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As Filed with the Securities and Exchange Commission on May 4, 1994
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ADVANTA CORP.
(Exact Name of Registrant as specified in its Charter)
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Delaware 23-1462070
(State of Incorporation) (I.R.S. Employer Identification No.)
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Brandywine Corporate Center
650 Naamans Road
Claymont, Delaware 19703
(302) 791-4400
(Address and telephone number of principal executive office)
GENE S. SCHNEYER, ESQ.
Advanta Corp.
Five Horsham Business Center
300 Welsh Road
P. O. Box 749
Horsham, Pennsylvania 19044-0749
(215) 657-4000
(Name, address and telephone number of agent for service)
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or reinvestment plans, please check the following box. / /
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 of the Securities
Act of 1933, check the following box: /x/
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CALCULATION OF REGISTRATION FEE
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Title of Shares Amount to be Proposed Maximum Offering Proposed Maximum Amount of
To Be Registered Registered (1) Price Per Share Offering Price Registration Fee (2)
---------------- -------------- ------------------------- ----------------- --------------------
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Class B Common
Stock, $.01 par
value 18,000 shares $11.00 $198,000 $69.00
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(1) Pursuant to Rule 416 under the Securities Act of 1933, this Registration
Statement also covers such additional shares as may hereinafter be offered or
issued to prevent dilution resulting from stock splits, stock dividends or
similar transactions effected without the receipt of consideration.
(2) Calculated in accordance with Rule 457(g) under the Securities Act of
1933, based upon the price at which the shares of the Class B Common Stock are
to be offered.
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The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PROSPECTUS
Subject to Completion, Dated May 4, 1994
ADVANTA CORP.
18,000 Shares of Class B Common Stock
The 18,000 shares of Class B Common Stock, par value $.01 per share
(the "Class B Common Stock"), of Advanta Corp. (the "Company") offered hereby
are being offered by the Company to the persons and upon the conditions
described herein. See "Plan of Distribution."
The Class B Common Stock is included in the National Association of
Securities Dealers Automated Quotation National Market System (the
"NASDAQ-NMS") under the symbol ADVNB and is the non-voting class of common
stock of the Company. On May 2, 1994, the last reported sale price of the
Company's Class B Common Stock was $35.25 per share, as reported on the
NASDAQ-NMS.
Investment in the shares involves material risks. See "Investment
Considerations."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The Date of this Prospectus is , 1994.
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TABLE OF CONTENTS
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Page
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Available Information 2
Incorporation of Certain Information by Reference 3
The Company 3
Investment Considerations 4
Use of Proceeds 5
Plan of Distribution 5
Description of Capital Stock 5
Experts 10
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No person is authorized to give any information or to make any
representation not contained in this Prospectus, and any information or
representation not contained herein must not be relied upon as having been
authorized by the Company or the Selling Stockholders. This Prospectus does
not constitute an offer of any securities other than the Class B Common Stock
to which it relates or an offer to any person in any jurisdiction where such
offer would be unlawful. Neither the delivery of this Prospectus nor any sales
made hereunder shall, under any circumstances, create any implication that
there has been no change in the affairs of the Company since the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of
the Commission: Seven World Trade Center, 13th Floor, New York, N.Y. 10048; and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may also be obtained at prescribed
rates from the Public Reference Section of the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549.
The Company has filed with the Commission a registration statement
(herein together with all amendments and exhibits thereto called the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Class B Common Stock offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement. For further information with respect to the Company
and the Class B Common Stock offered hereby, reference is made to the
Registration Statement. Statements contained in this Prospectus concerning the
provisions of certain documents are not necessarily complete and, in each
instance, reference is made to the copy of such document filed as an exhibit to
the Registration Statement, each statement being qualified in all respects by
such reference. Copies of all or any part of the Registration Statement,
including exhibits thereto, may be obtained, upon payment of the prescribed
fees, at the offices of the Commission as set forth above.
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
As required by the Commission, the following documents previously
filed by the Company (Commission File No. 0-14120) with the Commission under
the Exchange Act are incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993;
2. The Company's Current Reports on Form 8-K dated January 26, 1994
and April 19, 1994; and
3. The description of the Company's Class B Common Stock which is
contained in the Registration Statement on Form 8-A filed on April
23, 1992 by the Company to register such securities under Section
12 of the Exchange Act, File No. 0-14120, including any amendments
or reports filed for the purpose of updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act after the date of this Prospectus and prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold shall be deemed to be incorporated by reference in this Prospectus and
to be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modified or
supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon written or oral request, a copy of any
document incorporated herein by reference (other than exhibits to such document
which are not specifically incorporated by reference in such document).
