<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 3, 1995
REGISTRATION NO. 33-58579
_____________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
NATIONAL AUTO CREDIT, INC.
(Exact name of Registrant as specified in its charter)
Delaware 34-1050582
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
30000 Aurora Road, Solon, Ohio 44139, (216) 349-1000
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
Thomas J. Dostart copy to:
National Auto Credit, Inc. David A. Zagore
30000 Aurora Road Squire, Sanders & Dempsey
Solon, Ohio 44139 4900 Society Center, 127 Public Square
(216) 349-1000 Cleveland, Ohio 44114-1304
(Name, address, including zip code,
and telephone number, including
area code, of agent for service)
Approximate date of commencement of proposed sale to public: From time
to time after the Registration Statement is declared effective.
If the only Securities being registered on this form are being offered
pursuant to dividend or reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or reinvestment plans, please check the following box. [X]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Title of each class of Amount to be Proposed Maximum Proposed Maximum Amount of
Securities to be Registered Offering Price Aggregate Registration
Registered Per Offering Fee
Share (1) Price
Common Stock, $.05 par 500,000 shares $11.3125 $5,656,250 $1,950.43
value (2)
Options to purchase Common Indeterminable
Stock number of (3)
options
<FN>
(1) Estimated solely for the purpose of determining the amount of the registration fee, based upon the average of the high
and low prices of the Common Stock on April 6, 1995 on NASDAQ.
(2) Issuable upon exercise of options. The number of shares may be adjusted to prevent dilution from stock splits, stock
dividends and similar transactions. This registration statement shall cover any such additional shares in accordance
with Rule 416(a).
(3) No separate registration fee is required for the options. See Rule 457(g).
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
<PAGE> 2
NATIONAL AUTO CREDIT, INC.
500,000 SHARES OF
COMMON STOCK, $.05 PAR VALUE,
AND OPTIONS TO PURCHASE COMMON STOCK
The 500,000 shares of common stock, $.05 par value, (the "Common
Stock"), of National Auto Credit, Inc. (the "Company") offered by this
Prospectus (the "Offering") are authorized and unissued or reacquired shares
that may be sold from time to time upon exercise of the options (the "Options")
granted pursuant to the Company's 1995 Stock Option Plan for Member Dealers
(the "Plan"). See "Plan of Distribution." The Offering is not underwritten.
The Company's principal executive offices are located at 30000 Aurora Road,
Solon, Ohio 44139 (telephone number: (216) 349-1000).
The Common Stock is included in The NASDAQ Stock Market, under the
symbol: NACC. The average of the high and low prices of the Common Stock on
April 6, 1995 on NASDAQ was $11.3125. The exercise price of any Option will
be, in the discretion of a committee appointed by the Board of Directors (the
"Committee"), equal to or greater than the "fair market value per share of
stock" at the time such Option is granted. All proceeds of sales under the
Plan will be received by the Company and used for general corporate purposes.
Expenses related to the offering of approximately $18,500.43 are payable by the
Company.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
___________________________
The date of this Prospectus is _______, 1995.
No dealer, salesman or other person has been authorized to give any
information or to make any representation other than as contained in this
Prospectus in connection with the offering described herein and, if given or
made, such information or representation may not be relied upon as having been
authorized by the Company. The delivery of this prospectus at any time does
not imply that the information herein is correct as of any time subsequent to
the date hereof or that there has been no change in the affairs of the Company.
This prospectus does not constitute an offer to sell or the solicitation of an
offer to buy such securities in any circumstances in which such offer or
solicitation is unlawful.
ii
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "Commission"). Such reports, proxy statements and
other information may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the following regional offices of the Commission: New York
Regional Office, 7 World Trade Center, 13th Floor, New York, New York, 10048;
and Chicago Regional Office, Suite 1400, 500 West Madison Street, Chicago,
Illinois 60661-2511. Copies of such material can also be obtained at
prescribed rates from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549. In addition, materials filed by the
Company may be inspected at the offices of NASDAQ, 1735 K Street, N.W.,
Washington, D.C. 20006.
This Prospectus is a part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus omits certain of the information included
in such Registration Statement. The Registration Statement may be inspected by
anyone at the office of the Commission without charge, and copies of all or any
part of it may be obtained upon payment of the Commission's charge for copying.
