SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
First Colorado Bancorp, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the filing
fee is calculated and state how it was determined.)
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[FIRST COLORADO BANCORP LETTERHEAD]
March 31, 1998
To Our Stockholders:
We are pleased to invite you to attend the Annual Meeting of Stockholders
(the "Meeting") of First Colorado Bancorp, Inc. (the "Company") to be held at
the Arvada Center for the Arts and Humanities, 6901 Wadsworth Boulevard, Arvada,
Colorado, on Monday, May 4, 1998, at 3:00 p.m.
The enclosed Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the Meeting. During the Meeting, we will
also report on the operations of the Company. Directors and officers of the
Company, as well as a representative of our independent auditors, KPMG Peat
Marwick LLP, are expected to be present to respond to any questions that
stockholders may have.
Also enclosed for your reference is the Annual Report to Stockholders
for the fiscal year ending December 31, 1997, which contains detailed
information concerning the activities and operating performance of the Company.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN
AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ACCOMPANYING POSTAGE-PAID
ENVELOPE AS PROMPTLY AS POSSIBLE. This will not prevent you from attending the
Meeting and voting in person but will assure that your vote is counted if you
are unable to attend the Meeting. YOUR VOTE IS VERY IMPORTANT.
Sincerely,
/s/ Malcolm E. Collier, Jr.
Malcolm E. Collier, Jr.
Chairman
<PAGE>
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FIRST COLORADO BANCORP, INC.
215 SOUTH WADSWORTH BOULEVARD
LAKEWOOD, COLORADO 80226
(303) 232-2121
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 4, 1998
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of First Colorado Bancorp, Inc. (the "Company") will be held at the
Arvada Center for the Arts and Humanities, 6901 Wadsworth Boulevard, Arvada,
Colorado, on Monday, May 4, 1998, at 3:00 p.m. The Meeting is for the purpose of
considering and acting upon:
1. The election of three directors of the Company;
2. The ratification of the First Colorado Bancorp, Inc. 1996
Stock Option Plan;
3. The ratification of the First Federal Bank of Colorado
Management Stock Bonus Plan and Trust Agreement; and
4. The ratification of the appointment of KPMG Peat Marwick LLP
as auditor for the Company for the fiscal year ending December
31, 1998.
The transaction of such other business as may properly come before the
Meeting or any adjournments thereof will also be considered and acted upon. The
Board of Directors is not aware of any other business to come before the
Meeting. Pursuant to the Bylaws of the Company, the Board of Directors has fixed
the close of business on March 24, 1998, as the record date for determination of
the stockholders entitled to vote at the Meeting and any adjournments thereof.
You are requested to complete and sign the enclosed form of proxy which
is solicited by the Board of Directors and to return it promptly in the enclosed
envelope. The proxy will not be used if you attend the Meeting and vote in
person.
EACH STOCKHOLDER, WHETHER OR NOT HE OR SHE PLANS TO ATTEND THE MEETING,
IS REQUESTED TO COMPLETE, SIGN, DATE, AND PROMPTLY RETURN THE ENCLOSED PROXY
CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE STOCKHOLDER
MAY BE REVOKED BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION
OR A DULY EXECUTED PROXY BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE
MEETING MAY REVOKE HIS OR HER PROXY AND VOTE IN PERSON ON EACH MATTER BROUGHT
BEFORE THE MEETING. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT
REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR
RECORD HOLDER TO VOTE IN PERSON AT THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Elaine M. Samuelson
ELAINE M. SAMUELSON
SECRETARY
Lakewood, Colorado
March 31, 1998
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IMPORTANT: PLEASE COMPLETE, DATE, SIGN, AND RETURN PROMPTLY THE ENCLOSED PROXY.
AN ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
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<PAGE>
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PROXY STATEMENT
OF
FIRST COLORADO BANCORP, INC.
215 SOUTH WADSWORTH BOULEVARD
LAKEWOOD, COLORADO 80226
(303) 232-2121
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ANNUAL MEETING OF STOCKHOLDERS
MAY 4, 1998
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GENERAL
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This Proxy Statement is furnished to holders of common stock, $0.10 par
value per share ("Common Stock"), of First Colorado Bancorp, Inc. (the
"Company") which acquired all of the outstanding common stock of First Federal
Bank of Colorado (the "Bank") issued in connection with the conversion from the
mutual to stock form of organization of First Savings Capital, M.H.C. (the
"Mutual Holding Company"), the former mutual holding company parent of the Bank
(the "Conversion"), and the reorganization of the Bank into the stock holding
company form of organization (the "Reorganization"). Proxies are being solicited
by the Board of Directors of the Company to be used at the Annual Meeting of
Stockholders of the Company (the "Meeting"), which will be held at the Arvada
Center for the Arts and Humanities, 6901 Wadsworth Boulevard, Arvada, Colorado,
on Monday, May 4, 1998, at 3:00 p.m. The accompanying Notice of Annual Meeting
of Stockholders and this Proxy Statement are being first mailed to stockholders
on or about March 31, 1998.
On March 9, 1998, the Company announced that it had entered into a
merger agreement with Commercial Federal Corporation whereby the Company will
merge with Commercial Federal Corporation and each share of Common Stock will be
exchanged for a certain amount of Commercial Federal Corporation common stock in
accordance with the merger agreement (the "Merger"). The Merger will be
submitted for approval by the stockholders of the Company at a special meeting
of stockholders anticipated to be held later in 1998.
At the Meeting, stockholders will consider and vote upon (i) the
election of three directors, (ii) the ratification of the First Colorado
Bancorp, Inc. 1996 Stock Option Plan (the "1996 Stock Option Plan"), (iii) the
ratification to the First Federal Bank of Colorado Management Stock Bonus Plan
and Trust Agreement ("MSBP"), and (iv) the ratification of the appointment of
the Company's independent auditor. The Board of Directors knows of no additional
matters that will be presented for consideration at the Meeting. Execution of a
proxy, however, confers on the designated proxyholder the discretionary
authority to vote the shares represented by such proxy in accordance with their
best judgment on such other business, if any, that may properly come before the
Meeting or any adjournment thereof.
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VOTING AND REVOCABILITY OF PROXIES
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Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by signed proxies will be voted
at the Meeting and all adjournments thereof. Proxies may be revoked by written
notice delivered in person or mailed to the Secretary of the Company at the
address of the Company shown above or by the filing of a later-dated proxy prior
to a vote being taken on a particular proposal at the Meeting. A proxy will not
be voted if a stockholder attends the Meeting and votes in person. Proxies
solicited by the Board of Directors will be voted in accordance
<PAGE>
with the directions given therein. Where no instructions are indicated, signed
proxies will be voted "FOR" the proposals set forth in this Proxy Statement for
consideration at the Meeting or any adjournment thereof.
The proxy confers discretionary authority on the persons named therein
to vote with respect to the election of any person as a director should the
nominee be unable to serve, or for good cause, will not serve, and matters
incident to the conduct of the Meeting.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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Stockholders of record as of the close of business on March 24, 1998
(the "Voting Record Date") are entitled to one vote for each share then held. As
of the Voting Record Date, the Company had 16,826,798 shares of Common Stock
issued and outstanding.
As provided in the Articles of Incorporation of the Company (the
"Articles") for a period of five years from the date of the Conversion and the
Reorganization, which was consummated on December 29, 1995, no person may
directly or indirectly offer to acquire or acquire beneficial ownership of any
class of equity securities of the Company in excess of 10% of the outstanding
shares of the class (the "Limit"). Furthermore, as provided in the Articles, any
person or entity who directly or indirectly beneficially owns Common Stock in
excess of the Limit will not be entitled or permitted to any vote with respect
to such shares of Common Stock held in excess of the Limit, and in certain
circumstances, voting rights may be reduced below the Limit. A person or entity
is deemed to beneficially own shares owned by an affiliate of, as well as shares
owned by persons acting in concert with such person or entity, but does not
include shares beneficially owned by any employee stock ownership or similar
plan of the Company or any subsidiary.
The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote (after subtracting any
shares held in excess of the Limit, if any, pursuant to the Articles) is
necessary to constitute a quorum at the Meeting. In the event there are not
sufficient votes for a quorum or to approve any proposals at the time of the
Meeting, the Meeting may be adjourned in order to permit further solicitation of
proxies.
As to the election of directors as stated under "Proposal I -- Election
of Directors," the proxy card being provided by the Board enables a stockholder
to vote for the election of the nominees proposed by the Board, or to withhold
authority to vote for one or more of the nominees being proposed. Directors are
elected by a plurality of votes cast, without respect to either (i) broker
non-votes or (ii) proxies as to which authority to vote for one or more of the
nominees being proposed is withheld.
As to the ratification of the 1996 Stock Option Plan and the
ratification of the MSBP, which are submitted as Proposals II and III,
respectively, a stockholder may; (i) vote "FOR" the ratification, (ii) vote
"AGAINST" the ratification, or (iii) "ABSTAIN" with respect to the ratification.
