As filed with the Securities and Exchange Commission on August 7, 1996
================================================================================
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
UNION ACCEPTANCE CORPORATION
(Exact name of Registrant as specified in its charter)
Indiana 35-1908796
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
250 North Shadeland Avenue
Indianapolis, Indiana 46219
(Address of Principal Executive Offices) (Zip Code)
UNION ACCEPTANCE CORPORATION 1994 INCENTIVE STOCK PLAN
(Full title of the plan)
Copy to:
Rick A. Brown Eric R. Moy, Esq.
Union Acceptance Corporation Barnes & Thornburg
250 North Shadeland Avenue 1313 Merchants Bank Building
Indianapolis, Indiana 46219 11 S. Meridian Street
(Name and address of agent for service) Indianapolis, Indiana 46204
Telephone number, of agent for service:
(317) 231-6400
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement as determined by
market conditions.
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
Title of maximum maximum Amount
securities Amount offering aggregate of
to be to be price per offering registration
registered registered (1) share(2) price(2) fee
- --------------------------------------------------------------------------------
Class A
Common Stock,
without par value 500,000 $15.35 $7,676,712.50 $2,647.14
================================================================================
(1) Any additional shares of Class A Common Stock to be issued as a result of
stock dividends, stock splits, or similar transactions shall be covered
by this Registration Statement as provided in Rule 416.
(2) Estimated solely to determine the registration fee and based on the
option price of stock options already granted under the Plan and on the
average of the high and low sales prices per share of Class A Common
Stock of Union Acceptance Corporation on August 5, 1996, as to shares not
yet subject to options granted under the Plan, pursuant to Rule 457(c)
and (h).
Page 1 of ___ Pages
Exhibit Index on Page E-1
<PAGE>
CROSS REFERENCE SHEET
Name and Caption in Form S-8 Caption in Reoffer Prospectus*
1. Forepart of the Registration Statement
and Outside Front Cover Page of
Prospectus................................. Front Cover Page of
Registration Statement;
Outside Front Cover
Page of Prospectus
2. Inside Front and Outside
Back Cover Pages of Prospectus............. Inside Front Page Prospectus
3. Summary Information, Risk Factors
and Ratio of Earnings to Fixed Charges..... Prospectus Summary;
Risk Factors
4. Use of Proceeds............................ Use of Proceeds
5. Determination of Offering Price............ Determination of Offering
Price
6. Dilution................................... ***
7. Selling Security Holders................... Selling Security Holders;
Plan of Distribution
8. Plan of Distribution....................... Selling Security Holders;
Plan of Distribution
9. Description of Securities
to Be Registered...................... **
10. Interests of Named Experts and Counsel..... Legal Matters; Experts
11. Material Changes........................... ***
12. Incorporation of Certain .................. Incorporation of Certain
Information by Reference Information by Reference
13. Disclosure of Commission
Position on Indemnification for
Securities Act Liabilities................. See page S-5
- ----------
* Note: the Prospectus filed with this Registration Statement is a "reoffer
prospectus" prepared in accordance with the requirements of Part I of S-3,
pursuant to General Instruction C of Form S-8.
** Incorporated by reference
*** Not applicable
<PAGE>
Reoffer Prospectus
[UAC LOGO HERE]
Up to 500,000 Shares
Union Acceptance Corporation
Class A Common Stock
(without par value)
The shares of Class A Common Stock covered by this reoffer prospectus
("Prospectus") are being sold by certain affiliates of the registrant, Union
Acceptance Corporation (the "Company"), which shares have been or will be
acquired by the selling security holders pursuant to the Union Acceptance
Corporation 1994 Incentive Stock Plan. Resales of shares of the Class A Common
Stock by such affiliates may also be made under Rule 144 under the Securities
Act of 1933, as amended (the "Securities Act").
The Company completed its initial public offering of the Class A Common Stock on
August 7, 1995 (the "Offering"). Prior to the Business Transfer, the Spin-off
(as such terms are defined in the Glossary) and the Offering, the Company
operated as a division (and from April 1994 as a subsidiary) of Union Federal
Savings Bank of Indianapolis ("Union Federal"), which is controlled by Mr.
Richard D. Waterfield and members of his family. The Company has two classes of
Common Stock: Class A Common Stock, shares of which are offered hereby, and
Class B Common Stock. In the election of directors, holders of Class A Common
Stock are entitled to one vote per share, and holders of Class B Common Stock
are entitled to five votes per share. The shareholders of Union Federal's parent
corporation, Union Holding Company, Inc. ("UHC"), own all of the outstanding
shares of Class B Common Stock, which represent approximately 70% of the equity
interest in the Company. However, the Class B Common Stock represents
approximately 92% of the votes eligible to be cast in respect of the election of
directors.
Approximately 83% of the Class B Common Stock, representing approximately 58% of
the outstanding Common Stock, is held in a voting trust (the "Voting Trust"), of
which Mr. Waterfield is trustee. The Class B Common Stock held in the Voting
Trust represents approximately 76% of the voting power of the outstanding Common
Stock. Such voting power enables Mr. Waterfield to control the election of the
entire board of directors and to cause the adoption of any shareholder proposal
favored by the Voting Trust. A share of Class B Common Stock generally converts
on transfer to a share of Class A Common Stock.
The Class A Common Stock is listed for trading on The Nasdaq Stock Market's
National Market under the symbol "UACA." The Class B Common Stock is not listed
for trading.
See "Risk Factors " on page 5 hereof for a discussion of certain risk factors
that should be considered by prospective purchasers of the Class A Common Stock.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE 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 ______________ ___, 1996.
<PAGE>
ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith
files reports and other information with the Securities and Exchange Commission
(the "Commission"). The Company has filed with the Commission a Registration
Statement (the "Registration Statement"), of which this Prospectus is a part, on
Form S-8 under the Securities Act with respect to the Class A Common Stock
offered hereby. This Prospectus does not contain all the information set forth
in the Registration Statement and the exhibits relating thereto. For further
information with respect to the Company and the Class A Common Stock offered by
this Prospectus, reference is made to such Registration Statement and exhibits.
Statements contained herein concerning the provisions of documents are
necessarily summaries of such documents, and each statement is qualified in its
entirety by reference to the copy of the applicable document filed with the
Commission. Such information, and the reports, proxy and information statements
and other information filed by the Company with the Commission, can be inspected
and copied at the office of the Commission at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at its regional offices located
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and at Seven World Trade Center, 13th Floor, New York, New York
10048. Copies of such material may also be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission also maintains a Web site on the Internet that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission, including
the Company. The address of such site is: http://www.sec.gov. In addition, the
Company intends to furnish its shareholders with annual reports containing
consolidated financial statements certified by an independent public accounting
firm.
The Class A Common Stock is listed for trading on the Nasdaq Stock
Market's National Market under the symbol "UACA," and reports, proxy and
information statements and other information concerning the Company can be
inspected at such exchange.
INCORPORATION OF DOCUMENTS BY REFERENCE
With respect to any document incorporated by reference in this
Prospectus but not delivered herewith, the Company undertakes to provide without
charge to each person, including a beneficial owner, to whom this Propectus is
delivered, upon written or oral request of such person, a copy of any and all of
the information that has been incorporated by reference herein (not including
exhibits to such information unless such exhibits are specifically incorporated
by reference into such information). Such requests may be addressed to Union
Acceptance Corporation, 250 North Shadeland Avenue, Indianapolis, Indiana 46219;
(317) 231-6400. See "Incorporation of Certain Information by Reference."
