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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
/X/ Preliminary proxy statement
/ / 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)
Advanta Corp.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / 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:
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1Set forth the amount on which the filing fee is calculated and state how it
was determined.
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FIVE HORSHAM BUSINESS CENTER
300 WELSH ROAD
HORSHAM, PENNSYLVANIA 19044-0691
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 5, 1994
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Advanta
Corp. (the "Company") will be held at The Rittenhouse Hotel, Grand Ballroom, 210
West Rittenhouse Square, Philadelphia, Pennsylvania, on Thursday, May 5, 1994 at
1:00 p.m. (the "Meeting") for the following purposes:
1. To elect four directors to hold office until the expiration of
their term of office and until their successors are duly elected and
qualified.
2. To consider and act upon an amendment to the Company's Restated
Certificate of Incorporation to increase the authorized number of shares of
Common Stock from 60,000,000 to 400,000,000, consisting of 200,000,000
shares of Class A Common Stock and 200,000,000 shares of Class B Common
Stock.
3. 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, March 18,
1994 as the record date of 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.
GENE S. SCHNEYER
Secretary
Dated: March , 1994
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FIVE HORSHAM BUSINESS CENTER
300 WELSH ROAD
HORSHAM, PENNSYLVANIA 19044-0691
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS TO
BE HELD ON THURSDAY, MAY 5, 1994
------------------------
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Advanta Corp. (the "Company") to be used at
the Annual Meeting of Stockholders, and any adjournment or postponement thereof
(the "Meeting"), to be held on the date, at the time and place, and for the
purposes set forth in the foregoing notice. 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 March , 1994.
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 or
the other proposal described in this proxy statement, 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 four
nominees for the Board of Directors, and "For" the proposal to amend the
Company's Restated Certificate of Incorporation (the "Share Authorization
Proposal").
Any proxy may be revoked at any time prior to its exercise by notifying the
Secretary 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 other
nominees, and will pay such firm a fee of $2,000, 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 itself), together with the
Company's Annual Report for the fiscal year ended December 31, 1993. The
expenses of such additional mailing will be borne by the Company.
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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 March 18, 1994 are entitled to
notice of, and to vote at, the Meeting. On that date the Company had outstanding
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.
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; votes that are withheld will be excluded entirely from the vote and
will have no effect, as directors are elected by a plurality of votes cast.
Since under applicable Delaware law the Share Authorization Proposal requires
the affirmative approval of stockholders entitled to cast a majority of the
votes entitled to be cast by the holders of all of the outstanding shares of
Class A Common Stock and Class A Preferred Stock, abstentions and broker
non-votes will have the same effect as votes against the proposal. Under
applicable Delaware law, broker non-votes will have no effect on the outcome of
the election of directors. In the election of directors, stockholders do not
have cumulative voting rights. 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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The information set forth on the following table is furnished as of March
1, 1994, 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
"Exchange 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.
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
TITLE OF CLASS NAME OWNERSHIP CLASS
- --------------- ---------------------------------------------- ---------- ----------
Class A J. R. Alter(1)(2)............................. 1,010 100.0%
Preferred
Class A Twentieth Century Investors, Inc.............. 992,800 (3) 5.8%
Common
Dennis Alter(1)............................... 4,955,983 (4)(5)(6) 28.5%
- ---------------
(1) The address for J. R. Alter and Dennis Alter is c/o ADVANTA Corp., Five
Horsham Business Center, 300 Welsh Road, Horsham, Pennsylvania 19044-0691.
(2) J. R. Alter is not a member of the Company's management.
(3) Information as to shares held by Twentieth Century Investors, Inc., a
registered investment company ("TCI"), is as of December 31, 1993, as set
forth in a Schedule 13G filed with the Securities and Exchange Commission
("SEC"). Under applicable SEC rules Investors Research Corporation, TCI's
investment advisor ("IRC"), is deemed to be the beneficial owner of the
shares owned by TCI because it has voting and dispositive power with
respect to those shares. IRC also has or shares voting power and has
dispositive power with respect to an additional 84,650 shares (0.5%), and
is thus deemed to be the beneficial owner of such shares. Under applicable
SEC rules the parent company of IRC, Twentieth Century Companies, Inc.
("TCC"), and Mr. James E. Stowers, Jr. who owns approximately 60% of the
voting stock of TCC, are each deemed to be the beneficial owner of the
shares with respect to which IRC has or shares voting and dispositive
power. The address of TCI, IRC, TCC and Mr. Stowers is 4500 Main Street,
P.O. Box 418210, Kansas City, MO 64141-9210.
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(4) Includes 999,462 shares owned by a trust, the beneficiary of which is Linda
Ominsky, the sister of Dennis Alter, and pursuant to which Dennis Alter is
sole trustee. Mr. Alter disclaims beneficial ownership of these shares.
(5) Includes 150,000 shares owned by Dennis Alter's wife and 168,824 shares
owned by several trusts established by Mr. Alter for the benefit of his
minor children, for which trusts Mrs. Alter serves as a trustee. Also
includes an aggregate of 150,000 shares held by a charitable foundation
established by Mr. Alter, as to which Mr. Alter shares voting and
investment powers, and 75,000 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 investment powers. Mr. Alter
disclaims beneficial ownership of all such shares.
(6) Does not include 1,010 shares of the Company's Class A Preferred Stock and
499,465 shares of Class A Common Stock owned by J. R. Alter, the father of
Dennis Alter, and 75,000 shares of Class A Common Stock owned by Helen
Alter, the mother of Dennis Alter, as to which Dennis Alter disclaims
beneficial ownership.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the Class A
Common Stock and Class B Common Stock beneficially owned by each director and
nominee for director of the Company, by the Company's Chief Executive Officer,
by each of the Company's four other most highly compensated executive officers
whose compensation exceeded $100,000 during 1993 and by all directors and
officers as a group, at the close of business on March 1, 1994.