With respect to Proposals II and III, such votes shall be determined by a
majority of the total votes cast affirmatively or negatively on such matters
without regard to broker non-votes. Votes for which the "ABSTAIN" box is
selected for Proposals II and III shall have the effect of a vote against such
proposals.
As to the ratification of auditors as set forth under "Proposal IV --
Ratification of Appointment of Auditors," by checking the appropriate box, a
stockholder may; (i) vote "FOR" the ratification, (ii)
2
<PAGE>
vote "AGAINST" the ratification, or (iii) "ABSTAIN" with respect to the
ratification. Unless otherwise required by law, the ratification of the
appointment of auditors shall be determined by a majority of votes cast
affirmatively or negatively without regard to (a) broker non-votes, or (b)
proxies marked "ABSTAIN" as to that matter.
As to all other matters that may properly come before the Meeting,
unless otherwise required by law, the Articles, or the Bylaws, a majority of the
votes cast by stockholders shall be sufficient to pass on the matter.
Persons and groups owning in excess of 5% of the Common Stock are
required to file certain reports regarding such ownership pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"). Other than as
noted below, management knows of no person or entity, including any "group" as
that term is used in ss.13(d)(3) of the 1934 Act, who or which is the beneficial
owner of more than 5% of the outstanding shares of Common Stock on the Voting
Record Date. Information concerning the security ownership of management is
included under "Proposal I - Election of Directors."
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent of Shares of
of Beneficial Owner Beneficial Ownership Common Stock Outstanding
- ------------------- -------------------- ------------------------
<S> <C> <C>
First Federal Bank of Colorado 1,722,205(1) 10.23%
Employee Stock Ownership Plan
215 South Wadsworth Boulevard
Lakewood, Colorado 80226
</TABLE>
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(1) The ESOP purchased such shares for the exclusive benefit of plan
participants. These shares are held in a suspense account and will be
allocated among ESOP participants annually on the basis of
compensation. As of the Voting Record Date, 669,901 shares have been
previously allocated under the ESOP to participant accounts. See
"Director and Executive Officer Compensation -- Other Compensation --
Employee Stock Ownership Plan."
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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The Common Stock is registered pursuant to Section 12(g) of the 1934
Act. The executive officers and directors of the Company and beneficial owners
of greater than 10% of the Common Stock ("10% beneficial owners") are required
to file reports on Forms 3, 4, and 5 with the Securities and Exchange Commission
("SEC") disclosing changes in beneficial ownership of the Common Stock. Based
solely on the Company's review of such ownership reports, no director, executive
officer, or 10% beneficial owners failed to file such ownership reports on a
timely basis during the fiscal year ended December 31, 1997.
3
<PAGE>
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INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
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Employees, officers, and directors of the Company have an interest in
certain matters being presented for stockholder ratification. Ratification of
the 1996 Stock Option Plan and the MSBP are being presented as Proposals II and
III, respectively. See "Voting Securities and Principal Holders Thereof" for
information regarding the voting control of shares of Common Stock held by
executive officers and directors.
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PROPOSAL I - ELECTION OF DIRECTORS
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Directors
The Company currently has nine directors serving on its Board. The
Articles require that directors be divided into three classes, as nearly equal
in number as possible, each class to serve for a term of three years, with
approximately one-third of the directors elected annually. Three directors will
be elected at the Meeting to serve for a three-year period.
Leeon E. Hayden, E. William Foerster, Jr., and Robert W. Richards have
been nominated by the Board of Directors each to serve for a three-year term, or
until their respective successors have been elected and qualified. If any
nominee is unable to serve, the shares represented by all valid proxies will be
voted for the election of such substitute as the Board of Directors may
recommend or the size of the Board may be reduced to eliminate the vacancy. At
this time, the Board knows of no reason why any nominee might be unavailable to
serve.
The following table sets forth for the nominees and the directors
continuing in office, such individual's name, age, the year the nominee first
became a director of the Company or the Bank, and the number of shares and
percentage of the Common Stock beneficially owned. Each director of the Company
is also a director of the Bank.
4
<PAGE>
<TABLE>
<CAPTION>
SHARES OF
YEAR FIRST CURRENT COMMON STOCK PERCENT
ELECTED OR TERM BENEFICIALLY OF
NAME AGE(1) APPOINTED EXPIRES OWNED(2)(3)(4) CLASS
- ---- ----- --------- ------- -------------- ------
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2001
<S> <C> <C> <C> <C> <C>
E. William Foerster, Jr. 67 1973 1998 8,046(5) 0.05%
Leeon E. Hayden 75 1956 1998 125,865(5)(6)(7) 0.75%
Robert W. Richards 48 1996 1998 78,930(8) 0.47%
THE BOARD OF DIRECTORS RECOMMENDS THAT NOMINEES BE ELECTED AS DIRECTORS
DIRECTORS CONTINUING IN OFFICE
Malcolm E. Collier, Jr. 60 1966 1999 500,686(9) 2.98%
John J. Nicholl 64 1969 1999 8,642(5)(6)(10) 0.05%
Robert T. Person, Jr. 55 1975 1999 9,918(5) 0.06%
Polly Baca 56 1995(11) 2000 12,774 0.08%
Stephen A. Burkholder 56 1987 2000 38,223(5)(6) 0.23%
James R. Wexels 58 1993 2000 8,604(5) 0.05%
All Executive Officers and 1,108,173(12) 6.59%
Directors as a Group
(14 persons)
</TABLE>
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(1) As of December 31, 1997.
(2) As of the Voting Record Date.
(3) Unless otherwise noted, all shares are owned directly by the named
individual or by their spouses and minor children, over which shares
the named individuals effectively exercise sole voting and investment
power.
(4) Includes shares of Common Stock that have been awarded under the First
Federal Bank of Colorado 1992 Management Recognition Plan ("MRP") and
1996 Management Stock Bonus Plan ("MSBP") which are subject to
forfeiture under certain circumstances. Also includes shares held by
the Bank's Employee Stock Ownership Plan ("ESOP") allocated to such
individual's account.
(5) Includes 2,400 stock options to purchase an equal number of shares of
Common Stock that are exercisable within 60 days of the Voting Record
Date.
(6) Excludes shares held by the ESOP for which directors Hayden, Nicholl,
and Burkholder serve as ESOP Trustees. The Plan Trustees may vote
unallocated shares (presently 1,052,304) and up to 669,901 allocated
shares, if no timely voting direction is received from plan
participants, within their fiduciary capacity. Also excludes shares
held by the MRP and the MSBP for which Directors Hayden, Nicholl, and
Burkholder serve as Plan Trustees. The Plan Trustees may vote
unallocated shares (presently 84,498) and up to 228,386 allocated
shares, if no timely voting direction is received from Plan
participants, within their fiduciary capacity.
(7) Includes 5,000 shares of Common Stock owned by the spouse of Mr. Hayden
for which Mr. Hayden disclaims beneficial ownership, but may be deemed
to beneficially own.
(8) Includes 20,064 stock options to purchase an equal number of shares of
Common Stock that are exercisable within 60 days of the Voting Record
Date. Includes 3,773 shares of Common Stock owned by the spouse of Mr.
Richards for which Mr. Richards disclaims beneficial ownership, but may
be deemed to beneficially own.
(9) Includes 69,201 stock options to purchase an equal number of shares of
Common Stock that are exercisable within 60 days of the Voting Record
Date. Includes 39,654 shares of Common Stock owned by the spouse of Mr.
Collier and 16,547 shares of Common Stock owned by the children of Mr.
Collier for which Mr. Collier disclaims beneficial ownership, but may
be deemed to beneficially own.
5
<PAGE>
(10) Includes 3,146 shares of Common Stock owned by the spouse of Mr.
Nicholl for which Mr. Nicholl disclaims beneficial ownership, but may
be deemed to beneficially own.
(11) Ms. Baca was previously a director of the Bank from 1990 until January
1994 when she left due to a relocation to Washington, D.C. She was
re-appointed to the Board on February 15, 1995.
(12) Includes 171,789 stock options to purchase an equal number of shares of
Common Stock that are exercisable within 60 days of the Voting Record
Date. Excludes 1,052,304 shares of unallocated Common Stock held by the
ESOP. Includes 73,757 shares of Common Stock owned by the spouses or
children of the executive officers and directors for which the
executive officers and directors disclaim beneficial ownership, but may
be deemed to beneficially own.
Executive Officers
The following individuals hold the offices in the Company set forth
below opposite their names.
<TABLE>
<CAPTION>
Name Age(1) Positions Held With the Company
- ---- ------------ ---------------------------------
<S> <C> <C>
Malcolm E. Collier, Jr. 60 President, Chief Executive Officer
and Chairman of the Board
Robert W. Richards 48 Vice President
Brian L. Johnson 46 Executive Vice President/Treasurer
Elaine M. Samuelson 51 Secretary
</TABLE>
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(1) At December 31, 1997.
