proxy, or, if no
instructions are given, your executed proxy will be voted for the proposal in
accordance with the recommendation of the Board of Directors. If you attend the
Special Meeting, you may vote in person if you wish, even though you previously
returned your proxy card. Your prompt cooperation will be greatly appreciated.
Sincerely,
/s/ Ronald N. Zebeck
Ronald N. Zebeck
Chairman and Chief Executive Officer
Minnetonka, Minnesota
August 7, 2000
<PAGE>
METRIS COMPANIES INC.
10900 Wayzata Boulevard
Minnetonka, Minnesota 55305
--------------------------------------------------------------------------------
BY ORDER OF THE BOARD OF DIRECTORS
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 14, 2000
--------------------------------------------------------------------------------
To the Shareholders of Metris Companies Inc.:
A Special Meeting of Shareholders (the "Special Meeting") of Metris
Companies Inc. (the "Company") will be held on Thursday, September 14, 2000, at
10:00 a.m., Central Time, at our new headquarters, located at 10900 Wayzata
Boulevard, Minnetonka, Minnesota, for the following purposes:
(1) Considering and voting upon a proposal of the Company's Board of
Directors to amend the Company's Amended and Restated Certificate of
Incorporation (the "Certificate") to increase the authorized number of
shares of common stock to be issued by the Company from 100,000,000 to
300,000,000 shares; and
(2) In the discretion of the persons named in the proxy, to transact any
other business that may properly come before the Special Meeting or any
adjournment thereof.
The accompanying Proxy Statement more fully describes the amendment of the
Certificate referred to above.
The Board of Directors has fixed the close of business on August 4, 2000, as
the record date for determining shareholders entitled to notice of, and to vote
at, the Special Meeting.
By Order of the Board of Directors,
/s/ Lorraine E. Waller
Lorraine E. Waller
Senior Vice President, Assistant
General
Counsel and Assistant Secretary
Minnetonka, Minnesota
August 7, 2000
Whether or not you plan to attend the Special Meeting, please complete, sign
and date the enclosed proxy card and return it promptly in the enclosed
postage-prepaid envelope. Your stock will be voted in accordance with the
instructions you have given in your proxy or, if no instructions are given,
your executed proxy will be voted for the proposal, in accordance with the
recommendation of the Board of Directors contained in this Proxy Statement. If
you attend the Special Meeting, you may vote in person if you wish, even though
you previously returned your proxy card. Your prompt cooperation will be
greatly appreciated.
<PAGE>
--------------------------------------------------------------------------------
Table of Contents
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
ATTENDANCE AND VOTING MATTERS............................................... 1
PROPOSAL: AMENDMENT OF CERTIFICATE OF INCORPORATION......................... 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.............. 7
NOTE REGARDING FORWARD LOOKING STATEMENTS................................... 10
WHERE YOU CAN FIND MORE INFORMATION......................................... 10
</TABLE>
<PAGE>
METRIS COMPANIES INC. PROXY STATEMENT
--------------------------------------------------------------------------------
Attendance and Voting Matters
--------------------------------------------------------------------------------
Why Did You Send Me This Proxy Statement?
We sent you this Proxy Statement and the enclosed proxy card because the
Board of Directors (the "Board") of Metris Companies Inc. ("we," "us," "Metris"
or our "Company") is soliciting your proxy to vote at the Special Meeting of
Shareholders (the "Special Meeting"). This Proxy Statement summarizes
information concerning the proposal. This information will help you to make an
informed vote at the Special Meeting.
We began sending this Proxy Statement, the attached Notice of Special
Meeting and the enclosed proxy card on August 7, 2000.
Who is Entitled to Vote?
Holders of our Common Stock. Shareholders of record of the Company's common
stock, par value $.01 (the "Common Stock"), at the close of business on August
4, 2000 (the "record date") are entitled to vote at the Special Meeting. A
holder of Common Stock is entitled to one vote on the proposal for each share
of Common Stock held on the record date. There is no cumulative voting.
Holders of our Series C Preferred Stock. The holders of our Series C
Perpetual Convertible Preferred Stock are entitled to vote on all matters voted
on by holders of our capital stock, voting as a single class, except the
election of directors. With respect to a vote on any matter other than the
election of directors, each share of Series C Preferred Stock entitles its
holder to cast the same number of votes he or she would have been able to cast
if such share of Series C Preferred Stock was converted into Common Stock on
the record date. One share of Series C Preferred Stock is convertible into 30
shares of Common Stock, plus a premium amount designed to guarantee a portion
of seven years' worth of dividends at a 9% annual rate. For conversions this
year, the premium amount would be equal to approximately 14% of those
dividends.
On the record date, the total shares outstanding were: (a) shares of
Common Stock; and (b) 925,458.8 shares of Series C Preferred Stock, which are
immediately convertible into 29,163,578 shares of Common Stock, including
accrued dividends and a premium amount designed to guarantee approximately 14%
of seven years' worth of dividends at a 9% annual rate, or approximately % of
the Common Stock on a diluted basis.
A list of shareholders entitled to vote at the Special Meeting will be
available at the Special Meeting and for ten days prior to the Special Meeting
at our corporate headquarters during normal business hours.
How Do I Vote?
Unless you hold your shares in the Metris Retirement Plan 401(k), you can
vote on matters to come before the Special Meeting in one of two ways:
. You can come to the Special Meeting and cast your vote there; or
. You can vote by marking, signing and returning the enclosed proxy card.
If you do so, the individuals named as proxies on the card will vote
your shares in the manner you indicate.
The Board of Directors has selected Ronald N. Zebeck and Lorraine E. Waller,
the persons named on the proxy card accompanying this Proxy Statement, to serve
as proxies for the Special Meeting. Mr. Zebeck and Ms. Waller are officers of
the Company.
1
<PAGE>
If you plan to attend the Special Meeting and vote in person, you should
request a ballot when you arrive. HOWEVER, IF YOUR SHARES ARE HELD IN THE NAME
OF YOUR BROKER, BANK OR OTHER NOMINEE, THE INSPECTORS OF ELECTION WILL REQUIRE
YOU TO PRESENT A POWER OF ATTORNEY FROM YOUR BROKER, BANK OR OTHER NOMINEE FOR
YOU TO VOTE SUCH SHARES AT THE SPECIAL MEETING. Please contact your broker,
bank or nominee.
What Shares are Included on my Proxy Card?
Your proxy card represents all shares registered to your account in the same
social security number and address, including shares you own under the Metris
Companies Inc. Employee Stock Purchase Plan and the Metris Retirement Plan
401(k).
How Do Employees in the Metris Companies Inc. Employee Stock Purchase Plan
Vote?
If you hold shares of Common Stock under the Metris Companies Inc. Employee
Stock Purchase Plan, you can vote such shares in either of the ways described
above.
How Do Employees in the Metris Retirement Plan 401(k) Vote?
If you hold shares of Common Stock in the Metris Retirement Plan 401(k), an
employee benefit plan of the Company, please return your proxy in the envelope
provided by September 7, 2000. Our transfer agent, Computershare Investor
Services, will calculate the votes returned by all holders in the Metris
Retirement Plan 401(k) and notify the Trustee of the Metris Retirement Plan
401(k). Scudder Trust Company, the Trustee for the Metris Retirement Plan
401(k), will act in accordance with your instructions for voting your shares of
Common Stock held in your 401(k) account. If your voting instructions for your
401(k) account are not received by September 7, 2000, the Trustee will vote
your shares in its absolute discretion. Holders of shares in the Metris
Retirement Plan 401(k) will not be permitted to vote in person at the Special
Meeting.
Will My Vote Be Disclosed?
We have a policy that all proxies, ballots and votes tabulated at a meeting
of the shareholders are confidential. We will not reveal individual votes to
any of our employees or anyone else, other than the non-employee tabulator of
the votes or an independent election inspector, except as necessary to meet
applicable legal requirements, including challenges to the election or in any
lawsuit in which such vote becomes an issue. Representatives of Computershare
Investor Services will tabulate votes and act as Inspector of Election at the
Special Meeting.
This policy is not a right of shareholders and we reserve the right to
change this policy as to future elections at any time. However, you will be
entitled to confidentiality, subject to the exceptions stated above, for your
votes in this election.
May I Revoke My Proxy?
If you give a proxy, you may revoke it at any time before it is exercised.
You may revoke your proxy in any one of three ways:
. You may send in another proxy with a later date;
. You may notify our Assistant Secretary in writing at 10900 Wayzata
Boulevard, Minnetonka, Minnesota 55305; or
. You may vote in person at the Special Meeting.
If you choose to revoke your proxy by attending the Special Meeting, you must
vote at such meeting in accordance with the rules for voting at the Special
Meeting. Attending the Special Meeting will not, by itself, constitute
revocation of a proxy.
2
<PAGE>
Must a Minimum Number of Shareholders Vote or be Present at the Special
Meeting?