For further information about the Company and its securities, reference is
hereby made to such Registration Statement, and to the exhibits and financial
schedules filed as part thereof or otherwise incorporated herein. Each summary
herein of additional information included in the Registration Statement or any
exhibit thereto is qualified in its entirety by reference to such information
or exhibit.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
hereby incorporated by reference and made a part hereof:
(a) Annual Report on Form 10-K for the fiscal year ended January 31,
1995.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering of the
securities covered by this Prospectus shall be deemed to be incorporated herein
by reference and to be a part hereof from the respective date of filing of each
such document. Any statement contained in a document incorporated by reference
or deemed to be incorporated by reference in this Prospectus shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
To the extent the foregoing documents are incorporated by reference
herein, copies may be obtained without charge (other than for exhibits to such
documents) upon written or oral request communicated to the Company's
Secretary, Thomas J. Dostart, at the Company's principal executive offices,
located at 30000 Aurora Road, Solon, Ohio 44139 (telephone number: (216)
349-1000).
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USE OF PROCEEDS
The Offering made hereby is for the purpose of promoting the long term
success of the Company's financial services program by providing Member Dealers
with incentive awards that reward performance of the Member Dealers for
increasing the number of contracts submitted to and accepted by the Company for
financing, thereby enhancing stockholder value. Additionally, the Company
believes the Plan will assist in attracting and retaining Member Dealers of the
highest caliber. Proceeds from the sale of Common Stock upon exercise of
Options under the Plan will be used for general corporate purposes.
PLAN OF DISTRIBUTION
The Company has reserved or repurchased 500,000 shares of Common Stock
for issuance pursuant to Options under the Plan. "Participants" in the Plan
are all automobile or truck dealerships, or other entities acceptable to the
Company, executing a Dealer's Acceptance Program Agreement with the Company
pursuant to which vehicle financing agreements are submitted by such dealer to
the Company for approval, provided that the Member Dealer is in good standing
in accordance with the terms of the Dealer's Acceptance Program Agreement.
"Affiliates" of the Company (as that term is used in the applicable federal
securities laws and regulations) shall not be eligible to participate in the
Plan. To the extent that a Dealer who has executed a Dealer's Acceptance
Program Agreement submits vehicle financing contracts originating from multiple
vehicle sales locations, each such location shall not be considered a separate
Participant for the purposes of determining eligibility. The Plan is
administered by the Committee (as previously defined) subject to the provisions
of the Plan. The total number of shares subject to the Plan and the number of
shares subject to outstanding Options may be subject to appropriate adjustment
in the event of any increase or decrease in the number of outstanding shares of
Common Stock resulting from payment of a stock dividend, stock split,
reclassification or other change in capitalization. All capitalized terms used
herein and not defined shall have the meaning given to them in the Plan.
Until the Plan terminates or shares are no longer available under the
Plan, a Participant shall receive a grant of an Option to purchase one thousand
(1,000) shares of Common Stock as of the last business day of the fiscal
quarter during which the Company processes, accepts and funds the one hundredth
(100th) Financing Contract from such Member Dealer on or after February 1,
1995. A Participant will receive an additional grant of an Option to purchase
five hundred (500) shares of Common Stock for each additional one hundred (100)
Financing Contracts processed, accepted and funded by the Company as of the
last business day of the fiscal quarter in which the Company processes, accepts
and funds from the Dealer a Financing Contract which is an integral multiple of
one hundred (100). For purposes of determining eligibility to receive Options,
"Financing Contract" shall mean a vehicle financing contract submitted to and
accepted and funded by the Company on or after February 1, 1995, pursuant to a
Dealer's Acceptance Program Agreement and meeting the Company's normal
criteria. The Board may also, from time to time, grant Participants additional
Options having such terms and conditions and numbers as the Board of Directors
may determine in its discretion, subject to the terms and conditions of this
Plan.
The option price per share will be, in the discretion of the
Committee, equal to or greater than the "fair market value per share of stock"
at the time such Option is granted. Vested portions of each Option shall be
deemed to be exercised when the holder thereof shall indicate the decision to
do so in writing delivered to the Company, and shall at the same time tender to
the Company payment in full for the stock as to which such Option is exercised
in cash or by certified check, bank draft or money order received by the
Company (i) within (10) business days following any day on which the Share
Trigger Value is reached in the case of options exercised as a result of the
Share Trigger Value having been reached; and (ii) within (10) business days of
the date of written notice to exercise in all other cases. Options granted
under the Plan may not be sold, or otherwise transferred by a Participant by
any means and may be exercised only by the Participant. Any purported transfer
shall be of no force or effect. Unless an earlier termination date is fixed by
the Committee at the time of the grant, an Option
2
<PAGE> 5
granted under the Plan shall terminate upon the earlier of (i) the close of
business on the seventh anniversary of the date upon which it is granted or
(ii) the termination of the Participant's Dealer's Acceptance Program
Agreement. No consideration is payable to the Company by the Participant upon
receipt of a grant.