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
- -------------------------------- ----------------- ---------- ----------------- ----------
OFFICER/DIRECTORS
Dennis Alter(1)(2)(3)(4)........ 4,955,983 28.5% 3,095,305 13.6%
Richard A. Greenawalt(5)(6)..... 827,220 4.6% 725,723 3.1%
Alex W. "Pete" Hart............. 0 * 200,000 *
Warren Kantor(7)(8)............. 91,763 * 216,341 *
OFFICERS
Robert A. Marshall(9)........... 193,490 1.1% 236,851 1.0%
Milton Riseman(10).............. 0 * 57,144 *
DIRECTORS
Arthur P. Bellis(11)............ 110,478 * 117,228 *
Max Botel(12)................... 19,612 * 38,662 *
Richard J. Braemer(13).......... 83,440 * 69,190 *
Anthony P. Brenner(14).......... 2,250 * 9,750 *
William C. Dunkelberg(15)....... 8,225 * 17,775 *
Graeme K. Howard, Jr.(16)....... 18,250 * 25,000 *
Ronald J. Naples(17)............ 750 * 6,750 *
Phillip A. Turberg(18).......... 43,886 * 53,636 *
All officers and directors as a
group (35 persons) (1)(2)
(4)(6)(8)(12)(14)(18)(19)..... 6,482,084 35.3% 5,318,543 22.2%
- ---------------
* Represents less than 1% of the indicated class of the Company's Common
Stock outstanding as of March 1, 1994.
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(1) Ownership includes 999,462 shares of the Company's Class A Common Stock
owned by a trust, the beneficiary of which is Linda Ominsky, 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 150,000 shares of Class A Common Stock and 75,000 shares
of Class B Common Stock held by Mr. Alter's wife, as well as 168,824 shares
of Class A Common Stock and 170,654 shares of Class B Common Stock held by
several trusts established by Mr. Alter for the benefit of his minor
children, for which trusts Mrs. Alter serves as a trustee. Also includes
150,000 shares of both the Company's Class A Common Stock and Class B
Common Stock held by a charitable foundation established by Mr. Alter, as
to which Mr. Alter shares voting and investment powers, and 75,000 shares
of the Company's Class A Common Stock and 22,600 shares of the Company's
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 investment powers. Mr. Alter disclaims beneficial
ownership of all such shares.
(3) Ownership includes options to purchase 159,375 shares of the Company's
Class B Common Stock pursuant to the Company's Stock Option Plans.
(4) Ownership does not include 1,010 shares of the Company's Class A Preferred
Stock, 499,465 shares of both the Company's Class A Common Stock and Class
B Common Stock owned by J. R. Alter, the father of Dennis Alter, and 75,000
shares of both the Company's Class A Common Stock and Class B Common Stock
owned by Helen Alter, the mother of Dennis Alter, as to all of which shares
Dennis Alter disclaims beneficial ownership.
(5) Ownership includes options to purchase 514,500 shares of the Company's
Class A Common Stock and 508,021 shares of the Company's Class B Common
Stock pursuant to the Company's Stock Option Plans and otherwise.
(6) Ownership includes 86,850 shares of the Company's Class A Common Stock and
77,850 shares of the Company's Class B Common Stock owned by Mr.
Greenawalt's wife and 12,000 shares of both the Company's Class A Common
Stock and Class B Common Stock held by Mr. Greenawalt as custodian for his
children. Mr. Greenawalt disclaims beneficial ownership of all such shares.
(7) Ownership includes options to purchase 5,625 shares of the Company's Class
B Common Stock pursuant to the Company's Stock Option Plans.
(8) Ownership includes 2,850 shares of the Company's Class B Common Stock held
by Mr. Kantor as custodian for his children. Mr. Kantor disclaims
beneficial ownership of all such shares.
(9) Ownership includes options to purchase 157,500 shares of the Company's
Class A Common Stock and 186,562 shares of the Company's Class B Common
Stock pursuant to the Company's Stock Option Plans.
(10) Ownership includes options to purchase 20,625 shares of the Company's Class
B Common Stock pursuant to the Company's Stock Option Plans.
(11) Ownership includes options to purchase 12,900 shares of the Company's Class
A Common Stock and 19,650 shares of the Company's Class B Common Stock
pursuant to the Company's Stock Option Plans and otherwise.
(12) Ownership includes options to purchase 12,900 shares of the Company's Class
A Common Stock and 19,650 shares of the Company's Class B Common Stock
pursuant to the Company's Stock Option Plans and otherwise. Also includes
1,500 shares of the Company's Class B Common Stock owned by Mr. Botel's son
and 1,500 shares of the Company's Class B Stock owned by Mr. Botel's
daughter, as to all of which shares Mr. Botel disclaims beneficial
ownership.
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(13) Ownership includes options to purchase 51,420 shares of the Company's Class
A Common Stock and 44,670 shares of the Company's Class B Common Stock
pursuant to the Company's Stock Option Plans and otherwise.
(14) Ownership includes options to purchase 6,000 shares of the Company's Class
B Common Stock pursuant to the Company's Stock Option Plans.
(15) Ownership includes options to purchase 6,575 shares of the Company's Class
A Common Stock and 15,825 shares of the Company's Class B Common Stock
pursuant to the Company's Stock Option Plans. Also includes 150 shares each
of the Company's Class A Common Stock and Class B Common Stock held by Mr.
Dunkelberg as custodian for his daughter. Mr. Dunkelberg disclaims
beneficial ownership of these shares.
