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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 [_]
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.
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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.
[_] 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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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
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April 19, 2000
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 17,
2000 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 II 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, 2000, (iii) FOR the approval of the Employee
Stock Purchase Plan, (iv) FOR the approval of the 1998 Plan to increase the
number of shares of Common Stock that are authorized to be optioned and sold
under the Plan from 225,000 to 425,000, and (v) 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
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COLORADO BUSINESS BANKSHARES, INC.
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
to be held on May 17, 2000
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 17, 2000, at the Denver Marriott City Center,
1701 California Street, Denver, Colorado, for the following purposes:
1. To elect three class II directors to hold office for a three-year term
expiring on the Annual Meeting of Shareholders occurring in 2003 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,
2000.
3. To approve an Employee Stock Purchase Plan.
4. To approve an amendment to the 1998 Stock Incentive Plan;
5. 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 and,
6. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on March 24, 2000 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,
/s/ Richard J. Dalton
Richard J. Dalton
Executive Vice President,
Chief Financial Officer And Secretary
Dated: April 19, 2000
SHAREHOLDERS UNABLE TO ATTEND THIS MEETING ARE URGED TO DATE AND SIGN
THE ENCLOSED PROXY AND TO RETURN IT IN THE ENCLOSED ENVELOPE.
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COLORADO BUSINESS BANKSHARES, INC.
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
to be held on May 17, 2000
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 17, 2000, at 8:00 a.m., local
time, at the Denver Marriott City Center, 1701 California Street, Denver,
Colorado 80202, and at any adjournment thereof.
A shareholder submitting 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 19, 2000,
together with the Company's 1999 Annual Report to Shareholders.
Only shareholders of record at the close of business on March 24, 2000 are
entitled to notice of and to vote at the Annual Meeting or at any adjournment
thereof. As of such date, there were 6,705,290 shares of Common Stock
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 bylaws 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. The Company has not yet incurred any expenses related to this
Proxy Statement, and any such expenses are expected to be minimal. 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 calls or facsimile transmissions.
The Company's principal executive offices are located at 821 17th Street,
Denver, Colorado 80202.
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ACTIONS TO BE TAKEN UNDER THE PROXIES
I. 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 II directors expires at the Annual Meeting, and three
class II directors will be elected at the Annual Meeting, each to hold office
until the Annual Meeting to be held in the year 2003 or until his or her
successor is elected and qualified, or until his or her earlier death,
resignation or retirement. Steven Bangert, Noel N. Rothman and Timothy J.
Travis are the incumbent class II 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. Bangert, Rothman and Travis unless otherwise directed. Each of
Messrs. Bangert, Rothman and Travis 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 in their discretion. The terms of the
incumbent class III and class I directors expire at the 2001 and 2002 Annual
Meetings, respectively.
The Board of Directors recommends a vote FOR the election of Messrs.
Bangert, Rothman and Travis. The affirmative vote of a majority of the shares
of Common Stock represented at the Annual Meeting is required for the election
of Messrs. Bangert, Rothman and Travis.
Information regarding the directors of the Company is set forth below:
Expiration
Name Age of Term
---- --- -------
Steven Bangert (3) 43 2000
Noel N. Rothman (1) 70 2000
Timothy J. Travis (1) 55 2000
Howard R. Ross (1) (2) (3) 73 2001
Michael B. Burgamy (2) 54 2001
Jonathan C. Lorenz (3) 48 2002
Mark S. Kipnis (2) 52 2002
Virginia K. Berkeley 47 2002
_______________________
(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 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 Colorado Business Bank, N.A., a wholly-owned subsidiary
of the Company (the "Bank") and a director of Colorado Business Leasing ("CBL").
From August 1992 to present, Mr. Bangert has 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 1998, 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 1998, Mr.
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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 has been a
principal shareholder, since September 1985. Mr. Rothman attended Wayne State
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. Mr. Travis is also President of the Denver Area Council of Boy Scouts of
America.
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 present, Mr. Ross has 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 1999 to present, Mr. Burgamy has served as the Chief Financial Officer of
Colibri Holding Corporation, a manufacturer of pet products and garden supplies.
From 1991 to 1999, Mr. Burgamy 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.
DIRECTORS WHOSE TERMS WILL EXPIRE 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 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. Prior to attending law school, Mr. Kipnis was a Certified Public
Accountant with Price Waterhouse and Company. He 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. Ms. Berkeley holds a B.S. degree in economics from
Purdue University and an M.B.A. from the University of Oklahoma.
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II. RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed Deloitte & Touche LLP as the
Company's independent accountants for the year ending December 31, 2000.
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 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, 2000. The affirmative vote of a majority of
the outstanding shares of Common Stock represented at the Annual Meeting is
required to ratify the appointment.
III. APPROVAL OF THE ADOPTION OF AN EMPLOYEE STOCK PURCHASE PLAN
On January 19, 2000, the Company's Board of Directors adopted an employee
stock purchase plan (the "ESPP") which provides, in pertinent part, that the
employees may elect to have a percentage of their payroll deducted and applied
to the purchase of Common Stock at a discount. In addition, the Company may
contribute up to 50% of an employee's deduction toward the purchase of
additional Common Stock.
Purpose
The purpose of the ESPP is to provide employees of the Company and
employees of certain of its related companies with the opportunity to share in
the ownership of the Company by providing them with a convenient means for
regular and systematic purchases of Common Stock, and, thus, develop a stronger
incentive to work for the continued success of the Company.
Administration
The ESPP will be administered by the Compensation Committee of the Board
of Directors. The Compensation Committee will have full authority to administer
the ESPP, including authority to interpret and construe any provision of the
ESPP, to establish deadlines by which the various administrative forms must be
received in order to be effective, and to adopt such other rules and regulations
for administering the ESPP as they may deem appropriate.
Participants
All full-time employees of the Company and its subsidiaries will be
eligible to participate in the ESPP. As of March 24, 2000, the Company and all
of its subsidiaries had approximately 138 full time employees.
Non-transferability
The right to purchase Common Stock under the ESPP may not be transferred,
except under certain limited circumstances. In addition, shares of Common Stock
purchased pursuant to the ESPP will not be transferable, except under certain
limited circumstances.
Amendment and Termination
The Board of Directors may amend or discontinue the ESPP at any time,
provided, however, that no amendment or discontinuation of the ESPP, shall,
without stockholder approval, be made that: (i) absent such stockholder
approval, would cause Rule 16(b)-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") to become unavailable with respect to the ESPP,
(ii) require stockholder
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approval under any rules or regulations of the National Association of
Securities Dealers, Inc. or of any securities exchange that are applicable to
the Company, or (iii) permit the issuance of Common Stock before payment thereof
in full.
The ESPP shall automatically terminate when all of the 200,000 shares that have
been authorized to be sold under the ESPP, have been sold.
Effective Date
The ESPP was approved by the Board of Directors on January 19, 2000 and
must be approved by the stockholders of the Company within 12 months thereof.
Certain Federal Income Tax Consequences
The ESPP is intended to qualify as an "employee stock purchase plan" under
Section 423 of the Internal Revenue Service Code. The following is a general
outline of tax features and is based on the assumption that the purchase price
is equal to the lesser of (a) 85% of the fair market value of the shares of
common stock on the first day of the purchase Period or (b) 85% of the fair
market value of the shares of common stock on the last day of the purchase
Period. Each participant is encouraged to seek specific advice from the
participant's tax advisor.
The amounts deducted under the ESPP will be reportable by a participant as
a part of his or her income for the year in which such amounts would otherwise
have been paid to him or her. The Company believes that the participant will not
have any additional taxable income at the time shares of common stock are
purchased under the ESPP, even though the purchase will be made for less than
fair market value. A participant may have taxable income in the year in which a
sale or other disposition is made, depending upon the circumstances.
When a participant sells shares of common stock purchased under the ESPP
more than two years after the first day of the purchase period and more than one
year after the shares were transferred to the participant:
(a) The excess of the fair market value on the date of sale over the
amount paid for the shares, or the excess of the fair market value on the
first day of the purchase period over the purchase price therefor
determined as if the purchase period ended on that same date, whichever is
smaller, will be treated as compensation taxable as ordinary income;
(b) The excess of the amount realized upon the sale over the sum of
the amount paid for the shares and the amount of ordinary income recognized
under (a) above will be treated as long-term capital gain;
(c) If the sales price is less than the amount paid for the shares of
common stock, the participant will realize a capital loss.
When a participant sells shares of common stock purchased under the ESPP
less than two years after the first day of the purchase period or less than
one year after the shares were transferred to the participant:
(a) The excess of the fair market value on the date of purchase over
the amount paid for the shares will be compensation taxable as ordinary
income;
(b) The excess (deficiency) of the amount realized upon the date of
sale over the fair market value on the date of purchase will be long- or
short-term capital gain (loss);
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(c) The Company will be allowed a tax deduction in the amount of
ordinary income described in (a) above, if and to the extent such amount is
an ordinary and necessary expense and satisfies the test for reasonable
compensation.
A copy of the ESPP is attached to this Proxy Statement as Exhibit A. The
above summary is qualified in its entirety by reference to Exhibit A.
The Board of Directors recommends a vote FOR the approval of the Employee
Stock Purchase Plan. The affirmative vote of a majority of the outstanding
shares of Common Stock represented at the Annual Meeting is required to approve
the Employee Stock Purchase Plan.
IV. APPROVAL OF THE ADOPTION OF AN AMENDMENT TO THE 1998 STOCK INCENTIVE PLAN
TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK THAT ARE AUTHORIZED TO BE
OPTIONED AND SOLD UNDER THE PLAN FROM 225,000 TO 425,000
The Board of Directors previously adopted and the shareholders approved the
1998 Stock Incentive Plan (the "1998 Plan"). A copy of the 1998 Plan and the
proposed amendment to the 1998 Plan are attached to this Proxy Statement as
Exhibit B. The following is a brief summary of the 1998 Plan, which is
qualified in its entirety by reference to Exhibit B.