The Plan or the granting of Options shall terminate on January 31,
1996, and no further Options shall be granted, other than those to which a
Participant became entitled on or prior to January 31, 1996. The Board of
Directors may terminate the Plan at any time prior to the above date at its own
discretion; and may amend or modify the Plan at any time and from time to time
but no amendment or modification of the Plan shall in any manner adversely
affect any Option granted under the Plan without the consent of the Participant
holding the Option. The Plan may be renewed or extended at the discretion of
the Board of Directors.
RECENT DEVELOPMENTS
The Company's business is currently divided between financing the sale
of used cars and the rental of automobile insurance replacements. Because the
financing business has been increasingly more profitable and has been growing
significantly faster than the vehicle replacement business, the Company has
determined that it will focus its resources on the financing business as a
means of enhancing the long-term growth outlook of the Company. For this
reason, on March 1, 1995, the Company announced that it had retained the
services of Brown Brothers Harriman & Co. to assist and advise in the marketing
and sale of the Company's vehicle rental operation. In the event the vehicle
rental operation is not sold within the first nine months of the current fiscal
year, the Board of Directors has approved a plan that would convert a
substantial portion of the rental fleet into cash for the purpose of a buy back
of the Company's stock.
LEGAL MATTERS
The validity under Delaware law of the shares offered hereby has been
passed upon for the Company by its counsel, Squire, Sanders & Dempsey, 4900
Society Center, 127 Public Square, Cleveland, Ohio 44114.
EXPERTS
The consolidated balance sheets as of January 31, 1995 and 1994, the
consolidated statements of income, stockholders' equity and cash flows for each
of the three (3) fiscal years in the period ended January 31, 1995, and the
related financial statement schedules, included in the Company's Form 10-K for
the fiscal year ended January 31, 1995 have been audited by Deloitte & Touche
LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference, and have been so incorporated in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
3
<PAGE> 6
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following statement sets forth the estimated amounts of expenses to
be borne by the Company in connection with the distribution of the Common Stock
offered hereby:
SEC Registration Fee . . . . . . . . . . . . . . . . . $ 1,950.43
Accounting Fees and Expenses . . . . . . . . . . . . . . * 2,000.00
Legal Fees and Expenses . . . . . . . . . . . . . . . . *13,500.00
Miscellaneous Expenses . . . . . . . . . . . . . . . . * 1,050.00
Total Expenses . . . . . . . . . . . . . . . . . . . . . $18,500.43
___________________
* Estimated
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law sets forth the
conditions and limitations governing the indemnification of officers, directors
and other persons. The Company shall indemnify any person who was or is a
party, or is threatened to be made a party, to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that he is or was a director, officer,
employee or agent of the corporation or served any other enterprise at the
request of the Company, against any and all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, actually and reasonably
incurred by him in connection with such action, suit or proceeding, in any
circumstances, and to the full extent, permitted by Section 145 of the Delaware
Corporation Law, any amendment thereto, or any law of similar import. Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to officers and directors pursuant to the foregoing provision, the
Company has been informed that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
Item 16. EXHIBITS
A list of exhibits included as part of this Registration Statement is
set forth in the Exhibit Index which immediately precedes such exhibits and is
incorporated herein by reference.
Item 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
1. (a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement; (b) that, for the purpose of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(c) to
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remove from registration by means of a post-effective amendment any of the
securities which remain unsold at the termination of the offering.
2. That for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. That insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Solon, State of Ohio on the 3rd day of May,
1995.
NATIONAL AUTO CREDIT, INC.
By: /s/ Sam J. Frankino
--------------------------------------
Sam J. Frankino, Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated.
