<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
------ SECURITIES EXCHANGE ACT OF 1934.
For the fiscal year ended December 31, 1996.
OR
------ TRANSITION REPORT PURSUANT TO SECTION 15d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from ____ to ____.
Commission file number:
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
NATIONAL AUTO CREDIT, INC.
401 (K) SAVINGS AND RETIREMENT PLAN & TRUST
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
NATIONAL AUTO CREDIT, INC.
30000 AURORA ROAD
SOLON, OHIO 44139
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REQUIRED INFORMATION
Listed below are all of the exhibits and financial statements filed as part of
the annual report:
a. Financial Statements:
Independent Auditors' Report
Statements of Net Assets Available for Benefits
as of December 31, 1996 and 1995
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1996
Notes to Financial Statements
b. Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment Purposes
as of December 31, 1996
Items 27d - Schedule of Reportable Transactions
for the Year Ended December 31, 1996
c. Exhibit - Independent Auditors' Consent
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the plan) have duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
NATIONAL AUTO CREDIT, INC.
401(K) SAVINGS AND RETIREMENT PLAN & TRUST
Date: June 27, 1997 BY: /s/ Davida S. Howard
--------------------
Davida S. Howard
Title: Vice President - Finance and Controller
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NATIONAL AUTO CREDIT, INC.
401(K) SAVINGS AND RETIREMENT
PLAN & TRUST
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND 1995
AND FOR THE YEAR ENDED
DECEMBER 31, 1996,
SUPPLEMENTAL SCHEDULES
FOR THE YEAR ENDED
DECEMBER 31, 1996
AND INDEPENDENT AUDITORS' REPORT
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NATIONAL AUTO CREDIT, INC.
401(K) SAVINGS AND RETIREMENT PLAN & TRUST
TABLE OF CONTENTS
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PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND DECEMBER 31, 1995
AND FOR THE YEAR ENDED DECEMBER 31, 1996:
Statements of Net Assets Available for Benefits 2-3
Statement of Changes in Net Assets Available for Benefits 4
Notes to Financial Statements 5-7
SUPPLEMENTAL SCHEDULES
FOR THE YEAR ENDED DECEMBER 31, 1996
Item 27a - Schedule of Assets Held for Investment Purposes 8
Item 27d - Schedule of Reportable Transactions 9
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[DELOITTE & TOUCHE LLP LOGO]
Suite 2500 Telephone: (216) 589-1300
127 Public Square Facsimile: (216) 589-1369
Cleveland, Ohio 44114-1301
INDEPENDENT AUDITORS' REPORT
National Auto Credit, Inc.
401(k) Savings and Retirement Plan & Trust
We have audited the accompanying statements of net assets available for benefits
of National Auto Credit, Inc. 401(k) Savings and Retirement Plan & Trust as of
December 31, 1996 and 1995, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1996. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1996
and 1995, and the changes in net assets available for benefits for the year
ended December 31, 1996 in conformity with generally accepted accounting
principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of (1) assets held for investment purposes as of December 31, 1996 and (2)
transactions in excess of five percent of the current value of plan assets for
the year ended December 31, 1996 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements, but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These schedules are the responsibility of the Plan's
management. The supplemental information by fund is presented for the purpose of
additional analysis rather than to present information regarding the net assets
available for benefits and changes in net assets available for benefits of the
individual funds, and is not a required part of the basic financial statements.
This supplemental information is the responsibility of the Plan's management.
The supplemental schedules and supplemental information by fund have been
subjected to the auditing procedures applied in our audits of the basic 1996
financial statements and, in our opinion, are fairly stated in all material
respects when considered in relation to the basic financial statements taken as
a whole.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Cleveland, Ohio
May 30, 1997
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DELOITTE TOUCHE
TOHMATSU
INTERNATIONAL
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NATIONAL AUTO CREDIT, INC.
401(K) SAVINGS AND RETIREMENT PLAN & TRUST
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
- -----------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
-----------------------------------------------------------------------------------------
GUARANTEED FIDELITY ADVISOR
INVESTMENT CORPORATION STOCK GROWTH PARTICIPANT
CONTRACT STOCK INDEX BALANCED OPPORTUNITIES LOAN
FUND FUND FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair value:
Interest in collective trust $1,439,580 $1,439,580
National Auto Credit, Inc.
common stock (cost $145,706) $150,852 150,852
Mutual funds $402,072 $271,797 $761,091 1,434,960
Money market funds 4,748 4,748
Loans to participants $32,503 32,503
--------- ------- ------- ------- ------- ------ ---------
Total investments 1,439,580 155,600 402,072 271,797 761,091 32,503 3,062,643
Other assets 6 21 3 2 4 36
--------- ------- -------- ------- ------- ------ ---------
NET ASSETS AVAILABLE FOR BENEFITS $1,439,586 $155,621 $402,075 $271,799 $761,095 $32,503 $3,062,679
========= ======= ======= ======= ======= ====== =========
</TABLE>
See the accompanying notes to financial statements.
