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As Filed with the Securities and Exchange Commission on June 10, 1994
Registration No. 33-53475
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 1
TO
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)
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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)
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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 /
---------------
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 June 10, 1994
ADVANTA CORP.
18,000 Shares of Class B Common Stock
This Prospectus relates to 18,000 shares of Class B Common Stock, par
value $.01 per share (the "Class B Common Stock"), of Advanta Corp. (the
"Company"), which may be offered by Adizes Institute, Inc. (the "Selling
Shareholder") from time to time, by registered securities brokers and/or
dealers, as may be directed by the Selling Shareholder or its representatives.
The Class B Common Stock is quoted on 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 June 8, 1994, the last reported sale price of the
Company's Class B Common Stock was $34.25 per share, as reported on the
NASDAQ-NMS.
Investment in the shares involves material risks. See "Investment
Considerations."
The Selling Shareholder will bear all commissions, discounts and other
compensation paid to brokers or dealers in connection with the sale of the
shares. Other offering expenses, estimated at $1,600 will be borne by the
Company. See "Plan of Distribution."
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
Selling Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 Shareholder. 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 Quarterly Report on Form 10-Q for the quarter ended
March 31, 1994;
3. The Company's Current Reports on Form 8-K dated January 26, 1994
and April 19, 1994; and
4. 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 totaled
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.
SELLING SHAREHOLDER
Pursuant to an agreement (the "AII Agreement"), dated as of July 1,
1992, between the Company and Adizes Institute, Inc. (the "Selling
Shareholder"), the Company agreed, subject to the terms and conditions
contained in the AII Agreement and in consideration for certain consulting
services performed by the Selling Shareholder between July 1992 and the date
hereof, 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. The
shares of Class B Common Stock being offered by the Selling Shareholder
pursuant to this Prospectus consist of the shares acquired by the Selling
Shareholder under the AII Agreement.
Prior to its acquisition of the shares pursuant to the AII Agreement,
the Selling Shareholder beneficially owned no shares of the Company's Class A
or Class B Common Stock. The 18,000 shares of Class B Common Stock being
offered pursuant to this Prospectus are offered for the account of the Selling
Shareholder. Subsequent to the completion of the offering, the Selling
Shareholder will own no shares of the Company's Class A or Class B Common
Stock.
PLAN OF DISTRIBUTION
The Selling Shareholder presently intends that any sales of the shares
covered by this Prospectus will be effected at the then market price, to or
through registered brokers and/or dealers, including dealers making a market in
the Company's Class A and/or Class B Common Stock. Although no agreements,
arrangements or understandings are in place regarding any such sales, and the
brokers or dealers to or through whom such sales may be made have not been
identified, the Selling Shareholder anticipates that it will pay normal
broker's commissions on any such sales effected through brokers, and will
receive the normal dealer's market price for any such shares sold to dealers.
Such brokers or dealers and any other participating brokers or dealers may be
deemed to be "underwriters" within the meaning of the Securities Act in
connection with such sales and their commissions or discounts and other
compensation may be regarded as underwriter's compensation.
DESCRIPTION OF CAPITAL STOCK
CLASS A COMMON STOCK AND CLASS B COMMON STOCK
Voting. The authorized capital of the Company includes 200,000,000
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.
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The authorized capital of the Company includes 200,000,000 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 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
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Class B Common Stock in fact generally have traded at disparate market prices.
On June 8, 1994 the last reported sale price on the NASDAQ-NMS for the Class A
Common Stock was $37.375 per share and the last reported sale price on the
NASDAQ-NMS for the Class B Common Stock was $34.25 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 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.
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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 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.
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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 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.
9
<PAGE> 11
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.
