<PAGE> 1
Registration No. 33-___________
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
------------------------------
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-------------------------------
SEARCH CAPITAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 41-1356819
(State or other jurisdiction of incorporation (I.R.S Employer
or organization) Identification No.)
700 North Pearl Street
Suite 400
Dallas, TX 75201
(Address of principal executive
offices, including zip code)
1994 EMPLOYEE STOCK OPTION PLAN
(Full title of the plan)
Ellis A. Regenbogen, Esq.
Executive Vice President and General Counsel
Search Capital Group, Inc.
700 North Pearl Street
Suite 400
Dallas, TX 75201
(Name and address of agent for service)
(214) 965-6000
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
Title of securities to Amount to be Proposed maximum Proposed maximum Amount of
be registered registered offering price per aggregate offering registration
unit price fee
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par
value 625,000 shares $5.375(1) $3,359,375(1) $1,018
==============================================================================================================
</TABLE>
(1) Determined pursuant to Rule 457(c) under the
Securities Act of 1933, based on the average of the bid and
ask prices for the Common Stock on February 21, 1997.
================================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents constituting Part I of this Registration Statement with
respect to registrant's 1994 Employee Stock Option Plan will be sent or given
to employees of registrant and its subsidiaries as specified by Rule 428(b)(1)
promulgated under the Securities Act of 1933.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents filed by registrant with the Securities and
Exchange Commission are incorporated herein by reference:
(a) registrant's Transition Report on Form 10-K for the
transition period ended March 31, 1996;
(b) registrant's Quarterly Reports on Form 10-Q for the
quarters ended June 30, September 30 and December 31, 1996;
(c) registrant's Current Reports on Form 8-K dated April
26, August 6, September 27, November 21 and November 25, 1996 and
February 7, 1997; and
(d) the description of registrant's Common Stock
contained in registrant's registration statement on Form 8-A,
including any amendments or reports filed for the purpose of updating
such information.
All documents subsequently filed by registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment which indicates that all securities
offered hereby have been sold, or which de-registers 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 of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
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<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Delaware General Corporation Law, Section 102(b)(7) of the Delaware
General Corporation Law provides that a certificate of incorporation may
contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 (relating to liability for
unauthorized acquisitions or redemptions of, or dividends on, capital stock) of
the Delaware General Corporation Law, or (iv) of any transaction from which the
director derived an improper personal benefit.
Section 145 of the Delaware General Corporation Law provides as
follows:
"(a) A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any 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 corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation 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 corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith in a manner which he 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 reasonable cause to believe that his conduct was unlawful.
(b) A corporation may 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 corporation 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 corporation, or is or was serving at the request of the
corporation 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 corporation 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 corporation unless and only to the
extent that the Court of Chancery 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 or such other court shall deem proper.
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<PAGE> 4
(c) To the extent that a director, officer, employee or agent of
the corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of this
section, 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.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in subsections (a) and
(b) of this section. Such determination shall be made (1) by a majority vote
of the directors who are not parties to such action, suit or proceeding, even
though less than a quorum, or (2) if there are no such directors, by
independent legal counsel in a written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid upon
such terms and conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the corporation would have the power to
indemnify him against such liability under this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and
employees or agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with respect to
the resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
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<PAGE> 5
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to any employee
benefit plan; and references to "serving at the request of the corporation"
shall include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to in
this section.
(j) The indemnification and advancement of expenses provided by,
or granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement, vote
of stockholders or disinterested directors, or otherwise. The Court of
Chancery may summarily determine a corporation's obligations to advance
expenses (including attorneys' fees)."
Restated Certificate of Incorporation. Paragraph ELEVENTH of the
Restated Certificate of Incorporation states that registrant shall, to the
fullest extent permitted by the Delaware General Corporation Law, indemnify any
and all persons who it would have the power to indemnify under such law from
and against any and all of the expenses, liabilities or other matters referred
to in or covered by such law and, to the extent permitted under any bylaw,
agreement, vote of stockholders or disinterested directors or otherwise, both
as to action in his director or officer capacity and as to action in another
capacity while holding such office. Such indemnification obligation will
continue as to a person who has ceased to be a director, officer, employee or
agent and inure to the benefit of his heirs, executors and administrators.
Paragraph TWELFTH of the Restated Certificate of Incorporation states
that, to the fullest extent permitted by the Delaware General Corporation Law,
a director of registrant will not be liable to registrant or its shareholders
for monetary damages for breach of fiduciary duty as a director.