A quorum of shareholders is necessary to hold a valid meeting. Our Amended
and Restated Bylaws (our "Bylaws") state that the presence, in person or by
proxy, of holders of one-third of the shares entitled to vote shall constitute
a quorum. Under Delaware law, if a shareholder abstains from voting as to any
particular matter, then the shares held by such shareholder shall be deemed
present at the Special Meeting for purposes of determining a quorum and for
purposes of calculating the vote with respect to such matter.
The Inspector of Election will also treat broker non-votes as shares that
are present and entitled to vote for purposes of determining a quorum. Broker
non-votes occur when a broker holding stock in street name votes shares on some
matters but not others. As to matters for which the broker lacks discretionary
authority, the shares will be treated as not present and not entitled to vote
(even if included for purposes of determining a quorum).
If the number of shares present at the Special Meeting is insufficient to
constitute a quorum, the Special Meeting may be adjourned by the vote of a
majority of shares present to a later date. No notice, other than as given at
the Special Meeting itself, is required with respect to the time and place for
the reconvening of the Special Meeting.
What Vote is Required to Approve the Proposal?
Approval of the proposal requires
. the affirmative vote of a majority of the outstanding stock entitled to
vote thereon, voting as a single class; and
. the affirmative vote of a majority of the outstanding Common Stock,
voting as a separate class.
On the record date, the number votes entitled to be cast by the holders of
our outstanding stock was and the number of votes that could be cast only
by the holders of our Common Stock was . Therefore, approval of the proposal
requires affirmative votes, of which must be cast by holders of our
Common Stock.
What Are the Costs of Soliciting These Proxies?
We will pay all costs of soliciting these proxies. In addition to mailing
proxy soliciting materials, we may also solicit proxies by telephone, telegram
or otherwise. We also ask banks, brokers and other institutions, nominees and
fiduciaries to forward proxy materials to the beneficial owners or principals
and to obtain authority to execute proxies. We will reimburse them for their
expenses. In addition, we have retained D. F. King & Co., Inc. to aid in the
solicitation of proxies. We have agreed to pay them a fee of $5,000 plus
telephone solicitation fees and out-of-pocket expenses. We have also retained
Institutional Shareholder Services to provide analysis and modeling in
connection with this Special Meeting, for which we have agreed to pay them a
fee of $8,000.
What Matters May be Raised at the Special Meeting?
The Board has proposed one item for action at the Special Meeting: the
amendment of the Company's Amended and Restated Certificate of Incorporation to
increase the authorized number of shares of Common Stock to be issued by the
Company from 100,000,000 to 300,000,000 shares.
Under the proxy rules promulgated by the SEC, a proxy may confer
discretionary authority to vote on any matter for which we did not have notice
in accordance with the notice provisions in our Bylaws. Therefore, if any other
matter is presented at the Special Meeting and you have signed and returned a
proxy card, the holder of your proxy will vote upon such matter in his or her
discretion.
In addition, under the rules of the SEC, the holders of your proxy may also
vote in their discretion with respect to matters incident to the conduct of the
Special Meeting. As of the date of the printing of this proxy, we have no
knowledge of any proposals submitted by our shareholders.
3
<PAGE>
PROPOSAL
--------------------------------------------------------------------------------
Amendment of the Certificate to Increase the Authorized Common Stock
--------------------------------------------------------------------------------
1.What is the Company Asking You to Approve?
The Certificate currently authorizes 110,000,000 shares of capital stock,
100,000,000 of which are authorized as Common Stock, par value $.01 per share,
and 10,000,000 of which are authorized as Preferred Stock, par value $.01 per
share. We are requesting your approval to increase the authorized Common Stock
from 100,000,000 to 300,000,000 shares.
2.What is the Company's Current Capital Structure?
As of August 4, 2000, shares of Common Stock were issued and outstanding
and an additional shares of Common Stock were committed for issuance upon
the exercise of outstanding options granted prior to our initial public
offering in October 1996 and under our stock incentive and option plans.
Furthermore, we are obligated to reserve virtually all of the remainder of the
100,000,000 presently authorized shares of Common Stock for conversion of
Series C Preferred Stock and exercise of outstanding stock options. Therefore,
for all practical purposes, no shares of Common Stock remain available for
other needs or opportunities that may arise.
As of August 4, 2000, 925,458.8 shares of our Preferred Stock were
outstanding in the form of Series C Preferred Stock and we reserved an
additional 3,574,541.2 shares of Preferred Stock for issuance as follows:
. 2,400,000 shares reserved for the issuance of Series B Preferred Stock;
. 1,074,541.2 shares reserved for the issuance of Series C Preferred Stock
and the pay-in-kind dividends associated therewith; and
. 100,000 shares reserved for the issuance of Series D Preferred Stock.
Thus, of the 10,000,000 presently authorized shares of Preferred Stock
5,500,000 shares remain available for other purposes.
3.What is the Impact of the Approval or Disapproval of this Proposal?
If shareholders approve this proposal, the Board of Directors will prepare
and file Articles of Amendment to the Certificate in accordance with the
proposed Amendments, which will become effective immediately upon acceptance of
the filing by the Secretary of State of the State of Delaware. The Board could
then cause the issuance of the Common Stock without any further action on the
part of the shareholders.
If shareholders do not approve this proposal, we would most likely have to
consider freezing or terminating our employee and director incentive, option
and stock purchase plans by 2001 and possibly immediately.
In addition, we would also need to consider other substantially economically
equivalent means of paying dividends to the holders of our Series C Preferred
Stock instead of in-kind dividends. Our Certificate of Designation for the
Series C Preferred Stock provides that, if approved by a vote of 80% of our
Board of Directors, including a majority of the directors elected by the
holders of Series C Preferred Stock (currently three of four), the dividends
may be in cash, debt or other securities, property or any combination thereof.
We would also have practically no shares of Common Stock for other needs,
uses and opportunities that may arise.
4
<PAGE>
4.Why is the Company Requesting an Increase in the Number of Authorized Shares
of Common Stock?
Our Certificate currently authorizes us to issue 100,000,000 shares of
Common Stock. On June 15, 1999, we split our shares two-for-one through the
payment of a 100% stock dividend. On May 9, 2000, we announced a three-for-two
split of our Common Stock, which we paid as a 50% stock dividend on June 15,
2000. Following the recent split, approximately 60 million shares of Common
Stock were outstanding. We believe that the two splits have helped broaden our
shareholder base, are an effective way to improve the marketability and
liquidity of our Common Stock and are supported by our increasing growth and
favorable operating results. Approval to increase the authorized Common Stock
would give us the opportunity, as favorable conditions arise, to further
enhance the liquidity of our stock through subsequent splits of our shares.
Furthermore, we are committed to reserving virtually all of our remaining
authorized shares for issuance upon conversion of Series C Preferred Stock and
exercise of outstanding stock options. The proposed amendment to our
Certificate would allow us to continue to make grants under our employee and
director option and incentive plans and pay dividends in kind to the holders of
our Series C Preferred Stock rather than through other substantially
economically equivalent, but less desirable, means.
In addition, we believe it is desirable to ensure that the Company will have
additional authorized shares of Common Stock available for general corporate
purposes, including possible acquisition, capital raising and financing
transactions. While we have no present plans or commitments to issue any of the
additional authorized shares other than to have them available for current
stock option and purchase plans and conversion of Series C Preferred Stock, we
believe it is advisable to have the ability and flexibility to meet our future
capital requirements by issuing the additional shares, as the need or
circumstances may arise, to take advantage of market conditions or the
availability of other favorable opportunities without the delay and expense of
calling a special shareholders' meeting.
Finally, we wish to restore the proportional availability of authorized but
unissued shares of Common Stock that existed before the two stock splits,
without placing our shareholders in a less favorable relative position than
they were in before the stock splits. The proposed increase does not exceed the
number that we would have had if our authorized shares had increased at the
same ratio as our two-for-one and three-for-two splits.
The additional shares of Common Stock will be available for issuance by the
Board of Directors for any proper corporate purpose, to such persons and for
such consideration as the Board may determine, without any further action by
the shareholders, except in certain types of transactions requiring shareholder
vote under the Delaware General Corporation Law, the Certificate or the rules
of the New York Stock Exchange. The New York Stock Exchange rules require
shareholder approval in several circumstances, including change of control,
certain acquisition transactions, the adoption of certain employee and director
plans and certain issuances of common stock, or securities convertible into
common stock, which would have 20% or more of the voting power, or constitute
20% or more of the common stock outstanding, before the issuance of the stock
or convertible securities.
5.What is the Text of the Proposed Amendments?
The Board of Directors recommends that the Certificate be further amended by
deleting Section 1 of Article IV in its entirety and replacing it as follows:
SECTION 1. Number of Shares. The total number of shares of all classes of
stock which the Corporation shall have authority to issue is 310,000,000
shares, consisting of 300,000,000 shares of Common Stock with par value $.01
per share ("Common Stock"), and 10,000,000 shares of Preferred Stock with par
value $.01 per share ("Preferred Stock").
