ADVANTA CORP, DEF 14A, 1999-04-30

ADVANTA CORP
DEF 14A, 1999-04-30
PERSONAL CREDIT INSTITUTIONS

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<PAGE> 1
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement

/ / Confidential. For use of the Commission Only (as permitted by Rule
14a-6(e)(2))

/x/ Definitive Proxy Statement

/ / Definitive Additional Materials

/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

Advanta Corp.
-------------
(Name of Registrant as Specified In Its Charter)

-------------------------------
(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.

(1) Title of each class of securities to which transaction
applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

/ / Fee paid previously with preliminary materials:

/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

<PAGE> 2

Advanta Logo

WELSH AND MCKEAN ROADS
P.O. BOX 844
SPRING HOUSE, PENNSYLVANIA 19477-0844

------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 10, 1999

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

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Advanta
Corp. (the "Company") will be held at the Company's headquarters, Welsh and
McKean Roads, Spring House, Pennsylvania, on Thursday, June 10, 1999 at 1:00
p.m. (the "Meeting") for the following purposes:

1. To elect three directors to hold office until the expiration of
their term of office and until their successors are duly elected and
qualified.

2. To transact such other business as may properly come before the
Meeting or any adjournment or postponement thereof.

The Board of Directors has fixed the close of business on Friday, April 16,
1999 as the record date for the Meeting. Only holders of record of the Company's
Class A Common Stock and Class A Preferred Stock at that time are entitled to
notice of, and to vote at, the Meeting and any adjournment or postponement
thereof.

The enclosed proxy is solicited by the Board of Directors of the Company.
Reference is made to the attached proxy statement for further information with
respect to the business to be transacted at the Meeting. The Board of Directors
urges you to date, sign and return the enclosed proxy promptly. A reply envelope
is enclosed for your convenience. You are cordially invited to attend the
Meeting in person. The return of the enclosed proxy will not affect your right
to vote if you attend the Meeting in person.

ELIZABETH H. MAI
Secretary

Dated: April 30, 1999
<PAGE> 3

Advanta Logo

WELSH AND MCKEAN ROADS
P.O. BOX 844
SPRING HOUSE, PENNSYLVANIA 19477-0844
------------------------

PROXY STATEMENT
------------------------

ANNUAL MEETING OF STOCKHOLDERS TO

BE HELD ON THURSDAY, JUNE 10, 1999
------------------------

This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Advanta Corp., a Delaware corporation (the
"Company"), to be used at the Annual Meeting of Stockholders, and any
adjournment or postponement thereof (the "Meeting"), to be held at the Company's
headquarters, Welsh and McKean Roads, Spring House, Pennsylvania, on Thursday,
June 10, 1999 at 1:00 p.m. This proxy statement, the foregoing notice and the
enclosed proxy are first being mailed to holders of the Company's Class A Common
Stock and Class A Preferred Stock on or about May 3, 1999.

The Board of Directors does not intend to bring any matter before the
Meeting except as specifically indicated in the notice, nor does the Board of
Directors know of any matters which anyone else proposes to present for action
at the Meeting. If any other matters properly come before the Meeting, however,
the persons named in the enclosed proxy, or their duly constituted substitutes
acting at the Meeting, will be authorized to vote or otherwise act thereon in
accordance with their judgment on such matters.

Shares represented by proxies received by the Company, where the
stockholder has specified a choice with respect to the election of directors
will be voted in accordance with the specification(s) so made. IN THE ABSENCE OF
SUCH SPECIFICATION(S), THE SHARES WILL BE VOTED "FOR" THE ELECTION OF ALL THREE
NOMINEES FOR THE BOARD OF DIRECTORS.

Any proxy may be revoked at any time prior to its exercise by notifying the
Secretary of the Company in writing, by delivering a duly executed proxy bearing
a later date or by attending the Meeting and voting in person.

The accompanying form of proxy is being solicited on behalf of the Board of
Directors of the Company. The expenses of solicitation of proxies for the
Meeting will be paid by the Company. In addition to the mailing of the proxy
material, such solicitation may be made in person or by telephone by directors,
officers and employees of the Company, who will receive no additional
compensation therefor. In addition, the Company has retained D.F. King & Co.
Inc. to assist in the search for, and distribution of proxies to, beneficial
owners of the Company's Class A Common Stock held in street name or by other
nominees, and will pay such firm a fee of $1,500, plus reimbursement of direct
out-of-pocket expenses incurred by such firm in such activity. Upon request, the
Company will reimburse brokers, dealers, banks and trustees, or their nominees,
for reasonable expenses incurred by them in forwarding material to beneficial
owners of shares of Class A Common Stock of the Company. Beneficial owners of
shares of Class B Common Stock, which will not be voting at the Meeting, also
will receive all proxy material (other than the proxy card itself), together
with the Company's Annual Report for the fiscal year ended December 31, 1998.
The expenses of such additional mailing will be borne by the Company.

1
<PAGE> 4

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

OUTSTANDING SHARES AND VOTING RIGHTS

Only holders of record of the Company's Class A Common Stock and Class A
Preferred Stock at the close of business on April 16, 1999 are entitled to
notice of, and to vote at, the Meeting. On that date the Company had outstanding
10,467,548 shares of Class A Common Stock, par value $.01 per share, and 1,010
shares of Class A Preferred Stock, par value $1,000 per share. On all matters
voted upon at the Meeting and any adjournment or postponement thereof, the
holders of the Class A Common Stock and the Class A Preferred Stock vote
together as a single class, with each record holder of Class A Common Stock
entitled to one vote per share, and each record holder of Class A Preferred
Stock entitled to one-half vote per share.

The presence, in person or by proxy, of stockholders entitled to cast a
majority of the votes which all stockholders are entitled to cast will
constitute a quorum for the conduct of business at the Meeting. With regard to
the election of directors, votes may be cast in favor of or withheld from each
nominee. Under applicable Delaware law, votes that are withheld and broker
non-votes will be excluded entirely from the vote and will not affect the
outcome of the election of directors, as directors are elected by a plurality of
votes cast. In the election of directors, stockholders do not have cumulative
voting rights.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The information set forth in the following table is furnished as of April
1, 1999 (unless otherwise specified), with respect to any person (including any
"group" as that term is used in Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended (the "1934 Act")) who is known to the Company to be the
beneficial owner of more than 5% of any class of the Company's voting
securities.

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP CLASS
- -------------- --------------------------------------- ---------- ----------
<S> <C> <C> <C>
Class A Gisela Alter(1)........................ 1,010 100.00%
Preferred
Class A Common Dennis Alter(1)........................ 3,046,067(2)(3)(4)(5) 29.10%
Advanta Corp. Employee Stock Ownership
Plan(6).............................. 1,000,000 9.55%
Neuberger Berman, LLC(7)............... 966,616 9.23%
Kestrell Investment Management
Corporation, et al.(8)............... 817,719 7.81%
</TABLE>

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

(1) The address for Gisela Alter and Dennis Alter is c/o Advanta Corp., Welsh
and McKean Roads, P.O. Box 844, Spring House, Pennsylvania, 19477-0844.

(2) Includes 551,695 shares owned by a trust, the beneficiary of which is Linda
Alter, the sister of Dennis Alter, and pursuant to which Dennis Alter is
sole trustee. Mr. Alter disclaims beneficial ownership of these shares.

(3) Ownership includes 82,798 held by a charitable foundation established by Mr.
Alter, as to which Mr. Alter shares voting and dispositive powers, and
41,399 shares held by a trust established by Mr. Alter, through which he has
made certain charitable gifts of shares and as to which Mr. Alter has sole
voting and dispositive powers. Also includes 571,905 shares held by a

2
<PAGE> 5

charitable foundation established by Mr. Alter, as to which Mr. Alter and his
wife share voting and dispositive powers. Mr. Alter disclaims beneficial
ownership of all such shares.

(4) Does not include 1,010 shares owned by Gisela Alter, the wife of Dennis
Alter.

(5) Does not include shares held in trust for the benefit of employees of the
Company participating in the Advanta Corp. Employee Stock Ownership Plan
(the "ESOP") as to which Mr. Alter is a trustee. As of December 31, 1998,
the ESOP held 1,000,000 shares as follows: 1,487 shares allocated to ESOP
participants who direct the vote of such shares and as to which the ESOP
trustees have no beneficial ownership; and 998,513 shares which, as of
December 31, 1998, had not been allocated to ESOP participants as to which
the ESOP trustees may be deemed beneficial owners under Rule 13d-1 of the
1934 Act. Shares of Class A Common Stock held by the ESOP, but not yet
allocated or as to which ESOP participants have not made timely voting
direction, are voted by the ESOP trustees in the same proportions as shares
for which directions are received (subject to each trustee's fiduciary
responsibilities under Section 404 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")). Mr. Alter disclaims beneficial
ownership of the 998,513 unallocated shares held by the ESOP.

(6) Information as to shares held by the ESOP is based solely on a Schedule 13G
filed with the Securities and Exchange Commission (the "SEC") on April 28,
1999. According to its Schedule 13G, the ESOP has sole voting power as to
998,513 unallocated shares and shared voting power as to 1,487 shares that
have been allocated to ESOP participants. The allocated shares are voted by
the ESOP trustees as directed by ESOP participants. Shares of Class A Common
Stock held by the ESOP, but not yet allocated or as to which ESOP
participants have not made timely voting direction, are voted by the ESOP
trustees in the same proportions as shares for which directions are received
(subject to each trustee's fiduciary responsibilities under Section 404 of
ERISA). The address of the ESOP is P.O. Box 844, Welsh and McKean Roads,
Spring House, PA 19477.

(7) Information as to shares held by Neuberger & Berman, LLC ("Neuberger") et
al., is based solely on a Schedule 13G filed with the SEC on February 9,
1999. According to its Schedule 13G, Neuberger is deemed to be the
beneficial owner of the above-reported shares for purposes of Rule 13d of
the 1934 Act because it has the power to vote or direct the vote of and/or
shares dispositive power with respect to these shares. Of these shares,
938,694, or 8.97% of the class, are beneficially owned by Neuberger & Berman
Focus Portfolio ("Neuberger Portfolio"). Neuberger and Neuberger & Berman
Management, Inc. ("Neuberger Management") are deemed to be beneficial owners
of the shares beneficially owned by Neuberger Portfolio because Neuberger
and Neuberger Management serve as subadviser and investment manager,
respectively, of Neuberger Portfolio and thus share power to make decisions
regarding whether to retain or dispose of the shares held by Neuberger
Portfolio. The address of Neuberger, Neuberger Portfolio and Neuberger
Management is 605 Third Avenue, New York, NY 10158-3698.