(16) Ownership includes options to purchase 18,250 shares of the Company's Class
A Common Stock and 25,000 shares of the Company's Class B Common Stock
pursuant to the Company's Stock Option Plans.
(17) Ownership includes options to purchase 6,000 shares of the Company's Class
B Common Stock pursuant to the Company's Stock Option Plans.
(18) Ownership includes options to purchase 7,500 shares of the Company's Class
A Common Stock and 14,250 shares of the Company's Class B Common Stock
pursuant to the Company's Stock Option Plans. Also includes 1,500 shares of
both the Company's Class A Common Stock and Class B Common Stock held by
Mr. Turberg's wife, as to all of which shares Mr. Turberg disclaims
beneficial ownership.
(19) Ownership includes options to purchase 931,443 shares of the Company's
Class A Common Stock and 1,323,874 shares of the Company's Class B Common
Stock pursuant to the Company's Stock Option Plans and otherwise.
Section 16(a) of the Exchange 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 Securities and Exchange
Commission 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, 1993
through December 31, 1993 were made on a timely basis except that the reports of
the following transactions were filed subsequent to the applicable due date:
Ronald Averett -- one report relating to one transaction; and Michael
Girman -- one report relating to one transaction.
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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 Company's Chief Executive Officer and to
each of the Company's other four most highly compensated executive officers
whose compensation exceeded $100,000 during the periods indicated.
LONG TERM COMPENSATION ALL OTHER
----------------------- COMPENSATION($)
AWARDS (3)(4)(5)(6)(7)
----------------------- ------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
---------------------------------------------- STOCK UNDERLYING
OTHER ANNUAL AWARD(S) OPTIONS
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) ($)(1) (#)(2)
- --------------------------- ----- --------- -------- --------------- ---------- ----------
Dennis Alter............... 1993 $495,000 $178,213 $ -- $668,228 37,500 $ 60,225(8)
Chairman of the Board 1992 $495,000 $247,325 $ -- $ 0 300,000 $ 16,265
and Chief Executive 1991 $495,000 $247,506 $ -- $668,225 0
Officer
Richard A. Greenawalt...... 1993 $395,000 $136,084 $ 18,738 $533,205 37,500 $ 41,811(8)
President and Chief 1992 $395,000 $217,500 $ -- $ 0 120,000 $ 18,595
Operating Officer 1991 $395,000 $212,005 $ -- $533,221 9,000
Warren Kantor.............. 1993 $325,000 $ 34,189 $ -- $341,190 22,500 $ 23,732
Vice Chairman 1992 $325,000 $ 49,754 $ -- $ 0 45,000 $ 20,325
1991 $325,000 $ 39,004 $ -- $341,060 45,000
Robert A. Marshall......... 1993 $271,245 $ 91,012 $ -- $230,954 26,250 $ 20,656
Executive Vice President 1992 $220,000 $ 92,008 $ -- $ 0 45,000 $ 16,136
and Group Executive, 1991 $219,512 $ 84,008 $ -- $230,976 45,000
Consumer Financial Services
Milton Riseman, Senior..... 1993 $208,023 $ 31,507 $ -- $209,993 22,500 $ 16,237
Vice President, and 1992 $115,385 $ 66,014 $ 114,672(10) $250,831 60,000 $ 7,370
President of ADVANTA 1991 -- -- -- -- --
Mortgage Corp. USA(9)
- ---------------
(1) 1991 figures reflect restricted stock granted pursuant to the Advanta
Management Incentive Plan With Stock Election II ("AMIP II"), representing
"target" bonuses for 1993, 1994 and 1995 performance, at a grant date price
of $14.25 per share of Common Stock (each of which shares became 1 1/2
shares of Class A Common Stock and 1 1/2 shares of Class B Common Stock as
the result of the dual class stock plan approved by stockholders in 1992
and the subsequent three-for-two stock split of both classes of Common
Stock in October 1993), for Messrs. Alter, Greenawalt, Kantor and Marshall.
Mr. Riseman joined the Company in June 1992, at which time his AMIP II
restricted shares (all of which were Class B Common Stock), together with
restricted Class B shares in respect of his "target" bonus for 1992
performance under the predecessor plan to AMIP II, were granted at a grant
date price of $16.75 per share. 1993 figures reflect shares of restricted
Class B Common Stock granted pursuant to the Advanta Management Incentive
Plan with Stock Election III ("AMIP III") representing "target" bonuses for
1996, 1997 and 1998 performance, at a grant date price of $25.50 per share
(each of which shares became 1 1/2 shares as the result of the October 1993
three-for-two stock split). Shares vest under each plan 10 years after the
date of grant, but as indicated, are subject to accelerated vesting on the
basis of corporate and individual performance for each applicable year.
One-third of the 1991 grants (in Mr. Riseman's case, one-third of his 1992
AMIP II grant) was vested by the Board of Directors in December 1993, with
respect to 1993 performance of each of the named individuals. The remaining
two-thirds of the 1991 grants (and of Mr. Riseman's 1992 AMIP II grant) are
eligible for similar potential vesting with respect to 1994 and 1995
performance, and the 1993 grants are eligible for similar potential vesting
at the rate of one-third of the shares granted for each of 1996, 1997 and
1998. The number of restricted shares of each class of Common Stock held by
each executive under AMIP II and AMIP III, and
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the market value (rounded to the nearest dollar) of such restricted shares
at December 31, 1993, were as follows: Mr. Alter, 46,894 Class A shares,
86,201 Class B shares, $4,059,055; Mr. Greenawalt, 37,419 Class A shares,
68,784 Class B shares, $3,238,918; Mr. Kantor, 23,934 Class A shares,
44,004 Class B shares, $2,071,922; Mr. Marshall, 16,210 Class A shares,
29,795 Class B shares, $1,403,038; and Mr. Riseman, 24,890 Class B shares,
$721,810. Non-preferential dividends are paid on these restricted shares.
