As filed with the Securities and Exchange Commission on October 30, 1998
Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
CAPITAL TITLE GROUP, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 87-0399785
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14555 North Scottsdale Raod, Suite 320, Scottsdale, AZ 85254
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(Address of Principal Executive Offices) (Zip Code)
1996 Stock Option Plan
Non-Employee Directors Stock Option Plan
----------------------------------------
(Full title of the plans)
Dale A. Head
14555 North Scottsdale Road, #320
Scottsdale, Arizona 85254
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(Name and address of agent for service)
(602 ) 483-8868
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(Telephone number, including area code, of agent for service)
With copy to:
Christopher D. Johnson, Esq.
Squire, Sanders & Dempsey L.L.P.
40 North Central Avenue, Suite 2700
Phoenix, Arizona 85004
(602) 528-4000
Approximate Date of Commencement of Proposed Sale: As soon as practicable after
the Registration Statement becomes effective.
Page 1 of 9
Exhibit Index on Page 9
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER SHARE * PRICE * FEE
---------- ---------- ----------- --------- ------------
Common Stock, 2,400,000 $3.66 $8,784,000 $2,442
$.001 par value
Common Stock, 370,000 $3.66 $1,354,200 $377
$.001 par value
- ----------
* Estimated solely for the purpose of calculating the amount of the
registration fee, pursuant to Rules 457(c) and 457(h) of the Securities Act
of 1933, on the basis of the average of the closing bid and asked prices
for shares of Common Stock on October 23, 1998.
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents containing the information specified in Part I, Items 1 and
2, will be delivered to employees in accordance with Form S-8 and Securities Act
Rule 428.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents are hereby incorporated by reference into this
Registration Statement: (a) the Registrant's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 1997; (b) all reports filed with the
Securities and Exchange Commission pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 subsequent to December 31, 1997; and (c) the
description of the Registrant's capital stock contained in the Registrant's
Registration Statement on Form 10-SB filed with the Securities and Exchange
Commission pursuant to Section 12(g) of the Securities Exchange Act of 1934.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment to this Registration Statement which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing such documents.
Item 4. DESCRIPTION OF SECURITIES. Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article IX of the Company's Certificate of Incorporation provides that no
director of the Corporation shall be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director;
provided, however, that nothing contained in such Article IX eliminates or
limits the liability of a director of the Company to the extent provided by
applicable laws (i) for any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or knowing violation of law, (iii) for
liability imposed under Section 174 of Title 8 of the Delaware Corporation Law
or successor provisions thereof, or (iv) for any transaction from which the
director derived an improper personal benefit. The limitation of liability
provided herein shall continue after a director has ceased to occupy such
position as to acts or omissions occurring during such director's term or terms
of office. Section 145 of the Delaware General Corporation Law (the "DGCL")
enables a corporation to eliminate or limit personal liability of members of its
board of directors for violations of their fiduciary duty of care. However,
Delaware law does not permit the elimination of a director's or officer's
liability for engaging in intentional misconduct or fraud, knowingly violating a
law or unlawfully paying a distribution. The statute has no effect on the
availability of equitable remedies, such as an injunction or rescission, for
breach of fiduciary duty.
In addition, Article IX of the Company's Certificate of Incorporation
requires the Company to indemnify any person who was or is a party or is
threatened to be made a party to any
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threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company) by reason of the fact that he is or was a director,
officer, employee or agent of the Company, or is or was serving at the request
of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. Article IX of the Company's Certificate of Incorporation
further provides that the Company shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Company to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company and except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Company for negligence or misconduct in the
performance of his duty to the Company unless and only to the extent that the
Court of Chancery of the State of Delaware or the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery of the State of Delaware or such other court shall deem proper. To the
extent that a director, officer, employee or agent of the Company has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to therein or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith. Expenses
incurred in defending a civil or criminal action, suit or proceeding may be paid
by the Company in advance of the final disposition of such action, suit or
proceeding as authorized by the Board of Directors in the specific case upon
receipt of an undertaking by or on behalf of the director, officer, employee or
agent to repay such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the Company as provided in this Article IX.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable.
Item 8. EXHIBITS.
Exhibit Index located at Page 9.
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:
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(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
PROVIDED, HOWEVER, that paragraphs (i) and (ii) do not apply if the registration
statement is on Form S-8 and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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 of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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 of 1933 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 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Scottsdale, and the State of Arizona, on October 30,
1998.
