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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 24, 1999
REGISTRATION NO. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CAPITAL HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO 34-1588902
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
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5520 MONROE STREET
SYLVANIA, OHIO 43560
(419) 885-7379
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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JOHN S. SZUCH, CHAIRMAN AND CEO
CAPITAL HOLDINGS, INC.
5520 MONROE STREET
SYLVANIA, OHIO 43560
(419) 885-7379
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
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COPIES OF COMMUNICATIONS TO:
MARTIN D. WERNER, ESQ.
WERNER & BLANK CO., L.P.A.
7205 WEST CENTRAL AVENUE
TOLEDO, OHIO 43617
PHONE: (419) 841-8051
FAX: (419) 841-8380
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this registration statement
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEES
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TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE REGISTERED AMOUNT TO BE REGISTERED OFFERING PRICE PER SHARE OFFERING PRICE AMOUNT OF REGISTRATION FEE
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Common Stock, no par value. 900,000 $26.00 $23,400,000 $6,600
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Total.....................
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(1) Estimated solely for the purpose of computing the registration fee based
upon the average of the high and low prices of the common stock, no par value of
Capital Holdings as reported on the Over-the-Counter Electronic Bulletin Board
on August 16, 1999, in accordance with Rule 457(c) of the General Rules and
Regulations under the Securities Act of 1933, as amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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Prospectus
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Subject to Completion Dated ________, 1999
CAPITAL HOLDINGS, INC. [LOGO]
Up to 900,000 Shares of Common Stock
$25.00 per share
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We are offering up to 900,000 shares of common stock in this rights
offering to stockholders who owned common stock as of ____________, 1999. This
is called the rights offering and is made with the following conditions:
- You will receive, at no cost, a right to buy 0.14 share of common
stock for every share of common stock that you owned on
____________, 1999 at a price of $25.00 per share.
- We will not issue fractional rights, and we will not pay cash in
place of rights or fractional shares. Your subscription rights are
not transferable and the rights will not be listed for trading on
any stock exchange.
- The subscription rights are exercisable beginning on the date of
this prospectus and continuing until 5:00 p.m., Eastern time, on
November 15, 1999. If you want to participate in the rights
offering, you must submit your subscription documents to us before
that deadline or to your broker or bank at least 10 days before
that deadline.
We may offer any unsubscribed shares to the general public at the same
price of $25.00 per share. This is called the community offering. If you want to
participate in the community offering, you must submit your subscription
documents to us before December 1, 1999 or later, if we extend the date, or to
your broker or bank at least 10 days before that deadline.
Both the rights offering and the community offering are subject to the
following further conditions:
- We reserve the right to cancel the rights offering and the
community offering at any time before the expiration date.
- Subscriptions are irrevocable once we receive them, unless we
amend this offering.
- There is no minimum number of shares that we must sell in order to
complete the rights offering or the community offering.
- Stockholders who do not participate in the rights offering will
continue to own the same number of shares, but may own a smaller
percentage of the total shares outstanding to the extent that
other stockholders participate in the rights offering or stock is
sold in the community offering.
Our common stock is quoted on the Over-The-Counter Electronic Bulletin
Board under the symbol "CLHD."
INVESTING IN OUR SECURITIES INVOLVES RISK. SEE "RISK FACTORS" BEGINNING
ON PAGE 8.
NONE OF THE SECURITIES OFFERED BY THIS PROSPECTUS ARE DEPOSITS OR
ACCOUNTS. THEY ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENTAL AGENCY.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR
DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS ________, 1999
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The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
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TABLE OF CONTENTS
Prospectus Summary.......................................................4
Risk Factors.............................................................8
Use of Proceeds.........................................................11
Where You Can Find More Information.....................................11
Selected Consolidated Financial Data....................................13
The Offering............................................................14
Federal Income Tax Considerations.......................................18
Plan of Distribution....................................................20
Legal Matters...........................................................20
Experts.................................................................20
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PROSPECTUS SUMMARY
This section summarizes the information contained in this prospectus.
You should read the following summary together with the information set forth
under the heading "Risk Factors."
We use the term "we" or "CHI" to refer to Capital Holdings, Inc., a
business corporation organized under Ohio law. We use the term "the Bank" to
refer to Capital Bank, N.A., a commercial bank organized under the laws of the
United States. In some cases, a reference to "we" or "CHI" will include the
Bank, since it is our wholly owned subsidiary.
CAPITAL HOLDINGS, INC.
We are a one-bank holding company registered under the Bank Holding
Company Act of 1956. We were formed in July 1988 to own and organize our wholly
owned subsidiary, the Bank. We are a full-service commercial bank providing the
following services to our customers:
- savings accounts and checking accounts;
- money market accounts;
- certificates of deposits;
- sweep accounts;
- personal line credit services;
- credit cards;
- and commercial, residential and real estate loans and other
banking services.
Our continued commitment to customer satisfaction has resulted in our
ninth straight year of growth and profitability, fueled by a strong loan
portfolio, excellent overhead control and advances in technology. For the year
ended December 31, 1998, we ranked among the top six percent of all banks in the
country in total assets. Since 1989, we have focused our business primarily on:
- corporate, executive and professional customers;
- pursuing a deposit gathering strategy of offering money market
checking and savings accounts;
- serving small to mid-sized businesses, professionals and their
families; and
- offering certificates of deposits at attractive rates to mid-sized to
large depositors with an emphasis on minimizing the operating costs
of obtaining these deposits.
We have experienced significant asset growth and achieved continuing
profitability:
- Total assets increased to $802 million for the year ended
December 31, 1998 from $670 million for the same period in 1997
and $560 million for the same period in 1996. At June 30, 1999,
our total assets increased 11.07% from December 31, 1998 to $890
million.
- Net income increased to $7.9 million ($1.30 per share -- diluted)
for the year ended December 31, 1998 from $6.8 million ($1.14 per
share -- diluted) for the same period in 1997 and $5.7 million
($0.98 per share -- diluted) for the same period in 1996. For the
six months ended June 30, 1999, our net income was $4.4 million
($0.70 per share - diluted) as compared to $3.7 million ($0.61 per
share - diluted) for the six months ended June 30, 1998.
- For the year ended December 31, 1998 our loan portfolio grew by
23.3%, or $109.3 million, as compared to December 31, 1997, and
increased by 14.47%, or $83.7 million at June 30, 1999 as compared
to December 31, 1998.
