<PAGE> 1
As filed with the Securities and Exchange Commission on February 11, 1997
Registration Statement No. _________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------------
CAPSTONE CAPITAL CORPORATION
(Exact Name of Registrant as Specified in its Governing Instrument)
MARYLAND 63-1115479
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
1000 URBAN CENTER DRIVE; SUITE 630
BIRMINGHAM, ALABAMA 35244
(205) 967-2092
(Address of Principal Executive Offices)
CAPSTONE CAPITAL CORPORATION
1994 STOCK INCENTIVE PLAN
(Full title of the Plan)
JOHN W. MCROBERTS, PRESIDENT,
CHIEF EXECUTIVE OFFICER AND DIRECTOR
CAPSTONE CAPITAL CORPORATION
1000 URBAN CENTER DRIVE; SUITE 630
BIRMINGHAM, ALABAMA 35242
(Name and Address of Agent for Service)
(205) 967-2092
(Telephone Number, including Area Code, of Agent for Service)
Copies to:
JOHN H. COOPER, ESQ.
SIROTE & PERMUTT, P.C.
2222 ARLINGTON AVENUE SOUTH
BIRMINGHAM, ALABAMA 35255-5727
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered Registered Per Share Price Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.001 1,060,500 $17.64(2) $18,707,220.00 $6,450.77
per share shares(1)
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.001 3,100 $23.00(3) $71,300.00 $24.59
per share shares(1)
- -----------------------------------------------------------------------------------------------------------------------------------
Total 1,063,600 $18,778,520.00 $5,690.46
shares
====================================================================================================================================
</TABLE>
(1) For the sole purpose of calculating the registration fee, the number of
shares being registered under this Registration Statement has been
divided into two subtotals.
(2) Determined in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee. The computation is based on the
weighted average exercise price at which the options whose exercise
will result in the issuance of shares being registered may be
exercised.
(3) Determined pursuant to Rule 457(h) under the Securities Act of 1933
solely for the purpose of calculating the registration fee, and
represents the last sale price of the Common Stock of Capstone Capital
Corporation (the "Company") as reported on the New York Stock Exchange
Composite Transaction Tape on February 7, 1997.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Capstone Capital Corporation, a Maryland real estate investment trust
(the "Company"), hereby incorporates by reference into this registration
statement on Form S-8 (the "Registration Statement") the following documents
which have heretofore been filed by the Company with the Securities and Exchange
Commission (the "Commission"):
(a) The Company's Prospectus dated December 6, 1995, filed as part
of the Company's Registration Statement on Form S-3 (Reg. No.
33-97926) and Prospectus Supplement dated November 20, 1996.
(b) The description of securities to be registered contained in
the Registration Statement filed with the Commission on Form
8-A under the Exchange Act and declared effective on June 22,
1994, including any amendment or reports filed for the purpose
of updating such description.
(c) All other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since November 20, 1996.
(d) All documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 and 15(d) of the Exchange Act prior
to the filing of a post-effective amendment 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 into this Registration
Statement and to be a part hereof from the date of filing of
such documents.
Any statements contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes hereof to the extent
that a statement contained herein (or in any other subsequently filed document
which is also incorporated by reference herein) modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed to
constitute a part of this Prospectus except as so modified or superseded.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS & COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Amended and Restated Bylaws obligate it, to the
fullest extent permitted by Maryland law, to indemnify and advance expenses to
its present and former directors and officers.
The MGCL requires a corporation (unless its charter provides
otherwise, which the Company's charter does not) to indemnify a director or
officer who has been successful, on the merits or otherwise, in the defense of
any proceeding to which he is made a party by reason of his service in that
capacity. Section 2-418 also generally permits a corporation to indemnify its
present and former directors and officers, among others, who are
2
<PAGE> 3
made a party to any proceeding by reason of their service in these or other
capacities, unless it is established that (i) the act or omission of such person
was material to the matter giving rise to the proceeding and was committed in
bad faith or was the result of active and deliberate dishonesty; or (ii) such
person actually received an improper personal benefit in money, property or
services; or (iii) in the case of any criminal proceeding, such person had
reasonable cause to believe that the act or omission was unlawful. The
indemnification may include judgments, penalties, fines, settlements and
reasonable expenses actually incurred by the director in connection with the
proceeding. However, a Maryland corporation may not indemnify for an adverse
judgment in a suit by or in the right of the corporation. In addition, the MGCL
requires the Company, as a condition to advancing expenses, to obtain (a) a
written affirmation by the director or officer of his good faith belief that he
has met the standard of conduct necessary for indemnification by the Company as
authorized by the Bylaws and (b) a written statement by or on his behalf to
repay the amount paid or reimbursed by the Company if it shall ultimately be
determined that the standard of conduct was not met. The termination of any
proceeding by conviction or upon a plea of nolo contendere or its equivalent
creates a rebuttable presumption that the director did not meet the requisite
standard of conduct required for permitted indemnification. The termination of
any proceeding by judgment, order or settlement, however, does not create a
presumption that the director failed to meet the requisite standard of conduct
for permitted indemnification. Indemnification under the provisions of the MGCL
is not deemed exclusive of any other rights, by indemnification or otherwise, to
which a director or officer may be entitled under the Charter, Bylaws,
resolution of stockholders or directors, contract or otherwise.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