CAPITAL TITLE GROUP, INC., a Delaware
corporation
By /s/ Donald R. Head
---------------------------------
Chief Executive Officer
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned constitutes
and appoints Donald R. Head and Andrew A. Johns, and each of them, his true and
lawful attorney-in-fact and agent with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Form S-8 Registration Statement, and to file the same with all exhibits
thereto, and all documents in connection therewith, with the Securities and
Exchange Commission, granting such attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully and to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or each of them, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
/s/ Donald R. Head Chairman of the Board, Chief October 30, 1998
- --------------------------- Executive Officer and Director
Donald R. Head (Principal Executive Officer)
/s/ Andrew A. Johns President and Director October 30, 1998
- ---------------------------
Andrew A. Johns
/s/ Mark C. Walker Chief Financial Officer and October 30, 1998
- --------------------------- Treasurer
Mark C. Walker
/s/ Robert B. Liverant Director October 30, 1998
- ---------------------------
Robert B. Liverant
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/s/ Jeffreu P. Anderson Director October 30, 1998
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Jeffrey P. Anderson
/s/ Theo F. Lamb Director October 30, 1998
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Theo F. Lamb
/s/ David Dewar Director October 30, 1998
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David Dewar
/s/ Ben Morris Director October 30, 1998
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Ben Morris
/s/ Stephen A. McConnell Director October 30, 1998
- ---------------------------
Stephen A McConnell
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION METHOD OF FILING
- ------ ----------- ----------------
4.1 1996 Stock Option Plan *
4.2 Non-Employee Directors Stock Option Plan *
5 Opinion rendered by Squire, Sanders &
Dempsey L.L.P., counsel for the Registrant
(including consent) *
23.1 Consent of Counsel See Exhibit 5
23.2 Consent of Semple & Cooper, P.L.C. *
23.3 Consent of Ernst & Young, LLP *
24 Powers of Attorney See Signature Page
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* Filed herewith
9
EXHIBIT 4.1
CAPITAL TITLE GROUP, INC.
1996 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN. The purposes of this 1996 Stock Option Plan are
to attract and retain the best available personnel for positions of substantial
responsibility to provide successful management of the Company's business, to
provide additional incentive to certain key employees of the Company, and to
promote the success of the Company's business through the grant of options to
purchase shares of the Company's Common Stock.
Options granted hereunder may be either "Incentive Stock Options," as
defined in Section 422 of the Code, or "Nonstatutory Stock Options," at the
discretion of the Board and as reflected in the terms of the written option
agreement.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "BOARD" shall mean the Board of Directors of the Company
or the Committee, if one has been appointed.
(b) "CODE" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
(c) "COMMON STOCK" shall mean the common stock of the Company
described in the Company's Certificate of Incorporation, as amended.
(d) "COMPANY" shall mean Capital Title Group, Inc., a Delaware
corporation, and shall include any parent or subsidiary corporation of
the Company as defined in Sections 424(e) and (f), respectively, of the
Code.
(e) "COMMITTEE" shall mean the Committee appointed by the
Board in accordance with paragraph (a) of Section 4 of the Plan, if one
is appointed.
(f) "EMPLOYEE" shall mean any person, including officers and
directors, employed by the Company. The payment of a director's fee by
the Company shall not be sufficient to constitute "employment" by the
Company.
(g) "EXCHANGE ACT" shall mean the Securities and Exchange Act
of 1934, as amended.
(h) "FAIR MARKET VALUE" shall mean, with respect to the date a
given Option is granted or exercised, the value of the Common Stock
determined by the Board in such manner as it may deem equitable for
Plan purposes but, in the case of
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an Incentive Stock Option, no less than is required by applicable laws
or regulations; provided, however, that where there is a public market
for the Common Stock, the Fair Market Value per Share shall be the mean
of the bid and asked prices of the Common Stock on the date of grant,
as reported in the WALL STREET JOURNAL (or, if not reported, as
otherwise reported by the National Association of Securities Dealers
Automated Quotation System) or, in the event the Common Stock is listed
on the New York Stock Exchange or the American Stock Exchange, the Fair
Market Value per Share shall be the closing price on such exchange on
the date of grant of the Option, as reported in the WALL STREET
JOURNAL.
(i) "INCENTIVE STOCK OPTION" shall mean an Option which is
intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code.
(j) "OPTION" shall mean a stock option granted under the Plan.
(k) "OPTIONED STOCK" shall mean the Common Stock subject to an
Option.
(l) "OPTIONEE" shall mean an Employee of the Company who has
been granted one or more Options.
(m) "PARENT" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(n) "PLAN" shall mean this Stock Option Plan.
(o) "SHARE" shall mean a share of the Common Stock, as
adjusted in accordance with Section 11 of the Plan.
(p) "SUBSIDIARY" shall mean a "subsidiary corporation,"
whether now or hereafter *existing, as defined in Section 424(f) of the
Code.
(q) "TAX DATE" shall mean the date an Optionee is required to
pay the Company an amount with respect to tax withholding obligations
in connection with the exercise of an option.
3. COMMON STOCK SUBJECT TO THE PLAN. Subject to the provisions of
Section 11 of the Plan, the maximum aggregate number of shares which may be
optioned and sold under the Plan is Two Million Four Hundred Thousand
(2,400,000) Shares of Common Stock.* The Shares may be authorized, but unissued,
or previously issued Shares acquired or to be acquired by the Company and held
in treasury.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares covered by such
Option shall, unless the Plan shall have been terminated, be available for
future grants of Options.
- ----------
*Increased to 2,400,000 Shares pursuant to amendment approved by shareholders on
May 15, 1998.
