<PAGE> 1
As filed with the Securities and Exchange Commission on June 30, 1997
Registration Statement No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------------
CAPITAL FACTORS HOLDING, INC.
--------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 65-0500757
- ------------------------------- ----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
120 East Palmetto Park Road, 5th Floor
Boca Raton, Florida 33432
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(Address of Principal Executive Offices)
Capital Factors Holding, Inc. Stock Option Plan
---------------------------------------------------
(Full title of the Plan)
-------------------
John W. Kiefer
President and Chief Executive Officer
Capital Factors Holding, Inc.
120 East Palmetto Park Road, 5th Floor
Boca Raton, Florida 33432
-------------------------------------------------------------
(Name and address of agent for service)
(561) 368-5011
-------------------------------------------------------------
(Telephone number, including area code, of agent for service)
Copy to:
Timothy E. Kish, Esq.
General Counsel
Capital Factors Holding, Inc.
1221 Brickell Avenue, 6th Floor
Miami, Florida 33131
(305) 536-1500
-------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title Proposed maximum Proposed maximum
of securities Amount to be offering price aggregate Amount of
to be registered registered per share(1) offering price(2) registration fee
- ---------------- ------------ ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par
value................. 1,300,000 shares $17.16 $16,882,259 $5,116
</TABLE>
(1) Estimated solely for purpose of calculating the registration fee pursuant
to Rule 457(h) under the Securities Act of 1993.
(2) Computed in accordance with Rule 457(h) on the basis of the (i) actual
exercise price of $8.50 for an aggregate of 572,500 options to purchase
Common Stock being registered, which have already been granted under the
Capital Factors Holding, Inc. Stock Option Plan (the "Plan"), (ii) actual
exercise price of $13.50 for an aggregate of 117,850 options to purchase
Common Stock being registered, which have already been granted under the
Plan, (iii) actual exercise price of $14.875 for an aggregate of 16,000
options to purchase Common Stock being registered, which have already been
granted under the Plan, and (iv) the average of the high and low price of
a share of Common Stock as reported by the Nasdaq National Market on June
24, 1997 (which was $17.16) with respect to 593,650 shares of Common Stock
subject to future grants of options under the Plan.
<PAGE> 2
PART I: INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
- ------------------------------
*The documents(s) containing the information specified in this Part I
will be sent or given to employees as specified by Rule 428(b)(1). Such
documents will not be filed with the Securities and Exchange Commission (the
"Commission") either as part of this Registration Statement or as the
prospectuses or prospectus supplements pursuant to Rule 424. These documents
and the documents incorporated by reference in this Registration Statement
pursuant to Item 3 of Part II of this Registration Statement, taken together,
shall constitute a prospectus which meets the requirements of Section 10(a) of
the Securities Act of 1933, as amended.
II - 1
<PAGE> 3
PART II: INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Registrant hereby incorporates by reference into this Registration
Statement the following documents:
(i) the Registrant's Registration Statement on Form S-1
(Reg. No. 333-3419), as amended, filed with the Commission on May 9,
1996;
(ii) the Registrant's Annual Report pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on Form 10-K for the year ended December 31, 1996,
and all other documents filed by the Registrant pursuant to Section
13(a) or 15(d) of the Exchange Act since December 31, 1996;
(iii) Amended and Restated Articles of Incorporation of the
Registrant, filed with the Florida Secretary of State on July 2, 1996
(filed as Exhibit 3.1 to the Registrant's Form S-1 Registration
Statement); and
(iv) The description of the Registrant's shares of Common
Stock, $.01 par value, set forth or incorporated by reference into
Item 1 of the Registrant's Form 8-A Registration Statement (Reg. No.
0-20863) filed with the Commission on June 13, 1996.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated herein by reference and to be a part hereof from
the date of filing of such documents. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein, or in a subsequently filed document incorporated by reference
herein, modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
The Registrant's Common Stock, $.01 par value (the "Common Stock"),
has been registered pursuant to Section 12(g) of the Exchange Act. Accordingly,
a description of the Common Stock is not required herein.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
II - 2
<PAGE> 4
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The Registrant has the authority under the Florida Business
Corporation Act to indemnify its directors and officers to the extent provided
in such statute. The Registrant's Articles of Incorporation provide that the
Registrant shall indemnify its executive officers and directors to the fullest
extent permitted by law either now or hereafter. The Registrant has also
entered into an agreement with each of its directors and certain of its
officers wherein it has agreed to indemnify each of them to the fullest extent
permitted by law. In general, Florida law permits a Florida corporation to
indemnify its directors, officers, employees and agents, and persons serving at
the corporation's request in such capacities for another enterprise, against
liabilities arising from conduct that such persons reasonably believed to be
in, or not opposed to, the best interests of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful.