The full text of the Certificate, as proposed to be further amended by this
proposal, is set forth as an appendix to this Proxy Statement and has been
marked to show all proposed changes.
5
<PAGE>
6.What Are the Possible Effects of the Adoption of this Proposal?
Anti-takeover Implications
The proposed amendment may have anti-takeover implications. Although the
proposed amendment is not intended to be an anti-takeover measure, shareholders
should note that, under certain circumstances, the issuance of the additional
authorized shares of Common Stock could be used to create impediments to
persons seeking to effect a merger or otherwise gain control of the Company.
The Board of Directors could privately place any of the additional shares of
Common Stock with purchasers who might side with the Board in opposing a
hostile takeover bid, making a change in control of the Company more difficult,
and therefore less likely.
The Board of Directors is not currently aware that any person or group is
seeking to obtain control of the Company and has no current plans to use the
newly authorized shares for purposes of discouraging a takeover attempt.
Dilution
The issuance of additional Common Stock may have a dilutive impact on the
shareholders depending on the price at which it is issued. Holders of Common
Stock do not have preemptive rights to subscribe for additional securities that
may be issued by the Company.
7.What Does the Board of Directors Recommend With Respect to this Proposal?
THE BOARD OF DIRECTORS HAS APPROVED THE PROPOSED AMENDMENT TO THE COMPANY'S
CERTIFICATE TO INCREASE THE COMPANY'S AUTHORIZED SHARES TO 310,000,000 OF WHICH
300,000,000 WILL BE COMMON STOCK AND 10,000,000 WILL BE PREFERRED STOCK. THE
BOARD BELIEVES THAT THIS PROPOSAL IS IN THE BEST INTERESTS OF THE COMPANY AND
ITS SHAREHOLDERS AND RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THIS
PROPOSAL.
6
<PAGE>
--------------------------------------------------------------------------------
Persons Owning More than Five Percent of Company's Common Stock
--------------------------------------------------------------------------------
The following table sets forth information with respect to persons we know
to be the beneficial owner of more than 5% of our outstanding Common Stock on
June 26, 2000. We have based the information with respect to NewSouth Capital
Management, Inc. solely on a Form 13F report for the quarter ended March 31,
2000, filed with the SEC on May 12, 2000. We have based the information with
respect to American International Group, Inc. solely on a Form 13F report for
the quarter ended March 31, 2000, filed with the SEC on May 15, 2000. If you
wish, you may obtain these reports from the SEC or through the Internet via one
of the several sites that provide filings with the SEC on the EDGAR database.
<TABLE>
<CAPTION>
Name and Address of Number of Shares Percent
Beneficial Owner Beneficially Owned(1) of Class
------------------- --------------------- --------
<S> <C> <C>
Thomas H. Lee(2)........ 28,507,358 32.1%
Thomas H. Lee Company
75 State Street
Boston, MA 02110
THL Equity Advisors IV, 27,946,874 31.6%
LLC(2)...............
Thomas H. Lee Company
75 State Street
Boston, MA 02110
Thomas H. Lee Equity 24,689,651 29.0%
Fund IV, L.P.(2).....
Thomas H. Lee Company
75 State Street
Boston, MA 02110
NewSouth Capital 4,782,090 7.9%
Management, Inc......
1000 Ridgeway Loop
Road, Suite 233
Memphis, TN 38120
American International 4,088,997 6.8%
Group, Inc. .........
John McStay
Investment Counsel
L.P.
70 Pine Street
New York, NY 10270
</TABLE>
--------
(1) "Beneficial ownership" is a technical term broadly defined under the
Exchange Act to mean more than ownership in the usual sense. So, for
example, you beneficially own our Common Stock not only if you hold it
directly, but also if you indirectly (through a relationship, a position as
a director or trustee, or a contract or understanding) have (or share) the
power to vote the stock, or to sell it, or you have the right to acquire it
within 60 days. American International Group, Inc. and NewSouth Capital
Management, Inc. are institutional investment managers.
(2) Thomas H. Lee's beneficial ownership includes the shares beneficially owned
by THL Equity Advisors IV, LLC and other affiliates of the Thomas H. Lee
Company. THL Equity Advisors IV, LLC's beneficial ownership includes all of
the shares beneficially owned by Thomas H. Lee Equity Fund IV, L.P., the
853,822 shares beneficially owned by Thomas H. Lee Foreign Fund IV, L.P.
and the 2,403,400 shares beneficially owned by Thomas H. Lee Foreign Fund
IV-B, L.P.
7
<PAGE>
--------------------------------------------------------------------------------
Company Stock Owned by Officers and Directors
(As of June 26, 2000)
--------------------------------------------------------------------------------
The following table contains information as to the ownership of the
Company's Common Stock as of June 26, 2000, with respect to (a) each of the
directors, (b) the named executive officers, and (c) all directors and
executive officers as a group. Beneficial ownership has been determined for
this purpose in accordance with Rule 13d-3 of Section 13 of the Securities
Exchange Act of 1934. Under that rule, a person is deemed to be the beneficial
owner of securities if he or she has or shares voting power or investment power
in respect of such securities or has the right to acquire beneficial ownership
within 60 days of June 26, 2000.
<TABLE>
<CAPTION>
Number of Shares
of Common Stock Percent
Name of Beneficial Owner Beneficially Owned of Class
------------------------ ------------------ --------
<S> <C> <C>
Thomas H. Lee............................... 28,507,358 (1) 32.1%
Ronald N. Zebeck............................ 1,253,779 (2) 2.0%
Lee R. Anderson, Sr......................... 338,733 (3) *
Frank D. Trestman........................... 112,500 (4) *
David V. Harkins............................ 111,561 (5) *
C. Hunter Boll.............................. 87,414 (6) *
Thomas M. Hagerty........................... 87,414 (7) *
Derek V. Smith.............................. 58,500 (8) *
John A. Cleary.............................. 40,500 (9) *
Walter Hoff................................. 15,000(10) *
Edward Speno................................ 15,000(11) *
Douglas L. Scaliti.......................... 311,515(12) *
David D. Wesselink.......................... 111,683(13) *
Joseph A. Hoffman........................... 107,474(14) *
Patrick J. Fox.............................. 107,413(15) *
All directors and executive officers as a
group (19 persons)......................... 31,520,555(16) 34.8%
</TABLE>
--------
(*) Less than 1%
(1) Includes 28,492,358 shares of Common Stock that may be acquired through
the conversion of Series C Preferred Stock. Of those 28,492,358 shares:
(a) 27,946,874 shares are beneficially owned in the aggregate by Thomas H.
Lee Equity Fund IV, L.P., Thomas H. Lee Foreign Fund IV, L.P. and Thomas
H. Lee Foreign Fund IV-B, L.P., which may also be deemed to be
beneficially owned by THL Equity Advisors IV, LLC, as their general
partner; (b) 377,658 shares are beneficially owned by the 1997 Thomas H.
Lee Nominee Trust; (c) 160,641 shares are beneficially owned by Thomas H.
Lee Charitable Investment L.P.; and (d) 7,185 shares are beneficially
owned by THL-CCI Limited Partnership, which may also be deemed to be
beneficially owned by THL Investment Management Corp. Mr. Lee may be
deemed to beneficially own these shares because he acts as (a) General
Director; (b) settlor and beneficiary; (c) General Partner; and (d) sole
shareholder, respectively, of these entities. Mr. Lee disclaims beneficial
ownership of all shares except for those shares owned by the 1997 Thomas
H. Lee Nominee Trust and except to the extent of his pecuniary interest in
those shares owned by Thomas H. Lee Equity Fund IV, L.P., Thomas H. Lee
Foreign Fund IV, L.P., Thomas H. Lee Foreign Fund IV-B, L.P. and THL-CCI
Limited Partnership. Also includes 15,000 shares which Mr. Lee has the
right to acquire within 60 days of June 26, 2000 through the exercise of
stock options.
(2) Includes 5,336 shares of Restricted Common Stock and 367,308 shares of
Common Stock that Mr. Zebeck has the right to acquire within 60 days of
June 26, 2000, through the exercise of stock options.
(3) Includes 52,500 shares of Common Stock that Mr. Anderson has the right to
acquire within 60 days of June 26, 2000, through the exercise of stock
options.
8
<PAGE>
(4) Includes 67,500 shares of Common Stock that Mr. Trestman has the right to
acquire within 60 days of June 26, 2000, through the exercise of stock
options.
(5) Includes the following shares of Common Stock which may be acquired
through the conversion of Series C Preferred Stock: (a) 86,871 shares are
beneficially owned by Mr. Harkins; and (b) 9,690 shares are beneficially
owned by the 1995 Harkins Gift Trust. Mr. Harkins disclaims beneficial
ownership of the Trust shares. Also includes 15,000 shares that Mr.
