METRIS COMPANIES, INC.
                    LONG-TERM INCENTIVE AND STOCK OPTION PLAN

                      Non-Qualified Stock Option Agreement

         This  Non-Qualified  Stock Option Agreement is made and entered into as
of ___________________, by and between__________________________________  (the
"Optionee")  and Metris  Companies  Inc.,  a Delaware corporation,  with its
principal  business  office  located in St.  Louis Park, Minnesota
(the "Company").

         WHEREAS,  the Compensation  Committee (the "Committee") of the Board of
Directors  of the Company  (the  "Board")  desires to provide  Optionee  with an
option to purchase  shares of common stock of the Company  (the "Common  Stock")
pursuant to the provisions of the Metris Companies Inc. Long-Term  Incentive and
Stock Option Plan, as amended (the "Plan") and this  Non-Qualified  Stock Option
Agreement (the "Agreement"), and Optionee desires to acquire such option.

         NOW,  THEREFORE,  for and in  consideration of the mutual covenants and
promises contained herein, and for other valuable consideration, the receipt and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereto  agree as
follows:

         1. Grant of Option.  The Company hereby grants to Optionee effective as
of , (the "Date of Grant"),  the option (the  "Option") to purchase an aggregate
of , ( ) shares  (the  "Shares")  of  Common  Stock,  subject  to the  terms and
conditions set forth herein and in the Plan.

         2.       Option  Price.  The  purchase  price  of the  Shares  subject
to the  Option  (the  "Option  Price")  shall be $_________ per share,
subject to adjustment as provided herein.

         3.       Term of Option; Time of Exercise.

         3.1 The term of the Option shall be for a period of ten (10) years from
the Date of Grant.  The Option shall be exercisable  with respect to twenty-five
percent (25%) of the Shares on (date),  twenty-five  percent (25%) of the Shares
on  (date),  twenty-five  (25%)  percent  of the  Shares on (date) and the final
twenty-five (25%) of the shares on (date).

         3.2 This Option shall not under any circumstances be exercisable after,
and this Agreement and Option shall terminate as to all  unexercised  Shares at,
5:00 p.m.  (Minnesota  time) on the date that is ten (10) years from the Date of
Grant (the "Expiration  Date"),  unless terminated prior thereto pursuant to the
provisions of Section 5 hereof.

         3.3  Notwithstanding  the vesting  provisions  contained in Section 3.1
hereof,  but subject to the other terms and  conditions  set forth  herein,  the
Option may be exercised in full  immediately  following the date of a "Change in
Control" (as hereinafter defined). For purposes of this Agreement, the following
terms shall have the definitions set forth below:

         (a)      "Change in Control" shall mean:

         (i) a change  in  control  of a nature  that  would be  required  to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A  promulgated
under the  Securities  Exchange Act of 1934,  as amended (the  "Exchange  Act"),
whether or not the Company is then subject to such reporting requirement;

         (ii) the public  announcement  (which, for purposes of this definition,
shall include without limitation a report filed pursuant to Section 13(d) of the
Exchange  Act) by the Company or any  "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) that such person has become the "beneficial
owner" (as defined in Rule 13d-3 promulgated under the Exchange Act) directly or
indirectly of securities of the Company representing fifty percent (50%) or more
of the  combined  voting power of the  Company's  then  outstanding  securities;
provided,  however,  that  notwithstanding  the foregoing,  no Change of Control
shall be deemed to have  occurred  for  purposes of this  Agreement by reason of
ownership of fifty  percent  (50%) or more of the total voting  capital stock of
the Company then issued and  outstanding by any subsidiary of the Company or any
employee  benefit plan of the Company or of any subsidiary of the Company or any
entity  holding shares of the Common Stock  organized,  appointed or established
for,  or  pursuant  to the  terms of,  any such plan (any such  person or entity
described in this proviso is referred to herein as a "Company Entity");

         (iii) the announcement of a tender offer by any person or entity (other
than a Company Entity) for thirty percent (30%) or more of the Company's  voting
capital stock then issued and outstanding,  which tender offer has been approved
by the Board,  a majority of the members of which are  Continuing  Directors (as
hereinafter defined), and recommended to the shareholders of the Company;

         (iv)  the  Continuing  Directors  (as  hereinafter  defined)  cease  to
constitute a majority of the Board; or

         (v) the  shareholders of the Company approve (A) any  consolidation  or
merger of the Company in which the Company is not the  continuing  or  surviving
corporation or pursuant to which shares of Company stock would be converted into
cash, securities or other property,  other than a merger of the Company in which
shareholders  immediately  prior  to the  merger  have  the  same  proportionate
ownership of stock of the surviving  corporation  immediately  after the merger;
(B) any sale, lease,  exchange or other transfer (in one transaction or a series
of  related  transactions)  of all or  substantially  all of the  assets  of the
Company; or (C) any plan of liquidation or dissolution of the Company.