4.1 Capstone Capital Corporation (formerly Crescent Capital Trust, Inc.)
1994 Stock Incentive Plan.
4.2 Amendment to 1994 Stock Incentive Plan of Capstone Capital Corporation
(formerly Crescent Capital Trust, Inc.)
5 Opinion of Sirote & Permutt, P.C. as to legality of the Capstone
Capital Corporation Common Stock being registered.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Sirote & Permutt, P.C. (contained in the opinion of counsel
filed as Exhibit 5 to this Registration Statement).
24 Powers of Attorney (set forth on the signature page of this
Registration Statement).
ITEM 9. UNDERTAKINGS
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:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
3
<PAGE> 4
(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. Notwithstanding the foregoing, any
increase or decrease in the amount of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities Act
if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
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 (a)(1)(i) and (ii) do not apply if
the registration statement is on Form S-3, Form S-8, or Form F-3, and
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13 or
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.
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.
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 Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action',
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
4
<PAGE> 5
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 Birmingham, State of Alabama, on February 6,
1997.
CAPSTONE CAPITAL CORPORATION
By: /s/ John W. McRoberts
-----------------------------------------------
John W. McRoberts
President, Chief Executive Officer and
Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints John W. McRoberts and Andrew L.
Kizer, and each or either 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 Registration Statement and any
subsequent registration statements relating to the offering to which this
Registration Statement relates, 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 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 said attorneys-in-fact and agents or either of them, or
their or his substitutes or substitute, 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 by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Richard M. Scrushy Chairman of the Board February 6, 1997
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Richard M. Scrushy
/s/ John W. McRoberts President, Chief Executive Officer February 6, 1997
- -------------------------- and Director (Principal Executive
John W. McRoberts Officer)
5
<PAGE> 6
/s/ Andrew L. Kizer Vice President Finance February 6, 1997
- ------------------------- and Chief Financial Officer
Andrew L. Kizer (Principal Financial and
Accounting Officer)
/s/ Michael D. Martin Director February 6, 1997
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Michael D. Martin
/s/ Robert N. Elkins Director February 6, 1997
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Robert N. Elkins
/s/ Eric R. Hanson Director February 6, 1997
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Eric R. Hanson
/s/ Larry D. Striplin, Jr. Director February 6, 1997
- --------------------------
Larry D. Striplin, Jr.
/s/ W. Barry Morton Director February 6, 1997
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W. Barry Morton
/s/ George E. Bogle Director February 6, 1997
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George E. Bogle
Director February , 1997
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Larry R. House
6
<PAGE> 7
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
4.1 Capstone Capital Corporation (formerly Crescent Capital Trust, Inc.)
1994 Stock Incentive Plan.
4.2 Amendment to 1994 Stock Incentive Plan of Capstone Capital Corporation
(formerly Crescent Capital Trust, Inc.).
5 Opinion of Sirote & Permutt, P.C. as to legality the shares of Capstone
Capital Corporation Common Stock being registered.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Sirote & Permutt, P.C. (contained in the opinion of counsel
filed as Exhibit 5 to this Registration Statement).
24 Powers of Attorney (set forth on the signature page of this
Registration Statement).
<PAGE> 1
EXHIBIT 4.1
CRESCENT CAPITAL CORPORATION
1994 STOCK INCENTIVE PLAN
1. PURPOSE OF THE PLAN.
The purpose of the 1994 Stock Incentive Plan of Crescent Capital Trust,
Inc. (the "Company") is to:
(a) promote the interests of the Company and its stockholders by
strengthening the Company's ability to attract, motivate and retain employees
and members of the Board of Directors of training, experience and ability; and
(b) furnish incentives to individuals chosen to receive options because
they are considered capable of responding by improving operations and increasing
profits;
(c) provide a means to encourage stock ownership and proprietary
interest in the Company to valued employees and members of the Board of
Directors of the Company upon whose judgment, initiative, and efforts the
continued financial success and growth of the business of the Company largely
depend.
2. DEFINITIONS.
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Compensation Committee of the Board as
shall be appointed by the Board from time to time. The Committee shall
consist of three or more members of the Board, at least two of whom shall not
be Employees of the Company.
