UNITED STATES 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, 2004
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:
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 DRIVE
SUITE 100
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.
Onyx Acceptance Corporation
401(k) Savings Plan
Dated: June 29, 2005 By: /s/ DON DUFFY
------------------------------------
Don Duffy
Executive Vice President,
Chief Financial Officer and Director
TABLE OF CONTENTS
PAGE
NUMBER
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Report of Independent Registered Public Accounting Firm 1
Statements of Net Assets Available for Plan Benefits - December 31, 2004 and 2003 2
Statements of Changes in Net Assets Available for Plan Benefits -Years Ended
December 31, 2004 and 2003 3
Notes to Financial Statements - December 31, 2004 and 2003 4 - 8
Supplementary Information:
Schedule 1: Schedule of Assets Held for Investment Purposes at End of Year -
December 31, 2004 9
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Participants and Trustees
Onyx Acceptance Corporation 401(k) Savings Plan
We have audited the accompanying statements of net assets available for plan
benefits and the related statements of changes in net assets available for plan
benefits of the Onyx Acceptance Corporation 401(k) Savings Plan (the Plan), as
of and for the years ended December 31, 2004 and 2003. 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 in accordance with generally accepted auditing standards
and standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion of the effectiveness of Company's
internal control over financial reporting. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits and the
changes in net assets available for plan benefits as of and for the years ended
December 31, 2004 and 2003, in conformity with accounting principles generally
accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is 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. This supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures applied
in the audit of the basic financial statements for the year ended December 31,
2004, and, in our opinion, is fairly stated in all material respects in relation
to the basic financial statements taken as a whole.
As described in Note 10, the plan sponsor completed a plan of merger with
Capital One Auto Finance, Inc.
HASKELL & WHITE LLP
June 23, 2005
1
ONYX ACCEPTANCE CORPORATION
401(K) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 2004 AND 2003
ASSETS
2004 2003
----------- -----------
Investments at fair value (Notes 2, 3, 4 and 5) ....... $13,935,985 $ 7,561,267
Participant loans receivable .......................... 571,612 299,132
----------- -----------
Total investments ................................ 14,507,597 7,860,399
----------- -----------
Contributions receivable
Employer contributions .............................. 650,318 473,564
Participant contributions ........................... 94,273 74,247
----------- -----------
Total receivables .................................. 744,591 547,811
----------- -----------
Net assets available for plan benefits ................ $15,252,188 $ 8,408,210
=========== ===========
See accompanying notes to financial statements
2
ONYX ACCEPTANCE CORPORATION
401(K) SAVINGS PLAN
STATEMENTS OF CHANGES IN
NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEARS ENDED DECEMBER 31, 2004 AND 2003
2004 2003
----------- -----------
Additions to net assets attributed to:
Contributions:
Employer contributions ..................................... $ 650,318 $ 473,564
Participant contributions .................................. 1,761,933 1,451,570
Participant rollovers ...................................... 49,896 43,579
----------- -----------
Total contributions ..................................... 2,462,147 1,968,713
----------- -----------
Investment income:
Participant loan interest .................................. 24,984 12,324
Net appreciation in the fair value of investments .......... 5,022,634 3,018,362
Dividend income ............................................ 166,621 --
Other income ............................................... 219 3,299
----------- -----------
Total investment income ................................. 5,214,458 3,033,985
----------- -----------
Total additions ......................................... 7,676,605 5,002,698
----------- -----------
Deductions from net assets attributed to:
Benefits paid to participants ................................. 809,638 615,499
Corrective distributions ...................................... 8,074 --
Administrative expenses ....................................... 14,915 19,240
----------- -----------
Total deductions ........................................... 832,627 634,739
----------- -----------
Net increase .................................................... 6,843,978 4,367,959
Net assets available for plan benefits -- beginning of year ..... 8,408,210 4,040,251
----------- -----------
Net assets available for plan benefits -- end of year ........... $15,252,188 $ 8,408,210
=========== ===========
See accompanying notes to financial statements
3
ONYX ACCEPTANCE CORPORATION
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003
NOTE 1 - DESCRIPTION OF PLAN
The following description of Onyx Acceptance Corporation 401(k) Savings Plan
(the Plan) provides only general information. Participants should refer to the
Plan agreement for a more complete description of the Plan's provisions.
