EXHIBIT 10.1
            
                  EMPLOYMENT AGREEMENT

         This Employment Agreement ("Agreement") is made and entered into on
this _____ day of _________________, 1996, for the period commencing on January
1, 1997 and ending on December 31, 2001 by and between CAPITAL FACTORS, INC., a
Florida corporation (the "Company"), and JAMES L. MORRISON (hereinafter called
the "Executive").

                                 R E C I T A L S

         A. The Executive is currently employed as Executive Vice President and
Regional Manager of the California office of the Company.

         B. The Executive possesses intimate knowledge of the business and
affairs of the Company, its policies, methods and personnel.

         C. The Boards of Directors (the "Boards") of the Company and Capital
Factors Holding, Inc., the parent company of the Company ("Holding"), and the
Compensation and Benefits Committee of Holding (the "Committee") recognize that
the Executive has contributed to the growth and success of the Company, and
desire to assure the Company of the Executive's continued employment and to
compensate him therefor.

         D. The Boards and the Committee have determined that this Agreement
will reinforce and encourage the Executive's continued attention and dedication
to the Company.

         E. The Executive is willing to make his services available to the
Company and on the terms and conditions hereinafter set forth.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties agree as follows:

         1. EMPLOYMENT.

                 1.1 EMPLOYMENT. The Company hereby agrees to employ the
Executive and the Executive hereby agrees to serve the Company on the terms and
conditions set forth herein.

                 1.2 DUTIES OF EXECUTIVE. During the term of this Agreement,
the Executive shall serve as the Executive Vice President and Regional Manager
of the California office of the Company reporting directly to the President and
Board of Directors of the Company, shall diligently perform all services as may
be assigned to him by the Board or the President of the Company (provided that,
such services shall not materially differ from the services currently provided
by the Executive), and shall exercise such power and authority as may from time
to time


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be delegated to him by the Boards or the President of the Company. The Executive
shall devote his full time and attention to the business and affairs of the
Company and its subsidiaries, render such services to the best of his ability,
and use his best efforts to promote the interests of the Company and its
subsidiaries.

         2. TERM. The term of this Agreement, and the employment of the
Executive hereunder, shall commence as of January 1, 1997 (the "Commencement
Date") and shall expire on December 31, 2001 (the "Expiration Date"), unless
sooner terminated in accordance with the terms and conditions hereof (the
"Term").

         3. COMPENSATION.

                 3.1 BASE SALARY. The Executive shall receive a base salary (the
"Base Salary") at the annual rate of $210,000 during 1997, with such Base Salary
payable in installments consistent with the Company's normal payroll schedule,
subject to applicable withholding and other taxes. The Base Salary shall be
adjusted during each other year of the Term to reflect, at a minimum, an eight
percent (8%) increase from the Base Salary paid to the Executive in the previous
year. The Base Salary shall also be reviewed, at least annually, for merit
increases and may, by action and in the discretion of the Boards, or the
Compensation and Benefits Committee (the "Committee") of Capital Factors
Holding, Inc. ("Holding"), the parent company of the Company, be increased at
any time or from time to time.

                 3.2 SIGNING BONUS AND COMPANY LOAN. Upon execution of this
Agreement, the Company shall: (i) pay the Executive $100,000 in cash as a
signing bonus, subject to applicable withholding and other taxes; and (ii) loan
the Executive $100,000 (the "Company Loan"). The Company Loan shall bear
interest at THE WALL STREET JOURNAL prime rate (as defined in the Capital Bank
line of credit agreements) plus 1 1/2%. On each December 31 during the Term,
commencing on December 31, 1997, until paid in full, Twenty-Five Thousand
Dollars ($25,000) of the principal amount of the Company Loan together with all
interest accrued on the Company Loan through such date shall become immediately
due and payable, except that if in any one year (but only the first and no more
than one such year) during the Term that EBT (as hereinafter defined) for that
year has not increased by at least 15% from EBT for the prior year, such amount
and all further installments under the Company Loan shall not become due and
payable until the December 31 following the December 31 that they would
otherwise have become due, although interest shall continue to accrue at the
applicable rate. Notwithstanding the foregoing, the entire principal balance
together with all accrued interest thereon shall be due and payable in full in
the event of and upon the earlier termination of this Agreement. Notwithstanding
the foregoing, for each December 31 during the Term that the Executive continues
to be employed by the Company at such time and at which EBT for the year ending
on such December 31 has increased by at least 15% from EBT for the prior year,
the Company shall pay to the Executive a bonus equal to the amount of principal
and accrued interest due and payable to the Company under the Company Loan at
such December 31.

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                 3.3 INCENTIVE COMPENSATION.

                          (a) The Executive shall be entitled to receive
incentive compensation ("Incentive Compensation") during each year of the Term
of this Agreement, commencing with the 1997 year equal to 3% of EBT for such
year. For purposes hereof, "EBT" is the Company's net earnings before income
taxes attributable to the California regional office or the difference between
(i) Net Revenues (as hereinafter defined) and (ii) the sum of total operating
expenses and any provisions of the California regional office.

