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                          ADS, ALLIANCE DATA SYSTEMS, INC.

                               SUPPLEMENTAL EXECUTIVE
                                  RETIREMENT PLAN

                                       (SERP)

                               EFFECTIVE MAY 1, 1999

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Alliance Data Systems relies on key individuals, such as yourself, for the
continued success of our organization.  To assist your financial planning and
goals, Alliance Data Systems offers you the opportunity to save for retirement
through our 401(k) and Retirement Savings Plan.  The Company also contributes to
your retirement funds through a company match on your 401(k) contributions and
funding the Retirement Savings Plan.

Due to your level of income, the IRS limits the amounts you can contribute to
our qualified plan, as well as the amounts Alliance Data Systems can contribute
on your behalf.  This Supplemental Executive Retirement Plan (SERP) has been
designed to help you maximize your pre-tax savings and company contributions
that are otherwise restricted due to these IRS limitations.

PURPOSE OF THE SERP:

The Alliance Data Systems' SERP is a nonqualified, unfunded plan that is
designed to accomplish two things:

1.   The Plan has a contributory component that will allow you to save money on
     a pre-tax basis (separately and in addition to your 401(k) contribution).
2.   The Plan has a restorative component that allows you to continue to receive
     Retirement Savings Plan contributions that are otherwise limited due to
     certain IRS restrictions.

ELIGIBILITY:

You must be a regular, full-time associate on the United States payroll of ADS
Alliance Data Systems, Inc., and your eligible compensation must be equal to or
greater than the IRS compensation limit (currently $160,000) as of December 31
of the previous calendar year.  An associate is any person receiving
compensation for personal services rendered in the employment of ADS Alliance
Data Systems, Inc.  In addition, you must be a participant in the ADS Alliance
Data Systems, Inc. 401(k) and Retirement Savings Plan.

Eligible compensation is defined as your base annual salary, plus commissions,
payments received under the ADS Alliance Data Systems, Inc. Incentive
Compensation Plan and bonuses (but not sign-on bonus), up to a maximum of $1
million annually, paid to you while you are a full-time associate.  Excluded
from eligible compensation are severance payments, disability payments, workers
compensation payments, stock option earnings, referral or signing bonuses, and
gross-up of wages for contest or other earnings.

IRS LIMITATIONS (AS THEY PERTAIN TO THIS PLAN):

There are two IRS limitations on qualified plans, such as our 401(k) and
Retirement Savings Plan, which this Plan takes into consideration.

1.   For associates whose eligible compensation reaches the $160,000 IRS
     compensation limit (subject to cost of living adjustments announced by the
     IRS) during the plan year, all contributions to the 401(k) and Retirement
     Savings Plan must stop.  This means all pre- and post-tax associate
     contributions, as well as any Company contributions, such as the employer
     match.  It also means the maximum amount of compensation used to calculate
     Retirement


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     Savings Plan contribution is $160,000 (subject to cost of living
     adjustments announced by the IRS).

     For example, assume your eligible compensation as of December 31 is
     $200,000, you are 48 years old and have 10 years of service.  The age and
     service points under the 401(k) and Retirement Savings Plan would be 4, or
     4%.  However, only $6,400 ($160,000 x 4%) could be contributed to your
     401(k) and Retirement Savings Plan.  The remaining $1,600 [($200,000 -
     $160,000) x 4%] would be "restored" and placed in the Alliance Data
     Systems' SERP.

2.   The maximum allowable associate contribution to a qualified plan is equal
     to 25% of compensation as defined under Section 415(c) of the Internal
     Revenue Code, or $30,000, (whichever is less).  Compensation for these
     purposes is calculated by taking into consideration all pre-tax
     contributions, such as 401(k) contributions, as well as medical, dental,
     vision, and health care spending account deductions.  This is referred to
     as reaching the "415 Limit".  Any amounts that would normally be refunded
     to you from the qualified plan because of reaching the 415 Limit would
     instead be directed into the SERP on your behalf.

BASIC PLAN DESIGN:

There are two components:  contributory and restorative.