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         (b) "Continuing  Director" shall mean any person who is a member of the
Board,  while  such  person is a member of the  Board,  who is not an  Acquiring
Person (as defined  below) or an Affiliate or Associate (as defined below) of an
Acquiring  Person,  or a  representative  of an Acquiring  Person or of any such
Affiliate  or  Associate,  and who (i) was a member  of the Board on the date of
this Agreement as first written above or (ii)  subsequently  becomes a member of
the Board, if such person's initial  nomination for election or initial election
to the  Board  is  recommended  or  approved  by a  majority  of the  Continuing
Directors.  For purposes of this subparagraph (b), "Acquiring Person" shall mean
any "person"  (as such term is used in Sections  13(d) and 14(d) of the Exchange
Act) who or which,  together with all  Affiliates and Associates of such person,
is the  "beneficial  owner"  (as  defined in Rule  13d-3  promulgated  under the
Exchange Act), directly or indirectly of securities of the Company  representing
thirty percent (30%) or more of the combined  voting power of the Company's then
outstanding   securities,   but  shall  not  include  any  Company  Entity;  and
"Affiliate" and "Associate" shall have the respective  meanings ascribed to such
terms in Rule 12b-2 promulgated under the Exchange Act.

         4.       Exercise of Option.

         4.1 Subject to the terms and conditions of the Plan and this Section 4,
this Option may be exercised  by Optionee in whole or in part by written  notice
to the Company at its principal  executive  office addressed to the attention of
its General Counsel.  Such notice shall specify Optionee's  election to exercise
this Option and the number of Shares in respect of which it is being  exercised,
and shall be signed by Optionee.  The Company shall not, however, be required to
sell or issue any Shares  pursuant to this Option if the issuance of such Shares
would constitute a violation by Optionee or the Company of any applicable law or
regulation of any governmental authority.

         4.2 Notice of exercise of the Option by Optionee  shall be  accompanied
by payment of the full  Option  Price of the Shares as to which the Option is to
be exercised,  together with payment of the amount  determined by the Company to
be necessary to satisfy any applicable federal,  state and local tax withholding
requirements  arising from the exercise of the Option.  The Company  shall issue
and deliver a certificate or  certificates  representing  such Shares as soon as
practicable after such notice and payments are received.  Payment of such Option
Price shall be made in cash or check  payable to the order of the Company or, in
lieu thereof, if the Committee in its sole discretion at the time of exercise so
permits, by tendering to the Company shares of Common Stock having a fair market
value equal to the Option Price.  Payment by Optionee of any required  amount of
withholding for tax purposes shall be made in cash or check payable to the order
of the Company.  The certificate or certificates  for the Shares as to which the
Option shall have been so exercised  shall be registered in the name of Optionee
(or Optionee's Representative, (as defined in Section 5)) or at the direction of
Optionee or such  Representative  and shall be delivered as aforesaid to or upon
the written order of such person or persons.  In the event that the Option shall
be exercised by any person or persons other than Optionee,  such notice shall be
accompanied  by  appropriate  proof of the authority and right of such person or
persons to exercise the Option.  All Shares  purchased  upon the exercise of the
Option as provided herein shall be fully paid and nonassessable.