Our principal executive offices are located at 5520 Monroe Street,
Sylvania, Ohio. Our main telephone number is (419) 885-7379 or (800) 366-5580.
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THE OFFERING
The offering................................. This offering consists of both a
rights offering and, to the
extent any shares offered by
this prospectus remain
unsubscribed, a community
offering.
Offering price............................... $25.00 per share.
Rights Offering:
Eligible stockholders............... You are eligible to purchase
stock in the rights offering if
you owned shares of our common
stock on ____________, 1999.
Subscription rights................. If you are an eligible
stockholder, you will have the
right to purchase a 0.14 share
of our common stock for every
share of common stock you owned
as of ____________, 1999. There
is no minimum amount of shares
you must purchase using your
subscription rights.
When determining the number of
shares we will issue, multiply
the number of shares you own by
0.14 and round down to the
nearest whole number. For
example, if you own 125 shares,
you may subscribe for 17 shares
(125 shares x 0.14 = 17.5
shares, rounded down to 17
shares, the nearest whole
number).
Non-transferability of rights....... Your subscription rights are not
transferable. Shares issued upon
exercise of your subscription
rights will be issued in the
same record holder's name.
Persons wishing to exercise
rights for the benefit of others.... Brokers, banks, trustees, and
other individuals or entities
that hold common stock for the
account of others may, if
authorized by the beneficial
owner, complete the subscription
agreement and submit it to us
with the proper payment.
Expiration of the rights offering... The rights offering will expire
at November 15, 1999, at 5:00
p.m., Eastern time. After the
expiration date, you will no
longer be able to purchase
shares through the exercise of
your subscription rights.
However, you will be able to
subscribe for shares in the
community offering.
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Community Offering:
Community offering ................. We may offer to the general
public shares that have not been
subscribed for, if any remain.
If you wish to participate in
the community offering, you must
purchase at least 400 shares.
Shares available.................... We will first fill all
subscriptions received in the
rights offering. Any remaining
shares may then be offered to
the public in the community
offering, including our current
stockholders who want to
purchase additional shares.
Expiration of the community offering The community offering will
expire at the earlier of:
- a date determined by the
board of directors; or
- December 1, 1999 unless
extended by us but not later
than January 31, 2000.
Subscription Procedures...................... To subscribe for shares in the
offering, you should carefully
complete and sign the
subscription agreement. If you
are an existing stockholder
please indicate the number of
shares you are purchasing in the
rights offering and indicate any
additional shares you wish to
purchase in the community
offering.
Forward your completed
subscription agreement to our
main office, which address
appears below. Be sure to
include a check or money order
for the full amount of your
subscription price. Checks and
money orders will not be cashed
until we accept your
subscription.
If your subscription is not
completely filled, we will send
you a check for the difference.
No interest will be paid on
returned subscription funds.
YOUR SUBSCRIPTION IS IRREVOCABLE
AFTER YOU SUBMIT THE
SUBSCRIPTION DOCUMENTS.
Submit subscription agreements............... Deliver subscription
agreements to:
By mail:
Capital Holdings, Inc.
P.O. Box 327
Toledo, Ohio 43691-9978
ATTN: __________________
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By hand:
Capital Holdings, Inc.
5520 Monroe Street
Sylvania, Ohio 43560
ATTN: __________________
By overnight courier:
Capital Holdings, Inc.
5520 Monroe Street
Sylvania, Ohio 43560
ATTN: __________________
Ownership Limits............................. Federal law prohibits you from
directly or indirectly, or
through or in concert with one
or more persons, acquiring
"control" of CHI (defined to
include ownership, control or
the power to vote 10% or more of
a class of CHI voting
securities) unless you provide
at least 60 days' prior written
notice to the Federal Reserve
Board. A person is deemed to
have acquired shares that he or
she has the right to acquire
through the exercise of options,
warrants and rights. Therefore,
any subscriptions in this
offering that are subject to
such Federal laws may, in our
discretion, be deemed void in
their entirety or in part, and
not accepted by us.
Termination.................................. We may cancel the offering at
any time, in which case we will
return your subscription payment
without interest.
Stock certificates........................... Certificates representing shares
of the common stock will be
delivered to subscribers as soon
as practicable after the
completion of the offering. We
expect that this may take two
weeks or longer, due to the need
to allow checks to clear.
Risk Factors................................. An investment in shares of our
common stock involves a high
degree of risk. Please see Risk
Factors" beginning on page 8.
Federal Income Tax Consequences.............. Your receipt or exercise of the
subscription rights should not
be treated as a taxable event
for United States federal income
tax purposes, but may have other
tax effects.
Questions.................................... If you have any questions about
the rights offering, including
questions about subscription
procedures and requests for
additional copies of this
prospectus or other documents,
please contact
__________________, our
_____________________, at (419)
885-7379 or (800) 366-5580.
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RISK FACTORS
In addition to the other information in this prospectus and the
information we incorporate by reference, you should consider carefully the
following factors in evaluating CHI and our business before purchasing our
common stock.
RISKS RELATED TO THE OFFERING:
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IF YOU DO NOT EXERCISE YOUR FULL SUBSCRIPTION RIGHTS, YOUR PERCENTAGE OWNERSHIP
AND VOTING RIGHTS OF CHI WILL DECREASE.
If you choose not to exercise your subscription rights in full, your
relative ownership interests in CHI will be diluted to the extent other
stockholders exercise their subscription rights. Your voting rights and
percentage interest in any of CHI's net earnings may also be diluted if you
don't exercise your rights. We are unable to determine the number of shares, if
any, that will be sold in the offering.
THE OFFERING PRICE WAS DETERMINED BY OUR BOARD OF DIRECTORS AND BEARS NO
RELATIONSHIP TO THE VALUE OF OUR ASSETS, FINANCIAL CONDITION OR OTHER
ESTABLISHED CRITERIA FOR VALUE.
Our board of directors determined the offering after considering a
number of factors, including:
- book value of our assets;
- past operations;
- cash flow;
- earnings;
- our overall financial condition; and
- our future prospects.
In addition, the board took in account the results of our recent
independent appraisal. The board did not assign weighting to any one factor in
setting the offering price. After the date of this prospectus, our common stock
may trade at prices above or below the offering price.
AFTER YOU EXERCISE YOUR SUBSCRIPTION RIGHTS, YOU COULD SUFFER A LOSS IF THE
TRADING PRICE OF OUR COMMON STOCK DECLINES.
