<PAGE>
--SCHEDULE 14A TEMPLATE--
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 240.14a-12
COLORADO BUSINESS BANKSHARES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(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):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] 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:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
[LOGO OF COLORADO BUSINESS BANKSHARES, INC. APPEARS HERE]
April 19, 1999
Dear Fellow Shareholder:
This year's Annual Meeting of Shareholders of Colorado Business Bankshares,
Inc., a Colorado corporation (the "Company"), will be held at the Denver
Marriott City Center, 1701 California Street, Denver, Colorado 80202 on May 19,
1999 at 8:00 a.m., M.D.T. You are cordially invited to attend. The matters to
be considered at the meeting are described in the attached Proxy Statement and
Notice of Annual Meeting of Shareholders. The Company's Board of Directors
recommends that you vote: (i) FOR the election of management's three nominees
to serve as class I directors of the Company, (ii) FOR the ratification of the
selection of Deloitte & Touche LLP as the Company's independent auditors for
the fiscal year ending December 31, 1999, and (iii) AGAINST a proposal by a
shareholder of the Company to eliminate the classes of the Board and to have
all directors elected for one-year terms ending at the next Annual Meeting of
Shareholders.
To be certain that your shares are voted at the Annual Meeting, whether or
not you plan to attend in person, you should sign, date and return the enclosed
proxy as soon as possible. Your vote is important.
At the Annual Meeting, I will review the Company's activities during the past
year and its plans for the future. Shareholders will be given the opportunity
to address questions to the Company's management. I hope you will be able to
join us.
Sincerely,
/s/ Steven Bangert
Steven Bangert
Chairman of the Board and Chief
Executive Officer
<PAGE>
COLORADO BUSINESS BANKSHARES, INC.
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
to be held on May 19, 1999
TO THE SHAREHOLDERS OF COLORADO BUSINESS BANKSHARES, INC.:
Notice is hereby given that the Annual Meeting of Shareholders of Colorado
Business Bankshares, Inc., a Colorado corporation (the "Company"), will be held
at 8:00 a.m., M.D.T., on May 19, 1999, at the Denver Marriott City Center,
1701California Street, Denver, Colorado, for the following purposes:
1. To elect three class I directors to hold office for a three-year term
expiring on the Annual Meeting of Shareholders occurring in 2002 or until
the election and qualification of their respective successors.
2. The ratification of the selection of Deloitte & Touche, LLP as the
Company's independent auditors for the fiscal year ending December 31,
1999.
3. To consider a proposal by a shareholder of the Company to recommend that
the Board of Directors take action to eliminate the classes of the Board of
Directors and to have all directors elected for one-year terms.
4. To transact such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on April 13, 1999 as
the record date for the determination of shareholders entitled to notice of, and
to vote at, the meeting. Only shareholders of record as of the close of
business on such date are entitled to notice of and to vote at the meeting.
We encourage you to take part in the affairs of your Company either in person
or by executing and returning the enclosed proxy.
By Order of the Board of Directors,
Richard J. Dalton
Executive Vice President,
Chief Financial Officer
and Secretary
Dated: April 19, 1999
SHAREHOLDERS UNABLE TO ATTEND THIS MEETING ARE URGED TO DATE AND SIGN
THE ENCLOSED PROXY AND TO RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE>
COLORADO BUSINESS BANKSHARES, INC.
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
to be held on May 19, 1999
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Colorado Business Bankshares, Inc., a
Colorado corporation (the "Company"), for use at the Annual Meeting of
Shareholders of the Company to be held on May 19, 1999, at 8:00 a.m., M.D.T., at
the Denver Marriott City Center, 1701 California Street, Denver, Colorado 80202,
and at any adjournment thereof. A shareholder giving the enclosed proxy may
revoke it at any time before his or her vote is cast at the Annual Meeting by
delivery to the Secretary of the Company of a written notice of termination of
the proxy's authority or of a duly executed proxy or ballot bearing a later
date. Shares entitled to vote and represented by properly completed proxies
received prior to the Annual Meeting and not revoked will be voted in the manner
directed by the shareholder granting such proxy. If no direction is made, the
shares represented by the proxy will be voted as recommended by the Board of
Directors. This Proxy Statement and the accompanying form of proxy are being
transmitted or delivered to holders of the Company's common stock ("Common
Stock") beginning on or before April 13, 1999, together with the Company's 1998
Annual Report to Shareholders.
Only shareholders of record at the close of business on March 15, 1999 are
entitled to notice of and to vote at the Annual Meeting or at any adjournment
thereof. As of such date, there were 6,463,481 shares of Common Stock of the
Company outstanding. Each share is entitled to one vote. Cumulative voting is
not permitted. Shares voted as abstentions on any matter (or a "withhold vote
for" as to a director or the ratification of the Company's independent
accountants) will be counted as shares that are present and entitled to vote for
purposes of determining the presence of a quorum at the Annual Meeting and as
not voted, although present and entitled to vote, for purposes of determining
the approval of each matter as to which the shareholder has abstained. If a
broker submits a proxy that indicates the broker does not have discretionary
authority as to certain shares to vote on one or more matters, those shares will
be counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum at the meeting, but will not be considered
as present and entitled to vote with respect to such matters. The Company's by-
laws provide that the holders of not less than a majority of the shares entitled
to vote at any meeting of shareholders, present in person or represented by
proxy, shall constitute a quorum.