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> 12
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
<TABLE>
<S> <C>
Securities and Exchange Commission Registration fee . . . . . . . $ 100
Printing and engraving . . . . . . . . . . . . . . . . . . . . . . --
Blue Sky fees and expenses . . . . . . . . . . . . . . . . . . . . --
Accounting services . . . . . . . . . . . . . . . . . . . . . . . 1,250
Legal fees & expenses . . . . . . . . . . . . . . . . . . . . . . --
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . 250
------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,600
</TABLE>
------
* All amounts shown are estimates, other than the registration fee.
The Selling Shareholder will pay its own personal attorney's fees,
brokerage discounts and other expenses, if any.
ITEM 16. EXHIBITS.
*4.1 Restated Certificate of Incorporation of Registrant.
------
*Filed herewith.
II-1
<PAGE> 13
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 Pre-Effective
Amendment No. 1 to Form S-3 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 9th day of June, 1994.
Advanta Corp.
By: /s/ Gene S. Schneyer
-------------------------------------
Gene S. Schneyer,
Vice President and Secretary
Pursuant to the requirements of the Securities Act, this Pre-Effective
Amendment No. 1 to Form S-3 Registration Statement has been signed by the
following persons in the capacities indicated on June 9, 1994.
*
- --------------------------------------------
Dennis Alter
Chairman of the Board, Chief Executive
Officer and Director
*
- --------------------------------------------
Richard A. Greenawalt
President, Chief Operating
Officer and Director
*
- --------------------------------------------
David D. Wesselink
Senior Vice President and
Chief Financial Officer
*
- --------------------------------------------
John J. Calamari
Vice President, Finance, and
Chief Accounting Officer
II-2
<PAGE> 14
*
- -----------------------------------------
Alex W. "Pete" Hart
Executive Vice Chairman and Director
*
- -----------------------------------------
Arthur P. Bellis, Director
- -----------------------------------------
Max Botel, Director
*
- -----------------------------------------
Richard J. Braemer, Director
*
- -----------------------------------------
Anthony P. Brenner, Director
*
- -----------------------------------------
William C. Dunkelberg, 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 pursuant to a power of attorney
previously filed as part of this Registration Statement.
II-3
<PAGE> 15
EXHIBIT INDEX
ITEM
*4.1. Restated Certificate of Incorporation of Registrant.
-------
*Filed herewith.
II-4
<PAGE> 1
RESTATED CERTIFICATE OF INCORPORATION
OF
ADVANTA CORP.
---------------------------------------
Advanta Corp., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies as follows:
1. The Corporation was originally incorporated under the name
"Teachers Service Organization, Inc." on September 11, 1974. The Corporation's
name was changed to "TSO Financial Corp." on May 16, 1985 and to its present
name, "Advanta Corp.", on January 27, 1988.
2. The text of the Corporation's Restated Certificate of
Incorporation as heretofore amended or supplemented is hereby restated to read
in its entirety as follows:
FIRST: The name of the corporation is Advanta Corp.
SECOND: The address of its registered office in the State of
Delaware is 32 Lockerman Square, Suite L-100, City of Dover 19901, County of
Kent. The name of its registered agent at such address is The Prentice-Hall
Corporation System, Inc.
THIRD: The nature of the business or purposes to be conducted
or promoted is to engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Delaware.
FOURTH: The aggregate number of shares of all classes of
capital stock which the Corporation shall have authority to issue is:
Four Hundred Million (400,000,000) shares of common stock
("Common Stock"), consisting of Two Hundred Million (200,000,000) shares of
Class A Common Stock, par value $0.01 per share ("Class A Common Stock"),
amounting in the aggregate to Two Million Dollars ($2,000,000), and Two Hundred
Million (200,000,000) shares of Class B Common Stock, par value $0.01 per share
("Class B Common Stock"), amounting in the aggregate to Two Million Dollars
($2,000,000).
One Thousand Ten (1,010) Shares of Class A Preferred Stock,
par value $1,000 per share ("Class A Preferred Stock"), amounting in the
aggregate to One Million Ten Thousand Dollars ($1,010,0000), and One Million
(1,000,000) shares of Class B Preferred Stock, par value $0.01 per share
("Class B Preferred Stock"), amounting in the aggregate to Ten Thousand Dollars
($10,000).