Bylaws. Article IX of registrant's Bylaws requires registrant to
indemnify any person who was or is a party, or threatened to be made a party,
to any suit or proceeding, by reason of the fact that he is or was an
authorized representative of registrant for specified liabilities and expenses
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of registrant and, with respect to any
criminal action or proceeding, he had no reasonable cause to believe his
conduct was unlawful. The Board of Directors, by vote of a majority of those
present at any meeting, may elect to exclude such person from such
indemnification. The indemnified liabilities and expenses include, but are not
limited to, legal fees and disbursements and amounts of judgments, fines or
penalties against, and amounts paid in settlement by, the indemnified party.
Registrant may advance any reasonable expense incurred by the indemnified party
prior to the final disposition of any claim, action, suit or proceeding if it
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<PAGE> 6
receives an undertaking by or on behalf of the recipient to repay such amount
if it is ultimately determined that he is not entitled to indemnification.
These indemnification rights are in addition to any other indemnification
rights to which the person may be entitled under any agreement, vote of
stockholders, the Restated Certificate of Incorporation, or as a matter of law
or otherwise.
The directors and officers of registrant are insured (subject to
certain exceptions and deductions) against liabilities which they may incur in
their capacity as such, including liabilities under the Securities Act of 1933,
under a liability insurance policy carried by registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
Exhibit No. Description
----------- -----------
4.1 1994 Employee Stock Option Plan, as amended and adjusted
5 Opinion regarding legality of the securities being registered
23.1 Consent of BDO Seidman, LLP
23.2 Consent of counsel (included in Exhibit No. 5)
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes
(1) to file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective amendment
to this registration statement:
(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; and
(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;
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<PAGE> 7
provided, however, that the undertakings set forth in paragraphs
(1)(i) and (1)(ii) above do not apply if the information required to
be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this 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.
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 15(d) of the Securities
Exchange Act of 1934 (and each filing of the annual report of the Plan 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.
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,
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, 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 Act and will
be governed by the final adjudication of such issue.
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<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Dallas, State of Texas, on the 21st day of February,
1997.
SEARCH CAPITAL GROUP, INC.
By: /s/ George C. Evans
-------------------------------
George C. Evans, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints, jointly and severally, George C. Evans,
Robert D. Idzi and Ellis A. Regenbogen, or any of them, with full power to act
alone, his true and lawful attorneys-in-fact, 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 Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact full
power and authority to do and perform each and every act and thing requisite
and necessary to be done as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact or any of them may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1993, 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/ George C. Evans Chairman of the Board, February 21, 1997
- ----------------------------
George C. Evans Officer and Director
/s/ Richard F. Bonini Director February 21, 1997
- ----------------------------
Richard F. Bonini
/s/ William H. T. Bush Director February 21, 1997
- ----------------------------
William H. T. Bush
/s/ Frederick S. Hammer Director February 21, 1997
- ----------------------------
Frederick S. Hammer
/s/ Luther H. Hodges, Jr. Director February 21, 1997
- ----------------------------
Luther H. Hodges, Jr.
/s/ James F. Leary Director February 21, 1997
- ----------------------------
James F. Leary
</TABLE>
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<PAGE> 9
<TABLE>
<S> <C> <C>
/s/ A. Brean Murray Director February 21, 1997
- ------------------------
A. Brean Murray
/s/ Douglas W. Powell Director February 19, 1997
- ------------------------
Douglas W. Powell
/s/ Barry W. Ridings Director February 21, 1997
- ------------------------
Barry W. Ridings
/s/ Robert D. Idzi Senior Executive Vice February 21, 1997
- ------------------------ President, Chief Financial
Robert D. Idzi Officer and Treasurer
/s/ Andrew D. Plagens Vice President, Controller and February 21, 1997
- ------------------------
Andrew D. Plagens Chief Accounting Officer
</TABLE>
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<PAGE> 10
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
- -------------- -----------------------
4.1 1994 Employee Stock Option Plan, as amended and adjusted
5 Opinion regarding legality of the securities being
registered
23.1 Consent of BDO Seidman, LLP
23.2 Consent of counsel (included in Exhibit No. 5)
<PAGE> 1
EXHIBIT 4.1
1994 EMPLOYEE STOCK OPTION PLAN
OF
SEARCH CAPITAL GROUP, INC.