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4. ADMINISTRATION OF THE PLAN.
(a) Procedure.
(i) The Plan shall be administered by the Board in
accordance with Securities and Exchange Commission Rule 16b-3
("Rule 16b-3"); provided, however, that the Board may appoint
a Committee to administer the Plan at any time or from time to
time and, provided further, that if members of the Board are
not "disinterested" within the meaning of Securities and
Exchange Commission Rule 16b-3, then any participation by
directors in the Plan must be administered by a Committee
appointed by the Board.
(ii) The Committee shall consist of at least two (2)
members of the Board, each of whom is "disinterested" within
the meaning of Securities and Exchange Commission Rule 16b-3
to administer the Plan on behalf of the Board, subject to such
terms and conditions as the Board may prescribe. Once
appointed, the Committee shall continue to serve until
otherwise directed by the Board. From time to time the Board
may increase the size of the Committee and appoint additional
members thereof, remove members (with or without cause), and
appoint new members in substitution therefor, fill vacancies
however caused, or remove all members of the Committee and
thereafter directly administer the Plan; provided, however,
that at no time may any director who is not "disinterested"
within the meaning of Securities and Exchange Commission Rule
16b-3 serve on the Committee nor shall a Committee of less
than two (2) members administer the Plan.
(b) POWERS OF THE BOARD. Subject to the provisions of the
Plan, the Board shall have the authority, in its discretion: (i) to
grant Incentive Stock Options, in accordance with Section 422 of the
Code, and to grant "nonstatutory stock options;" (ii) to determine,
upon review of relevant information and in accordance with Section 2 of
the Plan, the Fair Market Value of the Common Stock; (iii) to determine
the exercise price per Share of Options to be granted, which exercise
price shall be determined in accordance with Section 8(a) of the Plan;
(iv) to determine the Employees to whom, and the time or times at which
Options shall be granted and the number of shares to be represented by
each Option; (v) to interpret the Plan; (vi) to prescribe, amend and
rescind rules and regulations relating to the Plan; (vii) to determine
the terms and provisions of each Option granted (which need not be
identical) and, with the consent of the Optionee thereof, modify or
amend each Option; (viii) to accelerate or defer (with the consent of
the Optionee) the exercise date of any Option; (ix) to authorize any
person to execute on behalf of the Company any instrument required to
effectuate the grant of an Option previously granted by the Board; (x)
to accept or reject the election made by an Optionee pursuant to
Section 17 of the Plan; and (xi) to make all other determinations
deemed necessary or advisable for the administration of the Plan.
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(c) EFFECT OF BOARD'S DECISION. All decisions, determinations
and interpretations of the Board shall be final and binding on all
Optionees and any other holders of any Options granted under the Plan.
5. ELIGIBILITY.
(a) Consistent with the Plan's purposes, Options may be
granted only to key Employees of the Company as determined by the
Board. An Employee who has been granted an Option may, if he is
otherwise eligible, be granted an additional Option or Options.
Incentive Stock Options may be granted only to those Employees who meet
the requirements applicable under Section 422 of the Code.
(b) With respect to Incentive Stock Options granted under the
Plan, the aggregate fair market value (determined at the time the
Incentive Stock Option is granted) of the Common Stock with respect to
which Incentive Stock Options are exercisable for the first time by the
employee during any calendar year (under all plans of the Company and
its parent and subsidiary corporations) shall not exceed One Hundred
Thousand Dollars ($100,000).
The Plan shall not confer upon any Optionee any right with respect to
continuation of employment with the Company, nor shall it interfere in any way
with his right or the Company's right to terminate his employment at any time.
6. EFFECTIVE DATE. The Plan shall take effect on May 23, 1996, the date
on which the Board approved the Plan. No Option may be granted after May 23,
2006 (ten (10) years from the effective date of the Plan); provided, however,
that the Plan and all outstanding Options shall remain in effect until such
Options have expired or until such Options are canceled. The Plan shall be
submitted for shareholder approval at the next meeting of shareholders of the
Company; provided, however, that failure to obtain such approval shall not
affect the effectiveness of the Plan.
7. TERM OF OPTION. Unless otherwise provided in the Stock Option
Agreement, the term of each Option shall be five (5) years from the date of
grant thereof. Notwithstanding the foregoing, in the event the Board determines
that the term of an Option should be other than five (5) years from the date of
grant thereof, (i) the term of each Incentive Stock Option shall not exceed ten
(10) years from the date of grant, (ii) the term of each Option which is not an
Incentive Stock Option shall not exceed eleven (11) years from the date of
grant, and (iii) in the case of an Incentive Stock Option granted to an Employee
who, at the time the Incentive Stock Option is granted, owns ten percent (10%)
or more of the Common Stock as such amount is calculated under Section 422(b)(6)
of the Code ("Ten Percent Shareholder"), the term of the Incentive Stock Option
shall not exceed five (5) years from the date of grant thereof.
