SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2001
------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _______________ to _______________
Commission file number _________________
A. Full title of the Plan and the address of the Plan, if different
from that of the issuer named below:
The Onyx Acceptance Corporation
401(k) Savings Plan
B. Name of issuer of the securities held pursuant to the Plan and
the address of its principal executive office:
Onyx Acceptance Corporation
27051 Towne Centre Dr.
Foothill Ranch, CA 92610
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Committee administering the Plan has duly caused this annual report to
be signed on its behalf by the undersigned hereunto duly authorized.
The Onyx Acceptance Corporation
401(k) Savings Plan
Dated: July 1, 2002 By: /s/ DON DUFFY
---------------------------------
Don Duffy
Executive Vice President,
Chief Financial Officer and
Director
ONYX ACCEPTANCE CORPORATION
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
DECEMBER 31, 2001 AND 2000
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PAGES
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits at December 31, 2001 and 2000 2
Statement of Changes in Net Assets Available for Benefits for the Year Ended
December 31, 2001 3
Notes to Financial Statements 4
Supplemental Schedules*:
Schedule of Assets (Held at End of Year) 10
Schedule of Reportable Transactions 11
* All other schedules required by Section 2520.103-10 of the Department of
Labor's Rules and Regulations for Reporting and Discourse under the
Employee Retirement Income Security Act of 1974 and not included herein
have been omitted because they are not applicable.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of
The Onyx Acceptance Corporation 401(k) Savings Plan:
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the financial status of The Onyx
Acceptance Corporation 401(k) Savings Plan (the "Plan") at December 31, 2001 and
2000, and the changes in its financial status for the year ended December 31,
2001 in conformity with accounting principles generally accepted in the United
States of America. These financial statements are the responsibility of the
Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule of Assets (Held
at End of Year) and Schedule of Reportable Transactions as of and for the year
ended December 31, 2001 are presented for the purpose of additional analysis and
are not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Orange County, California
June 18, 2002
THE ONYX ACCEPTANCE CORPORATION
401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
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DECEMBER 31,
----------------------------
2001 2001
---------- ----------
ASSETS
Investments, at fair value (Note 3) $3,605,613 $2,664,117
Participant loans receivable 198,747 207,506
---------- ----------
3,804,360 2,871,623
---------- ----------
Contributions receivable: 409,132 341,861
Employer 89,347 62,341
---------- ----------
Participants 498,479 404,202
---------- ----------
Net assets available for benefit $4,302,839 $3,275,825
========== ==========
The accompanying notes are an integral part of these financial statements.
2
THE ONYX ACCEPTANCE CORPORATION
401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2001
--------------------------------------------------------------------------------
Additions to net assets attributed to:
Investment income:
Interest $ 16,646
Dividend 10,257
Net depreciation in the fair value of investments (369,080)
Contributions:
Employees 1,339,366
Employer 437,241
Rollover 39,733
-----------
Total additions 1,474,163
-----------
Deductions from net assets attributed to:
Benefits paid to participants 439,384
Administrative expenses 7,765
-----------
Total deductions 447,149
-----------
Net increase 1,027,014
Net assets available for benefits:
Beginning of year 3,275,825
-----------
End of year $ 4,302,839
===========
The accompanying notes are an integral part of these financial statements.
3
THE ONYX ACCEPTANCE CORPORATION
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
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1. DESCRIPTION OF THE PLAN
The following description of The Onyx Acceptance Corporation 401(k) Plan
(the "Plan") provides only general information. Participants should
refer to the Plan document for a more complete description of the Plan's
provisions.
GENERAL
In January 1994, Onyx Acceptance Corporation and Subsidiaries (the
"Company") established the Plan, a defined contribution plan, to provide
deferred compensation benefits for its eligible employees. In July 2000,
the Company adopted a new Plan. The assets of the former plan were
transferred to CNA Trust, the new Plan administrator. The Plan is
subject to the provisions of the Employee Retirement Income Security Act
of 1974 ("ERISA").
The Plan is intended to be a qualified defined contribution plan, which
satisfies the requirements of Section 401(k) of the Internal Revenue
Code (the "IRC"). Under the IRC, participants are not liable for federal
income taxes on employee contributions, Company contributions, or Plan
earnings thereon until such time as they are partially or completely
withdrawn from the Plan.
ELIGIBILITY
Employees become eligible to participate in the Plan 6 months after the
employee's employment commence date, and the employee has reached his or
her 21st birthday.
CONTRIBUTIONS AND WITHDRAWALS
A participant is permitted to contribute to the Plan up to 20 percent of
annual compensation (as defined in the Plan Agreement). Amounts
distributed to participants from other tax qualified plans may be
contributed to the Plan and are classified as rollover contributions.
All contributions are held by CNA Trust (the "Trustee"), which invests
the Plan assets for the benefit of Plan participants.
Participants in service may make hardship withdrawals from their
accounts upon demonstrating immediate and heavy financial need as
defined by the provisions of the IRC.
