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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 15, 1996
REGISTRATION NO. 333-01833
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
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BRANDYWINE CORPORATE CENTER
650 NAAMANS ROAD
CLAYMONT, DELAWARE 19703
(302) 791-4400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)
------------------------
GENE S. SCHNEYER, ESQ.
ADVANTA CORP.
FIVE HORSHAM BUSINESS CENTER
300 WELSH ROAD
HORSHAM, PENNSYLVANIA 19044-9808
(215) 657-4000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
PROSPECTUS LOGO
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
ADVANTA CORP. (the "Company" or "Advanta") hereby offers participation in
its Dividend Reinvestment and Stock Purchase Plan (the "Plan"). The Plan
provides investors with a convenient and economical way to purchase the
Company's Class B Common Stock, $.01 par value per share ("Class B Stock") and
reinvest all or a portion of the cash dividends paid on their Class A Common
Stock, $.01 par value per share ("Class A Stock") and Class B Stock. The Class A
Stock and the Class B Stock are referred to collectively as "Common Stock." Some
of the significant features of the Plan are:
- Participants may purchase shares of Class B Stock through the automatic
reinvestment of quarterly cash dividends on shares of Class A Stock
and/or Class B Stock. Participants must either be a registered owner of
at least 25 shares or a beneficial owner of at least one share of a class
of Common Stock participating in the Plan to be eligible to participate.
- Additional shares may also be purchased through monthly cash investments
("Cash Investments"), subject to a minimum monthly limit of $50 and a
maximum monthly limit of $3,000. Cash Investments in excess of $3,000 may
be made with the permission of the Company pursuant to a waiver of the
$3,000 limit.
- Brokerage commissions or service charges will not be charged for
purchases made under the Plan.
- Shares may be offered from time to time at a discount ranging up to 5%
below what is essentially the then current market price, as explained
below. The discount may vary among different categories of purchasers. If
there is no discount, shares will be purchased at essentially the
then-current market price.
- The Plan's open enrollment provision permits non-shareholders to
participate by making an initial investment in Class B Stock of at least
$1,500 through the Plan. No Commission will be charged on such purchase.
- Participants' recordkeeping will be simplified because they will receive
periodic statements of their accounts.
- Participants may deposit Class B Stock certificates held by them and
registered in their names into the Plan and thereby avoid the need for
safekeeping of certificates.
- To fulfill requirements for the Plan, Class B Stock will be purchased
directly from the Company or by the Plan administrator in the open
market, as determined from time to time by the Company. At present, it is
expected that shares usually will be purchased directly from the Company.
- A holder of Common Stock through a broker or other nominee name may
participate in the Plan either by making an appropriate arrangement with
the nominee or by having the Common Stock transferred and registered in
the holder's name.
Participation in the Plan is entirely voluntary, and Participants may
terminate their participation at any time. Shareholders who do not choose to
participate in the Plan will continue to receive cash dividends, as declared, in
the usual manner.
The last reported sale price of the Class B Stock on the NASDAQ National
Market System on April , 1996, was $ per share. This Prospectus relates
to 1,500,000 shares of Class B Stock offered for purchase under the Plan.
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
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 , 1996
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TABLE OF CONTENTS
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AVAILABLE INFORMATION................................................................. 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE....................................... 4
SUMMARY OF PLAN....................................................................... 5
DESCRIPTION OF THE PLAN............................................................... 8
PURPOSE............................................................................. 8
What is the purpose of the Plan?................................................. 8
PARTICIPATION....................................................................... 8
Who is eligible to participate?.................................................. 8
PARTICIPATION CATEGORIES............................................................ 8
What categories are available under the Plan?.................................... 8
BENEFITS AND DISADVANTAGES.......................................................... 9
What are the benefits and disadvantages of the Plan?............................. 9
ADMINISTRATION AND INTERPRETATION................................................... 10
Who will administer and interpret the Plan?...................................... 10
MINIMUM PARTICIPATION............................................................... 10
What is the Minimum Participation?............................................... 10
NON-SHAREHOLDER PARTICIPATION THROUGH OPEN ENROLLMENT............................... 10
How may a non-shareholder become a Participant?.................................. 10
ENROLLMENT.......................................................................... 10
How and when may an eligible person enroll in the Plan and become a
Participant?.................................................................... 10
What are the participation options and what does the Authorization Form
provide?........................................................................ 11
When will participation in the Plan begin?....................................... 12
PURCHASES........................................................................... 13
When will shares be purchased under the Plan?.................................... 13
What is the source of shares to be purchased under the Plan?..................... 13
At what price will shares be purchased?.......................................... 13
How are Cash Investments made?................................................... 14
What limitations apply to Cash Investments?...................................... 15
What if a Participant has more than one account?................................. 15
How are waivers of the $3,000 monthly maximum on Cash Investments obtained?...... 15
DISCOUNTS........................................................................... 16
When and how will Discounts be established?...................................... 16
CERTIFICATES........................................................................ 17
Will certificates be issued for share purchases?................................. 17
May a Participant add shares of Common Stock to his or her account by
transferring stock certificates that the Participant possesses?................. 17
SALE OF SHARES...................................................................... 17
Can Participants sell shares held under the Plan?................................ 17
REPORTS............................................................................. 18
What reports will be sent to Participants?....................................... 18
WITHDRAWAL.......................................................................... 18
How may Participants withdraw from the Plan?..................................... 18
Will participation end automatically on the Participant's death or
incompetence?................................................................... 18
FEDERAL TAXES....................................................................... 18
What are the principal federal income tax consequences of participating in the
Plan?........................................................................... 18
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OTHER PROVISIONS.................................................................... 20
What happens if a Participant disposes of or acquires additional shares of
stock?.......................................................................... 20
May shares in the Plan be pledged?............................................... 20
How will a Participant's shares be voted?........................................ 20
Who pays the expenses of the Plan?............................................... 21
What are the responsibilities of the Company and the Administrator under the
Plan?........................................................................... 21
What happens if the Company issues a stock dividend or declares a stock split or
makes a rights offering?....................................................... 21
May the Plan be changed or terminated?........................................... 21
USE OF PROCEEDS....................................................................... 22
INDEMNIFICATION UNDER THE SECURITIES ACT.............................................. 22
COMMON STOCK DIVIDENDS AND PRICE RANGE................................................ 22
PLAN OF DISTRIBUTION.................................................................. 23
LEGAL OPINION......................................................................... 24
EXPERTS............................................................................... 24
GLOSSARY.............................................................................. 24
APPENDIX I............................................................................ 26
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No persons have been authorized to give any information or to make any
representations other than those contained or incorporated in this Prospectus
and, if given or made, such information or representations must not be relied
upon as having been authorized. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any securities other than those to
which it relates, or an offer or solicitation with respect to those securities
to which it relates to any persons in any jurisdiction where such offer or
solicitation would be unlawful. The delivery of this Prospectus at any time does
not imply that the information contained or incorporated herein at its date is
correct as of any time subsequent to its date.
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 and other information with the Securities and Exchange
Commission (the "Commission"). Information as of a particular date concerning
directors and officers, their remuneration, and any material interest of such
persons in transactions with the Company is disclosed in proxy statements
distributed to shareholders of the Company and filed with the Commission. Such
reports, proxy statements, and other information filed by the Company can be
inspected and copied at prescribed rates at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at the following Regional Offices: Chicago Regional Office, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661; and New York Regional
Office, 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of
such material also can be obtained from the Public Reference Section of the
Commission, Washington, D.C. 20549, at prescribed rates.
Additional information regarding the Company and the shares of Class B
Stock offered hereby is contained in the Registration Statement and the exhibits
relating thereto, filed with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). For further information pertaining to the
Company and the shares of Class B Stock, reference is made to the Registration
Statement and the exhibits thereto, which may be inspected without charge at the
office of the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549. Copies of the Registration Statement and the exhibits thereto may be
obtained from the Commission upon payment of the prescribed fees.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated in this Prospectus by reference the following
documents and information heretofore filed with the Commission pursuant to the
Exchange Act.
(a) The Company's latest annual report on Form 10-K filed pursuant to
Section 13 or 15(d) of the Exchange Act or the latest prospectus filed
pursuant to Rule 424(b) or (c) under the Securities Act, which
contains, either directly or by incorporation by reference, certified
financial statements for the year ended December 31, 1995.
(b) All other reports filed pursuant to Section 14(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the annual
report or the prospectus referred to in (a) above.
(c) The Company's definitive proxy statement filed pursuant to Section 14
of the Exchange Act in connection with the 1996 annual meeting of its
shareholders and any definitive proxy statements so filed in connection
with any subsequent special meetings of its shareholders.
(d) The description of the Company's Class B Stock which is contained in
its Registration Statement filed on Form 8-A dated April 22, 1992 to
register such shares under Section 12 of the Exchange Act, File No.
0-14120, including any amendment or report filed for the purpose of
updating such description.
All reports and other documents subsequently filed by the Company pursuant
to Section 13, 14 or 15(d) of the Exchange Act, prior to the termination of the
offering, shall be deemed to be incorporated by reference herein and to be a
part hereof from the date of the filing of such reports and documents. Any
statement contained in a document incorporated or deemed to be 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 modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents. Written or oral requests for such copies
should be directed to the Corporate Secretary, Advanta Corp., 5 Horsham Business
Center, 300 Welsh Road, Horsham, PA 19044, Telephone (215) 657-4000.
The name, address and phone number of the Plan Administrator are:
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If using ordinary mail: If using a courier service:
Mellon Bank, N.A. Mellon Bank, N.A.
Shareholders Investment Service Shareholders Investment Service
P.O. Box 750 Commerce Court
Pittsburgh, Pennsylvania 15230 4 Station Square, Third Floor
Pittsburgh, Pennsylvania 15219
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If using telephone, call: (800) 451-7392
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SUMMARY OF PLAN
The following is a summary description of the Advanta Corp. Dividend
Reinvestment and Stock Purchase Plan (the "Plan") which is contained herein.
Terms used in the summary have the meanings attributed to them in the Plan. A
glossary of defined terms, used below with initial capital letters, is included
at the end of this Prospectus. The Plan was approved recently by the Company's
Board of Directors, and no shares had been issued thereunder as of the date of
this Prospectus.
Purpose of Plan The primary purpose of the Plan is to provide
eligible holders of the Company's Class A Stock and
Class B Stock and other eligible investors with a
convenient and economic method of investing cash
dividends and making Cash Investments in shares of
Class B Stock without payment of any brokerage
commissions or service charges in connection with
purchases. In addition, purchases of Class B Stock
directly from the Company pursuant to the Plan will
provide the Company with additional capital for
general corporate purposes. The Plan does not
permit Participants to invest their cash dividends
in, or otherwise purchase, Class A Stock. Only
Class B Stock may be purchased under the Plan.
Purchase Price The Plan provides that Class B Stock to be offered
may be either newly issued or treasury shares of
Class B Stock to be acquired directly from the
Company or Class B Stock purchased on the open
market. Under the Plan, the Purchase Price for
newly issued shares is the average of the daily
high and low sales prices of the Class B Stock
during a Pricing Period consisting of the twelve
Trading Days preceding the Investment Date (all as
more fully described below), and for shares
purchased on the open market is the weighted
average price paid for such shares. The actual
price paid for shares may be reduced below the
Purchase Price as described above to the extent of
any Discount that may be offered. It is unlikely
that a Discount will apply to shares purchased on
the open market.