         EBT shall be derived from Holding's annual audited consolidated
financial statements for Holding's year and shall be calculated in accordance
with generally accepted accounting principles, applied consistently with prior
periods; provided that (i) EBT shall exclude extraordinary gains or losses
attributable to the California regional office of the Company, (ii) funding
costs attributable to the California regional office shall be calculated in
accordance with funding costs of the Company, and (iii) the Incentive
Compensation for any one year shall never exceed an amount equal to two times
the Executive's Base Salary for that year. Absent fraud, or manifest or gross
error, the determination of EBT by the Company will be final and shall not be
subject to further review, challenge or adjustment by the Executive.

                          (b) The Executive shall be entitled to receive the
estimated amount of the Incentive Compensation (the "Estimated Incentive
Compensation"), net of applicable withholding and other taxes, within thirty
(30) days after the end of the year, such Estimated Incentive Compensation to be
derived from the Company's and Holding's unaudited financial statements as
reviewed and approved by the Board. The Estimated Incentive Compensation will be
subject to upward or downward adjustment based on Holding's annual audited
consolidated financial statements reported on by Holding's independent certified
public accountants (the "Adjustment"). The Adjustment shall be paid by the
Executive to the Company, or shall be paid by the Company to the Executive, as
the case may be, within fifteen (15) days of receipt of Holding's audited
consolidated financial statements. In the event the Executive does not reimburse
the Company for any Adjustment within such fifteen-day period, the Company shall
have the right to offset the Adjustment against any other payments due to the
Executive hereunder.

                 3.4 ACCUMULATED ADDITIONAL BONUS FROM PRIOR EMPLOYMENT
AGREEMENT. Upon the execution of this Agreement, the Executive shall receive an
additional cash bonus (the "Additional Bonus") in the amount of $120,000,
subject to applicable withholding and other taxes, representing the pro rata
portion of the Additional Bonus provided for in Section 3.4 of the Employment
Agreement dated January 1, 1993 by and between the Company and the Executive
(the "Prior Employment Agreement"). The Executive shall not be entitled to any
other portion of the Additional Bonus provided for in Section 3.4 of the Prior
Employment Agreement and hereby waives any and all rights to such payment.

                 3.5 DEFERRED COMPENSATION. The Executive shall be entitled to
deferred compensation equal to .50 of his Base Salary (the "Deferred
Compensation"), vesting and payable as set forth below, for each year during the
Term that (i) Net Revenues for such year have increased at least 13.5% over Net
Revenues for the prior year, and (ii) EBT for such year has

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increased at least 22.5% over EBT for the prior year. For purposes hereof, Net
Revenues is the sum of (i) the difference between interest income and interest
expense of the California regional office of the Company, (ii) factoring fees or
commission income of the California regional office of the Company, (iii)
discount income of the California regional office of the Company and (iv) other
income of the California regional office of the Company.

         The Executive's rights in and to the Deferred Compensation for each
year shall vest as follows:

                           (i) The Executive shall vest in 50% of the Deferred
         Compensation payable for any year during the Term on the January 1
         first following the third anniversary of December 31 of the year in
         which Deferred Compensation is earned by the Executive, provided that
         the Executive is still employed by the Company at such time;

                           (ii) The Executive shall vest in an additional 25% of
         the Deferred Compensation payable for any year during the Term on the
         January 1 first following the fourth anniversary of December 31 of the
         year in which Deferred Compensation is earned by the Executive,
         provided that the Executive is still employed by the Company at such
         time;

                           (iii) The Executive shall vest in the final 25% of
         the Deferred Compensation payable for any year during the Term on the
         January 1 first following the fifth anniversary of December 31 of the
         year in which Deferred Compensation is earned by the Executive,
         provided that the Executive is still employed by the Company at such
         time; and

                           (iv) Notwithstanding the foregoing, the Executive
         shall not be required to remain employed by the Company after the
         Expiration Date in order to vest in and to be paid Deferred
         Compensation vesting after the Expiration Date, provided that the
         Executive is employed by the Company pursuant to this Agreement through
         the Expiration Date. Furthermore, should the Company and the Executive
         enter into another employment agreement or amend or extend this
         Agreement for an additional period of five years or more, then,
         immediately following the Expiration Date, the remaining unvested
         portion of the Deferred Compensation shall immediately become vested
         and payable subject to the other provisions of this Agreement.

Subject to Section 3.6 hereof, upon or after the Executive's vesting in any
Deferred Compensation, whether during or after the Term, such Deferred
Compensation shall be paid to the Executive. Subject to Section 3.6 hereof,
payments shall be made on the date on which the Executive's Deferred
Compensation vests (the "Vesting Date"), or on such later date elected in
writing by the Executive at least one year prior to the earlier of the Vesting
Date or the Expiration Date.