Options granted under the 1998 Plan may be either nonstatutory stock
options or incentive stock options. The purpose of the 1998 Plan is to advance
the interests of the Company and its stockholders by aiding the Company in
attracting and retaining management personnel capable of assuring the future
success of the Company, to offer such personnel incentives to put forth maximum
efforts for the success of the Company's business and to afford such personnel
an opportunity to acquire a proprietary interest in the Company. The Company is
approaching the limit on the number shares of the Common Stock that are
authorized to be issued under the 1998 Plan, and desires to increase the number
of shares of Common Stock authorized for issuance in order to continue to
accomplish the purposes of the 1998 Plan.
Amount of Common Stock Subject to Options Under the 1998 Plan.
The 1998 Plan currently provides for the grant of stock options covering an
aggregate of 225,000 shares of Common Stock. The number of shares of Common
Stock subject to options is subject to equitable adjustments for any stock
dividends, stock splits, reverse stock splits, combinations, recapitializations,
reclassifications or any other similar changes which may be required in order to
prevent dilution. Any option which is not exercised prior to expiration or
which otherwise terminates will thereafter be available for further grant under
the 1998 Plan. As of March 24, 2000, there were 200,444 options outstanding
under the 1998 Plan. The Company's Board of Directors has approved the First
Amendment to the 1998 plan, a copy of which is included as a part of Exhibit B,
to increase to 425,000 the number of shares eligible to be granted under the
Plan.
Administration
The 1998 Plan may be administered by the Board of Directors or by a
committee appointed by the Board of Directors consisting of members of the Board
of Directors (the "Committee"). Subject to the conditions set forth in the 1998
Plan, the Board of Directors or the Committee has full and final authority to
determine the number of shares to be represented by each option, the individuals
to whom and the time or times at which such options shall be granted and
exercisable, their exercise prices and the terms and provisions of the
respective agreements to be entered into at the time of the grant, which, may
vary. The 1998 Plan is intended to be flexible, and a significant amount of
discretion is vested in the Board of Directors or the Committee with respect to
all aspects of the options to be granted under the 1998 Plan.
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Participants
Incentive options may be granted only to persons who are employees of the
Company or any of its subsidiaries. As of March 24, 2000, the Company and all
its subsidiaries had approximately 152 full- and part-time employees. The
participants will not be required to pay any sums for the granting of options,
but may be required to pay the Company for extending the time to exercise the
options. As of March 24, 2000, the Board of Directors had granted incentive
options to purchase 465,242 shares of the Company's Common Stock at exercise
prices ranging from $2.12 to $18.00 per share through March 6, 2010, all of
which were outstanding and were granted to employees and directors of the
Company. Of such options, options to purchase approximately 257,962 shares were
exercisable on March 24, 2000.
Exercise Price
The exercise price of each nonstatutory option granted under the 1998 Plan
is determined by the Board of Directors or the Committee. The exercise price of
each incentive option granted under the 1998 Plan is determined by the Board of
Directors or the Committee and is, in no event, less than 100% (110% in the case
of a person who owns directly or indirectly more than 10% of Common Stock) of
the fair market value of the shares on the date of grant. Fair market value is
determined by the Board of Directors or the Committee in accordance with the
1998 Plan and such determination is binding upon the Company and upon the
holder. The closing sale price of the Common Stock on March 24, 2000, was $13.00
per share.
Terms of Options
Options may be granted for a term of up to ten (10) years (five (5) years
in the case of incentive options granted to a person who owns directly or
indirectly more than 10% of the Company's outstanding Common Stock), which may
extend beyond the term of the 1998 Plan.
Nontransferability
Options granted under the 1998 Plan are not transferable or assignable,
other than by will or laws of the descent and distributions and, during the
lifetime of the holder, incentive options are exercisable only by the holder.
Amendment and Termination
The Board of Directors may at any time and from time to time amend or
terminate the 1998 Plan, but may not, without the approval of the stockholders'
meeting or representing a majority of the voting power present at a
stockholders' meeting and entitled to vote thereon, or by unanimous consent of
the stockholders, amend the 1998 Plan in a manner that would (i) cause Rule
16(b)-3 to become unavailable with respect to the 1998 Plan; (ii) violate the
rules or regulations of the Nasdaq market, any other securities exchange or the
National Association of Securities Dealers, Inc. that are applicable to the
Company; or (iii) cause the Company to be unable, under the Internal Revenue
Code of 1986, as amended, to grant incentive stock options under the 1998 Plan.
No amendment or termination of the 1998 Plan by the Board of Directors may alter
or impair any of the rights under any option granted under the 1998 Plan without
the holder's written consent.
Effective Date and Term
Options may be granted under the 1998 Plan during its 10-year term, which
commenced on April 15, 1998. The 1998 Plan was ratified by the Company's
shareholders on May 19, 1998.
Certain Federal Income Tax Consequences
Incentive options: the Company believes that, with respect to incentive
options granted under the 1998 Plan, no income generally will be recognized by
an optionee for federal income tax purposes at the
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time such an option is granted or at the time it is exercised. If the optionee
makes no disposition of the shares so received within two years from the date
the incentive option was granted and one year from the receipt of the shares
pursuant to the exercise of the incentive option, the optionee will generally
recognize long term capital gain or loss upon disposition of the shares.
If the optionee disposes of shares acquired by exercise of an incentive
option before the expiration of the applicable holding period, any amount
realized from such a disqualifying disposition will be taxable as ordinary
income in the year of disposition, generally to the extent that the lesser of
the fair market value of the shares on the date the option was exercised or the
fair market value at the time of such disposition exceeds the exercise price.
Any amount realized upon such a disposition in excess of the fair market value
of the shares on the date of exercise generally will be treated as long term or
short term capital gain, depending on the holding period of the shares. A
disqualifying disposition will include the use of shares acquired upon exercise
of an incentive option in satisfaction of the exercise price of another option
prior to the satisfaction of the applicable holding period.
The Company will not be allowed a deduction for federal income tax purposes
at the time of the grant or exercise of an incentive option. At the time of a
disqualifying disposition by an optionee, the Company will be entitled to a
deduction for federal income tax purposes equal to the amount taxable to the
optionee as ordinary income in connection with such disqualifying disposition
(assuming that such amount constitutes reasonable compensation).
Nonstatutory Options
The Company believes that the grant of a nonstatutory option under the 1998
Plan will not be subject to federal income tax. Upon exercise, the optionee
generally will recognize ordinary income, and the Company will be entitled to a
corresponding deduction for federal income tax purposes (assuming that such
compensation is reasonable), in an amount equal to the excess of the fair market
value of the shares on the date of exercise over the exercise price. Gain or
loss on the subsequent sale of shares received on exercise of a nonstatutory
option generally will be long term or short term capital gain or loss, depending
on the period of the shares.
The Board of Directors recommends a vote FOR the approval of the 1998 Plan
to increase the number of shares of Common Stock that are authorized to be
optioned and sold under the Plan from 225,000 to 425,000. The affirmative vote
of a majority of the outstanding shares of Common Stock represented at the
Annual Meeting is required to approve the amendment to the 1998 Plan.
V. 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 15, 2000. In addition, all proposals must meet the requirements set
forth in the rules and regulations of the Securities and Exchange Commission
(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 1,750 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
8
<PAGE>
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."
"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 the initial public offering of its shares of
Common Stock, 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.
9
<PAGE>
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.
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 affirmative
vote of a majority of the outstanding shares of Common Stock represented at the
Annual Meeting is required to approve this Shareholder proposal.
MEETINGS OF THE BOARD OF DIRECTORS AND CERTAIN COMMITTEES
During the fiscal year ended December 31, 1999, 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. The
Board of Directors did not act by written consent during 1999. 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 1999, the audit committee held two meetings.
The Compensation Committee makes recommendations to the Board of
Directors 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 1999, 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 1999, the Executive
Committee did not meet.
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Steven Bangert 43 Chairman of the Board and Chief Executive Officer
Jonathan C. Lorenz 48 Vice Chairman of the Board and President
Richard J. Dalton 43 Executive Vice President and Chief Financial Officer
Lyne B. Andrich 33 Senior Vice President and Controller
</TABLE>
See the biographical information on Messrs. Bangert and Lorenz under "Election
of Directors."
10
<PAGE>
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 1998, 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 Senior Vice President of the Company since
July 1999 and Vice President and Controller of the Company since May 1997. From
November 1995 to May 1997, Ms. Andrich was a regional reporting manager for Key
Bank of the Rocky Mountains. From June 1989 to November 1995, Ms. Andrich held
several positions and served as Assistant Controller and Reporting Manager and
internal auditor for Bank One, Colorado, N.A. She holds a B.S. degree in
accounting from the University of Florida and is licensed as a Certified Public
Accountant in the State of Colorado.
KEY EMPLOYEES
Information regarding certain key employees of the Company is set forth below:
Name Age Position
- ---- --- --------
Virginia K. Berkeley 47 President of Colorado Business Bank - Denver and
Director
Darrell J. Schulte 45 President of Colorado Business Bank - Littleton
Charles E. Holmes 43 President of Colorado Business Bank - Boulder
Andrew L. Bacon 44 President of Colorado Business Bank - West
Kevin G. Quinn 39 President of Colorado Business Bank - DTC
Randal Garman 48 President of Colorado Business Bank of the Rockies
K. Denise Albrecht 47 President of Community Trust Division
Richard M. Hall, Jr. 53 President of Colorado Business Leasing, Inc.
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 20 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. Mr. Bacon holds a B.S. degree in business
administration with a concentration in finance, from Colorado State University.
Kevin G. Quinn has served as President of Colorado Business Bank - DTC
since May 1998. Prior to joining the Company, Mr. Quinn had been employed by
Norwest Bank of Colorado since June 1988. From June 1988 to May 1998, Mr. Quinn
was a Senior Vice President of Norwest, responsible for a
11
<PAGE>
private banking department with assets in excess of $295 million. From October
1991 to June 1998, Mr. Quinn was a Vice President and the Bank Manager of a
Norwest Bank location in downtown Denver. 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.