Cash Investment Monthly Cash Investments may be made at the option
of the Participant, subject to a minimum investment
of $50 per calendar month and a maximum investment
of $3,000 per calendar month. Cash Investments in
excess of $3,000 per month may be made only
pursuant to a written Request for Waiver accepted
by the Company. There is no limit in the Plan on
the dollar amount of the waivers that may be
granted. The factors that the Company will consider
in acting on waiver requests are set forth under
Question 17 below.
Cash Investments of less than $50 and that portion
of any Cash Investment which exceeds the maximum
monthly purchase limit, unless such limit has been
waived, will be returned to the Participant,
without interest.
Discount The Company may in its sole discretion establish a
discount each month ranging up to 5% (the
"Discount") of the Purchase Price that otherwise
would be applicable. The Discount may vary from
time to time, and may also vary with the amount of
the purchase and the category of Participant. Any
Discount will be established by the Company after a
review of current market conditions, the level of
participation, and current and projected capital
needs. The Company currently expects to establish a
Discount (if any) only
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with respect to Cash Investments in excess of
$3,000 pursuant to a written Request for Waiver
accepted by the Company. Any financial intermediary
or other person who establishes and maintains the
required minimum shareholding position, as
described in Question 13 below, may purchase shares
through the Plan at a Discount (if any is then
offered by the Company) and may capture the
Discount by reselling the shares shortly
thereafter. The Company has not entered into any
arrangements with any financial intermediary or
other person to engage in such arrangements.
Requests for Waiver In deciding whether to approve a Request for
Waiver, the Company will consider relevant factors
including, but not limited to whether shares for
the Plan are being acquired from the Company or on
the open market, the Company's need for additional
funds, the attractiveness of obtaining such funds
by the sale of Class B Stock as compared to other
sources of funds, the purchase price likely to
apply to any sale of Class B Stock, the Participant
submitting the request (including the extent and
nature of such Participant's prior participation in
the Plan, and the number of shares of Common Stock
held by such Participant), and the aggregate
amount, if any, of Cash Investments in excess of
the allowable maximum amounts for which Requests
for Waivers have been submitted by all
Participants.
The Company has no arrangements or understandings,
formal or informal, with any person relating to the
distribution of shares to be received pursuant to
the Plan. Broker-dealers, financial intermediaries
and other persons who acquire shares of Class B
Stock through the Plan and resell them shortly
after acquiring them may be considered to be
underwriters within the meaning of the Securities
Act.
New Investors Even if you are not currently an owner of Common
Stock, the Plan has a provision (the "Open
Enrollment Provision") that permits you to join by
making your initial purchase through the Plan
itself. To join the Plan in this manner, your
initial investment must be in Class B Stock, must
be at least $1,500 and, unless the monthly limit
has been waived, may not exceed $3,000. No
commissions or other charges will be imposed to
join the Plan through the Open Enrollment
Provision.
Threshold Price The Threshold Price will be a minimum price
applicable to a Cash Investment in Class B Stock in
a given month pursuant to a Request for Waiver in
excess of $3,000. For each Trading Day during the
Pricing Period on which the Threshold Price is not
met, one-twelfth of the Cash Investment of each
Participant who has submitted a Request for Waiver
will be returned without interest.
Cash Investments that do not exceed $3,000 per
month and the reinvestment of cash dividends in
shares of Class B Stock will not be subject to the
Threshold Price.
Number of Shares Offered As of the date of this Prospectus, 1,500,000 shares
of Class B Stock were registered under the
Securities Act for sale by the Company pursuant to
the Plan. Because the Company currently expects to
continue the Plan indefinitely, it expects to
register additional
6
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shares of Class B Stock under the Securities Act
from time to time as necessary for purposes of the
Plan. See "Plan of Distribution". To the extent
that shares purchased under the Plan are purchased
on the open market, such shares will not be
registered or required to be registered under the
Securities Act in connection with the sale of such
shares pursuant to the Plan.
Minimum Participation To be eligible to participate in the Plan with
respect to either Class A Stock or Class B Stock,
you must either be a "registered holder," a
shareholder whose shares of Common Stock are
registered in the stock transfer books of Advanta
in your name, who owns in one account, at least 25
shares of such class at the time you enroll in the
Plan and continuously thereafter so long as you
remain a Participant; or a beneficial owner of at
least one share of such stock. Additionally, in the
case of a record owner, you must participate in the
Plan to the extent of at least 25 shares of each
class for which you participate.
Initial Cost to the
Participate None. All initial costs will be borne by the
Company.
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DESCRIPTION OF THE PLAN
PURPOSE
1. What is the purpose of the Plan?
The primary purpose of the Plan is to provide the Company's shareholders
and other investors with a convenient and economic method of reinvesting cash
dividends on Common Stock in, and making Cash Investments in, shares of Class B
Stock without payment of any brokerage commissions or service charges in
connection with purchases. In addition, purchases of Class B Stock directly from
the Company pursuant to the Plan will provide the Company with additional
capital for general corporate purposes.
PARTICIPATION
2. Who is eligible to participate?
You may participate in the Plan if you qualify as either of the following:
(a) you are a "registered holder," a shareholder whose shares of Common Stock
are registered in the stock transfer books of Advanta in your name, or (b) you
are a "beneficial owner," a shareholder who has beneficial ownership of shares
of Common Stock that are registered in a name other than your name (for example,
in the name of a broker, bank or other nominee); provided, however, that to be
eligible to participate you must satisfy the Minimum Participation described in
Question 6. Registered holders may participate in the Plan directly. If you are
not a registered holder, you must either become a registered holder by having
your shares transferred into your own name, or you must make arrangements with
your broker, bank or other nominee to participate in the Plan on your behalf.
Most major brokers, banks and other nominees will make such arrangements on
request. See Question 8.
If you are not currently a shareholder of the Company, you may become a
Plan Participant by making an initial investment in Class B Stock of at least
$1,500 through the Open Enrollment Provision described in Question 7.
Your right to participate in the Plan is not transferable to another person
apart from a transfer of your underlying shares of Common Stock. The Company
reserves the right to exclude from participation in the Plan persons who utilize
the Plan to engage in short-term trading or arbitrage activities.
Persons who reside in jurisdictions in which it is unlawful for the Company
to permit participation in the Plan are not eligible to participate in the Plan.
PARTICIPATION CATEGORIES
3. What categories are available under the Plan?
If you are a registered or a beneficial owner of Common Stock who meets the
Minimum Participation requirement described in Question 6 and you elect to
become a Participant in the Plan (a "Participant"), you may have cash dividends
on all or a portion of your shares of Class A Stock or Class B Stock reinvested
automatically in Class B Stock.
If you wish, you may also make Cash Investments to purchase Class B Stock,
subject to a minimum investment of $50 in any month and a maximum investment of
$3,000 in any month. See Question 15. You may also make Cash Investments in
excess of $3,000 in any month in which the Company accepts your Request for
Waiver.
Additionally, if you are a registered or a beneficial owner of Common Stock
who meets the Minimum Participation requirement described in Question 6, you may
make Cash Investments even if you do not reinvest dividends on your Common
Stock.
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BENEFITS AND DISADVANTAGES
4. What are the benefits and disadvantages of the Plan?
The primary benefits of the Plan are:
- You may have the cash dividends on all or a portion of your Common Stock
reinvested automatically in shares of Class B Stock.
- You may invest in additional shares of Class B Stock by making Cash
Investments, subject to an individual minimum limit of $50 per month and
an individual maximum limit of $3,000 per month.
- Cash Investments in excess of $3,000 per month may be made with the
permission of the Company pursuant to a Request for Waiver as described
in Question 17.
- You pay no brokerage commissions or service charges in connection with
your purchases under the Plan. See Question 29.
- Your reinvested cash dividends and Cash Investments will be fully
invested because the Plan provides for fractional shares to be credited
to your account. Additionally, dividends on such fractional shares, as
well as whole shares participating in the Plan, will be reinvested
automatically in additional shares of Class B Stock and credited to your
Plan account.
- Shares may be offered from time to time at a Discount ranging up to 5%.
The Discount may vary among different categories of purchasers. See
Question 18.
- You will avoid cumbersome safekeeping of stock certificates for Plan
shares credited to your account. You may also deposit in the Plan shares
of Class B Stock held by you and registered in your name, thereby
avoiding the need for safekeeping of certificates.
- Periodic statements reflecting all current activity, including shares
purchased and latest Plan account balance, will simplify your
recordkeeping.
The primary disadvantages of the Plan are:
- Because the date by which you must decide to make Cash Investments is
prior to the Investment Date (as defined herein) for such investments,
your investments may be exposed to changes in market conditions. See
Question 14.
- Due to the Pricing Period, the Purchase Price (as defined herein) for
shares purchased through the Plan may exceed (or be less than) the price
of acquiring shares of Class B Stock (including transaction costs) on the
open market on the related Investment Date. See Questions 11 and 13.
- There may be delays between a Participant's instruction to sell Plan
Shares and the sale date. There may also be delays in receiving shares
withdrawn from the Plan. See Questions 21 and 23.
- No interest will be paid on funds held by the Administrator of the Plan
pending investment. See Question 14.
- Participants who reinvest cash dividends will be treated for federal
income tax purposes as having received a dividend on the dividend payment
date, giving rise to a tax payment obligation without providing the
Participant with immediate cash to pay such tax when it becomes due. See
Question 25.
- Participants will not know the actual number of shares purchased under
the Plan until after the Pricing Period. See Questions 13 and 14.
- Shares deposited in a Plan account may not be pledged. See Question 27.
NEITHER THE COMPANY NOR THE ADMINISTRATOR CAN ASSURE A PROFIT OR PROTECT
AGAINST A LOSS ON SHARES PURCHASED UNDER THE PLAN.
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ADMINISTRATION AND INTERPRETATION
5. Who will administer and interpret the Plan?
The Plan will be administered by Mellon Bank, N.A. or such successor
administrator as the Company may designate (the "Administrator"). The
Administrator acts as agent for Participants, keeps records of Participants'
accounts, sends regular account statements to Participants, and performs other
duties relating to the Plan. Shares purchased for each Participant under the
Plan, and shares of Class B Stock deposited with the Administrator for
safekeeping as described in Question 20, will be held by the Administrator on
behalf of the Participants, unless and until a Participant requests that a stock
certificate for his or her shares be issued, as described in Question 19. An
affiliate of the Administrator also serves as dividend disbursement agent,
transfer agent and registrar for the Common Stock. Communications with the
Administrator should be directed as follows:
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If using ordinary mail: If using a courier service:
Mellon Bank, N.A. Mellon Bank, N.A.
Shareholders Investment Service Shareholders Investment Service
P.O. Box 750 Commerce Court
Pittsburgh, Pennsylvania 15230 4 Station Square, Third Floor
Pittsburgh, Pennsylvania 15219
If using telephone, call: (800) 451-7392
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WHEN CORRESPONDING WITH THE ADMINISTRATOR, WE SUGGEST THAT YOU GIVE YOUR
DAYTIME TELEPHONE NUMBER AND AREA CODE.