Requests for such documents should be directed to: Investor Relations
Department, Advanta Corp., Five Horsham Business Center, P.O. Box 749, Horsham,
Pennsylvania, 19044, telephone (215) 784-5335.
THE COMPANY
The Company is a highly focused direct marketer of select consumer
financial services. The Company primarily originates and services credit cards
and mortgage loans. Other businesses include equipment leasing, credit
insurance and deposit products. Most of the Company's credit card receivables,
bank deposits and mortgage loan receivables are held by Colonial National Bank
USA ("Colonial National"), a nationally-chartered bank located in Claymont,
Delaware. At March 31, 1994, the Company's assets under management totalled
approximately $6.3 billion.
The Company was incorporated in Delaware in 1974 as Teachers Service
Organization, Inc., the successor to a business originally founded in 1951. In
January 1988, the Company's name was changed from TSO Financial Corp. to
Advanta Corp. The Company's principal executive office is located at
Brandywine Corporate Center, 650 Naamans Road, Claymont, Delaware 19703. Its
principal operating offices are located at Five Horsham Business Center, 300
Welsh Road, Horsham, Pennsylvania 19044. The Company's telephone numbers at
its principal executive and operating offices are, respectively, (302) 791-4400
and (215) 657-4000. References to the Company in this Prospectus include its
consolidated subsidiaries unless the context otherwise requires.
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INVESTMENT CONSIDERATIONS
In addition to the other information in this Prospectus, investors
should carefully consider the following factors, among others, in connection
with an investment in the Class B Common Stock:
LIMITED AVAILABILITY OF BANK AND INSURANCE COMPANY ASSETS; IMPACT ON
LIQUIDITY. Banking regulations limit the amount of dividends that a bank may
pay. Further, because of regulatory considerations, Colonial National does not
intend to make loans to the Company. In addition, Arizona insurance
regulations restrict the amount of dividends which an insurance company may
distribute without the prior consent of the Director of Insurance.
The limited availability to the Company of dividends from Colonial
National and the Company's insurance subsidiaries affects the Company's
liquidity. For the reasons described above, dividends from Colonial National
and the Company's insurance subsidiaries are not expected, for the foreseeable
future, to be the Company's major source of liquidity in satisfying its
obligations to creditors or in providing a source of dividend payments to
stockholders. The Company currently depends on the public sale of debt
securities as its primary source of liquidity at the holding company level.
RISKS ASSOCIATED WITH MAINTAINING PORTFOLIOS OF CREDIT CARD
RECEIVABLES AND MORTGAGE LOANS. There are certain risks associated with
maintaining portfolios of credit card receivables and mortgage loans. The
primary risks involve the possibility of future economic downturns causing an
increase in credit losses, and interest rate fluctuations. These risks are
inherent to every lender. The Company believes its credit loss experience is
generally comparable to industry averages. With respect to interest rate
fluctuations, the Company pursues a disciplined interest rate risk management,
which includes computer simulations of various scenarios, that it believes will
enable it to readily adjust to most market variations.
REGULATION. The banking and finance businesses in general are the
subject of extensive regulation at both the state and federal levels. Numerous
legislative and regulatory proposals are advanced each year which, if adopted,
could adversely affect the Company's profitability or the manner in which the
Company conducts its activities. In addition, the outcome of pending
litigation against other credit card issuers concerning the legality of certain
credit card fees and charges may adversely impact the Company's business.
COMPETITION. As a marketer of credit products, the Company faces
intense competition from numerous providers of financial services. Although
the Company believes it is generally competitive, there can be no assurance
that its ability to market its services successfully or to obtain adequate
yields on its loans will not be affected by the nature of the competition that
now exists or may develop. For example, competition in the credit card
industry is increasing as large corporate enterprises such as AT&T, General
Motors Corp., General Electric Co. and Ford Motor Co. have recently entered
the market, and other large nonbank organizations are expected to enter the
market as well. Since many of these credit cards have only recently been
introduced, the Company cannot assess the aggregate effect of these competitors
upon the Company's credit card business.
