<PAGE>
<PAGE>
SCHEDULE 14A INFORMATION
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Subsection 240.14a-11(c)
or Subsection 240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
HIGH COUNTRY BANCORP, INC.
- ----------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- ----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than
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)(1) and 0-11.
1. Title of each class of securities to which
transaction applies:
________________________________________________________________
2. Aggregate number of securities to which transaction
applies:
________________________________________________________________
3. Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11
(set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________
4. Proposed maximum aggregate value of transaction:
________________________________________________________________
5. Total fee paid:
________________________________________________________________
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1. Amount previously paid:
____________________________________________
2. Form, Schedule or Registration Statement no.:
____________________________________________
3. Filing Party:
____________________________________________
4. Date Filed:
____________________________________________<PAGE>
<PAGE>
November 16, 1998
Dear Stockholder:
We invite you to attend the first Annual Meeting of
Stockholders of High Country Bancorp, Inc. to be held at the
Salida Senior Citizens Center, 305 F Street, Salida, Colorado on
Tuesday, December 15, 1998 at 5:00 p.m., local time.
The accompanying notice and proxy statement describe the
formal business to be transacted at the Annual Meeting. Also
enclosed is an Annual Report to Stockholders for the 1998 fiscal
year. Directors and officers of the Company as well as
representatives of Grimsley, White & Company, the Company's
independent auditors for the 1998 fiscal year, will be available
to respond to any questions the stockholders may have.
You are cordially invited to attend the Annual Meeting.
REGARDLESS OF WHETHER YOU PLAN TO ATTEND, WE URGE YOU TO SIGN,
DATE AND RETURN THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE EVEN
IF YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING. This will
not prevent you from voting in person but will assure that your
vote is counted if you are unable to attend the meeting.
Sincerely,
/s/ Larry D. Smith
Larry D. Smith
President and Chief Executive Officer
<PAGE>
<PAGE>
_________________________________________________________________
HIGH COUNTRY BANCORP, INC.
130 WEST 2ND STREET
SALIDA, COLORADO 81201
(719) 539-2516
_________________________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 15, 1998
_________________________________________________________________
NOTICE IS HEREBY GIVEN that the first Annual Meeting of
Stockholders ("Annual Meeting") of High Country Bancorp, Inc.
(the "Company"), will be held at the Salida Senior Citizens
Center, 305 F Street, Salida, Colorado at 5:00 p.m., local time,
on Tuesday, December 15, 1998
A Proxy Card and a Proxy Statement for the Annual Meeting
are enclosed.
The Annual Meeting is for the purpose of considering and
acting upon:
1. The election of three directors of the Company; two
to a three-year term and one to a one-year term;
2. Approval of the High Country Bancorp, Inc. 1998
Stock Option and Incentive Plan;
3. Approval of the High Country Bancorp, Inc.
Management Recognition Plan; and
4. The transaction of such other matters as may
properly come before the Annual Meeting or any
adjournments thereof.
Note: The Board of Directors is not aware of any other
business to come before the Annual Meeting.
Any action may be taken on any one of the foregoing pro-
posals at the Annual Meeting on the date specified above or on
any date or dates to which, by original or later adjournment,
the Annual Meeting may be adjourned. Stockholders of record at
the close of business on November 12, 1998, are the stockholders
entitled to vote at the Annual Meeting and any adjournments
thereof.
You are requested to fill in and sign the enclosed Proxy
Card which is solicited by the Board of Directors and to mail it
promptly in the enclosed envelope. The Proxy Card will not be
used if you attend and vote at the Annual Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Richard A. Young
RICHARD A. YOUNG
SECRETARY
Salida, Colorado
November 16, 1998
________________________________________________________________
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY
THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A
QUORUM. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
________________________________________________________________
<PAGE>
<PAGE>
________________________________________________________________
PROXY STATEMENT
OF
HIGH COUNTRY BANCORP, INC.
130 WEST 2ND STREET
SALIDA, COLORADO 81201
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 15, 1998
________________________________________________________________
________________________________________________________________
GENERAL
________________________________________________________________
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of High
Country Bancorp, Inc. (the "Company") to be used at the 1998
Annual Meeting of Stockholders of the Company (the "Annual
Meeting") which will be held at the Salida Senior Citizens
Center, 305 F Street, Salida, Colorado on Tuesday, December 15,
1998, at 5:00 p.m., local time. The accompanying Notice of
Annual Meeting and form of proxy and this Proxy Statement are
being first mailed to stockholders on or about November 16,
1998.
________________________________________________________________
VOTING AND REVOCABILITY OF PROXIES
________________________________________________________________
Proxies solicited by the Board of Directors of the Company
will be voted in accordance with the directions given therein.
WHERE NO INSTRUCTIONS ARE INDICATED, PROXIES WILL BE VOTED FOR
THE NOMINEES FOR DIRECTORS SET FORTH BELOW AND IN FAVOR OF EACH
OF THE OTHER PROPOSALS SET FORTH IN THIS PROXY STATEMENT FOR
CONSIDERATION AT THE ANNUAL MEETING. The proxy confers
discretionary authority on the persons named therein to vote
with respect to the election of any person as a director where
the nominee is unable to serve or for good cause will not serve,
and with respect to matters incident to the conduct of the
Annual Meeting. If any other business is presented at the
Annual Meeting, proxies will be voted by those named therein in
accordance with the determination of a majority of the Board of
Directors. Proxies marked as abstentions will not be counted as
votes cast. In addition, shares held in street name which have
been designated by brokers on proxy cards as not voted will not
be counted as votes cast. Proxies marked as abstentions or as
broker nonvotes, however, will be treated as shares present for
purposes of determining whether a quorum is present.
Stockholders who execute proxies retain the right to
revoke them at any time. Unless so revoked, the shares
represented by properly executed proxies will be voted at the
Annual Meeting and all adjournments thereof. Proxies may be
revoked by written notice to the Secretary of the Company at the
address above or the filing of a later dated proxy prior to a
vote being taken on a particular proposal at the Annual Meeting.
A proxy will not be voted if a stockholder attends the Annual
Meeting and votes in person. The presence of a stockholder
alone at the Annual Meeting will not revoke such stockholder's
proxy.
________________________________________________________________
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
________________________________________________________________
The securities entitled to vote at the Annual Meeting
consist of the Company's common stock, par value $.01 per share
(the "Common Stock"). Stockholders of record as of the close of
business on November 12, 1998 (the "Record Date"), are entitled
to one vote for each share of Common Stock then held. As of the
Record Date, there were 1,322,500 shares of Common Stock issued
and outstanding.
Persons and groups beneficially owning more than 5% of the
Common Stock are required to file certain reports with respect
to such ownership pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The following table sets
forth, as of the Record Date, certain information as to the
Common Stock beneficially owned by any person or group of
persons who is known to the Company to be the beneficial owner
of more than 5% of the
<PAGE>
<PAGE>
Company's Common Stock and shares beneficially owned by all
directors and executive officers as a group. Other than as
disclosed below, management knows of no person who beneficially
owned more than 5% of the Common Stock at the Record Date.
<TABLE>
<CAPTION>
PERCENT OF SHARES
NAME AND ADDRESS AMOUNT AND NATURE OF OF COMMON STOCK
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OUTSTANDING
- ------------------- ----------------------- -----------------
<S> <C> <C>
High Country Bancorp, Inc. 105,800 (2) 8.00%
Employee Stock Ownership Plan ("ESOP")
130 West 2nd Street
Salida, Colorado 81201
Donald L. Koch 103,282 7.81%
4 Muirfield Lane
St. Louis, Missouri 63141
Sandler O'Neill Asset
Management LLC (3) 72,500 5.48%
712 Fifth Avenue - 22nd Floor
New York, New York 10019
Wellington Management Company (3) 69,000 5.22%
75 State Street
Boston, Massachusetts 02109
All Directors and Executive Officers
as a Group (7 persons) 162,211 12.27%
<FN>
_____________
(1) Includes all shares held directly as well as by spouses or as custodian
or trustee for minor children, and shares held by a group acting in
concert, over which shares the named individuals effectively exercise
sole voting and investment power, or for a group acting in concert, share
voting and investment power.
(2) These shares are held in a suspense account for future allocation among
participating employees as the loan used to purchase the shares is
repaid. The ESOP trustees, currently Directors Mitchell, Glenn, Young
and Harsh vote all allocated shares in accordance with instructions of
the participants. Unallocated shares and shares for which no
instructions have been received generally are voted by the ESOP trustees
in the same ratio as participants direct the voting of allocated shares
or, in the absence of such direction, as directed by the Company's Board
of Directors.
(3) Control shares through serving as investment advisor of various
investment funds.
</FN>
</TABLE>
________________________________________________________________
PROPOSAL I -- ELECTION OF DIRECTORS
________________________________________________________________
The Company's Board of Directors is currently composed of
six members. Under the Company's Certificate of Incorporation,
directors are divided into three classes and elected for terms
of three years each and until their successors are elected and
qualified. At the Annual Meeting in order to keep the number of
directors in each class equal, two directors will be elected for
terms expiring at the Annual Meeting to be held in the year 2001
and one director will be elected for a term expiring at the
Annual Meeting to be held in the year 1999. The Board of
Directors has nominated Director Scott G. Erchul and Philip W.