(d) "Common Stock" means the $.001 par value Common Stock of the
Company.
(e) "Company" means Crescent Capital Trust, Inc.
(f) "Eligible Person" means any full-time employee or Outside
Director of the Company or of any of its present or future parent or
subsidiary corporations.
(g) "Fair Market Value" means the closing price of a share of
Common Stock on the New York Stock Exchange Composite Tape or, if the Common
Stock is not then listed on the New York Stock Exchange, on any stock
exchange on which the Common Stock is then listed on the date as of which fair
market value is to be determined or, if the Common Stock is not then listed on
any stock exchange a price on which the Committee and Participant can agree
upon.
(h) "Incentive Award" means an Option, Incentive Stock Award, or
cash bonus award granted under the Plan.
(i) "Incentive Stock Award" means a right to the grant or
purchase, at a price determined by the Committee, of Common Stock of the
Company which is nontransferable and subject to substantial risk or forfeiture
until specific conditions are met. Conditions may be based on continuing
employment or achievement of preestablished financial objectives or both.
<PAGE> 2
(j) "Option" means any nonqualified or nonstatutory stock option and
any incentive stock option granted pursuant to Section 422 of the Code.
(k) "Outside Director" means a member of the Board who is not a
full-time employee.
(l) "Participant" means any Eligible Person selected to participate in
an Incentive Award pursuant to Section .
(m) "Plan" means the 1994 Stock Incentive Plan as set forth herein,
which may be further amended from time to time.
3. SHARES OF COMMON STOCK SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section and Section of the Plan, the
aggregate number of shares of Common Stock that may be issued or transferred or
exercised pursuant to Incentive Awards under the Plan will not exceed the
greater of: (i) seven percent (7%) of the Company's outstanding Common Stock, or
(ii) four hundred eighteen thousand six hundred (418,600) shares of Common
Stock.
(b) The shares of Common Stock to be delivered under the Plan will be
made available, at the discretion of the Board or the Committee, either from
authorized but unissued shares of Common Stock or from previously issued shares
of Common Stock reacquired by the Company, including shares purchased on the
open market.
(c) If any Incentive Award is not issued or transferred and ceases to
be issuable or transferable for any reason, such Incentive Award will no longer
be charged against the limitations provided for in Section and may again be made
subject to Incentive Awards.
4. ADMINISTRATION OF THE PLAN.
The Committee has and may exercise such powers and authority of the
Board as may be necessary or appropriate for the Committee to carry out its
functions as described in the Plan. The Committee has authority in its
discretion to determine the Eligible Persons to whom, and the time or times at
which, Incentive Awards may be granted and the number of shares subject to each
Incentive Award. The Committee also has authority to interpret the Plan, and to
determine the terms and provisions of the respective Incentive Awards agreements
and to make all other determinations necessary or advisable for Plan
administration. The Committee has authority to prescribe, amend, and rescind
rules and regulations relating to the Plan. All interpretations, determinations,
and actions by the Committee will be final, conclusive, and binding upon all
parties. No member of the Board or the Committee will be liable for any action
or determination made in good faith by the Board or the Committee with respect
to the Plan or any Incentive Award under it.
5. ELIGIBILITY.
All full-time salaried employees of the Company who have been
determined by the Committee to be key employees and all Outside Directors are
eligible to receive Incentive Awards under the Plan. The Committee has
authority, in its sole discretion, to determine and designate from time to time
those Eligible Persons who are to be granted Incentive Awards, and the type and
amount of Incentive Award to be granted. Each Incentive Award will be evidenced
by a written instrument and may include any other terms and conditions
consistent with the Plan, as the Committee may determine.
<PAGE> 3
6. WRITTEN AGREEMENT; EFFECT.
Each Option shall be evidenced by a written agreement (the "Option
Agreement"), in form satisfactory to the Committee, executed by the Company and
by the person to whom such Option is granted. The Option Agreement shall specify
whether each Option it evidences is a nonqualified stock option ("NQO") or an
incentive stock option ("ISO"). Failure of the grantee to execute an Option
Agreement shall not void or invalidate the grant of an Option; but the Option
may not be exercised, however, until the Option Agreement is executed.
7. ANNUAL $100,000 LIMITATION IN ISOS.
To the extent required by Section 422(d) of the Code, the aggregate
fair market value of shares of the Common Stock with respect to which ISOs are
exercisable for the first time by any individual during any calendar year shall
not exceed $100,000. For this purpose, fair market value shall be the fair
market value of the shares covered by the ISOs when the ISOs were granted. If by
their terms, such ISOs taken together would first become exercisable at a faster
rate, this $100,000 limitation shall be applied by deferring the exercisability
of those ISOs or portions of ISOs which have the highest per share exercise
prices. The ISOs or portions of ISOs, the exercisability of which are so
deferred, shall become exercisable on the first day of the first subsequent
calendar year during which they may be exercised, as determined by applying
these same principles of this Section and all other provisions of this Section
and all other provisions of this Plan, including those relating to the
expiration and termination of ISOs.