(AS AMENDED AND ADJUSTED)
I. PURPOSE. The purpose of this 1994 Employee Stock Option Plan
of Search Capital Group, Inc. is to advance the interests of Search Capital
Group, Inc., a Delaware corporation (the "Company"), by providing an additional
incentive to attract and retain qualified and competent employees for the
Company and its subsidiaries, 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.
II. DEFINITIONS. As used herein, the following terms shall have
the meaning indicated:
A. "AGREEMENT" shall mean the agreement between the
Company, and the Optionee that evidences the Option.
B. "BOARD" shall mean the Board of Directors of the
Company.
C. "BUSINESS DAY" shall mean (i) if the Shares trade on
a national exchange, or the NASDAQ National Market System, any day
that the national exchange or the NASDAQ National Market System on
which the Shares trade is open or (ii) if the Shares do not trade on a
national exchange or the NASDAQ National Market System, any day that
commercial banks in the City of Dallas are open.
D. "CODE" shall mean the Internal Revenue Code of 1986,
as it now exists or may be amended from time to time, and the rules
promulgated thereunder as they may exist or may be amended from time
to time.
E. "COMMISSION" shall mean the Securities and Exchange
Commission.
F. "COMMITTEE" shall mean the Compensation Committee of
the Board or other committee, if any, appointed by the Board pursuant
to Section 15.
G. "COMPANY" shall mean Search Capital Group, Inc., a
Delaware corporation.
H. "DATE OF GRANT" shall mean the date on which the
Committee takes formal action to grant an Option to an Eligible
Person, provided it is followed, as soon as reasonably possible, by
written notice to the Eligible Person of the grant.
I. "DIRECTOR" shall mean a member of the Board.
J. "ELIGIBLE PERSON(S)" shall mean those persons who are
Employees or members of the Board of Directors of any Subsidiary, but
excluding Directors who are not Employees.
<PAGE> 2
K. "EMPLOYEE(S)" shall mean those persons who are
employees of the Company or who are employees of any Subsidiary.
L. "EXCHANGE ACT" shall mean the Securities Exchange Act
of 1934, as amended.
M. "FAIR MARKET VALUE" shall mean:
1. If Shares are listed on a national securities
exchange or the NASDAQ National Market System at the date of
determining the Fair Market Value and Shares traded on such
exchange or NASDAQ National Market System on the date of
reference, the last reported sales price per share on such
exchange or NASDAQ National Market System on the date of
reference as reported in any newspaper of general circulation;
2. If Shares are listed on a national securities
exchange or the NASDAQ National Market System at the date of
determining the Fair Market Value and Shares did not trade on
such exchange or NASDAQ National Market System on the date of
reference, the last reported sales price per share on such
exchange or NASDAQ National Market System on the next day
prior thereto on which Shares traded as reported in any
newspaper of general circulation;
3. If Shares are quoted on NASDAQ (other than
the NASDAQ National Market System) or any similar system of
automated dissemination of quotations of securities prices in
common use, the mean between the closing high bid and low
asked quotations of Shares on such system on the date of
reference as reported in any newspaper of general circulation;
or
4. If neither Subsections 2(m)(i), 2(m)(ii) or
2(m)(iii) applies, a value determined by any fair and
reasonable means prescribed by the Committee.
N. "INCENTIVE STOCK OPTION" shall mean an option that is
an incentive stock option as defined in Section 422 of the Code.
O. "NASD" shall mean the National Association of
Securities Dealers, Inc.
P. "NASDAQ" shall mean the NASD Automated Quotation
System.
Q. "NONQUALIFIED STOCK OPTION" shall mean an option that
is not an incentive stock option as defined in Section 422 of the
Code.
R. "OPTION" (when capitalized) shall mean any option
granted under this Plan.
S. "OPTIONEE" shall mean a person to whom an Option is
granted or any successor to the rights of such Option under this Plan
by reason of the death of such person.
T. "PLAN" shall mean this 1994 Employee Stock Option
Plan of Search Capital Group, Inc.
U. "SHARE(s)" shall mean a share or shares of the common
stock , par value one cent ($0.01) per share, of the Company.
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<PAGE> 3
V. "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% or more of the total combined voting power
of all classes of stock in one of the other corporations in such
chain.
