SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM 11-K
(Mark One)
[X] Annual report pursuant to Section 15(d) of the Securities Exchange
Act of 1934.
For the fiscal year ended December 31, 1999
or
[ ] Transition Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________ to __________
Commission file number: 001-12351
METRIS RETIREMENT PLAN
METRIS COMPANIES INC.
600 South Highway 169, Suite 1800, St. Louis Park, Minnesota 55426
Financial Statements and Exhibits
(a) Financial Statements
The Metris Retirement Plan (the "Plan") became effective as of January 1,
1997. Filed as a part of this report on Form 11-K are the audited financial
statements of the Plan as of and for the years ended December 31, 1999 and 1998.
(b) Exhibit
(1) Consent of Independent Certified Public Accountants
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
Metris Retirement Plan
----------------------
(Name of Plan)
By: Jean C. Benson
Jean C. Benson
on behalf of the Benefits
Committee, as Plan
Administrator
Dated: June 26, 2000
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Metris Retirement Plan
Financial Statements and Supplemental Schedules
December 31, 1999 and 1998
<PAGE>
METRIS RETIREMENT PLAN
TABLE OF CONTENTS
Independent Auditors' Report...................................................1
Statements of Net Assets Available for Benefits as of December 31, 1999
and 1998....................................................................2
Statements of Changes in Net Assets Available for Benefits for the Years
Ended December 31, 1999 and 1998............................................3
Notes to the Financial Statements..............................................4
Schedule I - Item 27a - Schedule of Assets Held for Investment Purposes .......7
<PAGE>
Independent Auditors' Report
The Plan Administrator
Metris Retirement Plan:
We have audited the accompanying statements of net assets available for
benefits of the Metris Retirement Plan (the Plan) as of December 31, 1999
and 1998, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits as of
December 31, 1999 and 1998, and the changes in net assets available for
benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule of
assets held for investment purposes is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. This supplemental schedule
is the responsibility of the Plan's management. The supplemental schedule
has been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ KPMG LLP
KPMG LLP
Minneapolis, Minnesota
May 31, 2000
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<TABLE>
Metris Retirement Plan
Statements of Net Assets Available for Benefits
December 31,
1999 1998
---- ----
Assets:
<S> <C> <C>
Investments, at fair value:
Mutual funds of trustee bank................ $ 8,325,284 $4,162,263
Metris Companies Inc. common stock.......... 2,280,428 668,559
Participant loans........................... 240,141 71,955
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Total investments.......................... 10,845,853 4,902,777
Accrued income............................. 3,353 1,874
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Total assets held by trustee............... 10,849,206 4,904,651
Contributions receivable:
Employer................................... 43,171 21,006
Employees.................................. 193,122 90,315
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Total assets............................... 11,085,499 5,015,972
Liabilities:
Excess contributions payable............... 191,223 --
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Total liabilities.......................... 191,223 --
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Net assets available for benefits.......... $10,894,276 $5,015,972
=========== ==========
See Accompanying Notes to the Financial Statements
</TABLE>
<PAGE>
<TABLE>
Metris Retirement Plan
Statements of Changes in Net Assets Available for Benefits
Year Ended December 31,
1999 1998
---- ----
<S> <C> <C>
Contributions:
Employer .................................. $ 1,192,757 $ 777,453
Employees ................................. 3,032,051 1,543,102
Rollovers ...................................... 1,308,712 1,283,822
Investment income:
Dividends ................................. 65,791 37,185
Interest .................................. 39,902 18,685
Net realized/unrealized appreciation in
fair value .............................. 1,317,106 410,439
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Total investment income ................... 1,422,799 466,309
Benefits paid to participants .................. (886,792) (454,414)
Excess contributions to be refunded ............ (191,223) --
------------ ------------
Increase in net assets available for
benefits................................ 5,878,304 3,616,272
Net assets available for benefits:
Beginning of year.......................... 5,015,972 1,399,700
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End of year ............................... $ 10,894,276 $ 5,015,972
============ ============
See Accompanying Notes to the Financial Statements
</TABLE>
<PAGE>
METRIS RETIREMENT PLAN
Notes to Financial Statements
(1) Summary Description of the Plan
The following description of the Metris Retirement Plan (the Plan) provides only
general information. Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions. The Plan, which commenced
activity on January 1, 1997, is a defined contribution profit sharing plan
sponsored and administrated by Metris Companies Inc. and subsidiaries (the
"Company").
(a) Eligibility
The eligibility requirements for Plan participation allow Company
employees to enroll in the Plan on the first day of the month following
employment. Participants are eligible to receive Company matching
contributions after 12 months of service in which they have worked
1,000 hours. The Plan also allows the Company to use non-vested Company
matching contributions forfeited by terminated participants to first
reduce Plan administrative expenses and then future employer
contributions.
(b) Contributions
Employees may contribute from one to fifteen percent of their
compensation before federal income taxes to the Plan through payroll
deductions. For each plan year, the Company is required to make a
matching contribution equal to 50% of an employees contribution up to
6% of their recognized compensation. The employer matching
contribution will be credited to the participants employer matching
account. The Company may also elect to make discretionary matching
contributions and discretionary profit sharing contributions to the
Plan. The discretionary matching contribution will equal a percentage,
as determined by its Board of Directors, of the participants eligible
salary for the Plan year and will be credited to the employer
contribution account. The Company may elect to make a discretionary
profit sharing contribution to the Plan, in an amount determined by
its Board of Directors. Any employee who is eligible to participate in
the plan, will have credited to their employer contributions account,
an amount in the proportion which their recognized compensation bears
to the total recognized compensation of all those who are eligible to
participate in the Plan. Amounts credited to the participant's
employer matching account will be 100% vested upon contribution, while
those amounts credited to the participant's employer contributions
account will vest ratably over three years of service. In the event of
a participant's death, disability, or retirement, all Company
contributions are 100% vested.