The public trading market price of our common stock may decline before
the subscription rights expire. If you exercise your subscription rights and,
afterwards, the public trading market price of our common stock decreases below
$25.00, then you will have committed to buy shares of common stock at a price
above the prevailing market price. Once you have exercised your subscription
rights, you may not revoke your exercise unless we amend the offering. Moreover,
you may be unable to sell your shares of common stock at a price equal to or
greater than the offering price.
YOUR PARTICIPATION IN THE OFFERING IS NOT ASSURED BECAUSE WE MAY TERMINATE THE
OFFERING AT ANY TIME.
Once you exercise your subscription rights, you may not revoke the
exercise for any reason unless we amend the offering. We may terminate the
offering at any time. If we decide to terminate the offering, we will not have
any obligation with respect to the subscription rights except to return, without
interest, any subscription payments.
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RISKS RELATED TO CHI:
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WE MAY NOT BE ABLE TO CONTINUE TO GROW THE BANK'S ASSETS AND EARNINGS AS FAST AS
WE HAVE SINCE WE OPENED THE BANK IN 1989 BECAUSE OF OUR LIMITED MARKET AREA.
The Bank has experienced rapid growth in its assets and earnings since
it opened for business in 1989. In the future it may be more difficult to
continue this rate of growth for a number of reasons, including the fact that
the Bank already serves a significant percentage of its market and further
penetration of the remaining market will be more difficult.
INVESTORS MAY FIND IT DIFFICULT TO TRADE OUR COMMON STOCK ON THE
OVER-THE-COUNTER ELECTRONIC BULLETIN BOARD.
Persons who purchase our common stock may be unable to readily sell the
common stock. Our common stock trades only on the Over-the-Counter Electronic
Bulletin Board and has been trading with limited volume. We are not currently
listed on the Nasdaq National Market or any national stock exchange.
Furthermore, because our common stock is not listed on the Nasdaq National
Market, trading in our common stock is also limited by SEC rules. There can be
no assurance that we will list our securities on a national securities exchange
at anytime in the future.
WE FACE INTENSE AND SIGNIFICANT COMPETITION FROM MANY MULTI-BANK HOLDING
COMPANIES WHICH MAY AFFECT OUR ABILITY TO ATTRACT DEPOSITS, MAKE LOANS OR
DEVELOP OTHER LINES OF BUSINESS.
Our ability to maintain a history of strong financial performance and
return on investment to stockholders will depend in part on our ability to
expand our available financial services. In addition to the challenge of
attracting and retaining customers for traditional banking services, our
competitors now include securities dealers, brokers, mortgage bankers,
investment advisors and finance and insurance companies who seek to offer
one-stop financial services to their customers that may include services that
banks have not been able or allowed to offer to their customers in the past. The
increasingly competitive environment is a result primarily of changes in
regulation, changes in technology and product delivery systems and the
accelerating pace of consolidation among financial services providers. If we
fail to adequately address each of the competitive pressures in the banking
industry, our financial condition and results of operations could be adversely
affected.
CHANGES IN GOVERNMENTAL LAWS AND REGULATION AND POLICY COULD LIMIT OUR FUTURE
GROWTH.
Any changes to federal banking laws and regulations may negatively
impact our ability to expand services and to increase the value of our business.
We are subject to extensive state and federal regulation, supervision, and
legislation that govern almost all aspects of our operations. These laws may
change from time to time and are primarily intended for the protection of
consumers, depositors and the deposit insurance funds. In addition, CHI's
earnings are affected by the monetary policies of the Federal Reserve Board.
These policies, which include regulating the national supply of bank reserves
and bank credit, can have a major effect upon the source and cost of funds and
the rates of return earned on loans and investments. The Federal Reserve
influences the size and distribution of bank reserves through its open market
operations and changes in cash reserve requirements against member bank
deposits. We cannot predict what effect any presently contemplated or future
changes in the laws or regulations or their interpretations would have on us,
but such changes could be materially adverse to our financial performance.
ANY CHANGES IN INTEREST RATES MAY ADVERSELY AFFECT OUR EARNINGS AND FINANCIAL
CONDITION.
Changes in interest rates affect our operating performance and
financial condition in diverse ways. Our profitability depends in substantial
part on our "net interest spread," which is the difference between the rates we
receive on loans and investments and the rates we pay for deposits and other
sources of funds. Our net interest spread will depend on many factors that are
partly or entirely outside our control, including competition, federal economic,
monetary and fiscal policies, and economic conditions generally. Historically,
net interest spreads for other financial institutions have widened and narrowed
in response to these and other factors, which are often collectively referred to
as "interest rate risk."
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WE DEPEND ON OUR ABILITY TO ATTRACT AND RETAIN KEY PERSONNEL.
Our success depends upon the continued service of our senior management
team and upon our ability to attract and retain qualified financial services
personnel. Competition for qualified employees is intense. In our experience, it
can take a significant period of time to identify and hire personnel with the
combination of skills and attributes required in carrying out our strategy. If
we lose the services of our key personnel, or are unable to attract additional
qualified personnel, our business, financial condition, results of operations
and cash flows could be materially adversely affected.
OUR ABILITY TO PAY DIVIDENDS IS SUBJECT TO REGULATORY LIMITATIONS AND THERE IS
NO ASSURANCE THAT WE WILL CONTINUE TO PAY DIVIDENDS.
Although we have paid dividends on our common stock in the past, there
is no assurance that we may or will continue to pay dividends in the future.
Dividends are subject to determination and declaration by our board of
directors, which takes into account many factors. The declaration of dividends
by us on our common stock is subject to the discretion of our board and to
applicable federal regulatory limitations. We cannot guarantee that dividends
will not be reduced or eliminated in future periods. Our ability to pay
dividends on our common stock depends on our receipt of dividends from the Bank.
The Bank is a national bank and, as such, is subject to restrictions and
limitations in the amount and timing of the dividends it may pay to us.
WE HAVE IMPLEMENTED ANTI-TAKEOVER PROVISIONS, ANY OF WHICH MAY DISCOURAGE
TAKEOVER ATTEMPTS AND COULD REDUCE THE MARKET PRICE OF OUR COMMON STOCK.
Provisions of our Articles of Incorporation and Bylaws and Ohio law
could have the effect of discouraging takeover attempts which certain
stockholders might deem to be in their interest. For example, our board of
directors is divided into three classes and each class is elected for a
three-year term. This provision could make it more difficult for our
stockholders to remove members of our board of directors and may also make it
more difficult for a third party to acquire us, even if the acquisition would be
beneficial to you.