Randal Garman has served as President of Colorado Business Bank of the
Rockies since April 1999. From 1978 to present, Mr. Garman has been serving as
President of R. Garman, Inc. Mr. Garman has also served as Chairman of First
Bank of Eagle County. He holds a B.S. degree from the University of Colorado.
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 31 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 he
joined in March 1995. From March 1989 to April 1995, Mr. Hall was employed by
CNB, where he served as the 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 requires executive officers
and directors and persons who beneficially own more than 10% of the Common Stock
to file initial reports of ownership on Form 3 and reports of changes in
ownership on Forms 4 and 5 with the SEC. Executive officers, directors, and
greater than 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, each of Company's directors, officers and beneficial owners of more
than 10% of the Common Stock have filed all forms required by Section 16 of the
Exchange Act in fiscal 1999, except Randall Garman, who did not timely file a
Form 3, and Steven Bangert, Jonathan C. Lorenz, Virginia K. Berkeley, Darrell
Schulte, Charles Holmes, Andy Bacon, Kevin Quinn, Randal Garman, K. Denise
Albrecht, Richard Hall, Richard J. Dalton and Lyne B. Andrich, who did not
timely file their Forms 5.
EXECUTIVE COMPENSATION
The following table sets forth the cash and noncash compensation for fiscal
years 1997, 1998 and 1999 awarded to or earned by (i) the individual who served
as the Company's Chief Executive Officer ("CEO") in fiscal year 1999; 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 1999:
12
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Long Term
Compensation Compensation
------------ ------------
Securities
Underlying
Fiscal Salary Bonus Options
Name and Principal Position Year ($) (1) ($) (2) (#)
- --------------------------- ---- -------- ------- ---
<S> <C> <C> <C> <C>
Steven Bangert 1999 $187,480 $ 0 28,867
Chairman and CEO 1998 $149,725 $37,700 0
1997 $125,000 $ 0
Jonathan C.Lorenz..................................... 1999 $177,670 $42,000 12,300
Vice Chairman and President 1998 $150,800 $37,700 0
1997 $145,000 $39,000 0
Virginia K. Berkeley.................................. 1999 $117,704 $21,000 5,000
President - Colorado Business Bank - Denver 1998 $110,240 $21,200 0
1997 $106,000 $25,000 0
Richard J. Dalton..................................... 1999 $116,404 $21,000 8,000
Executive Vice President and CFO 1998 $ 99,167 $10,000 0
1997 $ 45,000 $ 16,500
Richard M. Hall, Jr................................... 1999 $103,572 $16,818 0
President - Colorado Business Leasing, Inc. 1998 $100,700 $ 8,526 0
1997 $ 99,837 $26,236 0
</TABLE>
__________________________________________
(1) Actual salary paid in each respective fiscal year.
(2) Actual bonus paid in each respective fiscal year.
13
<PAGE>
The following table summarizes individual grants of stock options made during
the 1999 fiscal year to each of the Named Executive Officers:
OPTIONS GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants Potential realizable value
at assumed annual rates of
stock price appreciation
for option term
- ----------------------------------------------------------------------------------------------------------------------------
Name Number of Percent of Exercise or base Expiration date 5% ($) 10% ($)
securities total options price (1) ($/Sh)
underlying granted to
Options employees in
granted (#) fiscal year
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Steven Bangert 28,867 17.4% 17.00 1/12/2004 $ 3,915 $102,034
Jonathan C. Lorenz 12,300 7.4% 16.37 1/12/2009 $54,071 $205,361
Virginia K. Berkeley 5,000 3.0% 16.00 1/12/2009 $23,850 $ 85,350
Richard J. Dalton 8,000 4.8% 16.75 1/12/2009 $32,160 $130,560
</TABLE>
- ---------------------------
(1) Average of all grants.
The following table summarizes, on an aggregate basis, each exercise of
stock options during the 1999 fiscal year by each of the Named Executive
Officers and the 1999 fiscal year-end value of their unexercised options.
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
<TABLE>
<CAPTION>
Number of securities
underlying unexercised Value of unexercised in-the-
options at FY-end (#) money options at FY-end ($)
--------------------- ---------------------------
Shares Value
Acquired on Realized
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ --- ------------ --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Steven Bangert 0 0 7,183 21,684 0 0
Jonathan C. Lorenz 0 0 40,471 10,000 $405,758 0
Virginia K. Berkeley 0 0 25,919 7,356 $268,026 $22,547
Richard J. Dalton 0 0 11,247 13,247 $ 72,374 $72,374
Richard M. Hall, Jr. 0 0 0 0 0 0
</TABLE>
- ---------------------
14
<PAGE>
Compensation Committee Report on Executive Compensation
The Company and its subsidiaries are engaged in a highly competitive
industry. In order to succeed, the Company must be able to attract and maintain
qualified executives. To achieve this objective, the Company's Compensation
Committee (the "Compensation Committee") has structured executive compensation
to include both a fixed, base salary component and a contingent component tied
to operating performance. The Committee believes this compensation structure
enables the Company to attract and retain key executives.
In setting base compensation, the Compensation Committee considers the
overall performance of each executive with respect to the duties and
responsibilities assigned him or her. Further, periodic surveys are taken of
compensation levels and benefit programs offered by other community banks, bank
holding companies and other industries in our market area, which provide the
Compensation Committee with information on which to evaluate salary and
compensation programs. The Compensation Committee maintains a philosophy that a
significant element of compensation of executive officers must be directly and
materially linked to operating performance. The benefit plans provided to the
executive officers are designed to accomplish that goal. In particular, cash
bonuses are heavily dependent on the Company meeting or exceeding budgeted net
income objectives, as well as asset quality standards. The incentive bonus plan
for executive officers consists of various objective and subjective criteria
related to areas for which each executive has responsibility as well as for
Company wide performance. In 1999, the performance measurements were: net
income versus budget; asset quality; and growth objectives for total loans,
total deposits and total assets.
The Company's stock incentive plans are an important component of the
Company's compensation program for executive officers and other employees. The
plans are intended to advance the interests of the Company and its shareholders
by encouraging and enabling executive officers and other employees to acquire
and retain a proprietary interest in the Company. Through stock option grants,
the long-range interests of management and employees are aligned with those of
shareholders as the optionees accumulate meaningful stakes in the Company. The
Compensation Committee makes all decisions concerning the granting of stock
options, including the individuals to whom options are granted and the
respective exercise prices and vesting periods. These decisions are made on a
subjective basis and generally do not bear a specific relationship to any
particular measure of the Company's performance. The Compensation Committee
believes that the stock option program is a valuable tool in recruiting,
retaining and motivating employees, including executive officers.
The Company maintains a 401(k) retirement savings plan applicable to all
eligible employees, including executive officers. Under the plan, the Company
typically matches a portion of employee contributions (for 1999, employee
contributions were matched up to a maximum of 6% of compensation). At December
31, 1999, all employer contributions made on behalf of executive officers were
vested in accordance with the vesting schedule of the plan, generally four years
from commencement of employment, on the basis of the officers' past service with
the Company.
The Compensation Committee believes that the base salary compensation
provided to the executive officers of the Company, including those named in the
Summary Compensation Table, is appropriate and reasonable in light of such
executives' duties, performance and responsibilities and that the contingent
forms of compensation provided through bonuses and stock options provide
additional, continuing incentives to executives in appropriate circumstances and
are consistent with the benefits derived by shareholders of the Company. This
report is submitted by the members of the Compensation Committee:
Howard R. Ross, Noel N. Rothman and Timothy J. Travis.
15
<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. In addition, each director, who was not an
officer of the company, received 1,725 options to purchase Common Stock with a
strike price of $18.00 per share, under the 1997 Option Plan. 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 24, 2000, 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 $790,000, $420,000, $146,000 and $331,000,
respectively.
16
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of March 24, 2000, 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 and Address of owner (1) beneficially owned Class (%)
- ----------------------------- ------------------ ---------
<S> <C> <C>
Steven Bangert (2)................................................. 1,166,378 17.36
Jonathan C. Lorenz (3)............................................. 156,542 2.32
Virginia K. Berkeley (4)........................................... 44,806 *
Richard M. Hall, Jr................................................ 0 *
Richard J. Dalton (5).............................................. 88,392 1.32
Mark S. Kipnis (6)................................................. 48,303 *
Noel N. Rothman (7)................................................ 748,444 11.16
Howard R. Ross (8)................................................. 1,088,322 16.22
Michael B. Burgamy (9)............................................. 91,000 1.36
Timothy J. Travis (10)............................................. 38,575 *
All directors and executive officers as a group
(17 persons) (11)................................................ 3,599,186 52.32
</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, 115,575 shares held by
Hawthorne Colorado, Inc. ("Hawthorne"), an entity of which Mr. Bangert is a
director and 50% shareholder, and 14,367 shares which may be issued upon
the exercise of options exercisable within 60 days after March 24, 2000.
(3) Includes 500 shares held by Mr. Lorenz' minor children and 40,471 shares
which may be issued upon the exercise of options exercisable within 60 days
after March 24, 2000.
(4) Includes 1,678 shares held by Ms. Berkeley's minor child and 30,875 shares
which may be issued upon the exercise of options exercisable within 60 days
after March 24, 2000.
(5) Includes 15,704 shares which may be issued upon the exercise of options
exercisable within 60 days after March 24, 2000.
(6) Includes 3,300 shares which may be issued upon the exercise of options
exercisable within 60 days after March 24, 2000.
(7) Includes 17,000 shares held by NaF Limited Partnership, an entity of which
Mr. Rothman is a general partner and 3,300 shares which may be issued upon
the exercise of options exercisable within 60 days after March 24, 2000.
17
<PAGE>
(8) Includes 29,975 shares held by Mr. Ross' wife and 115,575 shares held by
Hawthorne, an entity of which Mr. Ross is a director and 50% shareholder,
and 4,400 shares which may be issued upon the exercise of options
exercisable within 60 days after March 24, 2000.