The Company may contribute a matching contribution on behalf of each
participant making eligible contributions at the discretion of its Board
of Directors. The Company's contribution is allocated based on the
respective participant's percentage of total participant contributions
for the current year. Contributions cannot exceed the dollar amount
prescribed by law and cannot be calculated on a base pay in excess of
the amount allowed by law. The Company contributions can be in the form
of Onyx Acceptance Corporation stock.
Participant contributions are recorded in the period the Company makes
payroll deductions from the participants. The Company's matching
contributions are recorded when declared.
4
THE ONYX ACCEPTANCE CORPORATION
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
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VESTING
Vesting in the Company's matching contribution portion of participant
accounts plus actual earnings thereon is based on years of
participation. The vested percentage increases with years of
participation in the Plan at a rate of 20% per year, starting at 20% in
1 year and reaching 100% in 5 years. Participants are immediately vested
in their contributions plus actual earnings thereon, which are both
nonforfeitable. Forfeitures as a result of a participant's termination
prior to vesting are used to reduce subsequent contributions by the
Company for the Plan year immediately following the Plan year in which
the forfeiture occurs. At December 31, 2001, the balance in forfeited
non-vested accounts held in Company stock was approximately $35,000.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contribution and allocations of (a) the Company's contribution and (b)
the Plan's earnings or losses, less investment management and
transaction processing expenses. Allocations are based on the proportion
of the participant's account balance to the total of account balances of
all participants. The benefit to which a participant is entitled is the
benefit that can be provided from the participant's vested account.
Participants direct the investment of their accounts. Changes to these
investment elections are allowed at any time.
PAYMENT OF BENEFITS
A participant's interest in the Plan becomes fully distributable upon
death, total and permanent disability, or retirement at or after, the
early retirement date, as defined in the agreement. A participant may
elect to be paid his or her benefits in the form of a lump sum, or
periodic installments over a period not to exceed the life expectancy of
the participant and his or her spouse. Benefits to participants are
recorded when paid.
PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum of $1,000 up
to a maximum equal to the lesser of $50,000 or 50% of their vested
account balance. Loan transactions are treated as a transfer to (from)
the investment fund from (to) the Participant Loans fund. Loan terms
range from one to five years or up to 30 years for the purchase of a
primary residence. The loans are collateralized by the balance in the
participant's account and bear interest at a rate commensurate with
local prevailing rates as determined quarterly by the Plan
administrator. Interest rates are fixed and range from 6.0% to 10.5% and
mature at various dates through February 2017. Principal and interest
are paid ratably through monthly payroll deductions.
ADMINISTRATIVE EXPENSES
Administrative expenses, other than certain miscellaneous charges by the
Trustee, are paid for by the Company on behalf of the Plan. Payments of
administrative expenses on behalf of the Plan constitute exempt
party-in-interest transactions, and are not reflected in the Statement
of Changes in Net Assets Available for Benefits.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to terminate or amend the Plan, subject to the
provisions of ERISA. Upon termination of the Plan, all participants
shall have a 100% vested interest in their accounts, after payment of
any expenses properly chargeable thereto.
5
THE ONYX ACCEPTANCE CORPORATION
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements are prepared on the accrual basis of
accounting, in accordance with accounting principles generally accepted
in the United States of America.
INVESTMENT VALUATION AND INCOME RECOGNITION
Shares of registered investment company mutual funds are valued at
quoted market prices, which represent the net asset value of shares held
by the Plan at year-end. Participant loans are valued at the unpaid
principal amount of the loan.
Purchases and sales of investments are reflected on a trade date basis.
Interest income is recorded as earned and dividends are recorded on the
ex-dividend dates.
The Plan presents in the statement of changes in net assets available
for benefits the net appreciation (depreciation) in the fair value of
its investments which consists of the realized gains (losses) and the
unrealized appreciation (depreciation) on those investments.
Participants were offered the following investment options as of
December 31, 2001:
Alliance Technology Fund
Emphasizes growth of capital and invests for capital appreciation. The
fund invests primarily in securities of companies expected to benefit
from technological advance and improvements.
Alliance Worldwide Privatization Fund
Seeks long-term capital appreciation. The fund invests primarily in
securities of issuers that are undergoing or have undergone
privatizations, in both established and developing economies.
Alliance Global Small Cap Fund
Seeks long-term growth of capital appreciation. The fund invests
aggressively in small market capitalization. The fund buys small cap
stock with experienced management and large market opportunities.
Alliance Premier Growth Fund
Seeks long-term growth capital appreciation. The fund invests primarily
in a limited number of large carefully selected, high quality U.S.
companies.
Alliance Growth Fund
Invests in equity securities of companies with favorable earnings
outlook whose long-term growth rates are expected to exceed that of the
U.S economy over time. Focused primarily on large and medium cap growth
stocks.
Alliance Growth & Income Fund
Seeks to provide income and capital appreciation. The fund invests
primarily in dividend-paying common stock of good quality. The fund may
also invest in fixed-income and convertible securities.
Alliance Corporate Bond Portfolio
Seeks to maximize income over the long term. This fund targets
investments in long and average maturity and duration in both U.S. and
foreign debt obligations.