Harsh, each to serve for an additional term of three years and
Director Richard A. Young to serve for a one-year term, or until
their successors are elected and qualified. Under Colorado law,
directors are elected by a majority of the votes present in
person or represented by proxy at the Annual Meeting and
entitled to vote in the election of directors.
2<PAGE>
<PAGE>
Unless contrary instruction is given, the persons named in
the proxies solicited by the Board of Directors will vote each
such proxy for the election of the named nominees. If any of
the nominees are unable to serve, the shares represented by all
properly executed proxies which have not been revoked will be
voted for the election of such substitute(s) as the Board of
Directors may recommend. At this time, the Board knows of no
reason why the nominees might be unavailable to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
NOMINEES LISTED BELOW.
The following table sets forth, for the nominees and each
continuing director, his name, age as of the Record Date, the
year he first became a director of the Company's principal
subsidiary, Salida Building and Loan Association (the
"Association"), and the expiration of his current term as a
director of the Company. Except as noted below, all such
persons were initially appointed as directors of the Company in
connection with the incorporation and organization of the
Company in August 1997 and remained as such following the
conversion of the Association from mutual to stock form (the
"Conversion") on December 11, 1997. Each director of the
Company is also a member of the Board of Directors of the
Association.
<TABLE>
<CAPTION>
YEAR FIRST SHARES OF
ELECTED COMMON STOCK
AGE AS DIRECTOR CURRENT BENEFICIALLY
OF THE OF THE TERM OWNED AT THE PERCENT
NAME RECORD DATE ASSOCIATION TO EXPIRE RECORD DATE(1) OF CLASS
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BOARD NOMINEE FOR TERM TO EXPIRE IN 1999
Richard A. Young 44 1992 1998 25,000 (2) 1.89%
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2001
Philip W. Harsh 53 1995 1998 27,408 (2) 2.07
Scott G. Erchul 36 1997 1998 13,580 1.03
DIRECTORS CONTINUING IN OFFICE
Larry D. Smith 41 1987 1999 28,400 2.15
Robert B. Mitchell 73 1972 2000 25,000 (2) 1.89
Timothy R. Glenn 41 1991 2000 30,230 (2) 2.29
<FN>
____________
(1) Includes all shares held directly as well as by spouses or as custodian
or trustee for minor children, and shares held by a group acting in
concert, over which shares the named individuals effectively exercise
sole voting and investment power, or for a group acting in concert, share
voting and investment power.
(2) Excludes shares with respect to which Directors Mitchell. Glenn, Young
and Harsh may have "voting power" by virtue of their positions as trustees
of the trust holding 105,800 shares under the ESOP. Unallocated shares
and shares for which no instructions have been received generally are
voted by the ESOP trustees in the same ratio as participants direct the
voting of allocated shares or, in the absence of such direction, as
directed by the Company's Board of Directors.
</FN>
</TABLE>
The principal occupation of each nominee for director and
each continuing director of the Company for the last five years
is set forth below.
3<PAGE>
<PAGE>
RICHARD A. YOUNG currently serves as Secretary and
Treasurer of the Company and the Association. He has served as
a Director of the Association since 1992. He is a Certified
Public Accountant and a partner in the accounting firm of Swartz
& Young P.C. He is a high school football coach, treasurer and
board member of the local Pop Warner Football League.
PHILIP W. HARSH has been an owner and agent of the
Fredrickson Brown Insurance Agency since 1990 and a Director of
the Association since 1995. He is a member of the Salida
Chamber of Commerce and the Chamber of Commerce Business
Development Group. Also, he has served as President of the
ruling group for the Salida Public Golf Course and is past
president of the Independent Insurance Agents of Colorado.
SCOTT G. ERCHUL has been a member of the Board of
Directors of the Association since 1997. He currently serves as
Vice President of the Company and the Association, and has been
Vice President of the Association since 1991. His past and
current community involvement include the Rotary Club, Academic
Booster Club committee member and youth sports coach for
football, baseball and soccer.
LARRY D. SMITH currently serves as President and Chief
Executive Officer of the Company and the Association. Mr. Smith
became President of the Association in 1991 and has been a
Director of the Association since 1987. From 1978 to 1991, he
served as Controller of the Association. He is active in the
Salida school system and youth sports by serving as a coach for
various sports teams and by serving on the High School Building
Accountability and Business Advisory Committees. He is also
involved with several organizations which promote the academic
and athletic development of the youth of Salida.
ROBERT B. MITCHELL has served as a Director of the
Association since 1972. He is retired after 20 years as the
Post Master of Salida, Colorado. Mr. Mitchell serves as
Chairman of the Board of Directors of the Association and of the
Company. Mr. Mitchell is a past member and Treasurer of the
Salida Board of Education; past Senior Warden and Treasurer of
the Church of the Ascension; past President of Salida Golf Club;
past Commander of the Ray Lines Post #64 of the American Legion;
and a member of Salida Elks Lodge #808.
TIMOTHY R. GLENN has served as a Director of the
Association since 1991. He is the Funeral Director and Owner of
the Lewis & Glenn Funeral Home and the Coroner for Chaffee
County, Colorado. His civic activities include the Salida
Rotary Club, Elks Lodge, 4-H Club and the St. Joseph Catholic
Church. He has also served as President and a member of the
Board of Directors of the Colorado Association of Cemeteries.
________________________________________________________________
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
________________________________________________________________
The Company's Board of Directors conducts its business
through meetings of the Board. The Board of Directors of the
Company generally holds regular monthly meetings and holds
Annual Meetings as needed. During the year ended June 30, 1998,
the Board of Directors of the Company met 12 times. No director
attended fewer than 75% in the aggregate of the total number of
Board meetings of the Company held while he was a member during
the year ended June 30, 1998 and the total number of meetings
held by committees on which he served during such fiscal year.
The Company's Board of Directors has standing Audit and
Nominating Committees. The Compensation Committee consists of
the full Board of Directors and discusses compensation matters
as required. The Board of Directors' Audit Committee consists
of Directors Mitchell and Young. During the year ended June 30,
1998, the committee met two times to examine and approve the
audit report prepared by the independent auditors of the
Association, to review and recommend the independent auditors to
be engaged by the Association, to review the internal audit
function and internal accounting controls, and to review and
approve conflict of interest and audit policies.
4<PAGE>
<PAGE>
The Company's Nominating Committee consists of the entire
board of directors and is responsible for considering potential
nominees to the Board of Directors. The Board, in its capacity
as the Nominating Committee, met one time during the year ended
June 30, 1998. In its deliberations, the nominating committee
considers the candidate's knowledge of the banking business and
involvement in community, business and civic affairs, and also
considers whether the candidate would provide for adequate
representation of its market area.
________________________________________________________________
DIRECTORS' COMPENSATION
________________________________________________________________
Directors' Fees. The Company's directors receive fees of
$1,000 per month. This fee includes any Audit or Nominating
Committee meeting. No additional fees are paid for serving on
committees of the Board of Directors. During fiscal year 1998,
the Company's directors' fees totaled $72,000.
________________________________________________________________
EXECUTIVE COMPENSATION AND OTHER BENEFITS
________________________________________________________________
Summary Compensation Table. The following table sets
forth the cash and noncash compensation for the last two fiscal
years awarded to or earned by the Company's Chief Executive
Officer. No executive officer of the Company earned salary and
bonus in fiscal year 1998 exceeding $100,000 for services
rendered in all capacities to the Company and the Association,
except for the Chief Executive Officer.
<TABLE>
<CAPTION>
Annual Compensation
----------------------------------
Other Annual All Other
Name Year Salary Bonus Compensation(1) Compensation
- ---- ---- ------ ----- --------------- ------------
<S> <C> <C> <C> <C> <C>
Larry D. Smith 1998 $86,500 $ 7,500 $12,000 (2) $12,035 (3)
Chief Executive
Officer 1997 70,142 7,500 7,000 (2) --
<FN>
__________
(1) Executive officers of the Association receive indirect compensation in
the form of certain perquisites and other personal benefits. The amount
of such benefits received by the named executive officers in fiscal 1997
did not exceed 10% of each of the executive officer's respective salary
and bonus.
(2) Compensation for serving on the Board of Directors.
(3) Contribution to Mr. Smith's account in the Long Term Incentive Plan.
</FN>
</TABLE>
Employment Agreements. The Company and the Association
have entered into employment agreements (the "Employment
Agreements") under which Larry D. Smith serves as President of
the Association and the Company (the "Employee"). In such
capacities, the Employee is responsible for overseeing all
operations of the Association and the Company, and for
implementing the policies adopted by the Boards of Directors.
Such Boards believe that the Employment Agreements assure fair
treatment of the Employees in their career with the Company and
the Association by assuring them of some financial security.
The Employment Agreements became effective on August 13,
1997 and provide for a term of three years, with an annual base
salary equal to the Employee's existing base salary rate in
effect on the effective date. On each anniversary date of the
commencement of the Employment Agreements, the term of the
Employee's employment may be extended for an additional one-year
period beyond the then effective expiration date, upon a
determination by the Board of Directors that the performance of
the Employee has met the required performance standards and that
such Employment Agreements should be extended. The Employment
Agreements provide the Employee with a salary review by the
Board of Directors not less often than annually, as well as with
inclusion in any discretionary bonus plans, retirement and
medical plans, customary fringe benefits, vacation and sick
leave. As of November 12, 1998, the base salary under Mr.