Signature Date
--------- ----
/s/ Sam J. Frankino
- ------------------------------- May 3, 1995
Sam J. Frankino
Chairman of the Board
/s/ Robert J. Bronchetti
- ------------------------------- May 3, 1995
Robert J. Bronchetti
President, Chief Executive Officer and Director
(Principal Executive Officer)
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/s/ Davida S. Howard May 3, 1995
- ----------------------------------
Davida S. Howard
Vice President-Finance and Controller
(Principal Financial and Accounting Officer)
/s/ Edward A. Burkhart May 3, 1995
- ----------------------------------
Edward A. Burkhart, Executive
Vice President and Director
/s/ Noah T. Herndon * May 3, 1995
- ----------------------------------
Noah T. Herndon, Director
/s/ Per E. Hoel * May 3, 1995
- ----------------------------------
Per E. Hoel, Director
/s/ Edward N. Leszczynski * May 3, 1995
- ----------------------------------
Edward N. Leszczynski, Director
* By /s/ Robert J. Bronchetti
- ----------------------------------
Robert J. Bronchetti
Attorney-in-fact
6
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EXHIBIT INDEX
Exhibit No. Description of Exhibits Page No.
- ----------- ----------------------- --------
3(a) Certificate of Incorporation *
3(b) By-laws **
5 Opinion of Squire, Sanders & Dempsey 8
23(a) Independent Auditors' Consent 9
23(b) Consent of Squire, Sanders & Dempsey ***
24 Power of Attorney 10
99 Stock Option Plan for Dealers 11
* Incorporated by reference to Exhibit 3a to Form 10-K for the year ended
January 31, 1995, filed with the Commission on April 27, 1995, under
Commission File No. 0-12201
** Incorporated by reference to Exhibit 3b to Form 10-K for the year ended
January 31, 1995, filed with the Commission on April 27, 1995, under
Commission File No. 0-12201
*** Included in Exhibit 5
7
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Exhibit 5
May 3, 1995
National Auto Credit, Inc.
30000 Aurora Road
Solon, Ohio 44139
Gentlemen:
We have acted as counsel for National Auto Credit, Inc. (the
"Company"), a Delaware corporation, in connection with the preparation
and filing with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, of a Registration Statement on
Form S-3 on April 13, 1995 (the "Registration Statement"), and
Amendment No. 1 thereof, filed on May 3, 1995, with respect to 500,000
shares of common stock, $.05 par value of the Company ("Company Common
Stock") that may be issued in connection with the Company's 1995
Stock Option Plan for Member Dealers ("Plan").
In connection with the following opinion, we have examined such
documents and such questions of fact and law as we consider
appropriate and necessary.
Based upon the foregoing, we are of the opinion that the Company
Common Stock, when issued in the manner specified in the Registration
Statement upon the exercise of options granted under the Plan, will be
legally issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit
to the aforesaid Registration Statement and to the use of our name
under the caption "Legal Matters" in the Prospectus contained therein.
Respectfully Submitted,
/s/ Squire, Sanders & Dempsey
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EXHIBIT 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
National Auto Credit, Inc. on Form S-3 of our report dated March 23, 1995
appearing in the Annual Report on Form 10-K of National Auto Credit, Inc. for
the year ended January 31, 1995 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
/S/ Deloitte & Touche LLP
---------------------------
DELOITTE & TOUCHE LLP
Cleveland, Ohio
May 2, 1995
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EXHIBIT 24
NATIONAL AUTO CREDIT, INC.
1995 STOCK OPTION PLAN
FOR MEMBER DEALERS
LIMITED POWER OF ATTORNEY: REGISTRATION STATEMENT ON FORM S-3
The undersigned directors and officers of National Auto Credit, Inc.
(the "Company") hereby constitute and appoint Robert J. Bronchetti, Thomas J.
Dostart and David A. Zagore, and each of them, with full power of substitution
and resubstitution, as attorneys or attorney of the undersigned, to execute and
file under the Securities Act of 1933 a Registration Statement on Form S-3
relating to the registration of 500,000 shares of the Company's common stock,
$.05 par value per share, to be issued pursuant to the terms and conditions of
the National Auto Credit, Inc. 1995 Stock Option Plan for Member Dealers
including pre- and post-effective amendments, and any and all applications or
other documents to be filed with the Securities and Exchange Commission, NASDAQ
and any state securities agencies pertaining to such registration, with full
power and authority to do and perform any and all acts and things whatsoever
necessary, appropriate or desirable to be done in the premises, or in the name,
place and stead of the said directors and officers, hereby ratifying and
approving the acts of said attorneys and any of them and any such substitute.