(8) Information as to shares held by Kestrel Investment Management Corporation
("Kestrel"), David J. Steirman ("Mr. Steirman") and Abbott J. Keller ("Mr.
Keller") is based solely on a Schedule 13G filed with the Commission on
February 11, 1999. According to the Schedule 13G, Messrs. Steirman and
Keller are the only shareholders of Kestrel, an investment advisor; Kestrell
is deemed to be the beneficial owner of 817,719 shares, or 7.81% of the
class, having sole voting power of 693,324 shares and sole dispositive power
of 817,719 shares; each of Messrs. Steirman and Keller also is deemed to be
the beneficial owner of the 817,719 shares, having sole voting power of
693,324 shares and sole dispositive power of 817,719 shares pursuant to
their ownership interests in Kestrel. The address of Kestrel and Messrs.
Steirman and Abbott is 411 Borel Avenue, Suite 403, San Mateo, CA 94402.

3
<PAGE> 6

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth certain information regarding the Class A
Common Stock and Class B Common Stock as of April 1, 1999 beneficially owned by:
(i) each director and nominee for director of the Company; (ii) each person who
served as the Company's Chief Executive Officer and each of the Company's four
other most highly compensated executive officers whose compensation exceeded
$100,000 during 1998; and (iii) all directors and executive officers as a group.
Shares issuable pursuant to the exercise of stock options are included in the
table below if such options are currently exercisable or will become exercisable
by May 31, 1999. None of the Company's executive officers or directors
beneficially owns any shares of the Class A Preferred Stock or the 6 3/4%
Convertible Class B Preferred Stock, Series 1995 (Stock Appreciation Income
Linked Securities (SAILS)) ("Class B Preferred Stock (SAILS)").

<TABLE>
<CAPTION>
CLASS A COMMON CLASS B COMMON
------------------------------ ------------------------------
AMOUNT AND NATURE AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF OF BENEFICIAL PERCENT OF
NAME OWNERSHIP CLASS OWNERSHIP CLASS
- -------------------------------- ----------------- ---------- ----------------- ----------
<S> <C> <C> <C> <C>
EXECUTIVE OFFICERS/DIRECTORS
Dennis Alter(1)(2)(3)(4)........ 3,046,067 29.10% 1,315,611 8.14%
William A. Rosoff(4)(5)(6)...... 82,798 * 291,846 1.45%
Olaf Olafsson(4)(7)............. 50,000 * 284,614 1.76%

EXECUTIVE OFFICERS
Philip M. Browne................ 37,500 * 53,800 *
Charles H. Podowski(8).......... 0 * 60,983 *

DIRECTORS
Arthur P. Bellis(4)(9).......... 26,964 * 71,769 *
Max Botel(10)................... 3,579 * 31,916 *
William C. Dunkelberg(11)....... 1,656 * 36,950 *
Dana Becker Dunn(12)............ 0 * 20,486 *
Robert C. Hall(13).............. 0 * 17,982 *
James E. Ksansnak(14)........... 0 * 10,788 *
Ronald Lubner(15)............... 0 * 14,427 *
Michael Stolper(4)(16).......... 0 * 3,750 *
All officers and directors as a
group (14 persons)(1)(2)
(3)(4)(5)(17)................. 3,165,766 30.23% 2,213,566 13.71%
</TABLE>

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

* Represents less than 1% of the indicated class of the Company's Common
Stock outstanding as of April 1, 1999.

(1) Ownership includes 551,695 shares of Class A Common Stock owned by a trust,
the beneficiary of which is Linda Alter, the sister of Dennis Alter, and
pursuant to which Mr. Alter is sole trustee. Mr. Alter disclaims beneficial
ownership of these shares.

(2) Ownership includes 82,798 shares of Class A Common Stock and 40,768 shares
of Class B Common Stock held by a charitable foundation established by Mr.
Alter, as to which Mr. Alter shares voting and dispositive powers, and
41,399 shares of Class A Common Stock and 12,285 shares of Class B Common
Stock, held by a trust established by Mr. Alter, through which he has made
certain charitable gifts of shares and as to which Mr. Alter has sole
voting and dispositive powers. Also includes 571,905 shares of Class A
Common Stock and 36,400 shares of Class B Common Stock held by a charitable
foundation established by Mr. Alter, as to which Mr. Alter and his wife
share voting and dispositive powers. Mr. Alter disclaims beneficial
ownership of all such shares.

4
<PAGE> 7

(3) Ownership does not include 1,010 shares of Class A Preferred Stock owned by
the wife of Dennis Alter.

(4) Ownership does not include shares held in trust for the benefit of
employees of the Company participating in the ESOP as to which Messrs.
Alter, Rosoff, Olafsson, Bellis and Stolper are trustees. As of December
31, 1998, the ESOP held 1,000,000 shares as follows: 1,487 shares allocated
to ESOP participants who direct the vote of such shares and as to which the
ESOP trustees have no beneficial ownership; and 998,513 shares which, as of
December 31, 1998, had not been allocated to ESOP participants as to which
the ESOP trustees may be deemed beneficial owners under Rule 13d-1 of the
1934 Act. Shares of Class A Common Stock held by the ESOP, but not yet
allocated or as to which ESOP participants have not made timely voting
direction, are voted by the ESOP trustees in the same proportions as shares
for which directions are received (subject to each trustee's fiduciary
responsibilities under Section 404 of ERISA). Each of Messrs. Alter,
Rosoff, Olafsson, Bellis and Stolper disclaims beneficial ownership of the
998,513 unallocated shares held by the ESOP.

(5) Ownership includes 82,798 shares of Class A Common Stock and 40,768 shares
of Class B Common Stock owned by a charitable foundation established by Mr.
Alter as to which Mr. Rosoff has shared voting and dispositive power. These
shares are also reflected in the ownership table under Mr. Alter's name.

(6) Ownership includes options to purchase 80,241 shares of Class B Common
Stock pursuant to the Company's stock option plans.

(7) Ownership includes options to purchase 25,000 shares of Class B Common
Stock pursuant to the Company's stock option plans.

(8) Ownership includes options to purchase 32,389 shares of Class B Common
Stock pursuant to the Company's stock option plans.

(9) Ownership includes options to purchase 11,715 shares of Class B Common
Stock pursuant to the Company's stock option plans.

(10) Ownership includes options to purchase 1,530 shares of Class A Common Stock
and 24,842 shares of Class B Common Stock pursuant to the Company's stock
option plans.

(11) Ownership includes options to purchase 1,656 shares of Class A Common Stock
and 34,950 shares of Class B Common Stock pursuant to the Company's stock
option plans.

(12) Ownership includes options to purchase 20,486 shares of Class B Common
Stock pursuant to the Company's stock options plans.

(13) Ownership includes options to purchase 17,438 shares of Class B Common
Stock pursuant to the Company's stock option plans.

(14) Ownership includes options to purchase 10,625 shares of Class B Common
Stock pursuant to the Company's stock option plans.

(15) Ownership includes options to purchase 14,427 shares of Class B Common
Stock pursuant to the Company's stock option plans.

(16) Ownership includes options to purchase 3,750 shares of Class B Common Stock
pursuant to the Company's stock option plans.

(17) Ownership includes options to purchase 3,186 shares of Class A Common Stock
and 275,863 shares of Class B Common Stock pursuant to the Company's stock
option plans.

5
<PAGE> 8

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the 1934 Act requires the Company's officers and directors
and persons who own more than ten percent of a registered class of the Company's
equity securities (collectively, the "Reporting Persons") to file reports of
ownership and changes in ownership with the SEC and to furnish the Company with
copies of these reports. Based on the Company's review of the copies of those
reports which it has received, and written representations from Reporting
Persons, the Company believes that all filings required to be made by the
Reporting Persons from January 1, 1998 through December 31, 1998 were made on a
timely basis except as noted below. With respect to one transaction, Arthur
Bellis failed to timely file a Form 4; however, this transaction was
subsequently reported on an amendment to his Form 5. With respect to one
transaction, William C. Dunkelberg failed to timely file a Form 4; however, this
transaction was subsequently reported on a Form 4.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth, for the Company's last three fiscal years,
the cash compensation paid by the Company, as well as certain other compensation
paid or accrued for those years, to the individuals named below (the "Named
Executive Officers").

<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
-------------------------------------------- -------------------------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND BONUS($) COMPENSATION AWARD(S) OPTIONS/SARS COMPENSATION($)
PRINCIPAL POSITION YEAR SALARY($) (1)(2) ($)(3) ($)(4) (#)(5) (6)(7)(8)(9)
- ------------------------ ---- --------- ---------- ------------ ---------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dennis Alter(10)........ 1998 $595,000 $5,045,848 $ 41,805 $ 537,954 120,000 $297,636
Chairman of the Board 1997 $595,000 $ 334,730 $ 24,634 $ 0 0 $315,914
and Chief Executive 1996 $595,000 $ 0 $ 25,715 $1,340,850 0 $261,372
Officer

William A. Rosoff....... 1998 $595,000 $5,448,868 $ 1,869,611 $ 700,209 228,666 $128,106
Vice Chairman 1997 $475,000 $ 542,223 $ 0 $ 0 75,000 $168,490
1996 $475,000 $ 275,000 $ 0 $5,537,500 50,000 $ 9,209

Olaf Olafsson(11)....... 1998 $535,752 $ 200,000 $ 0 $6,710,419 100,000 $ 11,303
President 1997 $289,197 $ 0 $ 0 $ 0 $ 0 $ 0
1996 $ 88,000 $ 0 $ 0 $ 0 $ 0 $ 0

Philip M. Browne(12).... 1998 $195,185 $ 51,053 $ 0 $1,713,466 75,000 $ 297
Senior Vice President
and Chief Financial
Officer

Charles H. Podowski..... 1998 $330,000 $ 114,609 $ 528 $ 133,408 76,152 $ 19,790
President and Chief 1997 $270,670 $ 131,283 $ 234 $ 0 28,000 $ 17,200
Executive Officer, 1996 $215,385 $ 40,033 $ 87 $ 179,977 0 $ 6,705
Advanta Business Cards
and President and
Director, Advanta
Insurance Companies
</TABLE>

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

(1) Includes amounts paid pursuant to programs to compensate for any shortfall
in the value of restricted stock awards that vested in 1997 and 1998
pursuant to the AMIP Plans described in footnote 4 below. Messrs. Alter,
Rosoff and Podowski received $45,848, $293,868 and $49,576, respectively.
Messrs. Olafsson and Browne did not enter the AMIP Plans until 1998 and
therefore received no payments pursuant to these programs.

(2) 1998 figures include payments to Messrs. Alter and Rosoff, in the amount of
$5,000,000 each, under the Office of the Chairman Supplemental Compensation
Program in connection with the Company's strategic alternatives process and
the resulting contribution of the consumer credit card business to Fleet
Credit Card LLC, and a one-time signing bonus, in the amount of $200,000,
paid to Mr. Olafsson in connection with the execution of his employment
agreement.