GENERAL - The Plan is a defined contribution plan covering substantially all of
the employees of Onyx Acceptance Corporation and Subsidiaries (the Company) who
have completed six months of eligibility service and are at least 21 years old.
The Plan is designed to comply with Section 401(a) of the Internal Revenue Code
as a defined contribution plan. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974. The assets of the Plan are held
and invested by the TruSource Division of Union Bank of California (TruSource),
formerly CNA Trust Company, acting as trustee, custodian and recordkeeper.
ELIGIBILITY - Employees are eligible to enter the Plan following the completion
of the sixth month of employment with the Company, and the employee has reached
his or her 21st birthday.
CONTRIBUTIONS AND WITHDRAWALS - Contributions are made to the Plan by means of a
salary deferral agreement under which the participant is entitled to defer up to
the lesser of 20 percent of their eligible compensation or a fixed amount
determined annually by the Internal Revenue Service. The Company can make a
discretionary matching contribution annually to participants. Currently, the
Company's potential match is up to 50 percent of participant contributions up to
the first 6 percent of eligible contributions depending upon the years of
service, subject to approval annually by the Board of Directors. For the years
ended December 31, 2004 and 2003, the Company made matching contributions of
$650,318 and $473,564, respectively. The Company may also make discretionary
profit sharing contributions under the Plan. The Company made no discretionary
profit sharing contributions to the Plan for the years ended December 31, 2004
and 2003.
Participants in service may make hardship withdrawals from their accounts upon
demonstrating immediate and heavy financial need as defined by provisions of the
Internal Revenue Code ("IRC").
VESTING - Participants are vested on their contributions plus earnings,
immediately. Vesting in the Company's matching contribution is based on years of
service. A year of vesting service is defined as any period in which a
participant completes 365 days of service. The following schedule describes the
vesting percentages for participants:
YEARS OF SERVICE VESTED BENEFIT PERCENTAGE
---------------- -------------------------
1 year but less than 2 ........... 20%
2 years but less than 3 ........... 40%
3 years but less than 4 ........... 60%
4 years but less than 5 ........... 80%
5 years or more ................... 100%
PARTICIPANT ACCOUNTS - Each participant account is credited with the
participant's contribution and an allocation of (a) the Company's matching
contribution, (b) any Company discretionary contribution, and (c) Plan net
earnings which include an allocation of certain administrative expenses.
Allocations of matching contributions are based on participant contributions, as
defined. Allocations of discretionary contributions are based on participant
directed investment decisions. Allocations of Plan earnings and administrative
expenses, when applicable, are based on participant account balances. The
benefit to which a participant is entitled is the benefit that can be provided
from the participant's vested interest in their account balance.
PAYMENT OF BENEFITS - Upon termination of service before the normal retirement
age of 65, a participant with benefits of over $5,000 may elect to defer
distribution until normal retirement age or receive a lump sum payment equal to
the vested share of the participant's account.
4
ONYX ACCEPTANCE CORPORATION
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2004 AND 2003
NOTE 1 - DESCRIPTION OF PLAN (CONTINUED)
Upon termination of service at the normal retirement age of 65, a participant
may elect to receive a lump-sum payment equal to the vested value of his or her
account. Benefits may also be accessed in the event of disability or death.
The Plan allows participants to make early withdrawals for certain financial
hardships. The Plan also allows in-service withdrawals by participants after
they reach age 59-1/2. Participants age 59-1/2 taking in-service withdrawals
will be required to pay all applicable taxes on the withdrawals but will not be
subject to penalty taxes for early withdrawals.