8. EXERCISE PRICE AND PAYMENT.
(a) EXERCISE PRICE. The per Share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be
determined by the Board, but in the
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case of an Incentive Stock Option shall be no less than one hundred
percent (100%) of the Fair Market Value per Share on the date of grant;
provided, further, that in the case of an Incentive Stock Option
granted to an Employee who, at the time of the grant of such Incentive
Stock Option, is a Ten Percent Shareholder, the per Share exercise
price shall be no less than one hundred ten percent (110%) of the Fair
Market Value per Share on the date of grant. In no event may the
exercise price in the case of a nonstatutory stock option be less than
eighty-five (85%) of the Fair Market Value per share on the date of
grant.
(b) PAYMENT. The price of an exercised Option and any taxes
attributable to the delivery of Common Stock under the Plan, or portion
thereof, shall be paid:
(i) In United States dollars in cash or by check,
bank draft or money order payable to the order of the Company;
or
(ii) At the discretion of the Board, through the
delivery of shares of Common Stock, with an aggregate Fair
Market Value, equal to the option price; or
(iii) By a combination of (i) and (ii) above.
The Board shall determine acceptable methods for tendering
Common Stock as payment upon exercise of an Option and may impose such
limitations and prohibitions on the use of Common Stock to exercise an
Option as it deems appropriate, with respect to nonstatutory options,
at the election of the Optionee pursuant to Section 17, the Company may
satisfy its withholding obligations by retaining such number of shares
of Common Stock subject to the exercised Option which have an aggregate
Fair Market value on the exercise date equal to the Company's aggregate
federal, state, local and foreign tax withholding and FICA and FUTA
obligations with respect to income generated by the exercise of the
Option by Optionee.
9. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any
Option granted hereunder shall be exercisable at such times and under
such conditions as determined by the Board, including performance
criteria with respect to the Company and/or the Optionee, and as shall
be permissible under the terms of the Plan. Unless otherwise determined
by the Board at the time of grant, an Option may be exercised in whole
or in part as follows: provided that the Option has not terminated, (i)
fifty percent (50%) of the total Options granted shall vest and become
exercisable two (2) years from the date of grant, and (ii) the
remaining fifty percent (50%) shall vest and become exercisable three
(3) years from the date of grant. An Option may not be exercised for a
fraction of a Share.
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An Option shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with the
terms of the Option by the person entitled to exercise the Option and
full payment for the Shares with respect to which the Option is
exercised has been received by the Company. Full payment may, as
authorized by the Board, consist of any consideration and method of
payment allowable under Section 8(b) of the Plan. Until the issuance
(as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect
to the Optioned Stock, notwithstanding the exercise of the Option. No
adjustment will be made for a dividend or other right for which the
record date is prior to the date the stock certificate is issued,
except as provided in Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for
purposes of the Plan and for sale under the Option by the number of
Shares as to which the Option is exercised.
Notwithstanding anything contained in this Plan to the
contrary, the Board may establish certain restrictions on the times at
which an Option may be exercised after a number of elapsed years
together with cumulative exercise rights and may retain certain rights
with respect to a fixed repurchase price for the Option Stock if the
Employee voluntarily terminates his employment with the Company within
a certain period of time after exercising the Option or whose
employment is involuntarily terminated for gross misconduct, fraud,
embezzlement, theft, breach of any fiduciary duty owed to the Company
or for nonperformance of duties.
(b) TERMINATION OF STATUS AS AN EMPLOYEE. Unless otherwise
provided in an Option Agreement relating to an Option that is not an
Incentive Stock Option, if an Employee's employment by the Company is
terminated, except if such termination is voluntary or occurs due to
retirement with the consent of the Board, death or disability, the
Option, to the extent not exercised, shall cease on the date on which
Employee's employment by the Company is terminated. If an Employee's
termination is voluntary or occurs due to retirement with the consent
of the Board, then the Employee may, but only within thirty (30) days
(or such other period of time not exceeding three (3) months as is
determined by the Board) after the date he ceases to be an Employee of
the Company, exercise his Option to the extent that he was entitled to
exercise it at the date of such termination. To the extent that he was
not entitled to exercise the Option at the date of such termination, or
if he does not exercise such Option (which he was entitled to exercise)
within the time specified herein, the Option shall terminate.
(c) DISABILITY. Unless otherwise provided in an Option
Agreement relating to an Option that is not an Incentive Stock Option,
notwithstanding the provisions of Section 9(b) above, in the event an
Employee is unable to continue his employment with the Company as a
result of his permanent and total disability (as
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defined in Section 22(e)(3) of the Code), he may, but only within three
(3) months (or such other period of time not exceeding twelve (12)
months as it is determined by the Board) from the date of termination,
exercise his Option to the extent he was entitled to exercise it at the
date of such termination. To the extent that he was not entitled to
exercise the Option at the date of termination, or if he does not
exercise such Option (which he was entitled to exercise) within the
time specified herein, the Option shall terminate.