(c) Investment Elections
Participants may change investment elections on any day during the
month. The investment options available are the First American Balanced
Fund, First American Equity Index Fund, First American Large Cap Value
Fund, First American Prime Obligation Fund, First American
International Fund, First American Mid Cap Value Fund and the Metris
Companies Inc. Common Stock Fund. The last three investment options
were added to the Plan during 1998.
(d) Loans
Participants in the Metris Retirement Plan have the option of borrowing
against their account balances. Participants are able to obtain loans
up to 50% of their vested account balance, not less than $1,000 or in
excess of $50,000. The interest rate charged on the outstanding loan
principal is equal to one percent over Prime. For the years ended
December 31, 1999 and 1998, the interest rates fluctuated between 8.75%
and 10.00%.
(e) Distributions
Benefits may be distributed as follow:
Withdrawals during employment from employee and vested Company matching
contributions are permitted only if financial hardship is demonstrated
and other financial resources are not available. Hardship withdrawals
are made in compliance with provisions established by the Internal
Revenue Service (IRS).
The participants can choose when their vested benefits are distributed
after employment terminates or the age of 59 1/2 is attained. If the
amount of vested benefits is $5,000 or less, payment will be made as of
the first valuation date following the date employment ended.
Effective May 1, 2000, the Plan changed its trustee from US Bank Trust
National Association to Scudder Trust Company. Amounts remaining in
each fund under the previous trust agreement were distributed to
similar fund types under the new trust agreement. One additional fund
type was added under the new trust agreement, the PIMCO Total Return
Fund. The following table illustrates the conversion of funds from US
Bank Trust National Association to Scudder Trust Company:
<TABLE>
<S> <C>
US Bank Trust National Association Scudder Trust Company
---------------------------------- ---------------------
First American Balanced Fund Scudder Balanced Fund
First American Equity Index Fund Scudder Stock Index Fund
First American Large Cap Value Fund Scudder Large Company Growth Fund
First American Prime Obligation Fund Scudder Stable Value Fund
First American International Fund Scudder International Fund
First American Mid Cap Value Fund Scudder Enterprise Fund
Metris Companies Inc. Common Stock Fund Metris Companies Inc. Common Stock Fund
</TABLE>
(2) Summary of Significant Accounting Policies
The accompanying financial statements have been prepared on the accrual basis
and include the following significant accounting policies:
(a) Investments
Under the terms of the trust agreement, the trustee manages the
investments on behalf of the Plan. The trustee has been granted
discretionary authority concerning purchases and sales of investments
in the funds and custodial responsibility for most of the Plan's
assets.
The fair value of investments held is based on published market
quotations on the last business day of the year. Participant loans are
valued at cost, which approximates fair value. Interest income from
trustee-managed investment funds is recorded as accrued. Realized
investment gains and losses are determined using the
specific-identification method. Purchases and sales of securities are
recorded on a trade-date basis.
(b) Expenses
All Plan and trust expenses, except for investment management fees and
brokerage commissions of the mutual funds, are paid by the Company.
(c) Use of Estimates
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of net
assets available for plan benefits and disclosure of contingent assets
and liabilities as of the date of the financial statements and changes
in net assets available for plan benefits for the reporting period.
Actual results could differ significantly from those estimates.
<PAGE>
(3) Investments
The following investments, stated at fair value, exceeded 5% of the Plan's end
of year net assets:
December 31,
1999 1998
---- ----
First American Balanced Fund ................... $ 950,357 $ 531,797
First American Equity Index Fund ............... 2,848,698 1,257,405
First American Large Cap Value Fund ............ 2,008,372 1,428,823
First American Prime Obligation Fund ........... 762,407 476,483
First American International Fund .............. 723,387 113,356
Metris Companies Inc. Common Stock Fund ........ 2,864,140 814,093
(4) Tax Status
The IRS has determined and informed the Company by a letter dated October 20,
1998 that the Plan is qualified and the trust established under the Plan is
tax-exempt, under the appropriate sections of the Internal Revenue Code.
(5) Obligation for Retirement Benefits
Although the Company has not expressed any intent to terminate the plan
agreement, it may do so at any time, subject to such provisions of the law as
may be applicable. In the event that the Plan is terminated, all participants
will be fully vested.
The Company's contributions are designed to accumulate funds needed to provide
retirement benefits to its employees. The Plan does not provide for a
predetermined retirement income.
(6) Party-in-interest Transactions
Transactions resulting in plan assets being transferred to or used by a related
party are prohibited under the Employee Retirement Income Security Act of 1974
(ERISA) unless a specific exemption applies. US Bank Trust National Association
is a party-in-interest as defined by the Act as a result of its investing plan
assets in its mutual fund. However, such transactions are exempt under Section
408(b)(8) and are not prohibited by the Act.
<PAGE>
Schedule I
Metris Retirement Plan
Item 27a-Schedule of Assets Held for Investment Purposes
December 31, 1999
Shares Fair Value
Loan Account (8.75% to 10.00%) ................. -- $ 240,141
First American Balanced Fund * ................. 76,642 950,357
First American Equity Index Fund * ............. 100,130 2,848,698
First American Large Cap Value Fund * .......... 94,556 2,008,372
First American Prime Obligation Fund * ......... 762,407 762,407
First American International Fund * ............ 30,104 723,387
First American Mid Cap Value Fund * ............ 34,330 448,351
Metris Companies Inc. Common Stock Fund * ...... 149,119 2,864,140
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Total .......................................... $10,845,853
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*Party-in-interest investment.
See accompanying independent auditors' report.