III. SHARES AND OPTIONS.
A. Subject to adjustments provided in Section 10 the
Company may grant to Eligible Persons from time to time Options to
purchase an aggregate of up to Six Hundred and Twenty-Five Thousand
(625,000) Shares from Shares held in the Company's treasury or from
authorized and unissued Shares. Such number of Shares shall be and
hereby is reserved for sale for such purpose. Any of such Shares that
may remain unsold and that are not subject to outstanding Options at
the termination of the Plan shall cease to be reserved for the purpose
of the Plan, but until termination of the Plan, the Company shall at
all times reserve a sufficient number of Shares to meet the
requirements of the Plan. 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. An Option
granted hereunder shall be either an Incentive Stock Option or a
Nonqualified Stock Option as determined by the Committee on the Date
of Grant of such Option and shall clearly state whether it is an
Incentive Stock Option or a Nonqualified Stock Option. Incentive
Stock Options may only be granted to persons who are employees of the
Company or a Subsidiary.
B. The aggregate Fair Market Value (determined at the
Date of Grant of the Option) of the Shares with respect to which any
Incentive Stock Option is exercisable for the first time by an
Optionee during any calendar year under the Plan and all such plans of
the Company and any parent and subsidiary of the Company (as defined
in Section 425 of the Code) shall not exceed $100,000.
IV. CONDITIONS FOR GRANT OF OPTIONS.
A. Each Option shall be evidenced by an 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. Optionees shall be those persons selected by the
Committee from Eligible Persons. Any person who files with the
Committee, in a form satisfactory to the Committee, a written waiver
of eligibility to receive any 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, the Committee shall take into
consideration the contribution the person has made or may make 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 under the Plan prescribe such other terms and conditions
concerning such Options as it deems appropriate, including, without
limitation, relating an Option to achievement of specific goals
established by the Committee, the Optionee not competing with the
Company, the Optionee maintaining confidentiality of the Company's
trade secrets or the continued employment of the Optionee for a
specified period of time;
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<PAGE> 4
provided, however, that such terms and conditions are not more
favorable to an Optionee than those expressly permitted herein.
C. The Committee in its sole discretion shall determine
in each case whether periods of military or government service shall
constitute a continuation of employment for the purposes of this Plan
or any Option.
V. EXERCISE PRICE. The exercise price per Share of any Option
shall be any price determined by the Committee; provided, however, that the
exercise price for any Incentive Stock Option shall not be less than one
hundred percent (100%) of the Fair Market Value per Share on the Date of Grant
or as otherwise provided herein.
VI. 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 exercise 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, if any, that
the Committee determines to be necessary for the Company or Subsidiary
employing the Optionee to withhold in accordance with applicable federal and/or
state income tax withholding requirements. Unless further limited by the
Committee in any Option, the exercise price of any Shares purchased shall be
paid solely in cash, by certified or cashier's check, by money order, by
personal check or with Shares or by a combination of the above. 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 received by the
Company.
VII. VESTING OF OPTIONS. Unless otherwise provided in this Plan or
in the related Agreement, each Option shall vest 33% on the first anniversary
of its Date of Grant, an additional 33% on the second anniversary of its Date
of Grant and the final 34% on the third anniversary of its Date of Grant. The
Committee, in its sole discretion, can provide in an Agreement that an Option
may vest in such amounts and at such intervals as the Committee may provide.
In any event, Shares subject to an Option shall not vest if the Optionee is not
an Eligible Person on the date of the relevant vesting or if the Option has
expired.
VIII. EXERCISABILITY OF OPTIONS.
A. Except as otherwise provided in this Plan, an Option
shall not be exercisable with respect to Shares that have not vested
in accordance with the relevant Agreement.
B. The expiration date of an Option shall be determined
by the Committee at the Date of Grant, but in no event shall an Option
be exercisable after the expiration of ten (10) years from the Date of
Grant.
C. An Option shall not be exercisable prior to the
six-month anniversary of its Date of Grant.
D. The Committee may in its sole discretion accelerate
the date on which any Option may be exercised.
E. On the date thirty (30) days prior to any occurrence
described in Subsections (8)(e)(i), (ii) or (iii), but only where such
anticipated occurrence actually takes place, notwithstanding the
exercise schedule in an Option, each Option shall immediately become
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<PAGE> 5
exercisable in full where there (i) is any transaction (which shall
include a series of transactions occurring within 60 days or occurring
pursuant to a plan) that has the result that stockholders of the
Company immediately before such transaction cease to own at least 51%
of (x) the voting stock of the Company or (y) 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) is a merger, consolidation, reorganization,
liquidation or dissolution in which the Company does not survive; or
(iii) is a sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Company.