All expenses in connection with the solicitation of proxies will be paid by
the Company. In addition to solicitation by mail, officers, directors and
regular employees of the Company who will receive no extra compensation for
their services, may solicit proxies by telephone, facsimile or personal calls.
The Company's principal executive offices are located at 821 17th Street,
Denver, Colorado 80202.
<PAGE>
ELECTION OF DIRECTORS
The business and affairs of the Company are managed under the direction of
its Board of Directors, which is comprised of eight members. The Board of
Directors is divided into three classes and the members of each class are
elected to serve a three-year term, with the terms of office of each class
ending in successive years.
The term of the class I directors expires at the Annual Meeting to be held
May 19, 1999, and three class I directors will be elected at the Annual Meeting,
each to hold office until the Annual Meeting to be held in the year 2002 or
until his or her successor is elected and qualified, or until his or her earlier
death, resignation or retirement. Jonathan C. Lorenz, Mark S. Kipnis and
Virginia K. Berkeley are the incumbent class I directors, and each of them is
being nominated for re-election at the Annual Meeting. The persons named as
proxies in the enclosed form of proxy will vote the proxies received by them for
the election of Messrs. Lorenz and Kipnis and Ms. Berkeley unless otherwise
directed. Each of Messrs. Lorenz and Kipnis and Ms. Berkeley has indicated a
willingness to serve, but in case any of them is not a candidate at the Annual
Meeting, which is not presently anticipated, the persons named as proxies in the
enclosed form of proxy may vote for a substitute nominee at their discretion.
The terms of the incumbent class II and class III directors expire at the 2000
and 2001 Annual Meetings, respectively.
The Board of Directors recommends a vote FOR the election of Messrs. Lorenz
and Kipnis and Ms. Berkeley. The affirmative vote of a majority of the shares
of Common Stock represented at the Annual Meeting is required for the election
of Messrs. Lorenz and Kipnis and Ms. Berkeley.
Information regarding the directors of the Company is set forth below:
<TABLE>
<CAPTION>
Expiration
Name Age of Term
- ---- --- ----------
<S> <C> <C>
Jonathan C. Lorenz (3) 47 1999
Mark S. Kipnis (2) 51 1999
Virginia K. Berkeley 46 1999
Steven Bangert (3) 42 2000
Noel N. Rothman (1) 69 2000
Timothy J. Travis (1) 54 2000
Howard R. Ross (1) (2) (3) 72 2001
Michael B. Burgamy (2) 53 2001
_______________________
</TABLE>
(1) Member of the Compensation Committee of the Board of Directors.
(2) Member of the Audit Committee of the Board of Directors.
(3) Member of the Executive Committee of the Board of Directors.
NOMINEES FOR TERMS EXPIRING IN 2002
Jonathan C. Lorenz has served as President and Vice Chairman of the Board of
Directors of the Company since March 1995. He also serves as Vice Chairman of
the Board and Chief Executive Officer of Colorado Business Bank, N.A., a wholly-
owned subsidiary of the Company (the "Bank"). From June 1993 to March 1995, Mr.
Lorenz pursued various business investment opportunities, including the
formation of First Western Growth Fund, a small business investment company.
Mr. Lorenz was employed by Colorado National Bank ("CNB") in various capacities
from September 1976 to June 1993. Mr. Lorenz' last position with CNB was Senior
Vice President and Manager of Corporate Banking. He holds a B.A. degree in
political science and an M.B.A. from the University of Colorado.
Mark S. Kipnis has served as a director of the Company since September 1994.
Since January 1998, he has also served as Vice President, Secretary and
Corporate Counsel for Hollinger International Inc., a newspaper publishing
company that is publicly traded on the New York Stock Exchange. From January
1979 to December 1997, Mr. Kipnis was a partner of the Chicago-based law firm of
Holleb & Coff. He
2
<PAGE>
holds a B.S. degree in accounting from the University of Illinois and a J.D.
degree from Northwestern University School of Law.
Virginia K. Berkeley has served as President of Colorado Business Bank --
Denver since May 1995 and as a director of the Company since October 1995. Ms.
Berkeley served as Senior Vice President and Manager of Business Banking of Bank
One, Denver from January 1994 to May 1995. From December 1986 to January 1994,
Ms. Berkeley held several positions with CNB, including President of CNB -- Tech
Center and CNB -- Northeast. She holds a B.S. degree in economics from Purdue
University and an M.B.A. from the University of Oklahoma.