TABLE OF CONTENTS
Page
Additional Information.................................................... 2
Incorporation of Documents by Reference................................... 2
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 5
Use of Proceeds........................................................... 8
Determination of Offering Price........................................... 8
Selling Security Holders; Plan of Distribution............................ 8
Legal Matters............................................................. 8
Experts................................................................... 9
Incorporation of Certain Information by Reference......................... 9
Glossary.................................................................. 10
<PAGE>
PROSPECTUS SUMMARY
Unless otherwise indicated, references to the "Company" through fiscal 1994
refer to the conduct by Union Federal of the business of its indirect automobile
lending division (also referred to as the "Union Division"). References to the
"Company" after such date refer to the conduct of the business by the Union
Division and Union Acceptance Corporation ("UAC") and subsidiaries as a combined
business. References to the "Company" following consummation of the spin-off by
Union Federal of the Company refer to UAC and subsidiaries. Certain capitalized
terms are defined in the Glossary. Investors are referred to a more extensive
discussion of the following issues summary contained in the documents
incorporated in this Prospectus by reference.
The Company
Union Acceptance Corporation is a specialized finance company engaged in
acquiring and servicing automobile retail installment sales contracts originated
by dealerships affiliated with major domestic and foreign manufacturers. Through
the use of state-of-the-art technology for underwriting and servicing and
disciplined credit standards, the Company focuses its efforts on acquiring loans
on late model used and, to a lesser extent, new automobiles made to purchasers
who exhibit a favorable credit profile ("Prime lending," as defined in the
Glossary). The Company commenced business in 1986 and currently acquires loans
from over 2,000 manufacturer-franchised auto dealerships nationwide.
The Company seeks to be a premier provider of automobile financing that
differentiates itself from more traditional sources of automobile financing by
its product focus and emphasis on dealer service, flexible financing terms,
consistent underwriting standards, efficient centralized operations and advanced
systems. Key elements of the Company's strategy are:
o Product Focus -- The Company targets what it believes to be underserved
elements of the Prime lending market. In particular, the Company focuses on
providing loans through financings for late model used car purchasers and
through offering long-term loans for new car purchasers.
o Superior Service and Flexible Loan Terms -- While the Company seeks to
offer financing rates that are competitive in each of its markets, the Company
seeks to compete primarily on the basis of dealer service and flexible loan
terms. Many of the Company's credit buyers have had substantial prior experience
in new and used car financing or sales which enhances their relationships with
dealers and their knowledge of dealer financing practices. The Company
emphasizes prompt responses to loan applications and maintains evening and
weekend hours which coincide with auto dealers' busiest periods. The Company's
emphasis on the credit quality of borrowers allows it to offer more flexible
financing terms than many of its competitors, including longer-term loans with
lower monthly payments, or larger loan amounts relative to collateral value
based on Credit Scoring risk models.
o Consistent Underwriting Standards -- Through training, proprietary
technology and consistent management oversight, the Company seeks to instill a
disciplined approach to credit throughout the entire organization. Credit buyers
participate in a rigorous training process before receiving authority to make
independent purchasing decisions. The Company utilizes computerized Credit
Scoring which helps ensure the uniformity and consistency of the Company's
underwriting policies.
o Efficient, Centralized Operations -- The Company has achieved enhanced
productivity through its customized computer systems that integrate the
origination, servicing and collection processes. Centralized operations at the
Company's Indianapolis headquarters facilitate a consistent application of
credit standards and enhance its ability to control costs while offering prompt,
efficient service. The Company's centralized operations have also allowed it to
enter and exit markets while incurring relatively minor incremental costs.
o Liquidity through Securitization -- The Company generates earnings and
cash flow primarily through the purchase and subsequent securitization of
automobile loans. Such securitization transactions are designed to provide funds
for the purchase of additional auto loans, to reduce the risk of interest rate
fluctuations and to utilize capital efficiently. In each securitization, the
Company sells automobile loans to a trust which, in turn, sells Asset-backed
Securities to investors. The Company earns servicing fees from the trust in the
amount of 1.00% per annum, paid monthly, on the outstanding principal balance of
loans securitized. In addition, the Company generally recognizes a gain on the
sale of loans to the trust and, over time, receives cash distributions from the
trust resulting from the difference between the interest received from the
obligors on the loans and the interest paid to investors in the Asset-backed
Securities, net of losses and expenses (including servicing fees paid to the
Company).
The Company's primary growth strategy is to expand, on a controlled
basis, into metropolitan areas with demographic, regulatory and competitive
conditions which the Company believes are favorable. The Company believes that
<PAGE>
its centralized operations allow it to expand into new markets rapidly and
efficiently. In addition, the Company has a lending program known as the "PAC
Program" which is designed to enhance the Company's profitability through
selective lending to borrowers whose credit history would not permit them to
qualify for a loan under the Company's Prime lending program ("Non-prime
lending," as defined in the Glossary). Through the PAC Program, the Company
purchases Non-prime loans at face value at an appropriate interest rate,
generally in the range of 6% to 8% above the rate at which it purchases Prime
loans.
Union Federal entered the indirect automobile finance business in 1986.
The Company was incorporated in Indiana in December 1993 as a subsidiary of
Union Federal, which is a wholly-owned subsidiary of UHC. The Company's
headquarters are located at 250 North Shadeland Avenue, Indianapolis, Indiana
46219, and its telephone number is (317) 231-6400.
The Spin-off
The Company's indirect automobile finance business was conducted by the
Union Division as an unincorporated division of Union Federal through fiscal
1994. During fiscal 1995, the majority of the operations and assets of the
Company were transferred from Union Federal to UAC and its subsidiaries (the
"Business Transfer"), although its business continued to be operated in
combination with the Union Division. The Business Transfer was completed
immediately upon consummation of the Offering. Since such time, the Company's
business has been conducted solely by UAC and its subsidiaries.
Union Federal is a wholly-owned subsidiary of UHC. Immediately prior to the
consummation of the Offering, 9,200,000 shares of the Company's Class B Common
Stock, representing all of the issued and outstanding stock of the Company, were
distributed to the shareholders of UHC in a tax-free spin-off (the "Spin-off").
Upon completion of the Spin-off and the Offering, the Company's operations were
separated from those of Union Federal, except that the Company's Chairman
continues to serve as an executive officer and director of Union Federal, UHC
and certain affiliates. Union Federal effected the Business Transfer and the
Spin-off to realize certain cost savings and in response to federal regulatory
provisions (particularly risk-based capital requirements and "qualified thrift
lender" standards), that require it to hold high levels of capital to maintain
compliance with regulatory capital requirements, constraining its ability to
expand the Company's business. Due to the manner in which the Business Transfer
and Spin-off were required to be effected to comply with regulatory
requirements, the Company had no equity or retained earnings after the Offering
other than the net proceeds of the Offering. No cash was distributed to the
shareholders of UHC in the Spin-off or as a result of the Offering.