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<PAGE> 9

(3) Includes above-market interest earned on deferred compensation pursuant to
the Company's Executive Deferral Plan, in the amounts listed with respect
to each year as follows: Mr. Alter received $41,805, $24,634 and $25,715
for 1998, 1997 and 1996, respectively; and Mr. Podowski received $528, $234
and $87 for 1998, 1997 and 1996, respectively. With respect to Mr. Rosoff,
1998 amount includes $1,869,611 for amounts paid, consistent with the terms
of his employment agreement, in connection with the Company's Tender Offer
related to the purchase of restricted shares of Class B Common Stock and
the reimbursement for taxes arising therefrom. (see "Other Matters" on page
24 of this Proxy Statement).

(4) The Advanta Management Incentive Plan With Stock Election III ("AMIP III")
was instituted in 1993 for performance years 1996 through 1998. The Advanta
Management Incentive Plan With Stock Election IV ("AMIP IV") was instituted
in 1995 for performance years 1999 through 2001 (AMIP III and AMIP IV are
collectively referred to as the "AMIP Plans"). Pursuant to each of the AMIP
Plans, shares of restricted Common Stock were issued to participants in
each AMIP Plan upon the plan's commencement or such participant's later
employment with the Company (with a prorated share issuance awarded for any
partial year participation). The number of restricted shares issued to each
Named Executive Officer pursuant to the AMIP Plans is an amount equal to
the participant's "target bonus" for each performance year covered by the
applicable AMIP Plan divided by the applicable grant date price. Shares
vest under each of the AMIP Plans ten years after the date of grant, but
are subject to accelerated vesting on the basis of individual and corporate
(or applicable business unit) performance for each applicable performance
year. To the extent that individual and corporate (or applicable business
unit) performance for a given performance year achieves targeted levels in
that year, up to a maximum of one-third of the total shares granted under
the applicable AMIP Plan (or appropriate proration for participants
entering such AMIP Plan after the beginning of the first performance year
thereunder) will become vested.

1996 figures reflect additional shares of restricted Class B Common Stock
granted pursuant to each of AMIP III and AMIP IV with respect to increases
in the "target" bonuses under such plans, as approved by the Company's
stockholders. The total number of additional shares granted to each Named
Executive Officer who was employed by the Company in 1996 (except for Mr.
Rosoff whose target bonus was set when he joined the Company at a level
comparable to the new target levels of the other Named Executive Officers)
pursuant to the increases in target bonuses was: Mr. Alter, 17,031 AMIP
III shares and 17,031 AMIP IV shares; and Mr. Podowski, 2,286 AMIP III
shares and 2,286 AMIP IV shares. Mr. Rosoff joined the Company in January
1996 and consequently his 1996 figure includes 27,147 shares of restricted
Class B Common Stock granted pursuant to AMIP III and 27,147 shares
granted pursuant to AMIP IV in respect of his "target" bonuses for
performance years 1996 through 2001. In addition to his AMIP III and AMIP
IV shares, pursuant to his employment agreement which is described under
"Other Matters" on page 24 of this Proxy Statement, Mr. Rosoff was granted
100,000 shares of restricted Class B Common Stock in January 1996 of which
25,000 were to vest in January of each year from 1997 to 2000. As a result
of certain transactions in connection with the Tender Offer, as more fully
described in "Other Matters" on page 24, as of April 30, 1999 Mr. Rosoff
continues to own 50,641 of the original 100,000 shares, none of which is
restricted. For purposes of this table, the 100,000 shares of restricted
Class B Common Stock granted to Mr. Rosoff pursuant to his employment
agreement have been valued at their market value on the date of grant.

Messrs. Olafsson and Browne joined the Company in 1998 and consequently
their 1998 figures include shares granted pursuant to AMIP III and AMIP IV
in respect of their "target bonuses" for performance years 1998 through
2001 in the following amounts: Mr. Olafsson, 13,590 AMIP III shares and
48,924 AMIP IV shares; and Mr. Browne, 4,441 AMIP III shares and 22,839
AMIP IV shares.

7
<PAGE> 10

1998 figures also include a one-time adjustment to the number of shares of
restricted Class B Common Stock that previously had been granted pursuant
to each of AMIP III and AMIP IV. The total number of additional shares
granted to each Named Executive Officer (other than Mr. Alter, as
discussed below) pursuant to this adjustment was: Mr. Rosoff, 32,951 AMIP
III shares and 32,951 AMIP IV shares; Mr. Olafsson, 28,410 AMIP III shares
and 25,691 AMIP IV shares; Mr. Browne, 5,165 AMIP III shares and 8,855
AMIP IV shares; and Mr. Podowski, 6,278 AMIP III shares and 6,278 AMIP IV
shares. In lieu of granting Mr. Alter additional shares of restricted
Class B Common Stock pursuant to the one-time adjustment described above,
Mr. Alter received rights to receive the same economic benefits that he
would have received had he been issued 23,219 additional AMIP III shares
and 27,412 additional AMIP IV shares. These rights are subject to the same
terms and conditions as AMIP III and AMIP IV, including accelerated
vesting.

In addition to his AMIP III and AMIP IV shares, pursuant to his employment
agreement which is described under "Other Matters" on page 24 of this
Proxy Statement, Mr. Olafsson was granted 200,000 shares of restricted
Class B Common Stock in March 1998. In addition to his AMIP III and AMIP
IV shares, pursuant to his employment agreement which is described under
"Other Matters" on page 24 of this Proxy Statement, Mr. Browne was granted
50,000 shares of restricted Class B Common Stock in June 1998. The shares
of restricted Class B Common Stock granted pursuant to these employment
agreements are included in the 1998 figures for Messrs. Olafsson and
Browne and for purposes of this table are valued at their market value on
the date of grant.

In March 1997, ninety percent (90%) of one-third of the shares (including
the additional shares described above) issued under AMIP III vested with
respect to each of Messrs. Alter and Rosoff, and a full one-third of the
shares issued under AMIP III (including the additional shares described
above) vested with respect to Mr. Podowski for performance year 1996. The
remaining ten percent (10%) of one-third of the shares issued under AMIP
III (the "frozen shares") that did not vest for each of Messrs. Alter and
Rosoff were available for accelerated vesting in future years in the event
of an award made in future years that exceeds the executive's target bonus
for that year.

In March 1998, a full one-third of the shares issued under AMIP III
(including the additional shares described above) and all of the frozen
shares that did not vest in March 1997 vested, for performance year 1997,
for Messrs. Alter and Rosoff. A full one-third of the shares issued under
AMIP III (including the additional shares described above) vested, for
performance year 1997, with respect to Mr. Podowski.

In March 1999, a full one-third of the shares issued under AMIP III
(including the additional shares granted in each of 1996 and 1998, as
described above) vested, for performance year 1998, for each of the Named
Executive Officers. Mr. Alter also received the economic benefits of the
rights that were issued in lieu of additional restricted shares under AMIP
III, as described above.

The number of unvested restricted shares of Class B Common Stock held by
each Named Executive Officer under AMIP III and AMIP IV and by Mr.
Olafsson and Mr. Browne under the contractual arrangements described
above, and the market value (rounded to the nearest dollar) of such
restricted shares at December 31, 1998, were as follows: Mr. Alter, 62,542
shares, $691,871; Mr. Rosoff, 102,098 shares, $1,129,204; Mr. Olafsson,
316,615 shares, $3,502,553; Mr. Browne, 91,300 shares, $1,010,006; and Mr.
Podowski, 25,076 shares, $277,403. Non-preferential dividends are paid on
these restricted shares.

(5) Includes an aggregate of 146,818 shares underlying options granted in
connection with option repricing. See footnote (4) to the "Option/SAR
Grants in Last Fiscal Year" table on page 10 of this Proxy Statement.

8
<PAGE> 11

(6) Includes matching contributions of $8,000 paid by the Company to the
accounts of each of Messrs. Alter, Rosoff and Podowski, and $5,000 paid by
the Company to the account of Mr. Olafsson, under the Employee Savings Plan
(a 401(k) Plan), in respect of their 1998 participation in such plan.

(7) Includes the value of (i) Company paid term life insurance provided to all
salaried employees in an amount equal to two times annual salary (capped at
$500,000), (ii) Company paid term life insurance provided to Mr. Alter in
the amount of $5,000,000, and (iii) whole life insurance policies on the
lives of each of the Named Executive Officers other than Mr. Browne, which
policies are paid for by the Company and as to which the Named Executive
Officer has the right to designate the beneficiary (the "Split Dollar Life
Insurance Policies"). If an insured executive terminates his employment
with the Company, he may keep the Split Dollar Life Insurance Policy, but
must pay the Company the amount of the premiums paid by or on behalf of the
Company but not more than the cash value of the policy. Consequently, the
value of the Split Dollar Life Insurance Policy to the employee is the term
life insurance benefit. The aggregate value of these benefits to the named
individuals is included in the figures for 1998 in the following amounts:
Mr. Alter, $37,951; Mr. Rosoff, $11,450; Mr. Olafsson, $3,075; Mr. Browne,
$297; and Mr. Podowski, $3,802.

(8) Includes interest paid in 1998 by the Company on behalf of Messrs. Rosoff
and Podowski pursuant to an executive loan program adopted by the Company's
Board of Directors in 1992, which interest accrued on the Named Executive
Officers' respective stock margin accounts in connection with margin loans
against shares vested under the AMIP Plans and a predecessor stock bonus
plan, in the following amounts: Mr. Rosoff, $6,144; and Mr. Podowski,
$2,413. Information for Mr. Rosoff also includes $60,326, which represents
compensation attributed to imputed income and taxes arising from
non-interest-bearing loans made by the Company to Mr. Rosoff to satisfy his
tax liabilities resulting from the vesting of the restricted shares granted
pursuant to his employment agreement.

(9) Includes the value of Split Dollar Life Insurance Policies described above
in footnote (7) insuring the lives of each of the Named Executive Officers
other than Mr. Browne, the proceeds of which policies are payable to
beneficiaries designated by the respective executives. The value of the
term life insurance premiums paid by or on behalf of the Company under such
policies for the named individuals is included in the figures set forth in
footnote (7) above in the following amounts for 1998: Mr. Alter, $16,701;
Mr. Rosoff, $7,400; Mr. Olafsson, $2,504; and Mr. Podowski, $1,210.
Premiums paid by the Company will be refunded to the Company on termination
of the respective policies, and any cash surrender value in excess of such
premiums may be paid to the executive's beneficiary. The value of the
benefits to the executives of the remainder of the premiums paid by the
Company are included with respect to 1998 in the following amounts: Mr.
Alter, $251,685; Mr. Rosoff, $42,186; Mr. Olafsson, $3,228; and Mr.
Podowski, $5,575.

(10) Mr. Alter served as Chief Executive Officer of the Company from January
1972 through July of 1995 and from October 1997 until the present.