DIRECTORS WHOSE TERMS WILL EXPIRE IN 2000
Steven Bangert has served as Chairman of the Board of Directors and Chief
Executive Officer of the Company since September 1994. He also serves as
Chairman of the Board of the Bank and a director of Colorado Business Leasing
("CBL"). From August 1992 to January 1999, Mr. Bangert served as President and
a director of Western Capital Holdings, Inc. ("Western Capital"), formerly the
bank holding company for River Valley Bank -- Texas, located in McAllen, Texas.
From March 1992 to July 1996, Mr. Bangert also served as Chairman of the Board
of River Valley Bank -- Texas, and, from April 1988 to July 1994, he served as
Vice Chairman of the Board and Chief Executive Officer of River Valley Savings
Bank -- Illinois, a financial institution with locations in Chicago and Peoria,
Illinois. From February 1994 to July 1996, Mr. Bangert served as a director and
member of the Executive Committee of Lafayette American Bank. He holds a B.S.
degree in business administration from the University of Nebraska -- Lincoln.
Noel N. Rothman has served as a director of the Company since September 1994.
Mr. Rothman is a private investor and has served as President of Namtor, Inc.
("Namtor"), a closely held business services company in which he is a principal
shareholder, since September 1985. Mr. Rothman attended Wayne University.
Timothy J. Travis has served as a director of the Company since May 1998.
Since November 1981, Mr. Travis has been the President and Chief Executive
Officer of Eaton Metal Products Company, with which he has been employed since
1963.
DIRECTORS WHOSE TERMS WILL EXPIRE IN 2001
Howard R. Ross has served as a director of the Company since September 1994.
Mr. Ross is a private investor and has served as President of H.R. Financial,
Inc., a closely held investment company in which he is the principal
shareholder, since May 1994. From August 1992 to January 1999, he served as a
director of Western Capital, and, from August 1992 to July 1995, he served as
Vice Chairman of the Board of River Valley Bank -- Texas. He holds a B.S.
degree in mechanical engineering from the Illinois Institute of Technology.
Michael B. Burgamy has served as a director of the Company since May 1998.
From 1991 to present, Mr. Burgamy has served as the president of Perky-Pet
Products Co., a manufacturer of pet products and supplies. From January 1976 to
November 1994, he was President of CGS Distributing, Inc., a wholesale
distributor of lawn and garden supplies. He holds a B.S. degree in engineering
management from the United States Air Force Academy.
3
<PAGE>
Meetings of the Board of Directors and Certain Committees
During the fiscal year ended December 31, 1998, the Board of Directors held
four meetings. No incumbent director attended fewer than 75% of the aggregate
of all meetings of the Board of Directors and meetings of the committees on
which they served. The Board of Directors and its committees also act from time
to time by unanimous written consent in lieu of meetings. During the fiscal
year ended December 31, 1998, the Board of Directors conducted one meeting by
unanimous written consent. The committees of the Board of Directors did not act
by written consent during such period.
The Board of Directors of the Company has standing Audit, Compensation and
Executive Committees, each of which have the current membership as indicated in
the director table on page two hereof. The Board of Directors has no standing
nominating committee.
The Audit Committee aids management in the establishment and supervision of
the Company's financial controls, evaluates the scope of the annual audit,
reviews audit results, consults with management and the Company's independent
accountants prior to the presentation of financial statements to shareholders,
initiates, as appropriate, inquiries into aspects of the Company's financial
affairs and performs such other functions as the Board of Directors may direct.
During fiscal 1998, the audit committee held one meeting.
The Compensation Committee makes recommendations to the Board concerning
salaries and incentive compensation for the Company's officers and employees,
administers the Company's 1995, 1997 and 1998 Stock Incentive Plans (the "Stock
Incentive Plans") and performs such other functions as the Board of Directors
may direct. During fiscal 1998, the Compensation Committee held one meeting.
The Executive Committee is authorized to exercise certain of the powers of
the Board of Directors, subject to ratification by the full Board of Directors,
and meets as needed, usually in situations where it is not feasible to take
action by the full Board of Directors. During fiscal 1998, the Executive
Committee did not meet.
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Steven Bangert 42 Chairman of the Board and Chief Executive Officer
Jonathan C. Lorenz 47 Vice Chairman of the Board and President
Richard J. Dalton 42 Executive Vice President and Chief Financial Officer
Lyne B. Andrich 32 Vice President and Controller
</TABLE>
See the biographical information on Messrs. Bangert and Lorenz under "Election
of Directors."
Richard J. Dalton has served as the Executive Vice President and Chief
Financial Officer of the Company since January 1997. From August 1992 to
January 1998, Mr. Dalton was the Vice President of Western Capital. From August
1992 to June 1996, Mr. Dalton served as the President and Chief Executive
Officer of River Valley Bank -- Texas. He holds a B.S. degree in business
administration from the University of Southern Colorado and an M.B.A. from the
University of Colorado.
Lyne B. Andrich has served as Vice President and Controller of the Company
since May 1997. From November 1995 to May 1997, Ms. Andrich was a line of
business reporting manager for Key Bank. From June 1989 to November 1995, Ms.
Andrich served as an accounting manager and internal auditor for Bank One,
Colorado, N.A. She holds a B.S. degree in accounting from the University of
Florida.