         5.       Termination of Option.

         (a) This  Option  shall  terminate  and may no longer be  exercised  if
Optionee  ceases to be  employed by the  Company or one of its  subsidiaries  (a
defined in the Plan) except:

         (i) if Optionee's  employment  shall be terminated for any reason other
than gross and willful  misconduct,  death,  disability or retirement,  Optionee
may,  at any time  before  (A) the  expiration  of ninety  (90) days  after such
termination or (B) the Expiration  Date,  whichever shall first occur,  exercise
this Option (x) to the extent that the Option was exercisable on the date of the
termination  of  employment in the case of voluntary  termination  or (y) to the
extent  that the  Option  was or  would  become  exercisable  on or  before  the
expiration  of  such  ninety  (90)  day  period  in  the  case  of   involuntary
termination;  provided,  however, that if, immediately prior to such termination
of employment, Optionee was an "officer" as defined in Rule 16a.1(f) promulgated
under the Exchange Act, the periods of exercisability referred to in clauses (x)
and (y) above (but not the  acceleration  of vesting  referred to in clause (y))
shall be extended  from  ninety (90) days to seven (7) months  after the date of
such termination;

         (ii)  if  Optionee's  employment  shall  be  terminated  by  reason  of
Optionee's gross and willful  misconduct during the course of employment (as may
be determined by the Committee in its sole and absolute  discretion),  including
but not  limited  to  wrongful  appropriation  of funds of the  employer  or the
commission of a gross misdemeanor or felony,  this Option shall be terminated as
of the  date  of the  misconduct  and  Optionee  shall  have no  further  rights
hereunder;

         (iii)  if  Optionee's  employment  shall be  terminated  by  reason  of
Optionee's death, this Option will become fully exercisable and may be exercised
by  Optionee's  Representative  (as  defined  below) at any time  before (A) the
expiration  of three  (3) years  after  the date of death or (B) the  Expiration
Date, whichever shall first occur;

         (iv) (A) if  Optionee's  employment  shall be  terminated  by reason of
Optionee's disability (other than Total Disability), as may be determined by the
Committee in its sole and absolute discretion,  this Option may be exercised, to
the  extent  that the  Option  was  exercisable  on the date of  disability,  by
Optionee or Optionee's guardian or legal representative,  at any time before (x)
the  expiration  of one (1)  year  after  the  date  Optionee's  employment  was
terminated by reason of such  disability or (y) the Expiration  Date,  whichever
shall first occur or (B) if Optionee's  employment shall be terminated by reason
of Optionee's Total  Disability,  this Option will become fully  exercisable and
may be exercised by Optionee or Optionee's  guardian or legal  representative at
any time before (x) the expiration of three (3) years after the date  Optionee's
employment  was  terminated by reason of such  disability or (y) the  Expiration
Date, whichever shall first occur;

         (v)  if  Optionee's   employment  shall  be  terminated  by  Optionee's
Retirement (as defined below), this Option will become fully exercisable and may
be exercised by Optionee before (A) the expiration of three (3) years after such
date or (B) the Expiration Date, whichever shall first occur; or

         (vi) if Optionee dies or becomes  disabled (as may be determined by the
Committee in its sole and absolute discretion) during the time of exercisability
after  termination  of  employment  provided in clause (i) of this Section 5(a),
this Option may be exercised,  to the extent that the Option was  exercisable on
the  date of death  or  disability:  (A) in the  case of  death,  by  Optionee's
Representative  or (B) in the case of  disability,  by  Optionee  or  Optionee's
guardian or legal representative before (x) the expiration of one (1) year after
the date of death or the onset of such  disability or (y) the  Expiration  Date,
whichever shall first occur.

         (b) Notwithstanding the provisions contained in Section 5(a) above, but
subject to the other terms and conditions  set forth herein,  in the event that,
within one (1) year  following a Change in  Control,  Optionee's  employment  is
terminated for any reason other than for gross and wilful misconduct  (including
Optionee's voluntary termination), Optionee shall have the right to exercise the
Option in whole or in part at any time before (i) the expiration of one (1) year
after the date of such  termination of employment or (ii) the  Expiration  Date,
whichever shall first occur.

         (c) For  purposes  of this  Agreement,  the  following  terms  shall be
defined as follows:

         (i)  "Retirement"  shall  mean any  termination  other than by death or
gross and  willful  misconduct  after (A)  Optionee  has  attained  at least age
fifty-five  (55) and (B)  Optionee's  age  plus  completed  continuous  years of
service equals sixty (60) or more; provided,  however,  that if Optionee is less
than age sixty-five (65) on the date of termination of employment  Optionee must
have completed at least five (5) years of service.