(2) The numbers of securities underlying options granted have been adjusted to
reflect the dual class stock plan adopted in 1992 and the three-for-two
stock split effected in October 1993.
(3) In accordance with the transitional provisions applicable to the revised
rules on executive officer and director compensation disclosure adopted by
the SEC, amounts of All Other Compensation are excluded for the year 1991.
(4) Includes a matching contribution of $8,994 paid by the Company to the
respective accounts of each of the named executives under the Employee
Savings Plan (a 401(k) plan), in respect of their 1993 participation in
such plan.
(5) 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), and (ii) whole life insurance policies on the named executives,
which policies are paid for by the Company (or the executive is reimbursed
for his premium payments thereon) and as to which the named executive has
the right to designate the beneficiary. The Company owns each of the whole
life policies except Mr. Riseman's. If an insured executive terminates his
employment with the Company, he may acquire the whole life policy from the
Company (or in Mr. Riseman's case, retain such policy), but only upon
payment to the Company of the full cash value of the whole life policy (or
in Mr. Riseman's case, reimbursement to the Company of premiums paid by it
and carried thereon). Consequently, the value of this insurance to the
employee is the term life insurance benefit. The value of these benefits to
the named individuals for 1993 was as follows: Mr. Alter, $8,204; Mr.
Greenawalt, $7,874; Mr. Kantor, $8,534; Mr. Marshall, $4,574; and Mr.
Riseman, $5,294.
(6) Includes interest paid in 1993 by the Company in the following amounts
pursuant to an executive loan program adopted by the Company's Board of
Directors in January 1992, which interest accrued in the named executives'
respective stock margin accounts in connection with the vesting of shares
under the Advanta Management Incentive Plan With Stock Election: Mr.
Greenawalt, $7,499; Mr. Kantor, $6,204; Mr. Marshall, $5,361; and Mr.
Riseman, $1,060. Mr. Alter did not participate in the loan program.
(7) Includes above-market interest earned during 1993 on deferred compensation
pursuant to the Company's Executive Deferral Plan (which plan first became
effective in 1993), in the following amounts: Mr. Alter, $5,810; Mr.
Greenawalt, $4,126; Mr. Marshall, $1,727; and Mr. Riseman, $889. Mr. Kantor
did not participate in the plan in 1993.
(8) Includes the value of split-dollar life insurance policies purchased in
1993 separately insuring the life of Dennis Alter, the joint lives of
Dennis Alter and his spouse, and the joint lives of Richard Greenawalt and
his spouse, the proceeds of which policies are payable to beneficiaries
designated by the respective executives. The value of the term life
insurance benefits provided under such policies and included in the figure
for 1993 was $16,303 for Mr. Alter and $1,598 for Mr. Greenawalt. 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 and included in the figure for 1993 was $37,217 for Mr. Alter and
$13,318 for Mr. Greenawalt.
(9) Mr. Riseman first joined the Company in June 1992 as Senior Vice President,
Administration. He was elected to his present position in February 1994.
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(10) Represents the value of relocation benefits provided to Mr. Riseman when he
moved from New York City to join the Company in 1992, including $81,711 to
cover relocation costs and $32,961 to reimburse Mr. Riseman for the taxes
payable with respect to such benefits.
STOCK OPTION GRANTS
The following table contains information concerning the grant of stock
options under the Company's 1992 Stock Option Plan to the Company's Chief
Executive Officer and to each of the Company's other four most highly
compensated executive officers whose compensation exceeded $100,000 during 1993.
All options granted in 1993 are options to purchase shares of Class B Common
Stock. The Company does not currently have (and has not previously had) any plan
pursuant to which any stock appreciation rights ("SARs") may be granted.
OPTION GRANTS IN LAST FISCAL YEAR(1)
INDIVIDUAL GRANTS
- ------------------------------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -------------------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5%($)(2) 10%($)(2) 0%($)
- ------------------ ----------- ------------ ----------- ---------- -------- ---------- -----
Dennis Alter...... 37,500 7.3% $ 20.92 2/9/2003 $493,288 $1,250,088 $ 0
Richard A.
Greenawalt...... 37,500 7.3% $ 20.92 2/9/2003 $493,288 $1,250,088 $ 0
Warren Kantor..... 22,500 4.4% $ 20.92 2/9/2003 $295,973 $ 750,053 $ 0
Robert A.
Marshall........ 26,250 5.1% $ 20.92 2/9/2003 $345,301 $ 875,061 $ 0
Milton Riseman.... 22,500 4.4% $ 20.92 2/9/2003 $295,973 $ 750,053 $ 0
- ---------------
(1) Options granted in 1993 become exercisable on the anniversary of the date of
grant at the rate of 25% per year for four years. The options expire 10
years from the date of grant. The number of options granted and the exercise
price thereof have been adjusted to reflect the three-for-two stock split
effected in October 1993.
(2) The dollar amounts under these columns are the result of calculations at 5%
and 10% compounded annual rates set by the SEC and therefore are not
intended to forecast the future appreciation, if any, in the price of the
Company's Class B Common Stock. The potential realizable values illustrated
at 5% and 10% compound annual appreciation assume that the price of the
Company's Class B Common Stock increases to $34.07 or $54.25 per share,
respectively, over the 10-year term of the options. If the named executives
realize these values, the Company's stockholders will realize aggregate
appreciation in the price of the 22.6 million shares of the Company's Class
B Common Stock outstanding of approximately $297 million or $754 million,
respectively, over the same period. The Company did not use an alternative
formula for valuation of option grants because it is not aware of any
formula which determines with reasonable accuracy a present grant value.