EXECUTED the 11 day of April, 1995, unless otherwise indicated
below.
<TABLE>
<S> <C>
/S/ Sam J. Frankino
- ---------------------------------------- ----------------------------------------
Sam J. Frankino, Chairman of the Board Joseph P. Henley, Director
/S/ Robert J. Bronchetti /S/ Noah T. Herndon
- ---------------------------------------- ----------------------------------------
Robert J. Bronchetti Noah T. Herndon, Director
Director, President and Chief Executive Officer
/S/ Edward A. Burkhart /S/ Per E. Hoel
- ---------------------------------------- ----------------------------------------
Edward A. Burkhart Per E. Hoel, Director
Director and Executive Vice President
/S/ Edward N. Leszczynski
----------------------------------------
Edward N. Leszczynski, Director
</TABLE>
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Exhibit 99
NATIONAL AUTO CREDIT, INC.
1995 STOCK OPTION PLAN
FOR MEMBER DEALERS
1. Establishment, Purpose and Effective Date of Plan
-------------------------------------------------
National Auto Credit, Inc., a Delaware corporation (the "Company"),
hereby establishes the "National Auto Credit, Inc. 1995 Stock Option
Plan for Member Dealers" (the "Plan").
2. Purpose
-------
The purpose of the Plan is to promote the long term success of the
Company's financial services program, thereby enhancing stockholder
value by providing Member Dealers with incentive awards that reward
Member Dealers for increasing the number of Financing Contracts (as
defined below) submitted, accepted and funded by the Company. The
Company believes the Plan will assist in attracting and retaining
Member Dealers of the highest caliber.
3. Effective Date
--------------
The Plan shall be effective as of the later of (i) the date the
Company's Registration Statement for the Plan, filed with the
Securities and Exchange Commission, is effective, or (ii) after the
date of the Plan's adoption by the Board of Directors of the Company
(the "Board").
4. Administration of the Plan
--------------------------
The Plan shall be administered by a committee (the "Committee"),
appointed by the Board, subject to the provisions of the Plan. The
Committee shall have full and exclusive authority to interpret and
administer the Plan and to adopt such rules, regulations and
guidelines for carrying out the Plan as it may deem necessary or
desirable in the interests of the Company and in keeping with the
objectives of the Plan. The Committee shall also prescribe the types
and forms of the instruments evidencing any awards granted; adopt,
amend and rescind rules and regulations for the administration of the
Plan; construe and interpret the Plan, the rules and regulations, and
the instruments; and make all other determinations necessary or
desirable for the administration of the Plan. The decision of the
Committee concerning the interpretation of the Plan or any Option (as
defined below) shall be final and binding, subject to review by the
Board.
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<PAGE> 2
5. Eligibility
-----------
Any Member Dealer may be eligible to receive one (1) or more awards
under the Plan. An eligible "Member Dealer" shall be defined as a car
or truck dealership or other entity acceptable to the Company
executing a Dealer Acceptance Program Agreement as amended from time
to time, or similar or successor documents (the "Dealer Agreement"),
with the Company pursuant to which vehicle Financing Contracts (as
defined below) are submitted by such Member Dealer to the Company and
which are both accepted and funded by the Company; provided, that the
Member Dealer is in good standing in accordance with the terms of the
Dealer Agreement. A Member Dealer that submits vehicle Financing
Contracts originating from multiple vehicle sales locations, but
pursuant to a single Dealer Agreement, shall be treated as a single
participant for the purposes of determining eligibility. "Affiliates"
of the Company (as that term is used in the applicable Federal
Securities Laws and Regulations) shall not be eligible to participate
in the Plan.
6. Shares Subject to the Plan
--------------------------
The aggregate number of shares (the "Shares") of Common Stock, $.05
par value (the "Common Stock") of the Company for which options may be
granted under this Plan shall be five hundred thousand (500,000);
provided, however, that whatever number of Shares shall remain
reserved for issuance pursuant to the Plan at the time of any stock
split, stock dividend or other change in the Company's capitalization
shall be appropriately adjusted to reflect such stock dividend, stock
split, reclassification, or other change in capitalization. The
Committee may make or provide for such adjustments in the number and
the price of the Shares covered by outstanding Options as the
Committee in its sole discretion may determine is equitably required
to prevent dilution or enlargement of the rights of participants that
would otherwise result from (a) any stock dividend, stock split,
combination of shares, issuance of rights or warrants to purchase
stock, recapitalization or other change in the capital structure of
the Company; (b) any merger, consolidation, separation,
reorganization, or partial or complete liquidation; or (c) any other
corporate transaction, including a spin-off, or event having an effect
similar to any of the foregoing. Such Shares shall be made available
from authorized but unissued or reacquired Shares. Any Shares for
which an Option is granted hereunder that are released from such
Option for any reason shall become available for other Options to be
granted under this Plan.