Smith's contract was $88,500 per annum. An Employment Agreement
shall terminate upon the
5<PAGE>
<PAGE>
Employee's death, may terminate upon the Employee's disability
and are terminable by the Association for "just cause" (as
defined in the Employment Agreements). In the event of
termination for just cause, no severance benefits are available.
If the Company or the Association terminates an Employee without
just cause, the Employee will be entitled to a continuation of
his salary and benefits from the date of termination through the
remaining term of the Employment Agreements plus an additional
12 month's salary and, at the Employee's election, either
continued participation in benefit plans which the Employee
would have been eligible to participate in through the
Employment Agreements' expiration date or the cash equivalent
thereof. If the Employment Agreements are terminated due to the
Employee's "disability" (as defined in the Employment
Agreements), the Employee will be entitled to a continuation of
his salary and benefits through the date of such termination,
including any period prior to the establishment of the
Employee's disability. In the event of an Employee's death
during the term of his Employment Agreement, his estate will be
entitled to receive his salary through the last day of the
calendar month in which the Employee's death occurred. An
Employee is able to voluntarily terminate his Employment
Agreement by providing 90 days' written notice to the Boards of
Directors of the Association and the Company, in which case the
Employee is entitled to receive only his compensation, vested
rights, and benefits up to the date of termination.
In the event of (i) the Employee's involuntary termination
of employment other than for "just cause" during the period
beginning six months before a change in control and ending on
the later of the first anniversary of the change in control or
the expiration date of the Employment Agreements (the "Protected
Period"), (ii) the Employee's voluntary termination within 90
days of the occurrence of certain specified events occurring
during the Protected Period which have not been consented to by
the Employee, or (iii) the Employee's voluntary termination of
employment for any reason within the 30-day period beginning on
the date of the change in control, the Employee will be paid
within 10 days of such termination (or the date of the change in
control, whichever is later) an amount equal to the difference
between (i) 2.99 times his "base amount," as defined in Section
280G(b)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), and (ii) the sum of any other parachute payments, as
defined under Section 280G(b)(2) of the Code, that the Employee
receives on account of the change in control.
"Change in Control" means any one of the following events:
(i) the acquisition of ownership, holding or power to vote more
than 25% of the voting stock of the Association or the Holding
Company thereof, (ii) the acquisition of the ability to control
the election of a majority of the Association's or the Company's
Directors, (iii) the acquisition of a controlling influence over
the management or policies of the Association or of the Company
by any person or by persons acting as a "group" (within the
meaning of Section 13(d) of the Securities Exchange Act of
1934), or (iv) during any period of two consecutive years,
individuals (the "Continuing Directors") who at the beginning of
such period constitute the Board of Directors of the Association
or of the Company (the "Existing Board") cease for any reason to
constitute at least two-thirds thereof, provided that any
individual whose election or nomination for election as a member
of the Existing Board was approved by a vote of at least two-
thirds of the Continuing Directors then in office shall be
considered a Continuing Director. Notwithstanding the
foregoing, the Company's ownership of the Association shall not
of itself constitute a Change in Control for purposes of the
Agreement. For purposes of this paragraph only, the term
"person" refers to an individual or a corporation, partnership,
trust, association, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization or any other form of
entity not specifically listed herein. Notwithstanding the
foregoing, a "Change in Control" shall not be deemed to occur
solely by reason of a transaction in which the Association
converts to the stock form of organization, or creates an
independent holding company in connection therewith. The
decision of the Board as to whether a Change in Control has
occurred shall be conclusive and binding.
The payments that would be made to Mr. Smith assuming his
termination of employment under the foregoing circumstances at
June 30, 1998 would have been approximately $213,111. These
provisions may have an anti-takeover effect by making it more
expensive for a potential acquiror to obtain control of the
Company. In the event that the Employee prevails over the
Company and the Association, or obtains a written settlement, in
a legal dispute as to the Employment Agreement, he will be
reimbursed for his legal and other expenses.
6<PAGE>
<PAGE>
________________________________________________________________
TRANSACTIONS WITH MANAGEMENT
________________________________________________________________
The Association offers loans to its directors and
officers. These loans currently are made in the ordinary course
of business with the same collateral, interest rates and
underwriting criteria as those of comparable transactions
prevailing at the time and to not involve more than the normal
risk of collectibility or present other unfavorable features.
Under current law, the Association's loans to directors and
executive officers are required to be made on substantially the
same terms, including interest rates, as those prevailing for
comparable transactions and must not involve more than the
normal risk of repayment or present other unfavorable features.
Furthermore, all loans to such persons must be approved in
advance by a disinterested majority of the Board of Directors.
None of these loans had favorable terms. At June 30, 1998, the
Association's loans to directors and executive officers totaled
$860,106, or 4.71% of the Company's stockholders' equity, at
that date.
________________________________________________________________
PROPOSAL II -- APPROVAL OF THE HIGH COUNTRY BANCORP, INC.
1998 STOCK OPTION PLAN
________________________________________________________________
GENERAL
The Board of Directors of the Company is seeking approval
of the High Country Bancorp, Inc. 1998 Stock Option and
Incentive Plan (the "Option Plan"). The Option Plan is attached
hereto as Exhibit A and should be consulted for additional
information. All statements made herein regarding the Option
Plan, which are only intended to summarize the Option Plan, are
qualified in their entirety by reference to the Option Plan.
PURPOSE OF THE OPTION PLAN
The purpose of the Option Plan is to advance the interests
of the Company by providing directors and selected employees of
the Company and its affiliates, including the Association, with
the opportunity to acquire shares of Common Stock. By
encouraging such stock ownership, the Company seeks to attract,
retain, and motivate the best available personnel for positions
of substantial responsibility and to provide additional
incentive to directors and employees of the Company and its
affiliates to promote the success of the business of the
Company.
DESCRIPTION OF THE OPTION PLAN
Effective Date. The Option Plan will become effective on
the date of its approval by the Company's stockholders (the
"Effective Date"), and prior thereto no awards may or will be
made.
Administration. The Option Plan is administered by a
committee (the "Committee"), appointed by the Board of Directors
(the "Board"), consisting of at least two directors of the
Company who are "Non-employee Directors" within the meaning of
the federal securities laws. The Committee has discretionary
authority to select participants and grant options, to determine
the form and content of any options granted under the Option
Plan, to interpret the Option Plan, to prescribe, amend and
rescind rules and regulations relating to the Option Plan, and
to make other decisions necessary or advisable in connection
with administering the Option Plan. All decisions,
determinations, and interpretations of the Committee are final
and conclusive on all persons affected thereby. Members of the
Committee will be indemnified to the full extent permissible
under the Company's governing instruments in connection with any
claims or other actions relating to any action taken under the
Option Plan. It is expected that the Committee will initially
consist of Directors Mitchell, Glenn, Young, and Harsh.
Eligible Persons. Under the Option Plan, the Committee
has discretionary authority to grant stock options ("Options")
and stock appreciation rights ("SARs")(collectively, "Awards")
to such employees and directors as the Committee shall
designate. In addition, the Option Plan specifies the automatic
grants described below (see "Automatic
7<PAGE>
<PAGE>
Grants" below). As of the Record Date, the Company and its
affiliates had approximately 45 employees and four non-employee
directors who were eligible to participate in the Option Plan.
Shares Available for Grants. The Option Plan reserves
145,475 shares of Common Stock for issuance upon the exercise of
Options or SARs. Such shares may be (i) authorized by unissued
shares, (ii) shares held in treasury, or (iii) shares held in a
grantor trust. In the event of any merger, consolidation,
recapitalization, reorganization, reclassification, stock
dividend, split-up, combination of shares, or similar event in
which the number or kind of shares is changed without receipt or
payment of consideration by the Company, the Committee will
adjust the number and kind of shares reserved for issuance under
the Option Plan and the exercise prices of such Options. If
Awards should expire, become unexercisable or be forfeited for
any reason without having been exercised, the shares of Common
Stock subject to such Awards shall, unless the Option Plan shall
have been terminated, be available for the grant of additional
Awards under the Option Plan.
Options. Options may be either incentive stock options
("ISOs") as defined in Section 422 of the Code, or options that
are not ISOs ("Non-ISOs"). The exercise price as to any Option
may not be less than the fair market value (determined under the
Option Plan) of the optioned shares on the date of grant. In
the case of an optionee who owns more than 10% of the
outstanding Common Stock on the date of grant, such exercise
price may not be less than 110% of fair market value of the
shares. As required by federal tax laws, to the extent that the
aggregate fair market value (determined when an ISO is granted)
of the Common Stock with respect to which ISOs are exercisable
by an optionee for the first time during any calendar year
(under all incentive stock option plans of the Company and of
any affiliate) exceeds $100,000, the Options granted in excess
of $100,000 will be treated as Non-ISOs, and not as ISOs.
Automatic Grants. On the Effective Date, certain
employees and directors of the Company and the Association will
receive one-time grants of Options to purchase shares of Common
Stock at an exercise price per share equal to its fair market
value on that date (see "--Proposed Stock Option Grants" and
"New Plan Benefits" below).