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STOCK OPTION EXERCISES AND HOLDINGS
The following table sets forth information related to options exercised
during 1993 by the Company's Chief Executive Officer and by each of the
Company's other four most highly compensated executive officers whose
compensation exceeded $100,000 in 1993, and the number and value of options held
on December 31, 1993 by such individuals. The number of shares acquired on
exercise has been adjusted to reflect the three-for-two stock split effected in
October 1993. The Company does not have any outstanding SARs.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES AGGREGATE OPTIONS AT FY-END (#) FY-END ($)
ACQUIRED ON VALUE ---------------------------- ---------------------------
NAME EXERCISE(#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------- ----------- ------------ ----------- -------------- ----------- -------------
Dennis Alter....... 0 $ 0 75,000 262,500 $ 1,249,950 $ 4,052,933
Richard A.
Greenawalt....... 150,854 $3,772,357 983,146 127,500 $27,859,876 $ 1,803,023
Warren Kantor...... 47,418 $ 921,255 0 69,750 $ 0 $ 947,951
Robert A.
Marshall......... 0 $ 0 312,750 73,500 $ 9,026,074 $ 1,153,196
Milton Riseman..... 0 $ 0 15,000 67,500 $ 267,491 $ 984,321
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS
Mr. Greenawalt and Mr. Kantor each previously had employment agreements
with the Company, pursuant to which Mr. Greenawalt was entitled to a base annual
salary of at least $325,000 and Mr. Kantor was entitled to a base annual salary
of at least $225,000, as adjusted for increases in the Consumer Price Index.
Each of these employment agreements was terminated as of December 31, 1993, by
mutual consent of the Company and the respective executives.
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COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for
setting the overall direction for the executive compensation strategy of the
Company and the on-going monitoring of the strategy's implementation. However,
the full Board of Directors (excluding the management directors) has authority
to approve or disapprove the determinations of the Compensation Committee with
respect to senior executives.
The policies of the Committee and the Board of Directors are designed to
provide competitive levels of compensation that integrate pay with the Company's
annual and long-term performance goals, reward above-target corporate
performance, recognize individual initiative and achievements, and assist the
Company in attracting and retaining qualified executives.
The major elements of the executive compensation program are base salary,
performance-based annual and long-term incentives, and stock options. Target
levels of overall compensation are intended to be consistent with companies in
the Dow Jones Diversified Financial Services Index (the "peer group"). However,
for several years total compensation has been weighted toward programs
contingent upon the Company's short and long-term performance as measured by
increases in the value of the Company's publicly traded shares. As a result of
the increased emphasis on tying executive compensation to corporate performance
and share price, in any particular year the Company's executives may be paid
more or less than the executives of competitors, depending upon the Company's
performance and share price appreciation.
THE $1 MILLION DOLLAR CAP ON DEDUCTIBLE EXECUTIVE COMPENSATION
The Committee has determined that compensation payable to the executive
officers should generally meet the conditions required for full deductibility
under Internal Revenue Code Section 162(m). However, the Committee also
recognizes that in certain instances it may be in the best interest of the
Company to provide compensation that is not deductible.
BASE SALARY
Base salaries are set by the Committee based upon a comparison of the prior
year's salaries at companies in the peer group index. Base salaries are targeted
to approximate the median base salaries of the comparator companies. The
Company's philosophy is to limit fixed costs in its executives' compensation by
emphasizing the variable components of total compensation, i.e., short and
long-term incentives.
ANNUAL INCENTIVES
Bonuses are based upon achieving annual financial goals, as approved by the
Board of Directors. In 1993, the annual incentive program awards generally
resulted in a cash payout below the median cash bonus level of the Company's
peer group index. If a predetermined threshold level of performance is not
achieved, no bonus is paid. Achievement of "target" financial goals warrants
payment of the "target" bonus award. Accomplishment of financial goals in excess
of targeted levels warrants payment of correspondingly larger bonuses. The
maximum bonus is twice the target level.
The 1993 performance awards were based principally on return on equity and
earnings per share. Each of these factors was given approximately equal weight.
The Company exceeded both the target return on equity and earnings per share
goals in 1993. Along with these objective performance criteria, the Committee
also gave some consideration to subjective factors, including management's
maintenance of a proper control environment with respect to the Company's
operations, and management's success in positioning the Company for future
profitable growth. No specific weights were attached to these subjective
factors.
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LONG-TERM INCENTIVES
The long-term incentive program is designed to increase executive share
ownership. The Advanta Management Incentive Plan with Stock Election III is a
multi-year incentive program, intended as an additional incentive to employees
to enter into or remain in the employ of the Company. Under the Plan, 100% of
the target bonuses for 1996, 1997 and 1998 (projected at 1993 salary levels) is
payable in the form of a restricted stock grant made in 1993. The restricted
stock vests in 10 years. Vesting may be accelerated depending upon achievement
of performance goals, with up to one-third of the shares granted in 1993 being
vested for each of the 1996, 1997 and 1998 performance years. In 1993, the
long-term incentive awards and the stock option awards generally resulted in
total direct compensation above the median of the peer group index.
STOCK OPTIONS
The Stock Option Plan is designed to reward long-term accomplishment, based
upon increases in shareholder value. Based upon the Committee's determination,
options may be granted annually. The exercise price of options is 100% of fair
market value on the date of grant. Options vest over four years and expire 10
years after the grant date.