The Company has the right to establish procedures for administration of the
Plan and to interpret it. Its interpretation will be final, conclusive and
binding.
MINIMUM PARTICIPATION
6. What is the Minimum Participation?
To be eligible to participate in the Plan with respect to either Class A
Stock or Class B Stock, you must either be a "registered holder," a shareholder
whose shares of Common Stock are registered in the stock transfer books of
Advanta in your name, who owns in one account, of record, at least 25 shares of
such class at the time you enroll in the Plan and continuously thereafter so
long as you remain a Participant, or a beneficial owner of at least one share of
such stock. Additionally, in the case of a registered holder, you must
participate in the Plan to the extent of at least 25 shares of such class. These
requirements are referred to as the "Minimum Participation."
NON-SHAREHOLDER PARTICIPATION THROUGH OPEN ENROLLMENT
7. How may a non-shareholder become a Participant?
Even if you are not currently an owner of Common Stock, the Plan's Open
Enrollment Provision permits you to join by making your initial purchase of
Participating Shares through the Plan itself. To join the Plan in this manner,
your initial purchase must be at least $1,500 of Class B Stock.
No commissions or other charges will be imposed to join the Plan through
the Open Enrollment Provision.
ENROLLMENT
8. How and when may an eligible person enroll in the Plan and become a
Participant?
If you are a registered holder, you may enroll in the Plan and become a
Participant by completing and signing an Authorization Form (enclosed herewith)
and returning it to the Administrator at an address set forth in Question 5. An
additional Authorization Form may be obtained at any time from the
Administrator. If you have your Common Stock registered in more than one name
(e.g., joint
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tenants, trustees), all registered holders of such shares must sign the
Authorization Form exactly as their names appear on the account registration.
If you are a beneficial owner but not a record holder of Common Stock, you
must instruct your broker, bank or other nominee in whose name your shares are
held to participate in the Plan on your behalf. If a nominee holds shares of a
beneficial owner through a securities depository, such nominee may also be
required to provide a Broker and Nominee Form (a "B/N Form") to the
Administrator in order to participate in the Cash Investment portion of the
Plan. See Question 14. B/N Forms are available from the Administrator.
If you are not currently a shareholder of the Company and wish to use the
Open Enrollment Provision described in Question 7, your initial investment must
accompany your Authorization Form.
You may enroll in the Plan at any time. Once enrolled, you remain enrolled
without further action on your part until you discontinue your participation or
until the Plan is terminated. See Question 23 regarding withdrawal from the Plan
and Question 32 regarding termination of the Plan. However, if there is any
subsequent change in the manner in which your name appears on your
certificate(s), you must sign another Authorization Form, and execute a stock
power form to change the registration of your Plan account, in order to continue
participation.
9. What are the participation options and what does the Authorization Form
provide?
The Authorization Form appoints the Administrator as your agent for
purposes of the Plan. It may also direct the Company to pay to the
Administrator, for the purchase of additional shares of Class B Stock, all of
the cash dividends on (a) the specified number of shares of Common Stock owned
by you on the applicable Record Date (subject to the Minimum Participation
described in Question 6), and designated by you to be included in the Plan
("Participating Shares") and (b) all whole and fractional shares which have been
credited to your Plan account. Shares in your Plan account, other than shares of
Class B Stock deposited with the Administrator solely for safekeeping as
described in Question 20 ("Safekeeping Shares") are referred to as "Plan
Shares". The Authorization Form also may direct the Administrator to purchase
additional shares of Class B Stock with any Cash Investments that you make and
to reinvest automatically all subsequent dividends on Plan Shares. Cash
dividends will continue to be reinvested on the number of Participating Shares
and on all Plan Shares (but not Safekeeping Shares) until the Participant
specifies otherwise or terminates participation, or the Plan is terminated.
The Authorization Form provides for the purchase of shares of Class B Stock
through the investment options described below, which will apply to only the
class or classes of Common Stock specified on such form. If you elect to
participate with respect to only Class B Stock held by you, your participation
will not cover shares of Class A Stock then owned or subsequently acquired by
you. Similarly, if you elect to participate with respect to only Class A Stock,
your participation will cover the Class B Common Stock acquired by and held for
your account in the Plan, but it will not cover other shares of Class B Stock
then owned directly or subsequently acquired directly by you but not through the
Plan. You may elect to participate in the Plan with respect to a second class of
Common Stock by following the enrollment procedures described herein for the
second class.
If you wish to enroll with respect to both Class A Stock and Class B Stock,
you must complete both the Class A portion and Class B portion of the
Authorization Form.
The investment options are as follows:
(1) "Full Dividend Reinvestment"
This option directs the Administrator to invest in accordance with the
Plan all cash dividends on all shares of Common Stock then or
subsequently owned by you of the class or classes specified by your
Authorization Form, and also all cash dividends on your whole and
fractional Plan Shares.
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(2) "Partial Dividend Reinvestment"
This option directs the Administrator to invest in accordance with the
Plan all cash dividends on that number of whole shares of the
participating class or classes of Common Stock held by you which are
designated in the appropriate space on the Authorization Form and on
all whole and fractional Plan Shares. This option should be used if you
wish to reinvest dividends on some (equal to at least the Minimum
Participation) but not all of the Common Stock of the participating
class or classes that you own. If this option is selected, you will
continue to receive cash dividends in the usual manner on all shares of
Common Stock registered in your name or beneficially owned by you but
which you have not designated for participation in the Plan. It is
recommended that nominee firms holding shares in their own firm's
street name (i.e., shares not held for the firm by Depository Trust
Company or some other depository) use this option, even if they wish to
participate with respect to all of the Common Stock they own at the
time of enrollment.
(3) "Cash Investments"
This option permits you to make Cash Investments and directs the
Administrator to apply such investments towards the purchase of
additional shares of Class B Stock in accordance with the Plan. You may
select this option whether or not you reinvest your cash dividends. If
this option is selected and you do not elect to reinvest cash
dividends, you will continue to receive cash dividends on all shares of
Common Stock owned by you in the usual manner (unless you elect
thereafter to change your participation category) and the Administrator
will apply only Cash Investments received from you towards the purchase
of shares of Class B Stock.
You may select any one of the above three options. IN EACH CASE, CASH
DIVIDENDS ON ALL PARTICIPATING SHARES, INCLUDING ALL PLAN SHARES HELD IN YOUR
PLAN ACCOUNT, WILL BE REINVESTED, INCLUDING DIVIDENDS ON SHARES OF CLASS B STOCK
PURCHASED WITH CASH INVESTMENTS IF YOU HAVE SELECTED THE FULL DIVIDEND
REINVESTMENT OPTION, UNTIL YOU SPECIFY OTHERWISE OR WITHDRAW FROM THE PLAN
ALTOGETHER, OR UNTIL THE PLAN IS TERMINATED. See Question 23 regarding
notification of withdrawal to the Administrator. See Question 31 regarding
provisions on shares issued in stock splits or stock dividends and stock
acquired on the exercise of rights.
IF YOU RETURN A PROPERLY EXECUTED AUTHORIZATION FORM TO THE ADMINISTRATOR
WITHOUT ELECTING AN INVESTMENT OPTION, YOU WILL BE ENROLLED AS HAVING SELECTED
FULL DIVIDEND REINVESTMENT.
If you own Common Stock of record and also beneficially through one or more
brokers, banks or other nominees, each such holding will be treated as a
separate holding for purposes of authorizing participation in the Plan (although
all such holdings will be aggregated for purposes of applying purchase
limitations -- see Question 15). To participate in the Plan for all of your
holdings, separate Authorization Forms should be submitted by you individually
for your record holdings and by each such nominee for your beneficial holdings
with it.
10. When will participation in the Plan begin?
Participation as to dividend reinvestment will commence with the next
Investment Date after the Administrator's receipt of the Authorization Form,
provided it is received by the Administrator by the Record Date for such
investment. Participation as to Cash Investments will commence with the next
Investment Date, provided the authorization therefor and the funds to be
invested are received by the Cash Due Date for such investment. Cash Investments
must be received on or prior to the "Cash Due Date" which is the thirteenth
business day preceding the Investment Date, as defined in Question 11. See
Appendix I to determine the applicable Record Date and Cash Due Date. Should the
authorization (or the funds to be invested) arrive after the time indicated
above, the funds will be returned.
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PURCHASES
11. When will shares be purchased under the Plan?
For a monthly period when there is a cash dividend paid by the Company,
reinvested dividends and any Cash Investments under the Plan will be used to
purchase shares of Class B Stock on the dividend payment date declared by the
Board of Directors (in such case, the "Investment Date"), or if such day is not
a business day, the first business day immediately following such date shall be
the Investment Date. The "Record Date" for such investments will be the record
date declared by the Board of Directors with respect to the dividend. In all
other months, Cash Investments will be invested on the 18th of the month, or if
such day is not a business day, the first business day following the 18th of the
month (in each such case, the "Investment Date"). See Appendix I for information
with respect to anticipated dividend payment dates, Record Dates, and other
market data.
Notwithstanding the foregoing, due to regulatory requirements, in instances
in which the Class B Stock purchased through the Plan is purchased on the open
market the Plan may be required to make such open market purchases over two or
more consecutive Trading Days, in which event the first such purchase date will
be the Investment Date as defined above.
THERE CAN BE NO ASSURANCE AS TO THE DECLARATION OR PAYMENT OF DIVIDENDS,
AND NOTHING CONTAINED IN THE PLAN OBLIGATES THE COMPANY TO DECLARE OR PAY ANY
DIVIDENDS. THE PLAN DOES NOT REPRESENT A CHANGE IN THE COMPANY'S DIVIDEND POLICY
OR A GUARANTEE OF FUTURE DIVIDENDS, WHICH WILL CONTINUE TO BE DETERMINED BY THE
BOARD OF DIRECTORS BASED UPON THE COMPANY'S EARNINGS, FINANCIAL CONDITION AND
OTHER FACTORS.
12. What is the source of shares to be purchased under the Plan?
Shares of Class B Stock purchased through the Plan may be newly issued or
treasury shares purchased directly from the Company, shares purchased through
routine open market transactions or shares acquired by a combination of such
methods, provided, however, that it is likely that all shares purchased at a
Discount will be purchased directly from the Company. The Company will determine
the source of the Plan purchases, which may vary from time to time. It is
unlikely that a Discount will apply to shares purchased on the open market;
however, in such case the Company will supply cash to the Administrator equal to
the amount of the Discount.
13. At what price will shares be purchased?
The following answer describes the Purchase Price as though there is no
applicable Discount, as described in Question 18. If a Discount applies, the
actual price paid for the shares will be the Purchase Price described in this
Question 13 reduced by the Discount.
All shares purchased through the Plan directly from the Company not at a
Discount will be acquired at a price to you (in such case, the "Purchase Price")
equal to the average of the daily high and low sales prices, computed up to four
decimal places, if necessary, of the Class B Stock as reported on the NASDAQ
National Market System (the "NMS") for the twelve Trading Days immediately
preceding the applicable Investment Date. In the event the Class B Stock
subsequently becomes listed on the New York Stock Exchange (the "NYSE"), the
Purchase Price will be the average of the high and low sales price of the Class
B Stock on the NYSE for such twelve Trading Days. A "Trading Day" means a day on
which trades in Class B Stock are reported on the principal market for the Class
B Stock. The period encompassing the first twelve Trading Days immediately
preceding the applicable Investment Date constitutes the relevant "Pricing
Period".