PARTICIPANT LOANS - Participants may borrow 50 percent of their vested account
balance up to $50,000 at the prime rate plus 1 percent (an aggregate of 6.00%
and 5.00% at December 31, 2004 and 2003, respectively), with payment of
principal and interest made through payroll deductions. A general loan will have
a term of 5 years or less. Home loans can be repaid over a reasonable period of
time that may exceed 5 years. The loans are secured by the balance in the
participant's account. Participant loans are stated at the unpaid principal
value, which are estimated to approximate fair value.
ADMINISTRATIVE EXPENSE - Administrative expense, other than certain
miscellaneous charges by the Trustee, have to date been 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 Plan Benefits.
FORFEITURES - Forfeitures of unvested Plan assets are used to reduce the
Company's contributions and costs of administering the Plan. Total forfeitures
at December 31, 2004 and 2003 were $58,319 and $91,814, respectively. The
$91,814 in forfeitures was used to reduce the Company's matching contributions
during the year ended December 31, 2004.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The financial statements of the Plan are prepared under
the accrual basis of accounting. Administrative and other expenses are recorded
as incurred. Benefits are reported when paid.
BASIS OF PRESENTATION - The financial statements have been prepared in
compliance with the Department of Labor Rules and Regulations for reporting and
disclosure under ERISA.
USE OF ESTIMATES - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of net assets available for benefits at the date of the financial
statements and the reported amounts of additions to net assets and deductions
from net assets during the reporting period. Actual results could differ from
those estimates.
5
ONYX ACCEPTANCE CORPORATION
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2004 AND 2003
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
VALUATION OF INVESTMENTS - Investments are included in the accompanying
financial statements at fair value as determined by quoted market prices.
Interest is recorded on the accrual basis and is included in the investment's
value. Purchases and sales of securities are recorded on a trade date basis.
Dividends are on the ex-dividend date.
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 participant's account balances and the amounts reported in the Statements
of Net Assets Available for Plan Benefits and the Statements of Changes in Net
Assets Available for Plan Benefits.
NOTE 3 - INVESTMENTS
Investment accounts greater than 5 percent of the Plan's net assets as of
December 31, 2004 and 2003, respectively, are summarized as follows:
2004 2003
----------- -----------
Alliance Technology Fund .................... $ 1,077,215 $ 925,527
Alliance Premier Growth Fund ................ 1,037,331 804,703
Alliance Growth Fund ........................ 757,192 607,995
Alliance Growth & Income Fund ............... 920,562 773,021
AFD Exchange Reserves Fund .................. 442,835 424,742
Onyx Acceptance Corp. Common Stock .......... 7,793,594 2,854,560
----------- -----------
$12,028,729 $ 6,390,548
=========== ===========
During 2004 and 2003, the Plan's investments (including, gains and losses on
investments bought and sold, as well as held during the year) appreciated in
value by $5,022,634 and $3,018,362, respectively.
NOTE 4 - NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the net assets and the significant components of changes in
net assets related to the nonparticipant-directed investment is as follows:
DECEMBER 31, DECEMBER 31,
2004 2003
----------- -----------
Investments, at fair value:
Onyx Acceptance Corporation Common Stock ...................... $ 5,166,157 $ 1,950,253
=========== ===========
Changes in net assets:
Contributions ................................................. $ 531,452 $ 439,415
Net realized and unrealized appreciation in fair value ........ 3,134,813 1,443,671
Benefits paid to participants ................................. (242,699) (109,810)
Transfers to participant-directed investments ................ (207,662) (183,430)
----------- -----------
$ 3,215,904 $ 1,589,846
=========== ===========
6
ONYX ACCEPTANCE CORPORATION
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2004 AND 2003
NOTE 5 - EMPLOYER STOCK
Participants previously could invest their contributions into the Onyx
Acceptance Stock Fund and are permitted to transfer funds from the Plan's other
investment options into the Onyx Acceptance Stock Fund (Note 10). At December
31, 2004 and 2003, investments in Onyx Acceptance Corporation common stock
comprised 54 percent and 36 percent, respectively, of total net assets available
for benefits.