4
<PAGE>
KEY EMPLOYEES
Information regarding certain key employees of the Company is set forth below:
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Virginia K. Berkeley 46 President of Colorado Business Bank Denver and Director
Darrell J. Schulte 44 President of Colorado Business Bank Littleton
Charles E. Holmes 42 President of Colorado Business Bank Boulder
Andrew L. Bacon 43 President of Colorado Business Bank West
Kevin G. Quinn 38 President of Colorado Business Bank DTC
K. Denise Albrecht 46 President of Community Trust Division
Richard M. Hall, Jr. 52 President of Colorado Business Leasing, Inc.
</TABLE>
See the biographical information on Ms. Berkeley under "Election of Directors."
Darrell J. Schulte has served as President of Colorado Business Bank --
Littleton since May 1985. Mr. Schulte has been employed in the banking industry
for 21 years. He holds a B.S. degree in finance from Colorado State University.
Charles E. Holmes has served as President of Colorado Business Bank --
Boulder since June 1995. Mr. Holmes has been employed in the banking industry
for 17 years. Mr. Holmes served as Vice President and Manager of Commercial
Lending at Bank One -- Boulder from June 1992 to June 1995, where he was
responsible for a $300 million loan portfolio. He holds a B.S. degree in
business administration from Oklahoma State University.
Andrew L. Bacon has served as President of Colorado Business Bank -- West
since November 1997. From March 1997 to September 1997, Mr. Bacon served as
Senior Vice President of UMB Bank. From June 1988 to December 1996, Mr. Bacon
served as Senior Vice President in charge of the Commercial Banking Division at
Norwest Bank -- Golden. He holds a B.S. degree in business administration from
Colorado State University.
Kevin G. Quinn has served as President of Colorado Business Bank DTC since
September 1998. Prior to joining the Company, Mr. Quinn had been employed by
Norwest Bank of Colorado since June 1988. From June 1996 to May 1998, Mr. Quinn
was a Senior Vice President of Norwest, responsible for a private banking
department with assets in excess of $295 million. From October 1991 to June
1996, Mr. Quinn was a Vice President and the Bank Manager of a Norwest Bank
location in downtown Denver with assets of approximately $75 million. Mr. Quinn
holds a Business Administration degree in general business from the University
of Northern Colorado and a graduate degree in banking from the Stonier Graduate
School of Banking of the University of Delaware.
5
<PAGE>
K. Denise Albrecht has served as the President of Community Trust Division
of the Company since October 1997. From May 1993 to October 1997, Ms. Albrecht
served as Senior Vice President and Denver Market Manager of the Trust
Department of Bank One, Colorado, N.A. Ms. Albrecht was employed, in several
capacities, with CNB from December 1988 to May 1993. From January 1993 to May
1993, Ms. Albrecht served as President of Colorado Capital Advisors, a
subsidiary of CNB, and, from September 1988 to January 1993, she served as Vice
President and Institutional Services Division Manager for CNB. She holds a B.S.
degree in business administration and an M.B.A. from Northern Michigan
University.
Richard M. Hall, Jr. has served as President of CBL, the Company's
equipment leasing subsidiary, since January 1996 and has been employed in the
banking and financial services industry for 28 years. Prior to leading the
formation of CBL, Mr. Hall served as President of Evergreen Lifetime Income,
Inc., a development stage company in the reverse mortgage industry that was
formed in March 1995. From April 1989 to February 1995, Mr. Hall was employed
by CNB, where he served as a commercial banking division manager and as
President of Colorado National Leasing, Inc., a subsidiary of CNB. He holds
B.S. and M.S. degrees in business administration from Wichita State University
and a graduate degree in banking from the Southwestern Graduate School of
Banking at Southern Methodist University.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
executive officers and directors and persons who beneficially own more than ten
percent (10%) of the Company's Common Stock to file initial reports of ownership
on Form 3 and reports of changes in ownership on Forms 4 and 5 with the
Securities and Exchange Commission ("SEC"). Executive officers, directors, and
greater than ten percent (10%) beneficial owners are required by SEC regulations
to furnish the Company with copies of all Section 16(a) forms that they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the executive officers, directors and
holders of 10% or more of the Company's Common Stock, each of Messrs. Lorenz,
Kipnis, Bangert, Rothman, Travis, Ross, Dalton, Schulte, Holmes, Bacon, Quinn
and Burgamy, Ms. Berkeley, Ms. Albrecht and Ms. Andrich inadvertently filed
their respective Form 3 with the SEC five days late.