Harkins has the right to acquire within 60 days of June 26, 2000, through
the exercise of stock options.
(6) Includes the following shares of Common Stock that Mr. Boll has the right
to acquire within 60 days of June 26, 2000: 15,000 shares through the
exercise of stock options and 72,414 shares through the conversion of
Series C Preferred Stock.
(7) Includes the following shares of Common Stock that Mr. Hagerty has the
right to acquire within 60 days of June 26, 2000: 15,000 shares through
the exercise of stock options and 72,414 shares through the conversion of
Series C Preferred Stock.
(8) Includes 52,500 shares of Common Stock that Mr. Smith has the right to
acquire within 60 days of June 26, 2000, through the exercise of stock
options.
(9) Includes 37,500 shares of Common Stock that Mr. Cleary has the right to
acquire within 60 days of June 26, 2000, through the exercise of stock
options.
(10) Includes 15,000 shares of Common Stock that Mr. Hoff has the right to
acquire within 60 days of June 26, 2000, through the exercise of stock
options.
(11) Includes 15,000 shares of Common Stock that Mr. Speno has the right to
acquire within 60 days of June 26, 2000, through the exercise of stock
options.
(12) Includes 4,281 shares of Restricted Common Stock and 294,750 shares of
Common Stock that Mr. Scaliti has the right to acquire within 60 days of
June 26, 2000, through the exercise of stock options.
(13) Includes 9,796 shares of Restricted Common Stock and 89,437 shares of
Common Stock that Mr. Wesselink has the right to acquire within 60 days of
June 26, 2000, through the exercise of stock options. Also includes 450
shares of Common Stock held by Mr. Wesselink's son.
(14) Includes 3,376 shares of Restricted Common Stock and 95,062 shares of
Common Stock that Mr. Hoffman has the right to acquire within 60 days of
June 26, 2000, through the exercise of stock options.
(15) Includes 6,250 shares of Restricted Common Stock and 94,687 shares of
Common Stock that Mr. Fox has the right to acquire within 60 days of June
26, 2000, through the exercise of stock options. Also includes 3,000
shares of Common Stock held by Mr. Fox's spouse and 475 shares of Common
Stock held by Mr. Fox's children.
(16) Includes 31,225 shares of Restricted Common Stock, 1,483,869 shares of
Common Stock that the directors and executive officers have the right to
acquire within 60 days of June 26, 2000, through the exercise of stock
options, and 28,733,747 shares through the conversion of Series C
Preferred Stock.
9
<PAGE>
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Proxy Statement contains forward-looking statements. These statements
include statements regarding our intent, belief or current expectations. You
are cautioned that any such forward-looking statements are not guarantees of
future performance and involve a number of risks and uncertainties that may
cause our actual results to differ materially from the results discussed in the
forward-looking statements. Among the factors that could cause actual results
to differ materially from those indicated by such forward-looking statements
are: higher default and bankruptcy rates of our target market of moderate
income consumers; the lack of seasoning of our credit card portfolio, which
creates a risk of increasing loss levels; risks associated with unsecured
credit transactions, particularly to moderate income consumers; risks
associated with acquired portfolios; interest rate levels; dependence on the
securitization of our credit card loans to fund operations; and the general
economic climate.
WHERE YOU CAN FIND MORE INFORMATION
The Securities Exchange Act of 1934 (the "Exchange Act"), requires the
Company to file reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC"). You may inspect and copy these
reports, proxy statements and other information at the public reference
facilities maintained by the SEC at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the regional offices of the SEC located at 7
World Trade Center, 13th Floor, New York, New York 10048, and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. You may obtain
more information about the public reference facilities by calling the SEC at 1-
900-SEC-0330. In addition, you may access such reports, proxy statements and
other information electronically by means of the SEC's Web site at
http://www.sec.gov. Our Common Stock is listed on the new York Stock Exchange,
and you may also inspect copies of any documents filed with the SEC at the
offices of the new York Stock Exchange, 20 Broad Street, New York, New York,
10005.
The Exchange Act allows the Company to "incorporate by reference"
information into this Proxy Statement, which means that we can disclose
important information to you by referring you to another document filed
separately with the SEC. This Proxy Statement incorporates by reference the
following documents that we have previously filed with the SEC:
1. Our Annual Report on Form 10-K for the year ended December 31, 1999;
and
2. Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2000.
This Proxy Statement also incorporates by reference additional documents
that we may file pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act between the date of this Proxy Statement and the Special Meeting.
You may obtain copies of those documents which are incorporated by reference
in this Proxy Statement (other than exhibits thereto which are not specifically
incorporated by reference therein), without charge, upon written or oral
request to Metris Companies Inc., 10900 Wayzata Boulevard, Minnetonka,
Minnesota 55305, Attn: Investor Relations (telephone (952) 593-4874; fax (952)
593-4733).
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Lorraine E. Waller
Lorraine E. Waller
Assistant Secretary
August 4, 2000
10
<PAGE>
APPENDIX TO PROXY STATEMENT
(Marked to show proposed changes in Section 1 of Article IV)
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION,
AS AMENDED,
OF
METRIS COMPANIES INC.
(adopted in accordance with Sections 245 and 242
of the General Corporation Law
of the State of Delaware)
ARTICLE I
Name
The name of the Corporation is
Metris Companies Inc.
ARTICLE II
Registered Office and Registered Agent
The address of the Corporation's registered office in the State of Delaware
is 1013 Centre Road, in the City of Wilmington, New Castle County. The name of
its registered agent at such address is The Prentice-Hall Corporation System,
Inc.
ARTICLE III
Purpose
The purpose of the Corporation is to engage in any lawful act or activity
and to exercise any powers permitted to corporations under the General
Corporation Law of Delaware.
ARTICLE IV
Authorized Shares
SECTION 1. Number of Shares. The total number of shares of all classes of
stock which the Corporation shall have authority to issue is [110,000,000]
310,000,000 shares, consisting of [100,000,000] 300,000,000 shares of Common
Stock with par value $.01 per share ("Common Stock"), and 10,000,000 shares of
Preferred Stock with par value $.01 per share ("Preferred Stock").
SECTION 2. Dividends. Subject to the provisions of law and the rights of the
Preferred Stock and any other class or series of stock then outstanding having
a preference as to dividends over the Common Stock, dividends may be paid on
the Common Stock at such times and in such amounts as the Board of Directors
shall determine.
SECTION 3. Relative Rights of Shareholders. Upon the liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
after any preferential amounts to be distributed to the holders of the
Preferred Stock and any other class or series of stock then outstanding having
a preference over the Common Stock have been paid or declared and set apart for
payment, the holders of the Common Stock shall be entitled to receive all of
the remaining assets of the Corporation available for distribution to its
stockholders.
SECTION 4. Rights and Terms of Preferred Stock. The Board of Directors is
hereby authorized to provide, out of the unissued shares of Preferred Stock,
for one or more series of Preferred Stock. Before any shares of any such series
are issued, the Board of Directors shall fix, and hereby is expressly empowered
to fix, by the adoption and filing in accordance with the Delaware General
Corporation Law of an amendment or amendments to this Certificate of
Incorporation, the terms of such Preferred Stock or series of Preferred Stock,
including the following terms:
(a) the designation of such series, the number of shares to constitute
such series and the stated value thereof if different from the par value
thereof;
(b) whether the shares of such series shall have voting rights, in
addition to any voting rights provided by law, and, if so, the terms of
such voting rights, which may be special, conditional or limited or no
voting rights except as required by law;
(c) the dividends, if any, payable on such series, whether any such
dividends shall be cumulative, and, if so, from what dates, the conditions
and dates upon which such dividends shall be payable, the preference or
relation which such dividends shall bear to the dividends payable on any
shares of stock of any other class or any other series of Preferred Stock;
(d) whether the shares of such series shall be subject to redemption by
the Corporation and, if so, the times, prices and other conditions of such
redemption;.
<PAGE>
(e) the amount or amounts payable upon shares of such series upon, and
the rights of the holders of such series in, the voluntary or involuntary
liquidation, dissolution or winding up, or upon any distribution of the
assets, of the Corporation;
(f) whether the shares of such series shall be subject to the operation
of a retirement or sinking fund and, if so, the extent to and manner in
which any such retirement or sinking fund shall be applied to the purchase
or redemption of the shares of such series for retirement or other
corporate purposes and the terms and provisions relative to the operation
thereof;
(g) whether the shares of such series shall be convertible into, or
exchangeable for, shares of stock of any other class or any other series of
Preferred Stock or any other securities (whether or not issued by the
Corporation) or other property and, if so, the price or prices or the rate
or rates of conversion or exchange and the method, if any, of adjusting the
same, and any other terms and conditions of conversion or exchange;
(h) the limitations and restrictions, if any, to be effective while any
shares of such series are outstanding upon the payment of dividends or the
making of other distributions on, and upon the purchase, redemption or
other acquisition by the Corporation of, the Common Stock or shares of
stock of any other class or any other series of Preferred Stock;
(i) the conditions or restrictions, if any, upon the creation of
indebtedness of the Corporation or upon the issuance of any additional
stock, including additional shares of such series or of any other series of
Preferred Stock or of any other class of stock; and
(j) any other powers, preferences and relative participating, optional
and other special rights, and any qualifications, limitations and
restrictions thereof.