<TABLE>
<CAPTION>
 CONTRIBUTORY                            RESTORATIVE
<S>                                      <C>
 -    0% to 16% (in whole percentages)   -    Retirement Savings Plan
      of eligible compensation on a           contributions for compensation in
      pre-tax basis and contributed to        excess of the IRS allowable
      the plan each pay period (subject       compensation limit (subject to
      to eligible compensation of $1          cost of living adjustments
      million annually)                       announced by the IRS) that cannot
 -    401(k) contributions that would         be contributed to the 401(k) and
      otherwise be returned because of        Retirement Savings Plan (subject
      reaching the 415 Limit                  to eligible compensation of $1
                                              million annually)
</TABLE>

Unlike the qualified plan, the SERP does not provide any company match on your
contributions.

Your contributions and the restorative contributions from Alliance Data Systems
will initially accrue interest at a rate of 8% a year, compounded quarterly.
The interest rate is established by Alliance Data Systems and may be reviewed
and adjusted periodically at the sole discretion of the 401(k) and Retirement
Savings Plan Investment Committee.

Contributions to the SERP are in addition to any contributions you choose to
make to Alliance Data Systems' qualified 401(k) and Retirement Savings Plan.
Therefore, it's possible you could be contributing 16% to both plans at the same
time (a total of 32% of income).  You must decide prior to the beginning of the
Plan Year, by making an election in accordance with the procedures described in
this Plan, how much of a contributory contribution you want to make (i.e., how
much of your eligible compensation is to be deferred).


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VESTING:

You are always 100% vested in your own contributions.  You become 100% vested in
the restorative funds after five (5) continuous years of service.  For this
purpose, a year of service means a calendar year in which you have worked at
least 500 hours for ADS Alliance Data Systems, Inc.  Years of service worked for
a company acquired by ADS Alliance Data Systems, Inc. will not be used to
determine years of service for purposes of vesting under this Plan.

In the event of a change of control of Alliance Data Systems, as described under
Funding, you will become automatically 100% vested in the restorative funds,
regardless if you have five (5) years of service with Alliance Data Systems.

FUNDING:

The SERP is not funded.  The amounts you contribute to the plan as well as the
restored company contributions are not set aside in a trust.  Any payments made
to participating associates will be made from the general assets of Alliance
Data Systems.

In the event of a change of control of Alliance Data Systems, Alliance Data
Systems has established a "rabbi trust", which will fund all deferred and
restored amounts, to secure your SERP benefits.  A change of control occurs if
one person or entity acquires 51% of the voting stock of Alliance Data Systems
(other than a person or entity who now owns 51% of the voting stock of Alliance
Data Systems), or if there is a merger and more than 50% of the voting stock
after the merger is held by the new stockholders.  A change of control also
occurs if Alliance Data Systems is dissolved or liquidated, or if all or
substantially all of the company's assets are sold.  However, a change of
control will not be considered to occur when ADS Alliance Data Systems, Inc.
stock becomes publicly traded on the open stock exchange.

ACCESS TO SERP BENEFITS:

While you are actively employed at Alliance Data Systems, you cannot access your
contributions, restored company contributions and accrued interest in your SERP
account, unless you experience an unforeseeable financial emergency.  Requests
for funds must be approved by the Investment Committee or its delegate.  An
unforeseeable financial emergency means a severe financial hardship resulting
from:
-    a sudden and unexpected illness or injury to you or a dependent,
-    loss of your primary residence due to casualty, or
-    other similar unforeseeable circumstances arising out of events that are
     beyond your control.

Funds cannot be withdrawn to purchase a home or to pay for tuition.  Loans are
not available.

If approval by the Investment Committee or its delegate is approved for a reason
indicated above, voluntary contributions to the SERP will be suspended until the
first of the month following 12 months from the date funds are released from the
Plan.


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DISTRIBUTION OF BENEFITS:

If you cease to be actively employed, you retire, or become totally disabled
(under the terms of the long-term disability plan and as determined by Alliance
Data Systems' disability carrier at the time of distribution), you will be given
the value of your pre-tax contributions, vested restored company contributions,
and accrued interest on your pre-tax contributions and vested restored company
contributions.

Receiving severance payments from Alliance Data Systems as part of a separation
agreement is not considered to be actively employed by Alliance Data Systems.

If you die, your benefits will be paid to your designated beneficiary.  If there
is no beneficiary on file, benefits will be paid to your estate.

If the Plan is terminated, you will  be given the value of your pre-tax
contributions, vested restored company contributions, and accrued interest on
your pre-tax contributions and vested restored company contributions.