8. ADVANCE APPROVALS.
The Board may approve the grant of Options to persons who are expected
to become employees or Outside Directors of the Company, but are not employees
or Outside Directors at the date of approval. In such cases, the Option shall be
deemed granted, without further approval, on the date the grantee becomes an
employee, and must satisfy all requirements of this Plan for Options granted on
that date.
9. TERMS AND CONDITIONS OF STOCK OPTIONS.
(a) Each Option shall be designated as an ISO or a NQO and shall be
subject to the terms and conditions set forth in this Section . ISOs shall also
be subject to the terms and conditions set forth in Section 10.
(b) Each Option Agreement shall specify the date as of which it shall
be effective, which date shall be the Grant Date (determined pursuant to Section
in the case of advance approvals).
(c) Except as provided in Section hereof, the purchase price of Common
Stock under each Option will be determined by the Committee, and may not be less
than fifty percent (50%) of the Fair Market Value of the Common Stock on the
date of the grant. The purchase price of Common Stock under each Option granted
to Outside Directors will be the Fair Market Value of the Common Stock on the
Date of Grant.
(d) Options granted to employees of the Company may be exercised as
determined by the Committee. Options granted to Outside Directors may not be
exercised for a period of one (1) year after the Date of Grant. After such
period, such Options may be exercised with respect to all shares of Common Stock
covered thereby during its term as provided hereunder. Notwithstanding any other
provision to the contrary contained in the Plan, each Option granted under this
Plan will expire not later than ten (10) years from the Date of Grant.
(e) Except as set forth below, upon the exercise of an Option, the
purchase price will be payable in full in cash, or, in the discretion of the
Committee, by the assignment and delivery to the Company of shares of Common
Stock owned by the optionee; or in the discretion of the Committee, by a
promissory note secured by shares of Common Stock bearing interest at a rate
determined by the Committee but not less than the minimum rate permitted by the
Internal Revenue Service; or by a combination of any of the above. Any shares so
assigned and delivered to the Company in payment or partial payment of the
purchase price will be valued at their Fair Market
<PAGE> 4
Value on the exercise date. The Committee may, in its discretion and upon the
request of the optionee, issue shares of Common Stock upon the exercise of an
Option directly to a brokerage firm or firms to be selected by the Committee,
without payment of the purchase price by the optionee but upon delivery of an
irrevocable guarantee by such brokerage firm or firms of the payment of such
purchase price. No payment by an assignment of shares, by a promissory note or
by any combination thereof, or by the guarantee of a brokerage firm or firms as
described above, will be allowed unless such payments are allowed under
applicable requirements of Federal and state tax, securities and other laws,
rules and regulations and by any regulatory authority having jurisdiction.
(f) No fractional shares will be issued pursuant to the exercise of an
Option nor will any cash payment be made in lieu of fractional shares.
(g) Each Option Agreement may contain such other terms, provisions, and
conditions not inconsistent with this Plan, including rights of repurchase, as
may be determined by the Committee, and each ISO granted under this Plan shall
include such provisions and conditions as are necessary to qualify such option
as an "incentive stock option" within the meaning of Section 422 of the Code.
(h) If requested by the Company, at the time of exercise of an Option,
the optionee shall remit to the Company in cash all applicable federal and state
withholding and employment taxes. If and to the extent authorized and approved
by the Committee in its sole discretion, an optionee may elect, by means of a
form of election to be prescribed by the Committee, to have shares which are
acquired upon exercise of an Option withheld by the Company or tender other
shares of Common Stock or other securities of the Company owned by the optionee
to the Company at the time the amount of such taxes is determined in order to
pay the amount of such tax obligations, subject to the following limitations:
i. such election shall be irrevocable;
ii. such election shall be subject to the disapproval of the
Committee at any time;
iii. such election may not be made within six months of the
Grant Date of the Option the exercise of which resulted in the tax withholding
obligation (the "Related Option") (except that this limitation shall not apply
in the event death or disability of the optionee occurs before the expiration of
the six-month period); and
iv. such election must be made either (i) six months before
the date that the amount of tax to be withheld upon exercise of the Related
Option is determined or (ii) in any ten-day period before such tax determination
date beginning on the third business day following the date of release by the
Company for publication of quarterly or annual summary statements of sales or
earnings of the Company.