SARs. An SAR may be granted in tandem with all or part of
any Option granted under the Option Plan, or without any
relationship to any Option. An SAR granted in tandem with an
ISO must expire no later than the ISO, must have the same
exercise price as the ISO and may be exercised only when the ISO
is exercisable and when the fair market value of the shares
subject to the ISO exceeds the exercise price of the ISO. For
SARs granted in tandem with Options, the optionee's exercise of
the SAR cancels his or her right to exercise the Option, and
vice versa. Regardless of whether an SAR is granted in tandem
with an Option, exercise of the SAR will entitle the optionee to
receive, as the Committee prescribes in the grant, all or a
percentage of the difference between (i) the fair market value
of the shares of Common Stock subject to the SAR at the time of
its exercise, and (ii) the fair market value of such shares at
the time the SAR was granted (or, in the case of SARs granted in
tandem with Options, the exercise price). The exercise price as
to any particular SAR may not be less than the fair market value
of the optioned shares on the date of grant.
Exercise of Options and SARs. The exercise of Options and
SARs will be subject to such terms and conditions as are
established by the Committee in a written agreement between the
Committee and the optionee. Options granted to non-employee
directors will be exercisable on the Effective Date. With
respect to Options granted to employees on the Effective Date,
33 % of the optioned shares will be exercisable on the Effective
Date, and an additional 33 % of the optioned shares will become
exercisable on January 1, 1999, and on January 1, 2000. Awards
made to non-employee directors on the Effective Date will be
immediately exercisable. Notwithstanding the foregoing, an
Option will become fully (100%) exercisable immediately upon
termination of the participant's continuous service due to the
participant's retirement at or after age 55 with at least 15
years of service, disability, death, or upon a change in control
(as defined in the Option Plan) or, if earlier, the execution of
a written agreement to effect a change in control of the
Association or the Company. In the absence of Committee action
to the contrary, an otherwise unexpired Option shall cease to be
exercisable upon (i) an optionee's termination of employment for
"just cause" (as defined in the Option Plan), (ii) the date that
is one year after an optionee terminates service for a reason
other than just cause or death, or (iii) the date that is two
years after an optionee's death. Upon an optionee's exercise of
an Option, the Company may, in the discretion of the Committee,
pay the optionee a cash amount of up to the amount of any
dividends declared on the underlying shares between the date of
grant and the date of exercise of the Option.
8<PAGE>
<PAGE>
An optionee may exercise Options or SARs, subject to
provisions relative to their termination and limitations on
their exercise, only by (i) written notice of intent to exercise
the Option with respect to a specified number of shares of
Common Stock, and (ii) in the case of Options, payment to the
Company (contemporaneously with delivery of such notice) in
cash, in Common Stock, or a combination of cash and Common
Stock, of the amount of the exercise price for the number of
shares with respect to which the Option is then being exercised.
Common Stock utilized in full or partial payment of the exercise
price for Options shall be valued at its market value at the
date of exercise, and may consist of shares subject to the
Option being exercised.
Conditions on Issuance of Shares. The Committee will have
the discretionary authority to impose, in agreements, such
restrictions on shares of Common Stock issued pursuant to the
Option Plan as it may deem appropriate or desirable, including
but not limited to the authority to impose a right of first
refusal or to establish repurchase rights or both of these
restrictions. In addition, the Committee may not issue shares
unless the issuance complies with applicable securities laws,
and to that end may require that a participant make certain
representations or warranties.
Transferability. Optionees may transfer their Options to
family members or trusts under specified circumstances. Awards
may not otherwise be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or
by the laws of descent and distribution. In addition, Common
Stock that is purchased upon the exercise of an Option or SAR
may not be sold within the six-month period following the grant
date of that Award.
Effect of Dissolution and Related Transactions. In the
event of (i) the liquidation or dissolution of the Company, (ii)
a merger or consolidation in which the Company is not the
surviving entity, or (iii) the sale or disposition of all or
substantially all of the Company's assets (any of the foregoing
to be referred to herein as a "Transaction"), all outstanding
Awards, together with the exercise prices thereof, will be
equitably adjusted for any change or exchange of shares for a
different number or kind of shares or other securities which
results from the Transaction. However, any such adjustment will
be made in such a manner as to not constitute a modification,
within the meaning of Section 424(h) of the Code, of outstanding
ISOs.
Duration of the Option Plan and Grants. The Option Plan
has a term of 10 years from the Effective Date, after which date
no Awards may be granted. The maximum term for an Award is 10
years from the date of grant, except that the maximum term of an
ISO (and an SAR granted in tandem with an ISO) may not exceed
five years if the optionee owns more than 10% of the Common
Stock on the date of grant. The expiration of the Option Plan,
or its termination by the Committee, will not affect any Award
then outstanding.
Amendment and Termination of the Option Plan. The Board
of Directors of the Company may from time to time amend the
terms of the Option Plan and, with respect to any shares at the
time not subject to Options, suspend or terminate the Option
Plan. No amendment, suspension, or termination of the Option
Plan will, without the consent of any affected holder of an
Award, alter or impair any rights or obligations under any Award
previously granted.
Financial Effects of Awards. The Company will receive no
monetary consideration for the granting of Awards under the
Option Plan. It will receive no monetary consideration other
than the exercise price for shares of Common Stock issued to
optionees upon the exercise of their Options, and will receive
no monetary consideration upon the exercise of SARs. Under
applicable accounting standards, recognition of compensation
expense is not required when Options are granted at an exercise
price equal to or exceeding the fair market value of the Common
Stock on the date the Option is granted.
The granting of SARs will require charges to the income of
the Company based on the amount of the appreciation, if any, in
the average market price of the Common Stock to which the SARs
relate over the exercise price of those shares. If the average
market price of the Common Stock declines subsequent to a charge
against earnings due to estimated appreciation in the Common
Stock subject to SARs, the amount of the decline will reverse
such prior charges against earnings (but not by more than the
aggregate of such prior charges).
9<PAGE>
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
ISOs. An optionee recognizes no taxable income upon the
grant of ISOs. If the optionee holds the shares purchased upon
exercise of an ISO for at least two years from the date the ISO
is granted, and for at least one year from the date the ISO is
exercised, any gain realized on the sale of the shares received
upon exercise of the ISO is taxed as long-term capital gain.
However, the difference between the fair market value of the
Common Stock on the date of exercise and the exercise price of
the ISO will be treated by the optionee as an item of tax
preference in the year of exercise for purposes of the
alternative minimum tax. If an optionee disposes of the shares
before the expiration of either of the two special holding
periods noted above, the disposition is a "disqualifying
disposition." In this event, the optionee will be required, at
the time of the disposition of the Common Stock, to treat the
lesser of the gain realized or the difference between the
exercise price and the fair market value of the Common Stock at
the date of exercise as ordinary income and the excess, if any,
as capital gain.
The Company will not be entitled to any deduction for
federal income tax purposes as the result of the grant or
exercise of an ISO, regardless of whether or not the exercise of
the ISO results in liability to the optionee for alternative
minimum tax. However, if an optionee has ordinary income
taxable as compensation as a result of a disqualifying
disposition, the Company will be entitled to deduct an
equivalent amount.
Non-ISOs. In the case of a Non-ISO, an optionee will
recognize ordinary income upon the exercise of the Non-ISO in an
amount equal to the difference between the fair market value of
the shares on the date of exercise and the option price (or, if
the optionee is subject to certain restrictions imposed by the
federal securities laws, upon the lapse of those restrictions
unless the optionee makes a special tax election within 30 days
after the date of exercise to have the general rule apply).
Upon a subsequent disposition of such shares, any amount
received by the optionee in excess of the fair market value of
the shares as of the exercise will be taxed as capital gain.
The Company will be entitled to a deduction for federal income
tax purposes at the same time and in the same amount as the
ordinary income recognized by the optionee in connection with
the exercise of a Non-ISO.
SARs. The grant of an SAR has no tax effect on the
optionee or the Company. Upon exercise of the SARs, however,
any cash or Common Stock received by the optionee in connection
with the surrender of his or her SAR will be treated as
compensation income to the optionee, and the Company will be
entitled to a business expense deduction for the amounts treated
as compensation income.
10<PAGE>
<PAGE>
PROPOSED STOCK OPTION GRANTS
Set forth below is certain information relating to all
Options which are to be granted to the specified individuals and
groups of individuals on the Effective Date of the Option Plan.
All such Options (i) will be subject to the terms and conditions
described above, and are contingent on, and not exercisable
until, the Option Plan receives stockholder approval, and (ii)
will automatically expire ten years after the date of their
grant. The exercise price for these Options will equal the fair
market value of the Common Stock on the date of grant. The
closing sale price of the Common Stock on November 12, 1998, as
reported on the Nasdaq SmallCap Market, was $10.75 per share.
<TABLE>
<CAPTION>
Number of Shares
Participant or Group Subject to Options
-------------------- ------------------
<S> <C>
Larry D. Smith, President 36,368
Scott G. Erchul, Vice President 29,095
Frank L. DeLay, Chief Financial Officer 21,821
Robert B. Mitchell, Chairman of the Board 7,273
Timothy R. Glenn, Director 7,273
Richard A. Young, Director 7,273
Philip W. Harsh, Director 7,273
All executive officers as a group 87,284
All directors who are not executive officers
as a group 29,092
All employees, including all current officers
who are not executive officers,
as a group *
<FN>
_________
* The Board of Directors intends to grant options to certain
employees who are not executive officers or directors, at a
future date.