In determining the size of 1993 individual option grants, the Committee
took into consideration performance against the 1992 strategic plan and assessed
each executive officer's expected contribution to the Company and the
shareholders based upon the executive's level of responsibility and the
strategic value of his position. Prior awards were also considered in
determining the size of an option grant, with newer executives eligible for
proportionately larger awards.
THE CHIEF EXECUTIVE OFFICER'S 1993 COMPENSATION
Mr. Alter is eligible to participate in the same executive compensation
plans available to the other executive officers. The Committee's general
approach in setting Mr. Alter's target annual compensation is to seek to be
competitive with other companies in the peer group index, but to have a large
variable component in his compensation.
Mr. Alter's base salary was set based upon his perceived value to the
Company in increasing the Company's earnings and share value over the last six
years. Mr. Alter has not received a base salary increase for the past four
years. All increases in Mr. Alter's pay have been based upon the variable
component of his pay (bonus with restricted stock and stock option grants), and
are primarily reflected in the Company's share value appreciation.
Mr. Alter's base salary and total annual cash compensation were below the
median of the peer group index in 1993. For 1993, Mr. Alter's annual bonus was
tied principally to achievement of return on equity and earnings per share
goals. The Company exceeded the target goals for each of these factors. Some
consideration was also given to subjective factors, as described above under
"Annual Incentives."
Based upon his level of responsiblity, strategic value to the Company, and
the Company's performance against the 1993 strategic plan, the Committee awarded
Mr. Alter a stock option grant for 37,500 shares in 1993. Mr. Alter received a
grant in 1993 of $668,228 of restricted stock under the Advanta Management
Incentive Plan With Stock Election III. This represents his target bonuses for
1996, 1997 and 1998 performance (projected at his 1993 salary level).
COMPENSATION COMMITTEE
Philip A. Turberg, Chairman Arthur P. Bellis Max Botel
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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, 1993 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, 1989 in the
Class A Common Stock (then described simply as "Common Stock") and in the
foregoing indices and assumes the reinvestment of dividends. The price and
performance of the Class A Common Stock has been adjusted to reflect (i) the
effective two-for-one stock split as a result of the May 5, 1992 dividend of one
share of Class B Common Stock for each outstanding share of Class A Common
Stock, and (ii) the three-for-two stock split effected by means of a 50% stock
dividend in October 1993, as if such dividends had already occurred at January
1, 1989.
Diversified
Measurement Period Financial
(Fiscal Year Covered) Advanta S&P 500 Services
1/1/89 100 100 100
12/89 226.9 128.4 132.2
12/90 229.0 119.9 103.8
12/91 791.4 151.5 143.9
12/92 1484.9 158.3 163.0
12/93 2288.2 169.4 183.2
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ELECTION OF DIRECTORS
The Board of Directors has nominated four candidates to be elected at the
Meeting for a three-year term ending in 1997. Each nominee is currently serving
as a director of the Company. One director whose term expires at the Meeting is
not standing for re-election. Seven other directors are currently serving terms
which will expire in 1995 or 1996.
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 is set forth below, including such individual's age and principal
occupation, a brief account of business experience during at least the last five
years and other directorships currently held at other publicly held companies.
Messrs. Alter, Bellis, Botel and Braemer have been directors of the Company
since its incorporation in 1974. Messrs. Kantor and Turberg were elected as
directors by the shareholders in 1986. Messrs. Greenawalt, Dunkelberg, Brenner,
Naples and Hart were first elected by the Board in November 1987, June 1990, May
1992, November 1992, and February 1994, respectively.
NOMINEES FOR ELECTION FOR A TERM EXPIRING IN 1997
Richard A. Greenawalt Warren Kantor
Alex W. "Pete" Hart Ronald J. Naples
Mr. Greenawalt, age 50, was elected President and Chief Operating Officer
of the Company in November 1987. Prior to joining the Company, Mr. Greenawalt
served as President of Transamerica Financial Corp., Los Angeles, California,
from May 1986. For the 15 years prior to that, Mr. Greenawalt served in various
capacities with Citicorp, including most recently as Chairman and Chief
Executive Officer of Citicorp Person-to-Person, Inc. and, prior to that, as
President and Chief Executive Officer of Citicorp Retail Services, Inc.
Mr. Hart, age 53, joined the Company in March 1994 as Executive Vice
Chairman. For the five years prior to that he had been President and Chief
Executive Officer of MasterCard International, Inc., a worldwide association of
over 29,000 member financial institutions. Prior to joining MasterCard in
November 1988, Mr. Hart was Executive Vice President of First Interstate
Bancorp, Los Angeles, California.
In January 1994, Mr. Hart and the Company entered into an agreement
pursuant to which Mr. Hart's base salary was set at not less than $495,000. In
addition, he received 200,000 restricted shares of Class B Common Stock and an
option to purchase 100,000 shares of Class B Common Stock at $27.75 per share.
The restricted shares, which as of the January 1994 date of grant had a market
value of $5.6 million, will vest at the rate of 25% per annum for four years,
and the options will become exercisable at the same rate. Should Mr. Hart leave
the Company's employ before four years have passed, these benefits will vest
upon the departure except in certain limited circumstances. Mr. Hart is also to
receive a guaranteed one-time bonus of $525,000, other annual benefits and
perquisites estimated at $250,000, and will also be eligible to receive annual
bonuses under AMIP II and AMIP III.
Mr. Kantor, age 52, joined the Company as a Senior Vice President in April
1986, and later that year was promoted to Executive Vice President and Chief
Financial Officer. In November 1993 he was promoted to the position of Vice
Chairman, and he relinquished the title of Chief Financial
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Officer. Prior to joining the Company he had been, for more than ten years, a
partner of the accounting firm of Arthur Andersen & Co. Prior to his resignation
from that firm, he was in charge of the Financial Services Division of Arthur
Andersen & Co. in Philadelphia, Pennsylvania and was the audit partner assigned
to the Company's account.