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NATIONAL AUTO CREDIT, INC.
401(K) SAVINGS AND RETIREMENT PLAN & TRUST
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
--------------------------------------------------------------------------------------------
GUARANTEED FIDELITY ADVISOR
INVESTMENT CORPORATION STOCK GROWTH PARTICIPANT
CONTRACT STOCK INDEX BALANCED OPPORTUNITIES LOAN
FUND FUND FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair value:
Interest in collective trust $1,487,198 $1,487,198
National Auto Credit, Inc.
common stock (cost $120,356) $146,932 146,932
Mutual funds $293,934 $254,557 $856,879 1,405,370
Money market funds 4,548 1,094 1,429 869 4,366 12,306
Loans to participants $25,495 25,495
--------- ------- ------- ------- ------- ------ ---------
Total investments 1,491,746 148,026 295,363 255,426 861,245 25,495 3,077,301
Other assets 18 13 2 10,962 85 11,080
--------- ------- ------- ------- ------- ------ ---------
TOTAL ASSETS 1,491,764 148,039 295,363 255,428 872,207 25,580 3,088,381
LIABILITIES - Other liabilities (428) (557) (2,197) (1,186) (18,037) (22,405)
--------- ------- ------- ------- ------- ------ ---------
NET ASSETS AVAILABLE FOR BENEFITS $1,491,336 $147,482 $293,166 $254,242 $854,170 $25,580 $3,065,976
========= ======= ======= ======= ======= ====== =========
</TABLE>
See the accompanying notes to financial statements.
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NATIONAL AUTO CREDIT, INC.
401(K) SAVINGS AND RETIREMENT PLAN & TRUST
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1996
- -----------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
-----------------------------------------------------------------------------
GUARANTEED FIDELITY ADVISOR
INVESTMENT CORPORATION STOCK GROWTH PARTICIPANT
CONTRACT STOCK INDEX BALANCED OPPORTUNITIES LOAN
FUND FUND FUND FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Investment income:
Net appreciation in fair value of investments . $ 86,018 $ 63,520 $ 28,068 $116,627 $ 294,233
Interest and dividends ........................ 1,202 6,874 7,344 10,319 $ 2,701 28,440
--------- ------- ------ ------- ----- ----------
87,220 70,394 35,412 126,946 2,701 322,673
--------- ------- ------ ------- ----- ----------
Contributions:
Employee ...................................... 25,125 $11,968 39,599 16,632 89,664 182,988
Employer ...................................... 8,998 4,389 13,268 6,289 29,116 62,060
Employee rollovers ............................ 1,675 21,339 1,790 22,507 47,311
--------- ------- ------- ------ ------- ----- ----------
35,798 16,357 74,206 24,711 141,287 292,359
--------- ------- ------- ------ ------- ----- ----------
Total additions ........................ 123,018 16,357 144,600 60,123 268,233 2,701 615,032
--------- ------- ------- ------ ------- ----- ---------
DEDUCTIONS:
Net depreciation in fair value of investments ... (23,489) (23,489)
Benefits paid to participants ................... (173,976) (22,082) (64,191) (45,801) (264,556) (7,331) (577,937)
Administrative expenses ......................... (11,262) (400) (1,348) (928) (2,965) (16,903)
--------- ------- ------- ------- ------- ------ ----------
Total deductions ........................ (185,238) (45,971) (65,539) (46,729) (267,521) (7,331) (618,329)
--------- ------- ------- ------- ------- ------ ----------
Net increase (decrease) before transfers (62,220) (29,614) 79,061 13,394 712 (4,630) (3,297)
FUND TRANSFERS NET ................................ 10,470 37,753 29,848 4,163 (93,787) 11,553
--------- ------- ------- ------- ------- ------ ----------
INCREASE (DECREASE) IN NET ASSETS ................. (51,750) 8,139 108,909 17,557 (93,075) 6,923 (3,297)
NET ASSETS AVAILABLE FOR BENEFITS,
DECEMBER 31, 1995 ............................... 1,491,336 147,482 293,166 254,242 854,170 25,580 3,065,976
--------- ------- ------- ------- ------- ------ ---------
NET ASSETS AVAILABLE FOR BENEFITS,
DECEMBER 31, 1996 ............................... $1,439,586 $155,621 $402,075 $271,799 $761,095 $32,503 $3,062,679
========= ======= ======= ======= ======= ====== =========
</TABLE>
See the accompanying notes to financial statements
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<PAGE> 9
NATIONAL AUTO CREDIT, INC.