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                 3.6 EVENT OF NON-DEDUCTIBILITY.

                          SECTION 162(M) LIMITS. Notwithstanding any other
provision of this Agreement, payment of the portion (the "Section 162(m)
Portion") of the Executive's Incentive Compensation earned for any calendar year
that would not otherwise be deductible by reason of Section 162(m) of the
Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder (collectively, "Section 162(m)") (determined after taking into
account all other remuneration required to be taken into account under Section
162(m) for the year), as well as payment of any Deferred Compensation earned for
such year, shall be subject to the following conditions: (i) the performance
goals and incentive and deferred compensation set forth in Sections 3.3 and 3.5
that must be satisfied in order for the Section 162(m) Portion to be earned for
that year shall be subject to the approval of, and may be modified by, the
Committee, at such times as may be required for the Section 162(m) Portion to be
deductible under Section 162(m); (ii) payment of the Section 162(m) Portion
shall be subject to the approval by the shareholders of Holding of the material
terms of the performance goals and incentive and deferred compensation relating
to the Section 162(m) Portion before the Section 162(m) Portion is paid; and
(iii) the maximum amount of Incentive Compensation and Deferred Compensation
payable to the Executive is as set forth in Sections 3.3 and 3.5 of this
Agreement. If and to the extent that any remuneration (including without
limitation any Deferred Compensation) payable by the Company to the Executive
for any year would exceed the maximum amount of such remuneration that the
Company or Holding may deduct for that year by reason of Section 162(m), payment
of the portion of the remuneration for that year that would not be so deductible
under Section 162(m) shall, in the sole discretion of the Committee, be deferred
so that it shall become payable at such time or times as the Committee
reasonably determines that it first would be deductible by the Company or
Holding under Section 162(m), with interest at the "short-term applicable
federal rate" as such term is defined in Section 1274(d) of the Code. The grant
of options to purchase shares of Common Stock pursuant to Section 4.5 has been
approved by both the Stock Option Committee of Capital Bancorp and the Committee
and is subject to and conditioned upon the approval by shareholders of Holding
of the Company's Stock Option Plan. The Company agrees to seek the shareholder
approvals described in this Section 3.6.

                 3.7 NO PAYMENT IN VIOLATION OF APPLICABLE LAW OR REGULATION.
Notwithstanding anything else contained herein, no payment shall be made
hereunder that constitutes a golden parachute payment or prohibited
indemnification payment in violation of 12 CFR Part 359.

         4. EXPENSE REIMBURSEMENT AND OTHER BENEFITS.

                 4.1 REIMBURSEMENT OF EXPENSES. During the term of Executive's
employment hereunder, the Company, upon the submission of proper substantiation
by the Executive, shall reimburse the Executive for all reasonable expenses
actually paid or incurred by the Executive in the course of and pursuant to the
business of the Company. The Executive shall account to the Company in writing
for all expenses for which reimbursement is sought and shall supply to the
Company copies of all relevant invoices, receipts or other evidence reasonably
requested by the Company.

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                 4.2 OTHER BENEFITS. The Executive shall be entitled to
participate in all medical and hospitalization, group life insurance, and any
and all other plans as are presently and hereinafter offered by the Company to
its executives. The Executive shall be entitled to 20 business days of vacation
every year. During the term of this Agreement, the Company shall continue to pay
for the Executive's membership in a country club on terms consistent with past
practices.

                 4.3 WORKING FACILITIES. The Company shall furnish the Executive
with an office, secretarial help and such other facilities and services suitable
to his position and adequate for the performance of his duties hereunder.

                 4.4 AUTOMOBILE. The Company shall pay the Executive an
automobile allowance of $600 per month during the Initial Term of this
Agreement.

                 4.5 STOCK OPTIONS. Holding has granted to the Executive options
to purchase 60,000 shares of Common Stock pursuant to a Stock Option Agreement
dated ______________ and the Company's Stock Option Plan. The Executive shall
also be eligible to be considered for the grant of options under the Capital
Bancorp Stock Option Plan pursuant to the terms thereof and subject to the
restrictions contained therein.

         5. TERMINATION.

                 5.1 TERMINATION FOR CAUSE. The Company shall at all times have
the right, upon written notice to the Executive, to terminate the Executive's
employment hereunder, for cause. For purposes of this Agreement, the term
"cause" shall mean (i) an action or omission of the Executive which constitutes
a willful and material breach of this Agreement which is not cured within
fifteen (15) days after receipt by the Executive of written notice of same, (ii)
fraud, embezzlement, misappropriation of funds or breach of trust, (iii) any
criminal act which is a felony, (iv) gross negligence in connection with the
performance of the Executive's duties hereunder, (v) material and willful or
knowing failure or refusal (other than as a result of a disability) by the
Executive to perform his duties hereunder, or (vi) the request by any regulatory
agency that regulates Capital Bank or Capital Bancorp that the Executive be
removed from his duties hereunder. Any termination for cause shall be made in
writing to the Executive, which notice shall set forth in detail all acts or
omissions upon which the Company is relying for such termination. The Executive
shall have the right to address the Company's Board regarding the acts set forth
in the notice of termination. Upon any termination pursuant to this Section 5.1,
the Executive shall be entitled to be paid his Base Salary to the date of
termination and the Company shall have no further liability hereunder (other
than for (i) reimbursement for reasonable business expenses incurred prior to
the date of termination, subject, however, to the provisions of Section 4.1, and
(ii) payment of compensation for unused vacation days that have accumulated
during the calendar year in which such termination occurs).