The executive officers of the Company are elected annually and hold
office until their respective successors have been elected and qualified or
until death, resignation, or removal by the Board of Directors.
Biographical Information
The principal occupation during the past five years of each director,
nominee for director, and executive officer of the Company is set forth below.
All directors, nominees, and executive officers have held their present
positions for five years unless otherwise stated.
Directors
E. William Foerster, Jr. has been a director of the Bank since 1973 and
a director of the Company since its formation in September 1995. Mr. Foerster is
the President and majority stockholder of EZT Fastener Co., Inc., Englewood,
Colorado, and three other companies, all of which engage in manufacturing and
distributing.
Leeon E. Hayden has been a director of the Bank since 1956 and a
director of the Company since its formation in September 1995. Mr. Hayden was an
attorney with the firm of Leeon E. Hayden, P.C. and performed occasional legal
work for the Bank, consisting mainly of foreclosures on real property. Mr.
Hayden retired from this position in June 1996.
Robert W. Richards has been a director of the Bank and of the Company
since 1996. Mr. Richards has been President and Chief Operating Officer of the
Bank since April 1996 and has served the Bank in various officer and employee
positions since 1976. Mr. Richards was named a Vice President of the Company in
April 1997.
6
<PAGE>
Malcolm E. Collier, Jr. has been a director of the Bank since 1966 and
has been Chairman and Chief Executive Officer of the Bank since 1989 and 1972,
respectively, and Chairman and Chief Executive Officer of the Company since its
formation in September 1995. Mr. Collier was President of the Bank from July
1995 to April 1996. Mr. Collier has served in various officer capacities with
the Bank since 1962.
John J. Nicholl has been a director of the Bank since 1969 and a
director of the Company since its formation in September 1995. Mr. Nicholl is a
retired County Commissioner of Arapahoe County. Mr. Nicholl served in this
position from 1989 until his retirement in January 1997 and also served in that
position from 1965 to 1980. Mr. Nicholl was self-employed (semi-retired) from
1981 to 1988. Prior to that time, Mr. Nicholl owned and operated Arapahoe
Surveys, a land survey company.
Robert T. Person, Jr. has been a director of the Bank since 1975 and a
director of the Company since its formation in September 1995. Mr. Person has
been the sole owner of Robert Person Communications, a management consulting
practice in Denver, Colorado since 1991. Mr. Person was Vice President of the
Public Service Company of Colorado, a gas and electric utility in Denver,
Colorado, from 1978 to 1991.
Polly Baca has been a director of the Bank since 1995 and a director of
the Company since its formation in September 1995. Ms. Baca is presently the
Regional Administrator of the United States General Services Administration
Rocky Mountain Region headquartered in Denver, Colorado. Previously, from
February 1994 to November 1994, Ms. Baca served as a Special Assistant to
President Clinton and Director of the United States Office of Consumer Affairs.
Ms. Baca has been Executive Director of the Colorado Institute for Hispanic
Education and Economic Development, Denver, Colorado, from 1989 to January 1994.
Ms. Baca was President and sole proprietor of Sierra Baca Systems, Thornton,
Colorado, a consulting firm from 1985 to 1989. Ms. Baca is a former State
Senator, State of Colorado, serving from 1979 to 1986.
Stephen Burkholder has been a director of the Bank since 1987 and a
director of the Company since its formation in September 1995. Mr. Burkholder
has been the sole owner of the A&S Group, a marketing and distribution firm in
Lakewood, Colorado since April 1994. Mr. Burkholder was a long term care
specialist with AMEX Life Assurance Company from August 1993 to March 1994.
Prior to that time, Mr. Burkholder served as the Western Regional Manager for
Hirsch USA, a watch company, commencing in 1991, the Western Regional Sales
Manager for CSC Time Corporation commencing in 1990, and a sales representative
for Seiko Time Corporation from 1973 to 1990.
James R. Wexels has been a director of the Bank since 1993 and a
director of the Company since its formation in September 1995. Mr. Wexels has
been employed by the Public Service Company of Colorado, a gas and electric
utility, since 1966, and currently serves as Managing Director, Governmental
Affairs, for New Century Energies, the holding company of Public Service
Company.
Executive Officers Who Are Not Directors
----------------------------------------
Brian L. Johnson has been employed by the Bank in various officer and
employee capacities since 1974 and has served as Executive Vice President and
Chief Financial Officer since April 1996 and April 1992, respectively. From 1984
through April 1992, Mr. Johnson served as Vice President and Controller. Mr.
Johnson was Vice President and Treasurer of the Company since its formation from
September 1995 until April 1997, at which time he was named Executive Vice
President and Treasurer of the Company.
7
<PAGE>
Elaine M. Samuelson has been employed by the Bank in various officer
and employee capacities since 1970 and has served as Senior Vice President in
charge of lending since June 1996. From 1989 to June 1996, Ms. Samuelson served
as Senior Vice President in charge of loan administration. Ms. Samuelson has
been the Secretary of the Bank since 1975 and of the Company since its formation
in September 1995.
Nominations for Directors
Nomination of candidates for election as directors at any annual
meeting of stockholders may be made (a) by, or at the direction of, a majority
of the Board of Directors or (b) by any stockholder entitled to vote at such
annual meeting. Only persons nominated in accordance with the procedures set
forth in the Articles and Bylaws may be eligible for election as directors at an
annual meeting.
Nominations, other than those made by or at the direction of the Board
of Directors, must be made pursuant to timely notice in writing to the Secretary
of the Company. To be timely, a stockholder's notice shall be delivered to, or
mailed and received at, the principal executive offices of the Company not less
than 60 days prior to the anniversary date of the immediately preceding annual
meeting of stockholders of the Company. Such stockholder's notice shall set
forth (a) as to each person whom the stockholder proposes to nominate for
election or re-election as a director and as to the stockholder giving the
notice (i) the name, age, business address, and residence address of such
person, (ii) the principal occupation or employment of such person, (iii) the
number of shares of Common Stock that are beneficially owned (as defined in the
Articles) by such person on the date of such stockholder notice, and (iv) any
other information relating to such person that is required to be disclosed in
solicitations of proxies with respect to nominees for election as directors
pursuant to the 1934 Act, including, but not limited to, information which would
be required to be filed with the SEC; and (b) as to the stockholder giving the
notice (i) the name and address, as they appear on the Company's books, of such
stockholder and any other stockholders known by such stockholder to be
supporting such nominees and (ii) the number of shares of Common Stock that are
beneficially owned by such stockholder on the date of such stockholder notice
and, to the extent known, by any other stockholders known by such stockholder to
be supporting such nominees on the date of such stockholder notice. At the
request of the Board of Directors, any person nominated by, or at the direction
of, the Board for election as a director at an annual meeting must furnish to
the Secretary of the Company that information required to be set forth in a
stockholder's notice of nomination that pertains to the nominee.
The Board may reject any nomination by a stockholder not timely made in
accordance with the requirements of the Articles and Bylaws. A stockholder may
be given the opportunity to correct a notice not meeting the requirements of the
Articles and Bylaws as provided in the Bylaws. Notwithstanding the procedures
set forth in the Bylaws, if neither the Board nor such committee makes a
determination as to the validity of any nominations by a stockholder, the
presiding officer of the annual meeting shall determine and declare at the
annual meeting whether the nomination was made in accordance with the terms of
the Articles and Bylaws. If the presiding officer determines that a nomination
or proposal was made in accordance with the terms of the Articles and Bylaws,
such officer shall so declare at the annual meeting and ballots shall be
provided for use at the meeting with respect to such nominee or proposal. If the
presiding officer determines that a nomination or proposal was not made in
accordance with the terms of the Articles and Bylaws, such officer shall so
declare at the annual meeting and the defective nomination or proposal shall be
disregarded.
8
<PAGE>
- --------------------------------------------------------------------------------
DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
- --------------------------------------------------------------------------------
Director Compensation
The Company does not presently compensate its directors. Each director
of the Company is also a director of the Bank and receives fees accordingly.
Non-officer members of the Board of Directors of Bank received fees of
$750 per month during the fiscal year December 31, 1997. Non-officer members of
the Board of Directors of the Bank also received a fee of $100 for each special
meeting of the Board of Directors during the fiscal year December 31, 1997.
Because of her position in the Federal government, Director Polly Baca serves on
the Board of the Bank without compensation. Members of the Board's Audit
Committee were paid $100 for each meeting attended during fiscal 1997. Members
of the Board who are not officers of the Bank are paid $100 per meeting for
other committees and are paid $100 to $200 for meetings of the Boards of
Directors of subsidiary companies. In addition, Director Hayden received $250
per month for his performance as Secretary to the Board of Directors. The Bank
paid a total of $58,250 in directors' and committee fees for the fiscal year
ended December 31, 1997.
