SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
SEPTEMBER 26, 2001
Date of report (Date of earliest event reported)
NATIONAL AUTO CREDIT, INC.
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(Exact name of registrant as specified in charter)
DELAWARE 1-11601 34-1816760
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(State of Incorporation) (Commission File Number) (IRS Employer Identification No.)
555 Madison Avenue, 29th Floor, New York, New York 10022
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 644-1400
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30000 Aurora Road, Solon, Ohio 44139
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(Former name or former address, if changed since last report)
Item 5. OTHER EVENTS.
On September 26, 2001, the Board of Directors of National Auto
Credit, Inc. (the "Company") declared a dividend distribution of one Right for
each outstanding share of Common Stock to stockholders of record at the close of
business on October 8, 2001 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Company a unit consisting of one
one-hundredth of a share (a "Unit") of Series D Junior Participating Preferred
Stock, par value $.05 per share (the "Series D Preferred Stock") at a Purchase
Price of $5.00 per Unit, subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and American Stock Transfer& Trust Company, as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. Subject to certain exceptions specified in the
Rights Agreement, the Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 10 business days following
a public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired beneficial ownership of 15% or more of the
outstanding shares of Common Stock (the "Stock Acquisition Date"), other than as
a result of repurchases of stock by the Company or certain inadvertent actions
by institutional or certain other stockholders, or (ii) 10 business days (or
such later date as the Board shall determine) following the commencement of a
tender offer or exchange offer that would result in a person or group becoming
an Acquiring Person. Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be transferred with and only
with such Common Stock certificates, (ii) new Common Stock certificates issued
after the Record Date will contain a notation incorporating the Rights Agreement
by reference and (iii) the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate. Pursuant to the Rights
Agreement, the Company reserves the right to require prior to the occurrence of
a Triggering Event (as defined below) that, upon any exercise of Rights, a
number of Rights be exercised so that only whole shares of Preferred Stock will
be issued.
The Rights are not exercisable until the Distribution Date and will
expire at 5:00 p.m., New York City time, on September 26, 2011, unless such date
is extended or the Rights are earlier redeemed or exchanged by the Company as
described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that a Person becomes an Acquiring Person, each holder
of a Right will thereafter have the right to receive, upon exercise, Common
Stock (or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the exercise price of the Right.
Notwithstanding any of the foregoing, following the occurrence of the event set
forth in this paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void. However, Rights are not exercisable following the
occurrence of the event set forth above until such time as the Rights are no
longer redeemable by the Company as set forth below.
For example, at an exercise price of $5.00 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an event
set forth in the preceding
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paragraph would entitle its holder to purchase $10.00
worth of Common Stock (or other consideration, as noted above) for $5.00.
Assuming that the Common Stock had a per share value of $0.25 at such time, the
holder of each valid Right would be entitled to purchase 40 shares of Common
Stock for $5.00.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company engages in a merger or other business combination transaction in
which the Company is not the surviving corporation, (ii) the Company engages in
a merger or other business combination transaction in which the Company is the
surviving corporation and the Common Stock of the Company is changed or
exchanged, or (iii) 50% or more of the Company's assets, cash flow or earning
power is sold or transferred, each holder of a Right (except Rights which have
previously been voided as set forth above) shall thereafter have the right to
receive, upon exercise, common stock of the acquiring company having a value
equal to two times the exercise price of the Right. The events set forth in this
paragraph and in the second preceding paragraph are referred to as the
"Triggering Events."
At any time after a person becomes an Acquiring Person and prior to
the acquisition by such person or group of fifty percent (50%) or more of the
outstanding Common Stock, the Board may exchange the Rights (other than Rights
owned by such person or group which have become void), in whole or in part, at
an exchange ratio of one share of Common Stock, or one one-hundredth of a share
of Preferred Stock (or of a share of a class or series of the Company's
preferred stock having equivalent rights, preferences and privileges), per Right
(subject to adjustment).
The Purchase Price payable, and the number of Units of Preferred
Stock or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or convertible securities at
less than the current market price of the Preferred Stock, or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
At any time until ten business days following the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in part, at a price of
$.01 per Right (payable in cash, Common Stock or other consideration deemed
appropriate by the Board of Directors). Immediately upon the action of the Board
of Directors ordering redemption of the Rights, the Rights will terminate and
the only right of the holders of Rights will be to receive the $.01 redemption
price.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights will
not be taxable to stockholders or to the Company, stockholders may, depending
upon the circumstances, recognize taxable income in the event that the Rights
become exercisable for Common Stock (or other consideration) of the Company or
for common stock of the acquiring company or in the event of the redemption of
the Rights as set forth above.
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Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, to make changes which do not adversely
affect the interests of holders of Rights, or to shorten or lengthen any time
period under the Rights Agreement. The foregoing notwithstanding, no amendment
may be made at such time as the Rights are not redeemable.
A copy of the Rights Agreement is filed with the Securities and
Exchange Commission as an Exhibit to this Current Report on Form 8-K. A copy of
the Rights Agreement is available free of charge from the Rights Agent. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit No. Description
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4.1 Rights Agreement, dated as of September 26, 2001, between the
Company and American Stock Transfer & Trust Company, which
includes the form of Certificate of Designation for the Series
D Junior Participating Preferred Stock as Exhibit "A", the
form of Rights Certificate as Exhibit "B" and the Summary of
Rights to Purchase Preferred Stock as Exhibit "C."
99.1 Press Release dated October 9, 2001.
99.2 Form of Letter to Stockholders of the Company regarding the
adoption of the Rights Plan pursuant to the Rights Agreement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: October 9, 2001 NATIONAL AUTO CREDIT, INC.
(Registrant)
By:/s/ James J. McNamara
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James J. McNamara
Chief Executive Officer
EXHIBIT INDEX
Exhibit No. Description
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4.1 Rights Agreement, dated as of September 26, 2001, between the
Company and American Stock Transfer & Trust Company, which
includes the form of Certificate of Designation for the Series
D Junior Participating Preferred Stock as Exhibit "A", the
form of Rights Certificate as Exhibit "B" and the Summary of
Rights to Purchase Preferred Stock as Exhibit "C."
99.1 Press Release dated October 9, 2001.
99.2 Form of Letter to Stockholders of the Company regarding the
adoption of the Rights Plan pursuant to the Rights Agreement.