S&R with search input from a file

Hi,

Is it posible to search for a list of words, from a file and replace them if found in the buffer that is open, and making the first letter a uppercase
For example:

FileNAME: INPUT.TXT
Containing:
+----------+
james
quebec
canada
+----------+

:%s/<INPUT.TXT>/replace found word with same word but first letter in uppercase./g


Example:
james was in quebec.
The city quebec is in canada.

Becomes:
James was in Quebec.
The city Quebec is in Canada.

Rgds, Jeri

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