</FN>
</TABLE>
For additional information relating to proposed option
grants, see "New Plan Benefits" below.
RECOMMENDATION AND VOTE REQUIRED
The Board of Directors has determined that the Option Plan
is desirable, cost effective, and produces incentives which will
benefit the Company and its stockholders. The Board of
Directors is seeking stockholder approval of the Option Plan in
order to satisfy Nasdaq listing requirements and qualify options
for ISO treatment.
Stockholder approval of the Option Plan requires the
affirmative vote of the holders of a majority of the votes cast
at the Annual Meeting. THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" APPROVAL OF THE OPTION PLAN.
________________________________________________________________
PROPOSAL III -- APPROVAL OF MANAGEMENT RECOGNITION PLAN
________________________________________________________________
GENERAL
The Board of Directors of the Company is seeking approval
of the High Country Bancorp, Inc. Management Recognition Plan
(the "MRP"). A copy of the MRP is attached hereto as Exhibit B,
and should be consulted for additional information. All
statements made herein regarding the MRP, which are only
intended to summarize the MRP, are qualified in their entirety
by reference to the MRP.
11<PAGE>
<PAGE>
PURPOSE OF THE MRP
The purpose of the MRP is to reward and retain personnel
of experience and ability in key positions of responsibility by
providing employees and directors of the Company, the
Association and their affiliates with a proprietary interest in
the Company, with compensation for their past contributions to
the Company and the Association, and with an incentive to make
such contributions in the future.
DESCRIPTION OF THE MRP
Effective Date. The MRP will become effective immediately
upon its approval by the Company's stockholders (the "Effective
Date"), and prior thereto no awards may be made.
Administration. The MRP will be administered by an MRP
Committee consisting of not less than two members of the
Company's Board of Directors who are "Non-employee Directors"
within the meaning of the federal securities laws. Except as
limited by the express provisions of the MRP or by resolutions
adopted by the Board, the MRP Committee has sole and complete
authority and discretion (1) to grant MRP awards to such
employees as the MRP Committee may select, (2) to determine the
form and content of MRP awards to be issued under the MRP, (3)
to interpret the MRP, (4) to prescribe, amend, and rescind rules
and regulations relating to the MRP, and (5) to make other
determinations necessary or advisable for the administration of
the MRP. The MRP provides that members of the MRP Committee
shall be indemnified and held harmless for actions taken under
the MRP in good faith and which he or she reasonably believed to
be in the best interests of the Company and its affiliates. As
of the Record Date, the MRP Committee consists of Directors
Mitchell, Glenn, Young, and Harsh.
MRP Trust; Purchase Limitations. The assets of the MRP
will be held in a trust (the "MRP Trust"), as to which Directors
Mitchell, Glenn, Young, and Harsh will act as trustees ("MRP
Trustees") and thereby have the responsibility to invest all
funds contributed to the MRP Trust by the Company or the
Association. With funds contributed by the Company, the MRP
Trust may purchase, in the aggregate, up to 39,675 shares of the
Company's Common Stock. The number of shares is the maximum
that the MRP Trust may purchase. Such shares may be authorized
but unissued shares, treasury shares, or shares held in a
grantor trust. In the event the MRP award is forfeited for any
reason or additional shares are purchased by the MRP Trust
associated with the MRP, the MRP Committee may make awards with
respect to such shares.
Types of Awards; Eligible Persons. The MRP Committee may
make MRP awards with respect to shares held in the underlying
MRP Trust. The MRP Committee has the discretion to select
employees and directors of the Company and/or of the Association
who will receive MRP awards. In selecting those employees and
directors to whom MRP awards will be granted and the number of
shares covered by such awards, the MRP Committee will consider
the position, duties and responsibilities of eligible employees,
the value of their services to the Company and its affiliates
(including the Association) and any other factors the MRP
Committee may deem relevant. In addition, the MRP specifically
provides for certain automatic awards described below (see " --
Automatic Awards" below).
Automatic Awards. On the Effective Date, certain
employees and non-employee directors of the Company and the
Association are expected to receive one-time grants of Options
to purchase shares of Common Stock at an exercise price equal to
its fair market value on that date (see "New Plan Benefits"
below).
Vesting. Pursuant to the MRP, freely transferable shares
of Common Stock will be transferred to participants as they
become vested in their MRP awards. Unless the Committee
specifically eliminates any vesting requirement or imposes a
different vesting schedule, 25% of the shares subject to an MRP
award will be earned and become non-forfeitable by each
participant on the Effective Date, and an additional 25% of the
shares subject to an MRP award will be earned and become non-
forfeitable upon the participant's completion of each of three
years of service after the date of the award. Notwithstanding
the foregoing, all shares of Common Stock subject to outstanding
awards will become immediately 100% earned and non-forfeitable
upon a participant's retirement at or after age 55 with at least
15 years of service, death, disability (as defined in the MRP),
or upon a change in control as defined in the MRP (or, if
earlier, the execution of an agreement to effect a change in
control of the Association of the Company).
12<PAGE>
<PAGE>
Distribution of Shares; Voting. As MRP awards vest, the
MRP Trustees will distribute all shares, together with any
shares representing stock dividends, in the form of Common
Stock. One share of Common Stock will be given for each share
earned. All unvested shares of Common Stock held by the MRP
Trust (whether or not subject to an MRP award) shall be voted by
the MRP Trustees in the same proportion as the trustee of the
Company's Employee Stock Ownership Plan trust votes Common Stock
held therein, and in the absence of any such voting, shall be
voted in the manner directed by the Board of Directors.
Dividends. Whenever shares of Common Stock are paid to an
award recipient or beneficiary thereof, such recipient or
beneficiary shall also be entitled to receive, with respect to
each share paid, an amount equal to any cash dividends
(including special large and nonrecurring dividends, including
one that has the effect of a return of capital to the Company's
stockholders) and a number of shares of Common Stock equal to
any stock dividends declared and paid with respect to a share of
Common Stock between the date the relevant MRP award was
initially granted to such participant and the date the shares
are being distributed. There shall also be distributed an
appropriate amount of net earnings, if any, of the Trust with
respect to any cash dividends so paid out.
No shares may be distributed from the MRP Trust prior to
the date which is five years from the date of the Association's
conversion from mutual to stock form to the extent the recipient
would after receipt of such shares own in excess of 10% of the
issued and outstanding shares of Common Stock, unless such
action is approved in advance by a majority vote of non-employee
directors of the Company's Board of Directors. Any shares
remaining undistributed solely by reason of the operation of
this rule shall be distributed to the recipient on the date
which is five years from the date of the Association's
conversion to stock form.
Deferral of Awards. The MRP provides that at any time
that is at least six months prior to the date on which a
participant becomes vested in the first 25% of the shares
subject to his or her award, the participant may irrevocably
elect to defer the receipt of all or a percentage of the shares
that would otherwise be transferred to the participant upon the
vesting of such award (the "Deferred Shares"). MRP participants
shall receive earnings on dividends paid on Deferred Shares at a
rate equal to the yield on the Common Stock, as determined from
time to time by the MRP Committee in its sole discretion. The
MRP Trustees shall hold each participant's Deferred Shares and
deferred earnings in the MRP Trust until distribution is
required pursuant to the participant's election.
Transferability. Participants may transfer their MRP
awards to family members or trusts under specified
circumstances. MRP awards and rights to shares held in the MRP
Trust are not otherwise transferable by participants in the MRP,
and during the lifetime of a participant, shares held in the MRP
Trust may only be earned by and paid to the participant.
Taxation. Participants will recognize compensation income
when their interest vests, or at an earlier date pursuant to a
participant's election to accelerate recognition pursuant to
Section 83(b) of the Internal Revenue Code.
Financial Effects of Awards. Neither the Company nor the
Association will receive any monetary consideration for the
granting of awards under the MRP. Under applicable accounting
standards, when MRP awards are granted, the Company must
recognize compensation expense based on the fair market value of
the Common Stock on the date the MRP awards are granted, with
such amount being amortized over the expected vesting period for
the award.
Adjustments for Capital Changes. In the event of any
merger, consolidation, recapitalization, reorganization,
reclassification, stock dividend, split-up, combination of
shares, or similar event in which the number or kind of shares
is changed without receipt or payment of consideration by the
Company, the MRP Committee will adjust both the number and kind
of shares of stock which may be purchased under the MRP, and the
number and kind of shares of stock subject to outstanding MRP
awards. In the event of (i) the liquidation or dissolution of
the Company, (ii) a merger or consolidation in which the Company
is not the surviving entity, or (iii) the sale or disposition of
all or substantially all of the Company's assets, all
outstanding MRP awards shall be adjusted for any change or
exchange of shares of Common Stock for a different number or
kind of shares or other securities which results from the
transaction.
13<PAGE>
<PAGE>
Amendment and Termination of the MRP. The Company's Board
of Directors may, by resolution, amend or terminate the MRP at
any time, provided that no amendment or termination of the MRP
will not, without the written consent of any affected holders of
an MRP award, impair any rights or obligations under any MRP
award previously granted.