Any Common Stock or other securities so withheld or tendered will be valued by
the Company as of the date they are withheld or tendered. Unless the Committee
otherwise determines, the optionee shall pay to the Company in cash, promptly
when the amount of such obligations become determinable, all applicable federal
and state withholding taxes resulting from the lapse of restrictions imposed on
exercise of an Option, from a transfer or other disposition of shares acquired
upon exercise of an Option or otherwise related to the Option or the shares
acquired upon exercise of the Option.
(i) At the time a Participant exercises an Option, the Committee may
grant a cash bonus award in such amount as the Committee may determine. The
Committee may make such a determination at the time of grant or exercise. The
cash bonus award may be subject to any condition imposed by the Committee,
including a reservation of the right to revoke a cash bonus award at any time
before it is paid.
10. TERMS AND CONDITIONS TO WHICH ONLY ISOS ARE SUBJECT.
Options granted under this Plan which are designated as ISOs shall be
subject to the following terms and conditions:
<PAGE> 5
(a) Exercise Price. The exercise price of an ISO shall be determined in
accordance with the applicable provisions of the Code and shall in no event be
less than the fair market value of the stock covered by the ISO at the Grant
Date; provided, however, that the exercise price of an ISO granted to any person
who owns, directly or indirectly (or is treated as owning by reason of
attribution rules, currently set forth in Code Section 424), stock of the
Company constituting more than ten percent of the total combined voting power of
all classes of outstanding stock of the Company or of any Affiliate of the
Company, shall in no event be less than 110 percent of such fair market value.
(b) Option Term. Unless an earlier expiration date is specified by the
Committee at the Grant Date in the Option Agreement, each ISO shall expire ten
(10) years from its Grant Date; except that an ISO granted to any person who
owns, directly or indirectly (or is treated as owning by reason of applicable
attribution rules currently set forth in Section 424 of the Code) stock of the
Company constituting more than ten percent of the total combined voting power of
the Company's outstanding stock, or the stock of any Affiliate of the Company,
shall expire five years from its Grant Date.
(c) Disqualifying Dispositions. If Common Stock acquired by exercise of
an ISO is disposed of within two years from the Grant Date or within one year
after the transfer of the Common Stock to the optionee, the holder of the Common
Stock immediately prior to the disposition shall promptly notify the Company in
writing of the date and terms of the disposition and shall provide such other
information regarding the disposition as the Company may reasonably require.
Such holder shall pay to the Company any withholding and employment taxes which
the Company in its sole discretion deems applicable. The Company may instruct
its stock transfer agent by appropriate means, including placement of legends on
stock certificates, not to transfer stock acquired by exercise of an ISO unless
it has been advised by the Company that the requirements of this Section have
been satisfied.
11. TERMS AND CONDITIONS OF INCENTIVE STOCK AWARDS.
(a) All shares of Incentive Stock Awards granted or sold pursuant to
the Plan will be subject to the following conditions:
i. The shares may not be sold, transferred or otherwise
alienated or hypothecated until the restrictions are removed or expire.
ii. The Committee may required the Participant to enter into
an agreement providing that the certificates representing Incentive Stock Awards
granted or sold pursuant to the Plan will remain in the physical custody of the
Company until all restrictions are removed or expire.
iii. Each Certificate representing Incentive Stock Awards
granted pursuant to the Plan will bear a legend making appropriate reference to
the restrictions imposed.
iv. The Committee may impose other conditions on any shares
granted or sold pursuant to the Plan as it may deem advisable, including,
without limitations, restrictions under the Securities Act of 1933, as amended,
under the requirements of any stock exchange upon which such shares or shares of
the same class are then listed and under any blue sky or other securities laws
applicable to such shares.
(b) The restrictions imposed under subparagraph (a) above upon
Incentive Stock Awards will lapse in accordance with a schedule or other
conditions as determined by the Committee, subject to the provisions of
Section 14.(e) hereof.
(c) Subject to the provisions of subparagraph (a) above and Section
11(c) hereof, the holder will have all rights of a stockholder with respect to
the Incentive Stock Awards granted or sold, including the right to vote the
shares and receive all dividends and other distributions paid or made with
respect thereto.
<PAGE> 6
(d) Except as set forth below, the purchase price (if any) for shares
of Incentive Stock Awards will be payable in full in cash; or by the assignment
and delivery to the Company of shares of Common Stock owned by the holder of the
Incentive Stock Awards; or by a promissory note secured by shares of Common
Stock bearing interest at a rate equal to the minimum rate permitted by the
Internal Revenue Service; or by a combination of any of the above. Any shares so
assigned and delivered to the Company in payment or partial payment of the
purchase price will be valued at their Fair Market Value on the purchase date.