All shares purchased under the Plan through open market purchases will be
acquired on the applicable Investment Date at a price to you (in such case, the
"Purchase Price") equal to the average price, computed up to four decimal places
if necessary, paid by the Administrator for Class B Stock purchased by the Plan
through such open market purchases; provided, however, that due to regulatory
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requirements, the Plan may be required to make open market purchases over two or
more consecutive Trading Days commencing on the Investment Date.
Purchases made with Cash Investments pursuant to a Request for Waiver may
be subject to a Threshold Price, as more fully described in Question 17.
Although the Company will pay all brokerage fees on shares purchased on the
open market, for tax purposes, these fees will be considered as additional
dividend income to you. See Question 25. These fees, and the resulting
additional dividend income, are not expected to be substantial.
14. How are Cash Investments made?
All registered holders, including brokers, banks and other nominees with
respect to Common Stock registered in their name on behalf of a beneficial
owner, who have submitted an appropriately completed and signed Authorization
Form are eligible to make Cash Investments at any time. A broker, bank or other
nominee, as holder on behalf of a beneficial owner, must utilize a B/N Form for
Cash Investments if it holds the Common Stock in the name of a securities
depository.
Shares purchased through Cash Investments will be transmitted as the
Participant directs. If the Participant has elected the Full Dividend
Reinvestment option, all shares purchased through Cash Investments will become
Participating Shares automatically and future cash dividends on such shares will
be reinvested through the Plan. If any other participation option has been
elected, cash dividends on such shares will be sent directly to the Participant
and not reinvested automatically through the Plan (unless the owner thereafter
enrolls such shares in the Plan).
The B/N Form provides the sole means whereby a broker, bank or other
nominee holding shares on behalf of a beneficial owner in the name of a
securities depository may invest Cash Investments on behalf of such beneficial
owner. A B/N Form must be delivered to the Administrator at an address specified
in Question 5 each time the nominee transmits a Cash Investment on behalf of a
beneficial owner. B/N Forms will be furnished by the Administrator upon request.
Non-shareholders may make an initial investment through the Open Enrollment
Provision described in Question 7.
The Administrator will apply all Cash Investments which are received by the
close of business on the Cash Due Date to the purchase of shares of Class B
Stock at the time specified in Question 11. Cash Investments received after the
applicable Cash Due Date will be returned. NO INTEREST WILL BE PAID ON CASH
INVESTMENTS HELD PENDING INVESTMENT OR RECEIVED AFTER THE APPLICABLE CASH DUE
DATE. IT IS SUGGESTED THEREFORE THAT ANY CASH INVESTMENTS A PARTICIPANT WISHES
TO MAKE BE SENT SO AS TO REACH THE ADMINISTRATOR AS CLOSE AS POSSIBLE, BUT PRIOR
TO, THE RELATED CASH DUE DATE. IF YOU HAVE ANY QUESTIONS REGARDING THE CASH DUE
DATE YOU SHOULD CONTACT THE ADMINISTRATOR AT AN ADDRESS OR TELEPHONE NUMBER SET
FORTH IN QUESTION 5.
You should be aware that since investments under the Plan are made as of
specified dates, you lose any advantage that otherwise might be available from
being able to select the timing of your investment.
In the event that any check is returned to the Administrator unpaid for any
reason, the Administrator will consider the request for a Cash Investment null
and void and shall immediately remove from the Participant's account any shares
purchased upon credit of such money. The Administrator shall also be entitled to
sell these shares to satisfy uncollected amounts. If the net proceeds of the
sale of such shares are insufficient to satisfy such uncollected amounts, the
Participant will be accountable for any market loss and the Administrator shall
be entitled to sell additional shares from the Participant's account to satisfy
the uncollected balance.
ALL CASH INVESTMENTS MADE BY CHECK SHOULD BE MADE PAYABLE TO MELLON BANK,
N.A. AND MAILED TO THE ADMINISTRATOR AT AN ADDRESS LISTED IN QUESTION 5. OTHER
FORMS OF PAYMENT, SUCH AS WIRE TRANSFERS,
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MAY BE MADE, BUT ONLY IF APPROVED IN ADVANCE BY THE ADMINISTRATOR. INQUIRIES
REGARDING OTHER FORMS OF PAYMENTS AND ALL OTHER WRITTEN INQUIRIES SHOULD BE
ADDRESSED TO THE ADMINISTRATOR.
15. What limitations apply to Cash Investments?
MINIMUM/MAXIMUM LIMITS. Cash Investments are subject to a $50 minimum per
month, and the Company reserves the right to refuse to accept a Cash Investment
in excess of $3,000 per month from any Participant or related or associated
group of Participants. Cash Investments of less than $50 and that portion of any
Cash Investment which exceeds the $3,000 monthly purchase limit, unless such
limit has been waived, will be returned to the Participant, without interest.
The Company reserves the right to waive such limits on Cash Investments in its
sole discretion.
For information on the minimum initial investment of new investors joining
the Plan through the Open Enrollment Provision, see Question 7.
16. What if a Participant has more than one account?
For the purpose of the limitations discussed in the preceding Question 15,
the Company may aggregate all reinvestment dividends and Cash Investments for
Participants with more than one account using the same Social Security or
Taxpayer Identification Number. However, if you have multiple holdings in your
own name and through nominees, a separate Authorization Form must be submitted
for each holding. See the last paragraph of Question 9. For Participants unable
to supply a Social Security or Taxpayer Identification Number, their
participation may be limited by the Company to only one Plan account.
For the purpose of such limitations, all Plan accounts which the Company
believes to be under common control or management or to have common ultimate
beneficial ownership may be aggregated. Unless the Company has determined that
reinvestment of dividends and Cash Investments for each such account would be
consistent with the purposes of the Plan, the Company will have the right to
aggregate all such accounts and to return, without interest, within 30 days of
receipt, any amounts in excess of the investment limitations applicable to a
single account received in respect of all such accounts.
17. How are waivers of the $3,000 monthly maximum on Cash Investments obtained?
REQUEST FOR WAIVER. Cash Investments in excess of $3,000 per month may be
made only pursuant to a written request for waiver (a "Request for Waiver")
accepted by the Company. To submit a Cash Investment in excess of $3,000 for any
monthly period, a Participant must submit a written Request for Waiver no later
than two business days prior to the Cash Due Date for such Cash Investments. It
is within the Company's sole discretion whether to grant a waiver. In deciding
whether to approve such a request, the Company will consider relevant factors
including, but not limited to (a) whether shares for the Plan are being acquired
from the Company or purchased on the open market, (b) the Company's need for
additional funds, (c) the attractiveness of obtaining such funds by the sale of
Class B Stock as compared to other sources of funds, (d) the Purchase Price
likely to apply to any sale of Class B Stock, (e) the Participant submitting the
request, including the extent and nature of such Participant's prior
participation in the Plan, and the number of shares of Common Stock held by such
Participant, and (f) the aggregate amount, if any, of Cash Investments in excess
of the allowable maximum amounts for which requests have been submitted by all
Participants. If such requests are submitted for any monthly period for an
aggregate amount in excess of the amount the Company is willing to accept, the
Company may honor such requests in order of receipt, pro rata or by any other
method which the Company determines to be appropriate in its sole discretion.
The Plan contains no fixed dollar amount that may be purchased pursuant to
waivers, although the Company may establish a maximum from time to time, based
on the criteria stated above.
To obtain a Request for Waiver form and instructions for completing and
returning the form, please contact the Company at (800) 299-3150.
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The Plan will be used by the Company to raise additional capital through
the sale each month of all or a portion of the shares purchased under the Plan
to Participants (including brokers or dealers) who, in connection with any
resales of such shares, may be deemed to be underwriters. The Plan is intended
for the benefit of long term investors in the Company and not for persons who
engage in transactions which may cause aberrations in the price or trading
volume of Common Stock. See "Plan of Distribution". The Company reserves the
rights to modify, suspend or terminate participation in the Plan by otherwise
eligible Participants in order to eliminate practices which are not consistent
with the purposes of the Plan.
THRESHOLD PRICE. The Company may establish for any Pricing Period a
minimum price (the "Threshold Price") for Participants desiring to make Cash
Investments in excess of $3,000 per month made pursuant to written Requests for
Waiver. The Company will, at least three business days prior to each Cash Due
Date, determine whether to establish a Threshold Price and, if a Threshold Price
is established, its amount, and will so notify the Administrator. The
determination whether to establish a Threshold Price and, if a Threshold Price
is established, its amount will be made by the Company at its discretion after a
review of current market conditions, the level of participation in the Plan, and
current and projected capital needs.
A Threshold Price established for any Pricing Period will be a stated
dollar amount that the average of the high and low sale prices of the Class B
Stock on the NMS or, in the event the Class B Stock becomes listed on the NYSE,
on the NYSE, for each Trading Day of the relevant Pricing Period must equal or
exceed. In the event that the Threshold Price is not met for a Trading Day in
the Pricing Period (see Question 13), then that Trading Day and all trading
prices for that day will be excluded from the Pricing Period and the
determination of the Purchase Price.
Each Trading Day of a Pricing Period for which the Threshold Price is not
met will cause the return of a portion of your Cash Investment. The returned
amount will equal one-twelfth of the total amount of the Cash Investment for
each Trading Day that the Threshold Price is not met. Thus, for example, if the
Threshold Price is not met for three Trading Days, 3/12 (i.e., 25%) of your Cash
Investment will be returned without interest to you.
THE THRESHOLD PRICE AND RETURN PROCEDURE DISCUSSED ABOVE APPLY ONLY TO CASH
INVESTMENTS MADE PURSUANT TO WRITTEN REQUESTS FOR WAIVER, BUT NOT MONTHLY CASH
INVESTMENTS OF $3,000 OR LESS OR REINVESTMENTS OF DIVIDENDS. SETTING A THRESHOLD
PRICE FOR ANY PRICING PERIOD SHALL NOT AFFECT THE SETTING OF A THRESHOLD PRICE
FOR ANY SUBSEQUENT PRICING PERIOD.
For any particular month, the Company may waive its right to set a
Threshold Price for Cash Investments that exceed $3,000. Neither the Company nor
the Administrator shall be required to provide any written notice to
Participants as to the Threshold Price for any Pricing Period. Participants may
ascertain whether the Threshold Price applicable to a given Pricing Period has
been set or waived, as applicable, by telephoning the Company at (800) 299-3150.
DISCOUNTS
18. When and how will Discounts be established.
DISCOUNTS. Each month, at least three business days prior to the
applicable Cash Due Date, the Company may establish a discount from the Purchase
Price that otherwise would be applicable. Such discount (the "Discount") may
range up to 5% of the Purchase Price as otherwise determined under the Plan, and
may vary each month. The Discount will be established in the Company's sole
discretion after a review of current market conditions, the level of
participation in the Plan, and current and projected capital needs.