(9) Includes 4,400 shares which may be issued upon the exercise of options
exercisable within 60 days after March 24, 2000.
(10) Includes 3,300 shares which may be issued upon the exercise of option
exercisable within 60 days after March 24, 2000.
(11) Includes 174,000 shares which may be issued upon the exercise of options
exercisable within 60 days after March 24, 2000.
18
<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, 1999, the aggregate balance of the Company's loans and advances
under existing lines of credit to these parties was approximately $2.7 million,
or 0.8% 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 1999,
Hawthorne participated in 13 real estate loans, with an aggregate participation
commitment of $9.2 million, of which three loans, with an aggregate balance of
$1.2 million, were outstanding as of December 31, 1999. 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 approximately 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 $49,000 per month. Kesef purchased the building
from its previous owners in January 1998. The initial term of this lease is ten
years, with an option to renew for an additional ten year term at current market
rates.
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, 1999, the Bank's aggregate investment in
Prairie Capital was $390,000, and the Bank was subject to additional capital
calls pursuant to which it may be required to invest additional capital of
$110,000 in 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 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.
The Bank has committed $1,000,000 to a second fund, Prairie Capital
Mezzanine Fund II, L.P. ("Prairie Capital II"), but funding will not start until
later in the year 2000.
1999 ANNUAL REPORT TO STOCKHOLDERS
Included with this Proxy Statement is the Company's 1999 Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1999. The Company will
provide, without charge, an additional copy of the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1999, as required to be filed with
the Securities and Exchange Commission pursuant to the Securities Exchange Act
of 1934, as amended, upon written request to Richard J. Dalton, Secretary, at
the Company's principal offices, 821 17th
19
<PAGE>
Street, Denver, Colorado 80202, Each request must set forth a good faith
representation that, as of March 24, 2000, the person making the request was a
beneficial owner of the Common Stock. The exhibits to the Annual Report on Form
10-KSB for the fiscal year ended December 31, 1999 may be obtained by any
stockholder upon written request to Richard J. Dalton. Each person making any
such request will be required to pay a fee of $0.25 per page to cover the
Company's expenses in furnishing such exhibits.
OTHER MATTERS
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, 2000
COLORADO BUSINESS BANKSHARES, INC., UPON WRITTEN REQUEST OF A SHAREHOLDER
ENTITLED TO VOTE AT THIS SHAREHOLDER'S MEETING, WILL FUNISH, WITHOUT CHARGE, A
COPY OF ITS FORM 10-KSB, AS AMENDED, FOR THE YEAR ENDED DECEMBER 31, 1999,
ACCOMPANIED BY A LIST BRIEFLY DESCRIBING ALL THE EXHIBITS THERETO AND NOT
CONTAINED THEREIN, AND/OR A COPY OF THE FORM 10-QSB QUARTERLY REPORT FOR THE
PERIOD ENDED MARCH 31, 2000. COLORADO BUSINESS BANKSHARES, INC. WILL FURNISH A
COPY OF ANY EXHIBIT UPON THE ADDITIONAL REQUEST OF SUCH PERSON AND THE PAYMENT
OF A FEE OF $0.25 PER PAGE. ADDRESS ANY SUCH REQUESTS TO RICHARD J. DALTON,
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND SECRETARY, COLORADO
BUSINESS BANKSHARES, INC., 821 17TH STREET, DENVER, CO 80202.
20
<PAGE>
EXHIBIT A
2000 EMPLOYEE STOCK PURCHASE PLAN
<PAGE>
COLORADO BUSINESS BANKSHARES, INC.
2000 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
INTRODUCTION
Section 1.01 Purpose. The purpose of the Colorado Business Bankshares,
-------
Inc. 2000 Employee Stock Purchase Plan (the "Plan") is to provide employees of
Colorado Business Bankshares, Inc., a Colorado corporation (the "Company"), and
certain related corporations with an opportunity to share in the ownership of
the Company by providing them with a convenient means for regular and systematic
purchases of the Company's common stock, par value $.01 per share, and, thus, to
develop a stronger incentive to work for the continued success of the Company.
Section 1.02 Rules of Interpretation. It is intended that the Plan be an
-----------------------
"employee stock purchase plan" as defined in Section 423(b) of the Internal
Revenue Code of 1986, as amended (the "Code"), and Treasury Regulations
promulgated thereunder. Accordingly, the Plan shall be interpreted and
administered in a manner consistent therewith if so approved. All Participants
in the Plan will have the same rights and privileges consistent with the
provisions of the Plan.
Section 1.03 Definitions. For purposes of the Plan, the following terms
-----------
will have the meanings set forth below:
(a) "Acceleration Date" means the earlier of the date of stockholder
approval or approval by the Company's Board of Directors of (i) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of Company
Common Stock would be converted into cash, securities or other property, other
than a merger of the Company in which stockholders of the Company immediately
prior to the merger have the same proportionate ownership of stock in the
surviving corporation immediately after the merger; (ii) any sale, exchange or
other transfer (in one transaction or a series of related transactions) of all
or substantially all of the assets of the Company; or (iii) any plan of
liquidation or dissolution of the Company.
(b) "Affiliate" means any subsidiary corporation of the Company, as
defined in Section 424(f) of the Code, whether now or hereafter acquired or
established.
(c) "Committee" means the committee described in Section 10.01.
(d) "Common Stock" means the Company's Common Stock, $.01 par value, as
such stock may be adjusted for changes in the stock or the Company as
contemplated by Article XI herein.
(e) "Company" means Colorado Business Bankshares, Inc., a Colorado
corporation and its successors by merger or consolidation as contemplated by
Article XI herein.
<PAGE>
(f) "Current Compensation" means all regular salary payments paid by the
Company to a Participant in accordance with the terms of his or her employment,
but excluding annual bonus payments and all other forms of special compensation.
(g) "Fair Market Value" as of a given date, means such value of the Common
Stock as reasonably determined by the Committee, but shall not be less than (i)
the closing price of the Common Stock as reported for composite transactions if
the Common Stock is then traded on a national securities exchange, (ii) the last
sale price if the Common Stock is then quoted on the NASDAQ National Market
System, or (iii) the average of the closing representative bid and asked prices
of the Common Stock as reported on NASDAQ on the date as of which the fair
market value is being determined. If on a given date the Common Stock is not
traded on an established securities market, the Committee shall make a good
faith attempt to satisfy the requirements of this Section 1.03 and in connection
therewith shall take such action as it deems necessary or advisable.
(h) "Participant" means a Regular Full-Time Employee who is eligible to
participate in the Plan under Section 2.01 and who has elected to participate in
the Plan.
(i) "Participating Affiliate" means an Affiliate which has been designated
by the Committee in advance of the Purchase Period in question as a corporation
whose eligible Full-Time Employees may participate in the Plan.
(j) "Full-Time Employee" means an employee of the Company or a
Participating Affiliate as of the first day of a Purchase Period, including an
officer or director who is also an employee, but excluding an employee whose
customary employment is less than 20 hours per week.
(k) "Plan" means the Colorado Business Bankshares, Inc. 2000 Employee
Stock Purchase Plan, as amended, the provisions of which are set forth herein.
(l) "Purchase Period" means the approximate 12-month period beginning on
the first business day in January and ending on the last business day in
December of each year; provided, however, that the initial Purchase Period will
commence on January 19, 2000 and will terminate on December 31, 2000, and that
the then current Purchase Period will end upon the occurrence of an Acceleration
Date.
(m) "Stock Purchase Account" means the account maintained on the books and
records of the Company recording the amount received from each Participant
through payroll deductions made under the Plan and from the Company through
matching contributions, if any.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
Section 2.01 Eligible Employees. All Full-Time Employees shall be
------------------
eligible to participate in the Plan beginning on the first day of the first
Purchase Period to commence after such person becomes a Full-Time Employee.
Subject to the provisions of Article VI, each such
<PAGE>
employee will continue to be eligible to participate in the Plan so long as he
or she remains a Full-Time Employee.
Section 2.02 Election to Participate. An eligible Full-Time Employee may
-----------------------
elect to participate in the Plan for a given Purchase Period by filing with the
Company, in advance of that Purchase Period and in accordance with such terms
and conditions as the Committee in its sole discretion may impose, a form
provided by the Company for such purpose (which authorizes regular payroll
deductions from Current Compensation beginning with the first payday in that
Purchase Period and continuing until the employee withdraws from the Plan or
ceases to be eligible to participate in the Plan).
Section 2.03 Limits on Stock Purchase. No employee shall be granted any
------------------------
right to purchase Common Stock hereunder if such employee, immediately after
such a right to purchase is granted, would own, directly or indirectly, within
the meaning of Section 423(b)(3) and Section 424(d) of the Code, Common Stock
possessing 5% or more of the total combined voting power or value of all the
classes of the capital stock of the Company or of all Affiliates.
Section 2.04 Voluntary Participation. Participation in the Plan on the
-----------------------
part of a Participant is voluntary and such participation is not a condition of
employment nor does participation in the Plan entitle a Participant to be
retained as an employee.
ARTICLE III
PAYROLL DEDUCTIONS, COMPANY CONTRIBUTIONS
AND STOCK PURCHASE ACCOUNT
Section 3.01 Deduction from Pay. The form described in Section 2.02 will
------------------
permit a Participant to elect payroll deductions of any multiple of 1% but not
less than 1% or more than 10% of such Participant's Current Compensation for
each pay period, subject to such other limitations as the Committee in its sole
discretion may impose. A Participant may cease making payroll deductions at any
time, subject to such limitations as the Committee in its sole discretion may
impose. In the event that during a Purchase Period the entire credit balance in
a Participant's Stock Purchase Account exceeds the product of (a) 85% of the
Fair Market Value of the Common Stock on the first business day of that Purchase
Period, and (b) 3,000, then payroll deductions for such Participant shall
automatically cease, and shall resume on the first pay period of the next
Purchase Period.