In seeking investment funds from the public, the Company faces
competition from banks, savings institutions, money market funds, credit unions
and a wide variety of private and public entities that sell debt securities,
some of which are publicly traded. Many of the competitors are larger and have
more capital and other resources than the Company. There can be no assurance
that competition from these other borrowers will not increase the Company's
cost of funds.
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PRICE DIFFERENTIAL BETWEEN CLASSES OF COMMON STOCK. Since adoption of
an amendment to the Company's Certificate of Incorporation in 1992, the Company
has had two classes of common stock. Class A Common Stock has voting rights,
while Class B Common Stock, although carrying certain rights and privileges
lacking in the Class A Common Stock, is non-voting. See "Description of
Capital Stock - Class A Common Stock and Class B Common Stock." Since the dual
class structure was established, the Class A Common Stock and the Class B
Common Stock generally have traded at disparate market prices. This
differential has been as much as $8.50. There can be no assurance that the
price differential between the Class A Common Stock and the Class B Common
Stock will be reduced or eliminated or as to the extent or continuation of any
such price differential in the future.
USE OF PROCEEDS
The net proceeds to the Company from the sale of 18,000 shares of
Class B Common Stock offered hereby are expected to be approximately $198,000.
The net proceeds to the Company will be used for general corporate purposes.
PLAN OF DISTRIBUTION
Pursuant to an agreement (the "AII Agreement"), dated as of July 1,
1992, between the Company and Adizes Institute, Inc. ("AII"), the Company has
agreed, subject to the terms and conditions contained in the AII Agreement, to
sell directly to AII, from time to time, an aggregate of 18,000 shares of Class
B Common Stock at an offering price of $11.00 per share. To the extent that
AII exercises its rights to purchase any or all of the 18,000 shares of Class B
Common Stock offered hereby, the Company is obligated, subject to certain
conditions set forth in the AII Agreement, to sell such shares of Class B
Common Stock to AII.
DESCRIPTION OF CAPITAL STOCK
CLASS A COMMON STOCK AND CLASS B COMMON STOCK
Voting. The authorized capital of the Company includes 30,000,000
shares of Class A Common Stock, par value $.01 per share, of which 17,274,349
shares were outstanding on March 31, 1994. All outstanding shares are fully
paid and non-assessable. The holders of the Company's Class A Common Stock are
entitled to one vote per share; to receive such dividends, in conjunction with
dividends to holders of the Company's Class B Common Stock, as legally may be
declared by the Board of Directors, after dividends are paid to holders of
preferred stock as described below; and upon liquidation, to receive any net
assets of the Company after the liquidation rights of all holders of preferred
stock, if any, have been satisfied. There are no preemptive, conversion,
cumulative voting, or redemption rights applicable to the Class A Common Stock.
The authorized capital of the Company includes 30,000,000 shares of
Class B Common Stock, par value $.01 per share, of which 22,733,843 shares were
outstanding on March 31, 1994. All outstanding shares are fully paid and
non-assessable. The holders of the Company's Class B Common Stock are entitled
to the same rights as the holders of the Company's Class A Common Stock, except
that the holders of Class B Common Stock may not vote (i) in the election of
directors, (ii) on an amendment to the
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Company's Certificate of Incorporation (including an amendment to increase the
authorized shares of Class B Common Stock), (iii) on a proposed merger or
consolidation, (iv) on a proposed dissolution of the Company, or (v) on any
other matter except to the extent described below or as required under the
General Corporation Law of the State of Delaware. Holders of Class B Common
Stock are entitled to vote on proposals to change the par value of the Class B
Common Stock or to alter or change the powers, preferences or special rights of
the shares of Class B Common Stock, including the dividend and Class B
protection features described below, which proposals may affect them adversely.
Holders of the Class B Common Stock are also entitled to the additional rights
described in the following subsections.
Dividends and Other Distributions. Any cash dividend with respect to
either Class A Common Stock or Class B Common Stock, must be accompanied by a
dividend on the other class of common stock. The Board of Directors may,
however, in its discretion, declare a dividend per share with respect to the
Class B Common Stock which is up to 20% higher (but under no circumstances
lower) than the dividend declared with respect to the Class A Common Stock. In
all other respects the dividends and other distributions, including the per
share consideration in the event of a merger or consolidation, with respect to
Class A Common Stock and Class B Common Stock are equal, except that dividends
or other distributions payable in shares of common stock may be made only as
follows: (i) in shares of Class B Common Stock to the holders of both Class A
Common Stock and Class B Common Stock, (ii) in shares of Class A Common Stock
to the holders of Class A Common Stock and in shares of Class B Common Stock to
the holders of Class B Common Stock, or (iii) in any other authorized class or
series of capital stock to the holders of both classes of common stock.