Terms of the Class A Common Stock and Class B Common Stock.
The powers, preferences and rights of the Class A Common Stock and Class B
Common
<PAGE> 2
Stock, and the qualifications, limitations or restrictions thereof, shall be in
all respects identical, except as otherwise required by law or expressly
provided in this Restated Certificate of Incorporation, as amended.
(a) Voting. At each annual or special meeting of
stockholders, each holder of Class A Common Stock shall be entitled to one (1)
vote in person or by proxy for each share of Class A Common Stock standing in
such person's name on the stock transfer records of the Corporation in
connection with the election of directors and all other actions submitted to a
vote of stockholders; holders of Class B Common Stock shall not vote on any
matters except as otherwise provided by this Restated Certificate of
Incorporation, as amended, and the Delaware General Corporation Law.
(b) Dividends and Other Distributions. The record holders of
the Common Stock shall be entitled to receive such dividends and other
distributions in cash, stock or property of the Corporation as may be declared
thereon by the Board of Directors out of funds legally available therefor.
Each share of Class A Common Stock and each share of Class B Common Stock shall
have identical rights with respect to dividends and distributions (including
distributions in connection with any recapitalization, and upon liquidation,
dissolution or winding up of the Corporation); provided, that in the case of
regular cash dividends the payment per share of Class B Common Stock may be up
to twenty percent (20%) higher (but in no event less) than the payment per
share of Class A Common Stock; and provided, further, that dividends or other
distributions payable on the Common Stock in shares of Common Stock shall be
made to all holders of Common Stock and may be made only as follows: (i) in
shares of Class B Common Stock to the record holders of Class A Common Stock
and to the record holders of Class B Common Stock; (ii) in shares of Class A
Common Stock to the record holders of Class A Common Stock and in shares of
Class B Common Stock to the record 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.
(c) Convertibility. Except as described below, neither the
Class A Common Stock nor the Class B Common Stock shall be convertible into
another class of Common Stock or any other security of the Corporation.
(1) All outstanding shares of Class B Common Stock may be
converted into shares of 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, either the Class A Common Stock or Class B Common Stock
is, or both are, excluded from quotation on the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or, if such
shares are listed on a national securities exchange, from trading on the
principal national securities exchange on which such securities are traded.
(2) All outstanding shares of Class B Common Stock shall be
immediately converted into shares of Class A Common Stock on a share-for-share
basis if at any time the number of outstanding shares of Class A Common Stock
as reflected on the stock transfer records of the Corporation falls below 10%
of the aggregate number of
2
<PAGE> 3
outstanding shares of Class A Common Stock and Class B Common Stock. For
purposes of the immediately preceding sentence, any shares of Class A Common
Stock and Class B Common Stock repurchased or otherwise acquired by the
Corporation shall no longer be deemed "outstanding" from and after the date of
repurchase.
(3) In the event of any conversion of the Class B Common
Stock pursuant to subsection (c)(1) or (c)(2), certificates which formerly
represented outstanding shares of Class B Common Stock will thereafter be
deemed to represent a like number of shares of Class A Common Stock and all
shares of Common Stock authorized by this Restated Certificate of Incorporation
shall be deemed to be shares of Class A Common Stock.
(d) Class B Protection. (1) If, from and after the
Effective Time, any person or group acquires (other than upon issuance or sale
by the Corporation, 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 (such acquisition
making such person or group a "Significant Stockholder"), and such person or
group does not then own shares of Class B Common Stock acquired after the
initial distribute of Class B Common Stock by the Corporation (the
"Distribution") 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 in compliance with all applicable
laws and regulations to acquire additional shares of Class B Common Stock (a
"Class B Protection Transaction") as provided in this subsection (d) of this
Article FOURTH.