The Company is not aware of any other late report filed with the SEC or any
transaction that was not reported on a timely basis that was required to be so
reported. The Company believes that its executive officers, directors and 10%
beneficial owners complied with all other applicable Section 16(a) filing
requirements.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the cash and noncash compensation for fiscal
years 1997 and 1998 awarded to or earned by (i) the individual who served as the
Company's Chief Executive Officer ("CEO") in fiscal year 1998; and (ii) the
Company's four most highly compensated executive officers, other than the CEO
(collectively, with the CEO, the "Named Executive Officers"), who were serving
as executive officers for fiscal year 1998:
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Long Term
Compensation Compensation
----------------------------- ------------------
Fiscal Salary Bonus Options
Name and Principal Position Year ($) (1) ($) (2) (#)
- -------------------------------------------------- ---- ------- ------ --
<S> <C> <C> <C> <C>
Steven Bangert..................................... 1998 149,725 37,700 0
Chairman and CEO.................................. 1997 125,000 0 0
Jonathan C. Lorenz................................. 1998 150,800 37,700 0
Vice Chairman and President....................... 1997 145,000 39,000 0
Virginia K. Berkeley............................... 1998 110,240 21,200 0
President Colorado Business Bank Denver......... 1997 106,000 25,000 0
Richard M. Hall, Jr................................ 1998 100,700 8,526 0
President Colorado Business Leasing, Inc. ....... 1997 99,837 26,236 0
Richard J. Dalton.................................. 1998 99,167 10,000 0
Executive Vice President and CFO.................. 1997 45,000 0 16,500
</TABLE>
(1) Actual salary paid in each respective fiscal year.
(2) Actual bonus paid in each respective fiscal year.
The following table summarizes, on an aggregate basis, each exercise of stock
options during 1998 fiscal year by each of the named Executive Officers and the
1998 fiscal year-end value of their unexercised options.
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
<TABLE>
<CAPTION>
Number of securities Value of unexercised
underlying unexercised in-the-money options at
options at FY-end (#) FY-end ($)
Shares Value --------------------- -------------------------
Acquired on Realized
Name Exercise (#) ($) (1) Exercisable Unexercisable Exercisable Unexercisable
- --------------------- ------------ -------- ------------ --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Steven Bangert....... 28,275 $58,755 0 0 0 0
Jonathan C. Lorenz... 37,700 $78,340 28,629 9,542 $750,647 $83,540
Virginia K. Berkeley 0 0 18,851 9,424 $160,045 $77,513
Richard M. Hall, Jr.. 0 0 0 0 0 0
Richard J. Dalton.... 0 0 4,125 12,369 $ 28,466 $85,355
- ---------------------
</TABLE>
(1) Value based on the difference between $4.20 (the estimated share value at
2/24/98) and the option exercise price, multiplied by the number of shares
of Common Stock subject to exercise.
7
<PAGE>
Compensation of Directors
Each director who is not an employee of the Company is paid a director's fee
of $1,000 for each meeting of the Board of Directors, or any committee thereof,
attended by such director. Directors of the Company who also serve as officers
do not receive additional compensation for their services as directors or
committee members. All directors are reimbursed for expenses incurred in
attending board and committee meetings.
Employment Agreements
The Company has entered into employment agreements with each of Jonathan C.
Lorenz, Virginia K. Berkeley, Richard M. Hall, Jr. and Richard J. Dalton. Each
such agreement is terminable at will by the Company or the employee and provides
for annual salary, the use of a Company automobile, expenses related to
membership at a country, health or social club and eligibility for a bonus and
stock option grants. Each such agreement provides that, during the term of the
agreement and for one year thereafter, the employee is prohibited from
soliciting any employees or customers of the Company or the Bank. In the event
that the Company terminates the employment agreement for reasons other than "for
cause," or the Company constructively discharges the employee (for example, by
materially decreasing his or her responsibilities or his or her compensation) or
the employee's employment is terminated because of disability or death, the
Company is required to pay the employee one full year of salary (including
bonus) and maintain all other benefits for one full year after termination.
Moreover, each such employment agreement requires the Company to make a lump sum
payment to such employee in an amount equal to a multiple of such employee's
annual compensation in the event that their employment is terminated within two
years of the occurrence of certain types of changes of control of the Company or
the Bank. As of March 15, 1999, the estimated payments that would be due to Mr.
Lorenz, Ms. Berkeley, Mr. Hall and Mr. Dalton upon a termination of employment
after such a change in control were $779,000, $408,000, $101,000 and $325,000,
respectively.
8
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of April 13, 1999, certain information
regarding beneficial ownership of the Common Stock by (i) each shareholder known
by the Company to be the beneficial owner of more than 5% of the outstanding
Common Stock, (ii) each director of the Company, (iii) each Named Executive
Officer and (iv) all of the Company's directors, executive officers and key
employees as a group. Unless otherwise indicated, the Company believes that the
shareholders listed below have sole investment and voting power with respect to
their shares based on information furnished to the Company by such owners.
<TABLE>
<CAPTION>
Beneficial Ownership
----------------------------------
Number of shares Percent of
Name of Beneficial Owner (1) beneficially owned Class
- ---------------------------- --------------------- ----------
<S> <C> <C>
Steven Bangert(2)................................................. 1,092,492 16.35%
Jonathan C. Lorenz(3)............................................. 156,542 2.33
Virginia K. Berkeley(4)........................................... 39,838 *
Richard M. Hall, Jr............................................... 0 *
Richard J. Dalton(5).............................................. 82,169 1.23
Mark S. Kipnis.................................................... 32,703 *
Noel N. Rothman................................................... 725,294 10.87
Howard R. Ross(6)................................................. 1,022,147 15.32
Michael B. Burgamy(7)............................................. 21,600 *
Timothy J. Travis................................................. 35,275 *
All directors, executive officers and key employees as a group
(16 persons) (8).................................................. 3,239,777 47.64
- ------------------------------------------------------------------
</TABLE>
(*) Denotes less than 1%.