THE FAILURE OF OUR COMPUTER SYSTEMS OR THOSE OF OUR KEY VENDORS, SUPPLIERS AND
CUSTOMERS TO BE YEAR 2000 COMPLIANT COULD NEGATIVELY IMPACT OUR BUSINESS.
We are dependent, to a substantial degree, upon the proper functioning
of our computer systems as well as those of our vendors, suppliers and
customers. Most of our information and data is provided electronically and is
dependent on information systems and telecommunications. In addition, most of
our products and services rely on information and data provided by others.
If:
- our computer systems or those of our vendors and suppliers cannot
provide accurate information in a timely manner;
- we are unable to accurately and timely process such information;
- our customers are unable to receive and use our products and
services; or
- a general disruption of our telecommunications and utilities
occurs as a result of the Year 2000 problem,
we could suffer financial loss and potential legal liability.
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USE OF PROCEEDS
We plan to use the net proceeds from this offering to further
capitalize Capital Bank, N.A., for working capital and general corporate
purposes.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference facilities at 450 Fifth Street, N.W., Washington D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference room. The SEC maintains an Internet site that contains reports,
proxy and information statements, and other information regarding issuers that
file electronically with the SEC and the site address is http:\\www.sec.gov.
The SEC allows us to "incorporate by reference" the information we have
filed with them, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered to be part of this prospectus. We incorporate by reference all
documents listed below, all filings filed pursuant to the Exchange Act of 1934
after the date of the filing of this registration statement and prior to
effectiveness and any future filings made with the SEC pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until the
rights offering is terminated.
The documents we incorporate by reference are:
(1) Our Annual Report on Form 10-K for the year ended December 31,
1998;
(2) Our Quarterly Report on Form 10-Q for the quarter ended March 31,
1999;
(3) Our Quarterly Report on Form 10-Q for the quarter ended June 30,
1999;
(4) Our Current Report on Form 8-K dated July 25, 1999 and filed with
the Commission on August 4, 1999; and
(5) the description of our common stock contained in our registration
statement on Form 8-A filed with the SEC on April 30, 1993.
You may get copies of any of the incorporated documents (excluding
exhibits, unless the exhibits are specifically incorporated) at no charge to you
by writing __________________, our _____________________, at 5520 Monroe Street,
Sylvania, Ohio 43560 or by calling (419) 885-7379 or (800) 366-5580.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the information in this prospectus, including the above risk
factors section, contains "forward-looking statements" that involve risks and
uncertainties. "Forward-looking statements" are statements that relate to future
events or our future financial performance. In many cases, you can identify
forward-looking statements by terminology such as "may," "will," "should,"
"expects," "plans," "anticipates," "believes," "estimates," "predicts,"
"potential," or "continue," or the negative of such terms and other comparable
terminology.
You should not place undue reliance on these statements, which speak
only as of the date that they were made. Our actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including the risks faced by us described below and
elsewhere in this prospectus. We do not undertake any obligation to publicly
update any revisions to forward-looking statements after completion of this
offering to reflect later events or circumstances or to reflect the occurrence
of unanticipated events.
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We believe it is important to communicate our expectations to our
investors. However, there may be events in the future that we are not able to
predict accurately or over which we have no control. The risk factors listed
above, as well as any cautionary language in this prospectus, provide examples
of risks, uncertainties and events that may cause our actual results to differ
materially from the expectations we describe in our forward-looking statements.
Before you invest in our common stock, you should be aware that the occurrence
of the events described in these risk factors and elsewhere in this prospectus
could have a material adverse effect on our business, operating results and
financial condition.
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SELECTED CONSOLIDATED FINANCIAL DATA
The following table presents our selected consolidated financial data as of
and for each of the years in the period ended December 31, 1998, 1997, 1996,
1995 and 1994, and as of and for each of the six month interim periods ended
June 30, 1999 and 1998. The information has been derived from our consolidated
financial statements, including our audited consolidated financial statements
incorporated in this prospectus by reference to our 1998 Form 10-K, and should
be read in conjunction with the notes to those financial statements. See "WHERE
YOU CAN FIND MORE INFORMATION."
Historical results are not necessarily indicative of results to be expected
for any future period.
SELECTED FINANCIAL DATA SCHEDULE
(Dollars in thousands except per share amounts)
As of and for the six months
ended June 30 As of and for the Year-Ended December 31
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CONSOLIDATED RESULTS OF 1999 1998 1998 1997 1996 1995 1994
OPERATIONS:
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Interest Income $ 30,944 $ 26,726 $ 55,568 $ 47,593 $ 39,639 $ 34,752 $ 26,330
Interest Expense $ 17,090 $ 15,255 31,751 27,026 22,305 19,964 13,188
- ---------------------------------------------------------------------------------------------------------------------------------
Net Interest Income $ 13,854 $ 11,471 23,817 20,567 17,334 14,788 13,142
Provision for Credit Losses $ 1,125 $ 510 1,230 1,005 980 850 993
- ---------------------------------------------------------------------------------------------------------------------------------
Net Interest Income After $ 12,729 $ 10,961 22,587 19,562 16,354 13,938 12,149
Provision for Credit Losses
Other Income $ 934 $ 692 1,681 1,205 874 753 636
Other Expense $ 7,202 $ 6,094 12,534 10,752 8,821 7,590 6,860
- ---------------------------------------------------------------------------------------------------------------------------------
Income Before Income Taxes $ 6,460 $ 5,558 11,734 10,015 8,407 7,101 5,925
Income Taxes $ 2,100 $ 1,840 3,805 3,234 2,681 2,256 1,844
- ---------------------------------------------------------------------------------------------------------------------------------
Net Income $ 4,360 $ 3,718 $ 7,929 $ 6,781 $ 5,726 $ 4,845 $ 4,081
CONSOLIDATED BALANCE SHEET
DATA:
Total Assets $ 890,381 $ 737,418 $ 801,628 $ 669,540 $ 559,726 $ 483,170 $ 417,832
Cash and Cash Equivalents $ 19,030 $ 26,751 29,263 23,292 13,958 13,048 10,847
Securities Available for Sale $ 197,028 $ 178,682 184,583 167,521 159,209 140,627 77,982
Securities Held to Maturity -- -- -- -- -- -- 71,920
Loans, Net of Deferred Loan Fees $ 662,081 $ 521,494 578,370 469,036 380,160 324,788 251,184
Allowance for Credit Losses $ 9,279 $ 7,423 8,146 6,947 5,942 4,960 4,110
Deposits $ 719,675 $ 625,681 663,066 579,661 470,743 407,622 357,533
Shareholders' Equity $ 58,240 $ 53,790 58,422 50,547 41,590 36,136 27,565
PER SHARE DATA(1):
Net Income:
Basic 0.72 0.62 1.32 1.19 1.01 .86 .73
Diluted 0.70 0.61 1.30 1.14 .98 .84 .71
Book Value at Period End 9.58 8.96 9.66 8.46 7.31 6.39 4.92
Average Shares Outstanding:
Basic 6,067,814 5,998,974 6,007,458 5,699,712 5,652,834 5,607,051 5,561,568
Diluted 6,247,282 6,080,442 6,110,595 5,927,454 5,842,965 5,783,037 5,730,930
(1) Capital Holdings, Inc. adopted Financial Accounting Standards No. 128,
Earnings Per Share, effective December 31, 1997. Basic per share amounts
are based upon weighted-average number of common shares outstanding for
each period, after giving retroactive effect to a 3-for-1 stock split
effective June 30, 1999 and a 6% stock dividend issued during 1996, 1995
and 1994. Diluted per share amounts are based upon weighted-average number
of common shares outstanding including dilutive effects of options,
warrants and convertible securities for each period, after giving
retroactive effect to a 3-for-1 stock split effective June 30, 1999 and a
6% stock dividend issued during 1996, 1995 and 1994. All earnings per share
amounts for all periods have been restated to conform to the Statement 128
requirements. Book value at period end per share amounts are based upon
period end shares outstanding for each period.