Stock Awards. On July 24, 1996, the stockholders of the Company
approved the 1996 Stock Option Plan and the MSBP. Pursuant to the terms of the
1996 Stock Option Plan, certain non-employee directors (i.e., Directors,
Burkholder, Foerster, Hayden, Nicholl, Person, and Wexels) received on the date
of stockholder approval options to purchase 12,000 shares of Common Stock. Under
the MSBP, the same non-employee directors received 1,000 shares of restricted
stock on the date of stockholder approval. The options granted to these
non-employee directors become first exercisable at a rate of 20% one year from
the date of grant and 20% annually thereafter. Restricted stock granted to these
non-employee directors will vest 20% one year from the date awarded and an
additional 20% annually, thereafter.
Executive Compensation
Summary Compensation Table. The following table sets forth for the
fiscal years ended December 31, 1997, 1996, and 1995, certain information as to
the total remuneration received by the chief executive officer of the Company or
any subsidiary who served in these capacities during such period and received
total cash compensation in excess of $100,000 for the year ended December 31,
1997.
9
<PAGE>
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation(1) Awards
-------------------------------------------- --------------------------
Securities
Restricted Underlying
Name and Principal Other Annual Stock Options/ All Other
Position Year Salary Bonus Compensation(2) Award(s)(3) SARs(#) Compensation
- ------------------ ---- ------ ----- --------------- ----------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Malcolm E. Collier, Jr. 1997 $273,000 $23,649 $ 8,547 $ -- -- $ 28,908(4)
President, Chairman, 1996 251,000 8,894 8,723 343,750 90,000 30,000(4)
and CEO 1995 251,000 9,422 9,091 -- -- 30,002(4)
Robert W. Richards(5) 1997 109,000 9,433 4,379 -- -- 19,693(6)
President and Chief
Operating Officer
of the Bank
</TABLE>
- ----------------
(1) All compensation was paid by the Bank.
(2) Excludes compensation applicable to the vesting of awards of restricted
stock and receipt of income attributable to dividends paid on such
awards under the Bank's Management Recognition Plan as of December 31,
1997, 1996 and 1995 of $189,711, $133,247 and $79,986, respectively,
for Mr. Collier and of $37,117 in 1997 for Mr. Richards. Such awards
were made in 1992. Excludes compensation applicable to the vesting of
restricted stock and receipt of income attributable to dividends paid
on such awards under the MSBP as of December 31, 1997 of $75,043 and
$56,282 for Mr. Collier and Mr. Richards, respectively. Such awards
were made in 1996.
(3) At December 31, 1997, Mr. Collier and Mr. Richards held shares of
restricted stock with fair market values of $397,000 and $297,750,
respectively, (calculated by multiplying the number of shares that
remained restricted by $24.8125 per share, the average of the bid and
ask price of the Company's unrestricted stock on December 31, 1997).
(4) Includes cost of shares of Common Stock awarded under the ESOP as of
December 31, 1997, 1996, and 1995 of $27,068, $30,000 and $10,305,
respectively, to Mr. Collier and contributions to the Bank's
Profit-Sharing Plan on behalf of Mr. Collier for plan years ended
December 31, 1997, 1996, and 1995 of $1,840, $0, and $19,697,
respectively.
(5) Mr. Richards' total annual salary and bonus for 1996 and 1995 did not
exceed $100,000.
(6) Includes cost of shares of Common Stock awarded under the ESOP as of
December 31, 1997 of $18,440 and contributions to the Bank's Profit
Sharing Plan on behalf of Mr. Richards for the plan year ended December
31, 1997 of $1,253.
Change in Control Severance Agreements. The Bank entered into severance
agreements with Malcolm E. Collier, Jr., Chairman of the Board, Robert W.
Richards, President and the Bank, and certain other key executive officers (a
total of seven persons). The severance agreements are each for terms of three
years. The agreements are terminable by the Bank for "just cause" as defined in
the agreements. If the Bank terminates the employee without just cause, the
employee will be entitled to a continuation of his salary from the date of
termination through the remaining term of the agreement. Such agreements contain
a provision stating that in the event of the termination of employment in
connection with any change in control of the Bank or the Company, the employee
will be paid in a lump sum an amount equal to 2.99 times the average of the
employee's most recent five years annual taxable compensation. If such payments
were to be made under the agreements as of December 31, 1997, such payments
would equal approximately $2.9 million, of which approximately $1.2 million
would be allocated to Mr. Collier and approximately $350,000 to Mr. Richards.
The aggregate payments that would be made to such individuals would be an
expense to the Company, thereby reducing net income and the Company's capital by
that amount. The agreements may be renewed annually by the Board of Directors
upon a determination of satisfactory performance and that such agreements should
be renewed.
10
<PAGE>
Compensation Committee Interlocks and Insider Participation
During 1997, Directors Burkholder, Foerster, Person, Wexels and Baca
served as the Compensation Committee for the Company and the Bank.
Board Compensation Committee Report on Executive Compensation
The Company's executive officers consist of Mr. Collier (President,
Chairman, and Chief Executive Officer), Robert W. Richards (Vice President),
Brian L. Johnson (Executive Vice President and Treasurer), and Elaine M.
Samuelson (Secretary). The Bank's executive officers consist of Mr. Collier
(Chairman and Chief Executive Officer), Robert W. Richards (President and Chief
Operating Officer), James M. Rooney (Executive Vice President), Brian L. Johnson
(Executive Vice President and Chief Financial Officer), Elaine M. Samuelson
(Senior Vice President and Secretary), and Robert A. Francis and Robert P.
Easterly (Senior Vice Presidents). All of these persons are executive officers
of the Bank, therefore the Compensation Committee of the Bank determines their
compensation. The Compensation Committee meets in December of each year to
determine the level of any salary increase to take effect as of January 1 of the
following year. The Compensation Committee also approves any perquisites payable
to these executive officers.
The Compensation Committee determines the level of salary increase, if
any, to take effect on January 1 of the following year after reviewing various
published surveys of compensation paid to executives performing similar duties
for depository institutions and their holding companies, with a particular focus
on the level of compensation paid by comparable institutions in and around the
Bank's market area. Although the committee did not set compensation levels for
executive officers based on whether particular financial goals had been achieved
by the Bank, the committee did consider the overall profitability of the Bank
when making these decisions. With respect to each particular executive officer,
his or her particular contributions to the Bank over the past year are also
evaluated.
Mr. Collier's base salary for 1997 was $273,000. At the meeting of the
committee that determined Mr. Collier's salary for calendar year 1997, the
committee referred to various published compensation surveys. The committee
particularly noted the average annual compensation paid to chief executive and
chief operating officers of financial institutions in the State of Colorado and
nationally with assets of between $1.0 billion to $1.5 billion. Although the
committee did not set Mr. Collier's 1997 compensation based on whether
particular financial goals had been achieved by the Bank, the committee
considered the overall profitability of the Bank when making this decision.
During the last fiscal year, the Bank paid bonuses as determined by the
Compensation Committee equal to 2% of the net income of the Bank. Such bonuses
were paid to all employees of the Bank based on their pro rata compensation for
fiscal 1997.
The Compensation Committee:
Polly Baca Robert T. Person, Jr.
Stephen Burkholder James R. Wexels
E. William Foerster, Jr.
11
<PAGE>
The following table sets forth the year ended December 31, 1997,
information regarding options awarded pursuant to the 1992 Option Plan and the
1996 Stock Option Plan to the named executive officers in the Summary
Compensation Table and the year end value of such outstanding options.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options/SARs in-the-Money Options/SARs
Acquired on Value at Fiscal Year-End at Fiscal Year-End
Exercise Realized (#)(1) ($)(1)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Malcolm E. Collier, Jr. 10,000 $226,125(2) 51,201/0 $1,157,783/$0(2)
0 0 18,000/72,000 $ 202,500/$810,000(3)
Robert W. Richards 0 $ 0 6,064/0 $137,122/$0(2)
0 0 14,000/56,000 $157,500/$630,000(3)
</TABLE>
- ----------------
(1) No Stock Appreciation Rights ("SARs") have been awarded under the 1992
Stock Option Plan or the 1996 Stock Option Plan.
(2) 1992 Stock Option Plan - Based upon an exercise price of $2.20 and the
average bid and ask price of $24.8125 as of December 31, 1997.
(3) 1996 Stock Option Plan - Based on an exercise price of $13.5625 and the
average bid and ask price of $24.8125 as of December 31, 1997.
- --------------------------------------------------------------------------------
PERFORMANCE GRAPH
- --------------------------------------------------------------------------------
The following graph compares the cumulative total shareholder return on
an initial investment in common stock of First Colorado Bancorp, Inc. subsequent
to the Conversion and Reorganization with that of (a) the total return index for
domestic companies listed on the Nasdaq Stock Market and (b) the total return
index for banks listed on the Nasdaq Stock Market. These total return indices of
the Nasdaq Stock Market are computed by the Center for Research in Securities
Prices ("CRSP") at the University of Chicago. All three investment comparisons
assume the investment of $100 at the close of the market on January 2, 1996 (the
date the common stock of First Colorado Bancorp, Inc. was first traded) and the
reinvestment of dividends as paid. The graph provides comparisons as of December
31, 1997, the last day of trading for the year ended December 31, 1997. Stock
performance information regarding the Bank prior to the Conversion and
Reorganization has not been provided due to the lack of comparability of the
trading prices of the two stocks.