                 5.2 DISABILITY. The Company shall at all times have the right,
upon written notice to the Executive, to terminate the Executive's employment
hereunder, if the Executive shall, as the result of mental or physical
incapacity, illness or disability, become unable to perform his obligations
hereunder for a period of 90 consecutive days. Upon any termination pursuant to
this Section 5.2, the Company shall (i) pay to the Executive any unpaid Base
Salary through the

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effective date of termination specified in such notice, (ii) pay to the
Executive the Incentive Compensation, if any, not yet paid to the Executive for
any year prior to such termination, at such time as the Incentive Compensation
would otherwise have been payable to the Executive, and (iii) pay to the
Executive a severance payment equal to three (3) months of the Executive's Base
Salary at the time of such disability, (iv) pay to the Executive (within 45 days
after such termination) a pro rata portion of the Incentive Compensation, if
any, for the year in which such termination occurs, as calculated pursuant to
the terms of Section 3.3 (including the provisos set forth in clauses (i) -
(iii) of such Section); provided that, for purposes of such calculation, (x) EBT
shall be calculated for the portion of the year through the end of the month
prior to the month in which such termination occurs and based upon unaudited
financial information prepared in accordance with generally accepted accounting
principles, applied consistently with prior periods, as approved and reviewed by
the Board or the Committee, as applicable, and (y) in determining the maximum
Incentive Compensation for such year, Base Salary shall be the amount of Base
Salary actually paid to the Executive during the year of termination other than
pursuant to Section 5.2(iii), and (v) pay to the Executive, within 45 days after
the termination date, any Deferred Compensation earned in prior years during the
Term, whether or not vested, and a pro rata portion of the Deferred Compensation
for the current year, if any. Whether any Deferred Compensation is due for the
current year shall be determined pursuant to Section 3.5(i)-(iii) after
multiplying each of Net Revenues and EBT for the year through the month prior to
the month in which termination occurs by a fraction, the numerator of which is
12 and the denominator of which is the number of months in the year through the
month prior to the month in which termination occurs, and using the product of
each in performing the calculations under Section 3.5(i)-(iii). If Deferred
Compensation is due, the amount due shall be calculated by multiplying .50 by
the amount of Base Salary paid to the Executive for the year excluding severance
payments pursuant to Section 5.2(iii). The Company shall have no further
liability hereunder (other than for (i) reimbursement for reasonable business
expenses incurred prior to the date of termination, subject, however to the
provisions of Section 4.1, and (ii) payment of compensation for unused vacation
days that have accumulated during the calendar year in which such termination
occurs).

                 5.3 DEATH. In the event of the death of the Executive during
the term of his employment hereunder, the Company shall (i) pay to the estate of
the deceased Executive any unpaid Base Salary through the Executive's date of
death, (ii) pay to the estate of the deceased Executive the Incentive
Compensation, if any, not yet paid to the Executive for any year prior to the
date of death, at such time as the Incentive Compensation would otherwise have
been payable to the Executive, (iii) pay to estate of the deceased Executive
(within 45 days after such termination) a pro rata portion of the Incentive
Compensation, if any, for the year in which such termination occurs, as
calculated pursuant to the terms of Section 3.3 (including the provisos set
forth in clauses (i) and (ii) of such Section); provided that, for purposes of
such calculation, (x) EBT shall be calculated for the portion of the year
through the end of the month prior to the month in which such termination occurs
and based upon unaudited financial information prepared in accordance with
generally accepted accounting principles, applied consistently with prior
periods, as approved and reviewed by the Board or the Committee, as applicable,
and (y) in determining the maximum Incentive Compensation for such year, Base
Salary shall be the amount of Base Salary actually paid to the Executive during
the year of termination, and (iv) pay to the estate of the deceased Executive,
within 45 days after the termination date, any Deferred Compensation earned in
prior years during the Term, whether or not vested, and a pro rata

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portion of the Deferred Compensation for the current year, if any. Whether any
Deferred Compensation is due for the current year shall be determined pursuant
to Section 3.5(i)-(iii) after multiplying each of Net Revenues and EBT for the
year through the month prior to the month in which termination occurs by a
fraction, the numerator of which is 12 and the denominator of which is the
number of months in the year through the month prior to the month in which
termination occurs, and using the product of each in performing the calculations
under Section 3.5(i)-(iii). If Deferred Compensation is due, the amount due
shall be calculated by multiplying .50 by the amount of Base Salary paid to the
Executive for the year. The Company shall have no further liability hereunder
(other than for (i) reimbursement for reasonable business expenses incurred
prior to the date of the Executive's death, subject, however to the provisions
of Section 4.1, and (ii) payment of compensation for unused vacation days that
have accumulated during the calendar year in which such termination occurs).