(2) 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 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 the Effective Time by the total number of shares of Class B Common Stock
issued and 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 Distribution (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; provided, however, that if the number of shares of Class B Common
Stock tendered to the Significant Stockholder exceeds the number of shares
required to be acquired pursuant to the formula set forth in this paragraph
(2), the number of shares of Class B Common Stock acquired from each tendering
holder shall be pro rata in proportion to the total number of shares of Class B
Common Stock tendered by all tendering holders.
(3) 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
3
<PAGE> 4
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 bid price of a share of Class A Common Stock or Class B Common
Stock (whichever is higher) on the NASDAQ National Market System (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. For purposes of paragraph (4) below, the
applicable date for the calculations required by the preceding sentence shall
be the date on which the Significant Shareholder becomes required to engage in
a Class B Protection Transaction. In the event that the Significant
Stockholder has acquired Class A Common Stock in the six-month period ending on
the date such person or group becomes a Significant Stockholder for
consideration other than cash, the value of such consideration per share of
Class A Common Stock shall be as determined in good faith by the Board of
Directors.
(4) A Class B Protection Transaction shall also be required
to be effected each time a Significant Stockholder acquires shares of Class A
Common Stock constituting an additional 10% or more of the then issued and
outstanding Class A Common Stock (other than upon issuance or sale by the
Corporation, by operation of law, by will or the laws of descent and
distribution, by gift, or by foreclosure of a bona fide loan) subsequent to the
last acquisition of Class A Common Stock which triggered the requirement for a
Class B Protection Transaction, if such Significant Stockholder does not then
beneficially own shares of Class B Common Stock acquired after the Distribution
constituting an equal or greater percentage of all issued and outstanding
shares of Class B Common Stock. Such Significant Stockholder shall be required
to offer to buy through a public tender offer that number of Additional Shares
prescribed by the formula set forth in paragraph (2) above, and must acquire
all shares validly tendered or a pro rata portion thereof, as specified in such
paragraph (2) above, at the price determined pursuant to paragraph (3) 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.
(5) 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.
(6) If any Significant Stockholder fails to make an offer
required by this subsection (d) of Article FOURTH, or to purchase shares
validly tendered and not withdrawn (after proration, if any ), such Significant
Stockholder shall not be entitled to vote any shares of Class A Common Stock
beneficially owned by such Significant Stockholder and acquired by such
Significant Stockholder after the Effective Time unless and until such
requirements are complied with or unless and until all shares of Class A Common
Stock causing such offer requirement to be effective are no longer beneficially
owned by such Significant Stockholder. 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
4
<PAGE> 5
determination of aggregate voting shares for any purpose under this Restated
Certificate of Incorporation or the Delaware General Corporation Law.
(7) The Class B Protection Transaction requirement shall not
apply 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;
provided, that any acquisition after such change which results in any person or
group owning 10% or more of the Class A Common Stock (or an additional 10% or
more of the Class A Common Stock subsequent to the last acquisition which
triggered the requirement for a Class B Protection Transaction) excluding, with
respect to the numerator but not the denominator for the calculation of such
percentage, shares of Class A Common Stock held by such Significant Stockholder
immediately after the Effective Time (or immediately after the last acquisition
which triggered the requirement for a Class B Protection Transaction, as the
case may be), shall be subject to any Class B Protection Transaction
requirement that would be imposed with respect to a Significant Stockholder
pursuant to this subsection (d) of Article FOURTH.
(8) All calculations with respect to percentage ownership of
issued and outstanding shares of either class of Common Stock will be based
upon the numbers of issued and outstanding shares reported by the Corporation
on the last filed of (i) the Corporation's most recent Annual Report on Form
10-K, (ii) its most recent Quarterly Report on Form 10-Q, or (iii) if any, its
most recent Current Report on Form 8-K.
(9) For purposes of this subsection (d) of Article FOURTH,
the term "person" means a natural person, company, government, or political
subdivision, agency or instrumentality of a government, or other entity.