The Committee may, in its discretion and upon request of the holder, issue
shares of the Incentive Stock Awards directly to a brokerage firm or firms to be
selected by the Committee, without payment of the purchase price by the holder
but upon delivery of an irrevocable guarantee by such brokerage firm or firms of
the payment of such purchase price. No payment by an assignment of shares, by a
promissory note or by any combination thereof, or by the guarantee of a
brokerage firm or firms as described above, will be allowed unless such payments
are allowed under applicable requirements of Federal and state tax, securities
and other laws, rules and regulations and by any regulatory authority having
jurisdiction.
12. ADJUSTMENT PROVISIONS.
(a) Subject to Section 12.(b) hereof, if the outstanding shares of
Common Stock of the Company are increased, decreased, or exchanged for a
different number or kind of shares or other securities, or if additional
shares or new or different shares or other securities are distributed with
respect to such shares of Common Stock or other securities, through merger,
consolidation, sale of all or substantially all of the property of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other distribution with respect to such shares of
Common Stock, or other securities an appropriate and proportionate adjustment
may be made in (i) the maximum number and kind of shares provided in Section ,
(ii) the number and kind of shares or other securities subject to the then
outstanding Incentive Awards, and (iii) the price for each share or other unit
of any other securities subject to then outstanding Incentive Awards without
change in the aggregate purchase price or value as to which such Incentive
Awards remain exercisable or subject to restrictions.
(b) Despite the provisions of Section 12.(a), upon dissolution or
liquidation of the Company or upon a reorganization, merger, or consolidation
of the Company with one or more corporations as a result of which the Company
is not the surviving Corporation, or upon the sale of all or substantially all
of the property of the Company, all Incentive Awards then outstanding under the
Plan will be fully vested and exercisable and all restrictions will immediately
cease, unless provisions are made in connection with such transaction for the
continuance of the Plan and assumption or the substitution for such Incentive
Awards of new incentive awards covering the stock of a successor employer
corporation, or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of shares and prices.
(c) Adjustments under Sections 12.(a) and 12.(b) will be made by the
Committee, whose determination as to what adjustments will be made and the
extent thereof will be final, binding, and conclusive. No fractional interest
will be issued under the Plan on account of any such adjustments.
(d) In the event of pending or threatened takeover bid or tender offer
and pursuant to which 10% or more of the outstanding securities of the Company
is acquired, whether or not deemed a tender offer under applicable state or
Federal laws, or in the event that any person makes any filing under section
13(d) or 14(d) of the Securities Exchange Act of 1934 with respect to the
Company, the Committee may in its sole discretion, without obtaining stockholder
approval, at the time of any one or more of the following actions to the extent
permitted in Section with respect to all Eligible Persons and Participants:
i. Accelerate the exercise dates of any outstanding Option, or
make all outstanding Options fully vested and exercisable;
ii. Determine all or any portion of conditions associated with
an Incentive Stock Award have been met;
iii. Grant a cash bonus award to any of the holders of
outstanding Options;
<PAGE> 7
iv. Pay cash to any or all Option holders in exchange for the
cancellation of their outstanding Options;
v. Make any other adjustments or amendments to the plan and
outstanding Incentive Awards and substitute new Incentive Awards.
13. GENERAL PROVISIONS.
(a) Nothing in the Plan or in any instrument executed pursuant to the
Plan will confer upon any Participant any right to continue as an employee or
member of the Board of the Company or any of its subsidiaries or affect the
right of the Company to terminate the employment or membership on the Board of
any Participant at any time with or without cause.
(b) No shares of Common Stock will be issued or transferred pursuant to
an Incentive Award unless and until all then-applicable requirements imposed by
Federal and state securities and their laws, rules and regulations and by any
regulatory agencies having jurisdiction, and by any stock exchanges upon which
the Common Stock may be listed have been fully met. As a condition precedent to
the issuance of shares pursuant to the grant or exercise of an Incentive Award,
the Company may require the Participant to make any reasonable action to meet
such requirements.
(c) No Participant and no beneficiary or other person claiming under or
through such Participant will have any right, title or interest in or to any
shares of Common Stock allocated or reserved under the Plan or subject to any
Incentive Award except as to such shares of Common Stock, if any, that have been
issued or transferred to such Participant.
(d) The Company may make such provisions as it deems appropriate to
withhold any taxes the Company determines it is required to withhold in
connection with any Incentive Award.
(e) No Incentive Award and no right under the Plan, contingent or
otherwise, will be assignable or subject to any encumbrance, pledge or charge of
any nature except that, under such rules and regulations as the Company may
establish pursuant to the terms of the Plan, a beneficiary may be designated
with respect to an Incentive Award in the event of death of a Participant. If
such beneficiary is the executor or administrator of the estate of the
Participant, any rights with respect to such Incentive Award may be transferred
to the person or persons or entity (including a trust) entitled thereto under
the will of the holder of such Incentive Award.