(11) Information for Mr. Olafsson represents compensation for Mr. Olafsson from
September 1996 through February 1998 during his employment with Advanta
Information Services, Inc. and from March 1998 through December 1998 during
his employment with the Company.

(12) Represents compensation to Mr. Browne from June 1998, when he joined the
Company.

9
<PAGE> 12

STOCK OPTION/SAR GRANTS

The following table contains information concerning the stock options and
stock appreciation rights ("SARs") granted under the Company's 1992 Stock Option
Plan to the Named Executive Officers during 1998. All options granted in 1998
are options to purchase shares of Class B Common Stock. All SARs reported in the
table below are based on shares of Class B Common Stock.

OPTION/SAR GRANTS IN LAST FISCAL YEAR(1)

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES Options/SARs
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED(#)(1) FISCAL YEAR ($/SH) DATE VALUE($)
- ------------------------------- ------------- ------------ ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Dennis Alter................... 120,000 4.31% $19.000 6/3/08 $1,240,817(2)

William A. Rosoff.............. 120,000 4.31% $19.000 6/3/08 $1,240,817(3)
33,666(4) 1.21% $22.125 1/15/06 $ 392,736(3)
75,000(4) 2.69% $22.125 1/21/07 $ 909,705(3)

Olaf Olafsson.................. 100,000 3.59% $22.125 3/4/08 $1,260,761(5)

Philip M. Browne............... 75,000 2.69% $20.000 5/10/08 $ 832,355(6)

Charles H. Podowski............ 23,000 .83% $19.560 5/21/08 $ 247,367(7)
15,000 .54% $ 8.380 10/13/08 $ 51,092(7)
6,733(4) .24% $22.125 3/26/05 $ 75,826(7)
10,100(4) .36% $22.125 12/20/05 $ 117,823(7)
13,288(4) .48% $22.125 1/21/07 $ 161,175(7)
8,031(4) .29% $22.125 4/15/07 $ 98,517(7)
</TABLE>

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

(1) Options generally become exercisable in equal installments on the first four
anniversaries of the date of grant or, in the case of repriced options, on
the first four anniversaries of the date of grant of the original options
that were repriced. The options expire 10 years from the date of grant or,
in the case of repriced options, 10 years from the date of grant of the
original options that were repriced.

(2) The fair value of Mr. Alter's SARs, is estimated on the date of grant using
the Black Scholes option pricing model with the following assumptions:
risk-free interest rate of 5.80%; expected dividend yield of 1.60%; expected
life of ten years; and volatility of 47.37%.

(3) The fair value of Mr. Rosoff's options, identified below by expiration date,
is estimated on the date of grant using the Black Scholes option pricing
model with the following assumptions:

<TABLE>
<CAPTION>
RISK-FREE EXPECTED
EXPIRATION DATE INTEREST RATE DIVIDEND YIELD EXPECTED LIFE VOLATILITY
- --------------- ------------- -------------- ------------- ----------
<S> <C> <C> <C> <C>
6/3/08............... 5.80% 1.60% 10 yrs. 47.37%
1/15/06.............. 6.06% 1.37% 7 yrs. 9 mos. 48.07%
1/21/07.............. 6.06% 1.37% 8 yrs. 9 mos. 48.07%
</TABLE>

(4) Consists of options granted in connection with the repricing of stock
options. In accordance with this grant, the optionee surrendered to the
Company the same number of previously granted options that were being
repriced. See "10-Year Option Repricings."

(5) The fair value of Mr. Olafsson's options is estimated on the date of grant
using the Black Scholes option pricing model with the following assumptions:
risk-free interest rate of 6.06%; expected dividend yield of 1.37%; expected
life of ten years; and volatility of 48.07%.

10
<PAGE> 13

(6) The fair value of Mr. Browne's options is estimated on the date of grant
using the Black Scholes option pricing model with the following assumptions:
risk-free interest rate of 6.0%; expected dividend yield of 1.52%; expected
life of ten years; and volatility of 47.58%.

(7) The fair value of Mr. Podowski's options, identified below by expiration
date, is estimated using the Black Scholes option pricing model with the
following assumptions:

<TABLE>
<CAPTION>
RISK-FREE EXPECTED
EXPIRATION DATE INTEREST RATE DIVIDEND YIELD EXPECTED LIFE VOLATILITY
- --------------- ------------- -------------- ------------- ----------
<S> <C> <C> <C> <C>
5/21/08.............. 5.85% 1.55% 10 yrs. 47.58%
10/13/08............. 5.25% 3.62% 10 yrs. 47.53%
3/26/04.............. 6.06% 1.37% 7 yrs. 48.07%
12/20/04............. 6.06% 1.37% 7 yrs. 9 mos. 48.07%
1/21/07.............. 6.06% 1.37% 8 yrs. 9 mos. 48.07%
4/15/07.............. 6.06% 1.37% 9 yrs. 1 mo. 48.07%
</TABLE>

STOCK OPTION/SAR EXERCISES AND HOLDINGS

The following table sets forth information relating to the disposition of
options during 1998 by the Named Executive Officers, and the number and value of
options and SARs held on December 31, 1998 by such individuals. No options or
SARs were exercised by the Named Executive Officers during 1998. However, the
table reflects the number of shares underlying unexercised options that were
tendered by the Named Executive Officer and purchased by the Company pursuant to
the Company's tender offer on February 20, 1998 (the "Tender Offer"), as further
described under "Report on Executive Compensation -- Compensation Associated
with the Fleet Transaction/ Tender Offer."

AGGREGATE OPTION/SAR EXERCISES IN LAST YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED UNDERLYING UNEXERCISED IN-THE-MONEY
ON VALUE OPTIONS/SARS AT FY-END(#) OPTIONS/SARS AT FY-END
EXERCISE REALIZED ------------------------------ ---------------------------
NAME (#)(1) ($)(2) EXERCISABLE(3) UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- -------- ---------- -------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Dennis Alter.............. 154,041 $4,114,788 183,459 120,000 $0 $ 0
William A. Rosoff......... 16,334 $ 98,004 62,476 166,190 $0 $ 0
Olaf Olafsson............. 0 $ 0 0 100,000 $0 $ 0
Philip M. Browne.......... 0 $ 0 0 75,000 $0 $ 0
Charles H. Podowski....... 14,848 $ 144,055 22,660 53,492 $0 $40,313
</TABLE>

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

(1) The options were not exercised and no shares were acquired by the Named
Executive Officer. Reflects the number of shares underlying options that
were tendered by the Named Executive Officer and purchased by the Company in
the Tender Offer.

(2) The value per share realized on the sale of the options pursuant to the
Tender Offer is based on the difference between the Tender Offer price of
$40.00 per share less the option exercise price.

(3) Reflects the acceleration of vesting of 43.15% of all outstanding unvested
options to purchase Common Stock on February 20, 1998 in connection with the
Tender Offer.

11
<PAGE> 14

REPRICING OF OPTIONS

The following table sets forth certain information concerning the repricing
of options during the last ten years held by any person who was an executive
officer of the Company during that period.

10-YEAR OPTION REPRICINGS(1)

<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF MARKET ORIGINAL
SECURITIES PRICE EXERCISE OPTION TERM
UNDERLYING OF STOCK PRICE AT REMAINING AT
OPTIONS/SARS AT TIME OF TIME OF NEW DATE OF
REPRICED REPRICING OR REPRICING OR EXERCISE REPRICING OR
NAME AND POSITION DATE OR AMENDED(1) AMENDMENT AMENDMENT PRICE AMENDMENT
- --------------------------------- ------- ------------- ------------ ------------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles H. Podowski.............. 3/5/98 6,733 $22.125 $31.250 $22.125 7 yrs.
President and Chief Executive 3/5/98 10,100 $22.125 $37.000 $22.125 7 yrs. 9 mo.
Officer, Advanta Business Cards 3/5/98 13,288 $22.125 $25.875 $22.125 8 yrs. 9 mo.
and President and Director, 3/5/98 8,031 $22.125 $22.625 $22.125 9 yrs. 1 mo.
Advanta Insurance Companies 3/31/97 18,000 $25.875 $45.000 $25.875 9 yrs. 10 mo.
William A. Rosoff................ 3/5/98 33,666 $22.125 $34.000 $22.125 7 yrs. 9 mo.
Vice Chairman 3/5/98 75,000 $22.125 $45.000 $22.125 8 yrs. 9 mo.
Milton Riseman................... 3/5/98 8,154 $22.125 $28.500 $22.125 5 yrs. 11 mo.
President and Director, Advanta 3/5/98 13,467 $22.125 $31.500 $22.125 7 yrs.
Mortgage Corp. USA 3/5/98 13,467 $22.125 $37.000 $22.125 7 yrs. 9 mo.
3/5/98 18,455 $22.125 $25.875 $22.125 8 yrs. 11 mo.
3/31/97 25,000 $25.875 $45.000 $25.875 9 yrs. 10 mo.
James J. Allhusen................ 3/31/97 30,000 $25.875 $45.000 $25.875 9 yrs. 10 mo.
Executive Vice President
David D. Wesselink............... 3/31/97 20,000 $25.875 $45.000 $25.875 9 yrs. 10 mo.
Senior Vice President and
Chief Financial Officer
Jeffrey D. Beck.................. 3/5/98 5,436 $22.125 $28.500 $22.125 5 yrs. 11 mo.
Vice President and Treasurer 3/5/98 4,574 $22.125 $31.500 $22.125 7 yrs.
3/5/98 5,050 $22.125 $37.000 $22.125 7 yrs. 9 mo.
3/5/98 4,614 $22.125 $25.875 $22.125 8 yrs. 10 mo.
3/31/97 6,250 $25.875 $45.000 $25.875 9 yrs. 10 mo.
John J. Calamari................. 3/5/98 4,349 $22.125 $28.500 $22.125 5 yrs. 11 mo.
Vice President, Finance 3/5/98 4,714 $22.125 $31.500 $22.125 7 yrs.
3/5/98 4,040 $22.125 $37.000 $22.125 7 yrs. 9 mo.
3/5/98 4,429 $22.125 $25.875 $22.125 8 yrs. 10 mo.
3/31/97 6,000 $25.875 $45.000 $25.875 9 yrs. 10 mo.
Ronald W. Averett................ 3/31/97 4,000 $25.875 $45.000 $25.875 9 yrs. 10 mo.
Vice President, Advanta Personal
Payment Services
Renee B. Booth................... 3/31/97 18,000 $25.875 $45.000 $25.875 9 yrs. 10 mo.
Senior Vice President, Human 3/31/97 30,000 $25.875 $42.750 $25.875 9 yrs. 6 mo.
Resources
David Brooks..................... 3/31/97 100,000 $25.875 $45.000 $25.875 9 yrs. 10 mo.
President and Chief Operating
Officer
Christopher Derganc.............. 3/5/98 4,077 $22.125 $28.500 $22.125 5 yrs. 11 mo.
Senior Vice President, Corporate 3/5/98 4,040 $22.125 $31.500 $22.125 7 yrs.
Administration 3/5/98 6,733 $22.125 $37.000 $22.125 7 yrs. 9 mo.
3/5/98 11,811 $22.125 $25.875 $22.125 8 yrs. 10 mo.
3/31/97 16,000 $25.875 $45.000 $25.875 9 yrs. 10 mo.
Katharine Dyer................... 3/31/97 7,000 $25.875 $45.000 $25.875 9 yrs. 10 mo.
Vice President, Marketing,
Advanta Personal Payment Services
Michael A. Girman................ 3/5/98 2,175 $22.125 $28.500 $22.125 5 yrs. 11 mo.
Vice President, Audit and 3/5/98 2,694 $22.125 $31.500 $22.125 7 yrs.
Control 3/5/98 2,694 $22.125 $37.000 $22.125 7 yrs. 9 mo.
3/5/98 2,215 $22.125 $25.875 $22.125 8 yrs. 10 mo.
3/31/97 3,000 $25.875 $45.000 $25.875 9 yrs. 10 mo.
</TABLE>

12
<PAGE> 15

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

(1) In accordance with the terms of the grant of each repriced option reported
in this table, the optionee surrendered to the Company the same number of
previously granted options that were repriced.