The provisions of the Florida Business Corporation Act that authorize
indemnification do not eliminate the duty of care of a director and, in
appropriate circumstances, equitable remedies such as injunctive relief or
other forms of nonmonetary relief will remain available under Florida law. In
addition, each director will continue to be subject to liability for (a)
violations of criminal law, unless the director had reasonable cause to believe
that his conduct was lawful or had no reasonable cause to believe his conduct
was unlawful, (b) deriving an improper personal benefit from a transaction, (c)
voting for or assenting to an unlawful distribution, and (d) willful misconduct
or a conscious disregard for the best interest of the corporation in a
proceeding by or in the right of the corporation to procure a judgment in its
favor or in a proceeding by or in the right of a shareholder. The statute does
not affect a director's responsibilities under any other law, such as the
federal securities laws or the state or federal environmental laws.
At present, there is no pending litigation or proceeding involving a
director or officer of the Registrant as to which indemnification is being
sought from the Registrant, nor is the Registrant aware of any threatened
litigation that may result in claims for indemnification from the Registrant by
any officer or director.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.*
(3.1) Registrant's Articles of Incorporation, as amended (Exhibit
3.1 filed with the Registrant's Registration Statement on Form S-1 (Reg. No.
333-3419) , as amended, filed with the Commission on May 9, 1996 (the
"Registration Statement").
(3.2) Registrant's Amended and Restated Bylaws (Exhibit 3.2 filed
with the Registration Statement).
II - 3
<PAGE> 5
(5.1) Opinion of Greenberg, Traurig, Hoffman, Lipoff, Rosen &
Quentel, P.A.
(10.1) Capital Factors Holding, Inc. Stock Option Plan, as amended
(23.1) Consent of Deloitte & Touche LLP.
(23.2) Consent of Greenberg, Traurig, Hoffman, Lipoff, Rosen &
Quentel, P.A. (included in the opinion filed as Exhibit 5.1
hereof).
- -------------------
* Exhibits followed by a parenthetical reference are
incorporated herein by reference from the document described therein.
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 to
include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change to
such information in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, as amended (the "Securities 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.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange 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
Securities 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 Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities
II - 4
<PAGE> 6
(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 Securities Act and will be governed
by the final adjudication of such issue.
II - 5
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Boca Raton, State of Florida on June 27, 1997.
CAPITAL FACTORS HOLDING, INC.
By: /s/ John W. Kiefer
--------------------------
John W. Kiefer
President and Principal Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Javier J. Holtz Chairman of the Board June 27, 1997
- ---------------------------
JAVIER J. HOLTZ
/s/ Dennis A. McDermott Treasurer June 27, 1997
- --------------------------- (principal financial and
DENNIS A. McDERMOTT accounting officer)
/s/Daniel M. Holtz Director June 27, 1997
- ---------------------------
DANIEL M. HOLTZ
/s/ Stephen N. Ashman Director June 27, 1997
- ---------------------------
STEPHEN N. ASHMAN
/s/ Ronald S. Chase Director June 27, 1997
- ---------------------------
RONALD S. CHASE
/s/ Cynthia R. Cohen Director June 27, 1997
- ---------------------------
CYNTHIA R. COHEN
/s/ Norman G. Einspruch Director June 27, 1997
- ---------------------------
NORMAN G. EINSPRUCH
</TABLE>
II - 6
<PAGE> 8
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Jack D. Listanowsky Director June 27, 1997
- ---------------------------
JACK D. LISTANOWSKY
- --------------------------- Director June 27, 1997
HAROLD L. OSHRY
/s/ Bruce S. Raiffe Director June 27, 1997
- ---------------------------
BRUCE S. RAIFFE
</TABLE>
II - 7
<PAGE> 9
EXHIBIT INDEX*
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
- ------- ----------- ----------
5.1 Opinion of Greenberg, Traurig, Hoffman, Lipoff,
Rosen & Quentel, P.A...................................
10.1 Capital Factors Holding, Inc. Stock Option Plan, as
amended................................................
23.1 Consent of Deloitte & Touche LLP.......................
23.2 Consent of Greenberg, Traurig, Hoffman, Lipoff,
Rosen & Quentel, P.A. (included in the opinion filed
as Exhibit 5.1 hereof).................................
* All other exhibits listed under Item 8 of Part II of this
Registration Statement are incorporated by reference to documents
previously filed, as indicated therein.
II - 8
<PAGE> 1
EXHIBIT 5.1
June 27, 1997
Capital Factors Holding, Inc.
120 East Palmetto Park Road, 5th Floor
Boca Raton, Florida 33432
Ladies and Gentlemen:
We have acted as counsel to Capital Factors Holding, Inc., a Florida
corporation (the "Company"), and have reviewed the Company's Registration
Statement on Form S-8 covering 1,300,000 shares of the Company's authorized but
unissued common stock, $0.01 par value per share (the "Common Stock"), issuable
pursuant to stock options and/or stock appreciation rights granted under the
Company's Stock Option Plan (the "Plan"). It is our opinion that the shares of
Common Stock issuable under the Plan, when issued in accordance with the terms
of the Plan, will be validly issued, fully paid and non-assessable.