The power to amend or terminate includes the power to
direct the MRP Trustees to return to the Company all or any part
of the assets of the MRP Trust, including shares of Common Stock
held in the plan share reserve of the MRP. However, the
termination of the MRP Trust may not affect a participant's
right to earn outstanding MRP awards and to receive Common Stock
relating thereto, including earnings thereon, in accordance with
the terms of the MRP and the particular MRP award made to the
participant.
Duration of the MRP. The MRP and MRP Trust will remain in
effect until the earlier of (i) termination by the Company's
Board of Directors, or (ii) the distribution of all assets of
the MRP Trust. Termination of the MRP will not affect any MRP
awards previously granted, and such MRP awards will remain valid
and in effect until they have been earned and distributed from
the MRP Trust, or by their terms expire or are forfeited.
RECOMMENDATION AND VOTE REQUIRED
The Board of Directors has determined that the MRP is
desirable, cost effective, and produces incentives which will
benefit the Company and its stockholders. The Board of
Directors is seeking stockholder approval of the MRP in order to
satisfy Nasdaq listing requirements.
Approval of the MRP requires the affirmative vote of the
holders of a majority of the votes cast at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE
MRP.
________________________________________________________________
NEW PLAN BENEFITS
________________________________________________________________
<PAGE>
The following tables sets forth certain information
regarding the benefits to be received under the Option Plan and
the MRP.
<TABLE>
<CAPTION>
Option Plan MRP
---------------------- ----------------------
Dollar Number Dollar Number
Name and Position Value ($)(1) of Units Value ($)(2) of Units
- ----------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Larry D. Smith, President $ 0 36,368 $106,619 9,918
Scott G. Erchul, Vice President 0 29,095 85,301 7,935
Frank L. DeLay, Chief Financial
Officer 0 21,821 63,973 5,951
Robert B. Mitchell, Chairman of
the Board 0 7,273 21,317 1,983
Timothy R. Glenn, Director 0 7,273 21,317 1,983
Richard A. Young, Director 0 7,273 21,317 1,983
Philip W. Harsh, Director 0 7,273 21,317 1,983
All current executive officers as
a group (3 persons) 0 87,284 255,893 23,804
All current directors who are not
executive officers 0 29,092 85,269 7,932
as a group (4 persons)
All employees, including all current -- * (3) -- * (3)
officers who are not executive
officers, as a group (42 persons)
</TABLE>
__________
(1) Based on the fair market value of the Common Stock on the
date of grant less the exercise price. All Options will be
granted at an exercise price equal to the fair market value
of the underlying shares of Common Stock on the date of the
grant, which will occur upon receipt of stockholder approval
at this Annual Meeting.
(footnotes continued on following page)
14<PAGE>
<PAGE>
(footnotes for table on previous page)
(2) Based on the closing price of the underlying Common Stock of
$10.75 per share as quoted on the Nasdaq SmallCap Market on
November 12, 1998.
(3) The Board of Directors intends to award Option Plan and MRP
benefits to certain employees who are not executive officers
or directors at a future date.
________________________________________________________________
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
________________________________________________________________
Pursuant to regulations promulgated under the Exchange
Act, the Company's officers, directors and persons who own more
than ten percent of the outstanding Common Stock are required to
file reports detailing their ownership and changes of ownership
in such Common Stock, and to furnish the Company with copies of
all such reports. Based solely on the Company's review of such
reports which the Company received during the last fiscal year,
or written representations from such persons that no annual
report of change in beneficial ownership was required, the
Company believes that, during the last fiscal year, all persons
subject to such reporting requirements have complied with the
reporting requirements.
________________________________________________________________
OTHER MATTERS
________________________________________________________________
The Board of Directors is not aware of any business to
come before the Annual Meeting other than those matters
described above in this Proxy Statement and matters incident to
the conduct of the Annual Meeting. However, if any other
matters should properly come before the Annual Meeting, it is
intended that proxies in the accompanying form will be voted in
respect thereof in accordance with the determination of a
majority of the Board of Directors.
________________________________________________________________
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
________________________________________________________________
Grimsley, White & Company, which were the Company's
independent auditors for the 1998 fiscal year, have been
retained by the Board of Directors to be the Company's auditors
for the 1999 fiscal year. A representative of Grimsley, White &
Company is expected to be present at the Annual Meeting to
respond to appropriate stockholders' questions and will have the
opportunity to make a statement if he so desires.
________________________________________________________________
MISCELLANEOUS
________________________________________________________________
The cost of soliciting proxies will be borne by the
Company. The Company will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending proxy materials to the beneficial
owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may
solicit proxies personally or by telegraph or telephone without
additional compensation.
The Company's 1998 Annual Report to Stockholders,
including financial statements, accompanies this Proxy
Statement, which has been mailed to all stockholders of record
as of the close of business on the Record Date. Any stockholder
who has not received a copy of such Annual Report may obtain a
copy by writing to the Secretary of the Company. Such Annual
Report is not to be treated as a part of the proxy solicitation
material or as having been incorporated herein by reference.
15<PAGE>
<PAGE>
________________________________________________________________
STOCKHOLDER PROPOSALS
________________________________________________________________
In order to be eligible for inclusion in the Company's
proxy materials for next year's Annual Meeting of Stockholders,
any stockholder proposal to take action at such meeting must be
received at the Company's executive office at 130 West 2nd
Street, Salida, Colorado 81201 no later than June 2, 1999. Any
such proposals shall be subject to the requirements of the proxy
rules adopted under the Exchange Act.
________________________________________________________________
FORM 10-KSB
________________________________________________________________
A COPY OF THE COMPANY'S FORM 10-KSB FOR THE YEAR ENDED
JUNE 301998 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE
RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY, HIGH COUNTRY
BANCORP, INC., 130 WEST 2ND STREET, SALIDA, COLORADO 81201.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Richard A. Young
RICHARD A. YOUNG
SECRETARY
Salida, Colorado
November 12, 1998
16<PAGE>
<PAGE>
EXHIBIT A
HIGH COUNTRY BANCORP, INC.
1998 STOCK OPTION AND INCENTIVE PLAN
1. PURPOSE OF THE PLAN.
The purpose of this Plan is to advance the interests of
the Company through providing select key Employees and Directors
of the Association, the Company, and their Affiliates with the
opportunity to acquire Shares. By encouraging such stock
ownership, the Company seeks to attract, retain and motivate the
best available personnel for positions of substantial respon-
sibility and to provide additional incentives to Directors and
key Employees of the Company or any Affiliate to promote the
success of the business.
2. DEFINITIONS.
As used herein, the following definitions shall apply.
(a) "Affiliate" shall mean any "parent corporation" or
"subsidiary corporation" of the Company, as such terms are
defined in Section 424(e) and (f), respectively, of the Code.
(b) "Agreement" shall mean a written agreement entered
into in accordance with Paragraph 5(c).
(c) "Association" shall mean Salida Building & Loan
Association.
(d) "Awards" shall mean, collectively, Options and SARs,
unless the context clearly indicates a different meaning.
(e) "Board" shall mean the Board of Directors of the
Company.
(f) "Change in Control" shall mean any one of the
following events: (i) the acquisition of ownership, holding or
power to vote more than 25% of the voting stock of the
Association or the Holding Company thereof, (ii) the acquisition
of the ability to control the election of a majority of the
Association's or the Company's Directors, (iii) the acquisition
of a controlling influence over the management or policies of
the Association or of the Company by any person or by persons
acting as a "group" (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934), or (iv) during any period of
two consecutive years, individuals (the "Continuing Directors")
who at the beginning of such period constitute the Board of
Directors of the Association or of the Company (the "Existing
Board") cease for any reason to constitute at least two-thirds
thereof, provided that any individual whose election or
nomination for election as a member of the Existing Board was
approved by a vote of at least two-thirds of the Continuing
Directors then in office shall be considered a Continuing
Director. For purposes of this paragraph only, the term
"person" refers to an individual or a corporation, partnership,
trust, association, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization or any other form of
entity not specifically listed herein.
Notwithstanding the foregoing, a "Change in Control" shall
not be deemed to occur solely by reason of a transaction in
which the Association converts to the stock form of
organization, or creates an independent holding company in
connection therewith. The decision of the Board as to whether a
Change in Control has occurred shall be conclusive and binding.
(g) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
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(h) "Committee" shall mean both the Stock Option
Committee appointed by the Board in accordance with Paragraph
5(a) hereof, and the Board.
(i) "Common Stock" shall mean the common stock of the
Company.
(j) "Company" shall mean High Country Bancorp, Inc.
(k) "Continuous Service" shall mean the absence of any
interruption or termination of service as an Employee or
Director of the Company or an Affiliate. Continuous Service
shall not be considered interrupted in the case of sick leave,
military leave or any other leave of absence approved by the
Company, in the case of transfers between payroll locations of
the Company or between the Company, an Affiliate or a successor,
or in the case of a Director's performance of services in an
emeritus or advisory capacity.
(l) "Director" shall mean any member of the Board, and
any member of the board of directors of any Affiliate that the
Board has by resolution designated as being eligible for
participation in this Plan.
(m) "Disability" shall mean a physical or mental
condition, which in the sole and absolute discretion of the
Committee, is reasonably expected to be of indefinite duration
and to substantially prevent a Participant from fulfilling his
or her duties or responsibilities to the Company or an
Affiliate.