Payments will be made within 60 days of the end of the quarter in which you
become eligible for a distribution.  All benefits will be paid in one lump-sum
payment.

ACCOUNT STATEMENTS:

A summary of your account, reflecting your contributions, restored company
contributions and accrued interest will be prepared and distributed annually.

TAXES:

This is a brief summary of tax rules in effect as of the date this Plan is
adopted.

While your contributions into the SERP will be taken through payroll deduction
on a pre-tax basis, you will be required to pay FICA taxes on any contributions
made to the SERP.  These contributions and their earnings will not be subject to
FICA taxes upon distribution from the Plan.

Restored company contributions made to the Plan are subject to FICA taxes only
after you have become vested in these contributions.

When a distribution is made from the plan, the payment is taxed as ordinary
income at time of payment and any taxes required to be withheld will be
subtracted from any amounts distributed.  Distributions are not eligible for any
special tax treatment, nor can they be rolled over into an IRA or another
qualified plan.

ENROLLMENT PROCESS:

If you wish to take advantage of the pre-tax option of this plan, you must
complete the form found at the end of this booklet.


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You do not have to do anything to enroll in the restorative component of the
SERP.  However, you should still complete the Beneficiary Designation section of
the form in the event a distribution needs to be made as a result of your death.


                                FOLLOW THESE STEPS:

     1.   Complete the Enrollment Form found in the back of this booklet.
     2.   If you wish to make pre-tax contributions to the SERP, indicate the
          percentage of pay you wish to defer.
     3.   ALL PARTICIPANTS NEED TO COMPLETE THE BENEFICIARY DESIGNATION SECTION
          OF THE FORM.
     4.   Return the form to the Manager, Corporate Benefits, DAD1, PRIOR TO
          APRIL 30, 1999.

IMPORTANT NOTE:

You can stop your pre-tax voluntary contribution to the SERP at any time,
however, YOU CANNOT DECREASE OR INCREASE YOUR CONTRIBUTION AT ANY TIME DURING
THE CALENDAR YEAR.  Contribution percentages can only be changed effective each
January 1.  If you stop contributions during the calendar year, you may not
begin making pre-tax contributions until the next January 1.

You will be given an opportunity to change your pre-tax contribution each year
prior to January 1.

AMENDMENT AND TERMINATION:

While Alliance Data Systems intends to continue the Supplemental Executive
Retirement Plan, it is impossible to predict all future conditions.  Therefore,
the Investment Committee reserves the right to amend or terminate the plan at
any time.  However, no amendment may be made that would negatively impact your
vested benefit or delay your ability to receive the benefits without your
written consent.

OTHER INFORMATION:

PLAN ADMINISTRATION.  The SERP is administered by the Alliance Data Systems'
Investment Committee.  The members of this committee are associates of Alliance
Data Systems who are appointed by the Alliance Data Systems' Board of Directors
and serve at the discretion of the Board.  The Investment Committee has the
authority to interpret the plan and decide all matters arising under the plan.
Decisions of the Investment Committee are final and binding upon all parties.
Additional information about the plan is available by contacting:

     Investment Committee
     C/o Sr. VP of Human Resources
     Alliance Data Systems
     17566 Waterview Parkway
     Dallas, TX   75252


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ERISA, TAX AND SECURITIES MATTERS.  While not a qualified plan, the SERP is
subject to some provisions of the Employee Retirement Income Security Act of
1974 (ERISA), as amended.  It is not subject to any funding requirements and no
property is held in the plan.  It is not a qualified plan under Section 401(a)
of the Internal Revenue Code and Alliance Data Systems may not take a tax
deduction for contributions to the plan until the plan participant receives
payment.

No person has or may create a lien on a participant's interest in the plan,
under the plan, or on behalf of a plan participant or pursuant to any contracts
in connection with the plan.

CLAIMS PROCEDURE.  In the event a participant or named beneficiary has a dispute
concerning the administration of this Plan, it shall first be submitted in
writing to the Senior Vice President of Human Resources of the Company.  In the
event that this Senior Vice President does not provide a response satisfactory
to the participant within 90 business days after receipt of the claim, the
participant or named beneficiary may submit the dispute in writing within 60
business days thereafter to the Investment Committee, whose decision regarding
the dispute shall be final and binding on each participant or person claiming
under the plan.  The Investment Committee review and decision shall be made
within 60 business days, unless special circumstances require an extension of
time for processing, in which case a decision shall be rendered within a
reasonable period of time, but not later than 120 days after receipt of a
request for review.