A Discount may apply from time to time, in the Company's sole discretion,
to any one or more of the following groups of Participants electing the
following options: (a) those who reinvest dividends, (b) those who make Cash
Investments in the $50 to $3,000 range, and (c) those who make Cash Investments
in excess of $3,000 pursuant to a Request for Waiver. The Discount will apply
uniformly
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during each month for all Participants within any category, but it may vary from
0% to 5% among categories; provided, that the Company may establish levels of
purchases within category (c) with different Discounts to apply to purchasers at
different levels (but which will apply uniformly to all purchasers within each
such level).
Participants may ascertain the Discount applicable to the next Pricing
Period by telephoning the Company at (800) 299-3150. Setting a Discount for a
particular month will not affect the setting of a Discount for any subsequent
monthly purchase.
CERTIFICATES
19. Will certificates be issued for share purchases?
All Plan Shares and all Class B Stock deposited for safekeeping with the
Administrator pursuant to Question 20 will be held together by the
Administrator. This service protects against the loss, theft and destruction of
certificates. Upon written request, the Administrator will have certificates
issued and delivered to you for any full shares credited to your account.
Certificates will be issued only in the same names as those enrolled in the
Plan. In no event will certificates for fractional shares be issued.
20.May a Participant add shares of Common Stock to his or her account by
transferring stock certificates that the Participant possesses?
You may send to the Administrator for safekeeping all the Class B Stock
certificates which you hold. Shares of Class B Stock deposited with the
Administrator for safekeeping which are not Participating Shares are referred to
herein as "Safekeeping Shares." The Plan will hold the shares purchased for a
Participant, and any shares deposited by the Participant with the Plan for
safekeeping, until the Participant terminates participation in the Plan. The
safekeeping of shares offers the advantage of protection against loss, theft or
inadvertent destruction of certificates as well as convenience if and when
shares are sold through the Plan. All shares represented by such certificates
will be kept in safekeeping in "book entry" form and will be combined with any
full and fractional shares then held by the Plan for the Participant. ALL
DIVIDENDS ON SHARES HELD BY THE PLAN UNDER THE SAFEKEEPING SERVICE, WHICH SHARES
HAVE BEEN DESIGNATED AS PARTICIPATING SHARES, WILL BE REINVESTED FOR THE
PARTICIPANT. ALL DIVIDENDS ON SAFEKEEPING SHARES WILL BE PAID TO THE PARTICIPANT
IN CASH, AND WILL NOT BE REINVESTED THROUGH THE PLAN.
To deposit certificates for Class B Stock for safekeeping under the Plan,
you must transmit the certificates to the Administrator. Stock certificates as
well as all written inquiries about the safekeeping service should be directed
to the Administrator. See Question 5. The Participant will bear the risk of the
means of transmission selected. It is recommended that certificates be sent by
registered mail or a reliable courier service.
Certificates for either Participating Shares or Safekeeping Shares that
have been deposited with the Administrator may be withdrawn by the Participant
by submitting a written request to the Administrator.
Certificates for Class A Stock will not be accepted for safekeeping by the
Administrator, even if such shares are Participating Shares.
SALE OF SHARES
21. Can Participants sell shares held under the Plan?
Following receipt of written instructions from you, the Administrator will
sell some or all of your Plan Shares or your Safekeeping Shares and will remit
to you a check for the proceeds of such sale, less your share of brokerage
commissions, service charges and any applicable taxes. Prior written
instructions from the Participant must be received at least 48 hours preceding
the sale. Shares will be sold at least once per week in routine open market
transactions by the Administrator at then current market prices in transactions
carried out through one or more brokerage firms.
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This procedure for selling shares may be particularly attractive to holders
of small amounts of the Class B Stock, because the Plan can combine odd lots and
small numbers of shares into larger blocks to be sold, and thereby take
advantage of lower brokerage costs than might otherwise be available to
individual Participants in the sale of their shares. The Administrator will
impose an administrative charge in connection with sales which will be deducted
from proceeds of the sale paid to the Participant.
Notwithstanding the foregoing, if there are any legal restrictions on or
limitations on a Participant's right to sell shares publicly (e.g., because the
Participant is a controlling person of the Company), the Administrator will not
be obligated to sell such shares.
REPORTS
22. What reports will be sent to Participants?
Unless you are participating in the Plan through your broker, bank or other
nominee, you will receive from the Administrator a detailed statement of your
Plan account following each dividend payment and account transaction. These
detailed statements will show total cash dividends received, total Cash
Investments received, total shares purchased (including fractional shares),
price paid per share, and total shares held by you in the Plan. These statements
should be retained by you to determine your tax cost basis for shares purchased.
If you are participating in the Plan through your broker or other nominee, you
should contact such entity regarding a statement of your interests in the Plan.
WITHDRAWAL
23. How may Participants withdraw from the Plan?
You may terminate your enrollment in the Plan by giving written notice to
the Administrator, and thereafter all dividends will be sent to you or to the
nominee through which your shares are held. In order to terminate participation
prior to the usual dividend payment dates in March, June, September or December,
written notice must be received by the Record Date for each such quarterly
dividend, which Record Date may be in the preceding month. Upon termination,
stock certificates for any full shares will be issued in the Participant's name
or, upon receipt of written instructions, shares will be sold for the
Participant. See Questions 19 and 21. Any fractional shares held in the Plan at
the time of termination will be converted to cash on the basis of the then
current market price of the Class B Stock. NO SALES OR WITHDRAWALS WHICH WILL
RESULT IN A PARTICIPANT'S PLAN ACCOUNT BEING REDUCED TO ZERO WILL BE EXECUTED
BETWEEN A DIVIDEND RECORD DATE AND THE FOLLOWING DIVIDEND PAYMENT DATE.
24. Will participation end automatically on the Participant's death or
incompetence?
Participation in the Plan will not terminate automatically upon the death
or incompetence of the Participant, even if the Company or the Administrator is
aware of such event. However, the Participant's legal representative or
successor may terminate further participation in the Plan at any time.
FEDERAL TAXES
25. What are the principal federal income tax consequences of participating in
the Plan?
A Participant will be treated as having received dividend income equal to
the fair market value on the Investment Date of shares acquired from the Company
with reinvested dividends on the Participant's Participating Shares, plus the
amount of any fee charged by the Administrator that is subtracted from the
amount reinvested. For this purpose, the fair market value of shares of Class B
Stock acquired through the Plan will be equal to the average of the high and low
sale prices of shares of Class B Stock on the Investment Date. The fair market
value on the Investment Date may differ from the Purchase Price (which is used
to determine the number of shares acquired). In the case of shares
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acquired on the open market with reinvested dividends, a Participant will be
treated as having received dividend income equal to the sum of the Purchase
Price of the shares, the amount of any fee charged by the Administrator that is
subtracted from the amount reinvested, plus the Participant's share of any
brokerage fees paid by the Company. Thus, a Participant recognizes dividend
income even though these amounts are not actually received by the Participant in
cash, but are applied to the purchase of shares for the Participant's Plan
account. In the case of corporate shareholders, dividends received under the
Plan may be eligible for the dividends-received deduction.
A Participant's tax basis in the shares acquired with reinvested dividends
will include any amount the Participant is treated as having received as a
dividend reduced by the amount of any fee charged by the Administrator.
Generally, a Participant may deduct the fee charged by the Administrator in the
year paid, provided that in the case of a Participant who is an individual, such
Participant itemizes deductions on his federal income tax return for such year.
The holding period for such shares will begin the day after the date that the
shares are purchased.
Upon the purchase of shares from the Company with a Cash Investment,
Participants who currently own Common Stock will be treated as having received
dividend income in an amount equal to the excess, if any, of the fair market
value of the shares acquired on the Investment Date over the Cash Investment.
Upon the purchase of shares on the open market with a Cash Investment,
Participants who currently own Common Stock will be treated as having received
dividend income in an amount equal to the sum of any Discount plus the
Participant's share of any brokerage fees paid by the Company. Shares purchased
with a Cash Investment will have a tax basis equal to the sum of the Cash
Investment plus any amount the Participant is treated as having received as a
dividend. The fair market value on an acquisition date may differ from the
Purchase Price (which is used to determine the number of shares acquired). A
Participant's holding period in such shares will begin on the day after the date
the shares are purchased.
When a Participant receives certificates for whole shares that were
credited to the Participant's Plan account, the Participant will not realize any
taxable income. However, a Participant who receives a cash adjustment for a
fraction of a share may realize gain or loss with respect to such fraction equal
to the difference between the cash adjustment and the Participant's tax basis in
such fraction. Gain or loss may also be realized by the Participant when whole
shares are sold, either pursuant to the Participant's request upon withdrawal
from the Plan or by the Participant after withdrawal from the Plan. The amount
of such gain or loss will be the difference between the amount realized by the
Participant for the shares and the Participant's tax basis in the shares. Such
gain or loss generally will be capital gain or loss if the shares disposed of
were held as capital assets by the Participant, and will be long-term capital
gain or loss if the shares disposed of were held for more than one year at the
date of sale.
A Participant (other than certain exempt shareholders who establish the
exemption to the Administrator's satisfaction, including among others, all
corporations and certain foreign individuals and entities) may be subject to 31%
backup withholding on dividend income or proceeds from the sale of fractional or
whole shares held in the Plan unless the Participant provides to the
Administrator its federal taxpayer identification number or social security
number (TIN). Backup withholding may also apply if the IRS notifies the Company
of under reporting of interest or dividend income by the Participant. If
withholding is required on dividend income, the Administrator will reinvest
dividends net of the amount of tax withheld. In order to avoid backup
withholding, a Participant must provide the Administrator with the Participant's
correct TIN on Form W-9 or a substitute Form W-9 provided by the Administrator
(or Form W-8, Certificate of Foreign Status, with respect to certain foreign
Participants). Copies of these forms may be obtained from the Administrator.
In the case of those foreign Participants whose dividends are subject to
U.S. income tax withholding, the amount of the tax to be withheld will be
deducted from the amount of dividends available to be reinvested under the Plan.
19
<PAGE> 21
The foregoing discussion is a summary of the principal federal income tax
consequences of participating in the Plan and does not constitute tax advice.
This summary is based on the current state of federal law and does not take into
account possible changes in such law. Any such changes may have retroactive
effect and may adversely affect the discussion in this summary. This summary
does not address the special tax consequences that may be applicable to certain
Participants subject to special tax treatment (including tax-exempt
organizations, broker dealers, and foreign shareholders). Participants should
consult with their own tax advisors for further information with respect to the
federal, foreign, state or local tax consequences of participation in the Plan.
OTHER PROVISIONS
26. What happens if a Participant disposes of or acquires additional shares of
stock?
The following discussion relates to the class or classes of Common Stock
with respect to which a Participant has elected to participate in the Plan.
Participants who own both Class B Stock outside of the Plan and Class A Stock
should review Question 9.