There can be no assurance that the Company's stock performance will
continue with the same or similar trends as that of the Company as depicted in
the graph below. The Company will not make or endorse any predictions as to
future stock performance.
12
<PAGE>
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
==================================================================================================
1/2/96 12/31/96 12/31/97
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CRSP Nasdaq Bank Index $100.00 $133.02 $223.00
- --------------------------------------------------------------------------------------------------
CRSP Nasdaq U.S. Index $100.00 $122.00 $151.00
- --------------------------------------------------------------------------------------------------
First Colorado Bancorp, Inc. $100.00 $151.00 $216.00
==================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------------------------------
The Bank had no "interlocking" relationships existing on or after
January 1, 1995 in which (i) any executive officer is a member of the Board of
Directors/Trustees of another entity, one of whose executive officers is a
member of the Board of Directors of the Bank, or where (ii) any executive
officer is a member of the compensation committee of another entity, one of
whose executive officers is a member of Board of Directors of the Bank.
The Bank, like many financial institutions, has followed a policy of
offering residential mortgage loans for the financing of personal residences,
share loans, consumer loans, and overdraft protection to its officers,
directors, and employees. The loans are made in the ordinary course of business
and are made on substantially the same terms and conditions, including interest
rate and collateral, as those of comparable transactions prevailing at the time
with other persons, and do not include more than the normal risk of
collectibility or present other unfavorable features. At December 31, 1997 loans
to
13
<PAGE>
executive officers and directors of the Company and the Bank, and their
immediate family members, approximated $700,000 or 0.34% of the Company's
stockholders' equity.
- --------------------------------------------------------------------------------
PROPOSAL II -- RATIFICATION OF THE 1996 STOCK OPTION PLAN
- --------------------------------------------------------------------------------
General
The Board of Directors adopted the 1996 Stock Option Plan and the
Company's stockholders subsequently approved it on July 24, 1996 ("Effective
Date"). Pursuant to the 1996 Stock Option Plan, up to 1,340,379 shares of Common
Stock, are reserved for issuance by the Company upon exercise of stock options
awarded or to be granted to officers, directors, key employees and other persons
from time to time. The purpose of the 1996 Stock Option Plan is to attract and
retain qualified personnel for positions of substantial responsibility and to
provide additional incentive to certain officers, directors, key employees and
other persons to promote the business success of the Company and the Bank.
Pursuant to regulations of the Office of the Thrift Supervision (the
"OTS") applicable to stock benefit plans established or implemented within one
year following the completion of a mutual-to-stock conversion of a federally
chartered savings institution such as the Bank, including the 1995 corporate
reorganization and holding company formation of the Bank as a subsidiary of the
Company ("Reorganization"), the 1996 Stock Option Plan contains certain
restrictions and limitations. The 1996 Stock Option Plan provides that options
granted to employees or directors become first exercisable no more rapidly than
ratably over a five-year period (with acceleration upon death or disability or a
Change in Control (as such terms are defined in the 1996 Stock Option Plan);
provided, however, that such accelerated vesting is not inconsistent with the
regulations of the OTS at the time of such acceleration). Recent OTS
interpretive letters permit awards under such stock benefit plans to accelerate
vesting of awards upon a Change in Control; provided that stockholders ratify
such plan provisions by action of stockholders taken more than one year
following the completion of the mutual-to-stock conversion. The Board of
Directors is seeking ratification of the 1996 Stock Option Plan (as previously
approved by the stockholders in 1996) as a means of complying with the OTS
interpretive letters.
The Company has approved an Agreement of Merger and Reorganization
("Merger Agreement") with Commercial Federal Corporation. Although there can be
no assurance that all conditions contained in the Merger Agreement (including
approval by the stockholders of the Company and Commercial Federal Corporation,
and regulatory approval) will be met and the transaction will be consummated,
the Board has determined that the ratification of the 1996 Stock Option Plan as
a means of complying with the OTS interpretive letters is in the best interests
of the stockholders of the Company, as well as the officers, directors and
employees of the Company. The transaction contemplated by the Merger Agreement
will constitute a "Change in Control" of the Company as defined in the 1996
Stock Option Plan. A summary of the 1996 Stock Option Plan is provided below and
is qualified in its entirety by reference to the 1996 Stock Option Plan.
Ratification of the 1996 Stock Option Plan does not increase the number
of shares reserved for issuance under the 1996 Stock Option Plan, alter the
classes of individuals eligible to participate in such plan, or otherwise amend
or modify the terms of the plan. In the event that the 1996 Stock Option Plan is
not ratified by stockholders at the Meeting, the 1996 Stock Option Plan will
nevertheless remain in effect. However, any employees or directors of the
Company or the Bank that have their service terminated prior to the vesting of
their option awards may forfeit such unvested awards to the extent required
under applicable OTS regulations and policies. In light of the proposed merger
with Commercial
14
<PAGE>
Federal Corporation, the potential for a termination of service among current
option holders may have increased. Therefore, absent acceleration of vesting of
such awards upon a Change in Control of the Company or the Bank, such
individuals have an increased likelihood of forfeiting option awards made in
accordance with the 1996 Stock Option Plan, which was previously adopted by the
Board and subsequently approved by the Company's stockholders.
The 1996 Stock Option Plan is administered by the Board of Directors or
a committee of not less than two non-employee directors appointed by the
Company's Board of Directors and serving at the pleasure of the Board (the
"Option Committee"). Members of the Option Committee shall be deemed
"Non-Employee Directors" within the meaning of Rule 16b-3 pursuant to the 1934
Act. The Option Committee may select the officers and employees to whom options
are to be granted and the number of options to be granted based upon several
factors including prior and anticipated future job duties and responsibilities,
job performance, the Bank's financial performance and a comparison of awards
given by other institutions. A majority of the members of the Option Committee
shall constitute a quorum and the action of a majority of the members present at
any meeting at which a quorum is present shall be deemed the action of the
Option Committee.
Officers, directors, key employees and other persons who are designated
by the Option Committee are eligible to receive, at no cost to them, options
under the Option Plan (the "Optionees"). Each option granted pursuant to the
Option Plan shall be evidenced by an instrument in such form as the Option
Committee shall from time to time approve. Option shares may be paid for in
cash, shares of Common Stock, or a combination of both. The Company will receive
no monetary consideration for the granting of stock options under the Option
Plan. Further, the Company will receive no consideration other than the option
exercise price per share for Common Stock issued to Optionees upon the exercise
of those options.
Shares of Common Stock issuable under the 1996 Stock Option Plan may be
from authorized but unissued shares or shares purchased in the open market. An
option which expires, becomes unexercisable, or is forfeited for any reason
prior to its exercise will again be available for issuance under the 1996 Stock
Option Plan. No Option or any right or interest therein is assignable or
transferable except by will or the laws of descent and distribution. The 1996
Stock Option Plan shall continue in effect for a term of ten years from the
Effective Date.
Stock Options
The Option Committee may grant either Incentive Stock Options or
Non-Incentive Stock Options. In general, if an Optionee ceases to serve as an
employee of the Company for any reason other than disability or death, an
exercisable Incentive Stock Option may continue to be exercisable for three
months but in no event after the expiration date of the option, except as may
otherwise be determined by the Option Committee at the time of the award. In the
event of the disability or death of an Optionee during employment, an
exercisable Incentive Stock Option will continue to be exercisable for one year
and two years, respectively, to the extent exercisable by the Optionee
immediately prior to the Optionee's disability or death but only if, and to the
extent that, the Optionee was entitled to exercise such Incentive Stock Options
on the date of termination of employment. The terms and conditions of
Non-Incentive Stock Options relating to the effect of an Optionee's termination
of employment or service, disability, or death shall be such terms as the Option
Committee, in its sole discretion, shall determine at the time of termination of
service, disability or death, unless specifically determined at the time of
grant of such options.
15
<PAGE>
Currently, the 1996 Stock Option Plan requires that options granted to
employees or directors become first exercisable no more rapidly than ratably
over a five-year period (with acceleration upon death or disability or a Change
in Control (as such terms are defined in the 1996 Stock Option Plan); provided,
however, that such accelerated vesting is not inconsistent with the regulations
of the OTS at the time of such acceleration). Ratification of the 1996 Stock
Option Plan at the Meeting will conform the acceleration of vesting of options
upon a Change in Control with applicable OTS interpretive letters. Such
stockholder ratification will be effective with respect to previously awarded
options and any options that may be granted in the future. Pursuant to the 1996
Stock Option Plan, upon a Change in Control, all options previously granted and
outstanding as of the date of a Change in Control will automatically become
exercisable and non-forfeitable.