We hereby consent to the use of this opinion in the above referenced
Registration Statement. In giving such consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
Very truly yours,
GREENBERG, TRAURIG, HOFFMAN,
LIPOFF, ROSEN & QUENTEL, P.A.
By: /s/ Robert L. Grossman
--------------------------
Robert L. Grossman
<PAGE> 1
EXHIBIT 10.1
---------------------------------------
CAPITAL FACTORS HOLDING, INC.
STOCK OPTION PLAN
---------------------------------------
Purpose. The purpose of this Plan is to advance the interests of
Capital Factors Holding, Inc., a Florida corporation (the "Company"), by
providing an additional incentive to attract, retain and motivate qualified and
competent persons who are key to the Company (as hereinafter defined),
including key employees, Officers and Directors, and upon whose efforts and
judgment the success of the Company is largely dependent, through the
encouragement of stock ownership in the Company by such persons.
1. DEFINITIONS. As used herein, the following terms shall have the
meaning indicated:
(a) "Bank" shall refer to Capital Bank, a Florida bank and
majority shareholder of the Company.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(d) "Committee" shall mean the Company's Compensation
Committee.
(e) "Common Stock" shall mean the Company's Common Stock,
par value $0.01 per share.
(f) "Company" shall refer to Capital Factors Holding, Inc., a
Florida corporation, its wholly-owned subsidiary, Capital Factors, Inc., a
Florida corporation, and any additional existing or future direct or indirect
majority owned subsidiary of the Company.
(g) "Director" shall mean a member of the Board.
(h) "Disinterested Person" shall mean a Director who is not,
during the one year prior to his or her service as a member of the Committee,
or during such service, granted or awarded equity securities pursuant to this
Plan or any other plan of the Company or any of its affiliates, except that:
(i) participation in a formula plan meeting the
conditions in paragraph (c)(2)(ii) of Rule 16b-3 promulgated under the
Securities Exchange Act shall not disqualify a Director from being a
Disinterested Person;
<PAGE> 2
(ii) participation in an ongoing securities
acquisition plan meeting the conditions in paragraph (d)(2)(i) of Rule
16b-3 promulgated under the Securities Exchange Act shall not
disqualify a Director from being a Disinterested Person; and
(iii) an election to receive an annual retainer fee
in either cash or an equivalent amount of securities, or partly in
cash and partly in securities, shall not disqualify a Director from
being a Disinterested Person.
In addition, in order to be a "Disinterested Person" a director shall be an
outside director as defined in the rules and regulations under Section 162(m)
of the Code. Such rules and regulations presently provide that a director shall
not be a current employee of the Company or, a former employee receiving
compensation from the Company for prior services (other than from a qualified
retirement plan), shall not have been an officer of the Company, and shall not
be receiving any remuneration from the Company, either directly or indirectly,
in any capacity other than as a director. Remuneration is considered received,
either directly or indirectly, by a director if:
(i) it is paid in the applicable year to the
director or to an entity in which the director has a beneficial
ownership interest of greater than 50%;
(ii) it is not de minimis, and was paid in the prior
year to an entity in which the director has a beneficial interest of
at least 5% but not more than 50%; or
(iii) it is not de minimis, and was paid in the
prior year to an entity in which the director is employed or
self-employed other than as a director.
For the purposes hereof, remuneration paid for goods or services shall be
considered to be de minimis if the amount paid by the Company in its preceding
taxable year does not exceed 5% of the recipient's gross revenues. However,
remuneration in excess of $60,000 paid to an entity is not de minimis if it is
paid to an entity described in (ii) above (one in which the director owns from
a 5% to 50% interest), or if it is paid for personal services to an entity
described in (iii) above (one by which the director is employed but owns less
than a 5% interest).
(i) "Effective Date" shall mean the commencement date of the
Company's initial public offering of Common Stock as contemplated by the
Company's Registration Statement on Form S-1 (Registration No. 333-3419)
initially filed with the Securities and Exchange Commission on May 9, 1996.
(j) "Eighty Percent Control" shall refer to control of the
Company within the meaning of Section 368(c) of the Code, that is ownership of
at least 80 percent of the total combined voting power of all classes of stock
entitled to vote for directors of the Company and at least 80 percent of the
total number of shares of each other class of stock of the Company, all as
defined in Section 368(c) of the Code.
<PAGE> 3
(k) "Eighty Percent Holder" shall refer to Bank or any
designee of the Bank or any previous designee of the Bank to whom or which the
Bank or such previous designee has transferred Eighty Percent Control.
(l) "Eighty Percent Period" shall refer to that period
during which any Eighty Percent Holder has Eighty Percent Control.
(m) "Employee Director" shall mean a member of the Board
who is also an employee of the Company or a Subsidiary.