6
THE ONYX ACCEPTANCE CORPORATION
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
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AFD Exchange Reserves Fund
Money market fund. The fund's objective is to provide maximum current
income consistent with safety of principal and liquidity. The fund
maintains an average maturity of 90 days or less, by investing in short
term bonds, commercial paper, and certificates of deposits.
Onyx Acceptance Corp. Common Stock
Company Stock.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles in the United States of America requires
the Plan's management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts in the statement of changes in net assets available for
benefits during the reporting period. Actual results could differ from
those estimates.
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in any combination of
investment securities. Investment securities are exposed to various
risks, such as interest rate, market and credit. Due to the level of
risk associated with certain investment securities and the level of
uncertainty related to changes in the value of investment securities, it
is at least reasonably possible that changes in risks in the near term
would materially affect participants' account balances and the amounts
reported in the statements of net assets available for benefits and the
statement of changes in net assets available for benefits.
3. INVESTMENTS
The following table presents investments at fair value that represent 5
percent or more of the Plan's net assets at December 31, 2001:
Alliance Technology Fund $605,827
Alliance Premier Growth Fund 592,088
Alliance Growth Fund 408,236
Alliance Growth & Income Fund 405,030
AFD Exchange Reserves Fund 335,116
Onyx Acceptance Corp. Common Stock 629,324
7
THE ONYX ACCEPTANCE CORPORATION
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
4. NONPARTICIPANT-DIRECTED INVESTMENTS
Net assets and the significant components of the changes in net assets
relating to the participant directed investments consists of the
following:
DECEMBER 31,
----------------------------
2001 2000
------------ ------------
NET ASSETS
Common Stock $ 696,595 $ 371,375
========== =========
DECEMBER 31,
2001
------------
CHANGES IN NET ASSETS:
Contributions $ 333,215
Net Appreciation 120,659
Benefits paid to participants (37,155)
Transfers to participant-directed investments (91,499)
---------
$ 325,220
=========
5. INCOME TAX STATUS
The Internal Revenue Service has determined and informed CNATrust by
letter dated May 24, 1991 that its Adoption Agreement known as Defined
Contribution Master Plan No. 1 (the "master plan") and related trust,
are designated in accordance with applicable sections of the IRC. The
Company has adopted the master plan and trust in full as if the Company
was a signatory to that Agreement. However, the Plan as adopted has not
been evaluated by the IRS and, as such, no determination has been made
as to the Plan's compliance with the IRC. The Company and Plan
Administrator believe the Plan is currently designed and being operated
in compliance with the applicable requirements of the IRC. Therefore,
the Plan, is expected to continue as exempt from federal income taxes.
8
SUPPLEMENTAL SCHEDULES
9
THE ONYX ACCEPTANCE CORPORATION
401(k) PLAN
SCHEDULE OF ASSETS (HELD AT END OF YEAR#)
AT DECEMBER 31, 2001
--------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
IDENTITY OF ISSUER, BORROWER, DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, RATE OF COST CURRENT
LESSOR OR SIMILAR PARTY INTEREST, COLLATERAL, PAR OR MATURITY VALUE VALUE
Cash $ 58,246
(*) CNA Trust Alliance Technology Fund 605,827
(*) CNA Trust Alliance Worldwide Privatization Fund 202,049
(*) CNA Trust Alliance Global Small Cap Fund 204,240
(*) CNA Trust Alliance Premier Growth Fund 592,088
(*) CNA Trust Alliance Growth Fund 408,236
(*) CNA Trust Alliance Growth & Income Fund 405,030
(*) CNA Trust Alliance Corporate Bond Portfolio 165,457
(*) CNA Trust AFD Exchange Reserves Fund 335,116
(**) Onyx Acceptance Corporation Common Stock 656,472 629,324
(*) Participant Loans Interest rates range from 6.0% to 10.5% and are
collateralized by participant account balances 198,747
----------
$3,804,360
==========
* A party-in-interest for which a statutory exemption exists.
** Sponsor and employer and, therefore, a party-in-interest for which a
statutory exemption exists.
# Under ERISA, an asset held for investment purposes is any asset held by
the Plan on the last day of the Plan's fiscal year or acquired at any
time during the Plan's fiscal year and disposed of at any time before
the last day of the Plan's fiscal year, with certain exceptions.
10
THE ONYX ACCEPTANCE CORPORATION
401(k) PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
AT DECEMBER 31, 2001
--------------------------------------------------------------------------------
TOTAL TOTAL TOTAL TOTAL
NUMBER NUMBER DOLLAR VALUE DOLLAR VALUE NET
DESCRIPTION OF ASSET OF PURCHASES OF SALES OF PURCHASES OF SALES GAIN (LOSS)
-------------------- ------------ -------- ------------ -------- -----------
Onyx Acceptance Corp. Common Stock 100 $ 154,995 $ (14,652)
Onyx Acceptance Corp. Common Stock 54 $ 454,047 $ --
11
EXHIBIT INDEX
EXHIBIT DESCRIPTION
------- -----------
23.1 Consent of Independent Accountants