                 5.4 TERMINATION WITHOUT CAUSE. At any time the Company shall
have the right to terminate the Executive's employment hereunder by written
notice to the Executive. Upon any termination pursuant to this Section 5.4 (that
is not a termination under any of Sections 5.1, 5.2, 5.3, 5.5 or 5.6), the
Company shall (i) pay to the Executive any unpaid Base Salary through the
effective date of termination specified in such notice, (ii) subject to the
second last sentence of this Section 5.4, continue to pay the Executive's Base
Salary through the Expiration Date, in the manner and at such time as the Base
Salary would otherwise have been payable to the Executive, (iii) pay to the
Executive the Incentive Compensation, if any, not yet paid to the Executive for
any year prior to such termination, at such time as the Incentive Compensation
would otherwise have been payable to the Executive, (iv) pay to the Executive
(within 45 days after such termination) a pro rata portion of the Incentive
Compensation, if any, for the year in which such termination occurs, as
calculated pursuant to the terms of Section 3.3 (including the provisos set
forth in clauses (i)-(iii) of such Section); provided that, for purposes of such
calculation, (x) EBT shall be calculated for the portion of the year through the
end of the month prior to the month in which such termination occurs and based
upon unaudited financial information prepared in accordance with generally
accepted accounting principles, applied consistently with prior periods, as
approved and reviewed by the Board or the Committee, as applicable, and (y) in
determining the maximum Incentive Compensation for such year, Base Salary shall
be the amount of Base Salary actually paid to the Executive during the year of
termination other than pursuant to Section 5.4(ii), and (v) pay to the
Executive, within 45 days after the termination date, any Deferred Compensation
earned in prior years during the Term, whether or not vested, and a pro rata
portion of the Deferred Compensation for the current year, if any. Whether any
Deferred Compensation is due for the current year shall be determined pursuant
to Section 3.5(i)-(iii) after multiplying each of Net Revenues and EBT for the
year through the month prior to the month in which termination occurs by a
fraction, the numerator of which is 12 and the denominator of which is the
number of months in the year through the month in which termination occurs, and
using the product of each in performing the calculations under Sections
3.5(i)-(iii). If Deferred Compensation is due, the amount due shall be
calculated by multiplying .50 by the amount of Base Salary paid to the Executive
for the year other than pursuant to Section 5.4(ii). The Company shall have no
further liability hereunder (other than for (i) reimbursement for reasonable
business expenses incurred prior to the date of termination, subject, however,
to the provisions of Section 4.1, and (ii) payment of compensation for unused
vacation days that have accumulated during the calendar year in which such
termination occurs). Notwithstanding the foregoing, if the Executive shall find

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other employment prior to the Expiration Date, then the Executive shall notify
the Company in writing of the date and terms of such employment and the Company
shall be entitled to reduce the amount payable to the Executive pursuant to
Section 5.4(ii) during the period from the commencement of such other employment
until the Expiration Date (the "Other Employment Period") by the compensation
payable to the Executive for services rendered in connection with such other
employment during the Other Employment Period. Nothing contained in this Section
5.4 or elsewhere herein shall relieve the Executive from any obligation to
comply with any of the provisions of Section 6 hereof, which shall remain
binding on the Executive.

                 5.5 RESIGNATION BY EXECUTIVE. The Executive shall at all times
have the right, upon 90 days written notice to the Company, to terminate the
Executive's employment hereunder. Upon any termination pursuant to this Section
5.5, the Executive shall be entitled to be paid his Base Salary to the date of
termination and the Company shall have no further liability hereunder (other
than for (i) reimbursement for reasonable business expenses incurred prior to
the date of termination, subject, however, to the provisions of Section 4.1, and
(ii) payment of compensation for unused vacation days that have accumulated
during the calendar year in which such termination occurs).