(n) "Fair Market Value" of a Share on any date of
reference shall be the "Closing Price" (as defined below) of the Common Stock on
the business day immediately preceding such date, unless the Committee in its
sole discretion shall determine otherwise in a fair and uniform manner. For the
purpose of determining Fair Market Value, the "Closing Price" of the Common
Stock on any business day shall be (i) if the Common Stock is listed or admitted
for trading on any United States national securities exchange, or if actual
transactions are otherwise reported on a consolidated transaction reporting
system, the last reported sale price of Common Stock on such exchange or
reporting system, as reported in any newspaper of general circulation, (ii) if
the Common Stock is quoted on the National Association of Securities Dealers
Automated Quotations System ("Nasdaq"), or any similar system of automated
dissemination of quotations of securities prices in common use, the last
reported sale price of Common Stock for such day on such system, or (iii) if
neither clause (i) or (ii) is applicable, the mean between the high bid and low
asked quotations for the Common Stock as reported by the National Quotation
Bureau, Incorporated if at least two securities dealers have inserted both bid
and asked quotations for Common Stock on at least five of the ten preceding
days.
(o) "Incentive Stock Option" shall mean an incentive
stock option as defined in Section 422 of the Code.
(p) "Non-Employee Director" shall mean a member of the
Board who is not an employee of the Company or a Subsidiary.
(q) "Non-Qualified Stock Option" shall mean an Option
which is not an Incentive Stock Option.
(r) "Officer" shall mean the Company's president,
principal financial officer, principal accounting officer (or, if there is no
such accounting officer, the controller), any vice-president of the Company in
charge of a principal business unit, division or function (such as
administration or finance), any other officer who performs a policy-making
function, or any other person who performs similar policy-making functions for
the Company. Officers of Subsidiaries shall be deemed Officers of the Company if
they perform such policy-making functions for the Company. As used in this
paragraph, the phrase "policy-making function" does not include policy-making
functions that are not significant. Unless specified otherwise in a resolution
by the Board, an "executive officer" pursuant to Item 401(b) of Regulation S-K
(17 C.F.R. ss. 229.401(b)) shall be only such person designated as an "Officer"
pursuant to the foregoing provisions of this paragraph.
<PAGE> 4
(s) "Option" (when capitalized) shall mean any option
granted under this Plan.
(t) "Optionee" shall mean a person to whom a stock
option is granted under this Plan or any person who succeeds to the rights of
such person under this Plan by reason of the death of such person.
(u) "Plan" shall mean this Stock Option Plan for the
Company.
(v) "SAR" shall mean a stock appreciation right.
(w) "Securities Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(x) "Share(s)" shall mean a share or shares of the Common
Stock.
(y) "Subsidiary" shall mean any corporation (other than
the Company) in any unbroken chain of corporations beginning with the Company
if, at the time of the granting of the Option, each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50 percent
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
2. SHARES AND OPTIONS. The Company may grant to Optionees from time to
time Options to purchase an aggregate of up to 1,300,000 Shares from authorized
and unissued Shares. If any Option granted under the Plan shall terminate,
expire, or be canceled or surrendered as to any Shares, new Options may
thereafter be granted covering such Shares. Subject to the provisions of
Section 15 hereof, an Option granted hereunder shall be either an Incentive
Stock Option or a Non-Qualified Stock Option as determined by the Committee at
the time of grant of such Option and shall clearly state whether it is an
Incentive Stock Option or Non-Qualified Stock Option. All Incentive Stock
Options shall be granted within 10 years from the effective date of this Plan.
3. DOLLAR LIMITATION. Options otherwise qualifying as Incentive Stock
Options hereunder will not be treated as Incentive Stock Options to the extent
that the aggregate Fair Market Value (determined at the time the Option is
granted) of the Shares, with respect to which Options meeting the requirements
of Code Section 422(b) are exercisable for the first time by any individual
during any calendar year (under all plans of the Company and any Subsidiary),
exceeds $100,000.
4. CONDITIONS FOR GRANT OF OPTIONS.
(a) Each Option shall be evidenced by an option agreement
that may contain any term deemed necessary or desirable by the Committee,
provided such terms are not inconsistent with this Plan or any applicable law.
In addition to Non-Employee Directors (who shall receive Options only pursuant
to Section 15 of this Plan), Optionees shall be those persons selected by the
Committee from the class of all regular employees of the Company or its
Subsidiaries, including Employee Directors and Officers who are regular
employees of the Company. Any person who files with the Committee, in a form
satisfactory to the Committee, a written waiver of eligibility to receive any
<PAGE> 5
Option under this Plan shall not be eligible to receive any Option under this
Plan for the duration of such waiver.
(b) In granting Options to employees of the Company or its
Subsidiaries, the Committee shall take into consideration the contribution the
person has made to the success of the Company or its Subsidiaries and such
other factors as the Committee shall determine. The Committee shall also have
the authority to consult with and receive recommendations from officers and
other personnel of the Company and its Subsidiaries with regard to these
matters. The Committee may from time to time in granting Options to employees
of the Company or its Subsidiaries under the Plan prescribe such other terms
and conditions concerning such Options as it deems appropriate, including,
without limitation, (i) prescribing the date or dates on which the Option
becomes exercisable, (ii) providing that the Option rights accrue or become
exercisable in installments over a period of years, upon termination of the
Eighty Percent Period, the consent of the Eighty Percent Holder and/or the
attainment of stated goals, or (iii) relating an Option to the continued
employment of the Optionee for a specified period of time, provided that such
terms and conditions are not more favorable to an Optionee than those expressly
permitted herein.