         (ii)  "Representative"  shall  mean  the  person  or  persons  to  whom
Optionee's rights under this Agreement shall pass upon death, whether by will or
by the applicable laws of descent and distribution.

         (iii) "Total Disability" shall have the meaning given to "permanent and
total  disability" in Section  22(e)(3) of the Code (as defined in the Plan) and
shall be determined by the Committee in its sole and absolute discretion.

         (d)  Notwithstanding  the foregoing  provisions  of Section  5(a),  the
Committee  shall have the  authority,  on a case by case basis,  in its sole and
absolute  discretion to extend for up to a period of two (2) years following the
termination  of  employment  of  Optionee  the period of vesting  referred to in
Section 3.1 and the period of  exercisability,  provided such extension does not
exceed the Expiration Date.

         6. Leave of Absence;  Related Employment. A leave of absence granted in
accordance  with  the  Company's  usual  procedure  which  does not  operate  to
interrupt continuous  employment for other benefits granted by the Company shall
not be considered a termination of employment under this Agreement.  A period of
related  employment  during which  Optionee is not employed by the Company nor a
subsidiary  (as defined in the Plan) shall not be  considered a  termination  of
employment under this Agreement if (i) such employment is undertaken by Optionee
at the request of the Company or a  subsidiary,  (ii)  immediately  prior to the
undertaking  of such  employment  Optionee  was an  officer or  employee  of the
Company or a  subsidiary  or was  engaged in related  employment  and (iii) such
employment is recognized by the Committee,  in its sole  discretion,  as related
employment.  The death or  disability  of  Optionee  during a period of  related
employment shall be treated, for purposes of this agreement, as if such death or
the onset of such  disability  had  occurred  while  Optionee  was an officer or
employee of the Company.

         7.       Adjustments for Changes in Common Stock.

         7.1 In the event that the  outstanding  shares of Common  Stock  (other
than shares held by dissenting shareholders) shall be changed into, or exchanged
for, a different number or kind of shares of Common Stock or other securities of
the  Company,  or if further  changes or  exchanges of any Common Stock or other
securities into which the Common Stock shall have been changed,  or for which it
shall  have  been  exchanged,  shall  be made  (whether  by  reason  of  merger,
consolidation,     reorganization,     recapitalization,     stock     dividend,
reclassification,  split-up,  combination of shares or otherwise), then for each
Share subject to the Option,  there shall be substituted and exchanged  therefor
the number and kind of shares of Common  Stock or other  securities  into or for
which  each  outstanding  share of  Common  Stock  (other  than  shares  held by
dissenting  shareholders)  shall be so changed or exchanged.  If in the event of
any such  changes or exchanges in order to prevent  dilution or  enlargement  of
rights  under this  Agreement,  it is  necessary  to make an  adjustment  in the
number,  kind or option exercise price of the Shares then subject to the Option,
such  adjustment  shall be made by the  Committee  and  shall be  effective  and
binding for all purposes of this Agreement.

         7.2 All  adjustments  made  pursuant to the provision of this Section 7
shall be made by the  Committee,  whose  determination  as to which  adjustments
shall be made, and the extent thereof, shall be final, binding and conclusive.

         8.       Non-transferability of Option.

         (a) Except as provided in  subsection  8(b) below,  the Option  granted
under this Agreement shall not be transferable by Optionee,  either  voluntarily
or involuntarily,  except by will or the laws of descent and distribution.  This
Option may not be transferred,  assigned,  pledged or  hypothecated,  whether by
operation of law or otherwise, or be subject to attachment, execution or similar
process.  Any attempt to do so shall void this  Option.  During the  lifetime of
Optionee,  this  Option may be  exercised  only by  Optionee  (or by  Optionee's
guardian or legal  representative  in the case of  disability) or by a permitted
transferee pursuant to a transfer as described below.

         (b) To the extent such  transfers are permitted  under the Plan and are
not restricted by Rule l6b-3  promulgated under the Exchange Act, the Committee,
in its sole discretion, may establish, as permitted by applicable law, rules and
conditions  under which an Optionee  may  transfer  this Option to any member of
Optionee's  "immediate  family"  (as such  term is  defined  in Rule  16a-  1(e)
promulgated under the Exchange Act).