Mr. Naples, age 48, has been Chief Executive Officer of Hunt Manufacturing
Company, Inc., a manufacturer and distributor of office and art/craft products,
since 1981, and Chairman of the Board of Hunt since 1987. He is a former White
House Fellow, and served on the White House Staff during the Ford Administration
as Assistant to the Counsellor to the President for Economic Affairs, and as a
Special Assistant to the head of the Federal Energy Administration. Mr. Naples
is a director of Quaker Chemical Corp.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE ELECTION OF ALL FOUR
NOMINEES FOR ELECTION.
INCUMBENT DIRECTORS CONTINUING IN OFFICE FOR A TERM EXPIRING IN 1995
Dennis Alter William C. Dunkelberg
Arthur P. Bellis
Mr. Alter, age 51, became Executive Vice President and a director of the
Company's predecessor organization in 1967. He was elected President and Chief
Executive Officer of that predecessor in 1972, and Chairman of the Board of
Directors of the Company in August, 1985. In February 1986, he relinquished the
title of President.
Mr. Bellis, age 50, 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 remains a director of Boca Bancorp,
Inc.
Mr. Dunkelberg, age 50, has been Dean of the School of Business and
Management and Professor of Economics at Temple University since 1987. Prior to
that, Dean Dunkelberg was a professor of economics and management at Purdue
University and at Stanford University. As an authority on consumer credit and
small business, he was appointed to the Consumer Advisory Council of the Board
of Governors of the Federal Reserve System in January 1989.
INCUMBENT DIRECTORS CONTINUING IN OFFICE FOR A TERM EXPIRING IN 1996
Max Botel Anthony R. Brenner
Richard J. Braemer Phillip A. Turberg
Mr. Botel, age 54, has been, for more than five years, a partner in the law
firm of Botel, Binder and Weiss, and since February 1985 has also been Vice
President of Penn Center Investments, Inc., a securities brokerage firm.
Mr. Braemer, age 52, has been a partner in the law firm of Ballard, Spahr,
Ingersoll & Andrews since January 1994. Prior to that time, from May 1992 he was
a partner in the law firm of Hangley Connolly Epstein Chicco Foxman & Ewing, and
before May 1992 he was, for more than five years, a shareholder and director of
Braemer, Abelson & Hitchner, a professional corporation engaged in the practice
of law. Mr. Braemer is a director of Toll Brothers, Inc.
Mr. Brenner, age 36, has been President of Cedar Capital Investors, LTD,
the managing general partner of Cedar Point Partners, L.P., a private equity
investment partnership, since January 1989. In that capacity, Mr. Brenner has
undertaken management responsibilities for companies in which the partnership
has invested, including the positions of Chairman and Chief Executive Officer of
Liebhardt Mills, Inc., a bed pillow manufacturer, since June 1989, and Chairman
of Servomation
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International, L.P., an institutional food service company, since June 1991. He
assumed the additional position of Chief Executive Officer of Servomation in
July 1992.
Mr. Turberg, age 65, has been a management consultant affiliated with
Firemark Group, Inc. in Parsippany, New Jersey, a firm specializing in research
for insurance companies, since September 1993. Before that, from July 1992 he
was an independent management consultant. Prior to that he had been a management
consultant affiliated with the accounting firm of KPMG Peat Marwick in New York
City from February 1989. Prior to that he had been, for more than five years,
President of Huggins Financial Services, Inc., a management consulting firm.
COMMITTEES, MEETINGS AND COMPENSATION OF THE BOARD OF DIRECTORS
The Board of Directors held 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, except Mr. Howard.
The Board of Directors has an Audit Committee currently composed of Messrs.
Braemer, Brenner and Dunkelberg. 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 seven
times in 1993.
The Board of Directors has appointed a Compensation Committee currently
composed of Messrs. Bellis, Botel, and Turberg. The Compensation Committee
reviews compensation arrangements for executives, reviews and makes
recommendations to the full Board regarding the adoption or amendment of
employee benefit plans, and administers the Company's employee stock purchase
plan. The Compensation Committee also administers the Company's Stock Option
Plans, and except with respect to grants of options to non-employee directors,
has full authority to determine the persons to whom and the times at which
options shall be granted, the number of option shares to be granted and the
price and other terms of options. The Compensation Committee also has authority
to designate whether options granted are intended to qualify as incentive stock
options or are to be non-qualified stock options. The Compensation Committee met
or acted by consent eleven times in 1993.
In February 1993, the Board of Directors established 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. Bellis, Brenner and Naples. The Nominating
Committee met two times in 1993. The Nominating Committee will consider nominees
recommended by securityholders; any such nominations must comply with the
requirements of the Company's By-Laws, including delivery to the Company at
least thirty days before the meeting of stockholders of a written request from a
stockholder of record that the individual's name be placed in nomination,
accompanied by the written consent of such individual to serve as a director.
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
Committee chairperson, for which the annual retainer is $15,000 instead), and
are paid $1,000 per day for each Board or Board Committee meeting attended
(chairmen are paid $1,500 per day for each Committee meeting they chair). The
chairmen of the Audit Committee, the Compensation Committee and the Nominating
Committee are Messrs.
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Braemer, Turberg, and Bellis, respectively. Directors are reimbursed for
expenses incurred in attending meetings of the Board of Directors and committees
thereof.