If a Participant has elected to have all dividends automatically invested
in the Plan and subsequently sells or transfers all or any part of the shares
registered in the Participant's name, automatic investment will continue as long
as there are shares registered in the name of the Participant or held for the
Participant in the Plan by the Administrator (subject to the Minimum
Participation requirement described in Question 6) or until termination of
enrollment. Similarly, if a Participant has elected the "Full Dividend
Reinvestment" option under the Plan (see Question 9) and subsequently acquires
additional shares registered in the Participant's name, dividends paid on such
shares will automatically be invested until termination of enrollment or until
other instructions are given. If, however, a Participant has elected the
"Partial Dividend Reinvestment" option and subsequently acquires additional
shares which are registered in the Participant's name, dividends on such
additional shares will not be invested automatically under the Plan. See
Question 9. If a Participant has elected "Partial Dividend Reinvestment" and
sells shares, reinvestment will continue on the full number of Participating
Shares as long as the Participant owns at least the number of Participating
Shares previously specified, or on the number of shares the Participant
continues to own, if the Participant owns less than the number previously
specified.
27. May shares in the Plan be pledged?
Shares in the Plan may not be pledged and any purported pledge will be
void. If you wish to pledge such shares, you must first withdraw them from the
Plan.
28. How will a Participant's shares be voted?
Class B Stock does not have voting rights generally, and is entitled to
vote only under very limited circumstances. The following provisions apply to
Class B Stock only in those circumstances. In connection with the exercise of
shareholder voting rights, each Participant will receive proxy materials
enabling the Participant to vote the Common Stock held by the Participant
directly and the Common Stock held for the Participant's account by the
Administrator. All shares held by the Administrator will be voted as designated
by the Participant on the proxy card. If a Participant does not vote by proxy or
in person and does not otherwise instruct the Plan to the contrary, stock held
for the Participant's account by the Administrator will not be voted.
If the Participant owns Class B Stock not deposited with the Administrator,
the Participant will vote those shares in the normal manner, even if they are
Participating Shares; the Administrator will not be involved in the voting of
such shares.
20
<PAGE> 22
29. Who pays the expenses of the Plan?
There are no brokerage commissions or service charges on shares purchased
from the Company for a Participant's account. Brokerage fees on shares purchased
on the open market for a Participant's account will be paid by the Company and,
for tax purposes, these fees will be considered as additional dividend income to
the Participants. All costs of administering the Plan will be paid by the
Company, except as stated below and except for brokerage commissions in
connection with sales under the Plan and the costs of any broker, bank or other
nominee (other than the Administrator) which holds shares on behalf of a
Participant. When full or fractional shares are sold for a Participant's
account, the Plan will first deduct any applicable brokerage commissions and
taxes before remitting the balance to the Participant.
The Administrator will charge nominal fees for various services including,
but not limited to, sales of shares, preparing transcripts of accounts (in
addition to normal monthly statements) and other special requests. These charges
must be borne by Participants. A fee schedule is available from the
Administrator.
30. What are the responsibilities of the Company and the Administrator under the
Plan?
Neither the Company nor the Administrator has any duties, responsibilities
or liabilities except those expressly set forth in the Plan, or as imposed by
applicable legal requirements, including without limitation the federal
securities laws.
THE PARTICIPANT SHOULD RECOGNIZE THAT THE COMPANY CANNOT ASSURE A PROFIT OR
PROTECT AGAINST A LOSS ON THE SHARES PURCHASED FOR A PARTICIPANT UNDER THE PLAN.
31. What happens if the Company issues a stock dividend or declares a stock
split or makes a rights offering?
Any Class B Stock distributed by the Company as a result of a stock
dividend or a stock split on Plan Shares or Safekeeping Shares held under the
Plan for a Participant will be credited to the Participant's account as
additional Plan Shares or Safekeeping Shares, respectively.
With respect to shares issued through stock dividends or splits on
Participating Shares not held by the Administrator: (a) if the Participant has
elected the Full Dividend Reinvestment option (see Question 9), the newly issued
shares will become Participating Shares automatically, and (b) if the
Participant has elected the Partial Dividend Reinvestment option (see Question
9), the newly issued shares will not become Participating Shares unless the
Participant subsequently enrolls such shares under the Plan.
In the event that the Company makes rights available to holders of its
Class B Stock to purchase additional shares or other securities, the rights
issuable with respect to the Plan Shares and Safekeeping Shares will be
distributed directly to the Participants, who will be free to exercise or
otherwise dispose of the rights. If a Participant has elected the Full Dividend
Reinvestment option, any Class B Stock acquired by the Participant on the
exercise of rights will become Participating Shares automatically. If a
Participant has elected the Partial Dividend Reinvestment option, any Class B
Stock acquired by the exercise of rights will not become Participating Shares
unless the Participant subsequently enrolls such shares under the Plan.
32. May the Plan be changed or terminated?
The Company intends the Plan to continue indefinitely. However, the Company
reserves the right to amend, modify, suspend or terminate the Plan at any time.
Participants will be notified in writing of any material changes in the Plan.
21
<PAGE> 23
USE OF PROCEEDS
The proceeds to the Company from Class B Stock sold by it pursuant to the
Plan will be used for general corporate purposes.
INDEMNIFICATION UNDER THE SECURITIES ACT
Except in limited circumstances, the Company is required by provisions in
its Restated Certificate of Incorporation to indemnify its directors and
officers against liability incurred by them as a result of their service in
those capacities. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
COMMON STOCK DIVIDEND AND PRICE RANGE
The Company has paid quarterly cash dividends on its Class A Stock and its
Class B Stock for each full quarter since the third quarter of 1989 and the
second quarter of 1992, respectively. Such dividends (adjusted for a
three-for-two stock split in October 1993) were paid as follows since the
beginning of 1993.
<TABLE>
<CAPTION>
CLASS CLASS
YEAR A B
--------------------------------------------------------- ------ ------
<S> <C> <C>
1993
First Quarter............................................ $0.033 $0.040
Second Quarter........................................... 0.042 0.050
Third Quarter............................................ 0.042 0.050
Fourth Quarter........................................... 0.05 0.06
1994
First Quarter............................................ 0.05 0.06
Second Quarter........................................... 0.05 0.06
Third Quarter............................................ 0.05 0.06
Fourth Quarter........................................... 0.067 0.08
1995
First Quarter............................................ 0.067 0.08
Second Quarter........................................... 0.067 0.08
Third Quarter............................................ 0.067 0.08
Fourth Quarter........................................... 0.09 0.108
1996
First Quarter............................................ 0.09 0.108
</TABLE>
22
<PAGE> 24
The following table shows the high and low sales prices of the Company
Class B Stock as reported on the NMS:
<TABLE>
<CAPTION>
YEAR HIGH LOW
--------------------------------------------------------- ------ ------
<S> <C> <C>
1994
Third Quarter............................................ $34.75 $26.50
Fourth Quarter........................................... 30.50 23.25
1995
First Quarter............................................ 32.25 24.50
Second Quarter........................................... 38.75 30.75
Third Quarter............................................ 42.50 36.00
Fourth Quarter........................................... 45.00 35.13
1996
First Quarter............................................ 49.25 33.75
Second Quarter through April ..........................
</TABLE>
The last reported sale price of Class B Stock on the NMS on April , 1996
was $ per share.
The price of the Company's stock varies over time and neither the price of
the stock nor any dividends thereon are guaranteed by the Administrator, the
Company, any governmental authority or otherwise.
PLAN OF DISTRIBUTION
In connection with the administration of the Plan, the Company may be
requested to approve Cash Investments in excess of the allowable maximum amounts
on behalf of Participants pursuant to Requests for Waiver, including
Participants engaged in the securities business. In deciding whether to approve
such a request, the Company will consider relevant factors including, but not
limited to whether shares for the Plan are being acquired from the Company or
purchased on the open market, the Company's need for additional funds, the
attractiveness of obtaining such funds by the sale of Class B Stock in
comparison to other sources of funds, the purchase price likely to apply to any
sale of Class B Stock, the Participant submitting the request, including the
extent and nature of such Participant's prior participation in the Plan, the
number of shares of Common Stock held of record by such Participant, and the
aggregate amount, if any, of Cash Investments in excess of the allowable maximum
amounts for which requests have been submitted by all Participants. The Company
anticipates the probability that some shares will be issued pursuant to Requests
for Waivers, although the Company cannot currently estimate the proportion of
the shares that will be so issued.
Any financial intermediary or other person who maintains the required
Minimum Participation may purchase shares through the Plan at a Discount and may
capture the Discount by reselling the shares shortly thereafter. The Company has
not entered into any arrangements with any financial intermediary or other
person to engage in such arrangements.
Persons who acquire shares of Class B Stock through the Plan and resell
them shortly before or after acquiring them (including coverage of short
positions), under certain circumstances, may be participating in a distribution
of securities that would require compliance with Rule 10b-6 under the Exchange
Act and may be considered to be underwriters within the meaning of the
Securities Act. The Company will not extend to any such person any rights or
privileges other than those to which it would be entitled as a Participant, nor
will the Company enter into any agreement with any such person regarding such
person's purchase of such shares or any resale or distribution thereof. The
Company may, however, approve requests for waiver by such persons in excess of
the $3,000 monthly maximum on Cash Investments. If such requests are submitted
for any Investment Date for an aggregate amount in excess of the amount the
Company is willing to accept, the Company may honor such requests in
23
<PAGE> 25
order of receipt, pro rata or by any other method which the Company determines
to be appropriate in its sole discretion.
LEGAL OPINION
Gene Schneyer, Esquire, Vice President, Secretary and General Counsel of
the Company has rendered an opinion that any shares of Class B Stock sold by the
Company pursuant to the terms of the Plan will be duly authorized, fully paid
and non-assessable.
EXPERTS
The consolidated financial statements and schedules incorporated by
reference in this Prospectus and elsewhere in the Registration Statement to the
extent and for the periods indicated in their reports have been audited by
Arthur Andersen LLP, independent public accountants, and are incorporated herein
in reliance upon the authority of said firm as experts in giving said reports.
GLOSSARY
The following terms used in this Prospectus shall have the meanings set
forth below unless the context otherwise requires:
"Administrator" shall mean Mellon Bank, N.A. or such successor
Administrator as the Company may designate.
"Authorization Form" shall mean the form by which a Participant elects to
enroll in the Plan, as described in Question 8.
"B/N Form" shall mean a Broker and Nominee Form which must be supplied on
behalf of Participants who own their shares through a nominee, if the nominee
holds the Participant's shares through a securities depository and the
Participant wishes to make Cash Investments as discussed in Questions 8 and 14.
"Cash Due Date" shall mean the date which is the thirteenth business day
preceding each Investment Date.
"Cash Investments" shall mean optional investments of cash a Participant
may make in the Plan during any month, subject to a $50 minimum and a $3,000
maximum (unless the maximum is waived) on each such monthly investment.
"Class A Stock" shall mean the Company's Class A Common Stock, $.01 par
value per share.
"Class B Stock" shall mean the Company's Class B Common Stock, $.01 par
value per share.
"Commission" shall mean the Securities and Exchange Commission.
"Common Stock" shall mean collectively the Class A Stock and Class B Stock.
"Company" shall mean Advanta Corp., a Delaware corporation.
"Discount" shall mean the discount, determined in accordance with Question
18, from the Purchase Price otherwise applicable, that may range up to 5% of the
Purchase Price as otherwise determined under the Plan.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Full Dividend Reinvestment" shall mean one of the forms of participation
described in Question 9.
"Investment Date" shall mean the date on which an investment is scheduled
to be made, as described in Question 11.