(d) DEATH OF OPTIONEE. Unless otherwise provided in an Option
Agreement relating to an Option that is not an Incentive Stock Option,
if Optionee dies during the term of the Option and is at the time of
his death an Employee of the Company who shall have been in continuous
status as an Employee since the date of grant of the Option, the Option
may be exercised at any time within one (1) year following the date of
death (or such other period of time as is determined by the Board), by
the Optionee's estate or by a person who acquired the right to exercise
the Option by bequest or inheritance, but only to the extent that
Optionee was entitled to exercise the Option on the date of death. To
the extent that decedent was not entitled to exercise the Option on the
date of death, or if the Optionee's estate, or person who acquired the
right to exercise the Option by bequest or inheritance, does not
exercise such Option (which he was entitled to exercise) within the
time specified herein, the Option shall terminate.
10. NON-TRANSFERABILITY OF OPTION. An Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER. Subject to
any required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellations or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the common stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class
shall affect, and no adjustment by reason thereof, shall be made with respect to
the number or price of shares of Common Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the Company,
the Option will terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Board. The Board may, in the exercise
of its sole discretion in such instances,
7
<PAGE>
declare that any Option shall terminate as of a date fixed by the Board and give
each Optionee the right to exercise his Option as to all or any part of the
Optioned Stock, including Shares as to which the Option would not otherwise be
exercisable. In the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger of the Company with or into another
corporation, the Option shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Board determines, in the exercise of its sole
discretion and in lieu of such assumption or substitution, that the Optionee
shall have the right to exercise the Option as to all of the Optioned Stock,
including Shares as to which the Option would not otherwise be exercisable. If
the Board makes an Option fully exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Board shall notify
the Optionee that the Option shall be fully exercisable for a period of thirty
(30) days from the date of such notice (but not later than the expiration of the
term of the Option under the Option Agreement), and the Option will terminate
upon the expiration of such period.
12. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for
all purposes, be the date on which the Board makes the determination granting
such Option. Notice of the determination shall be given to each Employee to whom
an Option is so granted within a reasonable time after the date of such grant.
13. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may amend or
terminate the Plan from time to time in such respect as the Board may
deem advisable; provided, however, that the following revisions or
amendments shall require approval of the holders of a majority of the
outstanding Shares of the Company entitled to vote:
(i) Any increase in the number of Shares subject to
the Plan, other than in connection with an adjustment under
Section 11 of the Plan;
(ii) Any change in the designation of the class of
employees eligible to be granted Options; or
(iii) If the Company has a class of equity security
registered under Section 12 of the Exchange Act at the time of
such revision or amendment, any material increase in the
benefits accruing to participants under the Plan.
(b) EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or
termination of the Plan shall not affect Options already granted and
such Options shall remain in full force and effect as if this Plan had
not been amended or terminated, unless mutually agreed otherwise
between the Optionee and the Board, which agreement must be in writing
and signed by the Optionee and the Company.
14. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without
8
<PAGE>
limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the Share may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
In the case of an Incentive Stock Option, any Optionee who disposes of
Shares of Common Stock acquired on the exercise of an Option by sale or exchange
(a) either within two (2) years after the date of the grant of the Option under
which the Common Stock was acquired or (b) within one (1) year after the
acquisition of such Shares of Common Stock shall notify the Company of such
disposition and of the amount realized upon such disposition.
15. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
16. OPTION AGREEMENT. Options shall be evidenced by written option
agreement in such form as the Board shall approve.
17. WITHHOLDING TAXES. Subject to Section 4(b)(x) of the Plan and prior
to the Tax Date, the Optionee may make an irrevocable election to have the
Company withhold from those Shares that would otherwise be received upon the
exercise of any nonstatutory stock option, a number of Shares having a Fair
Market Value equal to the minimum amount necessary to satisfy the Company's
federal, state, local and foreign tax withholding obligations and FICA and FUTA
obligations with respect to the exercise of such Option by the Optionee.
An Optionee who is also an officer of the Company must make the
above-described election:
(a) at least six months after the date of grant of the Option
(except in the event of death or disability); and
(b) either:
(i) six months prior to the Tax Date, or
9
<PAGE>
(ii) prior to the Tax Date and during the period
beginning on the third business day following the date of the
Company releases its quarterly or annual statement of sales
and earnings and ending on the twelfth business day following
such date.
18. MISCELLANEOUS PROVISIONS.
(a) PLAN EXPENSES. Any expenses of administering this Plan
shall be borne by the Company.
(b) USE OF EXERCISE PROCEEDS. The payment received from
Optionees from the exercise of Options shall be used for the general
corporate purposes of the Company.
(c) CONSTRUCTION OF PLAN. The place of administration of the
Plan shall be in the State of Arizona, and the validity, construction,
interpretation, administration and effect of the Plan and of its rules
and regulations, and rights relating to the Plan, shall be determined
in accordance with the laws of the State of Arizona and where
applicable, in the State of Delaware and in accordance with the Code.
(d) TAXES. The Company shall be entitled if necessary or
desirable to pay or withhold the amount of any tax attributable to the
delivery of Common Stock under the Plan from other amounts payable to
the Employee after giving the person entitled to receive such Common
Stock notice as far in advance as practical, and the Company may defer
making delivery of such Common Stock if any such tax may be pending
unless and until indemnified to its satisfaction.