PROPOSAL TO AMEND THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has declared advisable and directed that there be
submitted to the stockholders of the Company at the Meeting a proposed amendment
to Article Fourth of the Company's Restated Certificate of Incorporation, in
order to increase the number of authorized shares of Common Stock of the Company
from 60,000,000 shares, consisting of 30,000,000 shares of Class A Common Stock
and 30,000,000 shares of Class B Common Stock, to 400,000,000 shares, consisting
of 200,000,000 shares of Class A Common Stock and 200,000,000 shares of Class B
Common Stock (together, the "Common Stock").
As of March 18, 1994, the record date for the Meeting, there were
shares of the Company's Class A Common Stock issued and outstanding
and shares of the Company's Class B Common Stock issued and
outstanding, for a total of shares out of 60,000,000 authorized
shares of Common Stock. An additional shares of Class A Common Stock
and shares of Class B Common Stock are reserved for issuance
pursuant to various employee compensation and benefit plans of the Company and
its subsidiaries.
Adoption of this proposal would permit the Company's Board of Directors,
without further approval of the Company's stockholders, except as may be
required by Delaware law or as may be required for the continued inclusion of
the Company's Common Stock in the NASDAQ National Market System, to issue
additional shares of the Company's Common Stock, from time to time as the Board
of Directors may determine, for such consideration as the Board of Directors
establishes.
The availability of additional shares of Common Stock would provide
flexibility in structuring possible acquisitions of other businesses, enable the
Company to raise additional equity capital if and when needed, enable the
Company to provide employees with appropriate incentives and allow the Board of
Directors, in its discretion, to declare stock splits or stock dividends in the
future. The Company has no present plans, arrangements or understandings with
respect to possible acquisitions, financings, stock splits or dividends
requiring the availability of additional authorized Common Stock. Although the
Board of Directors would only authorize the issuance of additional shares of
Common Stock based on its judgment as to the best interests of the Company and
its stockholders, the issuance of additional authorized shares could have the
effect of dilution of the voting power or book value per share of the
outstanding shares of Common Stock. The Board of Directors (if consistent with
its fiduciary responsibilities) may also issue shares to deter future attempts
to gain control over the Company.
There are no preemptive rights with respect to the Company's Common Stock;
and the proposed increase in the authorized number of shares of Class A Common
Stock and Class B Common Stock would not change the powers, preferences or
rights of the Common Stock or any series of the Company's preferred stock.
If the amendment is authorized, the text of the first sentence of Article
Fourth of the Company's Restated Certificate of Incorporation will be as
follows:
"FOURTH: The aggregate number of shares of all classes of capital stock
which the Corporation shall have authority to issue is:
Four Hundred Million (400,000,000) shares of common stock ("Common Stock"),
consisting of Two Hundred Million (200,000,000) shares of Class A Common Stock,
par value $0.01 per share ("Class A Common Stock"), amounting in the aggregate
to Two Million Dollars ($2,000,000), and
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Two Hundred Million (200,000,000) shares of Class B Common Stock, par value
$0.01 per share ("Class B Common Stock"), amounting in the aggregate to Two
Million Dollars ($2,000,000); and
One Thousand Ten (1,010) shares of Class A Preferred Stock, par value
$1,000 per share ("Class A Preferred Stock"), amounting in the aggregate to One
Million Ten Thousand Dollars ($1,010,000), and One Million (1,000,000) shares of
Class B Preferred Stock, par value $0.01 per share ("Class B Preferred Stock"),
amounting in the aggregate to Ten Thousand Dollars ($10,000)."
Although Article Fourth addresses preferred stock, no changes will be made
with respect to the Company's preferred stock as a result of this amendment.
The affirmative vote of the holders of a majority of the votes which may be
cast by the outstanding shares of Class A Common Stock and Class A Preferred
Stock entitled to vote at the Meeting is required to authorize the proposed
amendment to the Restated Certificate of Incorporation. Under applicable
Delaware law, in determining whether the proposal has received the requisite
number of affirmative votes, abstentions and broker non-votes will have the same
effect as votes against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE AMENDMENT TO THE
COMPANY'S RESTATED CERTIFICATE OF INCORPORATION.
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RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen & Co. 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 & Co. 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 Annual Meeting of
Stockholders in 1995 must be received by December 5, 1994, in order to be
considered for inclusion in the Company's proxy statement and form of proxy
relating to that meeting. Stockholder proposals should be directed to Gene S.
Schneyer, Secretary, at the address of the Company set forth on the first page
of this proxy statement.
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.
[logo]
This proxy statement has been printed entirely on recycled paper.
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ADVANTA CORP.
The undersigned, a stockholder of Advanta Corp., hereby
constitutes and appoints Dennis Alter, Richard A. Greenawalt and Gene
S. Schneyer, 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, May
5, 1994, at 1:00 p.m. at The Rittenhouse Hotel, Grand Ballroom, 210
West Rittenhouse Square, Philadelphia, 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:
1. / / FOR all four nominees for director listed below.
/ / WITHHOLD AUTHORITY to vote for all four nominees for director
listed below.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST
BELOW.
Nominees: Richard A. Greenawalt, Alex W. "Pete" Hart, Warren
Kantor and Ronald J. Naples.
2. / /FOR the proposal to amend the Company's Restated Certificate of
Incorporation to increase the number of authorized shares of
Common Stock from 60,000,000 to 400,000,000 shares, consisting
of 200,000,000 shares of Class A Common Stock and 200,000,000
shares of Class B Common Stock.
/ / AGAINST / / ABSTAIN
3. 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 FOUR NOMINEES FOR DIRECTOR, AND FOR THE PROPOSAL TO
AMEND THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION. Shares
voted "Abstain" with respect to Proposal 2
will be considered present at the meeting. 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.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
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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.
Dated: ----------------- , 1994
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(Stockholder's Signature)
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(Stockholder's Signature)
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.
PLEASE SIGN AND MAIL PROMPTLY
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