(f) The Company may make a loan to a Participant who is a full-time
employee in connection with (i) the exercise of an Option in an amount not to
exceed the aggregate exercise price of the Option being exercised and the
grossed up amount of any Federal and state taxes payable in connection with such
exercise for the purpose of assisting such optionee to exercise such Option, and
(ii) the vesting of an Incentive Stock Award in an amount equal to the grossed
up amount of any Federal and state taxes payable as a result of such vesting.
Any such loan may be secured by shares of Common Stock or other collateral
deemed adequate by the Committee and will comply in all respects with all
applicable laws and regulations. The Committee may adopt policies regarding
eligibility for such loans, the maximum amounts thereof and any terms and
conditions not specified in the Plan upon which such loans will be made. In no
event will the interest rate be less than the minimum rate established by the
Internal Revenue Service for the purpose of the purchase and sale of property.
(g) The Committee may cancel, with the consent of the Participant, all
or a portion of any Option granted under the Plan to be conditioned upon the
granting to the Participant a new Option for the same or a different number of
shares as the Option surrendered, or may require such voluntary surrender as a
condition to a grant of a new Option to such Participant. Such Option shall be
exercisable at the price, during the period, and in accordance with any other
terms or conditions specified by the Committee at the time the new Option is
granted, all determined in accordance with the provisions of the Plan without
regard to the price, period of exercise, or any other terms or conditions of the
Option surrendered.
<PAGE> 8
(h) The forms of Options granted under the Plan may contain such other
provisions as the Committee may deem advisable. Without limiting the foregoing
and if so authorized by the Committee, the Company may, with the consent of the
Participant, and at any time or from time to time, cancel all or a portion of
any Option granted under the Plan then subject to exercise and discharge its
obligation in respect of the Option either by payment to the Participant of an
amount of cash equal to the excess, if any, of the Fair Market Value, at such
time, of the shares subject to the portion of the Option so canceled over the
aggregate purchase price specified in the Option covering such shares, or by
issuance or transfer to the Participant of shares of Common Stock with a Fair
Market Value, at such time, equal to any such excess, or by a combination of
cash and shares. Upon any such payment of cash or issuance of shares, (i) there
shall be charged against the aggregate limitations set forth in Section 3(a) a
number of shares equal to the number of shares so issued plus the number of
shares purchasable with the amount of any cash paid to the Participant on the
basis of the Fair Market Value as of the date of payment, and (ii) the number of
shares subject to the portion of the Option so canceled, less the number of
shares so charged against such limitations, shall thereafter be available for
other grants.
14. AMENDMENT AND TERMINATION.
(a) The Committee will have the power, in its discretion, to amend,
suspend or terminate the Plan at any time. No such amendment will, without
approval of the stockholders of the Company, except as provided in Section of
the Plan:
i. Change the class of persons eligible to receive Incentive
Awards under the Plan;
ii. Materially increase the benefits accruing to Eligible
Persons under the Plan;
iii. Increase the number of shares of Common Stock subject to
the Plan; or
iv. Transfer the administration of the Plan to any person who
is not a Disinterested Person under the Securities Exchange Act of 1934.
(b) The Committee may, with the consent of a Participant, make such
modifications in the terms and conditions of an Incentive Award agreement as it
deems advisable.
(c) No amendment, suspension or termination of the Plan will, without
the consent of the Participant, alter, terminate impair or adversely affect any
right or obligation under any Incentive Award previously granted under the Plan.
(d) An Option held by a person who was an Eligible Person at the time
such Option was granted will expire immediately if and when the Participant
ceases to be an Eligible Person, except as follows:
i. If the employment of a Participant or the service of an
Outside Director is terminated by the Company or any subsidiary thereof other
than for cause, for which the Company will be the sole judge, then the Options
will expire eight months thereafter unless by their terms they expire sooner.
During said period, the Options may be exercised in accordance with their terms,
but only to the extent exercisable on the date of termination of employment.
ii. If a Participant retires at normal retirement age or
retires with the consent of the Company or any subsidiary thereof at an earlier
date, the Options of the Participant will expire, subject to the provisions of
Section 9.(d) hereof, three years thereafter unless by their terms they expire
sooner. During said period, the Options may be exercised in accordance with
their terms, but only to the extent exercisable on the date of retirement.
iii. If the Participant dies or becomes permanently and
totally disabled while employed by the Company, the Options of the Participant
will expire, subject to the provision of Section 9.(d) hereof, three years
<PAGE> 9
after the date of death or permanent and total disability unless by their terms
they expire sooner. If the Participant dies or becomes permanently and totally
disabled within the eight months referred to in paragraph (i) above, the
Options will expire, subject to the provision of Section 9.(d) hereof, one year
after the date of death or permanent and total disability, unless by their
terms they expire sooner. If the Participant dies or becomes permanently and
totally disabled within the three-year period referred to in subparagraph (ii)
above, the Options will expire, subject to the provisions of Section 9.(d)
hereof, upon the later of three years after retirement or one year after the
date of death or permanent and total disability, unless by their terms they
expire sooner.