Section 3.02 Company Contributions. The Company shall have no obligation,
---------------------
but may, in the sole discretion of the Committee, from time to time contribute
to each Participant's Stock Purchase Account an amount equal to up to 50% of
each payroll deduction credited to such Account. No Company contributions shall
be deemed to have been made until such contributions are credited to the
Participant's Stock Purchase Account as provided in Section 3.03.
Section 3.03 Credit to Account. Payroll deductions will be credited to
-----------------
the Participant's Stock Purchase Account on each payday, and Company
contributions, if any, will be credited to the Participant's Stock Purchase
Account on the last business day of the Purchase Period at the
<PAGE>
time of and in connection with the purchase of shares of Common Stock in
accordance with Articles IV and V hereof.
Section 3.04 Interest. No interest will be paid upon payroll deductions,
--------
Company contributions or on any amount credited to, or on deposit in, a
Participant's Stock Purchase Account.
Section 3.05 Nature of Account. The Stock Purchase Account is established
-----------------
solely for accounting purposes, and all amounts credited to the Stock Purchase
Account will remain part of the general assets of the Company or the
Participating Affiliate (as the case may be).
Section 3.06 No Additional Contributions. A Participant may not make any
---------------------------
payment into the Stock Purchase Account other than the payroll deductions made
pursuant to the Plan.
ARTICLE IV
RIGHT TO PURCHASE SHARES
Section 4.01 Number of Shares. Each Participant will have the right to
----------------
purchase on the last business day of the Purchase Period all, but not less than
all, of the largest number of whole shares of Common Stock that can be purchased
at the price specified in Section 4.02 with the entire credit balance in the
Participant's Stock Purchase Account, subject to the limitations that (a) no
more than 3,000 shares of Common Stock may be purchased under the Plan by any
one Participant for a given Purchase Period, (b) in accordance with Section
423(b)(8) of the Code, no more than $25,000 in Fair Market Value (determined at
the beginning of each Purchase Period) of Common Stock and other stock may be
purchased under the Plan and all other employee stock purchase plans (if any) of
the Company and the Affiliates by any one Participant for any calendar year and
(c) if the purchases for all Participants in any Purchase Period would result in
the sale of more than 50,000 shares of Common Stock in the aggregate under the
Plan for such Purchase Period, each Participant shall be allocated a pro rata
portion of the 50,000 shares of Common Stock to be sold for that Purchase
Period. If the purchases for all Participants would otherwise cause the
aggregate number of shares of Common Stock to be sold under the Plan to exceed
the number specified in Section 10.03, each Participant shall be allocated a pro
rata portion of the Common Stock to be sold.
Section 4.02 Purchase Price. The purchase price for any Purchase Period
--------------
shall be the lesser of (a) 85% of the Fair Market Value of the Common Stock on
the first business day of that Purchase Period or (b) 85% of the Fair Market
Value of the Common Stock on the last business day of that Purchase Period, in
each case rounded up to the next higher full cent.
ARTICLE V
EXERCISE OF RIGHT
Section 5.01 Purchase of Stock. On the last business day of a Purchase
-----------------
Period, the entire credit balance in each Participant's Stock Purchase Account
will be used to purchase the largest number of whole shares of Common Stock
purchasable with such amount (subject to the limitations of Section 4.01),
unless the Participant has filed with the Company, in advance of that
<PAGE>
date and subject to such terms and conditions as the Committee in its sole
discretion may impose, a form provided by the Company which requests the
distribution of the entire credit balance in cash.
Section 5.02 Cash Distributions. Any amount remaining in a Participant's
------------------
Stock Purchase Account after the last business day of a Purchase Period will be
paid to the Participant in cash within 30 days after the end of that Purchase
Period.
Section 5.03 Notice of Acceleration Date. The Company shall use its best
---------------------------
efforts to notify each Participant in writing at least ten days prior to any
Acceleration Date that the then current Purchase Period will end on such
Acceleration Date.
ARTICLE VI
WITHDRAWAL FROM PLAN; SALE OF STOCK
Section 6.01 Voluntary Withdrawal. A Participant may, in accordance with
--------------------
such terms and conditions as the Committee in its sole discretion may impose,
withdraw from the Plan and cease making payroll deductions by filing with the
Company a form provided for this purpose. In such event, the entire credit
balance in the Participant's Stock Purchase Account will be paid to the
Participant in cash within 30 days, provided that in no event shall any
Participant be entitled to withdraw from such Account any Company contributions
credited to such Account at the end of the Purchase Period pursuant to Section
3.03. A Participant who withdraws from the Plan will not be eligible to reenter
the Plan until the beginning of the next Purchase Period following the date of
such withdrawal.
Section 6.02 Death. Subject to such terms and conditions as the Committee
-----
in its sole discretion may impose, upon the death of a Participant, no further
amounts shall be credited to the Participant's Stock Purchase Account.
Thereafter, on the last business day of the Purchase Period during which such
Participant's death occurred and in accordance with Section 5.01, the entire
credit balance in such Participant's Stock Purchase Account will be used to
purchase Common Stock, unless such Participant's estate has filed with the
Company, in advance of that day and subject to such terms and conditions as the
Committee in its sole discretion may impose, a form provided by the Company
which elects to have the entire credit balance in such Participant's Stock
Account distributed in cash within 30 days after the end of that Purchase Period
or at such earlier time as the Committee in its sole discretion may decide,
provided that in no event shall any Participant's estate be entitled to receive
from such Account any Company contributions credited to such Account at the end
of the Purchase Period pursuant to Section 3.03. Each Participant, however, may
designate one or more beneficiaries who, upon death, are to receive the Common
Stock or the amount that otherwise would have been distributed or paid to the
Participant's estate and may change or revoke any such designation from time to
time. No such designation, change or revocation will be effective unless made
by the Participant in writing and filed with the Company during the
Participant's lifetime. Unless the Participant has otherwise specified the
beneficiary designation, the beneficiary or beneficiaries so designated will
become fixed as of the date of the death of the Participant so that, if a
beneficiary survives the Participant but dies before the receipt of the payment
due such beneficiary, the payment will be made to such beneficiary's estate.
<PAGE>
Section 6.03 Termination of Employment. Subject to such terms and
-------------------------
conditions as the Committee in its sole discretion may impose, upon a
Participant's normal or early retirement with the consent of the Company under
any pension or retirement plan of the Company or Participating Affiliate, no
further amounts shall be credited to the Participant's Stock Purchase Account.
Thereafter, on the last business day of the Purchase Period during which such
Participant's approved retirement occurred and in accordance with Section 5.01,
the entire credit balance in such Participant's Stock Purchase Account will be
used to purchase Common Stock, unless such Participant has filed with the
Company, in advance of that day and subject to such terms and conditions as the
Committee in its sole discretion may impose, a form provided by the Company
which elects to receive the entire credit balance in such Participant's Stock
Purchase Account in cash within 30 days after the end of that Purchase Period,
provided that (i) in no event shall any Participant be entitled to receive from
such Account any Company contributions credited to such Account at the end of
the Purchase Period pursuant to Section 3.03, and (ii) such Participant shall
have no right to purchase Common Stock in the event that the last day of such a
Purchase Period occurs more than three months following the termination of such
Participant's employment with the Company by reason of such an approved
retirement. In the event of any other termination of employment (other than
death) with the Company or a Participating Affiliate, participation in the Plan
will cease on the date the Participant ceases to be a Full-Time Employee for any
reason. In such event, the entire credit balance in such Participant's Stock
Purchase Account will be paid to the Participant in cash within 30 days,
provided that in no event shall any Participant be entitled to receive from such
Account any Company contributions credited to such Account at the end of the
Purchase Period pursuant to Section 3.03. For purposes of this Section 6.03, a
transfer of employment to any Affiliate, or a leave of absence which has been
approved by the Committee, will not be deemed a termination of employment as a
Full-Time Employee.
ARTICLE VII
NONTRANSFERABILITY
Section 7.01 Nontransferable Right to Purchase. The right to purchase
---------------------------------
Common Stock hereunder may not be assigned, transferred, pledged or hypothecated
(whether by operation of law or otherwise), except as provided in Section 6.02,
and will not be subject to execution, attachment or similar process. Any
attempted assignment, transfer, pledge, hypothecation or other disposition or
levy of attachment or similar process upon the right to purchase will be null
and void and without effect.
Section 7.02 Nontransferable Account. Except as provided in Section 6.02,
-----------------------
the amounts credited to a Stock Purchase Account may not be assigned,
transferred, pledged or hypothecated in any way, and any attempted assignment,
transfer, pledge, hypothecation or other disposition of such amounts will be
null and void and without effect.
Section 7.03 Nontransferable Shares. Except as the Committee shall
----------------------
otherwise permit, prior to the second anniversary of the beginning of any
Purchase Period, the certificates evidencing the Common Stock purchased at the
end of such Purchase Period by a Participant pursuant to Section 5.01 of the
Plan shall be held by the Company, and such share, shares or
<PAGE>
other rights may not be assigned, transferred pledged or hypothecated in any
way, and any attempted assignment, transfer, pledge, hypothecation or other
disposition of such share or shares will be null and void and without effect.
Thereafter, such stock certificate or other rights shall be delivered in
accordance with Section 8.01 hereof.
ARTICLE VIII
STOCK CERTIFICATES
Section 8.01 Delivery. Promptly after completion of the two year period
--------
described in Section 7.03 hereof, and subject to such terms and conditions as
the Committee in its sole discretion may impose, the Company will cause to be
delivered to or for the benefit of the Participant a certificate evidencing the
Common Stock purchased by a Participant during a given Purchase Period.
Section 8.02 Securities Laws. The Company shall not be required to issue
---------------
or deliver any certificate representing Common Stock prior to registration under
the Securities Act of 1933, as amended, or registration or qualification under
any state law if such registration is required. The Company shall use its best
efforts to accomplish such registration (if and to the extent required) not
later than a reasonable time following the Purchase Period, and delivery of
certificates may be deferred until such registration is accomplished.
Section 8.03 Completion of Purchase. A Participant shall have no interest
----------------------
in the Common Stock purchased until a certificate representing the same is
issued to or for the benefit of the Participant.