F. Notwithstanding any provisions hereof to the
contrary, if any Option is accelerated under Subsection 8(d) or (e),
the portion of such Option that may be exercised to acquire Shares
that the Optionee would not be entitled to acquire but for such
acceleration (the "Acceleration Shares"), is limited to that number of
Acceleration Shares that can be acquired without causing the Optionee
to have an "excess parachute payment" as determined under Section 280G
of the Code, determined by taking into account all of the Optionee's
"parachute payments" determined under Section 280G of the Code. If as
a result of this Subsection 8(f), the Optionee may not acquire all of
the Acceleration Shares, then the Acceleration Shares that the
Optionee may acquire shall be the last shares that the Optionee would
have been entitled to acquire had this Option not been accelerated.
IX. TERMINATION OF OPTION PERIOD.
A. Unless otherwise provided the respective Agreement,
the unexercised portion of an Option shall automatically and without
notice terminate and become null and void at the time of the earliest
to occur of the following:
1. Except as provided in Subsection 9(a)(iv),
thirty (30) days after the date that Optionee ceases to be
employed by the Company or a Subsidiary regardless of the
reason therefor other than as a result of such termination by
reason of (x) death, (y) mental or physical disability of
Optionee as determined by a medical doctor satisfactory to the
Committee or (z) termination of Optionee's employment with the
Company or a Subsidiary for cause;
2. Except as provided in Subsection 9(a)(iv),
one (1) year after the date on which the Optionee suffers a
mental or physical disability as determined by a medical
doctor satisfactory to the Committee;
3. one (1) year after the date that the Optionee
ceases to be employed by the Company or a Subsidiary by reason
of death of the Optionee;
4. six (6) months after the date on which the
Optionee shall die, if the Optionee's death shall occur during
the thirty-day period described in Subsection 9(a)(i) or the
one-year period described in Subsection 9(a)(ii) or 9(a)(iii);
5. the date that Optionee ceases to be employed
by the Company or a Subsidiary as a result of a termination
for cause;
6. with respect to Options held by a person who
is a member of the Board of Directors of a Subsidiary who is
not also an Employee, thirty (30) days after the date that
Optionee ceases to be a member of such Board of Directors;
provided, however,
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<PAGE> 6
that if the Optionee ceases to be a member of such Board of
Directors because of the mental or physical disability (as
determined by a medical doctor satisfactory to the Committee)
or death of such Optionee, or if such Optionee shall suffer a
mental or physical disability (as determined by a medical
doctor satisfactory to the Committee) or die within thirty
(30) days after the date that the Optionee ceases to be a
member of such Board of Directors, such Optionee shall
terminate one (1) year after the date on which the Optionee
shall cease to be a member of such Board of Directors; and
7. the tenth (10th) anniversary of the Date of
Grant of the Option.
B. If provided in an Option, the Committee in its sole
discretion may, by giving written notice (a "Cancellation Notice")
cancel, effective upon the date of the consummation of any of the
transactions described in Subsection 8(e), all or any portion of such
Option that remains unexercised on such date. Such Cancellation
Notice shall be given a reasonable period of time (but not less than
15 days) prior to the proposed date of such cancellation, and may be
given either before or after stockholder approval of such transaction.
X. 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.
1. appropriate adjustment shall be made in the
maximum number of Shares then subject to being optioned under
the Plan, so that the same proportion of the Company's issued
and outstanding Shares shall continue to be subject to being
so optioned; and
2. appropriate adjustment shall be made in the
number of Shares and the exercise price per Share thereof then
subject to outstanding Options, so that the same proportion of
the Company's issued and outstanding Shares shall remain
subject to purchase at the same aggregate exercise price.
B. The Committee may change the terms of Options
outstanding under this Plan, with respect to the exercise 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 any corporation transaction.
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 Shares reserved for
issuance under the Plan or 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
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<PAGE> 7
Company to make, authorize or consummate (1) any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's
capital structure or its business; (2) any merger or consolidation of
the Company; (3) any issue by the Company of debt securities, or
preferred or preference stock that would rank above the Shares subject
to outstanding Options; (4) the dissolution or liquidation of the
Company; (5) any sale, transfer or assignment of all or any part of
the assets or business of the Company; or (6) any other corporate act
or proceeding, whether of a similar character or otherwise.