(1) Unless otherwise indicated, the address of each of the above-named
shareholders is c/o Colorado Business Bankshares, Inc., 821 Seventeenth
Street, Denver, Colorado 80202.
(2) Includes 4,927 shares held jointly by Mr. Bangert and his wife, 106,030
shares held by Mr. Bangert's minor children, 57,200 shares held by Hawthorne
Colorado, Inc., an entity of which Mr. Bangert is a director and 50%
shareholder, and 7,183 shares which may be issued upon the exercise of
options exercisable within 60 days after March 15, 1999.
(3) Includes 40,471 shares which may be issued upon the exercise of options
exercisable within 60 days after March 15, 1999.
(4) Includes 25,919 shares which may be issued upon the exercise of options
exercisable within 60 days after March 15, 1999.
(5) Includes 9,481 shares which may be issued upon the exercise of options
exercisable within 60 days after March 15, 1999.
(6) Includes 29,975 shares held by Mr. Ross' wife and 57,200 shares held by
Hawthorne Colorado, Inc., an entity of which Mr. Ross is a director and 50%
shareholder. Does not include 36,588 shares held by Mr. Ross' adult
daughter and his grandchildren.
(7) Does not include 56,550 shares held by certain trusts for the benefit of
Mr. Burgamy's minor children, for which Mr. Burgamy's father acts as
trustee.
(8) Includes 127,535 shares which may be issued upon the exercise of options
exercisable within 60 days after March 15, 1999.
9
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The executive officers, key employees, directors and principal shareholders
of the Company, members of their immediate families and businesses in which they
hold controlling interests are customers of the Company, and it is anticipated
that such parties will continue to be customers of the Company in the future.
All outstanding loans and extensions of credit by the Company to these parties
were made in the ordinary course of business in accordance with applicable laws
and regulations and on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
unaffiliated persons, and, in the Company's opinion, do not involve more than
the normal risk of collectibility or contain other unfavorable features. At
December 31, 1998, the aggregate balance of the Company's loans and advances
under existing lines of credit to these parties was approximately $2.9 million,
or 1.3% of the Company's total loans and leases.
From time to time, Hawthorne Colorado, Inc. ("Hawthorne"), an entity
controlled by Messrs. Bangert and Ross, purchases participations in loans
originated by the Company that the Company does not fund fully because of its
legal lending limit or in order to manage portfolio concentration. During 1998,
Hawthorne participated in 19 real estate loans, with an aggregate participation
commitment of $14.6 million, of which six loans, with an aggregate balance of
$4.0 million, were outstanding as of December 31, 1998. The Company believes
that the terms of such participations were commensurate with terms that would be
negotiated in similar transactions between unrelated third parties. Hawthorne
receives interest on the portion of such loans funded by it at the same rate as
the Bank does on the portion that it funds. In addition, Hawthorne receives a
share of origination fees for such loans.
The Company leases 28,307 square feet of its downtown Denver facility from
Kesef, LLC ("Kesef"), an entity in which Evan Makovsky (director of the Bank)
owns 20% and Jack Stern (director of the Bank) and Messrs. Bangert, Lorenz, Ross
and Rothman (through Namtor-Denver Property LLC) each own a 16% interest, for
approximately $33,225 per month. Kesef purchased the building from its previous
owners in January 1998. The initial term of this lease is ten years after the
landlord delivers all of the 8th and 9th floors to the Company in the condition
required by the lease, with an option to renew for an additional ten-year term
at then-current market rates. It is anticipated that the 8th and 9th floors
will be delivered to the Company in May of 1999.
In July 1997, the Bank committed to purchase up to $500,000 of limited
partnership interests in Prairie Capital Mezzanine Fund, L.P. ("Prairie
Capital"), an investment fund, having $24 million in total capital commitments,
that makes subordinated debt and preferred stock investments in a wide variety
of small businesses throughout the United States. Prairie Capital is licensed
as a Small Business Investment Company (an "SBIC"). The Company intends to
refer companies in its market area requiring this type of investment capital to
Prairie Capital. As of December 31, 1998, the Bank's aggregate investment in
Prairie Capital was $142,500, and the Bank was subject to additional capital
calls pursuant to which it may be required to invest additional capital of
$357,500 in the Prairie Capital. Messrs. Bangert and Ross, Mr. Ross' wife and
Namtor, an entity controlled by Mr. Rothman, have made individual capital
commitments to Prairie Capital in amounts of $2 million, $2 million, $50,000 and
$1.5 million, respectively, and own interests in Prairie Capital proportionate
to their capital commitments. Messrs. Bangert and Ross act as consultants to
Prairie Capital. Their services consist primarily of assisting in the
identification and review of investments to be made by Prairie Capital. From
July 1997 to September 1998, Messrs. Bangert and Ross each received $80,000 in
consulting fees from Prairie Capital, $40,000 of which was received by each of
them in the 1998 fiscal year. In addition, Messrs. Bangert and Ross are members
of the advisory board of Prairie Capital. The general partner of Prairie
Capital has agreed to make certain payments to the Bank, Messrs. Bangert and
Ross, Mrs. Ross and Namtor (pro rata, in proportion to their respective
investments in Prairie Capital) following the liquidation of Prairie Capital in
the event that they do not realize an internal rate of return of at least 25% on
their respective investments.