(c) The Options granted to employees under this Plan shall be in
addition to regular salaries, pension, life insurance or other benefits related
to their employment with the Company or its Subsidiaries. Neither the Plan nor
any Option granted under the Plan shall confer upon any person any right to
employment or continuance of employment by the Company or its Subsidiaries.
(d) Notwithstanding any other provision of this Plan, and in
addition to any other requirements of this Plan, Options may not be granted to
(i) an Officer or Employee Director unless the grant of such Options is
authorized by, and all of the terms of such Options are determined by, a
Committee that is appointed in accordance with Section 13 of this Plan and all
of whose members are Disinterested Persons, or (ii) a Non-Employee Director
unless the grant of such Options is made in accordance with Section 15 of this
Plan.
(e) Notwithstanding any other provision of this Plan, and in
addition to any other requirements of this Plan, the aggregate number of
Options granted to any one Director, Officer or employee may not exceed 35% of
the total number of options available for grant under the Plan.
5. OPTION PRICE. The option price per Share of any Option shall be any
price determined by the Committee but shall not be less than the par value per
Share; provided, however, that in no event shall the option price per Share of
any Incentive Stock Option or Option granted pursuant to Section 15 of this
Plan be less than the Fair Market Value of the Shares underlying such Option on
the date such Option is granted.
6. EXERCISE OF OPTIONS. An Option shall be deemed exercised when (i)
the Company has received written notice of such exercise in accordance with the
terms of the Option, (ii) full payment of the aggregate option price of the
Shares as to which the Option is exercised has been made, and (iii)
arrangements that are satisfactory to the Committee in its sole discretion have
been made for the Optionee's payment to the Company of the amount that is
necessary for the Company or Subsidiary
<PAGE> 6
employing the Optionee to withhold in accordance with applicable Federal or
state tax withholding requirements. Unless further limited by the Committee in
any Option, the option price of any Shares purchased shall be paid in cash, by
certified or official bank check, by money order, with Shares or by a
combination of the above; provided further, however, that the Committee in its
sole discretion may accept a personal check in full or partial payment of any
Shares. If the exercise price is paid in whole or in part with Shares, the
value of the Shares surrendered shall be their Fair Market Value on the date
the Option is exercised. The Company in its sole discretion may, on an
individual basis or pursuant to a general program established in connection
with this Plan, and subject to applicable law, lend money to an Optionee,
guarantee a loan to an Optionee, or otherwise assist an Optionee to obtain the
cash necessary to exercise all or a portion of an Option granted hereunder or
to pay any tax liability of the Optionee attributable to such exercise. If the
exercise price is paid in whole or part with Optionee's promissory note, such
note shall (i) provide for full recourse to the maker, (ii) be collateralized
by the pledge of the Shares that the Optionee purchases upon exercise of such
Option, (iii) bear interest at a rate no less than the prime rate of the
Company's principal lender, and (iv) contain such other terms as the Board in
its sole discretion shall reasonably require. No Optionee shall be deemed to be
a holder of any Shares subject to an Option unless and until a stock
certificate or certificates for such Shares are issued to such person(s) under
the terms of this Plan. No adjust ment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions
or other rights for which the record date is prior to the date such stock
certificate is issued, except as expressly provided in Section 10 hereof.
7. EXERCISABILITY OF OPTIONS. Except as provided in Section 8 hereof
or otherwise provided in this Section 7, any Option shall become exercisable in
such amounts, at such intervals and upon such terms as the Committee shall
provide in such Option.
(a) The expiration date of an Option shall be determined by
the Committee at the time of grant, but in no event shall an Option be
exercisable after the expiration of 10 years from the date of grant of the
Option.
(b) Unless otherwise provided in any Option, each outstanding
Option shall become immediately fully exercisable:
(i) if there occurs any transaction (which shall
include a series of transactions occurring within 60 days or occurring
pursuant to a plan), that has the result that shareholders of the
Company immediately before such transaction cease to own at least 51
percent of the voting stock of the Company or of any entity that
results from the participation of the Company in a reorganization,
consolidation, merger, liquidation or any other form of corporate
transaction;
(ii) if the shareholders of the Company shall
approve a plan of merger, consolidation, reorganization, liquidation
or dissolution in which the Company does not survive (unless the
approved merger, consolidation, reorganization, liquidation or
dissolution is subsequently abandoned); or
<PAGE> 7
(iii) if the shareholders of the Company shall
approve a plan for the sale, lease, exchange or other disposition of
all or substantially all the property and assets of the Company
(unless such plan is subsequently abandoned);
provided, however, that this Section 7(b) shall not apply to accelerate the
exercisability of any Option if all or part of the shares in the Company are
distributed to Capital Bank, Capital Bancorp, to shareholders of Capital
Bancorp or to any of their affiliates, regardless of the manner in which such
Shares are distributed.