"Beneficial ownership" shall be determined pursuant to Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
any successor regulation. The formation or existence of a "group" shall be
determined pursuant to Rule 13d-5(b) under the Exchange Act or any successor
regulation.
(e) Merger and Consolidation. In the event of a merger or
consolidation of the Corporation with or into another entity (whether or not
the Corporation is the surviving entity), the holders of Class B Common Stock
shall be entitled to receive the same amount and form of consideration per
share as the per share consideration, if any, received by any holder of the
Class A Common Stock in such merger or consolidation.
(f) Subdivision of Shares. If the Corporation shall in any
manner split, subdivide or combine the outstanding shares of Class A Common
Stock or Class B Common Stock, the outstanding shares of the other such class
of Common Stock shall be proportionally split, subdivided or combined in the
same manner and on the same basis as the outstanding shares of the other class
of Common Stock have been split, subdivided or combined.
(g) Power to Sell and Purchase Shares. The Board of
Directors shall have the power to cause the Corporation to issue and sell all
or any part of any class of stock
5
<PAGE> 6
herein or hereafter authorized to such persons, firms, associations or
corporations, and for such consideration, as the Board of Directors shall from
time to time, in its discretion, determine, whether or not greater
consideration could be received upon the issue or sale of the same number of
shares of another class, and as otherwise permitted by law. The Board of
Directors shall have the power to cause the corporation to purchase any class
of stock herein or hereafter authorized from such persons, firms, associations
or corporations, and for such consideration, as the Board of Directors shall
from time to time, in its discretion, determine, whether or not less
consideration could be paid upon the purchase of the same number of shares of
another class, and as otherwise permitted by law.
(h) Increase or Decrease in Number of Shares. The number of
authorized shares of Class B Common Stock may be increased or decreased (but
not below the number of shares then outstanding) by the affirmative vote of a
majority of the votes which may be collectively cast by holders of the Class A
Common Stock and Class A Preferred Stock.
Terms of the Preferred Stock. The following are the
designations, powers, preferences and rights of the preferred stock and the
qualifications, limitations and restrictions thereof:
Holders of Class A Preferred Stock shall be entitled to
one-half of a vote per share on all matters on which stockholders are entitled
to vote. Non-cumulative dividends of One Hundred Forty Dollars ($140) per year
shall be payable, as and when declared, from the earnings and profits of the
Corporation on each share of Class A Preferred Stock outstanding. Holders of
Class A Preferred Stock otherwise shall not be entitled to participate in the
earnings and profits of the corporation. No dividends may be declared or paid
on the Corporation's outstanding Common Stock at any time unless all dividends
required to be paid on the Class A Preferred Stock pursuant to the foregoing
provision for such year have been declared and paid in full.
In the event of the liquidation, dissolution, or winding up,
either voluntary or involuntary, of the Corporation, holders of the Class A
Preferred Stock shall be entitled to receive One Thousand Dollars ($1,000) per
share, before any distribution may be made to the holders of Common Stock of
the Corporation. If, upon any liquidation, dissolution, or winding up of the
Corporation, the amount so payable is not paid in full to the holders of the
Class A Preferred Stock, the holders of Class A Preferred Stock shall share
ratably in any such distribution of assets in proportion to the full amounts to
which they are entitled. The consolidation or merger of the Corporation into
or with any other corporation or corporations shall not be a liquidation,
dissolution or winding up of the Corporation within the meaning of the
foregoing provisions.
The Board of Directors may issue in one or more series, up to
1,000,000 shares of Class B Preferred Stock, par value $0.01 per share, with
full, limited, multiple, fractional or no voting rights, with such
designations, preferences, qualifications,
6
<PAGE> 7
privileges, limitations, restrictions, options, conversion rights, and other
special relative rights as shall be fixed from time to time by resolution of
the Board of Directors.