XI. TRANSFERABILITY OF OPTIONS. Each Option shall be transferable
only in the event that (i) such transfer is pursuant to the Optionee's will or
the laws of descent and distribution or (ii) such transfer applies to a
Nonqualified Stock Option and receives the written consent of the Committee.
Otherwise, each Option shall not be transferable and so long as an Optionee
lives, only such Optionee or his guardian or legal representative shall have
the right to exercise such Option.
XII. ISSUANCE OF SHARES. No person shall be, or have any of the
rights or privileges of, a stockholder of the Company with respect to any of
the Shares subject to an Option unless and until certificates representing such
Shares shall have been issued and delivered to such person. As a condition of
any issuance or transfer of the certificate for Shares, the Committee may
obtain such agreements or undertakings, if any, as it may deem necessary or
advisable to assure compliance with any provision of the Plan, the respective
Agreement or any law or regulation including, but not limited to, the
following:
A. A representation, warranty or agreement by the
Optionee to the Company at the time any Option is exercised that he or
she is acquiring the Shares to be issued to him or her for investment
and not with a view to, or for sale in connection with, the
distribution of any such Shares; and
B. A representation, warranty 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 laws
deemed by the Committee to be applicable to the issuance of the Shares
and are endorsed upon the Share certificates.
XIII. OPTIONS FOR 10% SHAREHOLDER. 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 425(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 parent or subsidiary, as defined in Section 425 of the Code, at the
Date of Grant) unless the exercise price of such Incentive Stock Option is at
least 110% of the Fair Market Value of the Shares subject to such Incentive
Stock Option on the Date of Grant, and the period during which the Incentive
Stock Option may be exercised does not exceed five (5) years from the Date of
Grant.
XIV. NONQUALIFIED STOCK OPTIONS. Nonqualified Stock Options may be
granted hereunder and shall be subject to all terms and provisions hereof
except that each such Nonqualified Stock Option (i) must be clearly designated
as a Nonqualified Stock Option; (ii) may be granted for Shares in excess of the
limits contained in Subsection 3(b) of this Plan; and (iii) shall not be
subject to Section 13 of this Plan. If both Incentive Stock Options and
Nonqualified Stock Options are granted to an Optionee, the right to exercise,
to the full extent thereof, Options of either type shall not be contingent in
whole or in part upon the exercise of, or failure to exercise, Options of the
other type. Persons who are members
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<PAGE> 8
of the Board of Directors of a Subsidiary who are not also Employees shall only
be eligible to receive Nonqualified Stock Options.
XV. ADMINISTRATION OF THE PLAN.
A. The Plan shall be administered by the Compensation
Committee of the Board or other committee thereof as appointed by the
Board (herein called the "Committee") consisting of not less than two
(2) members of the Board. Except for the powers set forth in Section
18, 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. Any or all powers and functions of the
Committee may at any time and from time to time be exercised by the
Board.
B. The Committee, from time to time, may adopt rules and
regulations for carrying out the purposes of the Plan. The
determinations and the interpretation and construction of any
provision of the Plan by the Committee 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 written
approval of a majority of the members of the Committee.
D. Subject to the express provisions of this Plan, the
Committee shall have the authority, in its sole and absolute
discretion (i) to adopt, amend, and rescind administrative and
interpretive rules and regulations relating to this Plan or any
Option; (ii) to determine the terms and provisions of the respective
Agreements (which need not be identical); provided, however, such
terms and provisions shall not be inconsistent with this Plan,
including the extent to which the transferability of Shares upon the
exercise of Options is restricted; (iii) to construe the terms of this
Plan or any Agreement; (iv) as provided in Subsection 10(a), upon
certain events to make appropriate adjustments to the exercise price
and number of Shares subject to this Plan and Option; and (v) to make
all other determinations and perform all other acts necessary or
advisable for administering this Plan, including the delegation of
such ministerial acts and responsibilities as the Committee deems
appropriate. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in this Plan or any Agreement
in the manner and to the extent it shall deem expedient to carry it
into effect, and it shall be the sole and final judge of such
expediency. The Committee shall have full discretion to make all
determinations on the matters referred to in this Subsection 15(d),
and such determinations shall be final, binding and conclusive.
XVI. GOVERNMENT REGULATIONS. This Plan, Options and the
obligations of the Company to sell and deliver Shares under any Options, shall
be subject to all applicable laws, rules and regulations, and to such approvals
by any governmental agencies or national securities exchanges or the NASD as
may be required.