Section 8.04 Form of Ownership. The certificates representing Common
-----------------
Stock issued under the Plan will be registered in the name of the Participant or
jointly in the name of the Participant and another person, as the Participant
may direct on a form provided by the Company.
ARTICLE IX
EFFECTIVE DATE, AMENDMENT AND TERMINATION OF PLAN
Section 9.01 Effective Date. The Plan was approved by the Board of
--------------
Directors on January 19, 2000 and shall be approved by the stockholders of the
Company within twelve (12) months thereof.
Section 9.02 Plan Commencement. The initial Purchase Period under the
-----------------
Plan will commence on January 19, 2000. Thereafter, each succeeding Purchase
Period will commence and terminate in accordance with Section 1.03(l).
Section 9.03 Powers of Board. The Board of Directors may amend or
---------------
discontinue the Plan at any time. No amendment or discontinuation of the Plan,
however, shall without stockholder approval be made that: (i) absent such
stockholder approval, would cause Rule 16b-3 under the Securities Exchange Act
of 1934, as amended (the "Act") to become unavailable with respect to the Plan,
(ii) requires stockholder approval under any rules or regulations of the
<PAGE>
National Association of Securities Dealers, Inc. or any securities exchange that
are applicable to the Company, or (iii) permit the issuance of Common Stock
before payment therefor in full.
Section 9.04 Automatic Termination. The Plan shall automatically
---------------------
terminate when all of the shares of Common Stock provided for in Section 10.03
have been sold.
ARTICLE X
ADMINISTRATION
Section 10.01 The Committee. The Plan shall be administered by a
-------------
committee (the "Committee") of two or more directors of the Company, none of
whom shall be officers or employees of the Company and all of whom shall be
"disinterested persons" with respect to the Plan within the meaning of Rule 16b-
3 under the Act. The members of the Committee shall be appointed by and serve
at the pleasure of the Board of Directors.
Section 10.02 Powers of Committee. Subject to the provisions of the Plan,
-------------------
the Committee shall have full authority to administer the Plan, including
authority to interpret and construe any provision of the Plan, to establish
deadlines by which the various administrative forms must be received in order to
be effective, and to adopt such other rules and regulations for administering
the Plan as it may deem appropriate. The Committee shall have full and complete
authority to determine whether all or any part of the Common Stock acquired
pursuant to the Plan shall be subject to restrictions on the transferability
thereof or any other restrictions affecting in any manner a Participant's rights
with respect thereto but any such restrictions shall be contained in the form by
which a Participant elects to participate in the Plan pursuant to Section 2.02.
Decisions of the Committee will be final and binding on all parties who have an
interest in the Plan.
Section 10.03 Stock to be Sold. The Common Stock to be issued and sold
----------------
under the Plan may be treasury shares or authorized but unissued shares, or the
Company may purchase Common Stock in the market for sale under the Plan. Except
as provided in Section 11.01, the aggregate number of shares of Common Stock to
be sold under the Plan will not exceed 200,000 shares.
Section 10.04 Notices. Notices to the Committee should be addressed as
-------
follows:
Colorado Business Bankshares, Inc.
Attn: Employee Stock Purchase Plan Committee
821 17th Street
Denver, Colorado 80202
ARTICLE XI
ADJUSTMENT FOR CHANGES IN STOCK OR COMPANY
Section 11.01 Stock Dividend or Reclassification. If the outstanding
----------------------------------
shares of Common Stock are increased, decreased, changed into or exchanged for a
different number or kind of securities of the Company, or shares of a different
par value or without par value, through
<PAGE>
reorganization, recapitalization, reclassification, stock dividend, stock split,
amendment to the Company's Certificate of Incorporation, reverse stock split or
otherwise, an appropriate adjustment shall be made in the maximum numbers and
kind of securities to be purchased under the Plan with a corresponding
adjustment in the purchase price to be paid therefor.
Section 11.02 Merger or Consolidation. If the Company is merged into or
-----------------------
consolidated with one or more corporations during the term of the Plan,
appropriate adjustments will be made to give effect thereto on an equitable
basis in terms of issuance of shares of the corporation surviving the merger or
of the consolidated corporation, as the case may be.
ARTICLE XII
APPLICABLE LAW
Section 12.01 Applicable Law. Rights to purchase Common Stock granted
--------------
under the Plan shall be construed and shall take effect in accordance with the
laws of the State of Colorado.
<PAGE>
EXHIBIT B
1998 STOCK INCENTIVE PLAN
<PAGE>
FIRST AMENDMENT TO
COLORADO BUSINESS BANKSHARES, INC.
1998 STOCK INCENTIVE PLAN
THIS FIRST AMENDMENT (this "Amendment") is made as of January 19, 2000 to
the Colorado Business Bankshares, Inc. ("Company") 1998 Stock Incentive Plan
("1998 Plan"). In the event of any conflict between the terms of this Amendment
and the terms of the Plan, the terms of this Amendment shall control. All
capitalized terms not defined in this Amendment shall have their respective
meanings set forth in the 1998 Plan.
The Plan shall be amended as follows:
1. The first sentence of Section 4(a) shall be amended in its entirety to
read as follows: "Subject to adjustment as provided in Section 4(c),
the number of Shares available for granting under the Plan shall be
425,000."
2. The first sentence of Section 5(b) shall be amended in its entirety to
read as follows: "No Eligible Person who is an employee of the Company
at the time of grant may be granted any Award or Awards, the value of
which Awards are based solely on an increase in the value of the
Shares after the date of the grant of such Awards, for more than
42,500 Shares, in the aggregate, in any one calendar year."
Except as modified by this Amendment, the terms and conditions of the 1998
Plan are hereby ratified and confirmed by this Amendment.
IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this Amendment as of the date and year first set forth above.
COLORADO BUSINESS BANKSHARES, INC.,
a Colorado corporation
/s/ Richard J. Dalton
___________________________________________
Richard J. Dalton, Executive Vice President
<PAGE>
COLORADO BUSINESS BANKSHARES, INC.
1998 STOCK INCENTIVE PLAN
Section 1. Purpose.
The purpose of the Plan is to promote the interests of the Company and
its shareholders by aiding the Company in attracting and retaining management
personnel capable of assuring the future success of the Company, to offer such
personnel incentives to put forth maximum efforts for the success of the
Company's business and to afford such personnel an opportunity to acquire a
proprietary interest in the Company.
Section 2. Definitions.
As used in the Plan, the following terms shall have the meanings set
forth below:
(a) "Affiliate" shall mean (i) any entity that, directly or
indirectly through one or more intermediaries, is controlled by the Company, and
(ii) any entity in which the Company has a significant equity interest, in each
case as determined by the Committee.
(b) "Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock, Restricted Stock Unit, Performance Award, Dividend Equivalent
or Other Stock-Based Award granted under the Plan.
(c) "Award Agreement" shall mean any written agreement, contract or
other instrument or document evidencing any Award granted under the Plan.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and any regulations promulgated thereunder.
(e) "Committee" shall mean a committee of the Board of Directors of
the Company designated by it to administer the Plan, which shall consist of
members appointed from time to time by the Board of Directors.
(f) "Company" shall mean Colorado Business Bankshares, Inc., a
Colorado corporation, and any successor corporation.
(g) "Dividend Equivalent" shall mean any right granted under Section
6(e) of the Plan.
(h) "Effective Date" shall mean the date, if any, on which the Plan
is adopted by the shareholders of the Company.
(i) "Eligible Person" shall mean any director, officer or employee
of the
<PAGE>
Company or any Affiliate who the Committee determines to be an Eligible Person.
(j) "Fair Market Value" shall mean, with respect to any property
(including, without limitation, any Shares or other securities), the fair market
value of such property determined by such methods or procedures as shall be
established from time to time by the Committee; provided, however, that if the
Shares are publicly traded on an exchange or on Nasdaq or a successor quotation
system, "Fair Market Value" shall mean (i) the closing price per Share of the
Shares on the principal exchange on which the Shares are then trading, if any,
on such date, or if the Shares were not traded on such date, then on the next
preceding trading day during which a sale occurred; or (ii) if the Shares are
not traded on an exchange but are quoted on Nasdaq or a successor quotation
system, (1) the last sales price (if the Shares are then listed on the Nasdaq
National Market) of the Shares for such date as reported by Nasdaq or such
successor quotation system or (2) the mean between the closing representative
bid and asked prices (in all other cases) for the Shares on such date as
reported by Nasdaq or such successor quotation system.
(k) "Incentive Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is intended to meet the requirements of Section
422 of the Code or any successor provision.
(l) "Non-Qualified Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is not intended to be an Incentive Stock Option.
(m) "Option" shall mean an Incentive Stock Option or a Non-Qualified
Stock Option.
(n) "Other Stock-Based Award" shall mean any right granted under
Section 6(f) of the Plan.
(o) "Participant" shall mean an Eligible Person designated to be
granted an Award under the Plan.
(p) "Performance Award" shall mean any right granted under Section
6(d) of the Plan.
(q) "Person" shall mean any individual, corporation, partnership,
association, trust, limited liability company or other entity.
(r) "Plan" shall mean this 1998 Stock Incentive Plan, as amended
from time to time.
(s) "Restricted Stock" shall mean any Share granted under Section
6(c) of the Plan.
(t) "Restricted Stock Unit" shall mean any unit granted under
Section 6(c) of the Plan evidencing the right to receive a Share (or a cash
payment equal to the Fair Market Value of
<PAGE>
a Share) at some future date.
(u) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as amended,
or any successor rule or regulation.
(v) "Shares" shall mean shares of Common Stock, $.01 par value, of
the Company or such other securities or property as may become subject to Awards
pursuant to an adjustment made under Section 4(c) of the Plan.
(w) "Stock Appreciation Right" shall mean any right granted under
Section 6(b) of the Plan.
Section 3. Administration.