401(K) SAVINGS AND RETIREMENT PLAN & TRUST
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND 1995
AND THE YEAR ENDED DECEMBER 31, 1996
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1. DESCRIPTION OF THE PLAN
The following is a brief description of the National Auto Credit, Inc.
401(k) Savings and Retirement Plan & Trust (the "Plan"). Participants
should refer to the Plan agreement for more complete information.
GENERAL - The Plan, which became effective January 31, 1972, and as
amended February 1, 1989 and January 1, 1994, is a defined contribution
plan which covers substantially all employees of National Auto Credit,
Inc. and subsidiaries (the "Company"). Employees, other than temporary,
are eligible to participate upon completion of one year of service and
attainment of the age of 21. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
CONTRIBUTIONS AND PARTICIPANT ACCOUNTS - Participants may elect to make a
pre-tax compensation deduction ranging from 1% to 15% (subject to certain
limitations). National Auto Credit, Inc. (the Plan Sponsor) provided a
matching contribution of 50% and 20% of the employees' first 4% of salary
reduction for the years ended December 31, 1996 and 1995, respectively.
Additionally, the Plan Sponsor may make a discretionary profit sharing
contribution based upon a percentage of participant's eligible
compensation. The Plan also provides that this discretionary amount may be
funded by the forfeited amounts of employees who have withdrawn from the
Plan. Each participant's account is credited with the participant's
contribution and allocations of the Plan sponsor's contribution, Plan
earnings, and charged with an allocation of administrative expenses.
Allocations are based on participant earnings or account balances, as
defined.
INVESTMENTS - Participants elect to invest their and the employer's
contributions in one or more of the Plan's five funds. Key Trust Company
of Ohio, N.A. ("Key Trust", the Trustee) maintains separate accounts for
each participant and invests his or her contributions as directed into the
following funds:
- GUARANTEED INVESTMENT CONTRACT FUND - The assets of this fund are
invested in the Key Trust EB Managed Guaranteed Investment Contract
Fund which is a diversified portfolio of insurance company investment
contracts augmented by U.S. government securities and money market
instruments. Assets may also be invested on an interim basis in a Key
Trust money market fund.
- CORPORATION STOCK FUND - This fund is principally invested in
National Auto Credit, Inc. common stock. Assets may also be invested
on an interim basis in a Key Trust money market fund. Purchases or
sales of common stock of National Auto Credit, Inc. during 1996 were
not material.
- STOCK INDEX FUND - The assets of this fund are invested in the
Victory Stock Index Fund which is a diversified portfolio of common
stocks included in the Standard & Poor's 500 Index, Standard & Poor's
stock index futures contracts, and other derivative securities
designed to replicate the Standard & Poor's 500 Index. Assets may
also be invested on an interim basis in a Key Trust money market
fund.
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- BALANCED FUND - The assets of this fund are invested in the Victory
Balanced Fund which is a diversified portfolio of common stock and
fixed income securities or collective funds holding these securities,
effecting modest changes in the allocation between these asset
classes as their relative attractiveness changes. Assets may also be
invested on an interim basis in a Key Trust money market fund.
- FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND - The assets of this fund
are invested in the Fidelity Advisor Growth Opportunities Fund which
consists primarily of securities of companies that have long-term
growth potential. Assets may also be invested on an interim basis in
a Key Trust money market fund.
VESTING - Each participant is fully vested for his or her own salary
reduction contributions to the Plan. With respect to the employer matching
and discretionary contributions, participants become 20% vested after
three years of service increasing by increments of 20% for each additional
year thereafter, becoming 100% vested after seven years of service.
FORFEITURES - Forfeited non-vested amounts totalled $5,693 for the year
ended December 31, 1996. Forfeitures are maintained within the Plan and
may be used to reduce the Plan Sponsor's discretionary contribution. No
forfeitures were used for this purpose in 1996.
BENEFIT PAYMENTS - Participants are entitled to receive the balance held
in their account upon reaching age 65. If participants terminate
employment prior to reaching this age, such participants may elect to
receive either a lump-sum amount equal to their vested interests in their
account (which is automatic if the value of their account is less than
$3,500) or to receive their payments in installments over any period not
extending beyond the life expectancy of the participant and his or her
beneficiary.
ADMINISTRATIVE COSTS - Costs and fees incurred in administering the Plan
are paid by the Plan or the Company, as determined by the Company, subject
to limitations under ERISA.
PARTICIPANT LOANS - The Plan allows participants to borrow a minimum of
$1,000 and up to 50% of their vested account balance. Loans may have a
term of up to five years. However, the term can be extended to ten years
if the loan is used to acquire or construct a principal residence of the
participant. A participant may only have one loan outstanding. The
interest rate on loans is prime plus 1% and is fixed at the time the loan
is made.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The accompanying financial statements have been
prepared on the accrual basis of accounting.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles require management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of additions and
deductions during the reporting period. Actual amounts could differ from
those estimates.