(e) INDEMNIFICATION. In addition to such other rights of
indemnification as they may have as members of the Board, the members
of the Board shall be indemnified by the Company against all costs and
expenses reasonably incurred by them in connection with any action,
suit or proceeding to which they or any of them may be a party by
reason of any action taken or failure to act under or in connection
with the Plan or any Option, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent
legal counsel selected by the Company) or paid by them in satisfaction
of a judgment in any such action, suit or proceeding, except a judgment
based upon a finding of bad faith; provided that upon the institution
of any such action, suit or proceeding a Board member shall, in writing
give the Company notice thereof and an opportunity, at its own expense,
to handle and defend the same before such Board member undertakes to
handle and defend it on her or his own behalf.
(f) GENDER. For purposes of this Plan, words used in the
masculine gender shall include the feminine and neuter, and the
singular shall include the plural and vice versa, as appropriate.
10
EXHIBIT 4.2
CAPITAL TITLE GROUP, INC.
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
1. PURPOSES OF THE PLAN. The purposes of this Plan are to attract and
retain the best available individuals to serve as non-employee members of the
Board of Directors of the Company, to reward such directors for their
contributions to the profitable growth of the Company, and to maximize the
identity of interest between such directors and stockholders generally.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "BOARD" shall mean the Board of Directors of the Company.
(b) "COMPANY" shall mean Capital Title Group, Inc., a Delaware
corporation.
(c) "EFFECTIVE DATE" shall be the date that the Board of
Directors of the Company adopts this Plan.
(d) "ELIGIBLE DIRECTOR" shall mean (i) those individuals who
are serving as non-employee members of the Board on the Effective Date,
or (ii) those individuals who are elected or appointed as non-employee
members of the Board after the Effective Date, whether through
appointment by the Board or election of the Company's stockholders.
(e) "EXERCISE PRICE" shall mean, with respect to Shares of
Optioned Stock, the Fair Market Value of such Shares on the date of
grant of the Option.
(f) "FAIR MARKET VALUE" shall mean, with respect to the date a
given Option is granted or exercised, the value of the Common Stock
determined by the Board in such manner as it may deem equitable for
Plan purposes; provided, however, that where there is a public market
for the Common Stock, the Fair Market Value per Share shall be the mean
of the bid and asked prices of the Common Stock on the date of grant,
as reported in the WALL STREET JOURNAL (or, if not reported, as
otherwise reported by the National Association of Securities Dealers
Automated Quotation System) or, in the event the Common Stock is listed
on the New York Stock Exchange or the American Stock Exchange, the Fair
Market Value per Share shall be the closing price on such exchange on
the date of grant of the Option, as reported in the WALL STREET
JOURNAL.
(g) "OPTION" shall mean a right to purchase Stock, granted
pursuant to the Plan.
<PAGE>
(h) "OPTIONED STOCK" shall mean the Stock subject to an
Option.
(i) "OPTIONEE" shall mean a non-employee director of the
Company who has been granted an Option.
(j) "PLAN" shall mean this Non-Employee Directors Stock Option
Plan.
(k) "SHARE" shall mean a share of the Stock.
(l) "STOCK" shall mean the Common Stock of the Company
described in the Certificate of Incorporation of the Company.
(m) "STOCK OPTION AGREEMENT" shall mean the written agreement
evidencing the grant of an Option.
(n) "TRADING DAY" shall mean a day on which the Fair Market
Value of the Stock can be determined.
3. COMMON STOCK SUBJECT TO THE PLAN. Subject to increases and
adjustments pursuant to Section 9 of the Plan, the number of Shares reserved and
available for distribution under the Plan shall be Three Hundred Seventy
Thousand (370,000).* If an Option shall expire or become unexercisable for any
reason without having been exercised in full, the unauthorized Shares covered by
the Option shall, unless the Plan shall have terminated, be available for future
grants of Options.
4. OPTION GRANTS.
(a) Each individual who first becomes an Eligible Director on
or after the Effective Date, whether through election by the
stockholders or appointment of the Board, shall automatically be
granted at the time of such initial election or appointment, an Option
to purchase 15,000 shares of Stock.
(b) On the third business day after the announcement by the
Company of its annual financial results each year (the "Annual Grant
Date"), beginning with the date of such announcement in 1996, each
individual who is at that time an Eligible Director shall automatically
be granted an Option under the Plan to purchase an additional 10,000
shares of Stock; PROVIDED such individual (i) has attended 75% of the
meetings of the Board held during the 12-month period immediately
preceding the Annual Grant Date, or (ii) if such individual was
appointed or elected as a director during such 12-month period, he or
she has attended 75% of the meetings of the Board held during his of
her term as a director, and (iii) has attended 75% of the meetings of
any Committee of the Board to which such individual has been appointed
as a member during such 12-month period.
- ----------
* Increased to 370,000 Shares pursuant to amendment approved by stockholders on
May 15, 1998.