7. Granting of Options
-------------------
(A) An eligible Member Dealer in good standing shall be eligible
to receive a grant of an Option for the purchase of one
thousand (1,000) Shares as of the last business day of the
fiscal quarter in which the Company processes, accepts and
funds the one-hundredth (100th) Financing Contract as defined
below from such Member Dealer on or after February 1, 1995,
pursuant to the terms and conditions of Section 8 herein,
until the Plan terminates in accordance with Section 11 or
Shares are no longer available. Further,
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a Member Dealer who received a grant of an Option for one
thousand (1,000) Shares shall be eligible to receive an
additional grant of an Option to purchase an additional five
hundred (500) Shares for each additional one hundred (100)
Financing Contracts processed, accepted and funded by the
Company in accordance with the Plan.
Options granted under this Section 7 are referred to as
"Options" or "NAC 100 Options." A "Financing Contract" shall
mean a vehicle financing contract submitted, accepted and
funded by the Company on or after February 1, 1995. For
purposes of Section 422 of the Internal Revenue Code of 1986,
as amended, an Option shall be a "non-qualified stock option"
and shall not constitute an "incentive stock option."
(B) The Board may, from time to time, grant additional Options
having such terms and conditions and numbers as the Board may
determine in its discretion, subject to the terms and
conditions of this Plan.
(C) All Options granted hereunder must be evidenced by a written
agreement on a form approved by the Committee.
8. Exercise of Options
-------------------
Subject to the terms and conditions of this Plan, a participating
Member Dealer may exercise the NAC 100 Options so granted in whole or
in part in accordance with the terms and the conditions of the Plan as
follows:
(A) Option Exercise
(1) At any time after twelve (12) months from the date of
grant as to not more than thirty-three and one third
percent (33 1/3%) of the Shares subject to such
Option; and
(2) At any time after twenty-four (24) months from the
date of grant as to an additional thirty-three and
one third percent (33 1/3%) but not more than an
aggregate of sixty-six and two thirds percent (66
2/3%) of the Shares subject to such Option; and
(3) At any time after thirty-six (36) months from the
date of grant as to an additional thirty-three and
one third percent (33 1/3%) or up to one hundred
percent (100%) of the aggregate of the Shares subject
to such Option.
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(B) Option Price
The Option price per Share of any NAC 100 Option granted under
this Plan shall be determined, at a price equal to or greater
than the Fair Market Value of the Common Stock on the date of
grant. "Fair Market Value" for all purposes under the Plan
shall mean the closing price of the Common Stock as reported
by the National Association of Securities Dealers Automated
Quotation National Market System (the "NASDAQ") (or the
exchange on which the Company is then being traded) as
reported in the Wall Street Journal. If no sales of Common
Stock were made on such date, the closing price of the Common
Stock as reported for the preceding business day on which
sales of Common Stock were made shall be used.
(C) Share Trigger Value
In addition to the requirements listed under Section 8(A),
during the four (4) years from the date of grant an Option may
only be exercised when the Fair Market Value per Share as
defined above on the date of exercise, is equal to or greater
than one hundred twenty-five percent (125%) of the Option
price per Share (the "Share Trigger Value").
An Option may be exercised, in whole or in part, at such time
after four (4) years from the date of grant as the Share
Trigger Value may be reached and if otherwise in accordance
with the terms and provisions of this Plan.
In the event the Member Dealer is unable to exercise vested
portions of an Option due to the fact that the Share Trigger
Value is not reached, then the NAC 100 Options granted herein
shall be exercisable as follows:
(1) At any time after four (4) years from the date of
grant as to not more than thirty-three and one third
percent (33 1/3%) of the Shares subject to such
Option; and
(2) At any time after five (5) years from the date of
grant as to an additional thirty-three and one third
percent (33 1/3%) but not more than an aggregate of
sixty-six and two thirds percent (66 2/3%) of the
Shares subject to such Option; and
(3) At any time after six (6) years from the date of
grant as to an additional thirty-three and one third
percent (33 1/3%) or up to one hundred percent
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(100%) of the aggregate of the Shares subject to such
Option.