Except to the extent otherwise expressly required by law, (i) no share of
Preferred Stock shall have any voting rights other than those which shall be
fixed by the Board of Directors pursuant to this Section 4 and (ii) no share
of Common Stock shall have any voting rights with respect to an amendment to
the terms of any series of Preferred Stock; provided, however, that in the
case of this clause (ii) the terms of such series of Preferred Stock, as so
amended, could have been established without any vote of any shares of Common
Stock.
SECTION 5. Redemption Related to License or Franchise. Notwithstanding any
other provision of these Restated Articles of Incorporation to the contrary,
but subject to the provisions of an amendment or amendments adopted pursuant
to this Article IV creating any series of Preferred Stock or any other class
or series of stock having a preference over the Common Stock as to dividends
or upon liquidation, outstanding shares of Common Stock, Preferred Stock or
any other class or series of stock of the Corporation shall always be subject
to redemption by the Corporation, by action of the Board of Directors, if in
the judgment of the Board of Directors such action should be taken, pursuant
to any applicable provision of law, to the extent necessary to prevent the
loss or secure the reinstatement of any license or franchise from any
governmental agency held by the Corporation or such Subsidiary to conduct any
portion of the business of the Corporation or such Subsidiary (as defined
herein), which license or franchise is conditional upon some or all of the
holders of the Corporation's stock of any class or series possessing
prescribed qualifications. The terms and conditions of such redemption shall
be as follows:
(a) the redemption price of the shares to be redeemed pursuant to this
Section 5 shall be equal to the Fair Market Value (as defined herein) of
such shares;
(b) the redemption price of such shares may be paid in cash, Redemption
Securities (as defined herein) or any combination thereof;
(c) if less than all the shares held by Disqualified Holders (as defined
herein) are to be redeemed, the shares to be redeemed shall be selected in
such manner as shall be determined by the Board of Directors, which may
include selection first of the most recently purchased shares thereof,
selection by lot or selection in any other manner determined by the Board
of Directors;
(d) at least 30 days' written notice of the Redemption Date shall be
given to the record holders of the shares selected to be redeemed
<PAGE>
(unless waived in writing by such holder), provided that the Redemption
Date may be the date on which written notice shall be given to record
holders if the cash or Redemption Securities necessary to effect the
redemption shall have been deposited in trust for the benefit of such
record holders and subject to immediate withdrawal by them upon surrender
of the stock certificates for their shares to be redeemed;
(e) from and after the Redemption Date, any and all rights of whatever
nature, which may be held by the owners of shares selected for redemption
(including without limitation any rights to vote or participate in
dividends declared on stock of the same class or series as such shares),
shall cease and terminate and they shall henceforth be entitled only to
receive the cash or Redemption Securities payable upon redemption; and
(f) such other terms and conditions as the Board shall determine.
For purposes of this Section 5:
(i) "Disqualified Holder" shall mean any holder of shares of stock of
the Corporation of any class or series whose holding of such stock may
result in the loss of any license or franchise from any governmental agency
held by the Corporation or any Subsidiary to conduct any portion of the
business of the Corporation or any Subsidiary.
(ii) "Redemption Date" shall mean the date fixed by the Board of
Directors for the redemption of any shares of stock of the Corporation
pursuant to this Section 5.
(iii) "Redemption Securities" shall mean any debt or equity securities
of the Corporation, any Subsidiary or any other corporation, or any
combination thereof, having such terms and conditions as shall be approved
by the Board of Directors and which, together with any cash to be paid as
part of the redemption price, in the opinion of any nationally recognized
investment banking firm selected by the Board of Directors (which may be a
firm which provides other investment banking, brokerage or other services
to the Corporation), has a value, at the time notice of redemption is given
pursuant to paragraph (d) of this Section 5, at least equal to the Fair
Market Value of the shares to be redeemed pursuant to this Section 5
(assuming, in the case of Redemption Securities to be publicly traded, such
Redemption Securities were fully distributed and subject only to normal
trading activity).
SECTION 6. Assessability. Upon receipt by the Corporation of the
consideration for which the Board of Directors authorized the issuance of
stock, the stock issued therefor shall be fully paid and nonassessable.
SECTION 7. Subscription Rights. No holder of stock of the Corporation
shall, as such holder, have any right to purchase or subscribe for any shares
of stock of the corporation of any class, now or hereafter authorized, or any
obligations or instruments which the corporation may issue or sell that shall
be convertible into or exchangeable for or entitle the holders thereof to
subscribe for or purchase any shares of stock of the Corporation of any class,
now or hereafter authorized, other than such rights, if any, as the Board of
Directors, in its sole discretion, may determine.
ARTICLE V
Term of Directors and Vacancy on Board
SECTION 1. Term of Director. Except as otherwise provided by the terms of
any series of Preferred Stock or any other securities of the Corporation, the
number of directors of the Corporation shall be fixed from time to time by or
pursuant to the By-laws of the Corporation. Prior to the Threshold Time (as
defined in Article VII), the term of each director of the Corporation shall
expire at the next annual meeting of stockholders following such director's
election and until such director's successor shall have been elected and
qualified. The election of directors need not be by written ballot.
SECTION 2. Vacancy. Except as otherwise provided by the terms of any series
of Preferred Stock or any other securities of the Corporation, newly created
directorships resulting from any increase in the number of directors may be
filled by the Board of Directors, or as otherwise provided in the By-laws, and
any vacancies on the Board of Directors resulting from death, resignation,
removal or other cause shall only be filled by the affirmative vote of a
majority of the remaining directors then in office, even though less than a
quorum of the Board of Directors, or by a sole remaining director, or as
otherwise provided in the By-laws.
<PAGE>
ARTICLE VI
Provisions of By-Laws
The Board of Directors of the Corporation shall have the power, without the
assent or vote of the stockholders, to adopt, repeal, alter or amend the By-
laws of the Corporation pursuant to a resolution adopted by the vote of a
majority of the entire Board of Directors including, without limitation,
provisions governing the conduct of, and the matters which may properly be
brought before, meetings of the stockholders and provisions specifying the
manner and extent to which prior notice shall be given of the submission of
proposals to be submitted at any meeting of stockholders or of nominations or
elections of directors to be held at any such meeting.
ARTICLE VII
Provisions Relating to Threshold Time
SECTION 1. Threshold Time. The provisions of Sections 2, 3, 4 and 5 of this
Article VII shall become effective at such time, but only from and after such
time (the "Threshold Time"), as the Permitted Stockholder and Permitted
Transferees, taken together, shall no longer beneficially own in the aggregate
51% or more of the combined Voting Power (as defined herein) of the then
outstanding shares of Voting Stock (as defined herein) and shall continue to
be effective from and after the Threshold Time. The term "Permitted
Stockholder" shall mean FCI or any subsidiary of FCI. The term "Permitted
Transferee"shall mean each of the following:
(a) a trust or trustee, guardian, custodian or similar entity
established or acting for the benefit of the Permitted Stockholder;
(b) any corporation or other entity 100% of the voting stock (or
equivalent interests) of which is owned, directly or indirectly, by the
Permitted Stockholder and/or any other person or entity referred to in
clause (a); and
(c) a trust or trustee, guardian, custodian or similar entity
established or acting for the benefit of any person or entity referred to
in clause (b).