13
<PAGE> 16

REPORT ON EXECUTIVE COMPENSATION

INTRODUCTION

Compensation programs for the Company's leaders are intended to further the
earnings of the Company and secure, retain and motivate management employees of
high caliber and potential. The programs described herein cover those employees
whose decision-making and leadership drives the achievement of the Company's
business strategies.

The Compensation Committee of the Board of Directors (the "Committee") is
responsible for establishing the Company's overall compensation philosophy and
strategy and monitoring the implementation thereof, except with respect to the
administration of the Company's stock option plan and AMIP plans. However, the
Committee's determinations regarding compensation of members of the Office of
the Chairman (consisting of the Chairman and Chief Executive Officer ("CEO"),
Vice Chairman and President) are reviewed and approved by the full Board of
Directors (excluding the management directors). The Board of Directors has
established a subcommittee of the Committee that administers the Company's Stock
Option Plan with respect to the Company's "officers" as that term is defined for
purposes of Section 16 of the 1934 Act, as amended ("Section 16 Officers")
(including the Named Executive Officers) currently composed of Mr. Botel, Ms.
Becker Dunn and Mr. Lubner (each of whom is a "non-employee director" under
applicable SEC rules and an "outside director" under applicable IRS rules). In
addition, the Board of Directors has established the Plan Administrative
Committee, currently composed of the members of the Committee, to administer the
AMIP Plans with respect to the Company's Section 16 Officers (including the
Named Executive Officers).

The executive compensation program includes base salary, performance-based
annual and long-term incentives and stock options. Target levels of overall
compensation are intended to be consistent with the pay practices of a selected
peer group of companies (the "peer group").

The composition of the Company's peer group for compensation comparisons
changed significantly during 1998 to reflect that following the contribution of
the consumer credit card business to Fleet Credit Card LLC (the "Fleet
Transaction"), the Company's largest business is its nonconforming home equity
business. Consequently, the peer group changed from consumer credit card
companies to nonconforming mortgage banking companies.

BASE SALARIES

The Company establishes base salaries based upon periodic comparison to the
salaries paid by companies in the peer group. The Company's philosophy is to
limit fixed costs in its executives' compensation by emphasizing the variable
components of total compensation, i.e., annual and long-term incentives.

Base salaries are intended to approximate the median base salaries of the
comparator companies. The members of the Office of the Chairman are all paid the
same base salary, which is intended to provide a level of compensation that is
competitive with the Company's peer group. For 1998, the base salary rate for
Messrs. Alter, Rosoff and Olafsson (upon his becoming President in March 1998)
was $595,000. Mr. Podowski received a salary increase in 1998 in recognition of
his performance in 1997. Mr. Browne joined the Company in June of 1998 and his
base salary rate was set so that his compensation would be competitive with
compensation paid to Chief Financial Officers in the Company's peer group.

ANNUAL INCENTIVES

The Company offers senior management employees annual incentives through
its AMIP Plans. Each Named Executive Officer has an annual "target" bonus,
specified as a percentage (determined by the executive's position in the
Company) of his base salary. For 1998, the Named Executive

14
<PAGE> 17

Officers' target bonuses ranged from 50% (Messrs. Browne and Podowski) to 75%
(Messrs. Alter, Rosoff and Olafsson) of base salary. The actual award for each
Named Executive Officer, if any, for a given year's performance is determined by
the Plan Administrative Committee. In the case of compensation for members of
the Office of the Chairman, a recommendation is made by the Plan Administrative
Committee and then must be approved by the full Board of Directors.

The criteria for 1998 annual incentives were financially focused, tied most
heavily to the achievement of targeted earnings for the year. The Plan
Administrative Committee also considered progress in building stronger
cooperation and integration among the Company's business units. The Plan
Administrative Committee therefore considered overall Company performance as
well as specific business unit performance in determining the awards for the
Named Executive Officers.

The Company and its business units successfully achieved stated earnings
objectives, and therefore the Plan Administrative Committee recommended that
awards for Messrs. Alter, Rosoff and Olafsson be at 100% of target. Mr. Browne
received an award of 150% of target (prorated for his length of service in 1998)
in recognition of his contributions to the Company's financial strategies and
initiatives. Mr. Podowski received an award of 100% of target because his
business units achieved their expected financial results.

Rather than receiving their annual incentives for 1998 performance in cash,
the Named Executive Officers generally received the amounts that were at or
below "target" in the form of shares of restricted stock granted pursuant to
AMIP III for performance year 1998, which is accelerated in its vesting
according to AMIP III. Because of the long-term incentive nature of the shares
associated with the AMIP plans, more detail is given under "Long Term
Incentives".

LONG-TERM INCENTIVES

The Company offers its senior management employees two forms of long-term
incentives: restricted stock (primarily delivered through the AMIP Plans) and
stock options (discussed separately below). The Committee believes that share
ownership aligns the interests of Named Executive Officers and other senior
management employees with the interests of the Company's stockholders, tying a
significant portion of senior executive compensation to stockholder returns.

Mr. Alter entered the AMIP III restricted stock program upon its
introduction in 1994. At that time, his future target bonuses for the years
1996, 1997 and 1998 were issued in the form of restricted stock priced at the
then-market price of $17.00 per share. Upon joining the Company, Messrs. Rosoff,
Olafsson, Podowski, and Browne entered the AMIP III plan, and their bonuses were
issued in the form of restricted stock as well, at varying prices equal to the
market value of the shares on the respective grant dates. The restricted AMIP
shares will ultimately "cliff-vest" ten years after they have been issued (as
long as the executive remains employed by the Company). However, the intent is
for each executive to "earn" accelerated vesting of the shares by enabling the
Company to achieve performance goals for the performance years covered by the
plan.

Similarly, each of the Named Executive Officers has been issued restricted
stock under the AMIP IV restricted stock program in respect of his target bonus
awards for performance in years 1999, 2000, and 2001. If, upon accelerated
vesting of shares based on performance for a given year, the share price exceeds
the price at which the shares were originally issued, the executive in effect
receives a long-term incentive. The long-term incentive is realized in the form
of the stock's appreciation in value.

In addition to the restricted shares granted under the AMIP Plans, as
discussed above, restricted shares were granted outside of the AMIP Plans to Mr.
Olafsson (who received 200,000 on the date he became President) and Mr. Browne
(who received 50,000 on his date of hire) pursuant to the terms of their
employment agreements. All of these restricted shares are intended to vest in
equal increments on the first four anniversaries of the date of grant.

15
<PAGE> 18

STOCK OPTIONS

The Company's 1992 Stock Option Plan, as amended (the "Stock Option Plan")
rewards long-term accomplishment based upon increases in stockholder value. The
Stock Option Plan is administered by the subcommittee with respect to Section 16
Officers (including the Named Executive Officers) and by Messrs. Alter, Rosoff
and Olafsson with respect to all other eligible employees. Options are generally
granted annually. The exercise price of an option is 100% of fair market value
on the date of grant, typically the closing price. Options generally vest in
equal portions over a four-year period and expire 10 years after the grant date.

In May 1998, the subcommittee approved the annual grant of stock options to
Mr. Podowski. In June 1998, the subcommittee approved the annual grant of stock
options for Mr. Rosoff. The subcommittee approved stock appreciation rights
under the Stock Option Plan in lieu of stock options for Mr. Alter. Mr. Olafsson
and Mr. Browne, each of whom received options upon joining the Company in March
1998 and June 1998, respectively, did not receive additional stock options in
connection with the 1998 annual grants. Mr. Podowski received a special grant of
stock options in October 1998 in conjunction with the reorganization of the
business units which he managed.

COMPENSATION ASSOCIATED WITH THE FLEET TRANSACTION/TENDER OFFER

During 1997 the Company commenced a process to evaluate strategic
alternatives that ultimately concluded with the Fleet Transaction. On February
20, 1998, the Company closed the Fleet Transaction and effected the Tender
Offer. As previously described in the Company's filings with the SEC, in
connection with these transactions, many of the Company's existing compensation
and incentive plans were modified and certain additional programs were adopted
to ensure that appropriate arrangements were in place during the Company's
transition. Many of the awards granted pursuant to these modifications and new
programs were paid out in 1998 to the Company's former and continuing employees
and executives, including those Named Executive Officers who were with the
Company during the transition period.

In March 1997, the Committee approved the Advanta Senior Management Change
of Control Severance Plan (the "Management Severance Plan") which provides
benefits to senior management employees in the event of a change of control (as
defined) of the Company if, within one year of the date of a change of control,
there has been either an actual or constructive termination of the senior
management employee. In February 1998, pursuant to the Company's agreement with
Fleet Financial Group, Inc. ("Fleet"), the Committee amended and restated the
Management Severance Plan. Pursuant to the amended and restated Management
Severance Plan, the level of benefits otherwise allowed in the event of a change
of control was extended to employees who became employees of Fleet Credit Card
LLC or whose employment with the Company was terminated in connection with the
Fleet Transaction (the "Affected Employees"). The Board of Directors also
authorized the Chairman of the Board to pay bonuses to certain key employees in
recognition of their efforts on behalf of the Company in the strategic
alternatives process. In May 1997, the Board of Directors adopted the Office of
the Chairman Supplemental Compensation Program (the "Supplemental Plan") which
entitled the members of the Office of the Chairman to receive benefits in the
event of a change of control (as defined) or upon the consummation of a similar
transaction. Upon the closing of the Fleet Transaction, Messrs. Alter and Rosoff
each received $5 million under the terms of the Supplemental Plan.