No shares of Common Stock shall be issued upon the exercise of an
option until full payment therefor has been received by the Company, and no
Optionee shall have any of the rights of a stockholder of the Company until
shares of Common Stock are issued to such Optionee. Upon the exercise of an
option by an Optionee (or the Optionee's personal representative), the Option
Committee, in its sole and absolute discretion, may make a cash payment to the
Optionee, in whole or in part, in lieu of the delivery of shares of Common
Stock. Such cash payment to be paid in lieu of delivery of Common Stock shall be
equal to the difference between the fair market value of the Common Stock on the
date of the option exercise and the exercise price per share of the option. Any
cash payment shall be in exchange for the cancellation of such option. A cash
payment shall not be made in the event that such transaction would result in
liability to the Optionee and the Company under Section 16(b) of the 1934 Act,
and regulations promulgated thereunder.
The 1996 Stock Option Plan provides that the Board of Directors of the
Company may authorize the Option Committee to direct the execution of an
instrument providing for the modification, extension or renewal of any
outstanding option, provided that no such modification, extension or renewal
shall confer on the Optionee any right or benefit which could not be conferred
on the Optionee by the grant of a new option at such time, and shall not
materially decrease the Optionee's benefits under the option without the
Optionee's consent, except as otherwise provided under the 1996 Stock Option
Plan.
Awards Under the 1996 Stock Option Plan
The Board or the Option Committee shall from time to time determine the
officers, directors, key employees and other persons who shall be granted
options under the 1996 Stock Option Plan, the number of options to be granted to
any plan participant, and whether options granted to each such plan participant
shall be Incentive Stock Options and/or Non-Incentive Stock Options. In
selecting participants and in determining the number of shares of Common Stock
subject to options to be granted to each such plan participant, the Board or the
Option Committee may consider the nature of the past and anticipated future
services rendered by each such plan participant, each participant's current and
potential contribution to the Company and any other factors as may be deemed
relevant. Participants who have been granted an option may, if otherwise
eligible, be granted additional options. In no event shall shares of Common
Stock subject to options granted to non-employee directors in the aggregate
under the 1996 Stock Option Plan exceed more than 30% of the total number of
shares of Common Stock authorized for delivery under the 1996 Stock Option Plan,
and no more than 5% of the total available shares of Common Stock related to
options may be awarded to any individual non-employee director. In no event
shall shares of Common Stock subject to options granted to any employee exceed
more than 25% of the total number of shares of Common Stock authorized for
delivery under the 1996 Stock Option Plan.
16
<PAGE>
The table below presents information related to options previously
awarded by the Company under the 1996 Stock Option Plan. Ratification of the
1996 Stock Option Plan does not impact the number of options previously awarded.
Stockholder ratification of the 1996 Stock Option Plan confirms the provisions
of the 1996 Stock Option Plan, previously approved by stockholders of the
Company. In accordance with the 1996 Stock Option Plan, all outstanding options
shall become immediately exercisable in the event of a Change in Control of the
Company or the Bank.
PREVIOUSLY AWARDED BENEFITS
1996 STOCK OPTION PLAN
----------------------
Number of Options
Name and Position Previously Granted(1)(2)
- ----------------- ------------------------
Malcolm E. Collier, Jr.
Chairman of the Board, President and
CEO of the Company................................... 90,000(3)
Robert W. Richards
President of the Bank................................ 70,000(3)
Executive Officer Group
(7 persons).......................................... 395,000(3)
Non-Executive Officer Director Group
(6 persons).......................................... 72,000(4)
Non-Executive Officer Employee Group
(51 persons)......................................... 873,379(3)
(1) The exercise price of such options is equal to the fair market value of
the Common Stock on the date of grant.
(2) Options shall vest immediately upon the death or disability of the
participant or upon a change in control of the Company or the Bank.
(3) Options awarded to officers and employees are exercisable as follows:
Options are first exercisable at the rate of 20% one year from the date
of grant and 20% annually thereafter. Options shall vest during periods
of continued service as an employee, director, or director emeritus.
Upon vesting, awards shall remain exercisable for ten years from the
date of grant during periods of continued service as an employee,
director, or director emeritus.
(4) Options awarded to each of six non-employee directors (except Polly
Baca) are first exercisable at a rate of 20% as of July 24, 1997, and
20% annually thereafter, during such period of service as a director or
director emeritus and shall remain exercisable for ten years from the
date of grant without regard to continued service as a director or
director emeritus.
Effect of Mergers, Change of Control and Other Adjustments
Subject to any required action by the stockholders of the Company,
within the sole discretion of the Option Committee, the aggregate number of
shares of Common Stock for which options may be granted hereunder or the number
of shares of Common Stock represented by each outstanding option will be
proportionately adjusted for any increase or decrease in the number of issued
and outstanding shares of Common Stock resulting from a subdivision or
consolidation of shares or the payment of a stock dividend or any other increase
or decrease in the number of shares of Common Stock effected without the receipt
or payment of consideration by the Company. Subject to any required action by
the
17
<PAGE>
stockholders of the Company, in the event of any change in control,
recapitalization, merger, consolidation, exchange of shares, spin-off,
reorganization, tender offer, partial or complete liquidation or other
extraordinary corporate action or event, the Option Committee, in its sole
discretion, shall have the power, prior to or subsequent to such action or
events, to (i) appropriately adjust the number of shares of Common Stock subject
to each option, the exercise price per share of such option, and the
consideration to be given or received by the Company upon the exercise of any
outstanding options; (ii) cancel any or all previously granted Options, provided
that appropriate consideration is paid to the Optionee in connection therewith;
and/or (iii) make such other adjustments in connection with the 1996 Stock
Option Plan as the Option Committee, in its sole discretion, deems necessary,
desirable, appropriate or advisable. However, no action may be taken by the
Option Committee which would cause Incentive Stock Options granted pursuant to
the 1996 Stock Option Plan to fail to meet the requirements of Section 422 of
the Internal Revenue Code ("Code") without the consent of the Optionee. The 1996
Stock Option Plan provision to accelerate the exercise of options and the
immediate exercisability of options in the case of a Change in Control of the
Company could have an anti-takeover effect by making it more costly for a
potential acquiror to obtain control of the Company due to the higher number of
shares outstanding following such exercise of options.
The power of the Option Committee to make adjustments in connection
with the 1996 Stock Option Plan, including adjusting the number of shares
subject to options and canceling options, prior to or after the occurrence of an
extraordinary corporate action, allows the Option Committee to adapt the 1996
Stock Option Plan to operate in changed circumstances, to adjust the 1996 Stock
Option Plan to fit a smaller or larger company, and to permit the issuance of
options to new management following such extraordinary corporate action.
However, this power of the Option Committee may also have an anti-takeover
effect, by allowing the Option Committee to adjust the 1996 Stock Option Plan in
a manner to allow the present management of the Company to exercise more options
and hold more shares of the Common Stock, and to possibly decrease the number of
options available to new management of the Company.
Amendment and Termination of the 1996 Stock Option Plan
The Board of Directors may alter, suspend or discontinue the 1996 Stock
Option Plan, except that no action of the Board shall increase the maximum
number of shares of Common Stock issuable under the 1996 Stock Option Plan,
materially increase the benefits accruing to Optionees under the 1996 Stock
Option Plan or materially modify the requirements for eligibility for
participation unless such action of the Board shall be subject to ratification
by the stockholders of the Company.
Possible Dilutive Effects of the 1996 Stock Option Plan
The Common Stock to be issued upon the exercise of options awarded
under the 1996 Stock Option Plan may either be authorized but unissued shares of
Common Stock or shares purchased in the open market. Because the stockholders of
the Company do not have preemptive rights, to the extent that the Company funds
the 1996 Stock Option Plan, in whole or in part, with authorized but unissued
shares, the interests of current stockholders will be diluted. If upon the
exercise of all of the outstanding nonvested options as of the Voting Record
Date, the Company delivers newly issued shares of Common Stock (i.e., 1,066,979
shares of Common Stock), then the impact to current stockholders would be to
dilute their current ownership percentages by approximately 6.0%. Ratification
of the 1996 Stock Option Plan does not increase the maximum number of shares
issuable under the 1996 Stock Option Plan as previously approved by
stockholders.
18
<PAGE>
Federal Income Tax Consequences
Under present federal tax laws, awards under the 1996 Stock Option Plan
will have the following consequences:
1. The grant of an option will not by itself result in the
recognition of taxable income to an Optionee nor entitle the
Company to a tax deduction at the time of such grant.
