<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
April 16, 1997
--------------------------------------------------------
Date of Report (Date of earliest event reported)
First Merchants Acceptance Corporation
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-24686 36-3759045
- ---------------------------- ------------ -------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
570 Lake Cook Road, Suite 126, Deerfield, Illinois 60015
--------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(847) 948-9300
-------------------------------
(Registrant's telephone number)
<PAGE> 2
ITEM 5. OTHER EVENTS.
On April 16, 1997, First Merchants Acceptance Corporation (the
"Registrant") issued a press release, a copy of which is attached as Exhibit
99.1 to this Form 8-K and incorporated herein by reference.
ITEM 7. EXHIBIT.
Exhibit 99.1 Press release of the Registrant, dated April 16, 1997.
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
FIRST MERCHANTS ACCEPTANCE CORPORATION
/s/ Norman Smagley
--------------------------------------
Norman Smagley
Dated: April 16, 1997 Senior Vice President and Chief Financial Officer
<PAGE> 4
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- ------- ----------------
99.1 Press release of the Registrant dated April 16, 1997
<PAGE> 1
FOR IMMEDIATE RELEASE
First Merchants Acceptance Corporation Uncovers Irregularities:
Expects To Restate 1996 and Delay First Quarter 1997 Results
DEERFIELD, IL - April 16, 1997 - First Merchants Acceptance Corporation
(NASDAQ:FMAC) today announced that it had discovered irregularities involving
unauthorized entries made in the Company's financial records. As a result, the
Board has terminated the employment of Mitchell C. Kahn, President and Chief
Executive Officer; Thomas R. Ehmann, currently Vice President and Chief
Information Officer (formerly Vice President and Chief Financial Officer); Paul
Van Eyl, Vice President - Strategic Planning; and one other employee. An
ongoing investigation ordered by the Board is being conducted by Norman
Smagley, the newly named Senior Vice President and Chief Financial Officer,
together with the Company's outside counsel and independent auditors.
The Company said it expects that these events will result in a restatement of
the previously reported results for 1996 (net earnings of $1.56 per share) but
that restated net earnings for 1996 should remain at a level of at least $1.00
per share.
The Company also said that the release of first quarter 1997 results will be
delayed and that it presently anticipates announcing a loss of between $1.60
and $2.00 per share for the quarter. This is primarily because of a significant
increase in the provision for credit losses reflecting changes in management's
estimates of projected required reserves.
Management expects that restated 1996 results and first quarter 1997 results
will be available in early May.
<PAGE> 2
The Board announced that a search will be commenced for a new chief executive
officer immediately. For the interim, William N. Plamondon and Richard J. Uhl,
both current directors, will serve as co-chief executive offers. Mr. Plamondon,
currently a management consultant, was the President of Budget Rent A Car
Corporation from 1992 until February 1997. Mr. Uhl, President of Chicago
Holdings, Inc, is one of the major stockholders of the company, and has served
as an executive of several finance companies. Mr. Plamondon has served on the
Company's Board since 1995, Mr. Uhl since 1991.
Mr. Smagley reported that the irregularities result in the Company being out of
compliance with certain covenants under its financing arrangements. However,
all payments due under such arrangements have been made on a timely basis. The
Company is in discussion with its lenders and the credit enhancer of its
securitizations.
The Company believes that its financial condition remains strong and will
support its continuing operations and plans for future growth.
First Merchants is a national specialty finance company, primarily engaged in
financing the purchase of used automobiles by consumers who have limited access
to traditional sources of credit. The company acquires dealer-originated retail
installment contracts from franchised and independent automobile dealers and
financial institutions in 37 states.
<PAGE> 3
Safe Harbor Language
- --------------------
This press release contains various forward-looking statements and information
that are based on management's beliefs as well as assumptions made by and
information currently available to management, including statements regarding
future economic performance and financial condition, liquidity and capital
resources, and management's plans and objectives. Such statements are subject
to various risks and uncertainties which could cause actual results to vary
materially from those stated. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated, expected
or projected. Such risks and uncertainties include the availability of
financing on terms and conditions acceptable to the Company, the ability of the
Company to securitize its finance contracts in the asset-backed securities
market on terms and conditions acceptable to the Company and changes in the
quality or composition of the serviced finance contract receivable portfolio.
Certain of these as well as other risks and uncertainties are described in more
detail in the Company's Annual Report on Form 10-K for the year ended December
31, 1996. The Company undertakes no obligation to update any such factor or to
publicly announce the result of any revisions to any of the forward-looking
statements contained herein to reflect future events or developments.