Also contingent on the Fleet Transaction, the Board of Directors authorized
the accelerated vesting of 43.15% of outstanding options to purchase Class A and
Class B Common Stock that were not vested at the time of the closing of the
Fleet Transaction. The Company also amended the terms of options granted to
Affected Employees to extend the post-employment exercise period. In connection
with the Tender Offer, the subcommittee recommended to the Board of Directors
that present and former directors and employees who held exercisable options
have the opportunity to tender such options (the "Option Tender"). The Board of
Directors approved this recommendation

16
<PAGE> 19

and the Company purchased a percentage of the tendered stock options equal to
the respective percentages of Class A Common Stock and Class B Common Stock
redeemed in the Tender Offer at a price equal to the difference between $40 and
the exercise price of each purchased option. Messrs. Alter, Rosoff and Podowski
participated in the Option Tender. Messrs. Olafsson and Browne were not employed
by the Company at the time of the Tender Offer and therefore did not participate
in the Option Tender. Subsequent to the Fleet Transaction, the Board of
Directors authorized the amendment of the exercise provisions of options issued
to certain Directors to convert the options into stock appreciation rights.

In 1997, the Board of Directors approved a program under which a shortfall
in the value of restricted stock awards that vested in 1997 and 1998 would be
made up in cash payments in 1998 as long as the recipient continued to be an
employee of the Company or a successor entity. If an individual did not receive
an award of shares there would be no shortfall in value and the individual would
not be able to earn future cash payment under the program. During 1998, under
this program, Mr. Alter received $45,848, Mr. Rosoff received $293,868, and Mr.
Podowski received $49,576. Messrs. Olafsson and Browne did not receive payments
under this program because they did not enter the AMIP program until 1998.

In August 1998, the Plan Administrative Committee (acting with respect to
the Section 16 Officers, including the Named Executive Officers) and Messrs.
Alter, Rosoff and Olafsson (acting with respect to all other AMIP participants)
approved a one-time adjustment to the number of shares of restricted Class B
Common Stock that previously had been granted to Company employees who
participate in the AMIP programs. This adjustment was intended to preserve the
economic value of the original grants of restricted AMIP shares in light of the
Company's restructuring undertaken after the Fleet Transaction. The one-time
adjustment resulted in the issuance of additional AMIP III and AMIP IV
restricted shares to all AMIP participants, including the Named Executive
Officers (except Mr. Alter). This adjustment was authorized and approved in
order to continue the incentives intended by giving the Company's executive
officers the opportunity to earn the early vesting of their AMIP shares in
payment of their target bonuses. In approving the adjustment, the applicable
committees further noted that while Company stockholders were afforded the
opportunity to sell a significant portion of their shares at $40.00 per share in
the Tender Offer, AMIP participants were not afforded a comparable opportunity
to tender their nonvested AMIP restricted shares. In lieu of granting Mr. Alter
additional shares of restricted Class B Common Stock under the AMIP plans
pursuant to the one-time adjustment described above, Mr. Alter received rights
to receive the same economic benefits that he would have received had he been
issued additional AMIP III and AMIP IV shares. These rights are subject to the
same terms and conditions as AMIP III and AMIP IV, including accelerated
vesting.

Following the Fleet Transaction, the Tender Offer and the restructuring
undertaken after the Fleet Transaction, most of the outstanding stock options
were out-of-the-money and no longer useful as realistic incentive devices. In
March 1998, the subcommittee (acting with respect to the Section 16 Officers,
including the Named Executive Officers) and Messrs. Alter, Rosoff and Olafsson
(acting with respect to all other employees) therefore adjusted all
out-of-the-money options to make the exercise price of such options equal to the
fair market value of the stock on the date of the repricing. No options have
been repriced since March 1998.

IMPACT OF IRS PAY CAP REGULATION

Section 162(m) of the Internal Revenue Code limits the types of annual
compensation in excess of $1,000,000 that may be deducted for federal income tax
purposes for payments to a company's Chief Executive Officer and its four other
most highly compensated Executive Officers. The Committee believes that payment
of compensation that is not deductible under Section 162(m) is sometimes in the
best interests of the Company, and the Committee and the Board of Directors have
accordingly approved such arrangements in certain circumstances.

17
<PAGE> 20

THE CHIEF EXECUTIVE OFFICER'S 1998 COMPENSATION

Chairman Dennis Alter resumed the role of Chief Executive Officer in
October of 1997, when the Company announced its intention to exit the consumer
credit card business. Mr. Alter held the role of CEO previously from August 1972
through mid-1995. The Committee believes that Mr. Alter's compensation is
appropriate for his role as Chairman and CEO of the Company, and will continue
to evaluate the compensation levels on an ongoing basis.

The criteria for awarding annual incentives for the 1998 performance year
for the Chief Executive Officer are the same as the criteria described above for
other executive officers under "Annual Incentives." The Committee recommended
awarding Mr. Alter a bonus equal to 100% of the targeted amount. The Board of
Directors (excluding the management directors) approved this recommendation.

As described above, Mr. Alter was also paid a special one-time bonus under
the Supplemental Plan in connection with the Company's strategic alternatives
process and the completion of the Fleet Transaction. Also, as described above,
Mr. Alter participated in the Option Tender on the same terms as other
optionees. Although the terms of the Option Tender would have permitted the
accelerated vesting of 43.15% of Mr. Alter's stock options, he did not hold any
nonvested options in February 1998.

As described above, Mr. Alter received rights to be earned on the same
terms as if he had been granted restricted shares under AMIP III and AMIP IV,
including a right to dividend equivalents.

As CEO, Mr. Alter was eligible to receive a grant under the stock option
program, as were the other Named Executive Officers and, as described above, he
was granted stock appreciation rights under the Stock Option Plan.

<TABLE>
<CAPTION>
COMPENSATION COMMITTEE PLAN ADMINISTRATIVE
AND ITS SUBCOMMITTEE COMMITTEE
- ---------------------- --------------------
<S> <C>
Max Botel, Chairman Max Botel
Dana Becker Dunn Dana Becker Dunn
Arthur P. Bellis* Arthur P. Bellis*
Ronald Lubner Ronald Lubner
</TABLE>

- ---------------
* Mr. Bellis is involved in designing the compensation plans but generally does
not vote on stock-based incentive compensation for the Named Executive
Officers and is not a member of the subcommittee. See "Election of
Directors -- Compensation Committee Interlocks and Insider Participation".

18
<PAGE> 21

STOCK PERFORMANCE GRAPH

The following graph compares the yearly percentage change in the cumulative
total stockholder return on the Company's Class A Common Stock during the five
years ended December 31, 1998 with the cumulative total return on the Standard &
Poor's 500 index and the Dow Jones-Diversified Financial Services Companies
index. The comparison assumes that $100 was invested on January 1, 1994 in the
Class A Common Stock and the comparison indices with reinvestment of dividends.

[STOCK PERFORMANCE GRAPH]

<TABLE>
<CAPTION>
'ADVANTA (WITH 'ADVANTA (WITHOUT 'S&P 500'
PARTICIPATION IN PARTICIPATION IN 'DIVERSIFIED ---------
THE TENDER OFFER' THE TENDER OFFER)' FINANCIAL SERVICES'
----------------- ------------------ -------------------
<S> <C> <C> <C> <C>
'1/1/94' 100 100 100 100
'12/94' 79.5 79.5 98.2 101.3
'12/95' 116.7 116.7 158.7 139.4
'12/96' 131.5 131.5 215.6 171.4
'12/97' 82 82 346.4 228.6
'12/98(A)' 79.2 42 408.9 293.9
</TABLE>

19
<PAGE> 22

ELECTION OF DIRECTORS

The Board of Directors has nominated three candidates to be elected at the
Meeting for a three-year term ending in 2002. Each nominee is currently serving
as a director of the Company. Eight other directors are currently serving terms
which will expire in 2000 or 2001.

Each nominee has consented to being named in the proxy statement and to
serve if elected. Candidates for director will be elected by a plurality of the
votes of the shares present in person or represented by proxy at the Meeting and
entitled to vote on the election of directors, assuming a quorum is present at
the Meeting. If prior to the Meeting any nominee should become unavailable to
serve, the shares represented by a properly executed and returned proxy will be
voted for such additional person as shall be designated by the Board of
Directors, unless the Board should determine to reduce the number of directors
pursuant to the By-Laws.

Certain information regarding each nominee and each director continuing in
office following the meeting is set forth below, including such individual's age
and principal occupation, a brief account of his or her business experience
during at least the last five years and other directorships currently held at
other publicly held companies.

NOMINEES FOR ELECTION FOR A TERM EXPIRING IN 2002

Max Botel James E. Ksansnak Ronald Lubner

Mr. Botel, age 59, has been a director of the Company since its inception in
1974. He retired from the law firm of Botel, Binder & Weiss in July 1996, where
he had been a partner for more than five years. From February 1985 he also
served as Vice President of Penn Center Investments, Inc., a securities
brokerage firm, of which firm he became President in January 1995.

Mr. Ksansnak, age 59, has been a director of the Company since August 1995.
He is Vice Chairman of the Board of ARAMARK Corporation and is a member of its
Board of Directors. He has been with ARAMARK since May 1986 and before becoming
Vice Chairman in May 1997, he was Executive Vice President and Chief Financial
Officer, responsible for financial matters, planning and development, tax,
internal audit and information technology across all business units. Mr.
Ksansnak sits on the board of directors of CSS Industries, Inc.

Mr. Lubner, age 65, has been a director of the Company since December 1996.
He is Chairman and Chief Executive Officer of Plate Glass and Shatterprufe
Industries, a company quoted on the Johannesburg, South Africa Stock Exchange.
Mr. Lubner is a 40-year veteran of the Plate Glass Group, which has annual sales
of $1.5 billion. Headquartered in Johannesburg, the company manufactures and
distributes the complete range of glass and board products for the building,
automotive and furniture industries, and is the undisputed world leader in the
field of automotive glass repair and replacement.

THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE ELECTION OF ALL THREE
NOMINEES FOR ELECTION.

INCUMBENT DIRECTORS CONTINUING IN OFFICE FOR A TERM EXPIRING IN 2000

Olaf Olafsson William A. Rosoff Michael Stolper

Mr. Olafsson, age 36, has been a director of the Company since December
1997. He joined the Company in September 1996 as Vice Chairman of Advanta
Information Services, Inc. ("AIS") and was elected as a Director of AIS in
October 1996. Mr. Olafsson was elected President of the Company in March 1998.
Prior to joining the Company, he was president and chief executive officer of
Sony Interactive Entertainment, Inc., a business unit of Sony Corporation, which
he founded in 1991.