(a) Power and Authority of the Committee. The Plan shall be
administered by the Committee. Subject to the express provisions of the Plan
and to applicable law, the Committee shall have full power and authority to:
(i) designate Participants; (ii) determine the type or types of Awards to be
granted to each Participant under the Plan; (iii) determine the number of Shares
to be covered by (or with respect to which payments, rights or other matters are
to be calculated in connection with) each Award; (iv) determine the terms and
conditions of any Award or Award Agreement; (v) amend the terms and conditions
of any Award or Award Agreement and accelerate the exercisability of Options or
the lapse of restrictions relating to Restricted Stock, Restricted Stock Units
or other Awards; (vi) determine whether, to what extent and under what
circumstances Awards may be exercised in cash, Shares, other securities, other
Awards or other property, or canceled, forfeited or suspended; (vii) determine
whether, to what extent and under what circumstances cash, Shares, other
securities, other Awards, other property and other amounts payable with respect
to an Award under the Plan shall be deferred, either automatically or at the
election of the holder thereof or the Committee; (viii) interpret and administer
the Plan and any instrument or agreement relating to, or Award made under, the
Plan; (ix) establish, amend, suspend or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration
of the Plan; and (x) make any other determination and take any other action that
the Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with respect to the
Plan or any Award shall be within the sole discretion of the Committee, may be
made at any time and shall be final, conclusive and binding upon any
Participant, any holder or beneficiary of any Award and any employee of the
Company or any Affiliate. In exercising its authority pursuant to the Plan, the
Committee shall adhere to all provisions of the Code as are applicable to the
grant, issuance and exercise of any Award.
(b) Delegation. The Committee may delegate its powers and duties
under the Plan to one or more officers of the Company or any Affiliate or a
committee of such officers, subject to such terms, conditions and limitations as
the Committee may establish in its sole discretion; provided, however, that the
Committee shall not delegate its powers and duties under the Plan with regard to
officers or directors of the Company or any Affiliate who are subject to Section
16 of the
<PAGE>
Securities Exchange Act of 1934, as amended.
Section 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section
4(c), the number of Shares available for granting Awards under the Plan shall be
225,000. If any Shares covered by an Award or to which an Award relates are not
purchased or are forfeited, or if an Award otherwise terminates without delivery
of any Shares, then the number of Shares counted against the aggregate number of
Shares available under the Plan with respect to such Award, to the extent of any
such forfeiture or termination, shall again be available for granting Awards
under the Plan. The Company shall at all times keep available the number of
Shares to satisfy Awards granted under the Plan.
(b) Accounting for Awards. For purposes of this Section 4, if an
Award entitles the holder thereof to receive or purchase Shares, the number of
Shares covered by such Award or to which such Award relates shall be counted on
the date of grant of such Award against the aggregate number of Shares available
for granting Awards under the Plan.
(c) Adjustments. In the event that the Committee shall determine
that any dividend or other distribution (whether in the form of cash, Shares,
other securities or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company or other similar corporate transaction or event
affects the interest in the Company represented by the Shares such that an
adjustment is determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall, in such manner as it
may deem equitable, adjust any or all of (i) the number and type of Shares (or
other securities or other property) which thereafter may be made the subject of
Awards, (ii) the number and type of Shares (or other securities or other
property) subject to outstanding Awards and (iii) the purchase or exercise price
with respect to any Award; provided, however, that the number of Shares covered
by any Award or to which such Award relates shall always be a whole number.
<PAGE>
Section 5. Eligibility.
(a) Designation of Participants. Any Eligible Person, including
any Eligible Person who is an officer or director of the Company or any
Affiliate, shall be eligible to be designated a Participant. In determining
which Eligible Persons shall receive an Award and the terms of any Award, the
Committee may take into account the nature of the services rendered by the
respective Eligible Persons, their present and potential contributions to the
success of the Company or such other factors as the Committee, in its sole
discretion, shall deem relevant. Notwithstanding the foregoing, an Incentive
Stock Option may only be granted to full or part-time employees (which term as
used herein includes, without limitation, officers and directors who are also
employees) and an Incentive Stock Option shall not be granted to an employee of
an Affiliate unless such Affiliate is also a "subsidiary corporation" of the
Company within the meaning of Section 424(f) of the Code or any successor
provision.
(b) Award Limitations Under the Plan. No Eligible Person at the
time of grant may be granted any Award or Awards, the value of which Awards are
based solely on an increase in the value of the Shares after the date of grant
of such Awards, for more than 22,500 Shares, in the aggregate, in any one
calendar year. The foregoing annual limitation specifically includes the grant
of any Awards representing "qualified performance-based compensation" within the
meaning of Section 162(m) of the Code.
Section 6. Awards.
(a) Options. The Committee is hereby authorized to grant Options
to Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the
Committee shall determine:
(i) Exercise Price. The purchase price per Share purchasable under
an Option shall be determined by the Committee; provided, however, that
such purchase price shall not be less than 100% of the Fair Market Value of
a Share on the date of grant of such Option.
(ii) Option Term. The term of each Option shall be fixed by the
Committee.
(iii) Time and Method of Exercise. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part and
the method or methods by which, and the form or forms (including, without
limitation, cash, Shares, promissory notes, other securities, other Awards
or other property, or any combination thereof, having a Fair Market Value
on the exercise date equal to the relevant exercise price) in which,
payment of the exercise price with respect thereto may be made or deemed to
have been made.
(iv) Incentive and Non-Qualified Stock Options. Each Option granted
pursuant to the Plan shall specify whether it is an Incentive Stock Option
or a Non-qualified Stock Option, provided that the Committee may, in the
case of the grant of an Incentive Stock Option, give the Participant the
right to receive in its place a Non-qualified Stock Option.
<PAGE>
(b) Stock Appreciation Rights. The Committee is hereby authorized
to grant Stock Appreciation Rights to Participants, subject to the terms of the
Plan and any applicable Award Agreement. A Stock Appreciation Right granted
under the Plan shall confer on the holder thereof a right to receive upon
exercise thereof the excess of (i) the Fair Market Value of one Share on the
date of exercise (or, if the Committee shall so determine, at any time during a
specified period before or after the date of exercise) over (ii) the grant price
of the Stock Appreciation Right as specified by the Committee, which price shall
not be less than 100% of the Fair Market Value of one Share on the date of grant
of the Stock Appreciation Right. Subject to the terms of the Plan and any
applicable Award Agreement, the grant price, term, methods of exercise, dates of
exercise, methods of settlement and any other terms and conditions of any Stock
Appreciation Right shall be as determined by the Committee. The Committee may
impose such conditions or restrictions on the exercise of any Stock Appreciation
Right as it may deem appropriate.
(c) Restricted Stock and Restricted Stock Units. The Committee is
hereby authorized to grant Awards of Restricted Stock and Restricted Stock Units
to Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the
Committee shall determine:
(i) Restrictions. Shares of Restricted Stock and Restricted Stock
Units shall be subject to such restrictions as the Committee may impose
(including, without limitation, any limitation on the right to vote a Share
of Restricted Stock or the right to receive any dividend or other right or
property with respect thereto), which restrictions may lapse separately or
in combination at such time or times, in such installments or otherwise as
the Committee may deem appropriate.
(ii) Stock Certificates. Any Restricted Stock granted under the
Plan shall be evidenced by issuance of a stock certificate or certificates,
which certificate or certificates shall be held by the Company. Such
certificate or certificates shall be registered in the name of the
Participant and shall bear an appropriate legend referring to the terms,
conditions and restrictions applicable to such Restricted Stock. In the
case of Restricted Stock Units, no Shares shall be issued at the time such
Awards are granted.
(iii) Forfeiture; Delivery of Shares. Except as otherwise determined
by the Committee, upon termination of employment (as determined under
criteria established by the Committee) during the applicable restriction
period, all Shares of Restricted Stock and all Restricted Stock Units at
such time subject to restriction shall be forfeited and reacquired by the
Company; provided, however, that the Committee may, when it finds that a
waiver would be in the best interest of the Company, waive, in whole or in
part, any or all remaining restrictions with respect to Shares of
Restricted Stock or Restricted Stock Units. Any Share representing
Restricted Stock that is no longer subject to restrictions shall be
delivered to the holder thereof promptly after the applicable restrictions
lapse or are waived. Upon the lapse or waiver of restrictions and the
restricted period relating to Restricted Stock Units evidencing the right
to receive Shares, such Shares shall be issued and delivered to the holders
of the Restricted Stock Units.
<PAGE>
(d) Performance Awards. The Committee is hereby authorized to
grant Performance Awards to Participants subject to the terms of the Plan and
any applicable Award Agreement. A Performance Award granted under the Plan (i)
may be denominated or payable in cash, Shares (including, without limitation,
Restricted Stock), other securities, other Awards or other property and (ii)
shall confer on the holder thereof the right to receive payments, in whole or in
part, upon the achievement of such performance goals during such performance
periods as the Committee shall establish. Subject to the terms of the Plan and
any applicable Award Agreement, the performance goals to be achieved during any
performance period, the length of any performance period, the amount of any
Performance Award granted, the amount of any payment or transfer to be made
pursuant to any Performance Award and any other terms and conditions of any
Performance Award shall be determined by the Committee.
(e) Dividend Equivalents. The Committee is hereby authorized to
grant to Participants Dividend Equivalents under which such Participants shall
be entitled to receive payments (in cash, Shares, other securities, other Awards
or other property as determined in the discretion of the Committee) equivalent
to the amount of cash dividends paid by the Company to holders of Shares with
respect to a number of Shares determined by the Committee. Subject to the terms
of the Plan and any applicable Award Agreement, such Dividend Equivalents may
have such terms and conditions as the Committee shall determine.