After completion of the Spin-off and the Offering, Mr. Richard D.
Waterfield and eight other shareholders of UHC own approximately 83% of the
Class B Common Stock outstanding (representing approximately 58% of the
Company's outstanding Common Stock), which is held in a Voting Trust of which
Mr. Waterfield serves as the trustee. The Class B Common Stock held by the
Voting Trust represents approximately 76% of the voting power of the outstanding
Common Stock, which enables Mr. Waterfield to control the election of the entire
board of directors of the Company and to cause the adoption of any shareholder
proposal favored by the Voting Trust. In order to ensure compliance with the
terms of an Internal Revenue Service ruling obtained in connection with the
Business Transfer and the Spin-off, the holders of the Class B Common Stock must
retain at least 80% of the voting power represented by the Company's Common
Stock. Such holders who are parties to the Voting Trust have agreed to certain
restrictions on their ability to transfer such stock for a period of two years,
and other holders of Class B Common Stock have agreed to such restrictions with
the Company. Additionally, up to 400,000 shares of Class A Common Stock were
reserved for sale to certain employees, officers and directors of the Company,
Union Federal and its affiliates ("Company Offerees") in the Offering.
<PAGE>
RISK FACTORS
In addition to the other information in this Prospectus, the following
risk factors should be considered carefully by prospective investors in
evaluating an investment in the Class A Common Stock.
Dependence on Credit Facilities, Securitization Transactions and Potential Need
for Additional Capital
Dependence on Credit Facilities. Prior to the Offering, the Company was
substantially dependent upon Union Federal to provide short-term funding to
finance (i) the purchase of loans prior to the time they were securitized and
(ii) the payment of Dealer Premiums. The cash advanced for Dealer Premiums is
not recovered when a loan is securitized but is recovered over the life of the
loan. Since the consummation of the Offering, Union Federal has not provided
such funding to the Company, and the Company is dependent upon its Credit
Facilities to provide necessary funding. The Company has a $350 million
Prime-lending Warehouse facility (the "Prime Warehouse Facility") which provides
short-term loan acquisition funding between securitization transactions. The
Company also has a similar $50 million Warehouse facility to provide short-term
funding for Non-prime loan acquisitions (the "Non-prime Facility"). In addition,
the Company issued $110 million in Senior Notes concurrently with the Offering.
The Company's access to financing under the Credit Facilities is dependent upon
its compliance with the terms and conditions thereof, including timely
completion of securitizations. The availability of additional or substitute
credit facilities is dependent upon, among other things, the willingness of
financial institutions to fund automobile financing businesses generally and the
Company's financial condition and results of operations. If the Company were
unable to satisfy the conditions of its Credit Facilities, its operations could
be materially adversely affected.
Dependence on Securitizations. The Company relies significantly on a
strategy of periodically selling automobile loans through asset-backed
securitizations. Proceeds from securitizations will be utilized to repay
borrowings under the Credit Facilities, thereby making such facilities available
to acquire additional loans. If the Company fails to complete a securitization
of Prime loans each sixteen weeks, the amount of funding available under the
Prime Warehouse Facility is reduced from 98% to 95% of the outstanding principal
balance of eligible loans and the term of certain interest rate hedges required
thereby is required to be extended to a minimum of six months. If the Company
fails to complete a securitization of Prime loans for six months, the Prime
Warehouse Facility may be terminated. The Company expects to securitize pools of
its Non-prime loans from time to time. The Company has not securitized Non-prime
loans to date, and there is no assurance that it will be able to do so on
favorable terms. The Non-prime Facility provides that a failure to complete a
securitization of Non-prime loans for six months may result in the Non-prime
Facility being terminated. A number of external factors affect the Company's
ability to access the securities market. Such factors, including conditions in
the securities markets generally, conditions in the Asset-backed Securities
market and approvals by other parties to the securitization, could substantially
delay a securitization. Additionally, gains from the sale of loans in
securitizations can represent a significant portion of the Company's net
earnings. If the Company were unable to securitize loans in a financial
reporting period, the Company could incur a significant decline in total
revenues and net earnings for such period. Furthermore, as described below, an
unanticipated delay in completion of a securitization may also increase interest
rate risk.
Potential Need for Additional Capital. The Company's continued growth
(including the development of its Non-prime lending business) will be dependent
upon its ability to continue to effect securitization transactions or to
establish alternative long-term financing arrangements and to obtain sufficient
financing under interim credit facilities upon acceptable terms. If the
Company's growth exceeds anticipated levels, the Company may be required to
effect loan securitizations more rapidly or obtain additional interim funding or
equity. If the Company were unable to do so, its growth would be inhibited. If
the Company's financing sources were curtailed, the Company could be required to
sell additional equity, which would dilute the interests of shareholders who
invest in this Offering. There can be no assurance that the Company could raise
such additional equity capital on acceptable terms or that other sufficient
sources of funds will be available to meet its future financing needs.
Interest Rate Risk
The Company's profitability is largely determined by the difference, or
"spread," between the effective rate of interest paid on the loans acquired by
the Company and the Company's cost of funds under its Credit Facilities or in
securitization transactions. Amounts financed under certain of the Company's new
Credit Facilities bear interest at variable rates that are subject to frequent
adjustment to reflect prevailing rates for short-term borrowings. The interest
rate paid to third-party investors in securitization transactions is a function
of prevailing market rates for comparable transactions and the general interest
rate environment. Because the auto loans purchased by the Company are fixed-rate
loans, the Company bears the risk of interest-rate increases during the period
from the monthly posting of loan rates to the date of the securitization of the
loans made at those rates. The Company employs a hedging strategy that is
<PAGE>
intended to minimize this risk which generally involves the short sale of U.S.
Treasury securities. There can be no assurance, however, that this strategy will
consistently or completely offset adverse interest-rate movements during periods
when the Company holds loans in its portfolio pending securitization or that the
Company will not sustain losses on hedging transactions. The Company's hedging
strategy requires estimates by management of monthly loan acquisition volume. If
such estimates were materially inaccurate, the Company's Gains on Sales of Loans
and results of operations could be adversely affected. Due to compression of the
gross and net spread on the loans securitized and a mismatch in volume estimates
of related hedging transactions, the Company recognized losses on securitization
transactions in the third and fourth quarters of fiscal 1994.
As a result of the Company's strategy of responding promptly to
increases in market interest rates, it may raise rates more quickly than its
competition. To the extent dealers direct loans to financing sources that offer
lower rates than the Company offers, the Company's loan acquisition volumes may
be reduced. This reduction can result in lower market share during periods of
rising interest rates and may adversely affect results of operations.
Default and Prepayment Risk
A portion of the loans acquired by the Company may default or be
subject to certain claims or defenses that automobile buyers may assert against
automobile dealers. The Company bears the primary risk of losses resulting from
defaults. In the event of default, the collateral value of the car securing the
loan may not cover the outstanding loan balance and costs of recovery. The
Company's strategy of making larger advances based on the credit quality of the
borrower rather than the value of collateral may expose the Company to larger
losses on loans in the event of default. The Company expects to experience a
higher default rate on loans acquired through the Company's Non-prime lending
program than it has historically experienced with respect to loans acquired
through the Company's Prime lending program. There is no assurance that
additional losses due to default on Non-prime loans will be offset by the higher
interest rates charged on such loans. Under the terms of its Prime Warehouse
Facility and Non-prime Facility, the Company will not be able to borrow against
defaulted loans. The Company's allowance for credit losses on loans reflects an
estimate of credit losses on loans the Company owns. The Company does not have a
default history for loans acquired through its Non-prime lending program. If the
Company were to underestimate the allowance for credit losses for its Non-prime
loans, the Company would have to recognize losses which would adversely affect
the Company's results of operations.