Mr. Rosoff, age 55, has been a director of the Company since February 1996.
He joined the Company in January 1996 as Vice Chairman. Prior to joining the
Company, Mr. Rosoff was a long

20
<PAGE> 23

time partner of the law firm of Wolf, Block, Schorr and Solis-Cohen LLP, the
Company's outside counsel, where he advised the Company for over 20 years. While
at Wolf, Block, Schorr and Solis-Cohen LLP he served as Chairman of its
Executive Committee and, immediately before joining the Company, as a member of
its Executive Committee and Chairman of its Tax Department. Mr. Rosoff is a
Trustee of Atlantic Realty Trust, a publicly held real estate investment trust.

Mr. Stolper, age 43, has been a director of the Company since June 1998. He
is Co-managing Director at Hawthorn, a PNC company. Prior to that he served as
President of Stolper & Co., Inc. from 1986 through 1997. In 1997, Stolper & Co.,
Inc. merged with PNC Bank's Family Wealth Management Group to form Hawthorn. Mr.
Stolper has twenty years experience as an investment advisor and financial
consultant.

INCUMBENT DIRECTORS CONTINUING IN OFFICE FOR A TERM EXPIRING IN 2001

<TABLE>
<S> <C>
Dennis Alter Dana Becker Dunn
Arthur P. Bellis Robert C. Hall
William C. Dunkelberg
</TABLE>

Mr. Alter, age 56, has been a director of the Company since its inception
in 1974. He became Executive Vice President and a Director of the Company's
predecessor organization in 1967. He was elected President and Chief Executive
Officer of the Company's predecessor in 1972, and Chairman of the Board of
Directors of the Company in August 1985. Mr. Alter has remained as Chairman of
the Board of Directors since August 1985. In February 1986, he relinquished the
title of President, and in August 1995 he relinquished the title of Chief
Executive Officer. In October 1997, Mr. Alter resumed the title of Chief
Executive Officer.

Mr. Bellis, age 55, has been a director of the Company since its inception
in 1974. He has been a private investor since January 1993. Prior to that time,
from March 1986 he was Chairman and, until June 1991, Chief Executive Officer of
Boca Bank, Boca Raton, Florida. He was also Chairman and Chief Executive Officer
of Boca Bancorp, Inc., the bank's holding company, from its formation in
December 1986. Mr. Bellis has served on the Board of United Way International
since December 1993 and is currently Vice Chairman of that Board.

Dr. Dunkelberg, age 56, has been a director of the Company since June 1990.
He is Professor of Economics at the School of Business and Management at Temple
University. He served as Dean of the School of Business and Management at Temple
from 1987 through 1994. Prior to that, Dr. Dunkelberg was a professor of
economics and management at Purdue and Stanford Universities. As an authority on
consumer credit and small business, he serves on the Board of the National
Bureau of Economic Research and is Chief Economist of the National Federation of
Independent Business.

Mr. Hall, age 67, has been a director of the Company since September 1994.
He is retired. Until January 1999 he was Vice President of The Thomson
Corporation, with responsibilities for technology and global expansion. Until
January 1995, Mr. Hall was Chief Executive Officer of the Thomson
Information/Publishing Group, a worldwide operation with $3.0 billion in sales,
140 companies, and 22,000 employees, and a member of The Thomson Corporation
Board of Directors. From 1984 to 1992 Mr. Hall was Vice Chairman, then Chairman,
of WICIAT Systems, a developing education system company. He currently serves on
the Board of The Corporate Executive Board, a publicly held company.

Ms. Becker Dunn, age 48, has been a director since March 1996. She is Vice
President, Marketing and Strategic Business Planning, of Lucent Technologies
Business Communications Services ("BCS"), formerly AT&T Global Business
Communications, which she joined in December 1994. BCS develops, manufactures,
markets and services advanced communications and multimedia systems for business
and government customers in more than 90 countries worldwide. In 1992 she became
Vice President and Chief Technical Officer for AT&T's Call Servicing (Long
Distance)

21
<PAGE> 24

Organization, after which she was Vice President of Strategic Planning and New
Business Development for Consumer Communications Services. From 1984 to 1992,
Ms. Dunn served AT&T in a variety of capacities, including Product Marketing
Director in 1984, Director of Information Systems in 1986 and Operator
Services-Eastern Region Vice President in 1988.

COMMITTEES, MEETINGS AND COMPENSATION OF THE BOARD OF DIRECTORS

The Board of Directors held ten meetings during the last fiscal year. All
directors attended at least 75% of the aggregate number of meetings of the Board
and committees of the Board on which they served.

The Board of Directors has an Audit Committee currently composed of Messrs.
Dunkelberg, Ksansnak and Stolper. The Audit Committee reviews and evaluates the
Company's internal accounting and auditing procedures; recommends to the Board
of Directors the firm to be appointed as independent accountants to audit the
Company's financial statements; reviews with management and the independent
accountants the Company's year-end operating results; reviews the scope and
results of the audit with the independent accountants; reviews with management
the Company's interim operating results; and reviews the non-audit services to
be performed by the firm of independent accountants and considers the effect of
such performance on the accountants' independence. The Audit Committee met five
times in 1998.

The Board of Directors has appointed a Compensation Committee currently
composed of Messrs. Bellis, Botel and Lubner and Ms. Becker Dunn. The
Compensation Committee reviews and approves Company-wide benefit programs and
executive compensation programs, and, where appropriate, reviews and approves
individual arrangements for persons designated as Section 16 Officers. The
Compensation Committee also recommends and approves compensation arrangements
for outside Directors and serves in an advisory capacity to the full Board
regarding compensation matters. The Compensation Committee met six times and
acted by consent twice in 1998.

The Board of Directors has established a subcommittee of the Compensation
Committee to administer the Company's Stock Option Plan with respect to Section
16 Officers. The subcommittee is currently composed of Mr. Botel, Ms. Becker
Dunn and Mr. Lubner (each of whom is a "non-employee director under applicable
SEC rules and an "outside director" under applicable IRS rules). The
subcommittee also has authority to designate whether options granted are
intended to qualify as incentive stock options or are to be non-qualified stock
options. In addition, the Board of Directors has established the Plan
Administrative Committee to administer the AMIP Plans with respect to Section 16
Officers. The current members of the Plan Administrative Committee are the same
as the members of the Compensation Committee. The Board of Directors, as a
whole, administers the Stock Option Plan and AMIP Plans with respect to
non-employee Directors. The subcommittee and the Plan Administrative Committee
each met six times as part of the Compensation Committee's meetings. In
addition, the subcommittee met once and acted by consent five times and the Plan
Administrative Committee met once during 1998.

The Board of Directors has a Nominating Committee to identify and recommend
to the Board of Directors individuals to serve on the Board, which individuals
are to be selected, according to the Board resolution establishing the
Nominating Committee, on the basis of their integrity, leadership ability,
financial sophistication and capacity to help guide the Company successfully
into the 21st century. The current members of the Nominating Committee are
Messrs. Alter, Bellis and Lubner. The Nominating Committee met once during 1998.
The Nominating Committee will consider nominees recommended by stockholders; any
such nominations must comply with the requirements of the Company's By-Laws,
including timely delivery to the Company of a written request from a stockholder
of record that an individual's name be placed in nomination. Such written notice
must set forth certain information with respect to the nomination, including:
the name and address of the nominating stockholder; the name and address of the
beneficial owner, if different than the

22
<PAGE> 25

nominating stockholder, of the shares owned of record by the nominating
stockholder; the number and class of shares owned by such nominating stockholder
and beneficial owner; a description of all arrangements and understandings
between the nominating stockholder, any beneficial owner and any persons
nominated; the name and address of any persons nominated; a representation that
the nominating stockholder is a holder of record of the Company's shares
entitled to vote at the meeting and intends to appear in person or by proxy at
the meeting to nominate such persons; such other information regarding each
nominee as would have been required to be included in a proxy statement filed
pursuant to the proxy disclosure rules of the SEC had the nominee been nominated
by the Board of Directors of the Company; and the written consent of each
nominee to serve as a director. To be timely, such notice must, in the case of
an annual meeting that is called for a date that is within 30 days before or
after the anniversary date of the immediately preceding annual meeting, be
delivered not less than 60 nor more than 90 days prior to such anniversary date,
or, in the case of any other annual meeting or any special meeting, not later
than the close of business on the fifth day following the earlier of the day on
which notice of the date of meeting was mailed or publicly disclosed.

In June 1995, the Board of Directors established a Corporate Governance
Committee. The current members of the Corporate Governance Committee are Messrs.
Alter, Bellis, Hall and Lubner. The Corporate Governance Committee did not meet
during 1998. The Corporate Governance Committee was established to identify,
analyze and propose approaches and solutions to issues of importance relating to
the long-term effectiveness of the Board of Directors and senior management of
the Company, including for example, issues relating to succession planning,
retirement policies and performance measurement.

Members of the Board of Directors who are not officers or employees of the
Company receive an annual retainer of $25,000 for service on the Board, $10,000
as an annual retainer for service on a Board Committee (other than as a Board
Committee chairperson, for whom the annual retainer is $15,000), and are paid
$1,000 per day for each Board or Board Committee meeting attended (chairmen are
paid $1,500 per day for each Board Committee meeting they chair). However,
Messrs. Bellis, Botel and Lubner and Ms. Becker Dunn are not compensated
separately for serving on the subcommittee or the Plan Administrative Committee,
as applicable, as such service is considered ancillary to their service on the
Compensation Committee. The chairmen of the Audit Committee, the Compensation
Committee, the Nominating Committee and the Corporate Governance Committee are
Messrs. Ksansnak, Botel, Bellis and Hall, respectively. In addition, for each
non-employee Director, the Company pays the premiums on a $500,000 term life
insurance policy on which there is no build-up in cash value, but as to which
the non-employee Director has the right to designate the beneficiary under the
applicable policy. The Company's 1992 Stock Option Plan, as amended provides
that each non-employee Director is currently entitled to receive an annual
grant, generally on the fourth Wednesday in January, of an option to purchase
9,000 shares of Class B Common Stock, at an exercise price equal to the fair
market value of such stock on the grant date. Each such option granted becomes
exercisable on the anniversary of the grant date at the rate of 25% per year for
four years, and expires ten years from the grant date. Directors are reimbursed
for expenses incurred in attending meetings of the Board of Directors and
committees thereof.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The only individuals who served as members of the Compensation Committee
during the fiscal year ended December 31, 1998 are the Compensation Committee's
current members, Messrs. Botel, Bellis and Lubner and Ms. Becker-Dunn, who
served for all of fiscal 1998. None of the aforementioned members of the
Compensation Committee is an officer or other employee, or former officer, of
the Company or of any subsidiary of the Company.

The only individuals who served as members of the subcommittee of the
Compensation Committee during the fiscal year ended December 31, 1998 are the
subcommittee's current members, Messrs. Botel and Lubner and Ms. Becker-Dunn,
who served for all of fiscal 1998. None of
23
<PAGE> 26

the aforementioned members of the subcommittee is an officer or other employee,
or former officer, of the Company or of any subsidiary of the Company.