                 5.6 CHANGE IN CONTROL. In the event that (x) a Change in
Control (as hereafter defined) in Holding shall occur during the Term, and (y)
within one year of such Change in Control, the Executive is (i) assigned any
position, duties or responsibilities that are significantly diminished or
changed when compared with the position, duties or responsibilities of the
Executive prior to such Change in Control, (ii) forced to relocate to another
location more than 50 miles from his location prior to the Change in Control or
(iii) no longer provided coverage under benefit programs in existence prior to
the Change in Control (unless a comparable substitute is offered) (any of (i) to
(iii) being hereinafter referred to as an "Event"); then the Executive, by
written notice to the Company at any time within the thirty (30) day period
following the occurrence of an Event, shall have the right to terminate his
employment hereunder. For purposes of this Agreement, the term "Change in
Control" shall be deemed to have occurred if (a) Capital Bank and any other
direct or indirect subsidiaries of Capital Bancorp ("Corporate Affiliates"),
after aggregating all the shares of Holding held by such entities, no longer own
enough shares of Holding to, in the aggregate, be the largest single shareholder
of Holding, (b) Capital Bank and its Corporate Affiliates, in the aggregate,
cease to own at least 25% of the outstanding Common Stock of Holding; or (c)
there occurs any transaction which shall include a series of transactions
occurring within 60 days or occurring pursuant to a plan (collectively,
"Transaction") that has the result that (i) shareholders of Capital Bancorp
immediately before such Transaction cease to own at least 51% of the voting
stock of Capital Bancorp or of any entity that results from the participation of
Capital Bancorp in a reorganization, consolidation, merger, liquidation or any
other form of corporate transaction and (ii) any person or group of persons
acting in concert acquire in excess of 40% or more of the outstanding voting
stock of Capital Bancorp; provided, however, that it shall not constitute a
"Change in Control" if all or part of the shares in Holding are distributed to
shareholders of Capital Bancorp, regardless of the manner in which such shares
are distributed. In the event that Capital Bank and Capital Bancorp make such a
distribution then, thereafter, a "Change in Control" shall be deemed to have
occurred only upon the following: (a) the shareholders of Holding shall approve
and Holding shall consummate a plan of merger, consolidation, reorganization,
liquidation or any other form of corporate transaction in which shareholders of

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Holding immediately before such transaction cease to own at least 51% of the
voting stock of Holding or any other entity that results from the participation
of Holding in any of the foregoing; or (b) the shareholders of Holding shall
approve and Holding shall consummate a plan for the sale, lease, exchange or
other disposition of all or substantially all of the property and assets of
Holding.

         Upon termination by the Executive pursuant to this Section 5.6, Holding
shall (i) pay to the Executive any unpaid Base Salary through the effective date
of termination specified in such notice, (ii) pay to the Executive the Incentive
Compensation, if any, not yet paid to the Executive for any year prior to such
termination, at such time as the Incentive Compensation would otherwise have
been payable to the Executive, (iii) pay to the Executive (within 45 days after
such termination) a pro rata portion of the Incentive Compensation, if any, for
the year in which such termination occurs, as calculated pursuant to the terms
of Section 3.3 (including the provisos set forth in clauses (i)-(iii) of such
Section); provided that, for purposes of such calculation, EBT shall be
calculated for the portion of the year through the end of the month prior to the
month in which such termination occurs and based upon unaudited financial
information prepared in accordance with generally accepted accounting
principles, applied consistently with prior periods, as approved and reviewed by
the Board or the Committee, as applicable, and (y) in determining the maximum
Incentive Compensation for such year, Base Salary shall be the amount of Base
Salary actually paid to the Executive during the year of termination other than
as a lump sum pursuant to Section 5.6, (iv) pay to the Executive, within 45 days
after the termination date, any Deferred Compensation earned in prior years
during the Term, whether or not vested, and a pro rata portion of the Deferred
Compensation for the current year, if any (whether any Deferred Compensation is
due for the current year shall be determined pursuant to Section 3.5(i)-(iii)
after multiplying each of Net Revenues and EBT for the year through the month
prior to the month in which termination occurs by a fraction, the numerator of
which is 12 and the denominator of which is the number of months in the year
through the month in which termination occurs, and using the product of each in
performing the calculations under Sections 3.5(i)-(iii). If Deferred
Compensation is due, the amount due shall be calculated by multiplying .50 by
the amount of Base Salary paid to the Executive for the year other than as a
lump sum pursuant to this Section 5.6; and (v) pay to the Executive a lump sum
equal to the sum of (a) two years' Base Salary at the date of termination plus
(b) the product of his Incentive Compensation for the prior year multiplied by
two. In the event that the Executive's employment is terminated by the Company
within one year following a Change in Control and Without Cause, then, in lieu
of the compensation in clause (v) of this paragraph above, the Company shall pay
to the Executive a lump sum equal to the sum of (a) two years' Base Salary at
the date of termination and (b) the product of the sum of his Incentive
Compensation and Deferred Compensation for the prior year multiplied by two. The
Company shall also continue to pay the premiums for the same or substantially
similar medical and hospitalization, life (including any split dollar life
insurance policy existing presently) and other insurance coverage provided to
the Executive pursuant to Section 4.2 hereof for a period of two years from the
date of termination. In addition, all options held by the Executive to purchase
shares of Common Stock shall immediately vest in the Executive, subject to any
other restrictions contained in the applicable option agreement or option plan.
The Company shall have no further liability hereunder (other than for (i)
reimbursement for reasonable business expenses incurred prior to the date of
termination, subject, however, to the provisions of

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Section 4.1, and (ii) payment of compensation for unused vacation days that have
accumulated during the calendar year in which such termination occurs).