In addition, the Company is subject to certain loan prepayment risks.
Prepayments reduce the size of the servicing portfolio, thereby reducing the
Company's servicing income. Prepayments also may increase defaults as a
percentage of the remaining loans in the Company's portfolio.
The Gain on Sale of Loans in connection with each securitization
transaction and the amount of Excess Servicing recognized in each transaction
reflect deductions for estimates of future defaults and prepayments. The
carrying value of Excess Servicing may be adjusted periodically to reflect
differences between estimated and actual credit losses and prepayments on past
securitizations. The Company's results of operations would be adversely affected
if default or prepayment rates on securitized loans substantially exceed
anticipated levels.
Variable Quarterly Earnings
Several factors affecting the Company's business can cause significant
variations in its quarterly results of operations. In particular, variations in
the volume of the Company's loan acquisitions, the spreads between the average
rate of purchased loans and the Certificate rate of securitizations, as well as
the timing and size of securitization transactions, can result in significant
increases or decreases in the Company's net earnings from quarter to quarter.
New Status as Independent Entity and Additional Expenses
Prior to the Spin-off, the Company benefited from the support of Union
Federal, including its provision of financing. After the Spin-off, because of
regulatory requirements, Union Federal and its affiliates no longer provide
funding to the Company or provide guarantees or credit support for new
obligations of the Company. Without the support of Union Federal, the Company's
access to funding sources is based on its own financial condition and operating
results, and its cost of funds may be greater than that which would have been
available through Union Federal. Other historical expenses of Union Federal
allocated to the Company may not reflect actual expenses of the Company as an
independent entity. Accordingly, the historical results of operations of the
Company may not be indicative of the Company's future financial performance.
<PAGE>
Risks of Geographic Expansion
The Company has pursued a strategy of expanding its operations to new
markets within the United States as a means of profitably increasing its loan
volume and related interest and servicing fee income. The Company intends to
continue this expansion strategy. The Company's success in new markets will
depend upon its ability to attract dealerships and purchase loans profitably in
the context of each new market's regulatory and competitive environment. There
can be no assurance that the Company will be able to continue to implement its
business strategy successfully in other markets.
Risks of New Finance Products
The Company has initiated a "Non-prime" indirect automobile financing
business for borrowers with lower quality credit than its Prime borrowers.
Non-prime lending involves risks that differ from those inherent in Prime
lending upon which the Company has historically concentrated. Lending to
borrowers with lower quality credit generally involves higher average loan
default rates than is generally experienced in lending to borrowers with higher
quality credit, as well as higher average interest rates on loans payable by the
borrower. In the Non-prime lending business, the Company competes in a different
market segment than that in which it has historically competed and will likely
compete in such business more directly with finance companies and to a lesser
degree with local banks. The Company continues to consider offering alternative
consumer finance products. The Company is considering plans to offer credit card
loans, automobile leasing and potentially home equity lending. There can be no
assurance that the Company's Non-prime lending operations or any other consumer
financing products that the Company may offer in the future will be profitable.
The offering of new consumer finance products could adversely affect the
Company's results of operations.
Dependence on Automobile Loans
The Company currently purchases and services only automobile loans. The
Company's growth and profitability will depend significantly upon demand by
consumers in the Company's markets for financing in connection with new and used
auto purchases and their ability to qualify for such financing. Such demand can
be affected by general trends in the economy, including fluctuations in interest
rates and inflation.
Competition
Competition in the field of financing retail automobile sales is
intense. The auto finance market is highly fragmented and historically has been
serviced by a variety of financial entities including the captive finance
affiliates of major automotive manufacturers, banks, savings associations,
independent finance companies, credit unions and leasing companies. Many of
these competitors have greater financial resources than the Company and may have
a significantly lower cost of funds. Many of such competitors also have
long-standing relationships with automobile dealers and may offer dealers or
their customers other forms of financing or services not provided by the
Company. The Company's ability to compete successfully depends largely upon its
relationships with dealers and the willingness of dealers to offer loans to the
Company for purchase. There can be no assurance that the Company will be able to
continue to compete successfully in the markets it serves.
Regulation
The Company's business is subject to numerous federal and state
consumer protection laws and regulations, which, among other things: (i) require
the Company to obtain and maintain certain licenses and qualifications; (ii)
limit the interest rates, fees and other charges the Company is allowed to
charge; (iii) limit or prescribe certain other terms of the Company's contracts;
(iv) require specified disclosures; and (v) define the Company's rights to
repossess and sell collateral. Changes in existing laws or regulations, or in
the interpretation thereof, or the promulgation of any additional laws or
regulations could have an adverse effect on the Company's business.
Control of the Company
Mr. Waterfield and the 16 other existing shareholders of UHC own 100%
of the Class B Common Stock, which represents 70% of the equity interest of the
Company and enables such holders to cast approximately 92% of the votes eligible
to be cast in respect of the election of directors. Consequently, the holders of
shares of Class B Common Stock have the ability to control the election of the
entire Board of Directors. The shares of Class B Common Stock may convert into
Class A Common Stock on a share-for-share basis in the future if they are
transferred. Approximately 83% of the Class B Common Stock, representing
approximately 58% of the Common Stock, or approximately 76% of the voting power
of Common Stock outstanding after the Offering, is held in the Voting Trust of
which Mr. Waterfield is trustee. Mr. Waterfield's control of the voting power of
such stock enables him to control the election of the entire Board of Directors
<PAGE>
and to cause the adoption of any shareholder proposal favored by the Voting
Trust. Additionally, up to 400,000 shares of Class A Common Stock were reserved
for sale to certain employees, officers and directors of the Company, Union
Federal and its affiliates ("Company Offerees") in the Offering.
Shares Eligible for Future Sale
The Company has approximately 4,011,358 shares of Class A Common Stock
and 9,200,000 shares of Class B Common Stock outstanding. All of the shares sold
in the Offering are freely tradeable without restriction or further registration
under the Securities Act of 1933 (the "Securities Act"), unless acquired by an
affiliate of the Company, in which case those shares are subject to the resale
limitations of Rule 144 under the Securities Act. The shares of Class B Common
Stock distributed to existing shareholders of UHC in the Spin-off may be deemed
"restricted securities" as defined in Rule 144 under the Securities Act. If so,
they may not be resold in the absence of registration under the Securities Act
unless sold pursuant to an exemption from such registration, such as Rule 144.