(n) "Effective Date" shall mean the date specified in
Paragraph 14 hereof.
(o) "Employee" shall mean any person employed by the
Company, the Association, or an Affiliate.
(p) "Exercise Price" shall mean the price per Optioned
Share at which an Option or SAR may be exercised.
(q) "ISO" shall mean an option to purchase Common Stock
which meets the requirements set forth in the Plan, and which is
intended to be and is identified as an "incentive stock option"
within the meaning of Section 422 of the Code.
(r) "Market Value" shall mean the fair market value of
the Common Stock, as determined under Paragraph 7(b) hereof.
(s) "Non-Employee Director" shall have the meaning
provided in Rule 16b-3.
(t) "Non-ISO" means an option to purchase Common Stock
which meets the requirements set forth in the Plan but which is
not intended to be and is not identified as an ISO.
(u) "Option" means an ISO and/or a Non-ISO.
(v) "Optioned Shares" shall mean Shares subject to an
Award granted pursuant to this Plan.
(w) "Participant" shall mean any person who receives an
Award pursuant to the Plan.
(x) "Plan" shall mean this 1998 Stock Option and
Incentive Plan.
(y) "Rule 16b-3" shall mean Rule 16b-3 of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as amended.
(z) "Share" shall mean one share of Common Stock.
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(aa) "SAR" (or "Stock Appreciation Right") means a right
to receive the appreciation in value, or a portion of the
appreciation in value, of a specified number of shares of Common
Stock.
(bb) "Year of Service" shall mean a full twelve-month
period, measured from the date of an Award and each annual
anniversary of that date, during which a Participant has not
terminated Continuous Service for any reason.
3. TERM OF THE PLAN AND AWARDS.
(a) Term of the Plan. The Plan shall continue in effect
for a term of ten years from the Effective Date, unless sooner
terminated pursuant to Paragraph 16 hereof. No Award shall be
granted under the Plan after ten years from the Effective Date.
(b) Term of Awards. The term of each Award granted
under the Plan shall be established by the Committee, but shall
not exceed 10 years; provided, however, that in the case of an
Employee who owns Shares representing more than 10% of the
outstanding Common Stock at the time an ISO is granted, the term
of such ISO shall not exceed five years.
4. SHARES SUBJECT TO THE PLAN.
(a) General Rule. Except as otherwise required under
Section 11, the aggregate number of Shares deliverable pursuant
to Awards shall not exceed 145,475 Shares, which equals 11% of
the Shares issued by the Company in connection with the
Association's conversion from mutual to stock form. Such Shares
may be authorized but unissued Shares, Shares held in treasury,
or Shares held in a grantor trust created by the Company. If
any Awards should expire, become unexercisable, or be forfeited
for any reason without having been exercised, the Optioned
Shares shall, unless the Plan shall have been terminated, be
available for the grant of additional Awards under the Plan.
(b) Special Rule for SARs. The number of Shares with
respect to which an SAR is granted, but not the number of Shares
which the Company delivers or could deliver to an Employee or
individual upon exercise of an SAR, shall be charged against the
aggregate number of Shares remaining available under the Plan;
provided, however, that in the case of an SAR granted in
conjunction with an Option, under circumstances in which the
exercise of the SAR results in termination of the Option and
vice versa, only the number of Shares subject to the Option
shall be charged against the aggregate number of Shares
remaining available under the Plan. The Shares involved in an
Option as to which option rights have terminated by reason of
the exercise of a related SAR, as provided in Paragraph 10
hereof, shall not be available for the grant of further Options
under the Plan.
5. ADMINISTRATION OF THE PLAN.
(a) Composition of the Committee. The Plan shall be
administered by the Committee, which shall consist of not less
than two (2) members of the Board who are Non-Employee
Directors. Members of the Committee shall serve at the pleasure
of the Board. In the absence at any time of a duly appointed
Committee, the Plan shall be administered by the Board.
(b) Powers of the Committee. Except as limited by the
express provisions of the Plan or by resolutions adopted by the
Board, the Committee shall have sole and complete authority and
discretion (i) to select Participants and grant Awards, (ii) to
determine the form and content of Awards to be issued in the
form of Agreements under the Plan, (iii) to interpret the Plan,
(iv) to prescribe, amend and rescind rules and regulations
relating to the Plan, and (v) to make other determinations
necessary or advisable for the administration of the Plan. The
Committee shall have and may exercise such other power and
authority as may be delegated to it by the Board from time to
time. A majority of the entire Committee shall constitute a
quorum and the action of a majority of the members present at
any
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meeting at which a quorum is present, or acts approved in
writing by a majority of the Committee without a meeting, shall
be deemed the action of the Committee.
(c) Agreement. Each Award shall be evidenced by a
written agreement containing such provisions as may be approved
by the Committee. Each such Agreement shall constitute a
binding contract between the Company and the Participant, and
every Participant, upon acceptance of such Agreement, shall be
bound by the terms and restrictions of the Plan and of such
Agreement. The terms of each such Agreement shall be in
accordance with the Plan, but each Agreement may include such
additional provisions and restrictions determined by the
Committee, in its discretion, provided that such additional
provisions and restrictions are not inconsistent with the terms
of the Plan. In particular, the Committee shall set forth in
each Agreement (i) the Exercise Price of an Option or SAR, (ii)
the number of Shares subject to the Award, and its expiration
date, (iii) the manner, time, and rate (cumulative or otherwise)
of exercise or vesting of such Award, and (iv) the restrictions,
if any, to be placed upon such Award, or upon Shares which may
be issued upon exercise of such Award. The Chairman of the
Committee and such other Directors and officers as shall be
designated by the Committee are hereby authorized to execute
Agreements on behalf of the Company and to cause them to be
delivered to the recipients of Awards.
(d) Effect of the Committee's Decisions. All decisions,
determinations and interpretations of the Committee shall be
final and conclusive on all persons affected thereby.
(e) Indemnification. In addition to such other rights
of indemnification as they may have, the members of the
Committee shall be indemnified by the Company in connection with
any claim, action, suit or proceeding relating to any action
taken or failure to act under or in connection with the Plan or
any Award, granted hereunder to the full extent provided for
under the Company's governing instruments with respect to the
indemnification of Directors.
6. GRANT OF OPTIONS.
(a) General Rule. Only Employees shall be eligible to
receive Awards. In selecting those Employees to whom Awards
will be granted and the number of shares covered by such Awards,
the Committee shall consider the position, duties and
responsibilities of the eligible Employees, the value of their
services to the Company and its Affiliates, and any other
factors the Committee may deem relevant.
(b) Automatic Grants to Employees. On the Effective
Date, each of the following Employees shall receive an Option
(in the form of an ISO, to the extent permissible under the
Code) to purchase the number of Shares listed below, at an
Exercise Price per Share equal to the Market Value of a Share on
the Effective Date; provided that such grant shall not be made
to an Employee whose Continuous Service terminates on or before
the Effective Date:
Number of Shares
Participant Reserved under Paragraph 4(a)
----------- -----------------------------
Larry D. Smith 36,368
Scott G. Erchul 29,095
Frank L. DeLay 21,821
With respect to each of the above-named Participants, the
Option granted to the Participant hereunder (i) shall vest in
accordance with the general rule set forth in Paragraph 8(a) of
the Plan, (ii) shall have a term of ten years from the Effective
Date, and (iii) shall be subject to the general rule set forth
in Paragraph 8(c) with respect to the effect of a Participant's
termination of Continuous Service on the Participant's right to
exercise his Options.
(c) Special Rules for ISOs. The aggregate Market Value,
as of the date the Option is granted, of the Shares with respect
to which ISOs are exercisable for the first time by an Employee
during any calendar year (under all incentive stock option
plans, as defined in Section 422 of the Code, of the Company or
any present or future
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Affiliate of the Company) shall not exceed $100,000.
Notwithstanding the foregoing, the Committee may grant Options
in excess of the foregoing limitations, in which case Options
granted in excess of such limitation shall be Non-ISOs.
7. EXERCISE PRICE FOR OPTIONS.
(a) Limits on Committee Discretion. The Exercise Price
as to any particular Option shall not be less than 100% of the
Market Value of the Optioned Shares on the date of grant. In
the case of an Employee who owns Shares representing more than
10% of the Company's outstanding Shares of Common Stock at the
time an ISO is granted, the Exercise Price shall not be less
than 110% of the Market Value of the Optioned Shares at the time
the ISO is granted.
(b) Standards for Determining Exercise Price. If the
Common Stock is listed on a national securities exchange
(including the NASDAQ National Market System) on the date in
question, then the Market Value per Share shall be the average
of the highest and lowest selling price on such exchange on such
date, or if there were no sales on such date, then the Exercise
Price shall be the mean between the bid and asked price on such
date. If the Common Stock is traded otherwise than on a
national securities exchange on the date in question, then the
Market Value per Share shall be the mean between the bid and
asked price on such date, or, if there is no bid and asked price
on such date, then on the next prior business day on which there
was a bid and asked price. If no such bid and asked price is
available, then the Market Value per Share shall be its fair
market value as determined by the Committee, in its sole and
absolute discretion.