(f) Other Stock-Based Awards. The Committee is hereby authorized
to grant to Participants such other Awards that are denominated or payable in,
valued in whole or in part by reference to, or otherwise based on or related to,
Shares (including, without limitation, securities convertible into Shares), as
are deemed by the Committee to be consistent with the purpose of the Plan;
provided, however, that such grants must comply with Rule 16b-3 and applicable
law. Subject to the terms of the Plan and any applicable Award Agreement, the
Committee shall determine the terms and conditions of such Awards. Shares or
other securities delivered pursuant to a purchase right granted under this
Section 6(f) shall be purchased for such consideration, which may be paid by
such method or methods and in such form or forms (including without limitation,
cash, Shares, promissory notes, other securities, other Awards or other property
or any combination thereof), as the Committee shall determine, the value of
which consideration, as established by the Committee, shall not be less than
100% of the Fair Market Value of such Shares or other securities as of the date
such purchase right is granted.
(g) General.
(i) No Cash Consideration for Awards. Awards shall be granted for
no cash consideration or for such minimal cash consideration as may be
required by applicable law.
(ii) Awards May Be Granted Separately or Together. Awards may, in
the discretion of the Committee, be granted either alone or in addition to,
in tandem with or in substitution for any other Award or any award granted
under any plan of the Company
<PAGE>
or any Affiliate other than the Plan. Awards granted in addition to or in
tandem with other Awards or in addition to or in tandem with awards granted
under any such other plan of the Company or any Affiliate may be granted
either at the same time as or at a different time from the grant of such
other Awards or awards.
(iii) Forms of Payment Under Awards. Subject to the terms of the
Plan and of any applicable Award Agreement, payments or transfers to be
made by the Company or an Affiliate upon the grant, exercise or payment of
an Award may be made in such form or forms as the Committee shall determine
(including, without limitation, cash, Shares, promissory notes, other
securities, other Awards or other property or any combination thereof), and
may be made in a single payment or transfer, in installments or on a
deferred basis, in each case in accordance with rules and procedures
established by the Committee. Such rules and procedures may include,
without limitation, provisions for the payment or crediting of reasonable
interest on installment or deferred payments or the grant or crediting of
Dividend Equivalents with respect to installment or deferred payments.
(iv) Limits on Transfer of Awards. No Award and no right under
any such Award shall be transferable by a Participant otherwise than by
will or by the laws of descent and distribution; provided, however, that,
if so determined by the Committee, a Participant may, in the manner
established by the Committee, designate a beneficiary or beneficiaries to
exercise the rights of the Participant and receive any property
distributable with respect to any Award upon the death of the Participant.
Each Award or right under any Award shall be exercisable during the
Participant's lifetime only by the Participant or, if permissible under
applicable law, by the Participant's guardian or legal representative. No
Award or right under any such Award may be pledged, alienated, attached or
otherwise encumbered, and any purported pledge, alienation, attachment or
encumbrance thereof shall be void and unenforceable against the Company or
any Affiliate and, at the discretion of the Committee, any Award may be
extinguished if the holder of such Award attempts to pledge, alienate,
attach or encumber the Award in violation of this Section 6(g)(iv).
(v) Term of Awards. The term of each Award shall be for such
period as may be determined by the Committee.
(vi) Restrictions; Securities Exchange Listing. All certificates
for Shares or other securities delivered under the Plan pursuant to any
Award or the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the Plan
or the rules, regulations and other requirements of the Securities and
Exchange Commission and any applicable federal or state securities laws,
and the Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions. If the
Shares or other securities are traded on a securities exchange, the Company
shall not be required to deliver any Shares or other securities covered by
an Award unless and until such Shares or other securities have been
admitted for trading on such securities exchange.
<PAGE>
Section 7. Amendment and Termination; Adjustments.
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan. The Board of Directors of the Company
may amend, alter, suspend, discontinue or terminate the Plan; provided, however,
that, notwithstanding any other provision of the Plan or any Award Agreement,
without the approval of the shareholders of the Company, no such amendment,
alteration, suspension, discontinuation or termination shall be made that,
absent such approval:
(i) would cause Rule 16b-3 to become unavailable with respect to
the Plan;
(ii) would violate the rules or regulations of the Nasdaq National
Market, any other securities exchange or the National Association of
Securities Dealers, Inc. that are applicable to the Company; or
(iii) would cause the Company to be unable, under the Code, to grant
Incentive Stock Options under the Plan.
(b) Amendments to Awards. The Committee may waive any conditions
of or rights of the Company under any outstanding Award, prospectively or
retroactively. The Committee may not amend, alter, suspend, discontinue or
terminate any outstanding Award, prospectively or retroactively, without the
consent of the Participant or holder or beneficiary thereof, except as otherwise
herein provided.
(c) Correction of Defects, Omissions and Inconsistencies. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem desirable to carry the Plan into effect.
(d) Income Tax Withholding; Tax Bonuses. In order to comply with
all applicable federal or state income tax laws or regulations, the Company may
take such action as it deems appropriate to ensure that all applicable federal
or state payroll, withholding, income or other taxes, which are the sole and
absolute responsibility of a Participant, are withheld or collected from such
Participant. In order to assist a Participant in paying all or a portion of the
federal and state taxes to be withheld or collected upon exercise or receipt of
(or the lapse of restrictions relating to) an Award, the Committee, in its
discretion and subject to such additional terms and conditions as it may adopt,
may permit the Participant to satisfy such tax obligation by (a) electing to
have the Company withhold a portion of the Shares otherwise to be delivered upon
exercise or receipt of (or the lapse of restrictions relating to) such Award
with a Fair Market Value equal to the amount of such taxes or (b) delivering to
the Company Shares other than Shares issuable upon exercise or receipt of (or
the lapse of restrictions relating to) such Award with a Fair Market Value equal
to the amount of such taxes. The election, if any, must be made on or before the
date that the amount of tax to be withheld is determined.
<PAGE>
(j) Tax Bonuses. The Committee, in its discretion, shall have the
authority, at the time of grant of any Award under this Plan or at any time
thereafter, to approve cash bonuses to designated Participants to be paid upon
their exercise or receipt of (or the lapse of restrictions relating to) Awards
in order to provide funds to pay all or a portion of federal and state taxes due
as a result of such exercise or receipt (or the lapse of such restrictions).
The Committee shall have full authority in its discretion to determine the
amount of any such tax bonus.
Section 8. General Provisions.
(a) No Rights to Awards. No Eligible Person, Participant or other
Person shall have any claim to be granted any Award under the Plan, and there is
no obligation for uniformity of treatment of Eligible Persons, Participants or
holders or beneficiaries of Awards under the Plan. The terms and conditions of
Awards need not be the same with respect to any Participant or with respect to
different Participants.
(b) Award Agreements. No Participant will have rights under an
Award granted to such Participant unless and until an Award Agreement shall have
been duly executed on behalf of the Company.
(c) No Limit on Other Compensation Arrangements. Nothing contained
in the Plan shall prevent the Company or any Affiliate from adopting or
continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.
(d) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Affiliate, nor will it affect in any way the right of the Company
or an Affiliate to terminate such employment at any time, with or without cause.
In addition, the Company or an Affiliate may at any time dismiss a Participant
from employment free from any liability or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award Agreement.
(e) Governing Law. The validity, construction and effect of the
Plan or any Award, and any rules and regulations relating to the Plan or any
Award, shall be determined in accordance with the internal laws of the State of
Colorado, without regard to conflicts of law principles.
(f) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction
or would disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be so construed or deemed amended without, in
the determination of the Committee, materially altering the purpose or intent of
the Plan or the Award, such provision shall be stricken as to such jurisdiction
or Award, and the remainder of the Plan or any such Award shall remain in full
force and effect.
<PAGE>
(g) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.
(h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash shall be paid in lieu of any fractional Shares or whether such
fractional Shares or any rights thereto shall be canceled, terminated or
otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
Section 9. Term of the Plan.
Unless the Plan shall have been discontinued or terminated as provided
in Section 7(a), the Plan shall terminate on the tenth anniversary of the
Effective Date. No Award shall be granted after the termination of the Plan.
However, unless otherwise expressly provided in the Plan or in an applicable
Award Agreement, any Award theretofore granted may extend beyond the termination
of the Plan, and the authority of the Committee provided for hereunder with
respect to the Plan and any Awards, and the authority of the Board of Directors
of the Company to amend the Plan, shall extend beyond the termination of the
Plan.
<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, 2000, 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
Shareholders of Colorado Business Bankshares, Inc. (the "Company") to be held
on May 17, 2000 at the Denver Marriott City Center, 1701 California Street,
Denver, Colorado 80202 at 8:00 a.m., local time, and any adjournment thereof.
Matters 1, 2, 3 and 4 set forth below have been proposed by the Company and
matter 5 has been proposed by a shareholder of the Company.
1. ELECTION OF CLASS II DIRECTORS
[_] FOR Steven Bangert [_] WITHHOLD AUTHORITY to vote for Steven Bangert
[_] FOR Noel N. Rothman [_] WITHHOLD AUTHORITY to vote for Noel N. Rothman
[_] FOR Timothy J. Travis [_] WITHHOLD AUTHORITY to vote for Timothy J.
Travis
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, 2000.
[_] ABSTAIN from voting on the ratification of Deloitte & Touche LLP as the
Company's independent accountants for the fiscal year ending December
31, 2000.
[_] AGAINST the ratification of Deloitte & Touche LLP as the Company's
independent accountants for the fiscal year ending December 31, 2000.
3.APPROVAL OF THE EMPLOYEE STOCK PURCHASE PLAN
[_] FOR the approval of the Employee Stock Purchase Plan.
[_] ABSTAIN from voting on the approval of the Employee Stock Purchase Plan.
[_] AGAINST the approval of the Employee Stock Purchase Plan.
<PAGE>
4.APPROVAL OF THE AMENDMENT TO THE 1998 STOCK INCENTIVE PLAN
[_] FOR the approval of the Amendment to the 1998 Stock Incentive Plan.
[_] ABSTAIN from voting on the approval of the Amendment to the 1998 Stock
Incentive Plan.
[_] AGAINST the approval of the Amendment to the 1998 Stock Incentive Plan.
5. 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
6. 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, 2, 3 AND 4 ABOVE AND AGAINST ITEM 5 ABOVE.
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE ENCLOSED ADDRESSED ENVELOPE,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE U.S.
Date:_______________, 2000
__________________________
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.