10
<PAGE>
RATIFICATION OF INDEPENDENT ACCOUNTANTS
In July 1997, the Company's Board of Directors replaced Baird, Kurtz &
Dobson with Deloitte & Touche LLP as the Company's independent public
accountants. The report of Baird, Kurtz & Dobson on the Company's financial
statements as of and for the year ended December 31, 1996 did not contain an
adverse opinion or disclaimer of opinion and was not modified as to uncertainty,
audit scope or accounting principles. There were no disagreements with Baird,
Kurtz & Dobson on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure at the time of the change of
independent public accountants or with respect to the Company's financial
statements as of and for the year ended December 31, 1996. Prior to retaining
Deloitte & Touche LLP, the Company had not consulted with it regarding
accounting principles.
The Board of Directors has appointed Deloitte & Touche LLP as the
Company's independent accountants for the year ending December 31, 1999.
Deloitte & Touche LLP has no relationship with the Company other than that
arising from its engagement as independent accountants. Representatives of
Deloitte & Touche LLP will be present at the 1998 Annual Meeting. They will
have an opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions from shareholders.
The Board of Directors recommends a vote FOR the ratification of the
appointment of Deloitte & Touche LLP as the Company's independent accountants
for the year ending December 31, 1999. The affirmative vote of a majority of
the outstanding shares of Common Stock represented at the Annual Meeting is
required to ratify the appointment.
SHAREHOLDER PROPOSAL
The Company has received a proposal from a shareholder of the Company for
inclusion in the Proxy Statement and the form of proxy. Any shareholder who
intends to present a proposal at the next Annual Meeting and who wishes to have
the proposal included in the Company's proxy statement for that meeting, must
deliver the proposal to the Corporate Secretary at the Company's principal
executive offices, 821 17th Street, Denver, Colorado 80202, not later than
December 12, 1999. In addition, all proposals must meet the requirements set
forth in the rules and regulations of the SEC in order to be eligible for
inclusion in the proxy statement for that meeting.
Mr. Gerald R. Armstrong, whose address is 910 Fifteenth Street, No. 754,
Denver, Colorado 80202-2924, and who is the beneficial owner of 1,500 shares of
Common Stock, has proposed the adoption of the following resolution and has
furnished the following statement in support of his proposal:
RESOLUTION
"That the shareholders of COLORADO BUSINESS BANKSHARES, INC., assembled in
person and by proxy in an annual meeting, request that the Board of Directors
take those steps necessary to cause annual elections for all directors by
providing that at future elections in annual meetings, all directors be elected
annually and not by classes as is now provided and that on the expiration of the
present terms their subsequent elections shall also be on an annual basis."
STATEMENT
"Shareholders of EQUITABLE BANKSHARES OF COLORADO, INC., the predecessor of
COLORADO BUSINESS BANKSHARES, INC., elected all of their directors annually.
Only a name change seems to have changed shareholders' voting rights."
"It is significant that the shareholders of Chase Manhattan received one year
terms for their directors upon the merger with Chemical Bank."
11
<PAGE>
"Recently, Ameritech, Time-Warner, Lockheed-Martin, Campbell Soups, Atlantic
Richfield, Pacific Enterprises, Westinghouse, and other corporations have
replaced three year terms with the annual election of all directors."
---
"Occidental Petroleum Corporation stated in its 1997 proxy statement in support
of replacing three year terms with one year terms for its directors:
"the current Board of Directors . . . does recognize that under current views of
corporate governance a classified board is believed to offer less protection
against unfriendly takeover attempt than previously assumed while frustrating
stockholders in their exercise of oversight of the board. The Board of
Directors believes that the best interests of the stockholders are not currently
served by maintaining a classified board . . . .'"
"These actions have increased shareholder voting rights by 300%--and, at no cost
--------------------------------------------------------------
to the shareholders."
"The proponent believes the current system produces only a facade of continuity
which should be displaced; and accountability and performance be substituted as
the basis for re-election to our board of directors."
"In view of the fact that many of our directors do not have an established
record for managing a bank or bank holding company, shareholders should welcome
the opportunity for full accountability by being able to reject one or all
nominees on an annual basis rather than attempting a long-term struggle of
unseating "entrenched" directors who may not be acting in the best interests of
all shareholders."