         6. RESTRICTIVE COVENANTS.

                 6.1 NON-COMPETITION. For the period through the Expiration
Date (except that, if the Executive's employment is terminated pursuant to
Sections 5.4 or 5.6 hereof, the period shall be the greater of (i) one year
after such termination date, but in no event beyond the Expiration Date, or (ii)
(A) if the termination is pursuant to Section 5.4, the period of time that or
for which the Executive is receiving Base Salary payments or (B) if the
termination is pursuant to Section 5.6, the period of time with respect to which
the Executive receives a lump sum Base Salary payment pursuant to Section 5.6
(identified as two years in Section 5.6)), the Executive shall not, directly or
indirectly, engage in or have any interest in any sole proprietorship,
partnership, corporation or business or any other person or entity (whether as
an employee, officer, director, partner, agent, security holder, creditor,
consultant or otherwise) that directly or indirectly engages in competition with
the Company in any state in which the Company operates or has a client or
customer at the time of such termination; provided that such provision shall not
apply to the Executive's ownership of Common Stock of Holding or the acquisition
by the Executive, solely as an investment, of securities of any issuer that is
registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended, and that are listed or admitted for trading on any United States
national securities exchange or that are quoted on the National Association of
Securities Dealers Automated Quotations System, or any similar system or
automated dissemination of quotations of securities prices in common use, so
long as the Executive is not a member of any control group (within the meaning
of the rules and regulations of the Securities and Exchange Commission) of any
such issuer.

                 6.2 NONDISCLOSURE. The Executive shall not divulge,
communicate, use to the detriment of the Company or for the benefit of any other
person or persons, or misuse in any way, any confidential information pertaining
to the business of the Company. Any confidential information or data now or
hereafter acquired by the Executive with respect to the business of the Company
(which shall include, but not be limited to, information concerning the
Company's financial condition, prospects, customers, sources of leads and
methods of doing business) shall be deemed a valuable, special and unique asset
of the Company that is received by the Executive in confidence and as a
fiduciary, and Executive shall remain a fiduciary to the Company with respect to
all of such information.

                 6.3 NONSOLICITATION OF EMPLOYEES AND CLIENTS. For the period
through the Expiration Date, and for a period of two years following the
Expiration Date (except that, the period shall be six months after the
Expiration Date if (i) the Executive is employed by the Company on the
Expiration Date, and (ii) the Company has not offered, at or prior to the
Expiration Date, to employ the Executive after the Expiration Date on terms that
provide for payment of (x) a base salary equal to or greater than the Base
Salary (adjusted for cost-of-living increases) being paid to the Executive on
the Expiration Date, and (y) incentive compensation on terms equal to or greater
than the Incentive Compensation terms in effect as of the Expiration Date) the
Executive shall not, directly or indirectly, for himself or for any other
person, firm, corporation, partnership, association or other entity (i) employ
or attempt to employ or enter into

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<PAGE>

any contractual arrangement with any employee or former employee of the Company,
unless such employee or former employee has not been employed by the Company for
a period in excess of six months, and/or (ii) call on or solicit any of the
actual or targeted prospective clients of the Company on behalf of any person or
entity in connection with any business competitive with the business of the
Company, nor shall the Executive make known the names and addresses of such
clients or any information relating in any manner to the Company's trade or
business relationships with such customers, other than in connection with the
performance of Executive's duties under this Agreement.

                 6.4 BOOKS AND RECORDS. All books, records, and accounts
relating in any manner to the customers or clients of the Company, whether
prepared by the Executive or otherwise coming into the Executive's possession,
shall be the exclusive property of the Company and shall be returned immediately
to the Company on termination of the Executive's employment hereunder or on the
Company's request at any time.

                 6.5 DEFINITION OF COMPANY. As used in and solely for the
purposes of this Section 6, the term "Company" shall also include any existing
and future subsidiaries of the Company that are operating during the time
periods described herein, as well as Holding and any of its existing and future
subsidiaries.

                 6.6 ACKNOWLEDGMENT BY EXECUTIVE. The Executive acknowledges and
confirms that the length of the term of the provisions of this Section 6 and the
geographical restrictions contained in Section 6.1 are fair and reasonable and
not the result of overreaching, duress or coercion of any kind. The Executive
further acknowledges and confirms that his full, uninhibited and faithful
observance of each of the covenants contained in this Section 6 will not cause
him any undue hardship, financial or otherwise, and that enforcement of each of
the covenants contained herein will not impair his ability to obtain employment
commensurate with his abilities and on terms fully acceptable to him or
otherwise to obtain income required for the comfortable support of him and his
family and the satisfaction of the needs of his creditors. The Executive
acknowledges and confirms that his special knowledge of the business of the
Company is such as would cause the Company serious injury or loss if he were to
use such ability and knowledge to the benefit of a competitor or were to compete
with the Company in violation of the terms of this Section 6.