All holders of Class B Common Stock have agreed not to dispose of their shares
of Class B Common Stock acquired in the Spin-off for two years following
consummation of the Spin-off. In addition, the Company, its directors and
executive officers and certain shareholders of UHC, who collectively hold
approximately 88% of the Class B Common Stock and approximately 0.2% of the
Class A Common Stock, have agreed not to offer, sell, contract to sell or
otherwise dispose of any shares of Common Stock for a period of 180 days after
the consummation of the Offering without the prior written consent of Salomon
Brothers Inc. No prediction can be made as to the effect, if any, that future
sales of shares of Class A Common Stock (including Class A Common Stock issued
on conversion of Class B Common Stock) or the availability of shares of Class A
Common Stock for future sales will have on the market price of the shares of
Class A Common Stock prevailing from time to time.
Anti-Takeover Effect of Capital Structure; Provisions of Charter and Indiana Law
The ability of the holders of the Class B Common Stock to elect all of
the members of the Board of Directors may have the effect of discouraging offers
to acquire the Company. In addition, certain provisions of the Company's
articles of incorporation and by-laws and Indiana law may make acquisition of
control of the Company more difficult or expensive in the absence of prior
approval by the Board of Directors. The Board of Directors is authorized to
issue shares of preferred stock from time to time with rights and preferences as
may be determined by the Board of Directors without shareholder approval. The
Indiana Business Corporation Law contains certain provisions which, if
applicable at the time of the transaction, could restrict the acquisition of
control of the Company.
USE OF PROCEEDS
The Company will not receive any proceeds from the offer and sale of
shares of Class A Common Stock by selling securitity holders pursuant to this
Prospectus.
DETERMINATION OF OFFERING PRICE
Shares of Class A Common Stock offered pursuant to this Prospectus will
be sold by certain affiliates of the Company on the open market from time to
time as determined by market conditions.
SELLING SECURITY HOLDERS; PLAN OF DISTRIBUTION
The shares of Class A Common Stock offered pursuant to this Prospectus are
being sold by certain affiliates of the Company, including directors of the
Company who have acquired, or will acquire, such shares under the Union
Acceptance Corporation 1994 Incentive Stock Plan. Such sales will be effected on
the open market from time to time as determined by market conditions. Resales of
shares of the Class A Common Stock by such persons may also be made under Rule
144 under the Securities Act.
LEGAL MATTERS
The valid issuance of the shares of Class A Common Stock offered hereby
and certain other legal matters will be passed upon for the Company by Barnes &
Thornburg, Indianapolis, Indiana.
<PAGE>
EXPERTS
The combined balance sheets of the Company (UAC and subsidiaries, and
the Union Division combined), as of June 30, 1995 and 1994, and the related
combined statements of earnings and cash flows for each of the years in the
three-year period ended June 30, 1995, have been examined by KPMG Peat Marwick
LLP, independent certified public accountants. Such financial statements have
been included herein and in the Registration Statement in reliance upon the
reports with respect thereto of KPMG Peat Marwick LLP, appearing herein, and
upon the authority of said firm as experts in accounting and auditing.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents are hereby incorporated by reference into this
Prospectus:
(1) The annual report on Form 10-K of the Company for the fiscal
year ended June 30, 1995;
(2) All other reports filed pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "1934 Act") by the
Company since June 30, 1995; and
(3) The description of the capital stock of the Company contained
in the Company's Registration Statement on Form 8-A, which was
filed with the Commission on July 12, 1995, and all amendments
or reports filed for the purpose of updating such description.
All documents subsequently filed by the Company with the Commission
pursuant to Sections l3(a), 13(c), l4, and l5(d) of the 1934 Act prior to the
termination of the offering, shall be deemed to be incorporated by reference
into this Prospectus.
<PAGE>
GLOSSARY
Asset-backed Securities -- A general reference to securities, such as
Certificates, that are backed by financial assets, such as automobile loans or
leases, credit card or trade receivables, home equity loans or equipment.
Business Transfer -- The transfer of certain assets related to the Union
Division from Union Federal to the Company and the assumption of certain related
liabilities by the Company.
Credit Facilities -- Certain external financing arrangements negotiated by the
Company with independent financial institutions or investors to be available to
the Company following completion of the Offering, consisting of a $350 million
Warehouse facility (the "Prime Warehouse Facility") to fund the Company's
primary loan acquisitions and $108 million in Senior Notes due 2002. The Credit
Facilities are also expected to include a $50 million Non-prime Warehouse
facility (the "Non-prime Facility") to fund loan acquisitions through its new
Non-prime lending program,
Credit Scoring -- The process of utilizing standard models in the loan
origination process to evaluate an applicant's credit profile to arrive at an
estimate of the associated credit risk based on statistical evaluation of
several common characteristics that bear on credit worthiness and their
correlation with credit risk.
Dealer Premium -- The amount paid to the dealer for the purchase of a loan above
the principal amount financed. In states other than Ohio, the Dealer Premium is
based upon the finance charge that would be paid on the loan if it earned
interest at a rate equal to the difference between the contract rate and the
Company's periodically published buy rate. The difference in rates averages
approximately 2%. Dealer Premiums paid to Ohio dealers in the form of referral
fees are calculated as the product of the principal amount of the loan and a
periodically adjusted referral rate set forth on the Company's rate sheets for
loans with similar terms, note rate and age of collateral. All or a portion of a
Dealer Premium may be paid in advance at the time the loan is acquired, subject
to being charged back against the dealer if that loan prepays or defaults. The
Dealer Premium is generally advanced to the dealer in the month following
purchase of the loan, creating the Dealer Premium asset. An amortized portion of
such advance, depending on the dealer agreement, is recoverable from the dealer
if the loan is prepaid or defaults. When loans are sold, the related Dealer
Premium is expensed and a Dealer Premium rebate asset is established equal to
the estimated amount recoverable from dealers due to prepayments and defaults.
Actual rebate experience is analyzed by the Company on a monthly basis.
Excess Servicing -- The present value of Future Servicing Cash Flows to be
distributed to the Company by a Securitization trust as determined in accordance
with Statement of Financial Accounting Standards No. 65 ("SFAS 65"). Excess
Servicing represents the present value of Future Servicing Cash Flows earned on
each trust as determined in accordance with SFAS 65. Future Servicing Cash Flows
represent the difference between the coupon rate on the loans and the
pass-through rate to the investors in the securitized pool in excess of a normal
servicing fee of one percent and any other continuing costs such as trustee or
letter of credit fees. To determine Excess Servicing, the Future Servicing Cash
flows are first estimated using an assumed rate of prepayment that is intended
to be conservative relative to historical experience and then discounted at a
market rate commensurate with the risk associated with this type of investment.
Excess Servicing is then reduced by a credit loss provision based upon
historical experience and deemed adequate to cover net losses over the life of
the trust. The loss provision is calculated using a discount rate commensurate
with a risk-free investment of similar maturity in accordance with Emerging
Issues Task Force announcement 92-2. Excess Servicing is subsequently amortized
against servicing income on a level-yield basis. Periodically the Company
reviews the assumptions utilized in determining Excess Servicing. Should the
present value of Future Servicing Cash Flows prove to be insufficient to recover
the capitalized amount, a charge to servicing income would be made in accordance
with SFAS 65. To date the Company has not recorded any such charges.
Future Servicing Cash Flows -- The difference between the coupon rate paid on
securitized loans and the sum of the yield to certificate holders of a
securitized loan pool, a one percent annual servicing fee and other expenses of
the Securitization trust.