(c) Except with respect to an Option granted pursuant to
Section 15 of this Plan, and subject to the restrictions of Section 8, the
Committee may in its sole discretion accelerate the date on which any Option
may be exercised and may accelerate the vesting of any Shares subject to any
Option or previously acquired by the exercise of any Option.
8. RESTRICTIONS ON GRANT AND EXERCISE OF OPTIONS DURING EIGHTY
PERCENT PERIOD; CONVERSION TO SARs.
(a) During the Eighty Percent Period, Options to purchase no
more than 200,000 shares of Common Stock may be granted under the Plan without
the restrictions on exercise set forth in the next two sentences of this
Section 8(a). Options to purchase any additional shares issuable under the
Plan, even if vested pursuant to the terms of such Options, may not be
exercised by an Optionee without the prior written approval of the Eighty
Percent Holder during the Eighty Percent Period. Optionees desiring to exercise
such Options, must make written inquiry of the Company and the Eighty Percent
Holder requesting approval of any such exercise, prior to exercising any such
Options during the Eighty Percent Period. The Eighty Percent Holder may, in its
sole discretion, consent to the removal or limitation of the restrictions
contained in this Section 8 (a).
(b) Each Non-Qualified Stock Option or portion thereof
subject to the restrictions contained in Section 8(a) requiring approval by the
Eighty Percent Holder in order to be exercised shall be issued accompanied by
an SAR. The SARs shall be exercisable as provided by the Commit tee in the
Non-Qualified Stock Option, but in no event prior to April 15, 2001, and then
only in the event that the Eighty Percent Holder does not provide written
approval of the Optionee's exercise of such vested Non-Qualified Stock Option
or vested portion thereof which is subject to the restrictions set forth in
Section 8(a) above and only during the Eighty Percent Period. Each such SAR
shall be exercisable with respect to the same number of shares of Common Stock
that are subject to restriction pursuant to the vested Non-Qualified Stock
Option or vested portion thereof that the Optionee requested to exercise. Upon
the Optionee's exercise of such SAR, the Optionee shall be paid, in cash, an
amount equal to the product of (i) the amount by which the Fair Market Value
per share of Common Stock on the date on which the SAR is exercised exceeds the
exercise price per share of Common Stock prescribed in the SAR (former
Non-Qualified Stock Option) and (ii) the number of shares subject to the
exercisable portion of the SAR with respect to which the Optionee has requested
the ability to exercise. Any exercise of an SAR by an Optionee shall only occur
during the period beginning on the third business day following the release by
the Company of its quarterly or annual financial results and ending on the last
business day of the quarter in which such release was made.
<PAGE> 8
(c) Each and every SAR accompanying a Non-Qualified Stock
Option shall be subject to the same provisions and restrictions relating to
Non-Qualified Stock Options as are set forth in this Plan. In the event that
any Optionee's employment by the Company or any Subsidiary or service as a
Director of the Company shall terminate, any SARs held by any such Optionee on
the date of such termination may be exercised during the same period, by the
same person or persons, and to the same extent as any Non-Qualified Stock
Options may, or would be exercised by such Optionee.
(d) The restrictions set forth in this Section 8 and the SARs
shall immediately terminate at such time as there is no Eighty Percent Holder.
9. TERMINATION OF OPTION PERIOD.
(a) The unexercised portion of any Option, other than an
Option granted pursuant to Section 15 hereof, shall automatically and without
notice terminate and become null and void at the time of the earliest to occur
of the following:
(i) three months after the date on which the
Optionee's employment is terminated for any reason other than by
reason of (A) Cause, which, shall mean "Cause" under Optionee's
employment agreement, if any, or which, solely for purposes of this
Plan, shall mean the termination of the Optionee's employment (or, in
the case of non-employee Directors, the removal of the Optionee as a
Director) by reason of any act or any failure to act, by the Optionee
that constitutes (1) misfeasance or malfeasance in connection with the
performance by him of his duties and responsibilities as an employee
or Director of the Company; (2) fraud, embezzlement or breach of
trust; (3) any criminal act other than minor traffic infractions; or
(4) the willful or knowing refusal by the Optionee to perform
substantially all or any portion of his duties and responsibilities as
an employee or Director of the Company; (B) a mental or physical
disability as determined by a medical doctor satis factory to the
Committee, or (C) death;
(ii) immediately upon the termination of the
Optionee's employment for Cause;
(iii) twelve months after the date on which the
Optionee's employment is terminated by reason of a mental or physical
disability (within the meaning of Code Section 22(e)) as determined by
a medical doctor satisfactory to the Committee; or
(iv) (A) twelve months after the date of termination
of the Optionee's employment by reason of death of the employee, or (B) three
months after the date on which the Optionee shall die if such death shall occur
during the one year period specified in Subsection 9(a)(iii) hereof; provided,
however, that the Committee may adjust these terms, in its sole discretion,
with respect to any Option that contains restrictions pursuant to Section 8 of
this Plan.