In 1995, the Company engaged Mr. Bellis as a consultant to assist in the
evaluation of certain new business opportunities. During 1998, the Company paid
Mr. Bellis for his services at the rate of $14,000 per month plus reimbursement
of expenses. The consulting fees paid to Mr. Bellis in 1998 totaled $154,000,
plus $29,096 of expense reimbursement.

CHANGE IN CONTROL AND SEVERANCE ARRANGEMENTS

The Management Severance Plan provides benefits to senior management
employees, including the Named Executive Officers, in the event of a Change of
Control of the Company (as defined therein) if, within one year of the date of
the Change of Control, there has been either an actual or constructive
termination of the senior management employee. The Management Severance Plan
provides severance ranging from 39 to 104 weeks of salary, depending on the
senior management employee's level within the Company. In February 1998,
pursuant to the Company's agreement with Fleet, the Compensation Committee
amended and restated the Management Severance Plan. Pursuant to the amended and
restated Management Severance Plan, the level of benefits otherwise allowed in
the event of a Change of Control was extended to Affected Employees.

The Advanta Employees Severance Pay Plan provides benefits to all
employees, including the Named Executive Officers, in the event of termination
of employment due to layoff, reduction in force, reorganization or other similar
business decision. With respect to the Named Executive Officers, this plan
provides benefits ranging from 12 to 32 weeks of salary, depending on the Named
Executive Officer's years of service with the Company.

In May 1997, the Board of Directors adopted the Supplemental Plan under
which members of the Office of the Chairman would be entitled to receive
benefits in the event of a Change of Control or other similar transaction. On
February 20, 1998, the Company completed the Fleet Transaction and the Tender
Offer. Upon completion of the Fleet Transaction, Messrs. Alter and Rosoff each
received $5.0 million under the terms of the Supplemental Plan.

OTHER MATTERS

In January 1996, Mr. Rosoff and the Company entered into an agreement under
which Mr. Rosoff's annual base salary is a minimum of $475,000. Under the terms
of the agreement, he is entitled to receive a guaranteed cash bonus which,
together with his base salary, will bring his annual cash compensation to not
less than $750,000. He is also entitled to participate in the AMIP Plans (with a
target bonus of at least 75% of his base salary) and is guaranteed that his
total annual compensation from base salary, guaranteed cash bonus and AMIP award
will be at least $1 million. In anticipation of his execution of the agreement,
the Company paid Mr. Rosoff a one time signing bonus of $950,000 in December
1995. In addition, pursuant to this agreement he received 100,000 restricted
shares of Class B Common Stock and an option to purchase 50,000 shares of Class
B Common Stock at $34.00 per share, the fair market value of the shares on the
date of grant. The restricted shares, which as of the January 1996 date of grant
had a market value of $34.00 per share, originally were to vest at the rate of
25% per annum over four years, with the first two installments having vested on
January 15, 1997 and 1998, and the options become exercisable in the same
installments one day later. Should Mr. Rosoff leave the Company's employ before
January 2000, his remaining unvested benefits will vest upon his departure
except in certain limited circumstances. In addition, these benefits will vest
upon a change of control of the Company (as defined in the agreement). The
Company has agreed that the 100,000 shares of restricted Class B Common Stock
will have a fair market value sufficient to allow Mr. Rosoff to realize $40 per
share net after applicable taxes resulting from an assumed sale of such shares
on January 15, 2000, and it will make non-interest bearing loans to him in the
interim sufficient to pay his taxes arising from his receipt of the shares. At
April 30, 1999, the aggregate amount outstanding on these loans was $729,880.53,

24
<PAGE> 27

which was the largest aggregate amount outstanding at any time since January 1,
1998. If the net after tax proceeds of such assumed sale are less than $40,
loans will be canceled and a payment will be made in cash and/or Class B Common
Stock to Mr. Rosoff to make up the shortfall. In January 1998 the Company agreed
to accelerate certain provisions of the employment agreement with respect to
restricted shares purchased by the Company in the Tender Offer.

In connection with the Tender Offer, the Company purchased 49,359 of Mr.
Rosoff's restricted shares at a price of $40.00 per share (subject to the
agreements regarding the after-tax value of these shares to Mr. Rosoff described
above). Consistent with the terms of Mr. Rosoff's employment agreement, in 1998
the Company reimbursed Mr. Rosoff for the taxes arising from the sale of these
shares in the Tender Offer and on the reimbursement to Mr. Rosoff for any taxes.
Also, the Company removed the restrictions on the remaining 641 of his
restricted shares that were not purchased in the Tender Offer and such shares
were returned to Mr. Rosoff as fully vested shares.

In connection with his employment by the Company as President in March
1998, Mr. Olafsson entered into an employment agreement with the Company. The
agreement, which is terminable by either party upon 30 days' prior notice to the
other, provides that Mr. Olafsson's annual base compensation will be at least
$595,000 and that he shall be entitled to participate in the AMIP Plans (with a
target bonus of at least 75% of his base salary and a maximum bonus of 200% of
target). In connection with Mr. Olafsson's execution of the agreement, the
Company paid him a one-time signing bonus of $200,000. Pursuant to this
agreement, Mr. Olafsson received 200,000 shares of restricted Class B Common
Stock and options to purchase 100,000 shares of Class B Common Stock at $22.125
per share (the fair market value of the shares on the date of grant), both of
which vest in equal installments on the first four anniversaries of his March
1998 start date. The restricted stock and options will immediately vest (A) upon
the termination of Mr. Olafsson's employment for any reason other than (i) by
the Company for "Cause" (as defined in the agreement) or (ii) by Mr. Olafsson's
voluntary departure, (B) in event of a "change of control" (as defined in the
agreement) or (C) upon Mr. Olafsson's termination of employment for "Good
Reason" (as defined in the agreement).

In connection with his employment by the Company as Senior Vice President
and Chief Financial Officer, in May 1998 Mr. Browne entered into an employment
agreement with the Company. The agreement provides that Mr. Browne's annual base
compensation will be $350,000 and that he will be entitled to participate in the
AMIP Plans (with a target bonus of at least 50% of his base salary and a maximum
bonus of 200% of target). In the event of a "change in control" (as defined in
the Management Severance Plan), Mr. Browne will be entitled to severance of two
times his base salary. Pursuant to his employment agreement, Mr. Browne received
50,000 shares of restricted Class B Common Stock and options to purchase 75,000
shares of Class B Common Stock at an exercise price of $20.00 per share (the
fair market value of the shares on the date of the grant), both of which vest in
equal installments on each of the first four anniversaries of the date of grant.
The restricted stock and the options will immediately vest in the event of a
"change in control" (as defined in the Stock Option Plan).

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS

Arthur Andersen LLP has been selected by the Board of Directors as the
independent public accountants for the Company's current fiscal year. A
representative of Arthur Andersen LLP is expected to be present at the Meeting
and will have the opportunity to make a statement if he desires to do so and
will be available to respond to appropriate questions of stockholders.

STOCKHOLDER PROPOSALS

Proposals of stockholders intended to be presented at the 2000 Annual
Meeting of Stockholders must be received by December 31, 1999, in order to be
considered for inclusion in the Company's

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proxy materials relating to that meeting. A proposal that does not comply with
the applicable requirements of Rule 14a-8 under the 1934 Act will not be
included in the Company's proxy soliciting material for the 2000 Annual Meeting
of Stockholders. Stockholder proposals should be directed to Elizabeth H. Mai,
Secretary, at the address of the Company set forth on the first page of this
proxy statement.

A stockholder of the Company may wish to have a proposal presented at the
2000 Annual Meeting of Stockholders, but not to have such proposal included in
the Company's proxy statement and form of proxy relating to that meeting. If
notice of any such proposal (addressed to the Company at the address of the
Company set forth on the first page of this proxy statement) is not received by
the Company by March 19, 2000, then such proposal shall be deemed "untimely" for
purposes of Rule 14a-4(c) promulgated under the 1934 Act and, therefore, the
individuals named in the proxies solicited on behalf of the Board of Directors
of the Company for use at the Company's 2000 Annual Meeting of Stockholders will
have the right to exercise discretionary voting authority to such proposal.

ANNUAL REPORT ON FORM 10-K

THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON SOLICITED BY THIS
PROXY STATEMENT, ON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES
THERETO, AS FILED WITH THE SEC FOR ITS MOST RECENT FISCAL YEAR. SUCH WRITTEN
REQUEST SHOULD BE DIRECTED TO INVESTOR RELATIONS, AT THE ADDRESS OF THE COMPANY
APPEARING ON THE FIRST PAGE OF THIS PROXY STATEMENT.

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(LOGO)
This proxy statement has been printed entirely on recycled paper.
<PAGE> 30

PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

ADVANTA CORP.

The undersigned, a stockholder of Advanta Corp. (the "Company"), hereby
constitutes and appoints Dennis Alter, William A. Rosoff, Olaf Olafsson and
Elizabeth H. Mai, and each of them acting individually as the attorney and
special proxy of the undersigned, with full power of substitution, for and in
the name and stead of the undersigned to attend the Annual Meeting of
Stockholders of Advanta Corp. to be held on Thursday, June 10, 1999, at 1:00
p.m. at the Company's headquarters, Welsh and McKean Roads, Spring House,
Pennsylvania, and any adjournment or postponement thereof, and thereat to vote
all shares which the undersigned would be entitled to cast if personally present
as follows:

(CONTINUED, AND TO BE SIGNED ON THE REVERSE SIDE)

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<PAGE> 31
Please mark
your votes as [X]
indicated in
this example.

1. ELECTION OF DIRECTORS

FOR WITHHOLD AUTHORITY
all three nominees for to vote for all three
director listed below nominees for director below
[ ] [ ]

INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below.

NOMINEES: Max Botel, James E. Ksansnak and Ronald Lubner

2. To transact such other business as may properly come before the meeting.

IF NOT OTHERWISE SPECIFIED, THE SHARES WILL BE VOTED FOR THE ELECTION OF ALL
THREE NOMINEES FOR DIRECTOR. This proxy delegates authority to vote with respect
to all other matters upon which the undersigned is entitled to vote and which
may come before the meeting or any adjournment or postponement thereof.

The undersigned hereby revokes all previous proxies for such meeting and hereby
acknowledges receipt of the notice of the meeting and the proxy statement of
Advanta Corp. furnished herewith.

PLEASE SIGN AND MAIL PROMPTLY.

Stockholder's Signature(s)______________________________ Date ____________, 1999

NOTE: If shares are registered in more than one name, all owners should sign. If
signing in a fiduciary or representative capacity, please give full title and
attach evidence of authority. If a corporation, please sign with full corporate
name by a duly authorized officer and affix the corporate seal.

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