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<PAGE> 11
INVESTMENTS AND INVESTMENT INCOME - Investments in National Auto Credit,
Inc. common stock are valued on the basis of the closing price on the last
trading day of the year. Mutual funds are valued at current net asset
value as determined by the Trustee based upon the market values of the
underlying assets of the fund. The Guaranteed Investment Contract Fund is
valued at contract value which approximates its fair value. The money
market funds are stated at cost, which, due to their nature, approximates
their fair value. Participant loans are valued at cost which approximates
their fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date.
PAYMENT OF BENEFITS - Benefits are recorded when paid.
3. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated March 29, 1995, that the Plan and related Trust are designed
in accordance with applicable sections of the Internal Revenue Code (IRC).
The Plan administrator believes that the Plan is designed and is currently
being operated in compliance with the applicable requirements of the IRC.
4. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, participants will become 100 percent vested in their
accounts.
* * * * * *
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NATIONAL AUTO CREDIT, INC.
401(K) SAVINGS AND RETIREMENT PLAN & TRUST
<TABLE>
<CAPTION>
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
- --------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
IDENTITY OF ISSUER,
BORROWER, LESSOR DESCRIPTION CURRENT
OR SIMILAR PARTY OF INVESTMENT COST VALUE
<S> <C>
* Key Trust Company of Ohio, N.A. 125,769.212 shares of EB Managed
Guaranteed Investment Contract
Fund $ 1,327,897 $ 1,439,580
* National Auto Credit, Inc. 12,571 shares of National Auto
Credit, Inc. common stock 145,706 150,852
* Victory Broker Dealer Services, Inc. 26,417.345 shares of Victory Stock
Index Fund 306,794 402,072
* Victory Broker Dealer Services, Inc. 22,079.348 shares of Victory
Balanced Fund 226,835 271,797
Fidelity Investments 21,560.645 shares of Fidelity Advisor
Growth Opportunities Fund 602,240 761,091
* Key Trust Company of Ohio, N.A. Employee Benefits Money
Market Fund 4,748 4,748
* Various participants in the Plan 3 to 10 year loans to participants
with annual interest rates ranging
from 9.5% to 10% 32,503
------------
TOTAL $ 3,062,643
=============
</TABLE>
* Party in interest
-8-
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NATIONAL AUTO CREDIT, INC.
401(K) SAVINGS AND RETIREMENT PLAN & TRUST
<TABLE>
<CAPTION>
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1996
- ---------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
IDENTITY OF DESCRIPTION PURCHASE SELLING LEASE
PARTY INVOLVED OF ASSETS PRICE PRICE RENTAL
<S> <C> <C> <C> <C>
SERIES OF TRANSACTIONS:
Key Trust Co. of Ohio Employee Benefits Money Market Fund N/A $ 617,686 N/A
Key Trust Co. of Ohio Fidelity Advisor Growth Opportunities Fund N/A 356,845 N/A
Key Trust Co. of Ohio Employee Benefits Money Market Fund $ 610,139 N/A N/A
Key Trust Co. of Ohio Guaranteed Investment Contract Fund N/A 178,652 N/A
<CAPTION>
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(a) (b) (f) (g) (h) (i)
EXPENSES CURRENT VALUE NET
INCURRED COST ASSETS ON GAIN
IDENTITY OF DESCRIPTION WITH OF TRANSACTION OR
PARTY INVOLVED OF ASSETS TRANSACTION ASSETS DATE (LOSS)
<S> <C> <C> <C> <C> <C>
SERIES OF TRANSACTIONS:
Key Trust Co. of Ohio Employee Benefits Money Market Fund None $ 617,686 $ 617,686 None
Key Trust Co. of Ohio Fidelity Advisor Growth Opportunities Fund None 338,398 356,845 $ 18,447
Key Trust Co. of Ohio Employee Benefits Money Market Fund None 610,139 610,139 N/A
Key Trust Co. of Ohio Guaranteed Investment Contract Fund None 173,826 178,652 4,826
</TABLE>
NOTE: Reportable transactions are a single transaction or a series
of transactions in the same issue that when aggregated, are
in excess of 5% of the current value of Plan assets at the
beginning of the Plan year.
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<PAGE> 1
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement
No. 33-51729 of National Auto Credit, Inc. on Form S-8 of our report dated
May 30, 1997, appearing in this Annual Report on Form 11-K of National Auto
Credit, Inc. 401(k) Savings and Retirement Plan & Trust for the year ended
December 31, 1996.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Cleveland, Ohio
May 30, 1997