(b) The Committee in its sole discretion may by giving
written notice ("cancellation notice") cancel, effective upon the date of the
consummation of any corporate
<PAGE> 9
transaction described in Subsections 7(b)(ii) or (iii) hereof, any Option that
remains unexercised on such date. Such cancellation notice shall be given a
reasonable period of time prior to the proposed date of such cancellation and
may be given either before or after approval of such corporate transaction.
10. ADJUSTMENT OF SHARES.
(a) If at any time while the Plan is in effect or unexercised
Options are outstanding, there shall be any increase or decrease in the number
of issued and outstanding Shares through the declaration of a stock dividend or
through any recapitalization resulting in a stock split-up, combination or
exchange of Shares, then and in such event:
(i) appropriate adjustment shall be made in the
maximum number of Shares available for grant under the Plan, so that
the same percentage of the Company's issued and outstanding Shares
shall continue to be subject to being so optioned; and
(ii) appropriate adjustment shall be made in the
number of Shares and the exercise price per Share thereof then subject
to any outstanding Option, so that the same percentage of the
Company's issued and outstanding Shares shall remain subject to
purchase at the same aggregate exercise price.
(b) Subject to the specific terms of any Option, the
Committee may change the terms of Options outstanding under this Plan, subject
to written approval of the Eighty Percent Holder during the Eighty Percent
Period, including with respect to the option price or the number of Shares
subject to the Options, or both, when, in the Committee's sole discretion, such
adjustments become appropriate by reason of a corporate transaction described
in Subsections 7(b)(ii) or (iii) hereof.
(c) Except as otherwise expressly provided herein, the
issuance by the Company of shares of its capital stock of any class, or
securities convertible into shares of capital stock of any class, either in
connection with direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to the number of or
exercise price of Shares then subject to outstanding Options granted under the
Plan.
(d) Without limiting the generality of the foregoing, the
existence of outstanding Options granted under the Plan shall not affect in any
manner the right or power of the Company to make, authorize or consummate (i)
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business; (ii) any merger or
consolidation of the Company; (iii) any issue by the Company of debt securities
or preferred or preference stock that would rank above the Shares subject to
outstanding Options; (iv) the dissolution or liquidation of the Company; (v)
any sale, transfer or assignment of all or any part of the assets or business
of the Company; or (vi) any other corporate act or proceeding, whether of a
similar character or otherwise;
<PAGE> 10
although the foregoing shall remain subject to the provisions in the Company's
Amended and Restated Articles of Incorporation.
11. TRANSFERABILITY OF OPTIONS. Each Option shall provide that such
Option shall not be transferable by the Optionee otherwise than by will or the
laws of descent and distribution, and each Option shall be exercisable during
the Optionee's lifetime only by the Optionee.
12. ISSUANCE OF SHARES. As a condition of any sale or issuance of
Shares upon exercise of any Option, the Committee may require such agreements
or undertakings, if any, as the Committee may deem necessary or advisable to
assure compliance with any such law or regulation including, but not limited
to, the following:
(i) a representation and warranty by the Optionee to
the Company, at the time any Option is exercised, that he is
acquiring the Shares to be issued to him for investment and not
with a view to, or for sale in connection with, the distribution
of any such Shares; and
(ii) a representation, warranty and/or agreement to
be bound by any legends that are, in the opinion of the Committee,
necessary or appropriate to comply with the provisions of any
securities law deemed by the Committee to be applicable to the
issuance of the Shares and are endorsed upon the Share
certificates.
13. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Committee, which
shall consist of not less than two Directors, each of whom shall be
Disinterested Persons to the extent required by Section 4(d) hereof, provided
that the Committee shall not have any discretion with respect to the grant of
Options to Non-Employee Directors pursuant to Section 15 of this Plan. The
Committee shall have all of the powers of the Board with respect to the Plan.
Any member of the Committee may be removed at any time, with or without cause,
by resolution of the Board and any vacancy occurring in the membership of the
Committee may be filled by appointment by the Board.
(b) The Committee, from time to time, may adopt rules and
regulations for carrying out the purposes of the Plan. The Committee's
determinations and its interpretation and construction of any provision of the
Plan shall be final and conclusive.
(c) Any and all decisions or determinations of the Committee
shall be made either (i) by a majority vote of the members of the Committee at
a meeting or (ii) without a meeting by the unanimous written approval of the
members of the Committee.
