MATRIX BANCORP INC, DEF 14A, 2000-04-20

MATRIX BANCORP INC
DEF 14A, 2000-04-20
MORTGAGE BANKERS & LOAN CORRESPONDENTS

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<PAGE>

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement

[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12

Matrix Bancorp, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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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)

<PAGE>

MATRIX BANCORP, INC.
1380 Lawrence Street, Suite 1400
Denver, Colorado 80204

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 26, 2000

TO THE SHAREHOLDERS OF MATRIX BANCORP, INC.:

NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Shareholders (the
"Annual Meeting") of Matrix Bancorp, Inc., a Colorado corporation (the
"Company"), will be held at Hotel Teatro, 1100 14th Street, Denver, Colorado
80202 on the 26th day of May, 2000, at 10:00 a.m. (local time) for the following
purposes:

1. To elect two (2) directors to hold office until the 2003 Annual Meeting of
Shareholders or until their respective successors are duly elected and
qualified;

2. To consider and act upon a proposal to approve an amendment to the Company's
Employee Stock Purchase Plan (the "Purchase Plan") to increase the number of
shares of the Company's common stock issuable under the Purchase Plan from
125,000 to 250,000 shares;

3. To consider and act upon a proposal to approve an amendment of the Company's
1996 Amended and Restated Employee Stock Option Plan (the "Stock Option
Plan") to increase the number of shares of the Company's common stock
issuable under the Stock Option Plan upon the exercise of stock options
granted pursuant to the Stock Option Plan from 525,000 to 750,000 shares;

4. To ratify the Board of Directors' appointment of Ernst & Young LLP as the
independent auditors for the Company for the 2000 fiscal year; and

5. To transact any and all other business as may properly be brought before the
meeting or any adjournment(s) thereof.

The Board of Directors has fixed the close of business on April 4, 2000 as
the record date (the "Record Date") for the determination of shareholders
entitled to notice of and to vote at such meeting or any adjournment(s) thereof.
Only shareholders of record at the close of business on the Record Date are
entitled to notice of and to vote at such meeting. The stock transfer books
will not be closed. A list of shareholders entitled to vote at the Annual
Meeting will be available for examination at the offices of the Company for ten
(10) days prior to the Annual Meeting.

You are cordially invited to attend the meeting; whether or not you expect
to attend the meeting in person, however, you are urged to mark, sign, date, and
mail the enclosed form of proxy promptly so that your shares of stock may be
represented and voted in accordance with your wishes and in order that the
presence of a quorum may be assured at the meeting. Your proxy will be returned
to you if you should be present at the meeting and should request its return in
the manner provided for revocation of proxies on the initial page of the
enclosed proxy statement.

BY ORDER OF THE BOARD OF DIRECTORS

T. Allen McConnell, Secretary

Denver, Colorado
April 26, 2000

<PAGE>

MATRIX BANCORP, INC.
1380 Lawrence Street, Suite 1400
Denver, Colorado 80204

PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 26, 2000
__________________________________________

SOLICITATION AND REVOCABILITY OF PROXIES

The accompanying proxy is solicited by the Board of Directors on behalf of
Matrix Bancorp, Inc., a Colorado corporation (the "Company"), to be voted at the
2000 Annual Meeting of Shareholders of the Company (the "Annual Meeting") to be
held on May 26, 2000, at the time and place and for the purposes set forth in
the accompanying Notice of Annual Meeting of Shareholders (the "Notice") and at
any adjournment(s) thereof. When proxies in the accompanying form are properly
executed and received, the shares represented thereby will be voted at the
Annual Meeting in accordance with the directions noted thereon; if no direction
is indicated, such shares will be voted for the election of the director
nominees named herein pursuant to Proposal 1, in favor of Proposal 2, Proposal 3
and Proposal 4 set forth in the Notice, and the persons named in the proxy will
use their discretion with respect to any matters referred to in Proposal 5 set
forth in the Notice.

The executive offices of the Company are located at, and the mailing
address of the Company is, 1380 Lawrence Street, Suite 1400, Denver, Colorado
80204.

Management does not intend to present any business at the Annual Meeting
for a vote other than the matters set forth in the Notice and has no information
that others will do so. If other matters requiring a vote of the shareholders
properly come before the Annual Meeting, it is the intention of the persons
named in the accompanying form of proxy to vote the shares represented by the
proxies held by them in accordance with their judgment on such matters.

This proxy statement (the "Proxy Statement") and accompanying form of proxy
are being mailed on or about April 26, 2000. The Company's Annual Report to
Shareholders for 1999 is enclosed herewith, but does not form any part of the
materials for solicitation of proxies.

Any shareholder of the Company giving a proxy has the unconditional right
to revoke his proxy at any time prior to the voting thereof either in person at
the Annual Meeting by delivering a duly executed proxy bearing a later date or
by giving written notice of revocation to the Company addressed to T. Allen
McConnell, Secretary, Matrix Bancorp, Inc., 1380 Lawrence Street, Suite 1400,
Denver, Colorado 80204; no such revocation shall be effective, however, until
such notice of revocation has been received by the Company at or prior to the
Annual Meeting.

In addition to the solicitation of proxies by use of the mail, officers and
regular employees of the Company may solicit the return of proxies, either by
mail, telephone, telegraph or through personal contact. Such officers and
employees will not be additionally compensated but will be reimbursed for out-
of-pocket expenses. Brokerage houses and other custodians, nominees and
fiduciaries will, in connection with shares of voting Common Stock, par value
$.0001 per share (the "Common Stock"), registered in their names, be requested
to forward solicitation material to the beneficial owners of such shares of
Common Stock.
<PAGE>

The cost of preparing, printing, assembling and mailing the Annual Report,
the Notice, this Proxy Statement and the enclosed form of proxy, as well as the
cost of forwarding solicitation materials to the beneficial owners of shares of
the Common Stock, and other costs of solicitation, will be borne by the Company.

QUORUM AND VOTING

The record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting was the close of business on April 4, 2000
(the "Record Date"). On the Record Date, there were 6,759,741 shares of Common
Stock issued and outstanding.

Each holder of Common Stock shall be entitled to one vote for each share of
Common Stock on all matters to be acted upon at the meeting. Neither the
Company's Amended and Restated Articles of Incorporation, as amended, nor its
Bylaws, as amended, allow for cumulative voting rights. The presence, in person
or by proxy, of the holders of a majority of the issued and outstanding Common
Stock entitled to vote at the meeting is necessary to constitute a quorum to
transact business at the Annual Meeting. If a quorum is not present or
represented at the Annual Meeting, the shareholders entitled to vote thereat,
present in person or represented by proxy, may adjourn the Annual Meeting from
time to time, without notice other than announcement at the meeting, until a
quorum is present or represented. Assuming the presence of a quorum, the
affirmative vote of the holders of a plurality of the shares of Common Stock
voting at the meeting is required for the election of directors pursuant to
Proposal 1, and the affirmative vote of the holders of at least a majority of
the issued and outstanding shares of Common Stock represented in person or by
proxy at the Annual Meeting and voted is required for the approval of Proposal
2, Proposal 3 and Proposal 4.

An automated system administered by the Company's transfer agent tabulates
the votes. Abstentions will be included in vote totals and, as such, will have
the same effect on each proposal other than the election of directors as a
negative vote. Broker non-votes, if any, will not be included in vote totals
and, as such, will have no effect on any proposal.

PRINCIPAL SHAREHOLDERS AND STOCK OWNERSHIP OF MANAGEMENT

The following table sets forth information regarding the beneficial
ownership of Common Stock as of the Record Date by (i) each person known by the
Company to own beneficially five percent or more of the outstanding Common
Stock; (ii) each of the Company's directors and advisory directors; (iii) each
of the executive officers named in the Summary Compensation Table (the "Named
Executive Officers"); and (iv) all directors, advisory directors and executive
officers of the Company as a group. Unless otherwise indicated, the address of
each person listed in the following table is 1380 Lawrence Street, Suite 1400,
Denver, Colorado 80204.

2
<PAGE>

Shares Beneficially
Owned (1)
------------------- Percent
Name of Beneficial Owner Number of Class
- ----------------------------- ------------------- --------
Guy A. Gibson................ 1,149,875 17.0%

Richard V. Schmitz........... 1,151,375 17.0%

D. Mark Spencer.............. 1,147,876 17.0%

Thomas M. Piercy............. 236,375 3.5%

David W. Kloos............... 165,723 (2) 2.4%

Stephen G. Skiba............. 17,500 (2) *

David A. Frank............... 12,500 (2) *

Peter G. Weinstock........... 10,000 (2) *

George R. Bender............. 6,225 (2) *

Thomas P. Cronin............. 18,589 (2) *

Financial Stocks, Inc........ 424,300 (4) 6.3%
507 Carew Tower
441 Vine Street
Cincinnati, Ohio 45202

Fleet Boston Corporation..... 393,900 (3) 5.8%
One Federal Street
Boston, MA 02211

All directors, advisory
directors and executive
officers as a group
(13 persons)................ 4,004,528 (2) 58.3%

___________

* Indicates ownership of less than 1% of the Company's Common Stock.

(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "Commission") and generally
includes voting or investment power with respect to securities. Except as
indicated in the footnotes to this table and subject to applicable
community property laws, the persons named in the table have sole voting
and investment power with respect to all shares of Common Stock
beneficially owned.
(2) Includes options that are currently exercisable, or become exercisable
within 60 days of the Record Date, to purchase from the Company the number
of shares of Common Stock indicated for the following persons: David W.
Kloos (22,000), Thomas P. Cronin (16,000), Paul E. Skretny (16,000), Gary
Lenzo (19,000), T. Allen McConnell (9,000), George R. Bender (5,000),
Stephen G. Skiba (7,500), David A. Frank (7,500) and Peter G. Weinstock
(7,500). Under the terms of the Purchase Plan, participants are issued
fractional shares to the extent the money in their account is not evenly
divisible into a whole number of shares on the purchase date. For ease of
presentation, the number of shares of Common Stock outstanding and the
number of shares of Common Stock beneficially owned by the persons
described in this Proxy Statement have been rounded to the nearest whole
share.
(3) Based on a Schedule 13G filed by Fleet Boston Corporation on February 4,
2000. The Schedule 13G discloses that Fleet Boston Corporation has sole
power to vote or direct the vote of 265,800 shares and sole power to
dispose or direct the disposition of 393,900 shares.
(4) Based on a Schedule 13D filed by Financial Stocks, Inc. on March 31, 1998.
The Schedule 13D disclosed that Financial Stocks, Inc. has sole voting
power over 401,346 shares of common stock, shared voting power over 22,954
shares of common stock, sole dispositive power over 401,346 shares of
common stock and shared dispositive power over 22,954 shares of common
stock.

3
<PAGE>

ELECTION OF DIRECTORS
(Proposal 1)

General

Matrix Bancorp, Inc. ("Matrix Bancorp") is a unitary thrift holding company
that operates principally through the following operating subsidiaries: United
Financial, Inc. ("United Financial"), Matrix Financial Services Corporation
("Matrix Financial"), Matrix Capital Bank ("Matrix Bank"), United Special
Services, Inc. ("USS"), United Capital Markets, Inc. ("UCM"), Sterling Trust
Company ("Sterling"), First Matrix Investment Services Corporation ("First
Matrix") and ABS School Management Services, L.L.C. ("ABS").

The Bylaws, as amended, of the Company provide that the number of directors
that shall constitute the whole board shall be as fixed from time to time by the
Board of Directors. By resolution of the Board of Directors, the number of
directors comprising the Board of Directors has been set at seven (7).

The Board of Directors is divided into three classes. Directors for each
class are elected at the annual meeting held in the year in which the term for
such class expires and serve thereafter for three years or until their
successors are elected and qualified. All advisory directors serve at the
pleasure of the Board of Directors. Subject to any applicable employment
agreement provisions, all officers are appointed by, and serve at the discretion
of, the Board of Directors of the Company.

Nominees and Continuing Directors

Unless otherwise directed in the enclosed proxy, it is the intention of the
persons named in the proxy to nominate and to vote the shares represented by
such proxy for the election of the following named nominees for the office of
director of the Company, to hold office until the 2003 Annual Meeting of
Shareholders or until their respective successors shall have been duly elected
and shall have qualified.

Information regarding each nominee, each of the continuing directors of the
Company and each advisory director of the Company is set forth in the table and
text below:

<TABLE>
<CAPTION>
Director's
Name Age Present Office(s) Held Term Expires
- ------------------------------------ --------- ------------------------------------------- -------------------

Nominees:

<S> <C> <C> <C>
Thomas M. Piercy.................... 35 Matrix Bancorp: Director 2003
United Financial: Managing Director

Stephen G. Skiba(1)(2).............. 45 Matrix Bancorp: Director 2003

Continuing Directors:

Richard V. Schmitz.................. 37 Matrix Bancorp: Chairman of the Board 2002
United Financial: Chairman of the Board

D. Mark Spencer..................... 40 Matrix Bancorp: Vice Chairman 2002
Matrix Bank: Chairman of the Board

Guy A. Gibson....................... 35 Matrix Bancorp: President and Chief 2001
Executive Officer
Matrix Financial: Chairman of the Board

</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
Director's
Name Age Present Office(s) Held Term Expires
- ------------------------------------ --------- ------------------------------------------- -------------------
<S> <C> <C> <C>
David W. Kloos...................... 38 Matrix Bancorp: Senior Vice President 2001
and Chief Financial Officer

David A. Frank(1)(2)................ 52 Matrix Bancorp: Director 2001

Advisory Director:

Peter G. Weinstock.................. 38 Matrix Bancorp: Advisory Director --
</TABLE>

___________
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.

Guy A. Gibson has served as the Chief Executive Officer, President and
director of Matrix Bancorp since its formation in June 1993. Mr. Gibson has
served as Chairman of the Board of Matrix Financial since August 1990. Mr.
Gibson was one of the original founders of Matrix Financial and acted as its
Chief Executive Officer during 1990. Prior to his tenure with the Company, Mr.
Gibson held the position of Account Executive with the investment banking firms
of PaineWebber from 1987 to 1989 and Lincoln Financial Group, a Denver-based
servicing brokerage firm, from 1989 to 1990.

Richard V. Schmitz has served as a director of Matrix Bancorp since its
formation in June 1993. Since February 1996, Mr. Schmitz has been acting as
Chairman of the Board of Matrix Bancorp. Mr. Schmitz was one of the original
founders of United Financial and was named Chief Executive Officer and Chairman
of the Board in 1990. In early 1997, Mr. Schmitz resigned from the position of
Chief Executive Officer of United Financial, but continues to serve as Chairman
of the Board.