Neither the Class A Common Stock nor the Class B Common Stock may be split,
subdivided or combined unless the other is proportionately split, subdivided or
combined.
Although it is the present intention of the Board to maintain a higher
dividend on the Class B Common Stock, the Board of Directors is not required to
declare a higher dividend on the Class B Common Stock and the amount of future
dividends, if any, on each class of common stock will depend on circumstances
existing at the time, including the sufficiency of funds legally available for
the payment of dividends.
Class B Protection. Because of the existence of the two classes of
common stock, one class with voting rights and the other with non-voting
rights, voting rights disproportionate to equity ownership could be acquired
through acquisitions of Class A Common Stock. The Board of Directors was
advised that, while either class of common stock might trade at a premium
relative to the other, the non-voting or lesser-voting common stocks of public
companies with dual class capital structures frequently trade at a discount
from the full voting common stocks of such companies. The Company therefore
adopted the "Class B Protection" features described below as a means of helping
to reduce or eliminate the economic reasons for the Class A Common Stock and
Class B Common Stock to trade at disparate market prices, and to give holders
of Class B Common Stock the opportunity to participate in any premium paid in
the future for a significant block (10% or more) of the Class A Common Stock by
a buyer who has not acquired a proportionate share of the Class B Common Stock.
Although the Company adopted the "Class B Protection" features and has paid a
higher dividend on the Class B Common Stock in an attempt to minimize any price
differential between the classes of common stock, the Class A Common Stock and
the Class B Common Stock in fact generally have traded at disparate market
prices. On May 2, 1994 the last reported sale price on the NASDAQ-NMS for
the Class A Common Stock was $38.50 per share and the last reported sale price
on the NASDAQ-NMS for the Class B Common Stock was $35.25 per share. During
the period in which the two classes of common stock have existed, this
differential has been as much as $8.50. The Company adopted the division of
the common stock into two classes with the expressed expectation that the
Company generally would issue shares of Class B Common Stock rather than Class
A Common Stock in the future to raise equity, to finance acquisitions or
pursuant to incentive
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compensation plans, even if the market price per share of the Class B Common
Stock was lower at the relevant time than the market price per share of Class A
Common Stock. There can be no assurance that the price differential between
the Class A Common Stock and the Class B Common Stock will be reduced or
eliminated or as to the extent or continuation of any such price differential
in the future.
If after April 24, 1992, the effective date of the Certificate of
Amendment to the Company's Restated Certificate of Incorporation, any person or
group acquires (other than upon issuance or sale by the Company, by operation
of law, by will or the laws of descent and distribution, by gift, or by
foreclosure of a bona fide loan) beneficial ownership of shares of Class A
Common Stock constituting 10% or more of the then issued and outstanding shares
of Class A Common Stock (any person or group making such acquisition being
defined as a "Significant Stockholder"), and such person or group does not then
own shares of Class B Common Stock constituting an equal or greater percentage
of all then issued and outstanding shares of Class B Common Stock, such
Significant Stockholder must, within a 90-day period beginning the day after
becoming a Significant Stockholder, commence a public tender offer to acquire
additional shares of Class B Common Stock (a "Class B Protection Transaction").
For purposes of this provision, the terms "beneficial ownership" and "group"
have the same meanings as used in Regulation 13D promulgated under the Exchange
Act. The Class B Protection feature does not change the ability of Dennis
Alter or any member of his family or other management stockholder to transfer a
significant voting interest in the Company to another person or group by the
sale of their voting shares to such person or group. However, such person or
group may also be required to purchase a proportionate amount of Class B Common
Stock either concurrently from such stockholder or other persons or pursuant to
a Class B Protection Transaction, as described below.