24
<PAGE> 26
"Minimum Participation" shall mean the minimum with respect to the number
of shares of Class A Stock or Class B Stock that must be owned and that must
participate in the Plan, as more fully described in Question 6.
"NMS" shall mean the NASDAQ National Market System.
"NYSE" shall mean the New York Stock Exchange.
"Open Enrollment Provision" shall mean the provision that permits
non-shareholders to join the Plan by making a purchase of at least $1,500 of
Class B Stock as described in Question 7.
"Partial Dividend Reinvestment" shall mean one of the forms of
participation described in Question 9.
"Participant" shall mean a registered holder or beneficial owner of Common
Stock who elects to participate in the Plan.
"Participating Shares" shall mean the number of shares designated by the
Participant to participate in the Plan together with the Participant's Plan
Shares.
"Plan" shall mean the Company's Dividend Reinvestment and Stock Purchase
Plan that is contained in this prospectus.
"Plan Shares" shall mean whole and fractional shares of Class B Stock which
have been credited to a Participant's Plan account (excluding Safekeeping
Shares, which are not Participating Shares).
"Pricing Period" shall mean the first 12 Trading Days immediately preceding
the applicable Investment Date as described in Question 13.
"Purchase Price" with respect to Plan Shares issued by the Company shall
mean the price at which Plan Shares will be purchased directly from the Company
as described in Question 13, before the application of any Discount; and
"Purchase Price" with respect to Plan Shares purchased on the open market shall
mean the average price, computed up to four decimal places if necessary, paid by
the Administrator, all as more fully described in Question 13, before the
application of any Discount.
"Record Date" shall mean the record date with respect to each investment as
described in Question 11.
"Request for Waiver" shall mean a request to waive the $3,000 per month
maximum on Cash Investments, as described in Question 17.
"Safekeeping Shares" shall mean shares of Class B Stock deposited with the
Administrator for safekeeping that are not Participating Shares, and the cash
dividends thereon will not be reinvested through the Plan. See Question 20.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Threshold Price" shall mean a minimum price established for any Pricing
Period for the purchase of shares with Cash Investments in excess of $3,000 per
month made pursuant to a written Request for Waiver as described in Question 17.
"Trading Day" shall mean a day on which trades of Class B Stock are
reported on the principal market for the Class B Stock.
25
<PAGE> 27
APPENDIX I
<TABLE>
<CAPTION>
(C)
THRESHOLD PRICE (D)
AND DISCOUNT, "WAIVER" (F) (G)
IF ANY, REQUEST (E) CASH DUE PRICING PERIOD
CYCLE WILL BE SET BY: DUE DATE RECORD DATE DATE START DATE
- ----- ------------------ ------------------- ------------------ ------------------ ------------------
<C> <S> <C> <C> <C> <C>
B April 26, 1996 April 29, 1996 May 1, 1996 May 2, 1996
A May 24, 1996 May 28, 1996 May 31, 1996 May 30, 1996 May 31, 1996
B June 25, 1996 June 26, 1996 June 28, 1996 July 1, 1996
B July 26, 1996 July 29, 1996 July 31, 1996 August 1, 1996
A August 26, 1996 August 27, 1996 August 30, 1996 August 29, 1996 August 30, 1996
B September 26, 1996 September 27, 1996 October 1, 1996 October 2, 1996
B October 25, 1996 October 28, 1996 October 30, 1996 October 31, 1996
A November 22, 1996 November 25, 1996 November 29, 1996 November 27, 1996 November 29, 1996
B December 26, 1996 December 27, 1996 December 31, 1996 January 2, 1997
B January 24, 1997 January 27, 1997 January 29, 1997 January 30, 1997
A February 24, 1997 February 25, 1997 February 28, 1997 February 27, 1997 February 28, 1997
B March 26, 1997 March 27, 1997 April 1, 1997 April 2, 1997
B April 25, 1997 April 28, 1997 April 30, 1997 May 1, 1997
A May 23, 1997 May 27, 1997 May 30, 1997 May 29, 1997 May 30, 1997
B June 25, 1997 June 26, 1997 June 30, 1997 July 1, 1997
B July 25, 1997 July 28, 1997 July 30, 1997 July 31, 1997
A August 24, 1997 August 25, 1997 August 28, 1997 August 27, 1997 August 28, 1997
B September 26, 1997 September 29, 1997 October 1, 1997 October 2, 1997
B October 27, 1997 October 28, 1997 October 30, 1997 October 31, 1997
<CAPTION>
(H)
INVESTMENT
CYCLE DATE
- ----- -------------------
<C> <C>
B May 20, 1996
A June 18, 1996
B July 18, 1996
B August 19, 1996
A September 18, 1996
B October 18, 1996
B November 18, 1996
A December 17, 1996
B January 20, 1997
B February 18, 1997
A March 18, 1997
B April 18, 1997
B May 19, 1997
A June 17, 1997
B July 18, 1997
B August 18, 1997
A September 16, 1997
B October 20, 1997
B November 18, 1997
</TABLE>
- ---------------
A. Cash Investments and reinvestment of cash dividends.
B. Cash Investments only.
C. The Threshold Price and the Discount, if any, will be established three
business days prior to the Cash Due Date.
D. Shareholders/Participants requesting "waiver," must submit by this date,
which is two business days prior to the Cash Due Date.
E. The Record Date for dividend months (those indicated by the letter "A" in
the cycle column) will be established by the Board of Directors.
F. The Cash Due Date will be the thirteenth business day immediately preceding
the Investment Date.
G. The Pricing Period will be the twelve consecutive Trading Days ending on the
Trading Day immediately preceding the Investment Date.
H. The Investment Date will be the dividend payment date during a month in
which a cash dividend is paid, and in any other month the 18th calendar day
of such month; provided, however, if either the dividend payment date or
such 18th day falls on a date when the NMS or NYSE, as applicable, is
closed, the Investment Date will be the next day on which the NMS is open.
26
<PAGE> 28
Unless further notice is given, the cycle in and future periods will be the
same as above, except that if any date listed above is not a business day, the
date will be deferred or advanced slightly.
<TABLE>
<S> <C>
U.S. EQUITY
MARKETS CLOSED IN 1996
--------------------------------------------------------------------------
New Years Day............................................... January 1
Presidents Day.............................................. February 19
Good Friday................................................. April 5
Memorial Day................................................ May 27
Independence Day............................................ July 4
Labor Day................................................... September 2
Thanksgiving Day............................................ November 28
Christmas Day............................................... December 25
U.S. EQUITY
MARKETS CLOSED IN 1997
--------------------------------------------------------------------------
New Years Day............................................... January 1
Presidents Day.............................................. February 17
Good Friday................................................. March 28
Memorial Day................................................ May 26
Independence Day............................................ July 4
Labor Day................................................... September 1
Thanksgiving Day............................................ November 27
Christmas Day............................................... December 25
</TABLE>
27
<PAGE> 29
(LOGO)PRINTED ON RECYCLED PAPER
Dividend Reinvestment
and Stock Purchase Plan
-----------------------------------------
LOGO
Corp.
-----------------------------------------
<PAGE> 30
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
ITEM DESCRIPTION
- ----- -------------------------------------------------------------------------------------
<C> <S>
3.3 Restated Certificate of Incorporation of Registrant (incorporated by reference to
Exhibit 4.1 to Pre-Effective Amendment No. 1 to Registrant's Registration Statement
Form S-3
(File No. 33-53475), filed June 10, 1994).
3.4 By-Laws of Registrant, as amended (incorporated by reference to Exhibit 3.11 to
Registrant's Current Report on Form 8-K dated December 22, 1994, filed on the same
date).
4.1 Specimen of Class B Common Stock Certificate (incorporated by reference to
Registrant's Form 8-A dated April 22, 1992).
4.2 Certificate of Designations, Preferences, Rights and Limitations of Advanta Corp.'s
6 3/4% Convertible Class B Preferred Stock, Series 1995 (Stock Appreciation Income
Linked Securities (SAILS)) (incorporated by reference to Exhibit 4.3 to the
Registrant's Report on Form 8-K dated August 15, 1995).
*4.3 Authorization and Enrollment Form for the Plan.
5.1 Opinion and consent of Gene S. Schneyer, Vice President, Secretary and General
Counsel of Registrant, as to the legality of the shares being offered.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Gene S. Schneyer, Vice President, Secretary and General Counsel of
Registrant (included in his opinion filed as Exhibit 5.1 hereto).
*23.3 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (set forth on signature page).
</TABLE>
- ---------------
* Filed with Amendment No. 1.
II-1
<PAGE> 31
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Horsham Township, Montgomery County,
Commonwealth of Pennsylvania, on April 15, 1996.
ADVANTA CORP.
By: /s/ RICHARD A. GREENAWALT
------------------------------------
Richard A. Greenawalt
President and
Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
their capacities with Registrant on April 15, 1996.
<TABLE>
<CAPTION>
SIGNATURE DATE
- --------------------------------------------- ----------------------------------
<S> <C>
* April 15, 1996
- ---------------------------------------------
Dennis Alter
Chairman of the Board and Director
* April 15, 1996
- ---------------------------------------------
Alex W. Hart
Chief Executive Officer and Director
(Principal Executive Officer)
/s/ RICHARD A. GREENAWALT April 15, 1996
- ---------------------------------------------
Richard A. Greenawalt
President, Chief Operating Officer and
Director
* April 15, 1996
- ---------------------------------------------
William A. Rosoff
Vice Chairman and Director
* April 15, 1996
- ---------------------------------------------
David D. Wesselink
Senior Vice President and Chief Financial
Officer (Principal Financial Officer)
* April 15, 1996
- ---------------------------------------------
John J. Calamari
Vice President, Finance, and Chief Accounting
Officer (Principal Accounting Officer)
</TABLE>
II-2
<PAGE> 32
<TABLE>
<CAPTION>
SIGNATURE DATE
- --------------------------------------------- ----------------------------------
<S> <C>
* April 15, 1996
- ---------------------------------------------
Arthur P. Bellis
Director
* April 15, 1996
- ---------------------------------------------
Max Botel
Director
* April 15, 1996
- ---------------------------------------------
Richard J. Braemer
Director
* April 15, 1996
- ---------------------------------------------
Anthony P. Brenner
Director
* April 15, 1996
- ---------------------------------------------
William C. Dunkelberg
Director
* April 15, 1996
- ---------------------------------------------
Robert C. Hall
Director
* April 15, 1996
- ---------------------------------------------
Warren Kantor
Director
* April 15, 1996
- ---------------------------------------------
James E. Ksansnak
Director
* April 15, 1996
- ---------------------------------------------
Ronald J. Naples
Director
* April 15, 1996
- ---------------------------------------------
Phillip A. Turberg
Director
</TABLE>
*By: /s/ RICHARD A. GREENAWALT
Richard A. Greenawalt,
Attorney-in-Fact
pursuant to powers of attorney
previously
filed as part of this
Registration Statement
II-3
<PAGE> 33
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
ITEM DESCRIPTION PAGE NO.
- ------ --------------------------------------------------------------------------- ---------
<C> <S> <C>
3.3 Restated Certificate of Incorporation of Registrant (incorporated by
reference to Exhibit 4.1 to Pre-Effective Amendment No. 1 to Registrant's
Registration Statement Form S-3 (File No. 33-53475), filed June 10,
1994)......................................................................