D. Mark Spencer served as Chairman of the Board of Matrix Bancorp from June
1993 until February 1996. Mr. Spencer has also served as an executive officer
of the Company since June 1993. Mr. Spencer has served as Chairman of the Board
of Matrix Bank since October 1993 and has served as director of Matrix Financial
since August 1990. From 1985 through July 1990, Mr. Spencer served as Vice
President of Secondary Marketing for Austin Federal Savings and Loan, an Austin,
Texas savings and loan association.

Thomas M. Piercy has served as director of Matrix Bancorp since June 1993.
Mr. Piercy has served as Managing Director of United Financial since March 1997
and has served in various other managerial capacities since October 1990. From
1986 to 1990, Mr. Piercy served as Managing Director of Lincoln Financial Group.

David W. Kloos has served as Chief Financial Officer, Vice President and
director of Matrix Bancorp since its formation in June 1993. In September 1996,
he was named Senior Vice President of Matrix Bancorp. From 1989 through 1993,
Mr. Kloos served as Senior Vice President and Chief Financial Officer of Argo
Federal Savings Bank, a Summit, Illinois federal savings bank. Mr. Kloos, a
certified public accountant, was employed by KPMG Peat Marwick, LLP from 1985 to
1989.

Stephen G. Skiba, a director of Matrix Bancorp since March 1996, is
Director of Equity Research, focusing on banks and thrifts, for ABN AMRO Inc.,
an investment banking firm in Chicago, Illinois. From November 1990 to June
1996, Mr. Skiba was Senior Vice President, Chief Financial Officer and Treasurer
of N.S. Bancorp, Inc. in Chicago, Illinois. Prior to joining N.S. Bancorp,
Inc., Mr. Skiba was an audit partner with KPMG Peat Marwick, LLP.

5
<PAGE>

David A. Frank was elected director of Matrix Bancorp in September 1996.
Mr. Frank is a private investor and a consultant for financial services
companies. He was President, Chief Executive Officer and founder of America's
Mortgage Source, a mortgage company involved in the origination of residential
mortgage loans, which operated from 1995 into 1998. From 1994 to 1995, Mr.
Frank served as President and Chief Executive Officer of Chemical Residential
Mortgage Corporation in Edison, New Jersey, and as a director of Chemical Bank,
N.A. Chemical Residential Mortgage Corporation was the primary mortgage banking
operation of Chemical Banking Corporation (now known as Chase Manhattan). Prior
to joining Chemical Residential Mortgage Corporation, Mr. Frank served from 1989
to 1994 as President and Chief Operating Officer of Margaretten Financial
Corporation, a publicly traded national mortgage banking company based in Perth
Amboy, New Jersey. From 1977 to 1989, Mr. Frank held various positions with
Primerica Corporation/American Can Company (now known as Citigroup), where he
was primarily involved in mergers, acquisitions, capital market activities and
in restructuring a manufacturing based concern into a diversified financial
services company.

Peter G. Weinstock has served as an advisory director to Matrix Bancorp
since September 1996. In his capacity as advisory director, Mr. Weinstock is
invited to attend meetings of the Board of Directors and to participate in its
discussions. However, Mr. Weinstock is not entitled to vote in matters
submitted for approval and is not involved in the administration or management
of the Company. Mr. Weinstock is a member of the law firm of Jenkens &
Gilchrist, a Professional Corporation in Dallas, Texas, where he has been
employed for more than five years. Jenkens & Gilchrist, a Professional
Corporation, from time to time serves as outside counsel to the Company.

The Board of Directors does not contemplate that any of the nominees for
director will refuse or be unable to accept election as a director of the
Company or be unable to serve as a director of the Company. Should any of them
become unavailable for nomination or election or refuse to be nominated or to
accept election as a director of the Company, then the persons named in the
enclosed form of proxy intend to vote the shares represented in such proxy for
the election of such other person or persons as may be nominated or designated
by the Board of Directors.

Executive Officers

The following sets forth the name, age, current position with the Company
and the principal occupation during the last five years of each executive
officer of the Company. Information with respect to Messrs. Gibson, Schmitz,
Piercy, Spencer and Kloos is set forth above under the caption "--Nominees and
Continuing Directors."

George R. Bender, age 60, has been President and Chief Executive Officer of
Matrix Financial since October 1998. Prior to joining Matrix Financial, from
1990 to 1997, Mr. Bender served as Executive Vice President in charge of
mortgage banking operations for Bank United in Houston, Texas. From 1985 to
1990, Mr. Bender served as President and Chief Executive Officer of Centrust
Mortgage Corporation. Mr. Bender has been in the mortgage banking business for
more than 35 years, primarily serving during such time in various executive
capacities for subsidiaries of financial institutions and Wall Street investment
banking concerns.

Thomas P. Cronin, age 54, joined the Company in March 1997 as Vice Chairman
of Matrix Bancorp and Chief Executive Officer of United Financial. Mr. Cronin
has over 30 years of experience in the mortgage banking industry and currently
serves as the Vice President and Treasurer for the Mortgage Bankers Association
of America. Prior to joining Matrix Bancorp, Mr. Cronin held various positions
with MCA Financial Corporation, a Michigan-based financial services company, and
its wholly owned subsidiary, MCA Mortgage Corporation. Mr. Cronin's most recent
management position with MCA Financial Corporation was Vice Chairman. Mr.
Cronin served as a director of MCA Financial Corporation until January 1999. In
February 1999, MCA Financial Corporation and several of its affiliates,
including MCA Mortgage Corporation, filed for reorganization under Chapter 11 of
the

6
<PAGE>

bankruptcy code. The petition for reorganization was filed by a receiver for
such entities, who was appointed in January 1999.

Gary Lenzo, age 49, has served as President, Chief Executive Officer and
director of Matrix Bank since October 1993. From 1987 to 1992, Mr. Lenzo served
as Vice President of Austin Savings Association and Great Western Savings Bank,
both Austin, Texas-based savings associations. From 1984 to 1986, Mr. Lenzo
served as Vice President of Unifirst American Mortgage Corporation, an Austin,
Texas mortgage company.

T. Allen McConnell, age 33, joined the Company in October 1997 as Senior
Vice President, Secretary and General Counsel. From September 1992 to October
1997, Mr. McConnell was an attorney with Jenkens & Gilchrist, a Professional
Corporation, in Dallas, Texas, where his practice focused on corporate finance
and mergers and acquisitions. Jenkens & Gilchrist, a Professional Corporation,
from time to time serves as outside counsel for the Company.

Paul E. Skretny, age 55, has served as Chief Executive Officer of Sterling
since May 1993. Mr. Skretny also has served as Chairman of the Board of First
Matrix for more than five years. From 1964 to 1993, Mr. Skretny worked in
various capacities in commercial and investment banking businesses.

Committees of the Board of Directors

The Board of Directors currently has two standing committees: the
Compensation Committee and the Audit Committee. The Compensation Committee and
the Audit Committee are each comprised of Mr. Skiba and Mr. Frank. The
Compensation Committee is responsible for recommending to the Board of Directors
the Company's executive compensation policies for senior officers and
administering the Stock Option Plan and the Purchase Plan. The Compensation
Committee held four meetings during 1999 and also acted on one occasion during
1999 by unanimous consent. The Audit Committee is responsible for recommending
independent auditors, reviewing the audit plan, the adequacy of internal
controls, the audit report and management letter and performing such other
duties as the Board of Directors may from time to time prescribe. The Audit
Committee held two meetings during 1999.

The Board of Directors does not have a standing Nominating Committee.

The Board of Directors held eight meetings during 1999. During 1999, each
director attended at least 75% of the meetings of the Board of Directors and
committees on which he served.

Director Compensation

The Company pays each nonemployee director of the Company a $3,750
quarterly retainer and a fee of $1,000 ($250 if such director's attendance is
via teleconference) for each meeting of the Board of Directors of the Company
that he attends. The Company also reimburses each director for ordinary and
necessary travel expenses related to such director's attendance at Board of
Directors' and committee meetings. Nonemployee directors are also eligible for
stock option grants under the Stock Option Plan.

Each advisory director of the Company is paid a $2,500 quarterly retainer
and a fee of $1,000 ($250 if such advisory director's attendance is via
teleconference) for each meeting of the Board of Directors of Matrix Bancorp
that he attends. The Company also reimburses each advisory director for ordinary
and necessary travel expenses related to such advisory director's attendance at
Board of Directors' meetings. Advisory directors are also eligible for stock
option grants under the Stock Option Plan.

7
<PAGE>

Compensation of Executive Officers

The Summary Compensation Table below provides certain summary information
concerning compensation paid or accrued during 1997, 1998 and 1999 by the
Company to or on behalf of the Chief Executive Officer and the four other
highest paid executive officers of the Company whose salary and bonus for 1999
was in excess of $100,000:

Annual Long-Term
Compensation(1) Compensation
------------------------------------------ ------------
Other Annual Options/ All Other
Name and Principal Positions Year Salary Bonus Compensation SARs Compensation
- -------------------------------------- ---- -------- -------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Guy A. Gibson
President and Chief Executive Officer 1999 $295,833 $ -- $ -- -- $ 29,800(3)(4)(9)
of Matrix Bancorp; Chairman of the 1998 250,000 50,000 -- -- 33,500(3)(4)(9)
Board of Matrix Financial 1997 250,000 -- -- -- 8,375(3)(4)

Richard V. Schmitz
Chairman of the Board of Matrix Bancorp; 1999 $295,833 $ -- $ -- -- $ 36,320(3)(4)(9)
Chairman of the Board of United Financial 1998 250,000 50,000 -- -- 31,820(3)(4)(9)
1997 257,211 -- -- -- 8,525(3)(4)

D. Mark Spencer
Vice Chairman of Matrix Bancorp; 1999 $295,833 $ -- $ -- -- $ 34,170(3)(4)(9)
Chairman of the Board of Matrix Bank 1998 250,000 50,000 -- -- 34,920(3)(4)(9)
1997 257,211 -- -- -- 9,025(3)(4)

Thomas P. Cronin
Vice Chairman of Matrix Bancorp; 1999 $250,000 $ -- $ -- 5,000(5) $ 1,365(7)
Chief Executive Officer of United Financial 1998 250,000 120,000 -- -- 2,500(7)
1997 208,333 -- -- 25,000(5) --

George R. Bender
President and Chief Executive Officer 1999 $250,000 $ 25,000 $ -- -- $ 2,500(8)
of Matrix Financial 1998 54,968(2) -- -- 25,000(6) --
1997 -- -- -- -- --
</TABLE>

___________

(1) Annual compensation does not include the cost to the Company of benefits
certain executive officers receive in addition to salary and cash bonuses.
The aggregate amounts of such personal benefits, however, did not exceed
the lesser of either $50,000 or 10% of the total annual compensation of
such executive officer. The bonus amount reflected for each such person
for 1999 was actually paid in 2000.
(2) Mr. Bender's employment with the Company began in October 1998.
(3) Of this amount, the following represents directors fees paid by Matrix Bank
for such person's service on that entity's board of directors. Mr. Gibson
received $6,000 for 1997 and 1998, and $10,500 for 1999. Mr. Schmitz
received $5,500 for 1997, $6,000 for 1998 and $10,500 for 1999. Mr.
Spencer received $6,000 for 1997 and 1998 and $11,500 for 1999.
(4) Of this amount, $2,375, $2,500 and $2,500, respectively, represents the
Company's contribution to such person's account maintained under the 401(k)
savings plan during 1997, 1998 and 1999, respectively.
(5) Mr. Cronin received two separate option grants. Twenty-five thousand
options were granted on March 3, 1997, at an exercise price of $13.75.
These options become exercisable ratably over five years, with the first
20% exercisable as of March 3, 1998. Five thousand options were granted
on March 31, 1999, at an exercise price of $12.25. These options become
exercisable ratably over five years, with the first 20% exercisable as of
March 31, 2000.
(6) The exercise price for Mr. Bender's options is $8.125. These options become
exercisable ratably over five years, with the first 20% exercisable as of
October 13, 1999.
(7) Represents the Company's contribution to Mr. Cronin's account maintained
under the 401(k) savings plan.
(8) Represents the Company's contribution to Mr. Bender's account maintained
under the 401(k) savings plan.
(9) Represents premium paid by the Company for life insurance policies owned by
and payable to the family of each executive officer. Annual premiums paid
in 1998 were $25,000 for Mr. Gibson, $23,320 for Mr. Schmitz and $26,420
for Mr. Spencer and for 1999 were $16,800 for Mr. Gibson, $23,320 for Mr.
Schmitz and $20,170 for Mr. Spencer.

8
<PAGE>

Exercises of Options

The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of options during fiscal 1999 and
unexercised options held as of December 31, 1999. No options were exercised by
the Named Executive Officers during 1999.

Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Number of Unexercised in-the-money
Shares Options options
Acquired at FY-end: at FY-end:
on Exercisable/ Exercisable/
Name Exercise Value Realized Unexercisable Unexercisable(1)
- --------------------- ----------- -------------- ------------- ----------------
<S> <C> <C> <C> <C>

Guy A. Gibson........ -- -- --/-- $ --/--

Richard V. Schmitz... -- -- --/-- --/--

D. Mark Spencer...... -- -- --/-- --/--

Thomas P. Cronin..... -- -- 10,000/20,000 --/--

George R. Bender..... -- -- 5,000/20,000 $19,375/77,500
</TABLE>

___________
(1) Values are stated based upon the closing price of $12.00 per share of the
Common Stock on the NASDAQ National Market on December 31, 1999, the last
trading day of the Company's fiscal year.

Compensation Committee Report on Executive Compensation

The Board of Directors has established a Compensation Committee to review
and approve the compensation levels of executive officers of the Company,
evaluate the performance of the executive officers, consider senior management
succession issues and any related matters for the Company. The Compensation
Committee is charged with reviewing with the Board of Directors in detail all
aspects of the cash compensation for executive officers of the Company. Stock
option compensation for the executive officers is also considered by the
Compensation Committee.

The philosophy of the Company's compensation program is to employ, retain
and reward executives capable of leading the Company in achieving its business
objectives. These objectives include preserving a strong financial posture,
increasing the assets of the Company, positioning the Company's assets and
business operations in geographic markets and industry segments offering long-
term growth opportunities, enhancing stockholder value and ensuring the survival
of the Company. The accomplishment of these objectives is measured against
conditions prevalent in the industry within which the Company operates. In
recent years, these conditions reflect a highly competitive market environment
and rapidly changing regional, geographic and overall industry market
conditions. The Compensation Committee is also mindful, however, of the fact
that several of the Company's executive officers have entered into employment
agreements in connection with their agreements to join the Company; accordingly,
with respect to those executive officers, the Compensation Committee recognizes
that, to a large degree, compensation for such persons is set by contract.

In late 1997, the Compensation Committee retained Bank Compensation
Strategies, Inc. ("BCS") to analyze and review the Company's management
compensation structure and elements. BCS made an initial proposal to the
Compensation Committee for an annual incentive plan. This plan was tabled in
mid-1998 during the pendency of the Company's proposed merger with Fidelity
National Financial, Inc. ("Fidelity"). Since the termination of such proposed
merger, the Compensation Committee is once again

9
<PAGE>

pursuing the proposal. The proposed plan is based upon targeted goals and
objectives and a comparison to a peer group of companies. The performance
criteria include, depending on the executive in question, the Company's return
on equity, the Company's stock performance and budgeted pretax net income. The
Compensation Committee expects formal implementation of the final plan by the
date of the Annual Meeting and that the criteria with respect to such plan will
apply to executive compensation beginning with the 2000 year.

The Compensation Committee has determined in general that the available
forms of executive compensation should include base salary, cash bonus awards
and stock options. Performance of the Company, including stock price
performance, for 1999 was targeted as a key consideration (to the extent that
such performance can fairly be attributed or related to such executive's
performance) for determining 1999 executive compensation, as well as the nature
of each executive's responsibilities and capabilities. The Company's
compensation philosophy recognizes, nevertheless, that stock price performance
is only one measure of performance and, given industry business conditions and
the long term strategic direction and goals of the Company, it may not
necessarily be the best current measure of executive performance. The Company's
compensation philosophy also gives consideration to the Company's achievement of
specified business objectives, such as earnings expectations and return on
equity, when determining executive officer compensation. The Compensation
Committee endeavors to compensate the Company's executive officers based upon a
Company-wide salary structure consistent for each position relative to its
authority and responsibility compared to industry peers.

An additional objective of the Compensation Committee in determining
compensation is to reward executive officers with equity compensation in
addition to salary in keeping with the Company's overall compensation
philosophy, which attempts to place equity in the hands of its employees in an
effort to further instill shareholder considerations and values in the actions
of all the employees and executive officers. In making its determinations, some
consideration is given by the Compensation Committee to the number of options
already held by such persons and the existing amount of Common Stock already
owned by such persons.

Executive compensation for 1999 consisted of a base salary, and in most
instances, cash bonuses and option grants. As discussed more fully below, cash
bonuses for 1999 were paid during 2000 after review by the Compensation
Committee of the Company's and management's performance during 1999. With
respect to base salary, the Compensation Committee met in early 1999 to set base
salary for each of the executive officers of the Company. In determining base
salary for the executive officers, the Compensation Committee reviewed several
factors, paying particular attention to the Company's results of operations and
return on average equity for the year ended December 31, 1998. The Compensation
Committee also reviewed the performance of the Company's stock price during
1998. The Compensation Committee noted that the Company's net income per share
for 1998 was $1.24, that the return on average equity for the Company for 1998
was 18.9% and that the Company's stock price for 1998 had generally been
consistent with the Company's peers. In particular, the Compensation Committee
noted that the return on average equity for 1998 for the Company was generally
favorable in comparison to industry peers. Based upon such review, the
Compensation Committee determined to increase the base salary for 1999 of Mr.
Gibson, President and Chief Executive Officer of the Company, and one of the
principal shareholders of the Company, to $300,000. With respect to Messrs.
Schmitz and Spencer, also principal shareholders of the Company, their
respective base salaries for 1999 were also increased to $300,000. The other
executive officers of the Company generally received modest base salary
increases for 1999 due to the factors discussed above, as well as due to the
overall growth of the Company during 1998, which necessarily increased the
duties of such executive officers.

The cash bonuses paid to the executive officers who received bonuses for
performance during 1999 were paid in the first quarter of 2000. The
Compensation Committee met in February 2000 to

10
<PAGE>

consider the payment of cash bonuses to executive officers for 1999 performance.
The Compensation Committee reviewed the Company's financial performance during
1999, including net income per share and return on average equity, as well as
the Company's stock price performance for 1999. With respect to the Company's
stock price performance, the Compensation Committee did not place significant
weight on such performance due to the overall performance of the Company's
peers. Nevertheless, based upon such factors, the Compensation Committee
determined not to pay Messrs. Gibson, Schmitz or Spencer a cash bonus. The other
executive officers of the Company generally were paid cash bonuses in varying
amounts. In April 2000, the Compensation Committee also determined to grant an
aggregate of 30,000 stock options to the executive officers of the Company,
based upon their performance during 1999. No executive officer was granted more
than 7,500 stock options, and neither Mr. Gibson, Mr. Schmitz nor Mr. Spencer
was granted any stock options.

Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1 million
paid to any of the Chief Executive Officer and the four other most highly
compensated executive officers. Certain performance-based compensation, however,
is specifically exempt from the deduction limit. The Company does not have a
policy that requires or encourages the Compensation Committee to qualify stock
options or restricted stock awarded to executive officers for deductibility
under Section 162(m) of the Internal Revenue Code. However, the Compensation
Committee will consider the net cost to the Company in making all compensation
decisions.

COMPENSATION COMMITTEE

Stephen G. Skiba
David A. Frank

11
<PAGE>

Compensation Committee Interlocks and Insider Participation

There are no reportable compensation committee interlocks or insider
participation matters.

Common Stock Performance Graph

The following performance graph compares the cumulative return of the
Common Stock with that of the Broad Market (the NASDAQ Market Index) and a
published industry index (SIC Code 6035-Savings Institutions, Federally-
Chartered). Each index assumes $100 invested at October 18, 1996 and is
calculated assuming quarterly reinvestment of dividends and quarterly weighting
by market capitalization.

COMPARATIVE RETURNS
Matrix Bancorp, Inc., Broad Market and Published Industry Index
(Performance Results Through 12/31/99)

[GRAPH APPEARS HERE]

Beginning Year Ended Year Ended Year Ended Year Ended
October 18, 1996 December 31, 1996 December 31, 1997 December 31, 1998 December 31, 1999
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Matrix Bancorp, Inc. 100.00 141.11 135.56 120.00 106.67
- ----------------------------------------------------------------------------------------------------------------------
Industry Index 100.00 106.35 180.28 153.17 130.33
- ----------------------------------------------------------------------------------------------------------------------
Broad Index 100.00 105.97 129.63 182.83 322.47
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

12
<PAGE>

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On January 31, 2000, the Company renewed a loan originally made to Mr.
Spencer, Vice Chairman and a shareholder of the Company, in December 1994 in the
amount of approximately $80,000. The loan to Mr. Spencer accrues interest at
the prime rate, is unsecured and the entire principal and all accrued interest
is due and payable in one lump sum on January 31, 2001. The Company has the
option of extending the maturity of such loan to Mr. Spencer in annual
increments.

On January 31, 2000, the Company made a loan to Mr. Cronin, Vice Chairman
and a shareholder of the Company, in the amount of approximately $67,000. The
loan to Mr. Cronin accrues interest at the prime rate, is unsecured and the
entire principal and all accrued interest is due and payable in one lump sum on
January 31, 2001. The Company has the option of extending the maturity of such
loan to Mr. Cronin in annual increments.

Sterling Trust occupies approximately 11,300 square feet in Waco, Texas,
under a lease agreement that is in place until June 30, 2001, at a monthly
rental payment of $13,553. The lease agreement provides for renewal options and
allocation of certain expenses the lessee would reimburse over a specified
amount during the life of the lease. Mr. Skretny, President of Sterling Trust
and an executive officer of the Company, owns approximately 12.5% of the equity
interests of the lessor of such office space.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than 10% of a registered class of the Company's equity securities (the
"10% Shareholders"), to file reports of ownership and changes of ownership with
the Commission and NASDAQ National Market. Officers, directors and 10%
Shareholders of the Company are required by Commission regulation to furnish the
Company with copies of all Section 16(a) forms so filed.

Based solely on review of copies of such forms received and written
representation letters from executive officers and directors, the Company
believes that, during the last fiscal year, all filing requirements under
Section 16(a) applicable to its officers, directors and 10% Shareholders were
timely met, except that Mr. Spencer failed to file a Form 4 with respect to one
transaction from 1996 (which transaction was reported on a Form 5 for 1999 that
was filed timely), and Mr. Cronin failed to file a Form 4 with respect to one
transaction from 1999 (which transaction was reported on a Form 5 for 1999 that
was filed timely).

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF
EACH OF THE INDIVIDUALS NOMINATED FOR ELECTION AS A DIRECTOR.

Management of the Company beneficially owns in excess of 50% of the
outstanding Common Stock entitled to vote at the Annual Meeting, and management
has indicated its intent to vote in favor of the nominees for director.

13
<PAGE>

PROPOSAL TO INCREASE THE NUMBER OF AUTHORIZED SHARES UNDER
THE MATRIX BANCORP, INC. EMPLOYEE STOCK PURCHASE PLAN
(Proposal 2)

The Compensation Committee, subject to shareholder's approval, has amended
the Purchase Plan in order to increase the number of shares of Common Stock
available for issuance thereunder from 125,000 to 250,000. The Compensation
Committee has resolved to increase the number of available shares under the
Purchase Plan, because as of the Record Date, only 56,715 shares of Common Stock
remained available for purchase by the Company's employees. By increasing the
number of shares available under the Purchase Plan, the Compensation Committee
believes that the Purchase Plan will continue to be a useful stock-related
benefit program for attracting and retaining employees and providing additional
incentive for all employees to promote the success of the Company. The Company
intends to register the 125,000 additional shares of Common Stock issuable under
the Purchase Plan under the Securities Act of 1933, as amended, assuming the
shareholders approve the proposal to increase the number of available shares.

Description of Purchase Plan

In September 1996, the Board of Directors adopted the Purchase Plan and
reserved shares of Common Stock for issuance thereunder. The shareholders of the
Company approved the Purchase Plan in September 1996. The purpose of the
Purchase Plan is to provide eligible employees of the Company and its designated
subsidiaries with an opportunity to purchase Common Stock ("ESPP Shares") from
the Company through payroll deductions.

Offerings under the Purchase Plan generally have a duration ("Offering
Period") of 12 months and commence on January 1 of each year. On the first
business day of an Offering Period (the "Enrollment Date"), each eligible
employee who chooses to participate ("Participant") is granted the right to
purchase ("Purchase Right") on the last business day of such Offering Period
("Purchase Date") a number of whole ESPP Shares determined by dividing the
Participant's total annual payroll deductions accumulated during such Offering
Period by the Purchase Price described below. However, the number of ESPP Shares
subject to each Participant's Purchase Right during such Offering Period shall
in no event exceed the lesser of (i) the maximum number of ESPP Shares which
could be purchased with such Participant's total payroll deductions for the
Offering Period at a Purchase Price equal to 85% of the fair market value of the
ESPP Shares on the Enrollment Date, (ii) the number of ESPP Shares determined by
dividing $14,706 by the fair market value of the ESPP Shares on the Enrollment
Date or (iii) the maximum number of ESPP Shares that would cause the total owned
by the Participant to exceed the 5% ownership limits described below. Unless the
Participant's participation is discontinued, his or her Purchase Right will be
exercised automatically on the Purchase Date (i.e., the last business day of the
Offering Period) at the Purchase Price.

No less than 15 days prior to each Offering Period, the administrator of
the Purchase Plan will determine the total number of ESPP Shares that will be
made available for purchase during such Offering Period and will notify the
eligible employees. With respect to ESPP Shares that are made available for an
Offering Period, but which are not purchased during such Offering Period, the
administrator may again make them available for purchase with respect to any
subsequent Offering Period. In the event that on the Purchase Date of reference
the aggregate amount of payroll deductions during the corresponding Offering
Period exceed the aggregate Purchase Price of all ESPP Shares available for
purchase during such Offering Period, each Purchase Right of a participant shall
be reduced to that percentage of available ESPP Shares as the accumulated
payroll deduction in his or her account is of the aggregate accumulated payroll
deduction in the accounts of all Participants.

14
<PAGE>

Any employee who is customarily employed for at least 20 hours per week and
more than five months per calendar year by the Company or its designated
subsidiaries, who is employed on the first day of the month preceding the
Enrollment Date of reference and who continues to be employed on the Enrollment
Date, is eligible to participate in offerings under the Purchase Plan during the
Offering Period, which includes such Enrollment Date. As of the Record Date,
there were approximately 548 employees eligible to participate in the Purchase
Plan. Employees become Participants by delivering to the Company an agreement
authorizing payroll deductions at any time during the 45 days immediately
preceding the Enrollment Date of reference. No employee is permitted to
purchase ESPP Shares under the Purchase Plan if such employee owns 5% or more of
the total combined voting power or value of all classes of shares of stock of
the Company, including as owned by such employee all ESPP Shares subject to his
Purchase Right, as adjusted, shares subject to any other options, or shares
whose ownership is attributable to the employee by reason of ownership by
certain members of his or her family. In addition, no Participant is entitled
to purchase during the Offering Period of reference more than the maximum number
of ESPP Shares subject to such Participant's Purchase Right during such Offering
Period.

The price at which ESPP Shares are sold under the Purchase Plan ("Purchase
Price") is 85% of the lower of the fair market value per Share of Common Stock
on the Enrollment Date (i.e., first business day of the Offering Period) or the
Purchase Date (i.e., the last business day of the Offering Period). The Purchase
Price of the ESPP Shares is accumulated by payroll deductions made during the
Offering Period. The total payroll deductions of a Participant for an Offering
Period may not be greater than the lesser of $12,500, or 25% of the
Participant's annualized "considered pay" as determined at the beginning of the
Offering Period, nor may such payroll deductions be less than an aggregate of
$500. A Participant's "considered pay" is the administrator's reasonable
estimate of such Participant's basic rate of pay (i.e., exclusive of bonuses and
other special payments) during the Offering Period.

All payroll deductions of a Participant are credited to his or her account
under the Purchase Plan and are deposited with the general funds of the Company.
Such funds may be used for any corporate purpose. No charges for administrative
or other costs may be made by the Company against the accounts of Participants.
The Purchase Plan is administered by the Compensation Committee of the Board of
Directors.

A Participant may terminate his or her right to purchase ESPP Shares with
respect to a particular Offering Period by notifying the administrator at any
time prior to the last 15 days of the Offering Period that the Participant is
withdrawing all, but not less than all, of the accumulated payroll deductions
credited to such Participant's account. The withdrawal of accumulated payroll
deductions automatically terminates the Participant's Purchase Right with
respect to that Offering Period. As soon as practicable after notice of such
withdrawal, the payroll deductions credited to a Participant's account will be
returned to the Participant without interest. A Participant's withdrawal with
respect to an Offering Period does not have any effect upon such Participant's
eligibility to participate in subsequent Offering Periods. Termination of a
Participant's employment for any reason, including retirement or death,
immediately terminates his or her participation in the Offering Period during
which such termination of employment occurs. In such event, the payroll
deductions credited to the Participant's account will be returned to the
Participant as soon as practicable, or in the case of death, to the person or
persons entitled thereto, in either case without interest.

In the event of changes in the Common Stock of the Company, however, due to
stock dividends or other changes in capitalization, or in the event of any
merger, sale or any other reorganization, appropriate adjustments will be made
by the Company to the ESPP Shares subject to purchase, to the price per share
and, where necessary, to the conditions relating to the exercise of the Purchase
Right, so that, to the extent reasonably possible, such events do not adversely
affect the rights of Participants. If,

15
<PAGE>

however, there is a proposed dissolution or liquidation of the Company, the
Offering Period during which such event occurs will be deemed terminated upon
the occurrence of such event.

The Purchase Plan will terminate automatically on December 31, 2005, and
prior to that date, the administrator generally may at any time amend or
terminate the Purchase Plan.

The following table sets forth information with respect to shares purchased
under the Purchase Plan for 1999 as to each individual or group identified
below:
<TABLE>
<CAPTION>
Number of
Name Principal Positions Held Shares Purchased
- --------------------------------- ----------------------------------------- ----------------
<S> <C> <C>
Guy A. Gibson.................... Matrix Bancorp: President and Chief 0
Executive Officer
Matrix Financial: Chairman of the Board

Richard V. Schmitz............... Matrix Bancorp: Chairman of the Board 0
United Financial: Chairman of the Board

D. Mark Spencer.................. Matrix Bancorp: Vice Chairman 0
Matrix Bank: Chairman of the Board

Thomas P. Cronin................. Matrix Bancorp: Vice Chairman 0
United Financial: Chief Executive Officer

George R. Bender................. Matrix Financial: President and Chief 1,225
Executive Officer

All current executive officers
as a Group................... 4,900

All nonemployee directors,
including advisory directors
as a group................... 0

All employees including all
current officers who are not
executive officers as a group 24,330
</TABLE>

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF
AN AMENDMENT TO THE EMPLOYEE STOCK PURCHASE PLAN.

16
<PAGE>

PROPOSAL TO INCREASE THE NUMBER OF AUTHORIZED SHARES UNDER
THE 1996 AMENDED AND RESTATED EMPLOYEE STOCK OPTION PLAN
(Proposal 3)

In order to attract and retain employees and directors for the Company, the
Board of Directors has adopted, and the Company's stockholders have previously
approved, the Stock Option Plan pursuant to which an aggregate of 525,000 shares
of Common Stock may be issued upon the exercise options granted under the Stock
Option Plan. As of the Record Date, there were 429,100 options outstanding
under the Stock Option Plan, meaning that only 95,900 remained available for
grant.

The Board of Directors has authorized an amendment to the Stock Option
Plan, subject to stockholder approval, to increase the number of shares of the
Company's Common Stock available for issuance under the Stock Option Plan from
525,000 to 750,000 shares.

Description of Stock Option Plan

In January 1995, the Board of Directors and shareholders adopted the
Company's 1995 Stock Option Plan, which was amended and restated as the current
Stock Option Plan by the Board of Directors and shareholders in September 1996.
The purpose of the 1996 Stock Option Plan is to advance the interests of the
Company by providing additional incentives to attract and retain qualified and
competent employees and consultants of the Company and directors of the Company
and its subsidiaries, upon whose efforts and judgment the success of the Company
is largely dependent. Substantially all of the Company's full-time employees
and all of the Company's directors and advisory directors are eligible for
grants of stock options ("Plan Options") under the terms of the 1996 Stock
Option Plan. As of the Record Date, approximately 600 employees were eligible
to participate in the Stock Option Plan.

The 1996 Stock Option Plan authorizes the granting of incentive stock
options ("Incentive Options") and nonqualified stock options ("Nonqualified
Options") to purchase Common Stock to eligible persons. The 1996 Stock Option
Plan is currently administered by the Compensation Committee. The Compensation
Committee consists of at least two members of the Board of Directors, each of
whom is an "outside director" within the meaning of the Code and a "nonemployee
director" within the meaning of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The 1996 Stock Option
Plan provides for adjustments to the number of shares and to the exercise price
of outstanding options in the event of a declaration of a stock dividend or any
recapitalization resulting in a stock split-up, combination or exchange of
shares of Common Stock.

No Incentive Option may be granted with an exercise price per share less
than the fair market value of the Common Stock at the date of grant. The
Nonqualified Options may be granted with any exercise price determined by the
administrator of the 1996 Stock Option Plan. The exercise price of an Employee
Option may be paid in cash, by certified or cashier's check, by money order, by
personal check or by delivery of already owned shares of Common Stock having a
fair market value equal to the exercise price, or by delivery of a combination
of cash and already owned shares of Common Stock. However, if the optionee
acquired the stock to be surrendered directly or indirectly from the Company, he
must have owned the stock to be surrendered for at least six months prior to
tendering such stock for the exercise of a Plan Option.

An eligible employee may receive more than one Incentive Option, but the
maximum aggregate fair market value of the Common Stock (determined when the
Incentive Option is granted) with respect to which Incentive Options are first
exercisable by such employee in any calendar year cannot exceed $100,000. In
addition, no Incentive Option may be granted to an employee owning directly or
indirectly stock possessing more than 10% of the total combined voting power of
all classes of stock of the

17
<PAGE>

Company, unless the exercise price is set at not less than 110% of the fair
market value of the shares subject to such Incentive Option on the date of grant
and such Incentive Option expires not later than five years from the date of
grant. Awards of Nonqualified Options are not subject to these special
limitations.

No Incentive Option granted under the 1996 Stock Option Plan is assignable
or transferable, otherwise than by will or by laws of descent and distribution.
During the lifetime of an optionee, his Incentive Option is exercisable only by
him or his guardian or legal representative. Nonqualified Options may be
transferable if provided for in the option agreement governing the Nonqualified
Option. The expiration date of a Plan Option is determined by the administrator
at the time of the grant, but in no event may a Plan Option be exercisable after
the expiration of 10 years from the date of grant of the Plan Option.

The administrator of the 1996 Stock Option Plan may limit an optionee's
right to exercise all or any portion of a Plan Option until one or more dates
subsequent to the date of grant. The administrator also has the right,
exercisable in its sole discretion, to accelerate the date on which all or any
portion of a Plan Option may be exercised. The 1996 Stock Option Plan also
provides that 30 days prior to certain major corporate events such as, among
other things, certain changes in control, mergers or sales of substantially all
of the assets of the Company (a "Major Corporate Event"), each Plan Option shall
immediately become exercisable in full. In anticipation of a Major Corporate
Event, however, the administrator may, after notice to the optionee, cancel the
optionee's Employee Options on the consummation of the Major Corporate Event.
The optionee, in any event, will have the opportunity to exercise his Plan
Options in full prior to such Major Corporate Event.

If terminated for cause, all rights of an optionee under the 1996 Stock
Option Plan cease and the Plan Options granted to such optionee become null and
void for all purposes. The 1996 Stock Option Plan further provides that in most
instances a Plan Option must be exercised by the optionee within 30 days after
the termination of the consulting contract between such consultant and the
Company or termination of optionee's employment with the Company, as the case
may be (for any reason other than termination of cause, mental or physical
disability or death), if and to the extent such Plan Option was exercisable on
the date of such termination. If the optionee is not otherwise employed by, or
a consultant to, the Company, his Plan Option must be exercised within 30 days
of the date he ceases to be a director of the Company or a subsidiary of the
Company. Generally, if an optionee's employment or consulting contract is
terminated due to mental or physical disability, the optionee will have the
right to exercise the Plan Option (to the extent otherwise exercisable on the
date of termination) for a period of one year from the date on which the
optionee suffers the mental or physical disability. If an optionee dies while
actively employed by, or providing consulting services under a consulting
contract to, the company, the Plan Option may be exercised (to the extent
otherwise exercisable on the date of death) within one year of the date of the
optionee's death by the optionee's legal representative or legatee.

The Company plans to register the additional shares of Common Stock
issuable in connection with the proposed amendment as soon as presented
following shareholder approval.

Under current tax laws, the grant of a Plan Option will not be a taxable
event to the recipient optionee and the Company will not be entitled to a
deduction with respect to such grant. Upon the exercise of a Nonqualified
Option, an optionee will recognize ordinary income at the time of exercise equal
to the excess of the then fair market value of the shares of Common Stock
received over the exercise price. The taxable income recognized upon exercise
of a Nonqualified Option will be treated as compensation income subject to
withholding, and the Company will be entitled to deduct as a compensation
expense an amount equal to the ordinary income an optionee recognizes with
respect to such exercise. When Common Stock received upon the exercise of a
Nonqualified Option subsequently is sold or exchanged in a taxable transaction,
the holder thereof generally will recognize capital gain (or

18
<PAGE>

loss) equal to the difference between the total amount realized and the fair
market value of the Common Stock on the date of exercise; the character of such
gain or loss as long-term or short-term capital gain or loss will depend upon
the holding period of the shares following exercise.

The exercise of an Incentive Option will not be taxable to the optionee,
and the Company will not be entitled to any deduction with respect to such
exercise. However, to qualify for this favorable tax treatment of incentive
stock options under the Code, the optionee may not dispose of the shares of
Common Stock acquired upon the exercise of an Incentive Option until after the
later of two years following the date of grant or one year following the date of
exercise. The surrender of shares of Common Stock acquired upon the exercise of
an Incentive Option in payment of the exercise price of a Plan Option within the
required holding period for incentive stock options under the Code will be a
disqualifying disposition of the surrendered shares. Upon any subsequent
taxable disposition of shares of Common Stock received upon exercise of a
qualifying Incentive Option, the optionee generally will recognize long-term or
short-term capital gain (or loss) equal to the difference between the total
amount realized and the exercise price of the Plan Option.

If a Plan Option that was intended to be an incentive stock option under
the Code does not qualify for favorable incentive stock option treatment under
the Code due to the failure to satisfy the holding period requirements, the
optionee may recognize ordinary income in the year of the disqualifying
disposition. Provided the amount realized in the disqualifying disposition
exceeds the exercise price, the ordinary income an optionee shall recognize in
the year of a disqualifying disposition shall be the lower of (i) the excess of
the amount realized over the exercise price or (ii) excess of the fair market
value of the Common Stock at the time of the exercise over the exercise price.
In addition, the optionee shall recognize capital gain on the disqualifying
disposition in the amount, if any, by which the amount realized in the
disqualifying disposition exceeds the fair market value of the Common Stock at
the time of the exercise. Such capital gain shall be taxable as long-term or
short-term capital gain, depending on the optionee's holding period for such
shares.

Notwithstanding the favorable tax treatment of Incentive Options for
regular tax purposes, as described above, for alternative minimum tax purposes,
an Incentive Option is generally treated in the same manner as a Nonqualified
Option. Accordingly, an optionee must generally include in alternative minimum
taxable income for the year in which an Incentive Option is exercised the excess
of the fair market value on the date of exercise of the shares of Common Stock
received over the exercise price. If, however, an optionee disposes of shares
of Common Stock acquired upon the exercise of an Incentive Option in the same
calendar year as the exercise, only an amount equal to the optionee's ordinary
income for regular tax purposes with respect to such disqualifying disposition
will be recognized for the optionee's calculation of alternative minimum taxable
income in such calendar year.

The following table sets forth information with respect to options granted
under the Stock Option Plan for 1999 as to each individual or group identified
below:

<TABLE>
<CAPTION>
Number of
Name Principal Positions Held Options Granted
- ----------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
Guy A. Gibson...................... Matrix Bancorp: President and Chief 0
Executive Officer
Matrix Financial: Chairman of the Board

Richard V. Schmitz................. Matrix Bancorp: Chairman of the Board 0
United Financial: Chairman of the Board
</TABLE>

19
<PAGE>

<TABLE>
<CAPTION>
Number of
Name Principal Positions Held Options Granted
- ----------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
D. Mark Spencer.................... Matrix Bancorp: Vice Chairman 0
Matrix Bank: Chairman of the Board

Thomas P. Cronin.................. Matrix Bancorp: Vice Chairman 5,000
United Financial: Chief Executive Officer

George R. Bender................... Matrix Financial: President and Chief 0
Executive Officer

All current executive officers
as a group...................... 30,000

All nonemployee directors,
including advisory directors
as a group...................... 3,000

All employees including all
current officers who are not
executive officers as a group... 21,000
</TABLE>

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF
AN AMENDMENT TO THE EMPLOYEE STOCK OPTION PLAN.

PROPOSAL TO RATIFY APPOINTMENT OF
INDEPENDENT AUDITORS
(Proposal 4)

The Board of Directors has appointed Ernst & Young LLP, independent
auditors, to be the principal independent auditors of the Company and to audit
its consolidated financial statements for the fiscal year ending December 31,
2000. Ernst & Young LLP served as the Company's independent auditors for the
fiscal year ended December 31, 1999, and has reported on the Company's
consolidated financial statements. Representatives of the firm will be present
at the Annual Meeting, will have the 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 has the responsibility for the selection of the
Company's independent auditors. Although shareholder ratification is not
required for the selection of Ernst & Young LLP, and although such ratification
will not obligate the Company to continue the services of such firm, the Board
of Directors is submitting the selection for ratification with a view towards
soliciting the shareholders' opinion thereon, which may be taken into
consideration in future deliberations. If the appointment is not ratified, the
Board of Directors must then determine whether to appoint other auditors before
the end of the current fiscal year, and in such case, shareholders' opinions
would be taken into consideration.

20
<PAGE>

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE RATIFICATION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS OF THE COMPANY FOR
THE 2000 FISCAL YEAR.

Because management of the Company beneficially owns in excess of 50% of the
outstanding Common Stock entitled to vote at the Annual Meeting, and management
has indicated its intent to vote in favor of the ratification of the appointment
of Ernst & Young LLP, such ratification is virtually ensured.

OTHER BUSINESS
(Proposal 5)

The Board of Directors knows of no other business to be brought before the
Annual Meeting. If, however, any other business should properly come before the
Annual Meeting, the persons named in the accompanying proxy will vote the proxy
as in their discretion they may deem appropriate, unless they are directed by
the proxy to do otherwise.

DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS

For shareholder proposals to be considered for inclusion in the Proxy
Statement for the 2001 Annual Meeting, they must be received by the Company no
later than December 27, 2000. The Company's proxies may exercise their
discretionary authority to vote with respect to any shareholder proposal that
may be presented at the 2001 Annual Meeting if the Company first receives notice
of such proposal after March 12, 2001.

BY ORDER OF THE BOARD OF DIRECTORS

T. Allen McConnell, Secretary

April 26, 2000
Denver, Colorado

IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND THE ANNUAL MEETING AND WISH THEIR STOCK TO BE VOTED ARE URGED
TO DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED SELF-ADDRESSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.

21
<PAGE>

1996 EMPLOYEE STOCK PURCHASE PLAN
FOR
MATRIX CAPITAL CORPORATION

Section 1. Purpose. This 1996 Employee Stock Purchase Plan of Matrix
Capital Corporation is intended to provide employees of the Company and its
Designated Subsidiaries with an opportunity to purchase Stock of the Company
through accumulated payroll deductions under an "Employee Stock Purchase Plan"
as defined in Section 423 of the Code, and all provisions hereof will be
construed in accordance with those objectives.

Section 2. Definitions. As used herein, the following terms shall have
the meaning indicated:

(a) "Account" shall mean the account established for each Participant
to record the amounts withheld from his Compensation during the Offering Period
of reference.

(b) "Administrator" shall mean the Board or a designated committee of
the Board.

(d) "Code" shall mean the Internal Revenue Code of 1986, as amended.

(e) "Company" shall mean Matrix Capital Corporation.

(f) "Compensation" shall mean the actual cash remuneration (exclusive
of bonuses) paid to a Participant by the Employer in consideration of services
rendered.

(g) "Considered Compensation" shall be determined with respect to each
Offering Period, and shall mean a reasonable estimate (as determined by the
Administrator in its sole discretion, but treating Participants similarly
situated in a reasonably similar manner) of the Participant's basic Compensation
during the Offering Period (i.e. without taking into account bonuses, overtime
pay, noncash benefits or other special payments, all as reasonably determined by
the Administrator).

(h) "Designated Subsidiaries" shall mean the Subsidiaries that have
been designated by the Board from time to time in its sole discretion as
eligible to adopt, and which have in fact adopted, this Plan for the benefit of
their Employees.

(i) "Directed Withholding" shall mean the amount that an Eligible
Employee directs his or her Employer to withhold from such Eligible Employee's
Compensation on each Payroll Date during the Offering Period of reference;
provided, however, that the aggregate amount of Directed Withholding for the
Offering Period of reference (i) may not exceed the lesser of (x) twenty-five
percent (25%) of such Participant's Considered Compensation for such Offering
Period, and (y) Twelve Thousand Five Hundred ($12,500), and (ii) may not be less
than Five Hundred Dollars ($500).
<PAGE>

(j) "Direction to Withhold" shall mean the written notice to the
Administrator, in the form of Exhibit A attached hereto, which directs the
---------
Employer to commence to deduct the Directed Withholding from a Participant's
Compensation on each Payroll Date during the Offering Period of reference.

(k) "Election to Rescind" shall mean the written notice to the
Administrator, in the form of Exhibit B attached, which directs a Participant's
---------
Employer to discontinue deductions of Directed Withholding, and to refund the
entire amount credited to such Participant's Account.

(l) "Eligible Employee" shall mean each Employee (i) who is employed
as an Employee on the first day of the month preceding the Enrollment Date of
reference, (ii) who continues to be employed as an Employee on such Enrollment
Date, and (iii) who, on such Enrollment Date does not own Stock (within the
meaning of Section 423(b)(3) of the Code) possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company or of any Subsidiary and, without limiting the generality of the
foregoing, in computing the amount of such Stock owned by an Employee, there
shall be included the amount of Stock owned directly, the Stock subject to a
Purchase Right, the Stock which with respect to which the Employee has an option
to acquire, and the Stock owned by any other person whose stock is attributed to
such Employee pursuant to Section 425(d) of the Code.

(m) "Employee" shall mean any person, including an officer and
director who is also an Employee, who is customarily employed for at least
twenty (20) hours per week and for more than five (5) months in the calendar
year by the Employer.

(n) "Employer" shall mean, collectively, the Company and each
Designated Subsidiary.

(o) "Enrollment Date" shall mean the first business day of each
Offering Period.

(p) "Fair Market Value" of a Share on the Enrollment Date or on the
Purchase Date shall be the closing price of Stock on such date, which shall be
(i) if the Stock is listed or admitted for trading on any United States national
securities exchange (which for purposes hereof shall include the NASDAQ National
Market System), the last reported sale price of Stock on such exchange as
reported in any newspaper of general circulation, (ii) if the Stock is quoted on
NASDAQ (other than on the NASDAQ National Market System) or any similar system
of automated dissemination of quotations of securities prices in common use, the
mean between the closing high bid and low asked quotations for such day of the
Stock on such system or (iii) if neither clause (i) nor (ii) is applicable, a
value determined by any fair and reasonable means prescribed by the Board.

(q) "Offering Period" shall mean the period beginning on the day
immediately preceding the trade date of the shares to be issued and sold by the
Company in connection with its initial public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the "IPO"),
and ending on the following December 31st, and each calender year thereafter.

- 2 -
<PAGE>

(r) "Participant" shall mean each Eligible Employee who is having an
amount withheld from his Compensation under Section 4 at the time of reference.
---------

(s) "Payroll Date" shall mean each date on which a Participant is paid
his Considered Compensation.

(t) "Plan" shall mean this Matrix Capital Corporation Employee Stock
Purchase Plan.

(u) "Purchase Date" shall mean the last business day of each Offering
Period.

(v) "Purchase Price" shall mean the lesser of (i) 85% of the Fair
Market Value of the Shares on the Enrollment Date occurring during the Offering
Period of reference, or (ii) 85% of the Fair Market Value of the Shares on the
Purchase Date occurring during such Offering Period, but never less than the par
value of a Share.

(w) "Purchase Right" shall mean the Participant's right to acquire the
number of Shares that may be purchased in accordance with Section 3(b) as
------------
limited by Sections 3(c) and 8.
------------- -

(x) "Shares" shall mean the shares of Stock reserved for issuance
under this Plan.

(y) "Stock" shall mean the common stock, $0.0001 par value per share,
of the Company.

(z) "Subsidiary" shall mean any corporation (other than the Company)
in any unbroken chain of corporations beginning with the Company if, at the time
of reference, each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

Section 3. Shares Subject to Purchase.

(a) Subject to adjustments provided in Section 15 hereof, a total of
125,000 Shares shall be subject to the Plan. The Shares subject to the Plan
shall consist of unissued Shares or previously issued Shares reacquired and held
by the Company, or any Subsidiary, and such number of Shares shall be and hereby
is reserved for sale for such purpose. Any of such Shares that may remain
unsold at the termination of the Plan shall cease to be reserved for the purpose
of the Plan, but until termination of the Plan the Company shall at all times
reserve a sufficient number of Shares to meet the requirements of the Plan.
Should any Shares subject to Purchase Rights on the Enrollment Date of an
Offering Period fail to be purchased on the Purchase Date for such Offering
Period, such Shares may again be made available for purchase with respect to a
subsequent Offering Period.

(b) Not less than 15 days prior to each Offering Period, the
Administrator shall determine the maximum number of Shares (if any) that will be
available for purchase for such Offering Period. Each Participant will have a
Purchase Right to purchase the number of full Shares equal to the quotient of
(i) the amount in the Participant's Account on the Purchase Date, and (ii) the

- 3 -
<PAGE>

Purchase Price of the Shares for the Offering Period, all subject to the maximum
amounts, and the adjustments, if any, in Section 8.

(c) In the event that as of the Enrollment Date of reference the
quotient of (i) the aggregate Directed Withholdings of all Participants for the
Offering Period, divided by (ii) the Purchase Price of a Share on such
Enrollment Date exceeds the number of Shares designated by the Board in the
first sentence of Section 3(b) by a percentage (not less than 50%) specified by
------------
the Board at the time it determines the number of Shares under Section 3(b)
------------
above (and in the absence of a specification by the Board, the percentage shall
be deemed to be 50%), the Administrator will take reasonable steps to reduce, as
nearly as reasonably possible, each Participant's Directed Withholding to an
amount equal to the product of (x) his Directed Withholding, and (y) a fraction,
the numerator of which is the product of the percentage specified by the
Administrator in (ii) multiplied by the number of Shares designated by the
Administrator in the first sentence of Section 3(b), and the denominator of
------------
which is the quotient of (i) and (ii) above.

Section 4. Participation and Deduction of Directed Withholding.

(a) During the 45 days ending on the Enrollment Date for the Offering
Period of reference, each Eligible Employee may become a Participant for such
Offering Period by filing with the Administrator a written Direction to Withhold
setting forth the amount of such Eligible Employee's Directed Withholding.
Notwithstanding the foregoing, in the case of the initial Offering Period
hereunder, the Board, in its sole discretion, may extend the period during which
a Direction to Withhold my be filed for any period, not to exceed 60 days after
the Enrollment Date for such initial Offering Period, it selects and
communicates to the Eligible Employees.

(b) All amounts deducted from a Participant's Compensation under this
Plan shall be credited to such Participant's Account, but shall remain the
unencumbered assets of the Employer.

Section 5. Recision, or Termination of Employment.

(a) A Participant may not increase or decrease the amount of his
Directed Withholding during an Offering Period; except, however, (i) a
Participant may rescind his Direction to Withhold in its entirety at any time
prior to the Purchase Date for the Offering Period of reference by filing a
written Election to Rescind with the Administrator prior to December 16 of the
Offering Period of reference, (ii) a Participant will be deemed to have
rescinded his Direction to Withhold in its entirety in the event that his
Compensation payable on any Payroll Date is insufficient to fund the Directed
Withholding for such Payroll Date and such Participant fails to furnish the
Administrator with personal funds in an amount sufficient to complete the
Directed Withholding for such Payroll Date on or before the next Payroll Date,
and (iii) a Participant will be deemed to have rescinded his Direction to
Withhold in its entirety in the event of his termination of employment by an
Employer prior to the Purchase Date for the Offering Period of reference.

(b) If an event described in either Section 5(a)(i), (ii) or (iii)
--------------- ---- -----
occurs with respect to a Participant before the Purchase Date of reference, the
entire amount credited to such Participant's Account automatically will be paid
to such Participant in a lump sum, in cash, as soon as reasonably possible
following such occurrence.

- 4 -
<PAGE>

(c) The occurrence of an event described in Section 5(a)(i), (ii) or
--------------- ----
(iii) with respect to a Participant during an Offering Period shall not limit
- -----
such Participant's right to file a Direction to Withhold with respect to any
later Offering Period provided that at such time Participant is an Eligible
Employee.

Section 6. Exercise of Purchase Right. The Participant's Purchase Right
will be exercised automatically on each Purchase Date by debiting his Account
with the Purchase Price of the Shares subject to his Purchase Right, and
refunding (in a lump sum, in cash) the amount, if any, credited to his Account
that exceeds such Purchase Price.

Section 7. Delivery. As promptly as practicable after each Purchase Date,
the Administrator shall arrange the delivery to each Participant of a
certificate representing the Shares purchased on such Purchase Date.

Section 8. Maximum Shares, and Reduction in Shares, Subject to Purchase
Rights.

(a) Notwithstanding any provision hereof to the contrary, the maximum
number of Shares subject to each Participant's Purchase Right at any time during
the Offering Period shall be that number of Shares equal to the lesser of (i)
that number of Shares that has an aggregate Fair Market Value on the Enrollment
Date equal to $14,706, and (ii) that number of Shares that may be purchased with
the lesser of the maximum Directed Withholding amounts described in (x) and (y)
of Section 2(i) at the Purchase Price set forth in Section 2(v)(i), and (iii)
---------------
the maximum number of Shares (if any) that will not cause the Participant to
exceed the 5% ownership limitation of Section 2(l).

(b) If, on a Purchase Date, the maximum number of Shares available
for purchase as determined under Section 3(b) is less than the number of Shares
------------
subject to all then existing Purchase Rights (as limited by Section 8(a), if
applicable), the Administrator will reduce the number of Shares subject to each
Participant's Purchase Right to an amount equal to the product of (i) the
maximum Shares available for purchase as determined under Section 3(b), and (ii)
------------
a fraction, the numerator of which is the amount in such Participant's Account
(after such reductions, if any, required by the proviso of Section 2(i)), and
------------
the denominator of which is the amount in the Accounts of all Participants
(after such reductions, if any, required by the proviso of Section 2(i)).
------------

Section 9. Voting and Registration.

(a) A Participant will have no interest or voting right in or other
privileges relating to Shares subject to a Purchase Right until delivery of the
certificate representing such Shares.

(b) Shares to be delivered to a Participant will be registered in the
name of the Participant.

Section 10. Administration. The Plan shall be administered by the
Administrator, which will be the Board or a committee appointed by the Board.
If a committee of the Board is appointed by the Board to act as Administrator,
such committee shall have all of the powers of the Board with respect to the
Plan except for those powers set forth in Section 16 hereof. The
----------
administration, interpretation or application of the Plan by the Administrator
shall be final, conclusive and binding

- 5 -
<PAGE>

upon all Participants. Until the Board is advised by legal counsel that such
limitation is no longer required, Eligible Employees with respect to the
Offering Period of reference may not actively serve as a member of the
Administrator with respect to the Offering Period of reference or the succeeding
Offering Period.

Section 11. Designation of Beneficiary.

(a) A Participant may file a written designation of a beneficiary who
is to receive any cash as a result of the Participant's death prior to a
Purchase Date, or to receive any Shares (and excess cash, if any) in the event
of Participant's death subsequent to a Purchase Date but before delivery of the
Shares (and excess cash, if any).

(b) Such designation of beneficiary may be changed by the Participant
at any time by written notice. In the event of the death of a Participant
without a designated surviving beneficiary, the Administrator shall deliver such
cash and/or Shares to the spouse of the Participant or, if there is no surviving
spouse, then to the executor or administrator of the estate of the Participant.

Section 12. Transferability. Neither payroll deductions credited to
Participant's Account, nor any rights with regard to the making or recision of a
Directed Withholding, nor the right to receive Shares (and excess cash, if any)
may be assigned, transferred, pledged or otherwise disposed of in any way (other
than as provided in Section 11) by the Participant. Any such attempt at
----------
assignment, transfer, pledge or other disposition shall be without effect.

Section 13. Use of Funds. All payroll deductions received or held by the
Employer under the Plan may be used by the Employer for any corporate purpose,
and the Employer shall not be obligated to segregate such payroll deductions.

Section 14. Reports and Withholding.

(a) Statements will be given to all Participants within a reasonable
time following a Purchase Date, which statements will set forth the amounts of
payroll deductions, the per Share Purchase Price, the number of Shares purchased
(and an explanation of any reduction in the Shares subject to the Purchase
Right), and the remaining cash balance, if any.

(b) Each person who acquires Shares hereunder shall agree as a
condition of such acquisition that he shall notify his Employer in the event he
disposes of the Shares before the second anniversary of the Enrollment Date on
which he acquired the Purchase Right with respect to such Shares, and in the
event of such disposition while an employee of the Employer, and upon the
exercise of the Purchase Right, the Employer may withhold from such
Participant's current Compensation such amount as it reasonably determines to be
necessary to satisfy the Company's obligation to withhold for federal and state
taxes with respect to such events.

- 6 -
<PAGE>

Section 15. Adjustments Upon Changes in Capitalization.

(a) If a stock dividend, stock split, spinoff, recapitalization,
merger, consolidation, exchange of shares or the like, occurs during an Offering
Period, as a result of which shares of any class shall be issued in respect of
the Shares subject to purchase with respect to such Offering Period, or such
Shares shall be changed into a different number of the same or another class or
classes, the number of Shares to which each Purchase Right shall be applicable
and the calculation of the Fair Market Value as of the Enrollment Date for such
Shares shall be appropriately adjusted by the Company in a manner that in its
sole discretion will keep this Plan qualified under Section 423 of the Code.

(b) In the event of the proposed dissolution or liquidation of the
Company, the Offering Period will close, and the Purchase Date will occur, 15
days immediately prior to the consummation of such proposed action, all
Participants will be notified in advance of such revised Purchase Date, and each
Participant will be entitled to complete all or any portion of the funding of
such Participant's Directed Withholding with personal funds. In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, either (i) the event
will be deemed to constitute the dissolution or liquidation of the Company and
Participants shall have the rights set forth in the first sentence hereof, or
(ii) this Plan, and each Purchase Right shall be assumed or an equivalent plan
and right shall be substituted by such successor corporation or a parent or
subsidiary of such successor corporation.

Section 16. Amendment or Termination. The Board may at any time and for
any reason terminate or amend the Plan, provided, however, that the Plan may not
be amended without compliance with any applicable shareholder approval
requirements promulgated under the Internal Revenue Code, if applicable, or by
any stock exchange or market on which the Common Stock is listed for trading,
all as reasonably determined by the Administrator. Except as specifically
provided in the Plan, no such termination or amendment can reduce such rights as
a Participant would have if the effective date of the termination or amendment
were deemed to be a liquidation or dissolution of the Company, with the
resulting rights, duties and obligations set forth in Section 15(b).
-------------

Section 17. Notices. All notices or other communications shall be deemed
to have been duly given (i) if by a Participant to the Administrator, when
received in the required form at the corporate home office of the Company,
addressed to "Administrator, Employee Stock Purchase Plan," and (ii) if by the
Administrator to the Participant, when mailed to the last known address of
Participant shown on the Employer's records.

Section 18. Conditions upon Issuance of Shares. Shares shall not be
issued unless such issuance and delivery shall comply with all applicable
provisions of law, domestic or foreign, and the requirements of any stock
exchange upon which the Shares may then be listed, including, in each case the
rules and regulations promulgated thereunder, and shall be further subject to
the approval of counsel for the Company with respect to such compliance, which
may include a representation and warrants from the Participant that the Shares
are being purchased only for investment and without any present intention to
sell or distribute such Shares.

Section 19. Term of Plan. The Plan shall become effective on the date of
the IPO and shall terminate on the last day of the year in which occurs the 9th
anniversary of the date of the IPO.

- 7 -
<PAGE>

Section 20. Miscellaneous.

(a) Execution of Receipts and Releases. Any payment or any issuance
or transfer of Shares to any person shall be in full satisfaction of all claims
hereunder against the Plan, and the Administrator may require such person, as a
condition precedent to receiving delivery of Shares, to execute a receipt and
release therefor in such form as it shall determine.

(b) Payment of Expenses. All expenses incident to the
administration, termination, or protection of the Plan, including, but not
limited to, legal and accounting fees, shall be paid by the Company.

(d) Interpretations and Adjustments. To the extent permitted by law,
an interpretation of the Plan and a decision on any matter within the Board's or
Administrator's discretion made in good faith is binding on all persons. A
misstatement or other mistake of fact shall be corrected when it becomes known
and the person responsible shall make such adjustment on account thereof as he
considers equitable and practicable.

(e) No Rights Implied. Nothing contained in this Plan or any
modification or amendment to the Plan or in the creation of any Account, or the
execution of any subscription agreement, or the issuance of any Shares under the
Plan, shall give any Employee any right to continue employment or any legal or
equitable right against the Company or any officer, director, or Employee of the
Company, except as expressly provided by the Plan.

(f) Information. The Company shall, upon request or as may be
specifically required hereunder, furnish or cause to be furnished, all of the
information or documentation which is necessary or required by the Board and/or
Administrator to perform its duties and functions under the Plan. The Company's
records as to the current information the Company furnishes to the Board and/or
Administrator shall be conclusive as to all persons.

(g) Severability. In the event any provision of the Plan shall be
held to be illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining provisions of the Plan, but shall be fully severable
and the Plan shall be construed and enforced as if the illegal or invalid
provision had never been included herein.

(h) Headings; Gender. The titles and headings are included for
convenience of reference only and are not to be considered in construction of
the provisions hereof. Words used in the masculine shall apply to the feminine
where applicable, and whenever the context of the Plan dictates, the plural
shall be read as the singular and the singular as the plural.

(i) No Liability for Good Faith Determinations; Actions. Neither the
members of the Board nor the Administrator (nor their respective delegatees)
shall be liable for any act, omission, or determination taken or made in good
faith with respect to the Plan or any right to purchase Shares granted under it,
and members of the Board and the Administrator (and their delegatees) shall be
entitled to indemnification and reimbursement by the Company in respect of any
claim, loss, damage, liability or expense (including attorneys' fees, the costs
of settling any suit,

- 8 -
<PAGE>

provided such settlement is approved by independent legal counsel selected by
the Company, and amounts paid in satisfaction of a judgment, except a judgment
based on a finding of bad faith) arising therefrom to the full extent permitted
by law and under any directors' and officers' liability or similar insurance
coverage that may from time to time be in effect. The Company assumes no
liability to any Participant or his legal representatives, heirs, legatees or
distributees for any act of, or failure to act on the part of, the Company, the
Board or the Administrator.

(j) Governing Law. All questions arising with respect to the
provisions of this Plan shall be determined by application of the laws of the
State of Colorado except to the extent Colorado law is preempted by federal law.

In Witness Whereof, the undersigned has executed this Plan as of this _____
day of ______________, 1996 to fully evidence the Company's adoption thereof, to
be effective as provided in Section 19 hereof.

MATRIX CAPITAL CORPORATION

By:__________________________________________

Name:________________________________________

Title:_______________________________________

- 9 -
<PAGE>

EXHIBIT A
---------

EMPLOYEE STOCK PURCHASE PLAN
FOR
MATRIX CAPITAL CORPORATION

DIRECTION TO WITHHOLD

1. I, the undersigned, hereby elect to participate in the Employee Stock
Purchase Plan for Matrix Capital Corporation (the "Plan") for the
"Offering Period" beginning on the next Enrollment Date and ending on
the following December 31, and subscribe to purchase Shares of the
Stock in accordance with this Direction to Withhold and the Plan.

2. I hereby authorize payroll deductions on each of my Payroll Dates
during the Offering Period in the amount set forth below [you must
fill in all of blanks [1], [2] and [3]]:

[1] $________________ on each of the [2] ____________ Payroll
Dates during the Offering Period, for a total of [3]
$__________________ {Multiply [1] and [2]

Note: the amount in [3] above cannot be less than $500, nor more
than 25% of the basic compensation you are scheduled to earn
-----
during the Offering Period, not to exceed $12,500. Determine
your basic compensation based on your current hourly pay rate, or
-----
salary.

3. I direct the Administrator to use the amount in my Account on the
Purchase Date to purchase the maximum number of Shares that are
available to me under the terms of the Plan.

4. I understand and agree that my right to participate in the Plan is
governed by the Plan and the rules of the Administrator developed
under the Plan, and that, among other things, I understand and agree:

. That I may not change the amount of my withholding during the
---
Offering Period.

. That the amount of my withholding will be reduced by the
Administrator if it exceeds 25% of my Considered Compensation,
and that in any case it may not exceed $12,500.

. That the amount of my withholding may be reduced by the
Administrator if it appears unlikely that I will need all of the
withholding I have elected in order to purchase the number of
Shares that will be available to me on the Purchase Date, and may
also be reduced for other reasons relating to the continued
qualification of the Plan.
<PAGE>

. That I may completely discontinue withholding, and receive a refund
---
of all amounts previously withheld from my pay by filing an
Election To Rescind with the Administrator before December 16th.
-------------------

. That I automatically will be withdrawn from the Plan, and all
amounts previously withheld from my pay refunded to me, if my pay
on any Payroll Date is insufficient to satisfy my Directed
Withholding and I fail pay the amount of the insufficiency to the
---
Administrator on or before my next Payroll Date.

. That I will automatically be withdrawn from the Plan, and all
amounts previously withheld from my pay refunded to me, if I
terminate my employment with the Company before the end of the
year.

. That if I have not discontinued withholding before December 16th of
the Offering Period, the amounts withheld during Offering Period
automatically will be used to purchase the maximum number of
-------------
Shares available to me under the terms of the Plan.

5. I have received a copy of the complete Employee Stock Purchase Plan.
I understand that my participation in the Plan is in all respects
---------------
subject to the terms of the Plan.

6. I hereby agree to be bound by the terms of the Plan. The
effectiveness of this Direction to Withhold is dependent upon my
continued eligibility to participate in the Plan.

7. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all refunds of my withholding (or Shares
if I die after the last business day in September) due me under the
Plan, in equal amounts if more than one person is named:

BENEFICIARY(IES) NAME(s): (Please print)______________________________________

___________________________________ ______________________________________
Relationship(s) Telephone Number(s)

Name and Address of Participant [Print]: Signature:

___________________________________ ______________________________________

___________________________________ Date: ____________________

___________________________________

<PAGE>

Acknowledgment

The undersigned, acting for the Administrator of the Plan, acknowledges
receipt of the above Direction To Withhold prior to the Enrollment Date of the
Offering Period of reference.

DATE RECEIVED:____________________________

ADMINISTRATOR

-----------------------------------
<PAGE>

EXHIBIT B
---------

EMPLOYEE STOCK PURCHASE PLAN
FOR
MATRIX CAPITAL CORPORATION

ELECTION TO RESCIND

1. I, the undersigned, hereby elect to rescind my prior Direction to
Withhold and thereby to terminate my participation in the Employee
Stock Purchase Plan (the "Plan") for Matrix Capital Corporation for
the current "Offering Period."

2. I direct the Company to pay me, as promptly as possible, the payroll
deductions credited to my account during the current Offering Period.

3. I understand and agree that my termination of participation is
irrevocable, and that under no circumstances will I be entitled to
purchase any portion of the Shares available under the Plan for
purchase during the current Offering Period, although I continue to be
eligible to file a new Direction to Withhold with respect to any
future Offering Period(s) for which I otherwise qualify.

Name and Address of Participant [Print]: Signature:

___________________________________ ______________________________________

___________________________________ Date: ____________________

___________________________________

Acknowledgment

The undersigned, acting for the Administrator of the Plan, acknowledges
receipt of the above Election To Rescind prior to December 16 of the current
Offering Period.

DATE RECEIVED:____________________________

ADMINISTRATOR

-----------------------------------

<PAGE>

1996 AMENDED AND RESTATED EMPLOYEE STOCK OPTION PLAN
FOR
MATRIX CAPITAL CORPORATION

Section 1. Purpose. This 1996 Amended and Restated Employee Stock Option
Plan of Matrix Capital Corporation amends and restates the Matrix Capital
Corporation Stock Option Plan, dated January 1, 1995, and is intended as an
additional incentive to attract and retain qualified and competent employees,
consultants, advisors and directors for the Company and its Subsidiaries, upon
whose efforts and judgment the success of the Company is largely dependent,
through the encouragement of stock ownership in the Company by such persons.

Section 2. Definitions. As used herein, the following terms shall have
the meaning indicated:

(a) "Act" shall mean the Securities Exchange Act of 1934, as amended.

(b) "Board" shall mean the Board of Directors of the Company.

(c) "Business Day" shall mean (i) if the Shares trade on a national
exchange, any day that the national exchange on which the Shares trade is open
or (ii) if the Shares do not trade on a national exchange, any day that
commercial banks in the City of New York are open.

(d) "Commission" shall mean the Securities and Exchange Commission.

(e) "Committee" shall mean the Compensation Committee of the Board or
other committee, if any, appointed by the Board pursuant to Section 14 hereof.

(f) "Common Stock" shall mean the Company's common stock, par value
$.0001 per share.

(g) "Company" shall mean Matrix Capital Corporation.

(h) "Date of Grant" shall mean the date on which an Option is granted
to an Eligible Person pursuant to Section 4 hereof.
---------

(i) "Director" shall mean a member of the Board or an advisory
director of the Board.

(j) "Eligible Person(s)" shall mean those persons who are (i) under
written contract (a "Consulting Contract") with the Company or a Subsidiary to
provide consulting or advisory services to the Company or a Subsidiary (a
"Consultant"), (ii) Employees or (iii) members of the Board of Directors,
including advisory directors, of the Company or any Subsidiary.

(k) "Employee(s)" shall mean those persons who are employees of the
Company or who are employees of any Subsidiary.
<PAGE>

(l) "Fair Market Value" of a share on a particular date shall be the
closing price of the Common Stock, which shall be (i) if the Common Stock is
listed or admitted for trading on any United States national securities exchange
(which for purposes hereof shall include the NASDAQ National Market System), the
last reported sale price of Common Stock on such exchange as reported in any
newspaper of general circulation, (ii) if the Common Stock is quoted on NASDAQ
(other than on the National Market System) or any similar system of automated
dissemination of quotations of securities prices in common use, the mean between
the closing high bid and low asked quotations for such day of the Common Stock
on such system or (iii) if neither clause (i) nor (ii) is applicable, a value
determined by any fair and reasonable means prescribed by the Board.

(m) "Incentive Stock Option" shall mean an option that is an incentive
stock option as defined in Section 422 of the Internal Revenue Code.

(n) "Internal Revenue Code" or "Code" shall mean the Internal Revenue
Code of 1986, as it now exists or may be amended from time to time.

(o) "Nonqualified Stock Option" shall mean a stock option that is not
an incentive stock option as defined in Section 422 of the Internal Revenue
Code.

(p) "Option" (when capitalized) shall mean any option granted under
this Plan.

(q) "Optionee" shall mean a person to whom an Option is granted under
this Plan or any successor to the rights of such person.

(r) "Outside Director" shall mean a Director who qualifies as an
"outside director" under the regulations promulgated under Section 162(m) of the
Internal Revenue Code and as a "non-employee director" under Rule 16b-3
promulgated under the Securities Exchange Act of 1934, effective August 15,
1996.

(s) "Plan" shall mean this 1996 Amended and Restated Employee Stock
Option Plan for Matrix Capital Corporation.

(t) "Share(s)" shall mean a share or shares of the Common Stock.

(u) "Subsidiary" shall mean any corporation (other than the Company)
in any unbroken chain of corporations beginning with the Company if, at the time
of the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

2
<PAGE>

Section 3. Shares and Options.

(a) The Company may grant to Eligible Persons from time to time Options to
purchase an aggregate of up to 525,000 Shares from Shares held in the Company's
treasury or from authorized and unissued Shares. If any Option granted under
the Plan shall terminate, expire, or be canceled or surrendered as to any
Shares, new Options may thereafter be granted covering such Shares. An Option
granted hereunder shall be either an Incentive Stock Option or a Nonqualified
Stock Option as determined by the Committee at the Date of Grant of such Option
and shall clearly state whether it is an Incentive Stock Option or a
Nonqualified Stock Option. Incentive Stock Options may only be granted to
persons who are Employees.

(b) The aggregate Fair Market Value (determined at the Date of Grant of the
Option) of the Shares with respect to which any Incentive Stock Option is
exercisable for the first time by an Optionee during any calendar year under the
Plan and all such plans of the Company and any parent and subsidiary of the
Company (as defined in Section 425 of the Code) shall not exceed $100,000.

(c) Notwithstanding any provision herein to the contrary, the maximum
number of Shares which may be subject to an Option granted to any Eligible
Person shall be 100,000 less the number of Shares subject to any other Option
granted to such Eligible Person during the 365 days preceding the Date of Grant
of such Option.

Section 4. Conditions for Grant of Options.

(a) Each Option shall be evidenced by an option agreement that may contain
any term deemed necessary or desirable by the Committee, provided such terms are
not inconsistent with this Plan or any applicable law. Optionees shall be those
persons selected by the Committee from Eligible Persons. Any person who files
with the Committee, in a form satisfactory to the Committee, a written waiver of
eligibility to receive any Option under this Plan shall not be eligible to
receive any Option under this Plan for the duration of such waiver.

(b) In granting Options, the Committee shall take into consideration the
contribution the person has made or may make to the success of the Company or
its Subsidiaries and such other factors as the Board shall determine. The
Committee shall also have the authority to consult with and receive
recommendations from officers and other personnel of the Company and its
Subsidiaries with regard to these matters. The Committee may from time to time
in granting Options under the Plan prescribe such other terms and conditions
concerning such Options as it deems appropriate, including, without limitation,
relating an Option to achievement of specific goals established by the Committee
or the continued employment of the Optionee for a specified period of time,
provided that such terms and conditions are not more favorable to an Optionee
than those expressly permitted herein.

(c) The Committee in its sole discretion shall determine in each case
whether periods of military or government service shall constitute a
continuation of employment for the purposes of this Plan or any Option.

(d) The Committee in its sole discretion may delegate to the Chief
Executive Officer of the Company any or all of its powers under this Plan with
regard to the granting and administration of Options to Eligible Persons not
subject to reporting under Section 16 of the Exchange Act.

3
<PAGE>

Section 5. Exercise Price. The exercise price per Share of any Option
shall be any price determined by the Committee; provided, however, that the
exercise price for any Incentive Stock Option shall not be less than one hundred
percent (100%) of the Fair Market Value on the Date of Grant.

Section 6. Exercise of Options. An Option shall be deemed exercised when
(i) the Company has received written notice of such exercise in accordance with
the terms of the Option, (ii) full payment of the aggregate exercise price of
the Shares as to which the Option is exercised has been made, and (iii)
arrangements that are satisfactory to the Committee in its sole discretion have
been made for the Optionee's payment to the Company of the amount, if any, that
the Committee determines to be necessary for the Company or a Subsidiary to
withhold in accordance with applicable federal or state income tax withholding
requirements. Unless further limited by the Committee in any Option, the
exercise price of any Shares purchased shall be paid solely in cash, by
certified or cashier's check, by money order, by personal check or with Shares
(but with Shares only if permitted by an Option agreement or otherwise permitted
by the Committee in its sole discretion at the time of exercise) or by a
combination of the above. If the exercise price is paid in whole or in part
with Shares, the value of the Shares surrendered shall be their Fair Market
Value on the date received by the Company.

Section 7. Exercisability of Options.

(a) Any Option shall become exercisable in such amounts and at such
intervals as the Committee shall provide in any Option, except as otherwise
provided in this Section 7; provided in each case that the Option has not
expired on the date of exercise.

(b) The expiration date of an Option shall be determined by the Committee
at the Date of Grant, but in no event shall an Option be exercisable after the
expiration of ten (10) years from the Date of Grant.

(d) On the date thirty (30) days prior to any occurrence described in
Section (7)(d)(i), (ii) or (iii), but only where such anticipated occurrence
- ----------------- ---- -----
actually takes place, notwithstanding the exercise schedule in an Option, each
Option shall immediately become exercisable in full where there (i) is any
transaction (which shall include a series of transactions occurring within 60
days or occurring pursuant to a plan) that has the result that shareholders of
the Company immediately before such transaction cease to own at least 51% of (x)
the voting stock of the Company or (y) of any entity that results from the
participation of the Company in a reorganization, consolidation, merger,
liquidation or any other form of corporate transaction; (ii) is a merger,
consolidation, reorganization, liquidation or dissolution in which the Company
does not survive; (iii) is a sale, lease, exchange or other disposition of all
or substantially all of the property and assets of the Company.

(e) Notwithstanding any provisions hereof to the contrary, if any Option is
accelerated under Section 7(c) or (d), the portion of such Option that may be
------------ ---
exercised to acquire Shares that the Optionee would not be entitled to acquire
but for such acceleration (the "Acceleration Shares"), is limited to that number
of Acceleration Shares that can be acquired without causing the Optionee to have
an "excess parachute payment" as determined under Section 280G of the Code,
determined by

4
<PAGE>

taking into account all of the Optionee's "parachute payments" determined
under Section 280G of the Code. If as a result of this Section 7(e), the
------------
Optionee may not acquire all of the Acceleration Shares, then the Acceleration
Shares that the Optionee may acquire shall be the last shares that the Optionee
would have been entitled to acquire had the Option not been accelerated.

Section 8. Termination of Option Period.

(a) Unless otherwise provided in any Option, the unexercised portion of an
Option shall automatically and without notice terminate and become null and void
at the time of the earliest to occur of the following:

(i) except as provided in Section 8(a)(iii), (iv) or (v),
----------------- ---- ---
thirty (30) days after the date that Optionee ceases to be employed by the
Company or a Subsidiary or ceases to be a Consultant to the Company or a
Subsidiary, as the case may be, regardless of the reason therefor other
than as a result of such termination by reason of (x) death, (y) mental or
physical disability of Optionee as determined by a medical doctor
satisfactory to the Committee or (z) termination of Optionee's employment
or Consulting Contract, as the case may be, with the Company or a
Subsidiary for cause;

(ii) except as provided in Section 8(a)(iii), one (1) year
-----------------
after the date on which the Optionee suffers a mental or physical
disability as determined by a medical doctor satisfactory to the Committee;

(iii) either (y) one (1) year after the date that the Optionee
ceases to be a Consultant to or ceases to be employed by, as the case may
be, the Company or a Subsidiary, by reason of death of the Optionee, or (z)
six (6) months after the date on which the Optionee shall die, if the
Optionee's death shall occur during the thirty-day period described in
Section 8(a)(i) or the one-year period described in Section 8(a)(ii);
--------------- ----------------

(iv) the date that Optionee ceases to be a Consultant to or
ceases to be employed by, as the case may be, the Company or a Subsidiary
as a result of a termination for cause;

(v) with respect to an Option held by a person who is a
member of the Board of Directors of the Company or a Subsidiary but who is
not also an Employee or Consultant (regardless of whether or not such
person was an Employee or Consultant at the time of grant), thirty (30)
days after the date that Optionee ceases to be a member of such Board of
Directors; and

(vi) the tenth (10th) anniversary of the Date of Grant of the
Option.

(b) The Committee in its sole discretion may, by giving written notice (a
"Cancellation Notice") cancel, effective upon the date of the consummation of
any of the transactions described in Section 7(d), all or any portion of such
------------
Option that remains unexercised on such date. Such Cancellation Notice shall be
given a reasonable period of time (but not less than 15 days) prior to the
proposed date of such cancellation, and may be given either before or after
shareholder approval of such transaction.

5
<PAGE>

Section 9. Adjustment of Shares.

(a) If at any time while the Plan is in effect or unexercised Options are
outstanding, there shall be any increase or decrease in the number of issued and
outstanding Shares through the declaration of a stock dividend or through any
recapitalization resulting in a stock split-up, combination or exchange of
Shares, then and in such event:

(i) appropriate adjustment shall be made in the maximum number
of Shares then subject to being optioned under the Plan, so that the same
proportion of the Company's issued and outstanding Shares shall continue to
be subject to being so optioned; and

(ii) appropriate adjustment shall be made in the number of Shares
and the exercise price per Share thereof then subject to outstanding
Options, so that the same proportion of the Company's issued and
outstanding Shares shall remain subject to purchase at the same aggregate
exercise price.

(b) The Committee may change the terms of Options outstanding under this
Plan, with respect to the exercise price or the number of Shares subject to the
Options, or both, when, in the Committee's sole discretion, such adjustments
become appropriate by reason of any corporate transaction.

(c) Except as otherwise expressly provided herein, the issuance by the
Company of shares of its capital stock of any class, or securities convertible
into shares of capital stock of any class, either in connection with direct sale
or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to the number of Shares reserved for issuance under the
Plan or the number of or exercise price of Shares then subject to outstanding
Options granted under the Plan.

(d) Without limiting the generality of the foregoing, the existence of
outstanding Options granted under the Plan shall not affect in any manner the
right or power of the Company to make, authorize or consummate (i) any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (ii) any merger or consolidation of
the Company; (iii) any issue by the Company of debt securities, or preferred or
preference stock that would rank above the Shares subject to outstanding
Options; (iv) the dissolution or liquidation of the Company; (v) any sale,
transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceeding, whether of a similar
character or otherwise.

Section 10. Transferability of Options. Each Incentive Stock Option shall
provide that such Incentive Stock Option shall not be transferrable by the
Optionee otherwise than by will or the laws of descent and distribution and that
so long as an Optionee lives, only such Optionee or his guardian or legal
representative shall have the right to exercise such Incentive Stock Option.
The Committee, in its sole discretion, may provide in the agreement governing
any Nonqualified Stock Option that such Nonqualified Stock Option shall be
transferable and, if so, the extent to which such Nonqualified Stock Option is
transferable.

6
<PAGE>

Section 11. Issuance of Shares. No person shall be, or have any of the
rights or privileges of, a shareholder of the Company with respect to any of the
Shares subject to an Option unless and until certificates representing such
Shares shall have been issued and delivered to such person. As a condition of
any transfer of the certificate for Shares, the Committee may obtain such
agreements or undertakings, if any, as it may deem necessary or advisable to
assure compliance with any provision of the Plan, the agreement evidencing the
Option or any law or regulation including, but not limited to, the following:

(i) A representation, warranty or agreement by the Optionee to
the Company at the time any Option is exercised that he or she is acquiring
the Shares to be issued to him or her for investment and not with a view
to, or for sale in connection with, the distribution of any such Shares;
and

(ii) A representation, warranty or agreement to be bound by any
legends that are, in the opinion of the Committee, necessary or appropriate
to comply with the provisions of any securities laws deemed by the Board to
be applicable to the issuance of the Shares and are endorsed upon the Share
certificates.

Section 12. Options for 10% Shareholder. Notwithstanding any other
provisions of the Plan to the contrary, an Incentive Stock Option shall not be
granted to any person owning directly (or indirectly through attribution under
Section 425(d) of the Code) at the Date of Grant, stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company (or of
its parent or subsidiary [as defined in Section 425 of the Internal Revenue
Code] at the Date of Grant) unless the exercise price of such Incentive Stock
Option is at least 110% of the Fair Market Value of the Shares subject to such
Incentive Stock Option on the Date of Grant, and the period during which the
Incentive Stock Option may be exercised does not exceed five (5) years from the
Date of Grant.

Section 13. Nonqualified Stock Options. Nonqualified Stock Options may be
granted hereunder and shall be subject to all terms and provisions hereof except
that each such Nonqualified Stock Option (i) must be clearly designated as a
Nonqualified Stock Option; (ii) may be granted for Shares in excess of the
limits contained in Section 3(b) of this Plan; and (iii) shall not be subject to
------------
Section 12 of this Plan. If both Incentive Stock Options and Nonqualified Stock
- ----------
Options are granted to an Optionee, the right to exercise, to the full extent
thereof, Options of either type shall not be contingent in whole or in part upon
the exercise of, or failure to exercise, Options of the other type.

Section 14. Administration of the Plan.

(a) The Plan shall be administered by the Compensation Committee of the
Board or other committee thereof as appointed by the Board (the "Committee"),
consisting of not less than two (2) members, each of whom is an Outside
Director.

(b) The Committee, from time to time, may adopt rules and regulations for
carrying out the purposes of the Plan. The determinations and the
interpretation and construction of any provision of the Plan by the Committee
shall be final and conclusive.