SECTION 2. Change in Control. (a) In addition to any affirmative vote
required by law or by this Amended and Restated Certificate of Incorporation
or the terms of any series of Preferred Stock or any other securities of the
Corporation, and except as otherwise expressly provided in subsection (c) of
this Section 2:
(i) any merger or consolidation of the Corporation with (1) any
Interested Stockholder or (2) any other corporation (whether or not it is
itself an Interested Stockholder) which is, or after such merger or
consolidation would be, an Affiliate or Associate (as defined herein) of an
Interested Stockholder (as defined herein); or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Interested Stockholder or any Affiliate or Associate of any Interested
Stockholders of (1) all or substantially all the assets of the Corporation
or (2) assets of the Corporation or any of its Subsidiaries representing in
the aggregate more than 75% of the total value of the assets of the
Corporation and its consolidated Subsidiaries as reflected on the most
recent consolidated balance sheet of the Corporation and its consolidated
Subsidiaries prepared in accordance with generally accepted accounting
principles then in effect; or
(iii) (1) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Interested Stockholder or any Affiliate or Associate of any Interested
Stockholder of any assets of the Corporation or of any Subsidiary of the
Corporation having an aggregate Fair Market Value of $10,000,000 or more,
but less than the amount referred to in clause (2) of paragraph (ii) of
this subsection (a), or (2) any merger or consolidation of any Subsidiary
of the Corporation having assets with an aggregate Fair Market Value of
$10,000,000 or more in a transaction not covered by paragraph (ii) of this
subsection (a) with (x) any Interested Stockholder or (y) any other
corporation (whether or not it is itself an Interested Stockholder) which
is, or after such merger or consolidation would be, an Affiliate or
Associate of an Interested Stockholder; or
(iv) the issuance or transfer by the Corporation or any Subsidiary of
the Corporation (in one transaction or a series of transactions) to any
Interested Stockholder or any Affiliate or Associate of any Interested
<PAGE>
Stockholder of any securities of the Corporation or any Subsidiary of the
Corporation in exchange for cash, securities or other property (or a
combination thereof) having an aggregate Fair Market Value of $10,000,000
or more, other than the issuance of securities upon the conversion of
convertible securities of the Corporation or any Subsidiary of the
Corporation which were not acquired by such Interested Stockholder (or such
Affiliate or Associate) from the Corporation or a Subsidiary of the
Corporation; or
(v) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of any Interested
Stockholder or any Affiliate or Associate of any Interested Stockholder; or
(vi) any reclassification of securities (including any reverse stock
split) or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries, or any other
transaction (whether or not with or into or otherwise involving any
Interested Stockholder), which in any such case has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding shares
of any class or series of stock or securities convertible into stock of the
Corporation or any Subsidiary of the Corporation which is directly or
indirectly beneficially owned by any Interested Stockholder or any
Affiliate or Associate of any Interested Stockholder;
shall not be consummated without (1) the affirmative vote of the holders of at
least 80% of the combined Voting Power of the then outstanding shares of all
classes and series of Voting Stock and (2) the affirmative vote of a majority
of the combined Voting Power of the then outstanding shares of all classes and
series of Voting Stock held by Disinterested Stockholders (as defined herein),
in each case voting together as a single class. Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that a
lesser percentage may be specified, by law or by this Certificate of
Incorporation or the terms of any series of Preferred Stock or any other
securities of the Corporation or in any agreement with any national securities
exchange or otherwise.
(b) The term "Business Combination" as used in this Section 2 shall mean
any transaction which is referred to in any one or more of paragraphs (i)
through (vi) of subsection (a) of this Section 2.
(c) The provisions of subsection (a) of this Section 2 shall not be
applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative vote as is required by law and
any other provision of this Certificate of Incorporation and the terms of any
series of Preferred Stock or any other securities of the Corporation, if all
the conditions specified in any of the following paragraphs (i), (ii),(iii) or
(iv) are met:
(i) (1) such Business Combination shall have been approved by a majority
of the Disinterested Directors (as defined herein) and (2) the Interested
Stockholder involved in such Business Combination has (x) acquired such
status as an Interested Stockholder in a manner substantially consistent
with an agreement or memorandum of understanding approved by the Board of
Directors prior to the time such Interested Stockholder became an
Interested Stockholder and (y) complied with all requirements imposed by
such agreement or memorandum of understanding; or
(ii) in the case of any Business Combination described in paragraph (i)
of subsection (a) of this Section 2, (1) such Business Combination shall
have been approved by a majority of the Disinterested Directors, (2) such
Business Combination shall not have resulted, directly or indirectly, in an
increase of more than 10% in the total amount of shares of any class or
series of stock or securities convertible into stock of the Corporation or
any Subsidiary which was directly or indirectly beneficially owned by any
Interested Stockholder and all Affiliates and Associates of such Interested
Stockholder at the time of the approval of such Business Combination by a
majority of the Disinterested Directors, and (3) such Business Combination
shall not have been consummated within a period of two years after the
consummation of any other Business Combination described in paragraph (i),
(ii), (iii), (iv), (v) or (vi) of subsection (a) of this Section 2 (whether
or not
<PAGE>
such other Business Combination shall have been approved by a majority of
the Disinterested Directors) which had the effect, directly or indirectly,
of increasing the proportionate share of the outstanding shares of any
class or series of stock or securities convertible into stock of the
Corporation or any Subsidiary of the Corporation which was directly or
indirectly beneficially owned by such Interested Stockholder or any
Affiliate or Associate of such Interested Stockholder; or
(iii) in the case of any Business Combination described in paragraph
(iii), (iv) or (vi) of subsection (a) of this Section 2, such Business
Combination shall have been approved by a majority of the Disinterested
Directors; or
(iv) all of the six conditions specified in the following clauses (1)
through (6) shall have been met:
(1) the transaction constituting the Business Combination shall
provide for a consideration to be received by holders of each then
existing class of Common Stock in exchange for all their shares of each
class of Common Stock, and the aggregate amount of the cash and the
Fair Market Value as of the date of the consummation of the Business
Combination of any consideration other than cash to be received per
share by holders of each class of Common Stock in such Business
Combination shall be at least equal to the highest of the following:
(A) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees)
paid in order to acquire any shares of the particular class of
Common Stock in question beneficially owned by the Interested
Stockholder which were acquired (i) within the two-year period
immediately prior to the Announcement Date or (ii) in the
transaction in which it became an Interested Stockholder, whichever
is higher; and
(B) the Fair Market Value per share of the class of Common Stock
in question on the Announcement Date (as defined herein) or on the
Determination Date (as defined herein), whichever is higher; and
(2) if the transaction constituting the Business Combination shall
provide for a consideration to be received by holders of any class or
series of outstanding Voting Stock other than Common Stock, the
aggregate amount of the cash and the Fair Market Value as of the date
of the consummation of the Business Combination of any consideration
other than cash to be received per share by holders of shares of such
Voting Stock shall be at least equal to the highest of the following
(the requirements of this clause (iv) (2) must be met with respect to
every class and series of such outstanding Voting Stock, whether or not
the Interested Stockholder beneficially owns any shares of a particular
class or series of Voting Stock):
(A) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees)
paid in order to acquire any shares of such class or series of
Voting Stock beneficially owned by the Interested Stockholder which
were acquired (i) within the two-year period immediately prior to
the Announcement Date or (ii) in the transaction in which it became
an Interested Stockholder, whichever is higher;
(B) (if applicable) the highest preferential amount per share to
which the holders of shares of such class or series of Voting Stock
are entitled in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation; and
(C) the Fair Market Value per share of such class or series of
Voting Stock on the Announcement Date or
<PAGE>
on the Determination Date, whichever is higher; and
(3) the consideration to be received by holders of a particular
class or series of outstanding Voting Stock (including any class of
Common Stock) shall be in cash or in the same form as was previously
paid in order to acquire shares of such class or series of Voting Stock
which are beneficially owned by the Interested Stockholder and, if the
Interested Stockholder beneficially owns shares of any class or series
of Voting Stock which were acquired with varying forms of
consideration, the form of consideration to be received by holders of
such class or series of Voting Stock shall be either cash or the form
used to acquire the largest number of shares of such class or series of
Voting Stock beneficially owned by it; the prices determined in
accordance with clauses (1) and (2) of this paragraph (iv) shall be
appropriately adjusted in the event of any stock dividend, stock split
or subdivision or combination of shares or any similar event; and
(4) after such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such business Combination:
(A) except as approved by a majority of the Disinterested
Directors, there shall have been no failure to declare and pay at
the regular dates therefor the full amount of any dividends (whether
or not cumulative) payable on the Preferred Stock or any class or
series of stock having a preference over the Common Stock as to
dividends or upon liquidation;
(B) there shall have been (x) no reduction in the annual rate of
dividends paid on any class of Common Stock (except as necessary to
reflect any subdivision of such class of Common Stock), except as
approved by a majority of the Disinterested Directors, and (y) an
increase in such annual rate of dividends (as necessary to prevent
any such reduction) in the event of any reclassification (including
any reverse stock split), recapitalization, reorganization or any
similar transaction which has the effect of reducing the number of
outstanding shares of the Common Stock, unless the failure so to
increase such annual rate is approved by a majority of the
Disinterested Directors; and
(C) such Interested Stockholder shall not have become the
beneficial owner of any additional shares of Voting Stock except as
part of the transaction in which it became an Interested
Stockholder; and
(5) after such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the
benefit, directly or indirectly (except proportionately as a
stockholder) of any loan, advance, guarantee, pledge or other
arrangement provided by the Corporation or any Subsidiary, whether in
anticipation of or in connection with such Business Combination or
otherwise; and
(6) a proxy or information statement describing the proposed
Business Combination and complying with the requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and the rules and
regulations thereunder (or any subsequent provisions replacing such
Act, rules or regulations) shall be mailed to public stockholders of
the Corporation at least 30 days prior to the consummation of such
Business Combination (whether or not such proxy or information
statement is required to be mailed pursuant to such Act or subsequent
provisions).