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THE OFFERING
THE RIGHTS OFFERING
We are offering our stockholders the right to subscribe for and
purchase up to an aggregate of 900,000 shares of common stock at $25.00 per
share. Only those stockholders who owned common stock on ____________, 1999 will
receive subscription rights to purchase stock in the rights offering.
Each subscription right provides you with the opportunity to purchase
0.14 share of common stock for every share of common stock you owned at the
close of business on ____________, 1999. In determining the number of shares of
common stock a stockholder will have the right to buy, we will round down to the
nearest whole number. We will not issue fractional subscription rights and we
will not pay cash in place of subscription rights or fractional shares.
THE COMMUNITY OFFERING
If there are any shares that are not subscribed for in the rights
offering, we may offer them to the public at $25.00 per share. This offering
will be made on the same terms as the rights offering, except that you will not
need to be a current stockholder in order to participate. You must subscribe for
at least 400 shares. We reserve the right to accept or reject, for any reason,
any subscription for shares tendered to us in the community offering. We may
also determine not to proceed with the community offering even if we have
conducted the rights offering.
If there is an oversubscription of shares in this community offering,
we will allocate the shares among you. We will be taking into account the
following factors:
- the amount of the subscription;
- our business relationship with the subscriber; and
- whether the subscriber is an existing stockholder.
It is our intention to encourage broad ownership of our stock among
persons who live or work in our primary market areas.
If you request and pay for more shares than we allocate to you, we will
refund your overpayment, without interest.
CERTIFICATES FOR SHARES
You will receive certificates representing the shares that you purchase
as soon as practicable after the closing of the offering.
EXPIRATION DATES
RIGHTS OFFERING
The rights offering will expire at 5:00 p.m., Eastern Time, on November
15, 1999. IF YOU DO NOT EXERCISE YOUR SUBSCRIPTION RIGHTS ON OR BEFORE THAT
TIME, YOUR SUBSCRIPTION RIGHTS WILL EXPIRE AND THEREFORE BE NULL AND VOID. ANY
SUBSCRIPTION AGREEMENT RECEIVED AFTER THAT TIME WILL BE TREATED AS A
SUBSCRIPTION IN THE COMMUNITY OFFERING AND WILL BE SUBJECT TO SHARE AVAILABILITY
AND OVERSUBSCRIPTION PROCEDURES IF NECESSARY.
We may reject any subscription agreement submitted in the rights
offering that we receive after 5:00 p.m. on the expiration date, regardless of
when the documents were originally mailed. Stockholders who wish to participate
in the rights offering should submit their subscription agreement to us by the
expiration date, or to their broker or bank at least 10 days before the
expiration date, to allow the broker or bank sufficient time to carry out those
instructions.
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COMMUNITY OFFERING
The community offering will commence at the same time as the rights
offering and will expire at the earlier of:
- a date selected by the board of directors; or
- December 1, 1999 unless extended by us, but no later than
January 31, 2000.
DETERMINATION OF OFFERING PRICE
Our board of directors determined the offering price after considering
the following factors:
- the book value of our assets;
- our past operations;
- our cash flow;
- our earnings;
- our overall financial condition; and
- our future prospects.
In addition, the board took in account the results of the most recent
report from our regularly scheduled independent appraisals. The board did not
consider any one factor to be more important than any other in determining the
offering price.
SUBSCRIPTION PROCEDURES
The following procedures should be followed by all persons purchasing
stock in the offering. To participate in the offering, you must submit a
subscription agreement for the appropriate offering, together with full payment
of the offering price for all your desired shares. Those who hold common stock
for the account of others, such as brokers, banks, trustees or depositories,
should notify the beneficial owners of those shares as soon as possible to
ascertain the beneficial owners' intentions and to obtain instructions with
respect to the rights offering.
RIGHTS OFFERING. A subscription agreement exercising rights under the
rights offering must be properly executed and received by us, together with full
payment for these shares, before 5:00 p.m., Eastern time, on November 15, 1999.
You should also indicate on the same form the number of shares you would like to
purchase in the community offering. You must enclose full payment for all shares
ordered when submitting the subscription agreement. If received late, the entire
number of shares ordered in the subscription agreement will be treated solely as
a subscription in the community offering.
COMMUNITY OFFERING. A subscription agreement for shares in the
community offering must be properly executed and received by us, together with
full payment for these shares, before 5:00 p.m., Eastern time, on December 1,
1999, unless we extend the expiration date.
Payment of the offering price must be made by cashier's check, personal
check or bank draft drawn upon a U.S. bank or money order, in all cases payable
to "Capital Holdings, Inc."