(e) The Committee may in its sole discretion determine, (i) with
respect to an Incentive Award, that any Participant who is on leave of absence
for any reason will be considered as still in the employ of the Company,
provided that rights to such Incentive Award during a leave of absence will be
limited to the extent to which such right was earned or vested at the
commencement of such leave of absence, or (ii) with respect to any Options of
any Participant who is retiring at normal retirement age or with the consent of
the Company or any subsidiary thereof at an earlier age, that the Options of
such Participant will accelerate and become fully exercisable on a date
specified by the Committee which is not later than the effective date of such
retirement.
15. EFFECTIVE DATE OF PLAN AND DURATION OF PLAN.
This Plan will become effective upon adoption by the Board and the
holders of a majority of the outstanding shares at a meeting of stockholders of
the Company. Unless previously terminated, the Plan will terminate on March 31,
2004.
<PAGE> 1
EXHIBIT 4.2
STATE OF ALABAMA )
JEFFERSON COUNTY )
AMENDMENT TO 1994 STOCK INCENTIVE PLAN
OF CAPSTONE CAPITAL CORPORATION
(FORMERLY CRESCENT CAPITAL TRUST, INC.)
The Capstone Capital Corporation 1994 Stock Incentive Plan,
which plan was adopted by the Board of Directors of Capstone Capital Corporation
on March 31, 1994, and approved by the Shareholders of Capstone Capital
Corporation on March 31, 1994 (the "Plan"), is hereby amended as follows:
16. Section 3(a) of the Plan shall be deleted in its entirety and there
shall be substituted in lieu thereof the following:
"(a) Subject to the provisions of Section 3(c) and Section 12 of
the Plan, the aggregate number of shares of Common Stock that may be
issued or transferred or exercised pursuant to Incentive Stock Awards
under the Plan will not exceed the greater of: (i) seven percent (7%)
of the Company's outstanding Common Stock, or (ii) one million sixty
three thousand six hundred (1,063,600) shares of Common Stock."
17. Except as set forth in Paragraph 1 above, all other provisions of
the Plan shall remain unchanged.
18. The changes set forth in this Amendment shall be and hereby are
incorporated in the Capstone Capital Corporation 1994 Stock Incentive Plan.
Date amendment adopted by Board of Directors: December 14, 1995.
Date amendment adopted by Shareholders: May 1, 1996.
<PAGE> 1
EXHIBIT 5
OPINION OF SIROTE & PERMUTT, P.C.
(SIROTE & PERMUTT, P.C. - LETTERHEAD]
February 11, 1997
Capstone Capital Corporation
1000 Urban Center Drive
Suite 630
Birmingham, Alabama 35242
Re: Registration Statement on Form S-8
Registration No. 33-
Gentlemen:
We have acted as your counsel in connection with the
preparation of a registration statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange Commission on February
11, 1997, for the registration of up to 1,063,600 shares of Common Stock, $.001
par value (the "Shares") of Capstone Capital Corporation (the "Company")
pursuant to the Company's 1994 Stock Incentive Plan.
In connection with this opinion, we have examined and relied
upon such records, documents and other instruments as in our judgment are
necessary and appropriate in order to express the opinions hereinafter set forth
and have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, and the conformity to original documents
of all documents submitted to us as certified or photostatic copies.
Based upon the foregoing, we are of the opinion that the
Shares, when issued and delivered in the manner and on the terms described in
the Registration Statement, will be duly authorized, validly issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and further consent to the reference to us under the
caption "Tax Matters" in the 10(a) prospectus included in the Registration
Statement.
Very truly yours,
/s/ SIROTE & PERMUTT, P.C.
SIROTE & PERMUTT, P.C.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF KPMG PEAT MARWICK, LLP, INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
CONSENT OF INDEPENDENT ACCOUNTANTS
The Stockholders and Board of Directors
Capstone Capital Corporation:
We consent to incorporation by reference in the Registration Statement on Form
S-8 of Capstone Capital corporation of our report dated Januaruy 25, 1996,
relating to the consolidated balance sheets of Capstone Capital Corporation and
subsidiaries as of December 31, 1995 and 1994, and the related consolidated
statements of income, stockholders' equity, and cash flows for the year ended
December 31, 1995, and for the period from June 30, 1994 (inception) to December
31, 1994, which report appears in the December 31, 1995, annual report on Form
10-K of Capstone Capital Corporation.
KPMG PEAT MARWICK LLP
Birmingham, Alabama
February 10, 1997