In a Class B Protection Transaction, the Significant Stockholder must
offer to acquire from the holders of the Class B Common Stock that number of
shares of additional Class B Common Stock (the "Additional Shares") determined
by (i) multiplying the percentage of issued and outstanding shares of Class A
Common Stock beneficially owned by such Significant Stockholder which were
acquired after April 24, 1992 by the total number of shares of Class B Common
Stock outstanding on the date such person or group became a Significant
Stockholder, and (ii) subtracting therefrom the total number of shares of Class
B Common Stock beneficially owned by such Significant Stockholder on such date
which were acquired after the initial distribution of Class B Common Stock to
stockholders on May 5, 1992 pursuant to the Certificate of Amendment to the
Company's Restated Certificate of Incorporation (including shares acquired on
such date at or prior to the time such person or group became a Significant
Stockholder). The Significant Stockholder must acquire all shares validly
tendered or, if the number of shares tendered exceeds the number determined
pursuant to such formula, a pro rata amount from each tendering holder.
The offer price for any shares of Class B Common Stock required to be
purchased by the Significant Stockholder pursuant to a Class B Protection
Transaction is the greater of (i) the highest price per share paid by the
Significant Stockholder for any share of Class A Common Stock in the six-month
period ending on the date such person or group became a Significant Stockholder
or (ii) the highest price of a share of Class A Common Stock or Class B Common
Stock (whichever is higher) as reported on the NASDAQ-NMS (or such other
quotation system or securities exchange constituting the principal trading
market for either class of common stock) on the date such person or group
became a Significant Stockholder.
A Class B Protection Transaction is also required each time a
Significant Stockholder acquires an additional 10% of the then issued and
outstanding Class A Common Stock (other than upon issuance or sale by the
Company, by operation of law, by will or the laws of descent and distribution,
by gift, or by foreclosure of a bona fide loan) after the last acquisition by
such person or group which triggered the requirement for a Class B Protection
Transaction, if such Significant Stockholder does not then beneficially
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own shares of Class B Common Stock acquired after the initial distribution of
Class B Common Stock to stockholders on May 5, 1992 constituting an equal or
greater percentage of all then issued and outstanding shares of Class B Common
Stock. Such Significant Stockholder would be required to offer to buy that
number of Additional Shares prescribed by the formula set forth above, even if
a previous Class B Protection Transaction resulted in fewer shares of Class B
Common Stock being tendered than such previous offer included.
The requirement to engage in a Class B Protection Transaction is
satisfied by making the requisite offer and purchasing validly tendered shares,
even if the number of shares tendered is less than the number of shares
included in the required offer. The penalty applicable to any Significant
Stockholder that fails to make the required offer, or to purchase shares
validly tendered (after proration, if any), is to automatically suspend the
voting rights of the shares of Class A Common Stock owned by such Significant
Stockholder until consummation of an offer as required or until divestiture of
the shares of Class A Common Stock that triggered the offer requirement. To
the extent that the voting power of any shares of Class A Common Stock is so
suspended, such shares will not be included in the determination of aggregate
voting shares for any purpose. Neither the Class B Protection Transaction
requirement nor the related penalty applies to any increase in percentage
ownership of Class A Common Stock resulting solely from a change in the total
amount of Class A Common Stock outstanding.
The Class B Protection provision does not prevent any person or group
from acquiring a significant or controlling interest in the Company, provided
such person or group acquires a proportionate percentage of the Class B Common
Stock. If a Class B Protection Transaction is prescribed, the purchase price
required to be paid in such offer may be higher than the price at which a
Significant Stockholder might otherwise be able to acquire an identical amount
of Class B Common Stock. Such requirement, therefore, could make an
acquisition of a significant or controlling interest in the Company more
expensive and, if a Class B Protection Transaction is required, more time
consuming, than if such requirement did not exist. Consequently, a person or
group might be deterred from acquiring a significant or controlling interest in
the Company as a result of such requirement. Moreover, by restricting the
ability of an acquiror to acquire a significant interest in the Class A Common
Stock by paying a "control premium" for such stock without acquiring, or paying
a similar premium for, Class B Common Stock, the Class B Protection provision
should reduce or eliminate the economic reasons for the Class A Common Stock
and Class B Common Stock to trade at disparate market prices.
Convertibility. Except as described below, neither the Class A Common
Stock nor the Class B Common Stock is convertible into another class of common
stock or any other security of the Company.
The Class B Common Stock could be converted into Class A Common Stock
on a share-for-share basis by resolution of the Board of Directors if, as a
result of the existence of the Class B Common Stock, the Class A Common Stock
or the Class B Common Stock or both become excluded from quotation on the
NASDAQ-NMS, or, if such shares are then listed on a national securities
exchange, from trading on the principal national securities exchange on which
the shares are then traded.