"If you agree, please vote FOR this proposal. If your proxy card is unmarked,
your shares will be automatically voted "against" this proposal."
COMPANY RESPONSE
Your Board of Directors recommends a vote AGAINST this proposal.
When the Company effected its initial public offering of its shares of
Common Stock last year, it was determined that it was appropriate and in the
best interests of the Company's shareholders to have a classified board. The
Company operates in a highly competitive industry in which there is significant
merger and acquisition activity. In addition, there has been considerable
market volatility during the past fiscal year. The Board of Directors continues
to believe that a classified board remains, at this time, an appropriate measure
to reduce the ability of a third party to effect a sudden, unsolicited bid for
control or other unanticipated action which the Board of Directors determines is
not in the best interests of shareholders. In addition, the staggered board
system may place the Company in a better position to negotiate with the
unsolicited bidder to obtain a transaction or purchase price on more favorable
terms for shareholders. It may also afford the Board of Directors more time to
consider alternatives when confronted by an unsolicited initiative to obtain
control of the Company. The additional time for deliberations may ultimately
provide greater opportunities to optimize value for the Company's shareholders.
The Board of Directors believes that directors who are elected to three-
year terms are just as accountable to shareholders as directors who are elected
on an annual basis. Directors have fiduciary duties that do not depend on how
frequently they stand for election.
Approval of this proposal would require the affirmative vote of a
majority of the shares of Common Stock present in person or by proxy and
entitled to vote at the Annual Meeting. However, because this proposal is only
a request, approval of the proposal would not automatically repeal the
classified board. Eliminating the classified board would require further action
by the Board of Directors and a subsequent shareholder vote.
12
<PAGE>
The Board of Directors recommends a vote AGAINST the adoption of this
Shareholder proposal. Proxies solicited by the Board of Directors will be so
voted unless shareholders specify otherwise in their proxies.
The Board of Directors knows of no matters other than those that are
described in this Proxy Statement that may be brought before the meeting.
However, if any other matters are properly brought before the Annual Meeting,
persons named in the enclosed proxy or their substitutes will vote in accordance
with their best judgment on such matters.
Whether or not you plan to attend the Annual Meeting, please mark, sign,
date and promptly return the enclosed proxy in the enclosed return envelope.
By Order of the Board of Directors,
Richard J. Dalton
Executive Vice President,
Chief Financial Officer
and Secretary
Dated: April 19, 1999
13
<PAGE>
PROXY
COLORADO BUSINESS BANKSHARES, INC.
821 17th Street
Denver, Colorado 80202
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, having duly received the Notice of Annual Meeting and
Proxy Statement dated April 19, 1999, hereby appoints Steven Bangert and
Jonathan C. Lorenz proxies (each with the power to act alone and with the power
of substitution and revocation) to represent the undersigned and to vote, as
designated below, all shares of Common Stock of Colorado Business Bankshares,
Inc. that the undersigned is entitled to vote at the Annual Meeting of
Stockholders of Colorado Business Bankshares, Inc. to be held on May 19, 1999 at
the Denver Marriott City Center, 1701 California Street, Denver, Colorado 80202
at 8:00 a.m., M.D.T., and any adjournment thereof. Matters 1 and 2 set forth
below have been proposed by the Company and matter 3 has been proposed by a
shareholder of the Company.
<TABLE>
<CAPTION>
<S> <C>
1. ELECTION OF CLASS I DIRECTORS
[_] FOR Jonathan C. Lorenz [_] WITHHOLD AUTHORITY to vote for Jonathan C. Lorenz
[_] FOR Mark S. Kipnis [_] WITHHOLD AUTHORITY to vote for Mark S. Kipnis
[_] FOR Virginia K. Berkeley [_] WITHHOLD AUTHORITY to vote for Virginia K. Berkeley
</TABLE>
2. RATIFICATION OF INDEPENDENT ACCOUNTANTS
[_] FOR the ratification of Deloitte & Touche LLP as the Company's
independent accountants for the fiscal year ending December 31, 1999.
[_] WITHHOLD AUTHORITY to vote for the ratification of Deloitte & Touche
LLP as the Company's independent accountants for the fiscal year
ending December 31, 1999.
3. RECOMMENDATION TO THE BOARD OF DIRECTORS TO TAKE ACTION TO ELIMINATE THE
CLASSES OF THE BOARD OF DIRECTORS AND TO HAVE ALL DIRECTORS ELECTED TO ONE-
YEAR TERMS.
[_] FOR [_] AGAINST [_] ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR ITEMS 1 AND 2 ABOVE AND AGAINST ITEM 3 ABOVE.
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE ENCLOSED ADDRESSED ENVELOPE,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE U.S.
Date: ______________________________, 1999
_______________________________________
Signature
Please sign exactly as your name appears on
the certificate or certificates representing
shares to be voted by this proxy, as shown on
the left. Jointly owned shares will be voted
as directed if one owner signs unless another
owner instructs to the contrary, in which case
the shares will not be voted. If signing in a
representative capacity, please indicate title
and authority.