Gain on Sale of Loans -- The Gain on Sale of Loans is equal to Excess Servicing
less any difference between the aggregate principal balance of loans and the net
proceeds from the securitization and the prepaid Dealer Premium (after reduction
for future Dealer Premium rebates), adjusted by the gain or loss on related
hedging transactions. The securitizations are usually sold at or close to the
principal balance of the loans included therein. The costs of securitization
consist of issuance expenses and the underwriter's discount.
Non-prime Facility -- See definition of Credit Facilities, above.
Non-prime lending -- The Company's practice of acquiring loans made to borrowers
who generally would not be eligible for credit under Prime lending. Loans are
acquired from automotive dealers under a dealer agreement that provides for the
acquisition of loans at par without provision for payment of any Dealer Premium.
A Non-prime borrower may have had some credit problems in his or her past which
have been resolved and a payment history has been reestablished. To finance a
new or late-model used car, the Non-prime borrower may not qualify for a loan
from a captive finance subsidiary, but may access credit through non-traditional
finance sources.
<PAGE>
Prime lending -- The Company's practice of acquiring loans made to borrowers,
generally with high quality credit, through an automotive dealer under a dealer
agreement that provides for the acquisition of loans at par plus the payment of
a Dealer Premium to the dealer. A Prime borrower has a credit history with no or
few minor defaults and can finance a new car purchase through a bank, a captive
finance subsidiary of an automobile manufacturer or an independent finance
company that focuses on Prime credit.
Prime Warehouse Facility -- See definition of Credit Facilities, above.
Securitization -- The process through which loans and other receivables are
pooled and sold to a trust which issues Certificates to investors.
Senior Notes -- Unsecured Senior Notes of the Company in the original aggregate
principal amount of $108 million due 2002, to be issued by the Company in
connection with the Spin-off and the Offering.
Spin-off -- The pro rata distribution of the 9,200,000 shares of Class B Common
Stock currently held by Union Federal to UHC and from UHC to the shareholders of
UHC, immediately prior to consummation of the Offering.
Spread Account -- A cash collateral account or spread account maintained by the
trustee of a securitization trust into which Future Servicing Cash Flows are
deposited initially, to protect Certificate holders (and any provider of
third-party credit enhancement) against credit losses. The terms of the account,
which vary with each securitization, state a maximum balance, expressed as a
percentage of the original principal balance. Generally, the initial required
cash balance in the account (an amount less than the minimum balance) is funded
by the Company from the securitization proceeds. Excess Servicing cash flows
from the pool of loans, net of credit losses, are credited to the account and
retained until the account balance reaches the maximum balance. The Company
accrues these cash flows as servicing income and establishes the Spread Account
on the balance sheet. Once the maximum balance is attained, excess servicing
cash flows and any surplus in the Spread Account are remitted to the Company.
Should the interest and principal collected by the trust be less than the
required payments to the Certificate holders, the shortfall is funded from the
Spread Account and Future Servicing Cash Flows are retained until the maximum
balance is reestablished. Any remaining Spread Account balance is released to
the Company upon termination of the securitization. There is no recourse to the
Company for loan losses beyond the balance in the Spread Account and Future
Servicing Cash Flows from the trust.
Union Division -- The indirect automobile lending business conducted as a
division of Union Federal through fiscal 1994.
Voting Trust -- Voting Trust Agreement among Richard D. Waterfield, as trustee,
and certain existing shareholders of Union Holding Company, Inc., dated June 10,
1994.
Warehouse -- A method whereby loans are financed by financial institutions on a
short-term basis. In a Warehouse arrangement, loans are accumulated or pooled on
a daily or less frequent basis and assigned or pledged as collateral for
short-term borrowings until they are sold in a Securitization.
<PAGE>
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
Document(s) containing information specified by Part I of the form of
Registration Statement Form S-8 promulgated under the Securities Act of 1933, as
amended (the "1933 Act"), will be sent or given to participants in the Union
Acceptance Corporation Incentive Stock Plan (the "Plan"), as specified in Rule
428(b)(1) promulgated by the Securities and Exchange Commission (the
"Commission") under the 1933 Act. Such document(s) are not being filed with the
Commission but constitute (along with the documents incorporated by reference
into this Form S-8 Registration Statement (the "Registration Statement")
pursuant to Item 3 of Part II hereof), a prospectus that meets the requirements
of Section 10(a) of the 1933 Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are hereby incorporated by reference into this
Prospectus:
(1) The annual report on Form 10-K of Union Acceptance Corporation
(the "Registrant") for the fiscal year ended June 30, 1995;
(2) All other reports filed pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "1934 Act") by the
Registrant since June 30, 1995; and
(3) The description of the capital stock of the Registrant
contained in the Registrant's Registration Statement on Form
8-A, which was filed with the Commission on July 12, 1995, and
all amendments or reports filed for the purpose of updating
such description.
All documents subsequently filed by the Registrant with the Commission
pursuant to Sections l3(a), 13(c), l4, and l5(d) of the 1934 Act prior to the
termination of the offering, shall be deemed to be incorporated by reference
into this Prospectus.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 21 of the Indiana Business Corporation Law, as amended (the "Act"),
grants to each Indiana corporation broad powers to indemnify directors,
officers, employees or agents against expenses incurred in certain proceedings
if the conduct in question was found to be in good faith and was reasonably
believed to be in the corporation's best interests. This statute provides,
however, that this indemnification should not be deemed exclusive of any other
indemnification rights provided by the articles of incorporation, by-laws,
resolution or other authorization adopted by a majority vote of the voting
shares then issued and outstanding. Section 8.05 of Article VIII, and Article IX
of the Amended and Restated Articles of Incorporation of the Registrant state as
follows:
"ARTICLE 8
Section 8.05.
Limitation of Liability and Reliance on Corporate Records and
Other Information.
Clause 8.051. General Limitation. No Director, member of any
committee of the Board of Directors, or of another committee
appointed by the Board, Officer, employee or agent of the
Corporation ("Corporate Person") shall be liable for any loss or
damage if, in taking or omitting to take any action causing such
loss or damage, either (1) such Corporate Person acted (A) in good
faith, (B) with the care an ordinarily prudent person in a like
position would have exercised under similar circumstances, and (C)
in a manner such Corporate Person reasonably believed was in the
<PAGE>
best interests of the Corporation, or (2) such Corporate Person's
breach of or failure to act in accordance with the standards of
conduct set forth in Clause 8.051(1) above (the "Standards of
Conduct") did not constitute willful misconduct or recklessness.
Clause 8.052. Reliance on Corporate Records and Other
Information. Any Corporate Person shall be fully protected, and
shall be deemed to have complied with the Standards of Conduct, in
relying in good faith, with respect to any information contained
therein, upon (1) the Corporate Records, or (2) information,
opinions, reports or statements (including financial statements
and other financial data) prepared or presented by (A) one or more
other Corporate Persons whom such Corporate Person reasonably
believes to be competent in the matters presented, (B) legal
counsel, public accountants or other persons as to matters that
such Corporate Person reasonably believes are within such person's
professional or expert competence, (C) a committee of the Board of
Directors or other committee appointed by the Board of Directors,
of which such Corporate Person is not a member, if such Corporate
Person reasonably believes such committee of the Board of
Directors or such appointed committee merits confidence, or (D)
the Board of Directors, if such Corporate Person is not a Director
and reasonably believes that the Board merits confidence."