In addition, if at any time, as a result of additional issuances by
the Company of Class B Common Stock, repurchases by the Company of Class A
Common Stock or a combination of such issuances and repurchases, the number of
outstanding shares of Class A Common Stock as reflected on the stock transfer
books of the Company falls below 10% of the aggregate number of outstanding
shares of Class A Common Stock and Class B Common Stock, then, immediately upon
the occurrence of such event, all the outstanding shares of Class B Common
Stock will be automatically converted into shares of Class A Common Stock, on a
share-for-share basis. For purposes of the immediately preceding sentence, any
shares of Class A Common Stock or Class B Common Stock repurchased by the
Company will no longer
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be deemed "outstanding" from and after the date of repurchase. The Company has
no present intention to repurchase any shares of its common stock. In view of
the absence of a present intention by the Company to purchase any shares of
common stock and the substantial number of shares of Class B Common Stock that
would be required to be issued to reach the 10% threshold, the Company believes
it unlikely that this provision will be triggered in the foreseeable future.
CLASS A PREFERRED STOCK
The authorized capital stock of the Company includes 1,010 shares of
Class A Preferred Stock, par value $1,000 per share. All of such shares are
held by J. R. Alter, the Company's founder. The Class A Preferred Stock is
entitled to one-half of a vote per share on all matters on which stockholders
are entitled to vote. No dividends may be declared or paid on the Company's
outstanding common stock unless and until non-cumulative dividends of $140 per
share, payable as and when declared, which are required to be paid on the Class
A Preferred Stock for the applicable year (a total of $141,400) have been paid.
The holder of the Class A Preferred Stock is not otherwise entitled to
participate in the earnings or profits of the Company. Upon the liquidation of
the Company, the holder of the Class A Preferred Stock is entitled to receive
$1,000 per share ($1,010,000 in the aggregate) before any distributions are
made to the holders of the Company's common stock.
CLASS B PREFERRED STOCK
The authorized capital of the Company also includes 1,000,000 shares
of Class B Preferred Stock, par value $.01 per share, none of which is
currently outstanding. The Company has no present plans to issue any shares of
such stock. Class B Preferred Stock may be issued pursuant to resolutions of
the Company's Board of Directors from time to time without any action of the
stockholders. Such resolutions may authorize issuances in one or more series,
and may fix and determine dividend and liquidation preferences, voting rights,
conversion privileges, redemption terms, and other privileges and rights of the
shares of each series so authorized.
CERTAIN PROVISIONS IN THE CERTIFICATE OF INCORPORATION
The Company's Certificate of Incorporation, as amended, contains
certain provisions which may be deemed to be "anti-takeover" in nature in that
such provisions may deter, discourage or make more difficult the assumption of
control of the Company by another entity or person through a tender offer,
merger, proxy contest or other transaction or series of transactions.
One of these provisions is the authorization of 1,000,000 shares of
Class B Preferred Stock which the Board of Directors of the Company may issue
without stockholder approval for any proper corporate purpose. There are
currently no plans or arrangements for the issuance of such shares.
The Company's Certificate of Incorporation, as amended, does not
provide for cumulative voting by stockholders. This means that a significant
minority stockholder would not necessarily be able to elect one or more
designees to the Company's Board of Directors.
The Company's Certificate of Incorporation, as amended, also provides
that the members of the Board of Directors of the Company are classified in
three classes. The term of each class runs for three years and expires at
successive annual meetings of stockholders. Assuming the classes have a
relatively equal number of directors, it would take a minimum of two annual
meetings of stockholders to change the majority of the Board of Directors.
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The overall effect of the foregoing provisions may be to deter a
future takeover that a majority of the stockholders might view to be in their
best interests. In addition, these provisions may make it more difficult to
remove incumbent management.
EXPERTS
The consolidated financial statements and schedules incorporated by
reference in this Prospectus and elsewhere in the Registration Statement have
been audited by Arthur Andersen & Co., independent public accountants, as
indicated in their reports with respect thereto, and are incorporated herein in
reliance upon the authority of said firm as experts in giving said reports.