3.4 By-Laws of Registrant, as amended (incorporated by reference to Exhibit
3.11 to Registrant's Current Report on Form 8-K dated December 22, 1994,
filed on the same date)....................................................
4.1 Specimen of Class B Common Stock Certificate (incorporated by reference to
Registrant's Form 8-A dated April 22, 1992)................................
4.2 Certificate of Designations, Preferences, Rights and Limitations of Advanta
Corp.'s 6 3/4% Convertible Class B Preferred Stock, Series 1995 (Stock
Appreciation Income Linked Securities (SAILS)) (incorporated by reference
to Exhibit 4.3 to the Registrant's Report on Form 8-K dated August 15,
1995)......................................................................
*4.3 Authorization and Enrollment Form for the Plan.............................
5.1 Opinion and consent of Gene S. Schneyer, Vice President, Secretary and
General Counsel of Registrant, as to the legality of the shares being
offered....................................................................
23.1 Consent of Arthur Andersen LLP.............................................
23.2 Consent of Gene S. Schneyer, Vice President, Secretary and General Counsel
of Registrant (included in his opinion filed as Exhibit 5.1 hereto)........
*23.3 Consent of Arthur Andersen LLP.............................................
24.1 Power of Attorney (set forth on signature page)............................
</TABLE>
- ---------------
* Filed with Amendment No. 1.
II-4
<PAGE> 1
Advanta Corp.
DIVIDEND
REINVESTMENT
&
STOCK
PURCHASE
PLAN
Authorization and
Enrollment Form
<PAGE> 2
To participate in the Advanta Corporation Dividend Reinvestment & Stock Purchase
Plan please complete and sign the attached authorization and enrollment form,
mark your investment option and return it in the enclosed envelope to the Plan
Administrator as indicated below:
If using ordinary mail:
Mellon Bank, N.A.
Shareholder Investment Service
P.O. Box 750
Pittsburgh, PA 15230
If using a courier service:
Mellon Bank, N.A.
Shareholder Investment Service
Commerce Court
4 Station Square, Third Floor
Pittsburgh, PA 15219
This form authorizes the enrollment of your account in the Plan. You may also
make cash investments from $50 to $3,000 per month to purchase additional
shares of Class B Stock. You may change or revoke your enrollment in the Plan
at any time by notifying Mellon Bank in writing.
THIS IS NOT A PROXY
FOR YOUR RECORDS:
CLASS A:
Full / /
Partial / / ____________ # of shares
CLASS B:
Full / /
Partial / / ____________ # of shares
SAFEKEEPING: ____________ # of shares
INITIAL PURCHASE: $ ___________________
SENT: _______________________________
(Date)
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AUTHORIZATION FORM FOR ADVANTA CORP.
DIVIDEND REINVESTMENT & STOCK PURCHASE PLAN
In order to participate in the Advanta Corp. ("Advanta") Dividend Reinvestment
& Stock Purchase Plan (the "Plan") you must complete the appropriate sections
of this form and return it in the enclosed envelope to the Plan's Administrator
at the address shown to the left. The form appoints Mellon Bank, N.A. (the
"Administrator"), as agent to invest, as indicated thereon, the cash dividends
paid on shares of Advanta's Class A Common Stock ("Class A Stock") and/or Class
B Common Stock ("Class B Stock") registered in your name for the purchase of
whole or fractional shares of Class B Stock under the terms and conditions set
forth in the Prospectus which accompanied this form. The Prospectus contains a
glossary setting forth the definitions of certain capitalized terms used in
this form. By completing and signing this form, you certify that you have
received the Prospectus and are a registered owner of at least 25 shares of
each class of stock which you designate to participate in the Plan.
Please complete the appropriate sections below. If you wish to enroll both
Class A and Class B Stock owned by you in the Plan for reinvestment of cash
dividends thereon, you must complete both the Class A Stock section (either
Box 1 or Box 2) and the Class B Stock section (either Box 3 or Box 4). If you
return a signed form without selecting an investment option, you will be
enrolled as having selected Full Dividend Reinvestment. If you wish to transmit
certificates for shares of Class B Stock to be held by the Administrator either
as Participating Shares or for Safekeeping only please complete either Box 5 or
Box 6. This service is optional; you are not required to transmit certificates
to participate in the Plan.
Check all boxes that are appropriate to your choice and complete all
related blanks.
TO ENROLL CLASS A STOCK:
(Note: Dividends on shares of Class A Stock enrolled in the Plan
will be reinvested in Class B Stock)
Box 1 / / FULL DIVIDEND REINVESTMENT - Please apply dividends on all
shares of CLASS A STOCK now or hereafter registered in my name
and all shares of Class B Stock credited to my Plan account to
the purchase of Class B Stock*.
Box 2 / / PARTIAL DIVIDEND REINVESTMENT - Please apply dividends on
________ shares of CLASS A STOCK (must be a whole number)
registered in my name and all shares of Class B Stock credited
to my Plan account to the purchase of Class B Stock*.
* Selection of this option will not provide for reinvestment of
dividends on shares of Class B Stock owned by you directly, but
it will cover shares of Class B Stock you acquire through the
Plan and leave on deposit with the Administrator.
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TO ENROLL CLASS B STOCK:
Box 3 / / FULL DIVIDEND REINVESTMENT - Please apply dividends on all
shares of CLASS B STOCK now or hereafter registered in my name
and all shares of Class B Stock credited to my Plan account to
the purchase of Class B Stock.
Box 4 / / PARTIAL DIVIDEND REINVESTMENT - Please apply dividends on
________ shares of CLASS B STOCK (must be a whole number)
registered in my name and all shares of Class B Stock credited
to my Plan account to the purchase of additional shares of Class
B Stock.
TO TRANSMIT CERTIFICATES FOR
ENROLLED PARTICIPATING SHARES ONLY:
NOTE: CERTIFICATES FOR CLASS A STOCK WILL NOT BE HELD BY THE
ADMINISTRATOR.
Box 5 / / TO TRANSMIT CERTIFICATES FOR PARTICIPATING SHARES OF CLASS B
STOCK TO BE HELD FOR YOUR ACCOUNT - Please deposit the enclosed
certificate no. ______________ representing ________ shares of
Class B Stock in my Plan account. (Do not endorse your share
certificates.) NOTE: These shares will be Participating Shares
in the Plan and cash dividends thereon will be reinvested in
additional shares of Class B Stock. If you have elected the
Partial Dividend Reinvestment option and the certificate is for
a larger number of shares than the number you have specified
next to Box 4, please communicate directly with the Administrator
for further instructions.
If you wish to deposit certificates for shares of Class B Stock
with the Administrator to be held in safekeeping only, but
without having the cash dividends on such shares reinvested in
additional Class B Stock, do not check Box 5. Rather check Box
6.
TO TRANSMIT NON-ENROLLED CLASS B
STOCK CERTIFICATES FOR SAFEKEEPING:
NOTE: CERTIFICATES FOR CLASS A STOCK WILL NOT BE HELD BY THE
ADMINISTRATOR.
Box 6 / / Please hold the enclosed certificate no. ______________
representing ________ shares of Class B Stock for my account for
safekeeping. (Do not endorse your share certificates.) DIVIDENDS
ON SAFEKEEPING SHARES WILL NOT BE REINVESTED. If you wish your
shares to participate in the Plan (with the dividends thereon
reinvested) and you also wish the Administrator to hold your
certificates, use Box 5 and do not use this Box.
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CASH INVESTMENTS:
Box 7 / / Please authorize my account to participate in the Cash Investment
feature. Investments will be at my option by investing cash from
time to time for the purchase of Class B Stock. Unless Full
Dividend Reinvestment has been selected for any Class B Stock by
checking Box 3, dividends on shares purchased with cash
investments will not be automatically reinvested. I am aware
that Cash Investments must not be less than $50 or more than
$3,000 per calendar month. I will instruct the Administrator as
to how to transmit certificates for shares purchased with Cash
Investments. (Do not send funds for Cash Investments until you
have been advised that your account has been authorized for Cash
Investments.)
INITIAL PURCHASE:
Box 8 / / I wish to make my initial purchase of Class B Stock through the
Plan. My check made payable to Mellon Bank, N.A. in the amount
of $_______________ is enclosed (must not be less than $1,500 or
more than $3,000).
I understand that I may modify or revoke this authorization by
instructing the Administrator in writing of my desire to change
or terminate my participation. No change will be effective until
your instructions are received by the Administrator.
ACCOUNT REGISTRATION (Check One)
/ / Individual Ownership - You alone own the shares.
/ / Joint Tenants with Rights of Survivorship - You and one or more
persons equally own shares with right of survivorship.
/ / Custodian under Uniform Gifts to Minors Act
The Administrator will act upon the written request of any owner in all
matters pertaining to a joint account except for the sale or transfer of
shares, which requires the signature of all owners.
/ / Other (Trust, Corporation, etc.)
Please specify: _______________________________
You must sign the Account Authorization on the other side of this Form
THIS IS NOT A PROXY
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ADVANTA CORP.
To participate in Advanta's Dividend Reinvestment & Stock Purchase Plan please
complete and sign the reverse side of this form, mark your investment option
and return it in the enclosed envelope to the Administrator as indicated
below:
If using ordinary mail:
Mellon Bank, N.A.
Shareholder Investment Service
P.O. Box 750
Pittsburgh, PA 15230
If using a courier service:
Mellon Bank, N.A.
Shareholder Investment Service
Commerce Court
4 Station Square, Third Floor
Pittsburgh, PA 15219
<PAGE> 7
Account Authorization (Required)
This form authorizes the enrollment of your account in the Plan. You may also
make cash investments from $50 to $3,000 per month to purchase additional
shares of Class B Stock. You may change or revoke your enrollment in the Plan
at any time by notifying Mellon Bank in writing.
Substitute Form W-9
Under penalty of perjury, I hereby certify that the Social Security Number or
Tax Identification Number (TIN) indicated below is true and correct and that I
am not subject to backup withholding per the Internal Revenue Code. (Delete
"not" if you are subject to back up withholding)
Shareholder Signature: _______________________________________________
Shareholder Signature: _______________________________________________
Date: _______________________________________________
Sign name(s) exactly as shown on stock certificate or as your account is
registered. In case of joint owners, each owner must sign. If authorization is
signed as attorney-in-fact, officer, administrator, executor, trustee or
guardian, indicate title as such.
Please complete the following section with the name and address to which Plan
account statements should be sent:
____________________________________________________________
Name
____________________________________________________________
Address
____________________________________________________________
City
____________________________________________________________
State Zip Code
____________________________________________________________
Social Security Number/TIN
____________________________________________________________
Telephone Number
THIS IS NOT A PROXY
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Advanta Corp.
DIVIDEND
REINVESTMENT
&
STOCK
PURCHASE
PLAN
{ADVANTA LOGO]
<PAGE> 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 22, 1996 included in the Advanta Corp. Form 10-K for the year ended
December 31, 1995 and to all references to our Firm included in this Amendment
No. 1 to Registration Statement File No. 333-01833.
ARTHUR ANDERSEN LLP
Philadelphia, PA
April 12, 1996