NOTE 6 - PARTY-IN-INTEREST
Certain Plan investments are managed by TruSource, the trustee as defined by the
Plan and, therefore, these transactions qualify as party-in-interest
transactions. Fees paid by the Plan for the investment management services
amounted to $14,915 and $19,240 for the years ended December 31, 2004 and 2003,
respectively.
NOTE 7 - PLAN TERMINATION
Although the Company has not expressed any intent to do so, it has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination, the
net assets of the Plan will be allocated as prescribed by ERISA and its related
regulations, so that each participant receives 100 percent of his or her account
balance as of the date of the termination.
NOTE 8 - TAX STATUS
The Internal Revenue Service ("IRS") has determined and informed the Company by
letter dated January 18, 2005 that the Plan and related trust are designed in
accordance with applicable sections of 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.
ONYX ACCEPTANCE CORPORATION
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2004 AND 2003
NOTE 9 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of the net appreciation in the fair value of
investments per the Form 5500 to the financial statements at December 31, 2004
and 2003:
2004
----------
Unrealized appreciation of investments per the 5500 ....................... $3,932,074
Net gain on sale of assets per the 5500 ................................... 547,584
Net investment gain on registered investment companies per the 5500 ....... 542,976
----------
Net appreciation in the fair value of investments per the
financial statements as of December 31, 2004 .............................. $5,022,634
==========
2003
----------
Unrealized appreciation of investments per the 5500 ....................... $1,895,313
Net gain on sale of assets per the 5500 ................................... 167,984
Net investment on registered investment companies per the 5500 ............ 955,065
----------
Net appreciation in the fair value of investments per the
financial statements as of December 31, 2003 ............................ $3,018,362
==========
NOTE 10 - SUBSEQUENT EVENT
In January 2005, the Company completed a merger agreement with Capital One Auto
Finance, Inc., a subsidiary of Capital One Financial Corporation under which the
Company was acquired by Capital One Auto Finance for $28.00 per outstanding
share of Onyx common stock. As a result of this acquisition, the Company's
common stock is no longer publicly traded. As of the date of this report, there
are no plans to terminate the Plan as a result of the merger with Capital One
Auto Finance, Inc.
7
SCHEDULE 1
ONYX ACCEPTANCE CORPORATION
401(K) SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 2004
EIN #33-0577635
PN #001
(a) (b) (c) (d) (e)
DESCRIPTION OF NVESTMENT INCLUDING
IDENTITY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, CURRENT
LESSOR, OR SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST VALUE
------------------------ --------------------------------- ---- -----
* TruSource Division of UBC AFD Exchange Reserves Fund $ 442,835 $ 442,835
* TruSource Division of UBC Variable Rate Savings Account 61,554 61,554
Algers Mid Cap Growth Fund 34,015 37,940
American Funds Growth Fund 41,114 44,014
American Funds New Prospectives Fund 68,972 74,398
American Funds Small Cap Fund 33,900 36,682
* TruSource Division of UBC Alliance Technology Fund 1,047,220 1,077,215
* TruSource Division of UBC Alliance Worldwide Privatization Fund 407,810 552,009
* TruSource Division of UBC Alliance Global Small Cap Fund 395,372 476,864
* TruSource Division of UBC Alliance Premier Growth Fund 1,032,945 1,037,331
* TruSource Division of UBC Alliance Growth Fund 676,400 757,192
* TruSource Division of UBC Alliance Growth & Income Fund 812,359 920,562
* TruSource Division of UBC Alliance Corporate Bond Portfolio 404,364 419,092
* TruSource Division of UBC Alliance Americas Government Income Fund 65,666 65,582
* TruSource Division of UBC Alliance Balanced Shares Fund 124,741 139,121
** Onyx Acceptance Corporation Common Stock 2,296,562 7,793,594
Participant Loans Interest rates range from 5.0% to 7.0%
and are collateralized by
participant account balances -- 571,612
----------- -----------
$ 7,945,829 $14,507,597
=========== ===========
----------------------
* 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.
8
EXHIBIT INDEX
EXHIBIT DESCRIPTION
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23.1 Consent of Haskell & White LLP
9