"ARTICLE 9
Indemnification
Section 9.01. General. The Corporation shall, to the fullest
extent to which it is empowered to do so by the Act, or any other
applicable laws, as from time to time in effect, 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 and whether formal or informal, by reason of the
fact that he is or was a Director, Officer, employee or agent of
the Corporation, or who, while serving as such Director, Officer,
employee or agent of the Corporation, is or was serving at the
request of the Corporation as a director, officer, partner,
trustee, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise,
whether for profit or not, against expenses (including counsel
fees), judgments, settlements, penalties and fines (including
excise taxes assessed with respect to employee benefit plans)
actually or reasonably incurred by him in accordance with such
action, suit or proceeding, if he acted in good faith and in a
manner he reasonably believed, in the case of conduct in his
official capacity, was in the best interest of the Corporation,
and in all other cases, was not opposed to the best interests of
the Corporation, and, with respect to any criminal action or
proceeding, he either had reasonable cause to believe his conduct
was lawful or no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not meet the prescribed standard
of conduct.
Section 9.02. Authorization of Indemnification. To the extent
that a Director, Officer, employee or agent of the Corporation has
been successful, on the merits or otherwise, in the defense of any
action, suit or proceeding referred to in Section 9.01 of this
Article, or in the defense of any claim, issue or matter therein, the
Corporation shall indemnify such person against expenses (including
counsel fees) actually and reasonably incurred by such person in
connection therewith. Any other indemnification under Section 9.01 of
this Article (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case, upon a
determination that indemnification of the Director, Officer, employee
or agent is permissible in the circumstances because he has met the
applicable standard of conduct. Such determination shall be made (1)
by the Board of Directors by a majority vote of a quorum consisting of
Directors who were not at the time parties to such action, suit or
proceeding; or (2) if a quorum cannot be obtained under subdivision
(1), by a majority vote of a committee duly designated by the Board of
Directors (in which designation
<PAGE>
Directors who are parties may participate), consisting solely of
two or more Directors not at the time parties to such action, suit
or proceeding; or (3) by special legal counsel: (A) selected by
the Board of Directors or its committee in the manner prescribed
in subdivision (1) or (2), or (B) if a quorum of the Board of
Directors cannot be obtained under subdivision (1) and a committee
cannot be designated under subdivision (2), selected by a majority
vote of the full Board of Directors (in which selection Directors
who are parties may participate); or (4) by the Shareholders, but
shares owned by or voted under the control of Directors who are at
the time parties to such action, suit or proceeding may not be
voted on the determination.
Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible, except that if
the determination is made by special legal counsel, authorization
of indemnification and evaluation as to reasonableness of expenses
shall be made by those entitled under subsection (3) to select
counsel.
Section 9.03. Good Faith Defined. For purposes of any
determination under Section 9.01 of this Article 9, a person shall
be deemed to have acted in good faith and to have otherwise met
the applicable standard of conduct set forth in Section 9.01 if
his action is based on information, opinions, reports, or
statements, including financial statements and other financial
data, if prepared or presented by (1) one or more Officers or
employees of the Corporation or another enterprise whom he
reasonably believes to be reliable and competent in the matters
presented; (2) legal counsel, public accountants, appraisers or
other persons as to matters he reasonably believes are within the
person's professional or expert competence; or (3) a committee of
the Board of Directors of the Corporation or another enterprise of
which the person is not a member if he reasonably believes the
committee merits confidence. The term "another enterprise" as used
in this Section 9.03 shall mean any other corporation or any
partnership, joint venture, trust, employee benefit plan or other
enterprise of which such person is or was serving at the request
of the Corporation as a director, officer, partner, trustee,
employee or agent. The provisions of this Section 9.03 shall not
be deemed to be exclusive or to limit in any way the circumstances
in which a person may be deemed to have met the applicable
standards of conduct set forth in Section 9.01 of this Article 9.
Section 9.04. Payment of Expenses in Advance. Expenses
incurred in connection with any civil or criminal action, suit or
proceeding shall be paid for or reimbursed by the Corporation in
advance of the final disposition of such action, suit or
proceeding, as authorized in the specific case in the same manner
described in Section 9.02 of this Article, upon receipt of a
written affirmation of the Director, Officer, employee or agent's
good faith belief that he has met the standard of conduct
described in Section 9.01 of this Article and upon receipt of a
written undertaking by or on behalf of the Director, Officer,
employee or agent to repay such amount if it shall ultimately be
determined that he did not meet the standard of conduct set forth
in this Article 9, and a determination is made that the facts then
known to those making the determination would not preclude
indemnification under this Article 9.
Section 9.05. Provisions Not Exclusive. The indemnification
provided by this Article shall not be deemed exclusive of any
other rights to which a person seeking indemnification may be
entitled under these Amended and Restated Articles of
Incorporation, the Corporation's Code of By-Laws, any resolution
of the Board of Directors or Shareholders, any other
authorization, whenever adopted, after notice, by a majority vote
of all Voting Stock then outstanding, or any contract, both as to
action in his official capacity and as to action in another
capacity while holding such office, and shall continue as to a
person who has ceased to be a Director, Officer, employee or
agent, and shall inure to the benefit of the heirs, executors and
administrators of such a person.
Section 9.06. Vested Right to Indemnification. The right of
any individual to indemnification under this Article shall vest at
the time of occurrence or performance of any event, act or
omission giving rise to any action, suit or proceeding of the
nature referred to in Section 9.01 of this Article 9 and, once
vested, shall not later be impaired as a result of any
<PAGE>
amendment, repeal, alteration or other modification of any or all
of these provisions. Notwithstanding the foregoing, the
indemnification afforded under this Article shall be applicable to
all alleged prior acts or omissions of any individual seeking
indemnification hereunder, regardless of the fact that such
alleged acts or omissions may have occurred prior to the adoption
of this Article. To the extent such prior acts or omissions cannot
be deemed to be covered by this Article 9, the right of any
individual to indemnification shall be governed by the
indemnification provisions in effect at the time of such prior
acts or omissions.
Section 9.07. Insurance. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a
Director, Officer, employee or agent of the Corporation, or who is
or was serving at the request of the Corporation as a director,
officer, partner, trustee, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise, against any liability asserted against
or incurred by the individual in that capacity or arising from the
individual's status as a Director, Officer, employee or agent,
whether or not the Corporation would have power to indemnify the
individual against the same liability under this Article.
Section 9.08. Additional Definitions. For purposes of this
Article, "serving an employee benefit plan at the request of the
Corporation" shall include any service as a Director, Officer,
employee or agent of the Corporation which imposes duties on, or
involves services by such Director, Officer, employee, or agent
with respect to an employee benefit plan, its participants, or
beneficiaries. A person who acted in good faith and in a manner he
reasonably believed to be in the best interests of the
participants and beneficiaries of an employee benefit plan shall
be deemed to have acted in a manner "not opposed to the best
interest of the Corporation" referred to in this Article.
For purposes of this Article, "party" includes any individual
who is or was a plaintiff, defendant or respondent in any action,
suit or proceeding, or who is threatened to be made a named
defendant or respondent in any action, suit or proceeding.