NOT A CONTRACT OF EMPLOYMENT.  This Plan shall not be deemed to constitute a
contract between ADS Alliance Data Systems, Inc. and any associate or other
person whether or not in the employ of ADS Alliance Data Systems, Inc., nor
shall anything herein contained be deemed to give any associate or other person
whether or not in the employ of ADS Alliance Data Systems, Inc. any right to be
retained in the employ of ADS Alliance Data Systems, Inc., or to interfere with
the right of ADS Alliance Data Systems, Inc. to discharge any associate at any
time and to treat the associate without any regard to the effect which such
treatment might have upon said associate as a participant of the Plan.

NON-ASSIGNABILITY.  Except as may otherwise be required by law, no distribution
or payment under the Plan to any participant, named beneficiary, heirs and
successors shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, whether voluntary or
involuntary, and any attempt to so anticipate, alienate, sell, transfer, assign,
pledge, encumber or charge the same shall be void; nor shall any such
distribution or payment be in any way liable for or subject to the debts,
contracts, liabilities, engagements or torts of any person entitled to such
distribution or payment.  If any participant, named beneficiary, heir or
successor is adjudicated bankrupt or purports to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge any such distribution or payment,
voluntarily or involuntarily, the Investment Committee, in their discretion, may
cancel such distribution or payment or may hold or cause to be held or applied
such distribution or payment or any part thereof to or for the benefit of such
participant, named beneficiary, heir or successor in such manner as the
Investment Committee shall direct.

GOVERNING LAW.  The provisions of the Plan shall be construed, administered and
governed under applicable Federal law and the laws of the State of Ohio.


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Alliance Data Systems Supplemental Executive Retirement Plan


                        ENROLLMENT/BENEFICIARY DESIGNATION FORM

PLEASE PRINT
EMPLOYEE DATA

----------------------------------------------------------------------------
Last Name                             First Name                        M.I.

----------------------------------------------------------------------------
Social Security Number
(          )
----------------------------------------------------------------------------
Work Phone                       Work Location

DEFERRAL ELECTION
I elect to participate in the Supplemental Executive Retirement Plan and elect
the following savings percentage to be deducted from my eligible compensation:

 / /  / /  / /  / /  / /  / /  / /  / /  / /  / /  / /  / /  / /  / /  / /  / /
 1%   2%   3%   4%   5%   6%   7%   8%   9%   10%  11%  12%  13%  14%  15%  16%

BENEFICIARY DESIGNATION
PRIMARY BENEFICIARIES
I name the following as my primary beneficiary(ies) who, if living at the time
of my death, will receive my SERP account balance.  If any primary beneficiary
is not living at the time of my death, his or her share will be paid
proportionately to the remaining primary beneficiaries.

Name/Social Security Number    %     Relationship    Birth Date     Address

--------------------------    ----   ------------    ---------      ------------

--------------------------    ----   ------------    ---------      ------------

--------------------------    ----   ------------    ---------      ------------

CONTINGENT BENEFICIARIES
In the event no primary beneficiary survives me, I name the following as my
contingent beneficiary(ies) who, if living at the time of my death, his or her
share will be paid proportionately to the remaining contingent beneficiary(ies).

Name/Social Security Number    %     Relationship    Birth Date     Address

--------------------------    ----   ------------    ---------      ------------

--------------------------    ----   ------------    ---------      ------------

--------------------------    ----   ------------    ---------      ------------


By signing below, I acknowledge that:
 -   I authorize the savings deferrals indicated above.
 -   I understand this election is irrevocable until the end of the calendar
     year and shall continue in effect except: (1) I can stop my contributions
     at any time and (2) I can make a new election in the month of December to
     be effective the immediately following January 1.
 -   I understand the plan is not funded through a qualified trust.  Accounts
     are paid out of company assets, backed by the good faith of Alliance Data
     Systems.

Signature__________________________________________________Date________________
     RETURN THIS FORM TO MANAGER, CORPORATE BENEFITS, DAD1, DALLAS, TEXAS

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