2. The exercise of an option which is an "Incentive Stock Option"
within the meaning of Section 422 of the Code generally will
not, by itself, result in the recognition of taxable income to
an Optionee nor entitle the Company to a deduction at the time
of such exercise. However, the difference between the option
exercise price and the fair market value of the Common Stock
on the date of exercise is an item of tax preference which
may, in certain situations, trigger the alternative minimum
tax for an Optionee. An Optionee will recognize capital gain
or loss upon resale of the shares of Common Stock received
pursuant to the exercise of Incentive Stock Options, provided
that such shares are held for at least one year after transfer
of the shares or two years after the grant of the option,
whichever is later. Generally, if the shares are not held for
that period, the Optionee will recognize ordinary income upon
disposition in an amount equal to the difference between the
exercise price and the fair market value of the Common Stock
on the date of exercise, or, if less, the sales proceeds of
the shares acquired pursuant to the option.
3. The exercise of a Non-Incentive Stock Option will result in
the recognition of ordinary income by the Optionee on the date
of exercise in an amount equal to the difference between the
exercise price and the fair market value of the Common Stock
acquired pursuant to the option.
4. The Company will be allowed a tax deduction for federal tax
purposes equal to the amount of ordinary income recognized by
an Optionee at the time the Optionee recognizes such ordinary
income.
5. In accordance with Section 162(m) of the Code, the Company's
tax deductions for compensation paid to the most highly paid
executives named in the Company's Proxy Statement may be
limited to no more than $1 million per year, excluding certain
"performance-based" compensation. The Company intends for the
award of Options under the Option Plan to comply with the
requirement for an exception to Section 162(m) of the Code
applicable to stock option plans so that the Company's
deduction for compensation related to the exercise of options
would not be subject to the deduction limitation set forth in
Section 162(m) of the Code.
Accounting Treatment
Neither the grant nor the exercise of an option under the 1996 Stock
Option Plan currently requires any charge against earnings under generally
accepted accounting principles. In certain circumstances, Common Stock issuable
pursuant to outstanding options which are exercisable under the 1996 Stock
Option Plan will be considered outstanding for purposes of calculating earnings
per share on a fully diluted basis.
19
<PAGE>
Stockholder Ratification
Stockholder ratification of the 1996 Stock Option Plan is being sought
in accordance with the interpretive letters of the OTS. An affirmative vote of a
majority of the votes cast at the Meeting on the matter, in person or by proxy,
is required to constitute stockholder ratification of the 1996 Stock Option
Plan, submitted as Proposal II.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE 1996 STOCK OPTION PLAN.
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PROPOSAL III -- RATIFICATION OF THE MSBP
- --------------------------------------------------------------------------------
General
The Board of Directors of the Company has previously implemented the
MSBP as a method of providing directors, officers, and key employees of the Bank
with a proprietary interest in the Company in a manner designed to encourage
such persons to remain in the employment or service of the Bank. As previously
approved by stockholders of the Company in July 1996, the Bank contributed
sufficient funds to the MSBP to purchase up to 268,075 shares of Common Stock.
All of the Common Stock purchased by the MSBP was purchased at the fair market
value of such stock on the date of purchase. Awards under the MSBP were made in
recognition of prior and expected future services to the Bank by its directors,
officers and key employees responsible for implementation of the policies
adopted by the Bank's Board of Directors and as a means of providing a further
retention incentive.
Pursuant to regulations of the OTS applicable to stock benefit plans
established or implemented within one year following the completion of a
mutual-to-stock conversion, the MSBP contains certain restrictions and
limitations. The MSBP provides that stock awards ("Awards") granted to employees
or directors become vested no more rapidly than ratably over a five-year period
(with acceleration upon death or disability or a Change in Control (as such
terms are defined in the MSBP); provided, however, that such accelerated vesting
is not inconsistent with the regulations of the OTS at the time of such
acceleration). Recent OTS interpretive letters permit awards under such stock
benefit plans to accelerate the vesting of awards upon a change in control,
provided that stockholders ratify such plan provisions at a stockholder meeting
held more than one year following the completion of the institution's
mutual-to-stock conversion. The Board of Directors is seeking ratification of
the MSBP (as previously approved by the stockholders in 1996) as a means of
complying with the OTS interpretive letters.
Although there can be no assurance that all conditions contained in the
Merger Agreement (including approval by the stockholders of the Company and
Commercial Federal Corporation, and regulatory approval) will be met and the
transaction will be consummated, the Board has determined that the ratification
of the MSBP as a means of complying with the OTS interpretive letters is in the
best interests of the stockholders of the Company, as well as the officers,
directors and employees of the Company. The transaction contemplated by the
Merger Agreement will constitute a "Change in Control" of the Company as defined
in the MSBP. A summary of the MSBP is provided below and is qualified in its
entirety by reference to the MSBP.
Ratification of the MSBP does not increase the number of shares
reserved for issuance thereunder, alter the classes of individuals eligible to
participate in the MSBP, or otherwise amend or modify the terms of the MSBP. In
the event that the MSBP is not ratified by stockholders at the Meeting, the MSBP
20
<PAGE>
will nevertheless remain in effect. However, any employee or director of the
Company or the Bank that has their service terminated prior to the vesting of
such stock awards may forfeit such unvested awards to the extent that may be
required under applicable OTS regulations and policies. In light of the proposed
merger with Commercial Federal Corporation, the potential for a termination of
service among stock award holders may have increased. Therefore, absent
acceleration of vesting of such stock awards upon a Change in Control, these
individuals have an increased likelihood of forfeiting stock awards made in
accordance with the MSBP, which was previously authorized by the Board and
approved by the Company's stockholders.
Awards Under the MSBP
Currently, the MSBP requires that Awards granted to employees or
directors become first exercisable no more rapidly than ratably over a five-year
period (with acceleration upon death or disability or a Change in Control (as
such terms are defined in the MSBP); provided, however, that such accelerated
vesting is not inconsistent with the regulations of the OTS at the time of such
acceleration). Ratification of the MSBP at the Meeting will conform the
acceleration of vesting of Awards upon a Change in Control with applicable OTS
interpretive letters. Such stockholder ratification will be effective with
respect to previously granted Awards and any Awards that may be granted in the
future. Pursuant to the MSBP, upon a Change in Control, all Awards previously
granted and outstanding as of the date of a Change in Control will automatically
become exercisable and non-forfeitable.
Benefits under the MSBP ("Plan Share Awards") may be granted at the
sole discretion of a committee comprised of not less than two directors who are
not employees of the Bank or the Company (the "MSBP Committee") appointed by the
Bank's Board of Directors. The MSBP is managed by trustees (the "MSBP Trustees")
who are non-employee directors of the Bank or the Company and who have the
responsibility to invest all funds contributed by the Bank to the trust created
for the MSBP (the "MSBP Trust"). Unless the terms of the MSBP or the MSBP
Committee specify otherwise, awards under the MSBP will be in the form of
restricted stock payable as the Plan Share Awards shall be earned and
non-forfeitable. Twenty percent (20%) of such awards shall be earned and
non-forfeitable on the one year anniversary of the date of grant of such awards,
and 20% annually thereafter, provided that the recipient of the award remains an
employee, Director or Director Emeritus during such period. A recipient of such
restricted stock will not be entitled to voting rights associated with such
shares prior to the applicable date such shares are earned. Dividends paid on
Plan Share Awards shall be held in arrears and distributed upon the date such
applicable Plan Share Awards are earned. Any shares held by the MSBP Trust which
are not yet earned shall be voted by the MSBP Trustees, as directed by the MSBP
Committee. If a recipient of such restricted stock terminates employment or
service for reasons other than death, disability, or a Change in Control of the
Company or the Bank, the recipient forfeits all rights to the awards under
restriction. If the recipient's termination of employment or service is caused
by death, disability, or a Change in Control of the Company or the Bank, all
restrictions expire and all shares allocated shall become unrestricted. Awards
of restricted stock shall be immediately non- forfeitable in the event of the
death or disability of such recipient, or upon a Change in Control of the
Company or the Bank, and distributed as soon as practicable thereafter. The
transaction contemplated by the Merger Agreement will bring about a Change in
Control of the Company as defined in the MSBP. The Board of Directors may
terminate the MSBP at any time, and if it does so, any shares not allocated will
revert to the Company.
Plan Share Awards under the MSBP will be determined by the MSBP
Committee. In no event shall any Employee receive Plan Share Awards in excess of
25% of the aggregate Plan Shares authorized under the MSBP. Plan Share Awards
may be granted to newly elected or appointed non-employee
21
<PAGE>
Directors of the Bank subsequent to the effective date (as defined in the MSBP)
provided that the Plan Share Awards made to non-employee Directors shall not
exceed 30% of total Plan Share Reserve in the aggregate under the MSBP or 5% of
the total Plan Share Reserve to any individual non-employee Director.
The aggregate number of Plan Shares available for issuance pursuant to
the Plan Share Awards and the number of shares to which any Plan Share Award
relates shall be proportionately adjusted for any increase or decrease in the
total number of outstanding shares of Common Stock issued subsequent to the
effective date (as defined in the MSBP) of the MSBP resulting from any split,
subdivision or consolidation of the Common Stock or other capital adjustment,
change or exchange of Common Stock, or other increase or decrease in the number
or kind of shares effected without receipt or payment of consideration by the
Company.