(d) A majority of the Disinterested Directors of the Corporation shall have
the power and duty to determine, on the basis of information known to them
after reasonable inquiry, all facts necessary to determine compliance with
this Section 2, including, without limitation, (i) whether a person is an
Interested Stockholder, (ii) the number of shares of each class or series of
Voting Stock beneficially owned by any person, (iii) whether a person is an
<PAGE>
Affiliate or Associate of another person, (iv) whether the requirements of
subsection (c) of this Section 2 have been met with respect to any Business
Combination and (v) whether the assets which are the subject of any Business
Combination have, or the consideration to be received for the issuance or
transfer of securities by the Corporation or any Subsidiary of the Corporation
in any Business Combination has, an aggregate Fair Market Value of $10,000,000
or more or whether such assets or consideration, as the case may be, represent
in the aggregate more than 75% of the total value of the assets of the
Corporation and its consolidated Subsidiaries as reflected on the most recent
consolidated balance sheet of the Corporation and its consolidated
Subsidiaries prepared in accordance with generally accepted accounting
principles then in effect; and the good faith determination of a majority of
the Disinterested Directors on such matters shall be conclusive and binding
for all purposes of this Section 2.
(e) Nothing contained in this Section 2 shall be construed to relieve any
Interested Stockholder from any fiduciary obligation imposed by law.
SECTION 3. Staggered Board. (a) The directors of the Corporation, other
than those who may be elected pursuant to the terms of any series of Preferred
Stock or any other securities of the Corporation, shall be classified, with
respect to the time for which they severally hold office, into three classes,
as nearly equal in number as possible, as shall be provided in the By-laws of
the Corporation, one class whose term expires at the first annual meeting of
stockholders to be held after the Threshold Time, another class whose term
expires at the second annual meeting of stockholders to be held after the
Threshold Time, and another class whose term expires at the third annual
meeting of stockholders to be held after the Threshold Time, with each class
to hold office until its successors are elected and qualified. The classes
shall be initially comprised of directors serving on the Board of Directors at
the Threshold Time, and the membership of each class shall be initially
determined by the Board of Directors at such time. At each annual meeting of
the stockholders of the Corporation, the date of which shall be fixed by or
pursuant to the By-laws of the Corporation, the successors of the class of
directors whose term expires at that meeting shall be elected to hold office
for a term expiring at the annual meeting of stockholders held in the third
year following the year of their election. No decrease in the number of
directors constituting the Board of Directors shall shorten the term of any
incumbent director. Any director elected to fill a newly created directorship
or any vacancy on the Board of Directors resulting from any death,
resignation, removal or other cause shall hold office for the remainder of the
full term of the class of directors in which the new directorship was created
or the vacancy occurred and until such director's successor shall have been
elected and qualified.
(b) Except as otherwise provided by the terms of any series of Preferred
Stock or any other securities of the Corporation, any director of the
Corporation may be removed from office only for cause and only by the
affirmative vote of the holders of a majority of the combined Voting Power of
the then outstanding shares of Voting Stock, voting together as a single
class. For purposes of this subsection (b), "cause" shall mean the willful and
continuous failure of a director to substantially perform such director's
duties to the Corporation (other than any such failure resulting from
incapacity due to physical or mental illness) or the willful engaging by a
director in gross misconduct materially and demonstrably injurious to the
Corporation.
SECTION 4. Special Meetings. Subject to the terms of any series of
Preferred Stock or any other securities of the Corporation, special meetings
of stockholders of the Corporation may be called only by the Board of
Directors pursuant to a resolution approved by a majority of the entire Board
of Directors or as otherwise provided in the By-laws of the Corporation.
SECTION 5. Amendments of Certificate. In addition to any requirements of
law and any other provisions of this Certificate of Incorporation or the terms
of any series of Preferred Stock or any other securities of the Corporation
(and notwithstanding the fact that a lesser percentage may be specified by
law, this Certificate of Incorporation or the terms of any series of Preferred
Stock or any other securities of the Corporation), the affirmative vote of (i)
the holders of 80% or more of the combined Voting Power of the then
outstanding shares of Voting Stock and (ii) a majority of the combined Voting
Power of the then outstanding shares of Voting Stock held by the Disinterested
Stockholders, in
<PAGE>
each case voting together as a single class, shall be required to amend, alter
or repeal, or adopt any provision inconsistent with, this Article VII or
Article VIII insofar as the definitions set forth in Article VIII relate to
this Article VII.
ARTICLE VIII
Certain Definitions
For purposes of this Certificate of Incorporation:
"Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, as in effect on the date this Certificate of Incorporation are
filed.
"Announcement Date" shall mean the date of first public announcement of the
proposed Business Combination.
A person shall be a "beneficial owner" of any Voting Stock or other
security or interest:
(a) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(b) which such person or any of its Affiliates or Associates has (i) the
right to acquire (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote or to direct
the vote pursuant to any agreement, arrangement or understanding; or
(c) which are beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates or Associates has
any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of Voting Stock or such other
security or interest.
"Determination Date" means the date on which the Interested Stockholder
became an Interested Stockholder.
"Disinterested Director" means any member of the Board of Directors of the
Corporation who is unaffiliated with, and not a nominee of, an Interested
Stockholder or any Affiliate or Associate of such Interested Stockholder and
was a member of the Board of Directors prior to the time that such Interested
Stockholder became an Interested Stockholder, and any successor of a
Disinterested Director who is unaffiliated with, and not a nominee of, an
Interested Stockholder or any Affiliate or Associate of such Interested
Stockholder and who is recommended for election or elected to succeed a
Disinterested Director by a majority of Disinterested Directors then on the
Board of Directors.
"Disinterested Stockholder" shall mean a stockholder of the Corporation who
is not an Interested Stockholder or an Affiliate or an Associate of an
Interested Stockholder.
"Equity Interest" shall mean (i) in the case of a corporation, capital
stock, beneficially owned directly or indirectly, representing any portion of,
or, where a specified percentage of Equity Interest is referred to, the
specified percentage of, either (x) the total common equity of such
corporation or (y) the total outstanding Voting Power in respect of the
election of directors and (ii) in the case of a partnership or other person,
partnership or other ownership interests, beneficially owned directly or
indirectly, representing any portion of, or, where a specified percentage of
Equity Interest is referred to, the specified percentage of, either (x) the
total partnership or other ownership interests in such partnership or other
person or (y) the total outstanding Voting Power in respect of any matter
submitted to a vote of all partners or other owners.
"Fair Market Value" means: (a) in the case of stock, the highest closing
sale price during the 30-day period immediately preceding the date in question
of a share of such stock as reported in the consolidated transaction reporting
system for the principal United States securities exchange registered under
the Exchange Act on which such stock is listed, or, if such stock is not
listed on any such exchange, the highest closing sales price or bid quotation
with respect to a share of such stock during the 30-day period preceding the
date in question on the National Association of Securities Dealers, Inc.
Automated Quotations System or any system then in use, or, if no such
quotations are available, the fair market value on the date in question of a
share of such stock as determined by a majority of the Disinterested Directors
in good faith; and (b) in the case of stock of any class or series which is
not traded on any securities exchange or in the over-the-counter market or in
the case of
<PAGE>
property other than cash or stock, the fair market value of such stock or
property, as the case may be, on the date in question as determined by a
majority of the Disinterested Directors in good faith.
"Interested Stockholder" shall mean any person who or which:
(a) is the beneficial owner, directly or indirectly, of 20% or more of
the combined Voting Power of the then outstanding shares of Voting Stock;
or
(b) is an Affiliate of the Corporation and at any time within the two-
year period immediately prior to the date in question was the beneficial
owner, directly or indirectly, of 20% or more of the combined Voting Power
of the then outstanding shares of Voting Stock; or
(c) is an assignee of or has otherwise succeeded to the beneficial
ownership of any shares of Voting Stock which were at any time within the
two-year period immediately prior to the date in question beneficially
owned by any Interested Stockholder, if such assignment or succession shall
have occurred in the course of a transaction or series of transactions not
involving a public offering within the meaning of the Securities Act of
1933 or other public distribution regardless of whether registered under
such Act.
Notwithstanding the foregoing, "Interested Stockholder" shall not include:
(a) the Corporation or any Subsidiary of the Corporation;
(b) any employee benefit plan of the Corporation or of any Subsidiary of
the Corporation or any person holding any class or series of Voting Stock
for or pursuant to the terms of any such employee benefit plan;
(c) the Permitted Stockholder or any Permitted Transferee; or
(d) any transferee of the Permitted Stockholder or a Permitted
Transferee that would not absent such transfer be an Interested
Stockholder.
For the purposes of determining whether a person is an Interested
Stockholder, the number of shares of Voting Stock deemed to be outstanding
shall include shares of which such person is the beneficial owner as defined
in this Article VIII but shall not include any other shares of Voting Stock
which may be issuable to other persons pursuant to any agreement, arrangement
or understanding, or upon exercise of conversion rights, exchange rights,
warrants or options, or otherwise.