14. INCENTIVE OPTIONS FOR 10% SHAREHOLDERS. Notwithstanding any other
provisions of the Plan to the contrary, an Incentive Stock Option shall not be
granted to any person owning directly or indirectly (through attribution under
Section 424(d) of the Code) at the date of grant, stock possessing more than
10% of the total combined voting power of all classes of stock of the Company
(or of its subsidiary [as defined in Section 424 of the Code] at the date of
grant) unless the option price of such Option is at least 110% of the Fair
Market Value of the Shares subject to such Option
<PAGE> 11
on the date the Option is granted, and such Option by its terms is not
exercisable after the expiration of five years from the date such Option is
granted.
15. FORMULA GRANTS TO NON-EMPLOYEE DIRECTORS. Each Non-Employee
Director will receive (i) on the later of the date of his or her appointment as
a Director or the Effective Date, a Non-Qualified Stock Option to purchase
10,000 shares of Common Stock, and (ii) on the date of each annual meeting of
the Company's shareholders, beginning with the first such annual meeting that
occurs after December 31, 1996, if such person continues to serve as a director
on such date, a Non- Qualified Stock Option to purchase 2,000 shares of Common
Stock. During the Eighty Percent Period, such Options granted on the Effective
Date shall be subject to the restrictions of Section 8 on a pro-rata basis with
all other Options granted on the Effective Date and shall be accompanied by
SARs on the same pro-rata basis. Thereafter, during the Eighty Percent Period,
all such Options shall be subject to the restrictions of Section 8 and shall be
accompanied by SARs. All such SARs will have the same terms and conditions as
provided in Sections 8(b) - (d). Subject to the restrictions set forth in
Section 8, such Options will become exercisable for 20% of the shares on the
first anniversary date of grant and the balance in equal annual installments
over the four-year period thereafter. The per share exercise price of all
Options granted to Non-Employee Directors pursuant to this Section 15 will be
equal to the Fair Market Value of the Shares underlying such Option. The
unexercised portion of any Option granted pursuant to this Section 15 shall
become null and void (i) three months after the date on which such Non-Employee
Director ceases to be a Director for any reason other than for mental or
physical disability or death of the Non-Employee Director, or (ii) twelve
months after the mental or physical disability or death of the Non-Employee
Director, provided, however, if an Option granted to a Non-Employee Director is
subject to the restrictions set forth in Section 8 hereof at the time such
Non-Employee Director ceases to be a Director, then, the foregoing periods of
exercisability shall not commence until such restrictions terminate, or until
the SAR accompanying the Option is exercisable, whichever is earlier, and for
the period contained in (i) or (ii) above, whichever is applicable. If the
exercise term of the Option expires while the Option is still subject to
Section 8 hereof, then the Option (or SAR) shall be exercisable for three
months after the termination of such restrictions or its exercisability as an
SAR, whichever is earlier.
16. INTERPRETATION.
(a) The Plan shall be administered and interpreted so that
all Incentive Stock Options granted under the Plan will qualify as Incentive
Stock Options under Section 422 of the Code. If any provision of the Plan
should be held invalid for the granting of Incentive Stock Options or illegal
for any reason, such determination shall not affect the remaining provisions
hereof, but instead the Plan shall be construed and enforced as if such
provision had never been included in the Plan.
(b) This Plan shall be governed by the laws of the State
of Florida.
(c) Headings contained in this Plan are for convenience
only and shall in no manner be construed as part of this Plan.
<PAGE> 12
(d) Any reference to the masculine, feminine, or neuter
gender shall be a reference to such other gender as is appropriate.
17. AMENDMENT AND DISCONTINUATION OF THE PLAN.
(a) Either the Board or the Committee may from time to time
amend the Plan or any Option; provided, however, that, except to the extent
provided in Section 10, no such amendment may, without approval by the
shareholders of the Company, (i) materially increase the benefits accruing to
participants under the Plan, (ii) materially increase the number of securities
which may be issued under the Plan, or (iii) materially modify the requirements
as to eligibility for participation in the Plan; and provided further, that,
except to the extent provided in Section 9, no amendment or suspension of the
Plan or any Option issued hereunder shall substantially impair any Option
previously granted to any Optionee without the consent of such Optionee.
(b) Notwithstanding anything herein to the contrary, the
provisions of this Plan which govern the number of Options to be awarded to
Non-Employee Directors, the exercise price per share under each such Option,
when and under what circumstances such Option will be granted and the period
within which each such Option may be exercised, shall not be amended more than
once every six months (even with shareholder approval), other than to conform
to changes to the Code, or the rules promulgated thereunder, and under the
Employee Retirement Income Security Act of 1974, as amended, or the rules
promulgated thereunder, or with rules promulgated by the Securities and
Exchange Commission.
18. EFFECTIVE DATE AND TERMINATION DATE. The Plan shall be
effective upon the Effective Date and shall terminate on the 10th anniversary
of the Effective Date.
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Capital Factors Holding, Inc. on Form S-8 of our report dated March 10, 1997
apearing in the Annual Report on Form 10-K of Capital Factors Holding, Inc. for
the year ended December 31, 1996.
Deloitte & Touche LLP
Miami, Florida
June 27, 1997