The following table presents information related to the previously
granted awards of Common Stock under the MSBP as authorized pursuant to the
terms of the MSBP. Ratification of such MSBP does not change the number of
shares awarded or other terms. Such ratification of the MSBP confirms the
provisions of the MSBP previously approved by the stockholders of the Company.
PRIOR AWARDS UNDER THE MSBP
Number of Shares
Previously
Name and Position Granted(1)(2)
- ----------------- -------------
Malcolm E. Collier, Jr.
Chairman of the Board, President and CEO
of the Company......................................... 20,000
Robert W. Richards
President of the Bank................................ 15,000
Executive Officer Group (7 persons).................... 89,000
Non-Executive Officer Director Group
(6 persons).......................................... 6,000(3)
Non-Executive Officer Employee Group
(51 persons)......................................... 100,000
- --------------------
(1) All Plan Share Awards presented herein shall be earned at the rate of
20% one year from date of grant, and 20% annually thereafter. All
awards become immediately 100% vested upon death, disability, or
termination of service following a change in control (as defined in the
MSBP).
(2) Plan Share Awards shall continue to vest during periods of service as
an employee, director, or director emeritus.
(3) Each of six non-employee directors of the Bank were awarded 1,000
shares as of July 24, 1996.
Amendment and Termination of the MSBP
The Board may amend or terminate the MSBP at any time. However, no
action of the Board may increase the maximum number of Plan Shares permitted to
be awarded under the MSBP, except for adjustments in the Common Stock of the
Company, materially increase the benefits accruing to Participants under the
MSBP or materially modify the requirements for eligibility for participation in
the MSBP unless such action of the Board shall be subject to ratification by the
stockholders of the Company.
22
<PAGE>
Federal Income Tax Consequences
Common Stock awarded under the MSBP is generally taxable to the
recipient at the time that such awards become 100% vested and non-forfeitable,
based upon the fair market value of such stock at the time of such vesting.
Alternatively, a recipient may make an election pursuant to Section 83(b) of the
Code within 30 days of the date of transfer of the award to elect to include in
gross income for the current taxable year the fair market value of such stock as
of the date of transfer of the award. Such election must be filed with the
Internal Revenue Service within 30 days of the date of transfer of the stock
award. The Company will be allowed a tax deduction for federal tax purposes as a
compensation expense equal to the amount of ordinary income recognized by a
recipient of Plan Share Awards at the time the recipient recognizes taxable
ordinary income. A recipient of a Plan Share Award may elect to have a portion
of such award withheld by the MSBP Trust in order to meet any necessary tax
withholding obligations.
Accounting Treatment
For accounting purposes, the Company will recognize a compensation
expense in the amount of the fair market value of the Common Stock subject to
Plan Share Awards at the date of the award pro rata over the period of years
during which the awards are earned.
Stockholder Ratification
The Company is submitting the MSBP to stockholders for ratification in
accordance with interpretive letters of the OTS. An affirmative vote of a
majority of the votes cast at the Meeting on the matter, in person or by proxy,
is required to constitute stockholder ratification of the MSBP, submitted as
Proposal III.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE MSBP.
- --------------------------------------------------------------------------------
PROPOSAL IV -- RATIFICATION OF APPOINTMENT OF AUDITORS
- --------------------------------------------------------------------------------
KPMG Peat Marwick LLP was the Company's independent certified public
accountant for the fiscal year ended December 31, 1997. The Board of Directors
has approved the renewal of the Company's arrangements with KPMG Peat Marwick
LLP to be its auditors for the fiscal year ending December 31, 1998, subject to
ratification by the Company's stockholders. A representative of KPMG Peat
Marwick LLP is expected to be present at the Meeting to respond to stockholders'
questions and will have the opportunity to make a statement, if so desired.
The ratification of the appointment of the Company's auditors must be
approved by a majority of the votes cast by the stockholders of the Company at
the Meeting. The Board of Directors recommends that stockholders vote "FOR" the
ratification of the appointment of KPMG Peat Marwick LLP as the Company's
auditors.
23
<PAGE>
- --------------------------------------------------------------------------------
ANNUAL REPORTS
- --------------------------------------------------------------------------------
The Company's Annual Report to Stockholders for the fiscal year ending
December 31, 1997, including consolidated financial statements, has been mailed
to all persons who were listed as stockholders of record as of the close of
business on the Voting Record Date. Any stockholder who has not received a copy
of such Annual Report may obtain a copy by writing the Company. Such Annual
Report is not to be treated as a part of the proxy solicitation material or as
having been incorporated herein by reference.
A Copy of the Form 10-K as filed with the SEC will be furnished without
charge to stockholders as of the record date upon written request to the
Secretary, First Colorado Bancorp, Inc., 215 South Wadsworth Boulevard,
Lakewood, Colorado 80226. Such Form 10-K is not to be treated as a part of the
proxy solicitation material or as having been incorporated herein by reference.
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
In order to be eligible for inclusion in the Company's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's main office at 215
South Wadsworth Boulevard, Lakewood, Colorado 80226, no later than December 1,
1998. Any such proposals shall be subject to the requirements of Rule 14a-8
under the 1934 Act.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, including
any adjournments thereof, it is intended that proxies in the accompanying form
will be voted in respect thereof in accordance with the judgment of the person
or persons voting the proxies.
- --------------------------------------------------------------------------------
MISCELLANEOUS
- --------------------------------------------------------------------------------
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees, and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers, and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without payment of additional
compensation. The Company has retained Morrow & Co. to assist in the
solicitation of proxies at a cost not anticipated to exceed $3,500, plus
reimbursement of certain incurred expenses.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Elaine M. Samuelson
ELAINE M. SAMUELSON
SECRETARY
Lakewood, Colorado
March 31, 1998
24
REVOCABLE PROXY
FIRST COLORADO BANCORP, INC.
- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
MAY 4, 1998
- --------------------------------------------------------------------------------
The undersigned hereby appoints the official proxy committee of the
Board of Directors of the First Colorado Bancorp, Inc. (the "Company") with full
powers of substitution to act, as attorneys and proxies for the undersigned, to
vote all shares of common stock of the Company that the undersigned is entitled
to vote at the Annual Meeting of Stockholders (the "Meeting"), to be held at the
Arvada Center for the Arts and the Humanities, 6901 Wadsworth Boulevard, Arvada,
Colorado, on Monday, May 4, 1998, at 3:00 p.m. and at any and all adjournments
thereof, as follows:
FOR WITHHELD
1. The election as director of all nominees
listed below: |_| |_|
Leeon E. Hayden
E. William Foerster, Jr.
Robert W. Richards
INSTRUCTIONS: To withhold your vote for any individual nominee, insert the
nominee's name on the line provided below.
----------------------------------------
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
2. The ratification of the First Colorado
Bancorp, Inc. 1996 Stock Option Plan. |_| |_| |_|
3. The ratification of the First Federal Bank
of Colorado Management Stock Bonus Plan and
Trust Agreement. |_| |_| |_|
4. The ratification of the appointment of KPMG
Peat Marwick LLP as independent auditors of
First Colorado Bancorp, Inc. for the fiscal year
ending December 31, 1998. |_| |_| |_|
</TABLE>
In their discretion, such attorneys and proxies are authorized to vote upon such
other business as may properly come before the Meeting or any adjournments
thereof.
The Board of Directors recommends a vote "FOR" all of the listed
propositions.
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, A
SIGNED PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED. IF ANY OTHER
BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN
THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING. THIS PROXY ALSO
CONFERS DISCRETIONARY AUTHORITY ON THE OFFICIAL PROXY COMMITTEE TO VOTE WITH
RESPECT TO MATTERS INCIDENT TO THE CONDUCT OF THE MEETING.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
Should the undersigned be present and elects to vote at the Meeting, or
at any adjournment thereof, and after notification to the Secretary of the
Company at the Meeting of the stockholder's decision to terminate this proxy,
the power of said attorneys and proxies shall be deemed terminated and of no
further force and effect. The undersigned may also revoke this proxy by filing a
subsequently dated proxy or by written notification to the Secretary of the
Company of his or her decision to terminate this proxy.
The undersigned acknowledges receipt from the Company, prior to the
execution of this proxy, of Notice of the Meeting and a proxy statement dated
March 31, 1998.
Dated: , 1998 |_| Please check here if you plan to attend
------------------- the Meeting.
- --------------------------------- -----------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
- --------------------------------- -----------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
Please sign exactly as your name appears on the enclosed card. When signing as
attorney, executor, administrator, trustee, or guardian, please give your full
title. If shares are held jointly, each holder should sign.
- --------------------------------------------------------------------------------
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY PROMPTLY
IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
- --------------------------------------------------------------------------------