A "person" shall mean any individual, firm, corporation, partnership, trust
or other entity.
"Subsidiary" shall mean a person, a majority of the total outstanding
Voting Power of which is owned, directly or indirectly, by another person or
by one or more other Subsidiaries of such other person or by such person and
one or more other Subsidiaries of such other person; provided, however, that
for the purposes of the definition of Interested Stockholder set forth in this
Article VIII, the term "Subsidiary" shall mean only a person, a majority the
total outstanding Voting Power of which is owned by the Corporation, by a
Subsidiary of the Corporation or by the Corporation and one or more of its
Subsidiaries.
"Voting Power", when used with reference to the capital stock of, or units
of equity interests in, any person, shall mean the power under ordinary
circumstances (and not merely as a result of the occurrence of a contingency)
to vote in the election of directors of such person (if such person is a
corporation) or to participate in the management and control of such person
(if such person is not a corporation).
"Voting Stock" means capital stock of the Corporation of all classes and
series entitled to vote generally in the election of directors of the
Corporation.
ARTICLE IX
Amendments
Subject to the provisions of this Certificate of Incorporation (including
Section 5 of Article VII, Section 3 of Article X, and Section 2 of Article
XII) the Corporation reserves the right to amend, alter or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by the laws of Delaware, and all rights and powers
conferred on directors and stockholders herein are granted subject to this
reservation.
<PAGE>
ARTICLE X
Director Liability and Indemnification
SECTION 1. No Liability. To the fullest extent that the Delaware General
Corporation Law as it exists on the date hereof or as it may hereafter be
amended permits the limitation or elimination of the liability of directors,
no director of the Corporation shall be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
No amendment to this Certificate of Incorporation, directly or indirectly by
merger, consolidation or otherwise, having the effect of amending, altering,
changing or repealing any of the provisions of this Section 1 shall apply to
or have any effect on the liability or alleged liability of any director of
the Corporation for or with respect to any acts or omissions of such director
occurring prior to such amendment or repeal, unless such amendment shall have
the effect of further limiting or eliminating such liability.
SECTION 2. Indemnification. (a) The Corporation shall, to the fullest
extent permitted by applicable law as then in effect, indemnify any person
(the "indemnitee") who was or is involved in any manner (including, without
limitation, as a party or a witness) or was or is threatened to be made so
involved in any threatened, pending or completed investigation, claim, action,
suit or proceeding, whether civil, criminal, administrative or investigative
(including, without limitation, any action, suit or proceeding by or in the
right of the Corporation to procure a judgment in its favor) (a "proceeding")
by reason of the fact that he is or was a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a
director or officer of another corporation, or of a partnership, joint
venture, trust or other enterprise (including, without limitation, service
with respect to any employee benefit plan), whether the basis of any such
proceeding is alleged action in an official capacity as a director or officer
or in any other capacity while serving as a director or officer, against all
expenses, liabilities and loss (including, without limitation, attorneys'
fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to
be paid in settlement) actually and reasonably incurred by him in connection
with such proceeding. Such indemnification shall continue as to a person who
has ceased to be a director or officer and shall inure to the benefit of his
heirs and legal representatives. The right to indemnification conferred in
this Article X shall include the right to receive payment in advance of any
expenses incurred by the indemnitee in connection with such proceeding,
consistent with applicable law as then in effect, and shall be a contract
right. The Corporation may, by action of its Board of Directors, provide
indemnification for employees, agents, attorneys and representatives of the
Corporation with up to the same scope and extent as herein above provided for
officers and directors. No amendment to this Certificate of Incorporation
having the effect of amending, altering, changing or repealing any of the
provisions of this Section 2 shall remove, abridge or adversely affect any
right to indemnification or other benefits under this Section 2 with respect
to any acts or omissions occurring prior to such amendment or repeal.
(b) The right of indemnification, including the right to receive payment in
advance of expenses, conferred in this Article X shall not be exclusive of any
other rights to which any person seeking indemnification may otherwise be
entitled under any provisions of the Certificate of Incorporation, By-laws,
agreement, or otherwise.
(c) In any action or proceeding relating to the right to indemnification
conferred in this Article X, the Corporation shall have the burden of proof
that the indemnitee has not met any standard of conduct or belief which may be
required by applicable law to be applied in connection with a determination of
whether the indemnitee is entitled to indemnity, or otherwise is not entitled
to indemnity, and neither a failure to make such determination nor an adverse
determination of entitlement to indemnity shall be a defense of the
Corporation in such an action or proceeding or create any presumption that the
indemnitee has not met any such standard of conduct or belief or is otherwise
not entitled to indemnity. If successful in whole or in part in such an action
or proceeding, the indemnitee shall be entitled to be indemnified by the
Corporation for the expenses actually and reasonably incurred by him in
connection with such action or proceeding.
SECTION 3. Amendments of Certificate. No amendment to this Certificate of
Incorporation, directly or indirectly by merger, consolidation or otherwise,
shall amend, alter, change or repeal any of the provisions of this Article X,
unless the amendment effecting such amendment, alteration,
<PAGE>
change or repeal shall receive the affirmative vote of the holders of at least
80% of the outstanding shares of stock of the Corporation entitled to vote in
elections of directors, provided that this Section 3 shall not apply to any
such amendment if such amendment is submitted to the stockholders for adoption
with the unanimous recommendation of the entire Board of Directors.
ARTICLE XI
Compromise or Arrangement
Whenever a compromise or arrangement is proposed between the Corporation
and its creditors or any class of them and/or between the Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of the
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for the Corporation under Section 291 of
Title 8 of the Delaware Code or on the application of trustees in dissolution
or of any receiver or receivers appointed for the Corporation under Section
279 of Title 8 of the Delaware Code, order a meeting of the creditors or class
of creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, to be summoned in such manner as the said
court directs. If a majority in number representing three-fourths in value of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, agree to any compromise
or arrangement and to any reorganization of the Corporation as a consequence
of such compromise or arrangement, the said compromise or arrangement and the
said reorganization shall, if sanctioned by the court to which said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of the
Corporation, as the case may be, and also on the Corporation.
ARTICLE XII
Meetings of Stockholders
SECTION 1. Meetings Required. No action required to be taken or which may
be taken at any annual or special meeting of stockholders of the Corporation
may be taken without a meeting, except on written consent, setting forth the
action so taken, signed by the holders of record of at least 80% of the
outstanding shares entitled to vote thereon.
SECTION 2. Amendments of Certificate. No amendment to this Certificate of
Incorporation, directly or indirectly by merger, consolidation or otherwise,
shall amend, alter, change or repeal any of the provisions of this Article
XII, unless the amendment effecting such amendment, alteration, change or
repeal shall receive the affirmative vote of the holders of at least 80% of
the outstanding shares of stock of the Corporation entitled to vote in
elections of directors; provided that this Section 2 shall not apply to any
such amendment if such amendment is submitted to the stockholders for adoption
with the unanimous recommendation of the entire Board of Directors.
<PAGE>
[METRIS LOGO]
PROXY
METRIS COMPANIES INC.
Metris Companies Inc. Headquarters
10900 Wayzata Boulevard
Minnetonka, Minnesota 55305
SPECIAL MEETING OF STOCKHOLDERS--THURSDAY, SEPTEMBER 14, 2000, 10:00 A.M.
This proxy is solicited on behalf of the Board of Directors for use at the
Special Meeting on Thursday, September 14, 2000. The undersigned hereby appoints
RONALD N. ZEBECK and LORRAINE E. WALLER as proxies, each with power to act alone
and with the power of substitution and revocation, and hereby authorizes them to
vote all of the shares of the Common Stock of Metris Companies Inc. that the
undersigned is entitled to vote at the Special Meeting of Stockholders to be
held on September 14, 2000, or any adjournment thereof, as specified below on
the following matters which are further described in the Proxy Statement related
hereto.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY BE BROUGHT BEFORE THE MEETING.
See reverse for voting instructions.-------------------------------------------
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. The Board
of Directors Recommends a Vote FOR the Proposal.
1. Proposal to approve an amendment to the Amended and Restated Certificate of
Incorporation to increase the authorized number of shares of common stock from
100,000,000 to 300,000,000.
For [_] Against [_] Abstain [_]
IN THEIR DISCRETION, PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS
MAY PROPERLY BE BROUGHT BEFORE THE MEETING.
Address Change? Mark Box and indicate changes below:
[_] Dated: , 2000 ----------------------
Signature(s) --------------------------------- ---------------------------------
(If there are co-owners, both must sign.) Please sign exactly as your name(s)
appear on Proxy. If held in joint tenancy, all persons must sign. Trustees,
administrators, etc., should include title and authority. Corporations should
provide full name of corporation and title of authorized officer signing the
proxy.
--------------------------------------------------------------------------------
PLEASE FOLD AND DETACH HERE o YOUR VOTE IS IMPORTANT! PLEASE VOTE, SIGN, DATE
AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED ENVELOPE.