For purposes of this Article, "official capacity," when used
with respect to a Director, shall mean the office of director of
the Corporation; and when used with respect to an individual other
than a Director, shall mean the office in the Corporation held by
the Officer or the employment or agency relationship undertaken by
the employee or agent on behalf of the Corporation.
"Official capacity" does not include service for any other
foreign or domestic corporation or any partnership, joint venture,
trust, employee benefit plan, or other enterprise, whether for
profit or not.
Section 9.09. Payments a Business Expense. Any payments made
to any indemnified party under this Article or under any other
right to indemnification shall be deemed to be an ordinary and
necessary business expense of the Corporation, and payment thereof
shall not subject any person responsible for the payment, or the
Board of Directors, to any action for corporate waste or to any
similar action."
Item 7. Exemption from Registration Claimed.
An aggregate of 11,358 shares of Class A Common Stock have heretofore
been granted pursuant to formula bonus provisions to non-employee directors of
the Registrant. Such shares were granted without the payment of any
consideration and did not involve any sale requiring registration under the
Securities Act of 1933, as amended.
Item 8. Exhibits.
The exhibits furnished with this registration statement are listed on
page E-1.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes (1) to file, during
any period in which offers or sales are being made, a post-effective amendment
to this Registration Statement (i) to include any prospectus required by Section
10(a)(3) of the 1933 Act; (ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement; (iii) to include any material information with respect
to the plan of distribution not previously disclosed in the Registration
<PAGE>
Statement or any material change to such information in the Registration
Statement; provided, however, that clauses (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment by
those clauses is contained in periodic reports filed by the Registrant pursuant
to Section 13 or 15(d) of the 1934 Act that are incorporated by reference in the
Registration Statement; (2) that, for the purpose of determining any liability
under the 1933 Act, each such post-effective amendment 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; and (3) to remove from registration by means of a
post-effective amendment any of the securities being registered that remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference in the 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.
(c) Insofar as indemnification for liabilities arising under the 1933 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 Commission, such indemnification is
against public policy as expressed in the 1933 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 1933 Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Indianapolis, and the State of Indiana, on this
6th day of August, 1996.
UNION ACCEPTANCE CORPORATION
By: /s/ John M. Stainbrook
-------------------------------------
John M. Stainbrook
President
Each person whose signature appears below hereby constitutes and appoints
Jerry D. Von Deylen, and John M. Stainbrook, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement on Form S-8 and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission under the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
------------------------------------------------------------------------
(1) Principal Executive Officer:
/s/ John M. Stainbrook President )
------------------------- )
John M. Stainbrook )
)
)
(2) Principal Financial and )
Accounting Officer: )
)
)
/s/ Rick A. Brown Treasurer and ) August 6, 1996
------------------------- Chief Financial )
Rick A. Brown Officer )
)
)
(3) A Majority of the Board )
of Directors: )
)
)
/s/ Howard L. Chapman Director )
------------------------- )
Howard L. Chapman )
)
)
)
)
/s/ John M. Davis Director )
------------------------- )
John M. Davis )
<PAGE>
Signature Title Date
-------------------------------------------------------------------------
)
)
/s/ Fred M. Fehsenfeld Director )
------------------------- )
Fred M. Fehsenfeld, Jr. )
)
)
/s/ Donald A. Sheman Director )
------------------------- )
Donald A. Sherman )
)
)
/s/ John M. Stainbrook Director )
------------------------- )
John M. Stainbrook ) August 6, 1996
)
)
/s/ Jerry D. Von Deylen Director )
------------------------- )
Jerry D. Von Deylen )
)
)
/s/ Richard D. Waterfield Director )
------------------------- )
Richard D. Waterfield )
)
)
/s/ Thomas M. West Director )
------------------------- )
Thomas M. West )
<PAGE>
INDEX TO EXHIBITS
Page No.
In
This
Exhibit No. Description Filing
- ----------- ------------------------------------------- -------
3.1 Articles of Incorporation of the Registrant *
are incorporated by reference to Exhibit 3(1)
to the Registrant's Registration Statement
on Form S-1 (Registration No. 33-82254),
which was filed with the Commission on
August 1, 1994.
3.2 By-Laws of the Registrant are incorporated *
by reference to Exhibit 3(2)
of the Registrant's Registration Statement on
Form S-1 (Registration No. 33-82254).
5 Opinion of Barnes & Thornburg as to the
legality of the securities being registered.
10 Union Acceptance Corporation 1994 *
Incentive Stock Plan, incorporated by
reference to Exhibit 10.24 of the Registrant's
Registration Statement on
Form S-1 (Registration No. 33-82254).
23.1 Consent of KPMG Peat Marwick, LLP
23.2 Consent of Barnes & Thornburg
(included as part of Exhibit 5).
24 Power of Attorney (set forth on page
S-1 of this Registration Statement).
- ----------
(*) Previously filed with the SEC and incorporated by reference into this
Registration Statement.
EXHIBIT 5
August 6, 1996
Union Acceptance Corporation
250 North Shadeland Avenue
Indianapolis, IN 46219
Gentlemen:
You have requested our opinion in connection with the Registration
Statement on Form S-8 (the "Registration Statement") of Union Acceptance
Corporation (the "Corporation"), relating to the offer and sale of up to 500,000
shares of the Class A Common Stock, without par value, of the Corporation
("Class A Common Stock") under the Union Acceptance Corporation 1994 Incentive
Stock Plan (the "Plan"). In connection with your request, we have made such
examination of the corporate records and proceedings and considered such
questions of law and taken such further action as we deemed necessary or
appropriate to enable us to render this opinion.
Based upon such examination, we are of the opinion that, when the
Class A Common Stock has been purchased and the purchase price therefor has
been paid as contemplated by the Plan and as described in the Registration
Statement, as the same may be amended, and when the Corporation has complied
with the Securities Act of 1933, as amended, and with the securities laws of the
State of Indiana and all other jurisdictions in which the Class A Common Stock
is to be sold pursuant to the exercise of stock options granted under the Plan
or otherwise, the Class A Common Stock will be legally issued, fully paid and
nonassessable.
We consent to the filing of this opinion as Exhibit 5 to the
Registration Statement. In giving this consent, however, we do not admit that we
are in the category of persons whose consent is required under Section 7 of the
Securities Act of 1933 or the Rules and Regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
/s/ Barnes & Thornburg
BARNES & THORNBURG
ERM/srs
Exhibit 23.1
[KPMG PEAT MARWICK LLP LETTERHEAD]
The Board of Directors
Union Acceptance Corporation:
We consent to incorporation by reference in the registration statement (filed
August 7, 1996) on Form S-8 of Union Acceptance Corporation of our report dated
August 18, 1995, relating to the combined balance sheets of the Union Acceptance
Corporation and subsidiaries, and the Union Division as of June 30, 1995 and
1994, and the related combined statements of earnings and cash flows for each of
the years in the three-year period ended June 30, 1995, and all related
schedules, which report appears in the June 30, 1995, annual report on Form 10-K
of Union Acceptance Corporation.
/S/ KPMG Peat Marwick LLP
Indianapolis, Indiana
August 7, 1996