If you wish to pay by uncertified personal check, please note that your
check may take five business days or more to clear and, therefore, we may hold
the processing of your certificates for up to ten business days following the
closing of the offering. You are urged to arrange for payment by certified,
cashier's check or money order.
Deliver the subscription agreements and payments by mail, hand delivery
or overnight courier, as follows:
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By mail: By hand: By overnight courier:
-------- -------- ---------------------
Capital Holdings, Inc. Capital Holdings, Inc. Capital Holdings, Inc.
P.O. Box 327 5520 Monroe Street 5520 Monroe Street
Toledo, Ohio 43691-9978 Sylvania, Ohio 43560 Sylvania, Ohio 43560
Attention: _____________ Attention: _____________ Attention:____________
If you are an existing stockholder and do not indicate the number of
shares to be purchased or do not forward full payment of the offering price, you
will be deemed to have exercised your subscription rights only to the extent of
the payment received. If there are any remaining funds from your payment, we
will treat them as your payment toward a subscription in the community offering.
New investors will be deemed to have subscribed for the number of shares for
which payment is delivered.
The delivery method used for the subscription agreement and payment for
the related shares will be at your election and risk. If sent by mail, it is
recommended that your subscription agreement and payment be sent by registered
mail, properly insured, with return receipt requested, and that a sufficient
number of days be allowed to ensure delivery and clearance of payment prior to
the expiration date.
Our answers to all questions concerning the timeliness, validity, form
and eligibility of any subscription will be final and binding. We may, in our
sole discretion, waive any defect or irregularity, permit a defect or
irregularity to be corrected within any time as we may determine, or reject the
purported exercise of any right. Subscriptions are not deemed received or
accepted until all irregularities are waived or cured within the time that we
determine in our discretion. We have no duty to notify you of any defect or
irregularity in connection with the submission of your subscription agreement or
incur any liability for failure to give notification.
If you have any questions concerning the rights offering or these
subscription procedures, or if you would like additional copies of this
prospectus or other documents, please contact:
_____________________________. All others call toll free_______________.
NON-TRANSFERABILITY OF SUBSCRIPTION RIGHTS
Only you may exercise your subscription rights. You may not sell, give
away or otherwise transfer your subscription rights.
NO REVOCATION AFTER EXERCISE OF RIGHTS OR SUBSCRIPTION IN COMMUNITY OFFERING
After you exercise your subscription rights or subscribe for shares in
the community offering, you may not revoke that exercise or subscription unless
we amend the terms of this offering (as described below). You should not
exercise your subscription rights or submit a subscription in the community
offering unless you are certain that you wish to purchase shares of our common
stock.
AMENDMENT AND TERMINATION OF OFFERING
We reserve the right to amend the terms and conditions of this offering
at any time. If we make an amendment that we consider significant, we will:
- mail notice of the amendment to all stockholders who owned shares
of common stock on ____________, 1999;
- extend the expiration date of the offering by at least 14 days; and
- allow you at least 10 days to revoke any prior subscriptions,
in whole or in part.
In all other cases, subscriptions will be irrevocable.
We also reserve the right to terminate the rights offering at any time,
in our discretion, in which case all subscriptions will be canceled, and we will
return all subscription payments to subscribers. If we terminate
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the rights offering, we will also terminate the community offering. We may also
determine not to proceed with the community offering even if we have conducted
the rights offering.
Upon the occurrence of any change in or cancellation of this offering,
we will issue a press release to that effect, and we will file with the SEC a
post-effective amendment to the registration statement covering this prospectus.
SHARES OF COMMON STOCK OUTSTANDING AFTER THE OFFERING
Assuming we issue all of the 900,000 shares of common stock being
offered by this prospectus, we will then have approximately 6,979,771 shares of
common stock issued and outstanding. This would represent a 14.80% increase in
the number of outstanding shares of our common stock. If you are an existing
stockholder and you do not exercise your subscription rights, the percentage of
common stock that you hold could significantly decrease after the offering.
CERTAIN OWNERSHIP LIMITS AND REPORTING REQUIREMENTS
Federal law prohibits you from directly or indirectly, or through or in
concert with one or more persons, acquiring "control" of us (defined to include
ownership, control or the power to vote 10% or more of a class of our voting
securities) unless you provide at least 60 days' prior written notice to the
Federal Reserve Board. A person is deemed to have acquired shares that he or she
has the right to acquire through the exercise of options, warrants and rights.
Therefore, any subscriptions in this offering that are subject to such Federal
laws may, in our discretion, be deemed void in their entirety or in part, and
not accepted by us.
Any person or group that acquires direct or indirect beneficial
ownership of more than 5% of the outstanding shares of our common stock will be
subject to SEC reporting requirements under Section 13(d) or 13(g) of the
Securities Exchange Act of 1934. In addition, any person or group that acquires
direct or indirect beneficial ownership of more than 10% of the outstanding
shares of our common stock will be subject to further SEC reporting requirements
under Section 16(a) of the Exchange Act and may become liable under Section
16(b) of the Exchange Act for reimbursement of any "short-swing profits." Please
consult with your attorney to see if these rules will apply to you.
STATE AND FOREIGN SECURITIES LAWS
This offering is not being made in any state or foreign country in
which it is unlawful to do so, nor are we selling or accepting subscriptions
from holders who are residents of any such state or country. We may delay the
commencement of this offering in certain states or other jurisdictions in order
to comply with the securities law requirements of those states or other
jurisdictions. It is not anticipated that there will be any changes in the terms
of the rights offering. We may decline, in our sole discretion, to make
modifications to the terms of the offering requested by certain states or other
jurisdictions, in which case stockholders who live in those states or
jurisdictions will not be eligible to participate in the offering.
NO RECOMMENDATIONS
We are not making any recommendation as to whether or not you should
exercise your subscription rights. You should make your decision based on your
own assessment of your best interests.
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FEDERAL INCOME TAX CONSIDERATIONS
The following summarizes the material federal income tax consequences
of the rights offering. This summary is based on current law, which is subject
to change at any time, possibly with retroactive effect. This summary is not a
complete discussion of all federal income tax consequences of the rights
offering, and, in particular, may not address federal income tax consequences
applicable to stockholders subject to special treatment under federal income tax
law. In addition, this summary does not address the tax consequences of the
rights offering under applicable state, local or foreign tax laws. This
discussion assumes that your shares of CHI stock and the subscription rights and
shares issued to you pursuant to the rights offering constitute capital assets.