                 6.7 SURVIVAL. The provisions of this Section 6 shall survive
the termination of this Agreement, as applicable.

         7. INJUNCTION. It is recognized and hereby acknowledged by the parties
hereto that a breach by the Executive of any of the covenants contained in
Section 6 of this Agreement will cause irreparable harm and damage to the
Company, the monetary amount of which may be virtually impossible to ascertain.
As a result, the Executive recognizes and hereby acknowledges that the Company
shall be entitled to an injunction from any court of competent jurisdiction
enjoining and restraining any violation of any or all of the covenants contained
in Section 6 of this Agreement by the Executive or any of his affiliates,
associates, partners or agents, either directly or indirectly, and that such
right to injunction shall be cumulative and in addition to whatever other
remedies the Company may possess.

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<PAGE>

         8. ASSIGNMENT. The Executive agrees that the Company shall have the
right to assign this Agreement, provided, however, that such assignment does not
violate any other provision of this Agreement.. The Executive shall not delegate
his employment obligations hereunder, or any portion thereof, to any other
person.

         9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.

         10. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and, upon
its effectiveness on January 1, 1997, shall supersede all prior agreements,
understandings and arrangements, both oral and written, between the Executive
and the Company (or any of its affiliates) with respect to such subject matter,
including but not limited to the Prior Employment Agreement, it being understood
that the Prior Employment Agreement shall remain in full force and effect and
supersede this Agreement through December 31, 1996. This Agreement may not be
modified in any way unless by a written instrument signed by both the Company
and the Executive.

         11. NOTICES: Any notice required or permitted to be given hereunder
shall be deemed given when delivered by hand or when deposited in the United
States mail, by registered or certified mail, return receipt requested, postage
prepaid, (i) if to the Company or Holding, to the address of the Company's
principal offices in Fort Lauderdale, Florida, with a copy to Capital Bank, 1221
Brickell Avenue, Miami, Florida 33133, Attention: President, and (ii) if to the
Executive, to his address as reflected on the payroll records of the Company, or
to such other address as either party hereto may from time to time give notice
of to the other.

         12. BENEFITS; BINDING EFFECT. This Agreement shall be for the benefit
of and binding upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where applicable,
assigns, including, without limitation, any successor to the Company, whether by
merger, consolidation, sale of stock, sale of assets or otherwise.

         13. SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part thereof, all of which are inserted conditionally on their being valid in
law, and, in the event that any one or more of the words, phrases, sentences,
clauses or sections contained in this Agreement shall be declared invalid, this
Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted. If such invalidity is caused by length of time or size of
area, or both, the otherwise invalid provision will be considered to be reduced
to a period or area which would cure such invalidity.

         14. WAIVERS. The waiver by either party hereto of a breach or violation
of any term or provision of this Agreement shall not operate nor be construed as
a waiver of any subsequent breach or violation.

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         15. DAMAGES. Nothing contained herein shall be construed to prevent the
Company or the Executive from seeking and recovering from the other damages
sustained by either or both of them as a result of its or his breach of any term
or provision of this Agreement. In the event that either party hereto brings
suit for the collection of any damages resulting from, or the injunction of any
action constituting, a breach of any of the terms or provisions of this
Agreement, then the party found to be at fault shall pay all reasonable court
costs and attorneys' fees of the other.

         16. SECTION HEADINGS. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

         17. NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
other than the Company, the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and assigns, any rights or
remedies under or by reason of this Agreement.

         18. INDEMNIFICATION. Subject to limitations imposed by law, the Company
shall indemnify the Executive to the fullest extent permitted by law.

         19. WAIVER OF JURY TRIAL. THE UNDERSIGNED EXPRESSLY (I) WAIVE ANY RIGHT
TO A TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT
OF THIS AGREEMENT OR IN ANY WAY RELATED OR INCIDENTAL TO THE PERFORMANCE OF THE
PARTIES' OBLIGATIONS HEREUNDER, AND (II) AGREE THAT ANY PARTY HERETO MAY FILE AN
ORIGINAL COUNTERPART OR COPY OF THIS SECTION 19 WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT TO THE WAIVER OF THE RIGHT TO TRIAL BY JURY.

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<PAGE>

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.

                                    COMPANY:

                                    CAPITAL FACTORS, INC.

                                    By: ________________________________________
                                        Javier J. Holtz, Chairman of the Board

                                    EXECUTIVE:
 
                                    ____________________________________________
                                    James L. Morrison

Capital Factors Holding, Inc. hereby executes this Agreement for the purpose of
agreeing to the provisions of Section 4.5 hereof.

                                    HOLDING:

                                    CAPITAL FACTORS HOLDING, INC.

                                    By: ________________________________________
                                        Javier J. Holtz, Chairman of the Board

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