10
<PAGE> 13
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. *
<TABLE>
<S> <C>
Securities and Exchange Commission Registration fee $ 69
Printing and engraving --
Blue Sky fees and expenses --
Accounting services 1,250
Legal fees & expenses --
Miscellaneous 250
------
Total $1,569
</TABLE>
- ------------------------
* All amounts shown are estimates, other than the registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides,inter
alia, that under specified circumstances a corporation shall have the power to
indemnify any person who is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by reason of the
fact that such person is or was a director, officer, employee or agent of the
corporation, against expenses, attorneys' fees, judgments, fines and
settlements. The By-Laws of the Company provide that the Company shall
indemnify any director, officer, employee or agent of the Company to the
fullest extent now or hereafter permitted by law in connection with any such
action, suit or proceeding. The By-Laws further provide that the Board of
Directors of the Company may, by resolution, indemnify any person other than a
director, officer, employee or agent of the Company for liabilities incurred in
connection with services rendered for or at the request of the Company or its
subsidiaries. In addition, consistent with Section 102 of the Delaware General
Corporation Law, the Company's Certificate of Incorporation limits the personal
liability of the Company's directors to the Company or its stockholders for
monetary damages for certain breaches of fiduciary duty. The Company maintains
director and officer liability insurance which would provide coverage against
certain securities law liabilities.
ITEM 16. EXHIBITS
4.1. Restated Certificate of Incorporation of Registrant, as
amended (incorporated by reference to Exhibit 3 to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1988 and Exhibit 3 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31,
1993).
4.2. By-Laws of the Registrant, as amended (incorporated by
reference to Exhibit 3 to the Registrant's Quarterly Report on
Form 10-Q of the quarter ended June 30, 1989).
5. Opinion of Gene S. Schneyer, Vice President, Secretary and
General Counsel.
23.1. Consent of Arthur Andersen & Co.
23.2. Consent of Gene S. Schneyer, Vice President, Secretary and
General Counsel (included in Exhibit 5).
24. Power of Attorney of certain officers and directors.
II-1
<PAGE> 14
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post effective amendment to this Registration
Statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) To reflect in the Prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement; provided, however, that the undertakings
set forth in clauses (i) and (ii) of this paragraph shall not
apply if the information required to be included in such
post-effective amendments is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d)
of the Exchange Act that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
II-2
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Horsham Township, Montgomery County, Commonwealth of
Pennsylvania, on the 3rd day of May, 1994.
Advanta Corp.
By: /s/ Richard A. Greenawalt
-------------------------
Richard A. Greenawalt, President,
Chief Operating Officer and Director
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
on May 3, 1994.
/s/ Dennis Alter
- ---------------------------------------------------
Dennis Alter
Chairman of the Board, Chief Executive
Officer and Director
/s/ Richard A. Greenawalt
- ---------------------------------------------------
Richard A. Greenawalt
President, Chief Operating
Officer and Director
/s/ David D. Wesselink
- ---------------------------------------------------
David D. Wesselink
Senior Vice President and
Chief Financial Officer
/s/ John J. Calamari
- ---------------------------------------------------
John J. Calamari
Vice President, Finance, and
Chief Accounting Officer
/s/ Alex W. "Pete" Hart
- ---------------------------------------------------
Alex W. "Pete" Hart
Executive Vice Chairman and Director
II-3
<PAGE> 16
*
- ---------------------------------------------------
Arthur P. Bellis, Director
- ---------------------------------------------------
Max Botel, Director
*
- ---------------------------------------------------
Richard J. Braemer, Director
*
- ---------------------------------------------------
Anthony P. Brenner, Director
*
- ---------------------------------------------------
William C. Dunkelberg, Director
- ---------------------------------------------------
Graeme K. Howard, Jr., Director
*
- ---------------------------------------------------
Ronald J. Naples, Director
*
- ---------------------------------------------------
Phillip A. Turberg, Director
*
- ---------------------------------------------------
Warren W. Kantor, Vice Chairman and
Director
* By: /s/ Gene S. Schneyer
----------------------------------------------
Gene S. Schneyer
Attorney-in-Fact
II-4
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
ITEM
<S> <C>
4.1. Restated Certificate of Incorporation of Registrant, as amended (incorporated by
reference to Exhibit 3 to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1988 and Exhibit 3 to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1993).
4.2. By-Laws of the Registrant, as amended (incorporated by reference to Exhibit 3 to the
Registrant's Quarterly Report on Form 10-Q of the quarter ended June 30, 1989).
5. Opinion of Gene S. Schneyer, Vice President, Secretary and General Counsel.
23.1. Consent of Arthur Andersen & Co.
23.2. Consent of Gene S. Schneyer, Vice President, Secretary and General Counsel
(included in Exhibit 5).