The holders of Class B Preferred Stock shall not be entitled
to vote as a class with the holders of any other class of capital stock of the
Corporation on any matters except as otherwise provided in this Restated
Certificate of Incorporation, as the Board of Directors shall provide upon the
issuance thereof, or as specified by law.
FIFTH: In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized to make,
alter or repeal the By-Laws of the Corporation.
SIXTH: The business and affairs of the Corporation shall be
managed by or under the direction of a Board of Directors consisting of not
less than three nor more than fifteen directors, the exact number of the
directors to be determined from time to time by resolution adopted by
affirmative vote of a majority of the entire Board of Directors. At the 1986
annual meeting of stockholders, the directors shall be divided into three
classes, designated Class I, Class II and Class III. Each class shall consist,
as nearly as may be possible, of one-third of the total number of directors
constituting the entire Board of Directors.
At the 1986 annual meeting of stockholders, Class I directors
shall be elected for a one-year term, Class II directors for a two-year term
and Class III directors for a three-year term. At each succeeding annual
meeting of stockholders beginning in 1986, successors to the class of directors
whose term expires at that annual meeting shall be elected for a three-year
term. If the number of directors is changed, any increase or decrease shall be
apportioned among the classes so as to maintain the number of directors in each
class as nearly equal as possible, and any additional director of any class
elected to fill a vacancy resulting from an increase in such class shall hold
office for a term that shall coincide with the remaining term of that class,
but in no case will a decrease in the number of directors shorten the term of
any incumbent director. A director shall hold office until the annual meeting
for the year in which his term expires and until his successor shall be elected
and shall qualify, subject, however, to prior death, resignation, retirement,
disqualification or removal from office. Any vacancy on the Board of Directors
that results from an increase in the number of directors may be filled by a
majority of the Board of Directors then in office, and any other vacancy may be
filled by a majority of the Board of Directors then in office, although less
than a quorum, or by a sole remaining director. Any director elected to fill a
vacancy not resulting from an increase in the number of directors shall have
the same remaining term as that of his predecessor.
Stockholders shall not be entitled to cumulate their vote in
the election of directors. Any amendment to these provisions regarding the
election of directors shall require the affirmative vote of the holders of at
least 75% of the voting power of the outstanding shares of capital stock of the
Corporation entitled to vote in the election of directors.
7
<PAGE> 8
SEVENTH: Whenever a compromise or arrangement is proposed
between this corporation and its creditors or any class of them and/or between
this corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in
a summary way of this corporation or of any creditor or stockholder thereof or
on the application of any receiver or receivers appointed for this corporation
under the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this corporation under the provisions of Section 279 of Title 8
of the Delaware Code, order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation, as the
case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all of the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
EIGHTH: A director of this corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the Delaware General Corporation Law, or (iv) for any transaction from which
the director derived an improper personal benefit. Neither the amendment nor
repeal of this paragraph, nor the adoption of any provision of the certificate
of incorporation inconsistent herewith, shall eliminate or reduce the effect of
this paragraph in respect of any matter which occurs, or any cause of action,
suit or claim which accrues or arises, prior to such amendment, repeal or
adoption of an inconsistent provision.
8
<PAGE> 9
3. That the foregoing Restated Certificate of Incorporation
was duly adopted in accordance with Section 245 of the General Corporation Law
of the State of Delaware and only restates and integrates, and does not further
amend, the provisions of the corporation's certificate of incorporation as
theretofore amended or supplemented, and that there is no discrepancy between
those provisions and the provisions of the foregoing Restated Certificate of
Incorporation.
IN WITNESS WHEREOF, Advanta Corp. has caused its corporate
seal to be affixed hereto and this Restated Certificate of Incorporation to be
executed in its corporate name this 11th day of May, 1994.
<TABLE>
<S> <C>
Advanta Corp.
By /s/ Dennis Alter
-------------------
Dennis Alter
Chairman of the Board
[Seal]
Attest:
By /s/ Gene S. Schneyer
-----------------------
Gene S. Schneyer
Secretary
</TABLE>
9