Receipt and exercise of the subscription rights distributed pursuant to
the rights offering is intended to be nontaxable to stockholders, and the
following summary assumes you will qualify for such nontaxable treatment. We
have not sought, nor do we intend to seek, any ruling from the IRS or an opinion
of counsel related to the tax matters described below. This discussion is
included for your general information only. You should consult your tax advisor
to determine the tax consequences to you of the rights offering in light of your
particular circumstances, including any state, local and foreign tax
consequences.
TAXATION OF STOCKHOLDERS
Receipt of a subscription right: You will not recognize any gain or
other income upon receipt of a subscription right.
Tax basis of subscription rights: Your tax basis in each subscription
right will depend on whether you exercise the subscription right or allow the
subscription right to expire.
If you exercise a subscription right, your tax basis in the
subscription right will be determined by allocating the tax basis of your CHI
stock on which the subscription right is distributed between the CHI stock and
the subscription right, in proportion to their relative fair market values on
the date of distribution of the subscription right. However, if the fair market
value of your subscription rights is less than 15% of the fair market value of
your existing shares of CHI stock, then the tax basis of each subscription right
will be deemed to be zero, unless you elect, by attaching an election statement
to your federal income tax return for 1999, to allocate tax basis to your
subscription rights.
If you allow a subscription right to expire, it will be treated as
having no tax basis.
Holding period of subscription rights: Your holding period for a
subscription right will include your holding period for the shares of common
stock upon which the subscription right is issued.
Expiration of subscription rights: You will not recognize any loss upon
the expiration of a subscription right.
Exercise of subscription rights: You generally will not recognize a
gain or loss on the exercise of a subscription right. The tax basis of any share
of common stock that you purchase through the rights offering will be equal to
the sum of your tax basis, if any, in the subscription right exercised and the
price paid for the share. The holding period of the shares of common stock
purchased through the rights offering will begin on the date that you exercise
your subscription rights.
If treated as a taxable distribution: If, contrary to CHI's intent, the
rights offering does not qualify as nontaxable, you would be treated as
receiving a taxable distribution equal to the fair market value of the
subscription rights on their distribution date. The distribution would be taxed
as a dividend to the extent made out of our current or accumulated earnings and
profits; and any excess would be treated first as a return of your basis
(investment) in your CHI stock and then as a capital gain. You would have a tax
basis in the rights equal to the fair market value of the rights on the date of
the rights distribution and your holding period in the rights would begin on the
date of distribution of the rights. Expiration of the subscription rights would
result in a capital loss. You generally will not recognize gain or loss on the
exercise of a subscription right. The tax basis of any share of common stock
that you
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purchase through the rights offering will be equal to the sum of your tax basis,
if any, in the subscription right exercised and the price paid for the share.
The holding period of the shares of common stock purchased through the rights
offering will begin on the date that you exercise your subscription rights.
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PLAN OF DISTRIBUTION
On or about October 15, 1999, we will commence the rights offering by
distributing the subscription rights and copies of this prospectus, together
with a copy of subscription agreements, to individuals who owned shares of our
common stock on ____________, 1999. If you wish to exercise your subscription
rights and purchase shares of common stock, you should complete the subscription
agreement and return it, with payment for the shares, to us. If you have any
questions, you should contact: _______________________, at the telephone number
and address on page __. See "The Offering - Subscription Procedures."
At the same time, we will commence the community offering by
distributing copies of this prospectus and the community offering subscription
agreements to interested investors who are not already our stockholders. Persons
who wish to purchase stock in the community offering must complete the
subscription agreement and return it, with the required payment for the shares,
to us. See "The Offering - Subscription Procedures."
We will hold all subscription agreements received in the offering and
will be responsible for processing refunds, in case of cancellation of the
offering, to stockholders. Our transfer agent, Registrar and Transfer Co., will
be responsible for delivering stock certificates at the conclusion of the
offering. We will pay all fees and expenses of our transfer agent in connection
with the offering. You are responsible for paying any other commissions, fees,
taxes or other expenses incurred in connection with the purchase of stock in
this offering.
LEGAL MATTERS
Werner & Blank Co., L.P.A., will deliver an opinion to us about the
validity of the issuance of shares of our common stock in this offering.
EXPERTS
The audited consolidated financial statements incorporated by reference
in this registration statement from our annual report on Form 10-K for the year
ended December 31, 1998 have been audited by Ernst & Young LLP and have been
included in reliance on their report given on their authority as experts in
accounting and auditing.
------------------------------------------------------------
------------------------------------------------------------
- - WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION THAT DIFFERS
FROM THE INFORMATION IN THIS PROSPECTUS. IF YOU RECEIVE ANY DIFFERENT
INFORMATION, YOU SHOULD NOT RELY ON IT.
- - THE DELIVERY OF THIS PROSPECTUS SHALL NOT, UNDER ANY CIRCUMSTANCES, CREATE
AN IMPLICATION THAT CAPITAL HOLDINGS, INC. IS OPERATING UNDER THE SAME
CONDITIONS THAT IT WAS OPERATING UNDER WHEN THIS PROSPECTUS WAS WRITTEN.
DO NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT
AT ANY TIME PAST THE DATE INDICATED.
- - THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION
OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT
RELATES.
- - THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION
OF AN OFFER TO BUY, THE SECURITIES TO WHICH IT RELATES IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemized statement of the fees and expenses (all
but the SEC fees are estimates) in connection with the issuance and distribution
of the shares of common stock being registered hereunder. All such fees and
expenses shall be borne by Capital Holdings, Inc.
SEC Registration Fees $ 6,600
Blue Sky fees and expenses 5,000
Printing and engraving expenses 25,000
Transfer agent and registrar fee and expenses 5,000
Legal fees and expenses 75,000
Accounting fees and expenses 5,000
Miscellaneous 3,400
--------
Total $125,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1701.13(E) of the Ohio Revised Code provides that a corporation
may indemnify or agree to 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, trustee, officer, employee, member, manager, or agent of another
corporation, domestic or foreign, nonprofit or for profit, a limited liability
company, or a partnership, joint venture, trust, or other enterprise, against
expenses, including attorney's 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, if he had
no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit, or proceeding by judgment, order,
settlement, or 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 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, that he had reasonable cause to believe that his conduct was
unlawful. Section 1701.13(E)(2) further specifies that a corporation may
indemnify or agree to 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, trustee, officer, employee, member, manager, or agent of another
corporation, domestic or foreign, nonprofit or for profit, a limited liability
company, or a partnership, joint venture, trust, or other enterprise, against
expenses, including attorney's 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, except that no indemnification shall be made
in respect of (a) any claim, issue, or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the corporation unless, and only to the extent, that the court of
common pleas or the court in which such action or suit was brought determines,
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 as the court of common pleas or such other court
shall deem proper, and (b) any action or suit in which the only liability
asserted against a director is pursuant to Section 1701.95 of the Ohio Revised
Code concerning unlawful loans, dividends and distribution of assets.