         9. Rights as a  Shareholder.  No rights of a shareholder of the Company
shall  attach to Optionee  with  respect to any of the Shares  until this Option
shall be duly  exercised  as to such Shares and  Optionee  shall have become the
holder of record of such Shares. No adjustments shall be made for cash dividends
or other  distributions  or rights as to which there is a record date  preceding
the date that Optionee becomes the holder of record of such Shares.

         10.  Securities Law  Compliance.  The exercise of all or any portion of
this Option  shall only be  effective at such time that the sale of Common Stock
issued  pursuant  to such  exercise  will  not  violate  any  state  or  federal
securities  or other  laws.  The  Company is under no  obligation  to effect any
registration  of the stock  subject to the Option  under the  Securities  Act of
1933, as amended,  or to effect any state  registration or qualification of such
Common Stock. The Company may, in its sole discretion,  defer the  effectiveness
of any full or  partial  exercise  of the  Option  in order to  ensure  that the
issuance of stock upon  exercise  will be in  compliance  with  federal or state
securities  laws and the  rules  of the  Nasdaq  National  Market  or any  other
exchange upon which the Common Stock is traded.

         11.  Limitation  of  Liability.  Nothing  in this  Agreement  shall  be
construed to:

         (a)      limit in any way the right of the Company or a subsidiary to
terminate the employment of Optionee; or

         (b) be evidence of any agreement or understanding,  express or implied,
that the  Company  or a  subsidiary  shall  employ  Optionee  in any  particular
position at any particular rate of compensation or for any particular  period of
time.

         12. Severability.  It is intended that each provision of this Agreement
shall be viewed as  separate  and  divisible.  In the event  that any  provision
hereof shall be held to be invalid or unenforceable, the remaining provisions of
this Agreement shall continue to be in full force and effect.

         13.  Governing  Law. The place of  administration  of the Plan and this
Agreement shall be in the State of Minnesota.  The corporate law of the State of
Delaware  shall govern issues  relating to the validity and issuances of Shares.
Otherwise, this Agreement shall be construed and administered in accordance with
the laws of the State of Minnesota, without giving effect to principles relating
to conflict of laws.

         14. Further Assurances.  Upon the exercise of the Option by Optionee or
at such  subsequent  date as either  the  Company  or  Optionee  may  reasonably
request,   each  party  hereto  agrees  to  execute  and  deliver  such  further
instruments  and to take such other  action as shall be  reasonably  required to
carry out the intent and purposes of this Agreement.

         15.  Counterparts.  This  Agreement  may be  executed  in any number of
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same document

         16. Notices.  All notices that are required or may be given pursuant to
the terms of this Agreement  shall be in writing and delivered  personally or by
registered  or  certified  mail,  return  receipt  requested,  postage  prepaid,
addressed as follows and shall be deemed to have been given upon delivery to the
addressee:

                                        To the Company:

                                        Metris Companies Inc.
                                        600 South Highway 169, Suite 1800
                                        St. Louis Park, MN 55426
                                        Attention: General Counsel

                                        To Optionee;

                                        At  Optionee's   residence   address
               listed  in  the  Company's personnel records.

Notice of a change in address  of one of the  parties  hereto  shall be given in
writing to the other party as provided  above,  but shall be effective only upon
actual receipt.

         17.  Amendment.  This  Agreement  may not be amended or modified by the
parties  hereto in any  manner,  except by a written  instrument  signed by both
parties hereto.

         18. Binding  Effect;  Assignment.  This Agreement shall be binding upon
the heirs,  successors and assigns of the parties hereto, subject to shareholder
approval of the Plan.  This  Agreement  shall not be  assigned  by either  party
hereto without the express written consent of the other party.

         19. Entire Agreement. The Plan, the rules adopted by the Committee from
time to time and this Agreement  constitute,  except as to any written agreement
between the parties hereto which  specifically  references  this Section 19, the
entire  understanding  between  the parties  hereto with  respect to the matters
covered   herein  and   supersede   all  previous   written,   oral  or  implied
understandings  between the parties  hereto with  respect to the subject  matter
hereof.



<PAGE>


         IN WITNESS  WHEREOF,  the  Company  and  Optionee  have  executed  this
Agreement as of the day and year first above written.

                                      METRIS COMPANIES INC.


                                      By:
                                      Title:


                                      OPTIONEE



                                      Social Security #:
                                      Date: