Exhibit 10.11
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EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the
29th day of February, 1996, by and between Colorado Business Bankshares, Inc.,
a Colorado corporation ("Company"), and Xxxxxxx Xxxxxxx ("Employee").
WITNESSETH:
WHEREAS, Employee has been employed by Company or one of its subsidiaries
and the parties desire to set forth certain conditions of Employee's employment
as hereinafter set forth.
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT. Company hereby agrees to employ Employee, and Employee
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hereby agrees to be employed by Company, as (a) President of Company's
subsidiary Colorado Business Bank ("CBB"), and (b) such other different
executive capacities with the Company, CBB or any other Company subsidiary as
may be determined from time to time by the Boards of Directors of Company, CBB
or such other subsidiary.
2. RESPONSIBILITIES OF EMPLOYMENT. During the term of his employment,
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Employee:
(a) shall diligently and faithfully serve Company and its
subsidiaries in such executive capacities as may be determined from time to
time by the Boards of Directors of Company and its subsidiaries, and he
shall devote his best efforts and entire business time, services and
attention to the advancement of Company's interests;
(b) shall not, without the prior written consent of the Board of
Directors of Company, engage in any other employment or business, directly
or indirectly, as a sole proprietor, a member of a partnership or limited
liability company, as a director, officer, employee or shareholder of a
corporation not affiliated with Company, or as a consultant or otherwise,
whether for compensation or otherwise, which could reasonably be expected
to or does interfere with Employee's performance of his duties hereunder or
which business is in competition in any way with the business then being
conducted by Company and its subsidiaries; provided, however, that the
provisions of this subparagraph (b) shall not be deemed to prohibit
Employee's ownership of stock in any publicly owned corporation so long as
Employee's ownership, directly and indirectly, when aggregated with the
direct and indirect ownership of all members of Employee's family, does not
exceed one percent (1%) of the total outstanding stock of such publicly
owned corporation, measured by reference to either market value or voting
power;
(c) shall diligently and faithfully carry out the policies, programs
and directions of the Boards of Directors of Company and its subsidiaries;
(d) shall fully cooperate with such other officers of Company and its
subsidiaries as may be elected or appointed by the Boards of Directors of
Company and its subsidiaries; and
(e) shall report to the appropriate executive officer of Company.
3. COMPENSATION. Company will compensate Employee for his services during
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the term of this Agreement and his employment hereunder as follows:
(a) Basic Compensation. Company shall pay to Employee as a minimum
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basic compensation the sum of Eighty-Eight Thousand Dollars ($88,000.00)
per year, payable in equal monthly installments. Employee's basic
compensation may be increased from time to time in the sole discretion of
Company's Board of Directors.
(b) Benefits. Employee shall be entitled to use a Company car (with
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the option to purchase same pursuant to a January 4, 1996 agreement) with
phone at Company's expense in the course of performing his duties hereunder
and shall be entitled to participate in any and all other benefits from
time to time afforded executive employees of Company, including, without
limitation, health, accident, hospitalization and life insurance programs.
Company shall additionally pay the monthly (not initial or initiation) dues
for Employee at a health club to be agreed upon by Employee and Company.
(c) Reimbursement of Expenses. Employee shall be entitled to
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reimbursement of ordinary and necessary out-of-pocket expenses reasonably
incurred by Employee on behalf of Company in the course of performing his
duties hereunder subject to his furnishing appropriate documentation
relative to such expenses in form and substance satisfactory to Company.
(d) Vacations. Employee shall be entitled to four (4) weeks paid
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vacation each year, subject to Company's general vacation policy.
(e) Discretionary Bonus Plan. Company is in the process of developing
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a discretionary bonus plan for key executives. Employee shall be entitled
to participate in such discretionary bonus plan.
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(f) Allocations. As Company and Employee intend that Employee may
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be a dual employee of Company and one or more of its subsidiaries, Company
may allocate to one or more of its subsidiaries any portion of Employee's
basic and other compensation that Company and one or more of its
subsidiaries deem to be a lawful and appropriate allocation, but no such
allocation will relieve Company of any of its obligations to Employee under
this Agreement.
4. TERM AND TERMINATION.
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(a) Term. The term of Employee's employment shall be a one (1) year
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term beginning on the date hereof. Upon expiration of the stated term of
this Agreement, Employee's employment with Company shall revert to the
status of employment at will and shall thereafter be subject to termination
by either party and at any time regardless of cause.
(b) Termination. Upon termination of this Agreement by Company, by
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Employee or upon the death or disability of Employee, the rights and
obligations of Employee shall be as follows:
(i) Termination by Employee. In the event Employee elects to
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terminate his employment hereunder, this Agreement shall immediately
terminate without any further obligation on the part of Company,
except that Company shall pay to Employee such compensation pursuant
to Paragraph 3 hereof as may be accrued and unpaid on the date of
termination of employment.
(ii) Termination by Company for Cause. If Employee's employment
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hereunder is terminated by Company for cause, this Agreement shall
immediately terminate without any further obligation on the part of
Company, except that Company shall pay to Employee such compensation
pursuant to Paragraph 3 hereof as may be accrued and unpaid on the
date of such termination of employment. For purposes of this
Agreement, "cause" shall mean willful failure or neglect of Employee
to perform his duties as prescribed herein, the conviction of a
felony, theft, embezzlement or improper use of corporate funds by
Employee, self dealing detrimental to Company, any attempt to obtain
any personal profit from any transaction in which Company has an
interest or any breach of the terms of Paragraphs 6 or 7 of this
Agreement by Employee.
(iii) Termination by Company for Other Reasons. Company shall
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have the right at any time to terminate Employee's employment
hereunder for any reason by giving
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Employee written notice (which notice shall fix the date as of which
Employee's employment is to terminate) of its intention to do so. If
Employee's employment hereunder is terminated by Company other than
for cause, Company shall be obligated to pay Employee the severance
benefits set forth in Paragraph 4(c) hereof.
(iv) Constructive Discharge. If Employee is ever constructively
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discharged, he may terminate this Agreement and his employment
hereunder by delivering written notice to Company no later than thirty
(30) days before the effective date of termination. If Employee is
constructively discharged, Company shall be obligated to pay Employee
the severance benefits set forth in Paragraph 4(c) hereof. For
purposes of the foregoing "constructive discharge" means the
occurrence of any one or more of the following: (i) Employee is
removed from all of the offices described in Paragraph 1 hereof; (ii)
Company fails to vest with or removes from Employee the duties,
responsibilities, authority or resources that he reasonably needs to
competently perform the duties of his office; (iii) Company decreases
Employee's basic compensation or arbitrarily and capriciously
decreases Employee's bonus; or (iv) Company transfers Employee to a
location outside the Denver metropolitan area; and in any of such
events, Company fails to cure any of the above within thirty (30) days
after Employee gives Company written notice of such breach.
(v) Termination Upon Change of Control. If a Change of Control
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occurs within five (5) years after the date of this Agreement,
Employee may terminate this Agreement and his employment hereunder for
any reason within two (2) years after a Change of Control occurs by
delivering written notice of termination to Company or its successor
no less than thirty (30) days before the effective date of termination
(any such notice by Employee which can be construed as a notice under
either Paragraph 4(b)(iv) or this Paragraph 4(b)(v) shall be deemed a
notice under this Paragraph 4(b)(v)). If Employee so terminates,
Company shall be obligated to pay Employee two (2) times the severance
benefits set forth in Paragraph 4(c) hereof, with the exception that
the Paragraph 4(c)(ii) bonus component shall be based upon a full year
and not prorated to the date of Employee's termination.
(A) A "Change of Control" will be deemed to have occurred
if: a) any person (as such term is defined in Section 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended (the
"1934 Act") other than a person who is a shareholder of Company
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as of the date of this Agreement acquires beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the 0000 Xxx)
of fifty percent (50%) or more of the combined voting power of
the then outstanding voting securities of Company; or b) the
individuals who were members of Company's Board of Directors as
of the date of this Agreement (the "Current Board Members") cease
for any reason to constitute a majority of the Board of Directors
of Company or its successor; however, if the election or the
nomination for election of any new director of Company or its
successor is approved by a vote of a majority of the individuals
who are Current Board Members, such new director shall, for the
purposes of this paragraph, be considered a Current Board Member;
or c) Company's stockholders approve (1) a merger or
consolidation, of Company or CBB and the stockholders of Company
immediately before such merger or consolidation do not, as a
result of such merger or consolidation, own, directly or
indirectly, more than fifty percent (50%) of the combined voting
power of the then outstanding voting securities of the entity
resulting from such merger or consolidation in substantially the
same proportion as their ownership of the combined voting power
of the outstanding securities of Company immediately before such
merger or consolidation; or (2) a complete liquidation or
dissolution or an agreement for the sale or other disposition of
all or substantially all of the assets or stock of Company or CBB
(provided that a complete liquidation or dissolution or the sale
or other disposition of all or substantially all the assets or
stock of just CBB will be deemed a "Change of Control" only if
Employee is not offered a position with Company or one of its
subsidiaries with responsibilities, although not necessarily the
same title, and reporting requirements consistent with those
responsibilities and reporting requirements set forth in
Paragraph 2 hereof).
(B) Notwithstanding and in lieu of Paragraph 4(b)(v)(A), a
Change of Control will not be deemed to have occurred: a) solely
because fifty percent (50%) or more of the combined voting power
of the then outstanding voting securities of Company are acquired
by (l) a trustee or other fiduciary holding securities under one
or more employee benefit plans maintained for employees of
Company and its subsidiaries, or (2) any person pursuant to the
will or trust of any existing stockholder of
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Company, or who is a member of the immediate family of such
stockholder, or (3) any corporation which, immediately prior to
such acquisition, is owned directly or indirectly by the
stockholders in the same proportion as their ownership of stock
immediately prior to such acquisition; or b) if Employee agrees
in writing to waive a particular Change of Control for the
purposes of this Agreement.
(vi) Termination Upon Employee's Disability. In the event
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Employee's employment is terminated by Company due to Employee's
disability, Company shall be obligated to pay Employee the severance
benefits set forth in Paragraph 4(c) hereof. For purposes of the
foregoing, "disability" shall mean Employee's inability due to illness
or other physical or mental disability to substantially perform his
duties as prescribed herein for a period of sixty (60) days within any
consecutive six (6) month period, and any action to be taken hereunder
based on disability shall not be effective until the expiration of
such sixty (60) day period.
(vii) Termination Upon Employee's Death. In the event that
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Employee dies while employed by Company, then Company shall be
obligated to pay Employee's estate the severance benefits set forth in
Paragraph 4(c) hereof.
(viii) Continuing Obligations of Employee. Notwithstanding
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anything to the contrary contained herein, termination of this
Agreement or Employee's employment hereunder, for whatsoever reason or
for no reason at all, by Employee or otherwise, shall not be deemed in
any way to affect Employee's obligations under Paragraphs 6 and 7 of
this Agreement, with respect to which he shall remain bound.
(c) Severance Benefits. Provided Employee is in compliance with
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Paragraph 4(b)(viii) hereof, Company will pay or provide the following
severance benefits to Employee in lieu of any separation payments otherwise
provided upon termination of employment under any other severance pay or
similar plan or policy of Company:
(i) Twelve (12) consecutive monthly payments each equal to
one-twelfth (1/12th) of Employee's annual basic compensation in effect
immediately prior to Employee's termination;
(ii) Twelve (12) consecutive monthly payments each equal to
one-twelfth (1/12th) of the higher of (A) Employee's discretionary
bonus for the previous calendar
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year, or (B) the average of Employee's discretionary bonus for the
previous three (3) calendar years (or such fewer calendar years as
Employee has been employed), in each case prorated to the date of
Employee's termination;
(iii) For the twelve (12) month period following the date of
termination of Employee's employment, Company will maintain in full
force and effect for the continued benefit of Employee each employee
benefit plan in which Employee was a participant immediately prior to
the date of Employee's termination, unless an essentially equivalent
and no less favorable benefit is provided by a subsequent employer at
no additional cost to Employee. If the terms of any employee benefit
plan of Company do not permit continued participation by Employee,
then Company will arrange to provide to Employee (at Company's cost) a
benefit substantially similar to and no less favorable than the
benefit Employee was entitled to receive under such plan at the end of
the period of coverage. (This provision specifically is not
applicable to Employee's car phone, parking and club dues, which
benefits end upon Employee's date of termination of employment.)
(iv) For the twelve (12) month period following the date of
termination of Employee's employment, Company will treat Employee for
all purposes as an Employee under all of Company's retirement plans in
which Employee was a participant on the date of termination of
Employee's employment or under which Employee would become eligible
during such twelve (12) month period (hereinafter referred to
collectively as the "Plan"). Benefits due to Employee under the Plan
shall be computed as if Employee had continued to be an Employee of
Company for the twelve (12) month period following termination of
employment. If under the terms of the Plan such continued coverage is
not permitted, Company will pay to Employee or Employee's estate a
supplemental benefit in an amount which, when added to the benefits
that Employee is entitled to receive under the Plan, shall equal the
amount that Employee would have received under the Plan had Employee
remained an employee of Company during such twelve (12) month period.
(v) If any excise tax imposed under Internal Revenue Code
Section 4999 or any successor provision, as amended after the date
hereof, is due and owing by Employee as a result of any amount paid or
payable pursuant to this Paragraph 4(c), Company shall indemnify and
hold Employee harmless against all such excise taxes and any interest,
penalties or costs with respect thereto.
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(vi) Company will be obligated to make all payments that become
due to Employee under this Paragraph 4(c) whether or not he obtains
other employment following termination. The payments and other
benefits provided for in this Paragraph 4(c) are intended to
supplement any compensation or other benefits that have accrued or
vested with respect to Employee or his account as of the effective
date of termination.
(vii) Company may elect to defer any payments that may become
due to Employee under this Paragraph 4(c) if, at the time the payments
become due, Company, CBB or any of Company's other subsidiaries is not
in compliance with any regulatory-mandated minimum capital
requirements or if making the payments would cause Company's, CBB's or
any of Company's other subsidiaries' capital to fall below such
minimum capital requirements. In this event, Company will resume
making the payments as soon as it can do so without violating such
minimum capital requirements.
5. SALE OR REORGANIZATION OF COMPANY. This Agreement shall not restrict
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the sale, transfer, consolidation, liquidation, reorganization or disposition of
the assets of Company and to the extent that the business of Company is
conducted in another form or through another entity or entities, such entity or
entities shall be obligated to fulfill Company's obligations hereunder.
6. RESTRICTIVE COVENANT. It is mutually recognized and agreed that the
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services to be rendered pursuant to this Agreement by Employee are special,
unique and of extraordinary character. Therefore, as a condition to Company's
obligations hereunder, Employee agrees that without Company's prior written
consent, during the term of this Agreement and for a period ending on the first
anniversary of the date of termination of his employment hereunder, regardless
of cause, he will not engage in any manner, directly or indirectly, to solicit
or induce any employee or agent of Company or any of its subsidiaries to
terminate employment with Company or any of its subsidiaries, as the case may
be, or solicit or induce any customer of Company or any of its subsidiaries to
become a customer of any person, firm, partnership, corporation, trust or other
entity that owns, controls or is a bank, savings and loan association, credit
union or similar financial institution. Furthermore, Employee will at no time
during or subsequent to the term of his employment by Company make any
statements or take any actions which could reasonably be expected to damage the
reputation or business of Company. It is further recognized and agreed that
irreparable injury will result to Company, its businesses and property in the
event of a breach of this covenant by Employee, that such injury would be
difficult if not impossible to ascertain, and therefore, any remedy at law for
any breach by Employee of this covenant will be inadequate and Company shall be
entitled to
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temporary and permanent injunctive relief without the necessity of proving
actual damage to Company by reason of any such breach. In addition, in the
event of a breach of this covenant by Employee, Company shall also be entitled
to recover reasonable costs and attorneys' fees incurred in connection with the
enforcement of its rights hereunder. Whenever used herein, Company shall be
deemed to include any successors or any other person or entity which may
hereafter acquire the business of Company or any of its subsidiaries. The
foregoing notwithstanding, should the assets of Company be disposed of in such a
manner that no purchaser thereof has acquired a going business, then Employee
shall not be bound by the covenants expressed in this paragraph.
7. TRADE SECRETS AND CONFIDENTIAL INFORMATION. Employee hereby covenants
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and agrees that he will not, except as may be required in connection with his
employment under this Agreement or compelled by any judicial or administrative
order, directly or indirectly, use or disclose to any other person, firm or
corporation, whether during or subsequent to the term of his employment by
Company, irrespective of the time, manner or cause of the termination of his
employment, any information of a proprietary nature belonging to Company, or
which could be reasonably expected to have an adverse effect on Company, its
businesses, property or financial condition, including but not limited to
records, data, documents, processes, specifications, methods of operation,
techniques and know-how, plans, policies, customer lists, the names and
addresses of suppliers or representatives, investigations or other matters of
any kind or description relating to the products, services, suppliers,
customers, sales or businesses of Company. All records, files, documents,
equipment and the like relating to Company's businesses which Employee shall
prepare, use or observe shall be and remain the sole property of Company, and
upon termination of this Agreement or his employment hereunder for any reason,
Employee shall return to the possession of Company any items of that nature and
any copies thereof which he may have in his possession.
8. INDEMNITY.
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(a) Indemnification. Company will indemnify Employee (and, upon his
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death, his heirs, executors and administrators) to the fullest extent
permitted by law against all expenses, including reasonable attorneys'
fees, court and investigative costs, judgments, fines and amounts paid in
settlement (collectively, "Expenses") reasonably incurred by Employee in
connection with or arising out of any pending, threatened or completed
action, suit or proceeding in which he may become involved by reason of his
having been an officer or director of Company or any of its subsidiaries.
The indemnification rights provided for herein are not exclusive and will
supplement any rights to indemnification that Employee may have under any
applicable bylaw or charter provision of
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Company or any of its subsidiaries, or any resolution of Company or any of
its subsidiaries, or any applicable statute.
(b) Advancement of Expenses. In the event that Employee becomes a
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party, or is threatened to be made a party, to any pending, threatened or
completed action, suit or proceeding for which Company or any of its
subsidiaries is permitted or required to indemnify Employee under this
Agreement, any applicable bylaw or charter provision of Company or any of
its subsidiaries, any resolution of Company or any of its subsidiaries, or
any applicable statute, Company will, to the fullest extent permitted by
law, advance all Expenses incurred by Employee in connection with the
investigation, defense, settlement or appeal of any threatened, pending or
completed action, suit or proceeding, subject to receipt by Company of a
written undertaking from Employee to reimburse Company for all Expenses
actually paid by Company to or on behalf of Employee in the event it shall
be ultimately determined that Company or any of its subsidiaries cannot
lawfully indemnify Employee for such Expenses, and to assign to Company all
rights of Employee to indemnification under any policy of directors' and
officers' liability insurance to the extent of the amount of Expenses
actually paid by Company to or on behalf of Employee.
(c) Litigation. Unless precluded by an actual or potential conflict
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of interest, Company will have the right to recommend counsel to Employee
to represent Employee in connection with any claim covered by this Section
8. Further, Employee's choice of counsel, his decision to contest or settle
any such claim, and the terms and amount of the settlement of any such
claim will be subject to Company's prior reasonable approval in writing.
9. ARBITRATION. Any disputes arising out of this Agreement or connected
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with Employee's employment shall be submitted by Employee and Company to
arbitration by the American Arbitration Association or its successor, and the
determination of the American Arbitration Association or its successor shall be
final and absolute. The arbitrator shall be governed by the duly promulgated
rules and regulations of the American Arbitration Association or its successor,
and the pertinent provisions of the laws of the State of Colorado relating to
arbitration. The decision of the arbitrator may be entered as a judgment in any
court in the State of Colorado or elsewhere. The prevailing party shall be
entitled to receive reasonable attorneys' fees incurred in connection with such
arbitration in addition to such other costs and expenses as the arbitrators may
award.
10. INTERPRETATION. This Agreement shall be construed in accordance with
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the internal laws of the State of Colorado. The titles of the paragraphs have
been inserted as a matter of
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convenience of reference only and shall not be construed to control or affect
the meaning or construction of this Agreement.
11. SEVERABILITY. In the event that any portion of this Agreement is found
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to be in violation of or conflict with any federal or state law, the parties
agree that said portion shall be modified only to the extent necessary to enable
it to comply with such law.
12. ASSIGNMENT. This Agreement shall not be assignable by Employee, but
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shall be binding upon and inure to the benefit of the heirs, successors and
assigns of Employee and Company.
13. NOTICES. All notices or other communications in connection with this
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Agreement shall be in writing and shall be deemed to have been duly given when
delivered, sent by professional courier or mailed first class, postage prepaid
and addressed as follows:
(i) If to Company, addressed to:
Colorado Business Bankshares, Inc.
000 - 00xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
with a copy to:
Xxxxxx & Coff
Suite 4100
55 X. Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxx
(ii) If to Employee, addressed to:
Xxxxxxx Xxxxxxx
0000 X. Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
or such other address or addressed to the attention of such other person or
persons as either of the parties may notify the other in accordance with the
provisions of this paragraph.
14. ENTIRE AGREEMENT. This Agreement is the entire agreement and
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understanding of the parties hereto with respect to the subject matter hereof
and supersedes any and all prior and contemporaneous negotiations,
understandings and agreements with regard to the subject matter hereof, whether
oral or written. No representation, inducement, agreement, promise or
understanding altering, modifying, taking from or adding to the terms and
conditions hereof
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shall have any force or effect unless the same is in writing and validly
executed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COLORADO BUSINESS BANKSHARES,
INC.
/s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxxx
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XXXXXXX XXXXXXX Xxxxxx Xxxxxxx,
Chief Executive Officer
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