The Committee may make appropriate adjustments in the Share
Trigger Value to appropriately reflect any stock dividend,
stock split, reclassification or other change in
capitalization.
(D) Method of Exercise and Payment of Options
Each NAC 100 Option granted under this Plan shall be deemed to
be exercised when the holder thereof shall indicate the
decision to do so in writing delivered to the Company, and
shall at the same time tender to the Company payment in full
for the Shares as to which such NAC 100 Option is exercised in
cash or by certified check, bank draft or money order at the
time of exercise; (i) within ten (10) business days after any
day on which the Share Trigger Value is reached in the case of
Options exercised as a result of the Share Trigger Value
having been reached; and, (ii) within ten (10) business days
of the date of written notice to exercise in all other cases.
Each such Option holder shall comply with such other
requirements as the Company may establish pursuant to Section
4 of this Plan, but this provision shall not preclude exercise
of any NAC 100 Option by any other proper legal methods
specifically approved by the Committee.
(E) Limitations on Exercise or Grant of Option
Notwithstanding the above provisions, no Options will be
exercisable and no shares will be issued under this Plan
except by or to a Member Dealer in good standing. In the
event a Member Dealer shall be deemed by the Company to be in
breach of any terms of the Dealer Agreement at any time, any
exercise of an Option or part thereof, and any issuance of
shares shall be suspended until such time as the Member Dealer
resolves the breach to the satisfaction of the Company.
(F) Termination of Options
All NAC 100 Options must be exercised within seven (7) years
from the date of grant. Any portion of an Option not
exercised within such period shall terminate. In addition,
all NAC 100 Options shall terminate upon the termination of
the Optionee's Dealer Agreement.
9. Non-transferability of Options
------------------------------
No Option granted under this Plan may be sold or otherwise transferred
or encumbered by a Member Dealer by any means, intentionally
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or otherwise and may be exercised only by the Member Dealer. Any
purported transfer or encumbrance of any kind shall be of no force
or effect.
10. Compliance with Law and Approval of Regulatory Bodies
-----------------------------------------------------
No Option will be exercisable and no Shares will be delivered under
this Plan except in compliance with all applicable federal and state
laws and regulations including, without limitation, compliance with
applicable securities laws, withholding tax requirements, if any, and
with the rules of all domestic stock exchanges on which the Shares may
be listed. Any Share certificate issued to evidence Share(s) may bear
such legends and statements as the Committee shall deem advisable to
assure compliance with federal and state laws and regulations. No
Option shall be exercisable, and no Shares will be delivered under
this Plan, until the Company has obtained such consent or approval
from regulatory bodies, federal or state, having jurisdiction over
such matters as the Committee may deem advisable. Further, the
Company shall have the right to postpone for at least ninety (90) days
any exercise of an Option or delivery of Shares, if such action would
result in a violation of any state or federal laws and/or regulations.
11. Termination of Plan
-------------------
This Plan or the granting of Options shall terminate on January 31,
1996, and no Options shall be granted hereunder other than those
Options which a Member Dealer became entitled to prior to the close of
business on January 31, 1996. The Board may terminate this Plan at
any time prior to the above date in its own discretion; and may amend
or modify the Plan at any time and from time to time, but no amendment
or modification of the Plan shall in any manner adversely affect any
Option previously granted under the Plan without the consent of the
Member Dealer holding the Option. The Plan may be renewed or extended
by the Board for such period(s) as may be determined by the Board
including from year to year, at its discretion. In the event the Plan
is renewed, accumulations of Financing Contracts may continue to
accrue and may be carried over to the succeeding year or years as
permitted by the Board.
12. General Provision
-----------------
Headings are given to the sections of this Plan solely as a
convenience to facilitate reference; such headings, numbering and
paragraphing shall not in any case be deemed in any way material or
relevant to the construction of the Plan or any provisions thereof.
Use of the masculine gender shall also include within its meaning the
feminine. The use of the singular shall also include within its
meaning the plural and vice versa.
13. No Rights Prior To Issuance Of Shares Of Stock
----------------------------------------------
A Member Dealer shall have no rights as a stockholder with respect to
any Shares covered by an Option until the receipt of a stock
certificate for each Share to the participating Member Dealer for such
Shares.
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