XVII. MISCELLANEOUS.
A. The proceeds received by the Company from the sale of
Shares pursuant to an Option shall be used for general corporate
purposes.
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<PAGE> 9
B. The grant of an Option shall be in addition to any
other compensation paid to the Optionee or other stock option plans of
the Company or other benefits with respect to Optionee's position with
the Company or its Subsidiaries. The grant of an Option shall not
confer upon the Optionee the right to continue as an Employee, or
interfere in any way with the rights of the Company to terminate his
or her status as an Employee.
C. Neither the members of the Board nor any member of
the Committee shall be liable for any act, omission, or determination
taken or made in good faith with respect to this Plan or any Option.
Members of the Board and the Committee shall, in addition to all other
rights of indemnification and reimbursement, be entitled to
indemnification and reimbursement by the Company in respect of any
claim, loss, damage, or expense (including attorneys' fees, the costs
of settling any suit (provided such settlement is approved by
independent legal counsel selected by the Company), and amounts paid
in satisfaction of a judgment, except a judgment based on a finding of
bad faith) arising from such claim, loss, damage, or expense to the
full extent permitted by law and under any directors' and officers'
liability or similar insurance coverage that may from time to time be
in effect.
D. Any issuance or transfer of Shares to an Optionee, or
to his legal representative, heir, legatee, or distributee, in
accordance with the provisions of this Plan or the applicable Option,
shall, to the extent thereof, be in full satisfaction of all claims of
such persons under the Plan. The Committee may require any Optionee,
legal representative, heir, legatee or distributee as a condition
precedent to such payment or issuance or transfer of Shares, to
execute a release and receipt for such payment or issuance or transfer
of Shares in such form as it shall determine.
E. Neither the Committee nor the Company guarantees
Shares from loss or depreciation.
F. All expenses incident to the administration,
termination, or protection of this Plan or any Option, including, but
not limited to, legal and accounting fees, shall be paid by the
Company; provided, however, the Company may recover from an Optionee
or his heirs or assigns any and all damages, fees, expenses and costs
incurred by the Company arising out of any actions taken by an
Optionee in breach of this Plan or such Optionee's Agreement.
G. Records of the Company shall be conclusive for all
purposes under this Plan or any Option, unless determined by the
Committee to be incorrect.
H. The Company shall, upon request or as may be
specifically required under this Plan or any Option, furnish or cause
to be furnished all of the information or documentation that is
necessary or required by the Committee to perform its duties and
functions under this Plan or any Option.
I. The Company assumes no liability to any Optionee or
his legal representatives, heirs, legatees or distributees for any act
of, or failure to act on the part of, the Committee.
J. Any action required of the Company relating or the
Committee to this Plan or any Option shall be by resolution of its
Board, the Committee or by a person authorized to act by resolution of
the Board or the Committee, as the case may be.
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<PAGE> 10
K. If any provision of this Plan or any Option is held
to be illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining provisions of this Plan or any Option,
but such provision shall be fully severable, and the Plan or Option,
as applicable, shall be construed and enforced as if the illegal or
invalid provision had never been included in the Plan or Option, as
applicable.
L. Whenever any notice is required or permitted under
this Plan or any Option, such notice must be in writing and personally
delivered or sent by mail or delivery by a nationally recognized
courier service. Any notice required or permitted to be delivered
under this Plan or any Option shall be deemed to be delivered on the
date on which it is personally delivered, or, if mailed, whether
actually received or not, on the third Business Day after it is
deposited in the United States mail, certified or registered, postage
prepaid, addressed to the person who is to receive it at the address
that such person has previously specified by written notice delivered
in accordance with this Subsection 17(l) or, if by courier,
seventy-two (72) hours after it is sent, addressed as described in
this Subsection 17(l). The Company or the Optionee may change, at any
time and from time to time, by written notice to the other, the
address that it or he had previously specified for receiving notices.
Until changed in accordance with this Plan or any Option, the Company
and the Optionee shall specify as its and his address for receiving
notices the address set forth in the Option pertaining to the Shares
to which such notice relates.
M. Any person entitled to notice under this Plan may
waive such notice.
N. This Plan or any Option shall be binding upon (i) the
respective Optionee, his legal representatives, heirs, legatees or
distributee, (ii) upon the Company, its successors, and assigns, and
(iii) upon the Board, the Committee and its successors.
O. The titles and headings of Sections are included for
convenience of reference only and are not to be considered in
construction of this Plan's provisions.