2
<PAGE>
(c) The purchase price of Shares subject to an Option shall be
the Fair Market Value on the date of grant.
(d) Options granted shall vest as follows: (i) fifty percent
(50%) of the total Options granted shall vest and become exercisable
two (2) years from the date of grant, and (ii) the remaining fifty
percent (50%) shall vest and become exercisable three (3) years from
the date of grant. Options are only exercisable provided the Optionee
remains an Eligible Director at such vesting date.
5. STOCKHOLDER APPROVAL. This Plan was adopted by the Board of
Directors of the Company on May 23, 1996 (the "Effective Date"). Options may be
granted under the Plan on and after the Effective Date. The Plan shall be
submitted for stockholder approval at the next annual or special meeting of
stockholders. However, the failure to obtain such approval shall not affect the
effectiveness of the Plan. No Option may be granted after the expiration of ten
(10) years from the effective date of the Plan; PROVIDED, HOWEVER, that the Plan
and all outstanding Options shall remain in effect until such Options shall have
been exercised, shall have expired or shall otherwise be terminated.
6. TERM; EXERCISE; RIGHTS AS A STOCKHOLDER.
(a) The term of each Option shall be five (5) years from the
date of grant thereof. The Option may be exercised in whole or in part
at any time after vesting and during the term of the Option. No
fractional Shares will be issued upon exercise of the Option and, if
the exercise results in a fractional interest, an amount will be paid
in cash equal to the value of such fractional interest based on the
Fair Market Value of the Shares on the date of exercise.
(b) An Option shall be deemed to be exercised upon receipt by
the Company from the Optionee of written notice of such exercise. Such
notice shall be accompanied by full payment for the Shares subject to
such exercise.
7. PAYMENT. The Exercise Price shall be paid:
(a) In United States dollars in cash or by check payable to
the order of the Company; or
(b) Subject to the approval of the Board, by delivery of
Shares with an aggregate Fair Market Value equal to the Exercise Price;
or
(c) By any combination of (a) and (b) above.
The Board shall determine acceptable methods for tendering
Stock as payment upon exercise of an Option and may impose such limitations and
prohibitions on the use of Stock to exercise an Option as it deems appropriate.
3
<PAGE>
8. TRANSFERABILITY OF OPTIONS. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent and distribution to the limited extent provided
herein or pursuant to a "qualified domestic relations order" as defined by the
Internal Revenue Code or the Employee Retirement Income Security Act or the
rules thereunder. Except as permitted herein, an Option may be exercised, during
the lifetime of the Optionee, only by the Optionee or by his guardian or legal
representative.
In the event of the Optionee's death, his or her Option shall
be exercisable, prior to the expiration of the Option, by the person or persons
to whom his or her accrued and vested rights pass by will or by the laws of
descent and distribution.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER. Subject to any
required action by the stockholders of the Company, the number of Shares covered
by each outstanding Option, and the number of Shares which have been authorized
for issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, as well as the price per Share covered by each such outstanding Option,
shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, consolidation,
subdivision, stock dividend, combination or reclassification of the Shares, or
any other increase or decrease in the number of issued Shares effected without
receipt of consideration by the Company; PROVIDED, HOWEVER, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made, with
respect to the number or price of Shares subject to an Option.
In the event of the proposed dissolution or liquidation of the
Company, all Options will terminate immediately prior to the consummation of
such proposed action, unless otherwise provided by the Board. The Board may, in
the exercise of its sole discretion in such instances, declare that any Option
shall terminate as of a date fixed by the Board and give each holder the right
to exercise the Option as to all or any part thereof, including Shares as to
which the Option would not otherwise be exercisable. In the event of a proposed
sale of all or substantially all of the assets of the Company, or the merger of
the Company with or into another corporation, the Option shall be assumed or an
equivalent Option shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation, unless the Board determines, in the
exercise of its sole discretion and in lieu of such assumption or substitution,
that the holder shall have the right to exercise the Option as to all of the
Shares, including Shares as to which the Option would not otherwise be
exercisable. If the Board makes an Option exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Board shall notify
the holder that the Option shall be fully exercisable for a period of thirty
(30) days from the date of such notice (but not later than the expiration of the
term of the Option), and the Option will terminate upon the expiration of such
period.
4
<PAGE>
10. AMENDMENT AND TERMINATION OF THE PLAN. The Board may amend the Plan
from time to time in such respects as the Board may deem advisable or terminate
the Plan; PROVIDED, HOWEVER, that amendments to the Plan relating to the amount,
price or timing of Option grants shall not be made more than once in any six
month period, other than amendments necessary to comply with changes in the
Internal Revenue Code, the Employee Retirement Income Security Act, or the rules
thereunder. Any amendment or termination of the Plan shall not affect Options
already granted and such Options shall remain in full force and effect as if
this Plan had not been amended or terminated.