(c) Subject to the express provisions of this Plan, the Committee shall
have the authority, in its sole and absolute discretion (i) to adopt, amend, and
rescind administrative and interpretive

7
<PAGE>

rules and regulations relating to this Plan or any Option; (ii) to construe the
terms of this Plan or any Option; (iii) as provided in Section 9(a), upon
------------
certain events to make appropriate adjustments to the exercise price and number
of Shares subject to this Plan and Option; and (iv) to make all other
determinations and perform all other acts necessary or advisable for
administering this Plan, including the delegation of such ministerial acts and
responsibilities as the Committee deems appropriate. The Committee may correct
any defect or supply any omission or reconcile any inconsistency in this Plan or
any Option in the manner and to the extent it shall deem expedient to carry it
into effect, and it shall be the sole and final judge of such expediency. The
Committee shall have full discretion to make all determinations on the matters

referred to in this Section 14(d), and such determinations shall be final,
- -------------
binding and conclusive.

Section 15. Government Regulations. This Plan, Options and the
obligations of the Company to sell and deliver Shares under any Options, shall
be subject to all applicable laws, rules and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be
required.

Section 16. Miscellaneous.

(a) The proceeds received by the Company from the sale of Shares pursuant
to an Option shall be used for general corporate purposes.

(b) The grant of an Option shall be in addition to any other compensation
paid to the Optionee or other stock option plans of the Company or other
benefits with respect to the Optionee's position with or relationship to the
Company or its Subsidiaries. The grant of an Option shall not confer upon the
Optionee the right to continue as an Employee or Consultant, or interfere in any
way with the rights of the Company to terminate his status as an Employee or
Consultant.

(c) Neither the members of the Board nor any member of the Committee shall
be liable for any act, omission, or determination taken or made in good faith
with respect to this Plan or any Option, and members of the Board and the
Committee shall, in addition to all other rights of indemnification and
reimbursement, be entitled to indemnification and reimbursement by the Company
in respect of any claim, loss, damage, liability or expense (including
attorneys' fees, the costs of settling any suit, provided such settlement is
approved by independent legal counsel selected by the Company, and amounts paid
in satisfaction of a judgment, except a judgment based on a finding of bad
faith) arising from such claim, loss, damage, liability or expense to the full
extent permitted by law and under any directors' and officers' liability or
similar insurance coverage that may from time to time be in effect.

(d) Any issuance or transfer of Shares to an Optionee, or to his legal
representative, heir, legatee, distributee, or assign in accordance with the
provisions of this Plan or the applicable Option, shall, to the extent thereof,
be in full satisfaction of all claims of such persons under the Plan. The
Committee may require any Optionee, legal representative, heir, legatee or
distributee as a condition precedent to such payment or issuance or transfer of
Shares, to execute a release and receipt for such payment or issuance or
transfer of Shares in such form as it shall determine.

(e) Neither the Committee nor the Company guarantees Shares from loss or
depreciation.

8
<PAGE>

(f) All expenses incident to the administration, termination, or protection
of this Plan or any Option, including, but not limited to, legal and accounting
fees, shall be paid by the Company; provided, however, the Company may recover
any and all damages, fees, expenses and costs arising out of any actions taken
by the Company to enforce its rights under this Plan or any Option.

(g) Records of the Company shall be conclusive for all purposes under this
Plan or any Option, unless determined by the Committee or the Board to be
incorrect.

(h) The Company shall, upon request or as may be specifically required
under this Plan or any Option, furnish or cause to be furnished all of the
information or documentation that is necessary or required by the Committee to
perform its duties and functions under this Plan or any Option.

(i) The Company assumes no liability to any Optionee or his legal
representatives, heirs, legatees or distributees for any act of, or failure to
act on the part of, the Company, the Committee or the Board.

(j) Any action required of the Company or the Committee relating to this
Plan or any Option shall be by resolution of the Committee or by a person
authorized to act by resolution of the Committee.

(k) If any provision of this Plan or any Option is held to be illegal or
invalid for any reason, the illegality or invalidity shall not affect the
remaining provisions of this Plan or any Option, but such provision shall be
fully severable, and the Plan or Option, as applicable, shall be construed and
enforced as if the illegal or invalid provision had never been included in the
Plan or Option, as applicable.

(l) Whenever any notice is required or permitted under this Plan, such
notice must be in writing and personally delivered or sent by mail or delivery
by a nationally recognized courier service. Any notice required or permitted to
be delivered under an Option shall be deemed to be delivered on the date on
which it is personally delivered, or, if mailed, whether actually received or
not, on the third Business Day after it is deposited in the United States mail,
certified or registered, postage prepaid, addressed to the person who is to
receive it at the address that such person has previously specified by written
notice delivered in accordance with this Section 16(l) or, if by courier,
-------------
seventy-two (72) hours after it is sent, addressed as described in this Section
-------
16(l). The Company or the Optionee may change, at any time and from time to
- -----
time, by written notice to the other, the address that it or he had previously
specified for receiving notices. Until changed in accordance with this Plan,
the Company and the Optionee shall specify as its and his address for receiving
notices the address set forth in the Option pertaining to the Shares to which
such notice relates.

(m) Any person entitled to notice under this Plan may waive such notice.

(n) The titles and headings of Sections are included for convenience of
reference only and are not to be considered in construction of this Plan's
provisions.

(o) All questions arising with respect to the provisions of this Plan shall
be determined by application of the laws of the State of Colorado except to the
extent Colorado law is preempted

9
<PAGE>

by federal law. The obligation of the Company to sell and deliver Shares under
this Plan is subject to applicable laws and to the approval of any governmental
authority required in connection with the authorization, issuance, sale, or
delivery of such Shares.

(p) Words used in the masculine shall apply to the feminine where
applicable, and wherever the context of this Plan dictates, the plural shall be
read as the singular and the singular as the plural.

Section 17. Amendment and Discontinuation of the Plan. The Board may from
time to time amend, suspend or terminate the Plan or any Option; provided,
however, that no such amendment may alter any provision of the Plan or any
Option without compliance with any applicable shareholder approval requirements
promulgated under the Internal Revenue Code, if applicable, or by any stock
exchange or market on which the Common Stock of the Company is listed for
trading; and provided, further, that, except to the extent provided in Section
-------
8, no amendment or suspension of the Plan or any Option issued hereunder shall,
except as specifically permitted in any Option, substantially impair any Option
previously granted to any Optionee without the consent of such Optionee.

Section 18. Effective Date and Termination Date. The Plan is effective on
the date set forth below on which the Board and the stockholders of the Company
adopted this Plan, and shall terminate on the tenth anniversary of such
effective date.

ADOPTED BY THE BOARD AND STOCKHOLDERS: __________, 1996

Executed at the direction of the Board to evidence that this is the Plan
adopted by the Board and the stockholders on ____________, 1996.

MATRIX CAPITAL CORPORATION

By:_______________________________________________

Name:_____________________________________________

Title:____________________________________________

10
<PAGE>

AMENDMENT NO. 1
TO THE
1996 EMPLOYEE STOCK PURCHASE PLAN
FOR
MATRIX CAPITAL CORPORATION

This First Amendment to the 1996 Employee Stock Purchase Plan For Matrix
Capital Corporation ("Plan") is made under authority of Section 16 of the Plan
and is effective as of the date of the IPO.

(1) Section 2(l) is amended by deleting it in its entirety and substituting
therefore the following:

"(l) "Eligible Employee" shall mean each Employee who is employed as
an Employee on the first day of the month preceding the Enrollment
Date of reference; (ii) who continues to be employed as an Employee on
such Enrollment Date, and (iii) who, on such Enrollment Date does not
own Stock (within the meaning of Section 423(b)(3) of the Code)
possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company or of any
Subsidiary and, without limiting the generality of the foregoing, in
computing the amount of such Stock owned by an Employee, there shall
be included the amount of Stock owned directly, the Stock subject to a
Purchase Right, the Stock which with respect to which the Employee has
an option to acquire, and the Stock owned by any other person whose
stock is attributed to such Employee pursuant to Section 425(d) of the
Code; provided, further, that (iv) each person who becomes an Employee
during the period beginning with the date of the initial public
offering by the Company pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the "IPO"),
and ending on December 31, 1996 shall be deemed to satisfy the
requirements of (i) with respect to the Offering Period beginning
January 1, 1997, and (v) each person who is an employee of an employer
described in Section 2(q)(iv) on the effective date of the acquisition
of such employer shall be deemed to satisfy the requirements of (i)
with respect to the Offering Period designated by the Administrator
with respect to such acquired employer."

(2) Section 2(q) is amended by deleting it in its entirety and substituting
therefore the following:

"(q) "Offering Period" shall mean (i) the period beginning on the 1st
day of the calendar month immediately following the date of the IPO,
and ending on December 31, 1997, (ii) with respect to persons
described in Section 2(l)(iv), the period beginning on January 1, 1997
and ending on December 31, 1997; (iii) the period beginning on January
1, 1998 and ending on December 31, 1998 and each calender year
thereafter; and (iv) following the date of an acquisition by an
Employer of the stock or assets of another employer (and, in the case
of a stock acquisition, only where the acquired employer is a
Subsidiary and adopts the Plan), the Offering Period (if any) with
respect to such acquired employer designated by the Administrator in
<PAGE>

its sole discretion, provided such Offering Period begins on the first
day of a month, and provided further that it begins not less than 30
days after such acquisition and on or prior to October 1st of the year
of the acquisition, and ends on the following December 31st.

2
<PAGE>

AMENDMENT NO. 2
TO THE
1996 EMPLOYEE STOCK PURCHASE PLAN
FOR
MATRIX CAPITAL CORPORATION

This Second Amendment to the 1996 Employee Stock Purchase Plan For Matrix
Capital Corporation ("Plan") is made under authority of Section 16 of the Plan
and is effective as of the date of the IPO.

(1) Section 2 is amended by adding thereto the following:

"(aa) "Special Offering Period" shall mean each of the periods
designated by the Administrator and described in Section 6."

(1) Section 6 is amended by deleting it in its entirety and substituting
therefore the following:

"Section 6. Special Offering Period. The Administrator, in its sole
discretion may designate as a Special Offering Period (i) the period
beginning January 1, 1997 and ending on December 31, 1997, and (ii)
following the date of an acquisition by an Employer of the stock or
assets of another employer (and, in the case of a stock acquisition,
only where the acquired employer is a Subsidiary and adopts the Plan),
the period beginning on the first day of a month which occurs not less
than 30 days following such acquisition, and not later than October
1st of the current calender year, and ending on the following December
31st. In the event the Administrator designates a Special Offering
Period then, notwithstanding any provisions hereof to the contrary,
(iii) the first day of each such Special Offering Period shall be its
Enrollment Date; (iv) the Eligible Employees with respect to the
Special Offering Period of reference shall be (a) in the case of the
Special Offering Period described in (i), those persons who were not
Eligible Employees on the first Enrollment Date under the Plan but who
were employed as Employees on January 1, 1997, and (b) with respect to
a Special Offering Period described in (ii), those persons who are
employed by the acquired employer on the date of the acquisition and
are Employees on the Enrollment Date with respect to such Special
Offering Period; and (v) the amounts described in the definition of
Directed Withholding under (i)(y) and (ii) shall be determined by
multiplying them by a fraction whose numerator is the number of months
during the Special Offering Period, and whose denominator is 12.
Except as provided in (i) through (v) of this Section 6, each Special
Offering Period shall be deemed to be an Offering Period hereunder."

(2) Section 7 is amended by deleting it in its entirety and substituting
therefore the following:

"Section 7. Exercise of Purchase Right and Delivery. The
Participant's Purchase Right will be exercised automatically on each
Purchase Date by debiting his Account with the Purchase Price of the
Shares subject to his Purchase Right, and refunding (in a lump sum, in
cash) the amount, if any, credited to his Account that exceeds such
Purchase Price. As promptly as practicable after each Purchase Date,
the Administrator shall arrange the delivery to each Participant of a
certificate representing the Shares purchased on such Purchase Date."
<PAGE>

PROXY

MATRIX BANCORP, INC.

1380 Lawrence Street, Suite 1400

Denver, Colorado 80204

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Guy A. Gibson, Kelly J. Carranza and T.
Allen McConnell, and each of them, as proxies, each with the power to appoint
his or her substitute, and hereby authorizes them to represent and vote, as
designated below, all of the shares of the common stock of Matrix Bancorp,
Inc. (the "Company"), held of record by the undersigned on April 4, 2000, at
the Annual Meeting of Shareholders of the Company to be held on May 26, 2000,
and any adjournment(s) thereof.

(To Be Dated And Signed On Reverse Side)
<PAGE>

THIS PROXY, WHEN PROPERLY EXECUTED AND DATED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES UNDER PROPOSAL 1, IN
FAVOR OF PROPOSAL 2, PROPOSAL 3 AND PROPOSAL 4, AND THE PERSONS NAMED ON THE
FRONT OF THIS PROXY WILL USE THEIR DISCRETION WITH RESPECT TO ANY MATTERS
REFERRED TO IN PROPOSAL 5.
1. PROPOSAL TO ELECT AS DIRECTORS OF THE COMPANY THE FOLLOWING PERSONS TO HOLD
OFFICE UNTIL THE 2003 ANNUAL ELECTION OF DIRECTORS BY SHAREHOLDERS OR UNTIL
THEIR SUCCESSORS HAVE BEEN DULY ELECTED AND QUALIFIED.
[_] FOR all nominees listed (except as marked below to the contrary)
[_] WITHHOLD AUTHORITY to vote for all nominees listed
Thomas M. Piercy, Stephen G. Skiba
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
Withhold:___________________________________
2. PROPOSAL TO AMEND THE EMPLOYEE STOCK PURCHASE PLAN TO INCREASE THE SHARES
ELIGIBLE FOR PURCHASE THEREUNDER FROM 125,000 SHARES TO 250,000 SHARES.
[_] FOR[_] AGAINST[_] ABSTAIN
3. PROPOSAL TO AMEND THE 1996 AMENDED AND RESTATED EMPLOYEE STOCK OPTION PLAN
TO INCREASE THE SHARES ELIGIBLE FOR ISSUANCE UPON EXERCISE OF OPTIONS
GRANTED THEREUNDER FROM 525,000 SHARES TO 750,000 SHARES.
[_] FOR[_] AGAINST[_] ABSTAIN
4. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT
AUDITORS FOR THE 2000 FISCAL YEAR.
[_] FOR[_] AGAINST[_] ABSTAIN
5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
[_] FOR[_] AGAINST[_] ABSTAIN
DATED: __________________________________________, 2000

-------------------------------------------------------
(Signature)

-------------------------------------------------------
(Signature if Held jointly)
NOTE: Please execute this proxy as your name appears
hereon. When shares are held by joint tenants,
both should sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such. If a corporation,
please sign in full corporate name by the
president or other authorized officer. If a
partnership, please sign in partnership name by
authorized person. PLEASE MARK, SIGN, DATE AND
RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.