P. All questions arising with respect to the provisions
of this Plan or any Option shall be determined by application of the
laws of the State of Texas except to the extent Texas law is preempted
by federal law or Delaware corporate law that is controlling.
Questions arising with respect to the provisions of an Agreement that
are matters of contract law shall be governed by the laws of the state
specified in the Agreement, except to the extent preempted by federal
law and except to the extent that Delaware corporate law conflicts
with the contract law of such state, in which event Delaware corporate
law shall govern.
Q. Words used in the masculine shall apply to the
feminine where applicable, and wherever the context of this Plan or
any Option dictates, the plural shall be read as the singular and the
singular as the plural.
XVIII. AMENDMENT AND DISCONTINUATION OF THE PLAN. 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 stockholders of the Company, (a) increase the number of Shares reserved
for Options or change the class of employees eligible to receive Options, (b)
permit the granting of Options that expire beyond the maximum 10-year period
described in Subsection 8(b), or (c) extend the termination date of the Plan as
set forth in Section 19; and provided, further, that [except to the extent
provided in Section 9] no amendment or suspension of the Plan or any
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<PAGE> 11
Option issued hereunder shall, except as specifically permitted in any Option,
substantially impair any Option previously granted to any Optionee without the
consent of such Optionee.
XIX. EFFECTIVE DATE AND TERMINATION DATE. The effective date of
the Plan is the date set forth below, on which date the Board adopted this
Plan; provided, however, if the Plan is not approved by at least a majority of
the votes cast by the stockholders of the Company at a meeting of stockholders
at which a quorum is present within one (1) year after the effective date then,
in such event, the Plan and all Options granted pursuant to the Plan shall be
null and void. The Plan shall terminate on the tenth anniversary of the
effective date. Options outstanding on the termination date of the Plan shall
survive the termination of the Plan and shall terminate pursuant to the terms
of the Agreements evidencing such Options.
ADOPTED BY THE BOARD: AUGUST 1, 1994
EFFECTIVE DATE: AUGUST 1, 1994
AMENDED AND ADJUSTED: JANUARY 27, 1997
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EXHIBIT 5
[SEARCH CAPITAL GROUP LETTERHEAD]
February 21, 1997
Search Capital Group, Inc.
700 N. Pearl Street, Suite 400
Dallas, TX 75201
Re: Form S-8 Registration Statement of Search Capital Group, Inc.;
Registration of 625,000 Shares of Common Stock, $.01 par
value, under the Search Capital Group, Inc. 1994 Employee
Stock Option Plan
Ladies and Gentlemen:
I am the Executive Vice President and General Counsel of Search
Capital Group, Inc., a Delaware corporation (the "Company"), and have acted as
counsel to the Company in connection with the execution and filing of the
Company's Registration Statement on Form S-8, filed with the Securities and
Exchange Commission on the date hereof (the "Registration Statement"),
providing for the registration of 625,000 shares of Common Stock, $.01 par
value per share, of the Company (the "Shares"), issuable by the Company in
connection with the Company's 1994 Employee Stock Option Plan (the "Plan"). I
am rendering this opinion to you pursuant to Item 601(b) (5) of Regulation S-K
promulgated by the Securities and Exchange Commission.
As counsel for the Company, I am generally familiar with the corporate
affairs of the Company and its subsidiaries and the terms of the Plan. In
furnishing this opinion, I have examined such corporate and other records as I
have deemed necessary or appropriate to provide a basis for the opinion set
forth below.
Based thereon, I am of the opinion that the Shares that may be issued
pursuant to the Plan have been duly authorized and, when issued in accordance
with the Plan and the authorized forms of Stock Option Agreements applicable
thereto, will be validly issued, fully paid and non-assessable so long as the
consideration received by the Company for the Shares is at least equal to their
par value.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Ellis A. Regenbogen
Ellis A. Regenbogen
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Search Capital Group, Inc.
Dallas, Texas
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement (Form S-8) pertaining to the
Search Capital Group, Inc. 1994 Employee Stock Option Plan of our report dated
May 10, 1996, relating to the consolidated financial statements and schedules
of Search Capital Group, Inc. appearing in the Company's Transition Report on
Form 10-K for the period ended March 31, 1996. Our report contains an
explanatory paragraph regarding a change in accounting principle.
/s/ BDO Seidman, LLP
BDO SEIDMAN, LLP
Dallas, Texas
February 20, 1997