Notwithstanding the foregoing, revisions or amendments that
accomplish any of the following shall require approval of the stockholders of
the Company, to the extent required by law, rule or regulation:
(a) Materially increase the benefits accruing to participants
under the Plan;
(b) Materially increase the number of Shares which may be
issued under the Plan;
(c) Materially modify the Plan as to eligibility for
participation in the Plan; or
(d) Otherwise cause the Plan to lose its exemption under
Section 16(b) of the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
11. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
or market system upon which the Shares may be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an Option, the Company may
require the Optionee to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required or advisable.
Inability of the Company to obtain authority from a regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary or advisable to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority shall not have
been obtained.
5
<PAGE>
12. TERMINATION OF OPTION.
(a) TERMINATION AS A DIRECTOR. If an Optionee ceases to be a
director, unless such cessation occurs due to death or disability, then
the Option shall terminate on the date thirty (30) days after the date
the Optionee ceases to be a director.
(b) DISABILITY. Unless otherwise provided in the Stock Option
Agreement, in the event an Optionee is unable to continue to be a
member of the Board as a result of his permanent and total disability
(as defined in Section 22(e)(3) of the Internal Revenue Code of 1986,
as amended), he may exercise the Option at any time within twelve (12)
months following the date he ceased to be a director, but only to the
extent he was entitled to exercise it on the date he ceased to be a
director. To the extent that he was not entitled to exercise the Option
on the date he ceased to be a director, or if he does not exercise such
Option (which he was entitled to exercise) within the time specified
herein, the Option shall terminate.
(c) DEATH. Unless otherwise provided in the Stock Option
Agreement, if an Optionee dies during the term of the Option, the
Option may be exercised at any time within twelve (12) months following
the date of death, but only to the extent that an Optionee was entitled
to exercise the Option on the date of death. To the extent that
decedent was not entitled to exercise the Option on the date of death,
or if the Optionee's estate, or person who acquired the right to
exercise the Option by bequest or inheritance, does not exercise such
Option (which he was entitled to exercise) within the time specified
herein, the Option shall terminate.
13. OPTION AGREEMENT. Options shall be evidenced by Stock Option
Agreements in such form as the Board shall approve.
14. MISCELLANEOUS PROVISIONS.
(a) PLAN EXPENSE. Any expenses of administering this Plan
shall be borne by the Company.
(b) CONSTRUCTION OF PLAN. The validity, construction,
interpretation, administration and effect of the Plan and of its rules
and regulations, and rights relating to the Plan, shall be determined
by the Board in accordance with the laws of the State of Delaware.
(c) TAXES. The Company shall be entitled if necessary or
desirable to pay or withhold the amount of any tax attributable to the
delivery of Common Shares under the Plan after giving the person
entitled to receive such Shares notice as far in advance as practical,
and the Company may defer making delivery of such Shares if any such
tax may be pending unless and until indemnified to its satisfaction.
6
<PAGE>
(d) GENDER. For purposes of this Plan, words used in the
masculine gender shall include the female and neuter, and the singular
shall include the plural and vice versa, as appropriate.
7
EXHIBIT 5
October 30, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: CAPITAL TITLE GROUP, INC. - 1996 STOCK OPTION PLAN AND NON-
EMPLOYEE DIRECTORS STOCK OPTION PLAN
Ladies and Gentlemen:
We have acted as counsel to Capital Title Group, Inc., a
Delaware corporation (the "Company"), in connection with its Registration
Statement on Form S-8 (the "Registration Statement") filed under the Securities
Act of 1933 relating to the registration of 2,770,000 shares of its Common
Stock, $.001 par value per share (the "Shares"), issuable pursuant to the
Company's 1996 Stock Option Plan (the "1996 Plan") and Non-Employee Directors
Stock Option Plan (the "Non-Employee Directors Plan").
In that connection, we have examined such documents, corporate
records and other instruments as we have deemed necessary or appropriate for
purposes of this opinion, including the Certificate of Incorporation and the
Bylaws of the Company.
Based upon the foregoing, we are of the opinion that:
1. The Company has been duly organized and is validly existing
as a corporation under the laws of the State of Delaware.
2. The Shares, when issued and sold in accordance with the
terms of the 1996 Plan or the Non-Employee Directors Plan, as applicable, will
be validly issued, fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
SQUIRE, SANDERS & DEMPSEY L.L.P.
[LETTERHEAD OF SEMPLE & COOPER, LLP]
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in the Form S-8 registration statement, to be filed
on October 30, 1998, of our report dated December 30, 1996, included in Capital
Title Group, Inc.'s consolidated financial statements for the year ended October
31, 1996, and to the all references to our Firm included in this registration
statement.
/s/ Semple & Cooper, LLP
- ------------------------
Semple & Cooper, LLP
Phoenix, Arizona
October 28, 1998
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-______) pertaining to the 1996 Stock Option Plan and the
Non-Employee Directors Stock Option Plan of our report dated February 26, 1998,
with respect to the consolidated financial statements of Capital Title Group,
Inc. and Subsidiary as of and for the year ended December 31, 1997 and for the
two month period ended December 31, 1996 included in its Form 10-KSB for the
year ended December 31, 1997, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Phoenix, Arizona
October 27, 1998