24. Power of Attorney of certain officers and directors.
</TABLE>
<PAGE> 1
EXHIBIT 5
May 4, 1994
Advanta Corp.
650 Naamans Road
Brandywine Corporate Center
Claymont, DE 19703
Ladies and Gentlemen:
I am Vice President, Secretary and General Counsel of Advanta Corp. (the
"Company"), and have acted as counsel for the Company in connection with the
filing of a Registration Statement on Form S-3 (the "Registration Statement")
under the Securities Act of 1933, as amended, registering 18,000 shares of
Advanta Corp. Class B Common Stock, par value $.01 per share (the "Class B
Common Stock"), proposed to be offered and issued pursuant to the AII Agreement
(as defined in the Registration Statement). I am familiar with the
requirements of the Securities Act of 1933, as amended, and the rules and
regulations promulgated pursuant thereto. I have examined the Company's
Restated Certificate of Incorporation, as amended, the Company's By-Laws and
such other corporate records and proceedings of the Company as I have deemed
necessary or advisable in rendering this opinion.
Based upon the foregoing, it is my opinion that, when issued pursuant to the
terms of the AII Agreement, the Class B Common Stock will be duly authorized,
legally issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion as an exhibit to said
Registration Statement on Form S-3.
Sincerely yours,
/s/ Gene S. Schneyer
Gene S. Schneyer
Vice President, Secretary
and General Counsel
GSS/gm
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-3 Registration Statement of our reports dated January
25, 1994 included in the Advanta Corp. Form 10-K for the year ended December
31, 1993, and to all references to our Firm included in this Form S-3
Registration Statement.
Philadelphia, PA Arthur Andersen & Co.
May 4, 1994
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned does
hereby constitute and appoint Dennis Alter, Richard A. Greenawalt, Warren W.
Kantor, John J. Calamari, and Gene S. Schneyer, or any of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution, for him or her and on his or her behalf
to sign, execute and file a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended, relating to the offer and sale of up to
18,000 shares of ADVANTA Corp.'s Class B Common Stock, and any or all
amendments (including, without limitation, post-effective amendments and any
amendment or amendments increasing the amount of securities for which
registration is being sought) to such Registration Statement, with all exhibits
and any and all documents required to be filed with respect thereto, with the
Securities and Exchange Commission or any regulatory authority, granting unto
such attorneys-in-fact and agents, and each of them, full power and authority
to do and perform each and every act and thing requisite and necessary to be
done in and about the premises in order to effectuate the same as fully to all
intents and purposes as he or she might or could do if personally present,
hereby ratifying and confirming all that such attorneys-in-fact and agents, or
any of them, or their substitute or substitutes, may lawfully do or cause to be
done.
IN WITNESS WHEREOF, each of the undersigned has hereunto set his or
her hand this 20th day of April, 1994.
<TABLE>
<S> <C>
/s/ Dennis Alter /s/ Richard A. Greenawalt
- --------------------------------------------------- ------------------------------------------
Dennis Alter Richard A. Greenawalt
Chairman of the Board, Chief Executive President, Chief Operating
Officer and Director Officer and Director
/s/ Warren W. Kantor /s/ John J. Calamari
- ------------------------------------------- ------------------------------------------
Warren W. Kantor John J. Calamari
Vice Chairman and Director Vice President, Finance, and
Chief Accounting Officer
/s/ Arthur P. Bellis
- ------------------------------------------- ------------------------------------------
Arthur P. Bellis, Director Max Botel, Director
/s/ Richard J. Braemer /s/ Anthony P. Brenner
- ------------------------------------------- ------------------------------------------
Richard J. Braemer, Director Anthony P. Brenner, Director
/s/ Alex W. "Pete" Hart /s/ David D. Wesselink
- ------------------------------------------- ------------------------------------------
Executive Vice Chairman and Senior Vice President and
Director Chief Financial Officer
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
/s/ William C. Dunkelberg
- --------------------------------------------------- ------------------------------------------
William C. Dunkelberg, Director Graeme K. Howard, Jr., Director
/s/ Ronald J. Naples /s/ Phillip A. Turberg
- ------------------------------------------- ------------------------------------------
Ronald J. Naples, Director Phillip A. Turberg, Director
</TABLE>