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In addition, Section 1701.13(E) requires a corporation to pay any
expenses, including attorney's fees, of a director in defending an action, suit,
or proceeding referred to above as they are incurred, in advance of the final
disposition of the action, suit, or proceeding, upon receipt of an undertaking
by or on behalf of the director in which he agrees to both (1) repay such amount
if it is proved by clear and convincing evidence that his action or failure to
act involved an act or omission undertaken with deliberate intent to cause
injury to the corporation or undertaken with reckless disregard for the best
interests of the corporation and (2) reasonably cooperate with the corporation
concerning the action, suit, or proceeding. The indemnification provided by
Section 1701.13(E) shall not be deemed exclusive of any other rights to which
those seeking indemnification may be entitled under the articles of
incorporation or code of regulations of Capital Holdings.
The code of regulations of Capital Holdings provides that Capital
Holdings shall indemnify each director and each officer of Capital Holdings, and
each person employed by Capital Holdings who serves at the written request of
the President of Capital Holdings as a director, trustee, officer, employee or
agent of another corporation, domestic or foreign, nonprofit or for profit, to
the full extent permitted by Ohio law. Capital Holdings may indemnify assistant
officers, employees and others by action of the Board of Directors to the extent
permitted by Ohio law.
Capital Holdings carries directors' and officers' liability insurance
coverage which insures its directors and officers and the directors and officers
of its subsidiaries in certain circumstances.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Exhibit
Number Description
- ------ -----------
3.1 Articles of Incorporation of Capital Holdings, Inc.*
3.1.1 Amendment to the Articles of Incorporation
3.2 Code of Regulations of Capital Holdings, Inc.*
5.1 Opinion of Werner & Blank Co., L.P.A.
23.1 Consent of Werner & Blank Co., L.P.A. (Reference is made to the last page of the opinion)
23.2 Consent of Ernst & Young, LLP
24.1 Power of Attorney (Reference is made to the signature page)
99.1 Letter of Transmittal
99.2 Subscription Agreement for Rights Offering
99.3 Subscription Agreement for Community Offering
- --------------------------------------------------------------------------------
* Incorporated by reference from Capital Holdings, Inc. Form S-1 (File No.
33-46573) Registration Statement, as amended.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act.
(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
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the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of the 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) 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.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(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 by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to supplement the prospectus,
after the expiration of the subscription period, to set forth the results of the
subscription offer, the transactions by the registrant during the subscription
period and the terms of any subsequent reoffering thereof. If any public
offering by the registrant is to be made on terms differing from those set forth
on the cover page of the prospectus, a post-effective amendment will be filed to
set forth the terms of such offering.
(d) 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 the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
(e) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
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(2) For the purposes of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3, and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Sylvania, State of Ohio, on August 23, 1999.
CAPITAL HOLDINGS, INC.
By: /s/ John S. Szuch
-------------------------------------
John S. Szuch
Chairman and Chief Executive Officer
(Duly Authorized Representative)
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints John S. Szuch
his or her true and lawful attorney-in-fact, with power to act and with full
power of substitution, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to the Registration Statement and file the
same with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent full power and authority to do and perform each and every act
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agents, or their substitutes,
may lawfully 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/ John S. Szuch Chairman of the Board of Directors, August 23, 1999
- ------------------ Chief Executive Officer and Director
John S. Szuch (Principal Executive Officer)
/s/ Michael P. Killian Senior Vice President and August 23, 1999
- ---------------------- Chief Financial Officer
Michael P. Killian (Principal Financial and Accounting Officer)
/s/ Robert A. Sullivan President, Chief Operating Officer, August 23, 1999
- ---------------------- Secretary and Director
Robert A. Sullivan
/s/ Bruce K. Lee Executive Vice President and Director August 23, 1999
- ----------------
Bruce K. Lee
/s/ George A. Isaac, III Director August 23, 1999
- ------------------------
George A. Isaac, III
/s/ W. Geoffrey Lyden, III Director August 23, 1999
- --------------------------
W. Geoffrey Lyden, III
/s/ James D. Sayre Director August 23, 1999
- ------------------
James D. Sayre
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/s/ James M. Appold Director August 23, 1999
- -------------------
James M. Appold
/s/ David P. Bennett Director August 23, 1999
- --------------------
David P. Bennett
/s/ Yale M. Feniger Director August 23, 1999
- -------------------
Yale M. Feniger
/s/ Harley J. Kripke Director August 23, 1999
- --------------------
Harley J. Kripke
/s/ Thomas W. Noe Director August 23, 1999
- -----------------
Thomas W. Noe
/s/ Michael C. Landin Director August 23, 1999
- ---------------------
Michael C. Landin
/s/ Ronald R. Langenderfer Director August 23 1999
- --------------------------
Ronald R. Langenderfer
/s/ Joel A. Levine Director August 23, 1999
- ------------------
Joel A. Levine
/s/ Noel S. Romanoff Director August 23, 1999
- --------------------
Noel S. Romanoff
/s/ Scott J. Savage Director August 23, 1999
- -------------------
Scott J. Savage
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Exhibit Index
-------------
Exhibit
Number Description
- ------ -----------
3.1 Articles of Incorporation of Capital Holdings, Inc.*
3.1.1 Amendment to the Articles of Incorporation
3.2 Code of Regulations of Capital Holdings, Inc.*
5.1 Opinion of Werner & Blank Co., L.P.A.
23.1 Consent of Werner & Blank Co., L.P.A. (Reference is made to the last page of the opinion)
23.2 Consent of Ernst & Young, LLP
24.1 Power of Attorney (Reference is made to the signature page)
99.1 Letter of Transmittal
99.2 Subscription Agreement for Rights Offering
99.3 Subscription Agreement for Community Offering
- --------------------------------------------------------------------------------
* Incorporated by reference from Capital Holdings, Inc. Form S-1 (File No.
33-46573) Registration Statement, as amended.
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