8. EXERCISE OF OPTIONS.
(a) Generally. Options granted to Non-Employee
Directors shall be exercisable on the Effective Date. With
respect to Options granted to Employees, 33 1/3% of the Optioned
Shares shall be exercisable on the Effective Date, and an
additional 33 1/3% of the Optioned shares shall become
exercisable on January 1, 1999 and on January 1, 2000.
Notwithstanding the foregoing, an Option shall become fully
(100%) exercisable immediately upon termination of the
Participant's Continuous Service due to the Participant's
retirement at or after age 55 with at least 15 years of service,
Disability, death, or as of a Change in Control or, if earlier,
the execution of an agreement to effect a Change in Control. An
Option may not be exercised for a fractional Share.
(b) Procedure for Exercise. A Participant may exercise
Options, subject to provisions relative to its termination and
limitations on its exercise, only by (1) written notice of
intent to exercise the Option with respect to a specified number
of Shares, and (2) payment to the Company (contemporaneously
with delivery of such notice) in cash, in Common Stock, or a
combination of cash and Common Stock, of the amount of the
Exercise Price for the number of Shares with respect to which
the Option is then being exercised. Each such notice (and
payment where required) shall be delivered, or mailed by prepaid
registered or certified mail, addressed to the Treasurer of the
Company at its executive offices. Common Stock utilized in full
or partial payment of the Exercise Price for Options shall be
valued at its Market Value at the date of exercise, and may
consist of Shares subject to the Option being exercised. Upon a
Participant's exercise of an Option, the Company may, if
provided by the Committee in the underlying Agreement, pay to
the Participant a cash amount up to but not exceeding the amount
of dividends, if any, declared on the underlying Shares between
the date of grant and the date of exercise of the Option.
(c) Period of Exercisability. Except to the extent
otherwise provided in the terms of an Agreement, an Option may
be exercised by a Participant only while he is an Employee and
has maintained Continuous Service from the date of the grant of
the Option, or within one year after termination of such
Continuous Service (but not later than the date on which the
Option would otherwise expire), except if the Employee's
Continuous Service terminates by reason of --
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(1) "Just Cause" which for purposes hereof shall
have the meaning set forth in any unexpired employment or
severance agreement between the Participant and the
Association and/or the Company (and,
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in the absence of any such agreement, shall mean
termination because of the Employee's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar
offenses) or final cease-and-desist order), then the
Participant's rights to exercise such Option shall expire
on the date of such termination;
(2) death, then to the extent that the Participant
would have been entitled to exercise the Option
immediately prior to his death, such Option of the
deceased Participant may be exercised within two years
from the date of his death (but not later than the date on
which the Option would otherwise expire) by the personal
representatives of his estate or person or persons to whom
his rights under such Option shall have passed by will or
by laws of descent and distribution.
(d) Effect of the Committee's Decisions. The
Committee's determination whether a Participant's Continuous
Service has ceased, and the effective date thereof, shall be
final and conclusive on all persons affected thereby.
(e) Mandatory Six-Month Holding Period. Notwithstanding
any other provision of this Plan to the contrary, common stock
of the Company that is purchased upon exercise of an Option or
SAR may not be sold within the six-month period following the
grant of that Option or SAR, except in the event of the
Participant's death or Disability, or such other event as the
Board may specifically deem appropriate.
9. GRANTS OF OPTIONS TO NON-EMPLOYEE DIRECTORS
(a) Automatic Grants. Notwithstanding any other
provisions of this Plan, each Director who is not an Employee
but is a Director on the Effective Date shall receive, on said
date, Non-ISOs to purchase 7,273 Shares. Such Non-ISOs shall
have an Exercise Price per Share equal to the Market Value of a
Share on the date of grant. Each Director, including each
Director who joins the Board after the Effective Date and who is
not then an Employee, is eligible to receive discretionary
grants under the Plan.
(b) Terms of Exercise. Options received under the
provisions of this Paragraph (i) shall become exercisable in
accordance with paragraph 8(a) of the Plan, and (ii) may be
exercised from time to time by written notice of intent to
exercise the Option with respect to all or a specified number of
the Optioned Shares, and payment to the Company
(contemporaneously with the delivery of such notice), in cash,
in Common Stock, or a combination of cash and Common Stock, of
the amount of the Exercise Price for the number of the Optioned
Shares with respect to which the Option is then being exercised.
Each such notice and payment shall be delivered, or mailed by
prepaid registered or certified mail, addressed to the Treasurer
of the Company at the Company's executive offices. Upon a
Director's exercise of an Option, the Company may, if provided
by the Committee in the underlying Agreement (which may not be
utilized to pay out such dividends unless the Plan would
maintain conformity with Rule 16b-3), pay to the Director a cash
amount up to but not exceeding the amount of dividends, if any,
declared on the underlying Shares between the date of grant and
the date of exercise of the Option. A Director who exercises
Options pursuant to this Paragraph may satisfy all applicable
federal, state and local income and employment tax withholding
obligations, in whole or in part, by irrevocably electing to
have the Company withhold shares of Common Stock, or to deliver
to the Company shares of Common Stock that he already owns,
having a value equal to the amount required to be withheld;
provided that to the extent not inconsistent herewith, such
election otherwise complies with those requirements of
Paragraphs 8 and 19 hereof.
Options granted under this Paragraph shall have a term of
ten years; provided that Options granted under this Paragraph
shall expire one year after the date on which a Director
terminates Continuous Service on the Board for a reason other
than death, but in no event later than the date on which such
Options would otherwise expire. In the event of such Director's
death during the term of his directorship, Options granted under
this Paragraph shall become immediately exercisable, and may be
exercised within two years from the date of his death by the
personal representatives of his estate or person or persons to
whom his rights under such Option shall have passed by will or
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by laws of descent and distribution, but in no event later than
the date on which such Options would otherwise expire. In the
event of such Director's Disability during his or her
directorship, the Director's Option shall become immediately
exercisable, and such Option may be exercised within one year of
the termination of directorship due to Disability, but not later
than the date that the Option would otherwise expire. Unless
otherwise inapplicable or inconsistent with the provisions of
this Paragraph, the Options to be granted to Directors hereunder
shall be subject to all other provisions of this Plan.
(c) Effect of the Committee's Decisions. The
Committee's determination whether a Participant's Continuous
Service has ceased, and the effective date thereof, shall be
final and conclusive on all persons affected thereby.
10. SARS (STOCK APPRECIATION RIGHTS)
(a) Granting of SARs. In its sole discretion, the
Committee may from time to time grant SARs to Employees either
in conjunction with, or independently of, any Options granted
under the Plan. An SAR granted in conjunction with an Option
may be an alternative right wherein the exercise of the Option
terminates the SAR to the extent of the number of shares
purchased upon exercise of the Option and, correspondingly, the
exercise of the SAR terminates the Option to the extent of the
number of Shares with respect to which the SAR is exercised.
Alternatively, an SAR granted in conjunction with an Option may
be an additional right wherein both the SAR and the Option may
be exercised. An SAR may not be granted in conjunction with an
ISO under circumstances in which the exercise of the SAR affects
the right to exercise the ISO or vice versa, unless the SAR, by
its terms, meets all of the following requirements:
(1) The SAR will expire no later than the ISO;
(2) The SAR may be for no more than the difference
between the Exercise Price of the ISO and the Market Value
of the Shares subject to the ISO at the time the SAR is
exercised;
(3) The SAR is transferable only when the ISO is
transferable, and under the same conditions;
(4) The SAR may be exercised only when the ISO may be
exercised; and
(5) The SAR may be exercised only when the Market Value
of the Shares subject to the ISO exceeds the Exercise
Price of the ISO.
(b) Exercise Price. The Exercise Price as to any
particular SAR shall not be less than the Market Value of the
Optioned Shares on the date of grant.
(c) Timing of Exercise. The provisions of Paragraph
8(c) regarding the period of exercisability of Options are
incorporated by reference herein, and shall determine the period
of exercisability of SARs.
(d) Exercise of SARs. An SAR granted hereunder shall be
exercisable at such times and under such conditions as shall be
permissible under the terms of the Plan and of the Agreement
granted to a Participant, provided that an SAR may not be
exercised for a fractional Share. Upon exercise of an SAR, the
Participant shall be entitled to receive, without payment to the
Company except for applicable withholding taxes, an amount equal
to the excess of (or, in the discretion of the Committee if
provided in the Agreement, a portion of) the excess of the then
aggregate Market Value of the number of Optioned Shares with
respect to which the Participant exercises the SAR, over the
aggregate Exercise Price of such number of Optioned Shares.
This amount shall be payable by the Company, in the discretion
of the Committee, in cash or in Shares valued at the then Market
Value thereof, or any combination thereof.
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(e) Procedure for Exercising SARs. To the extent not
inconsistent herewith, the provisions of Paragraph 8(b) as to
the procedure for exercising Options are incorporated by
reference, and shall determine the procedure for exercising
SARs.
11. EFFECT OF CHANGES IN COMMON STOCK SUBJECT TO THE PLAN.
(a) Recapitalizations; Stock Splits, Etc. The number
and kind of shares reserved for issuance under the Plan, and the
number and kind of shares subject to outstanding Awards, and the
Exercise Price thereof, shall be proportionately adjusted for
any increase, decrease, change or exchange of Shares for a
different number or kind of shares or other securities of the
Company which results from a merger, consolidation, recapita-
lization, reorganization, reclassification, stock dividend,
split-up, combination of shares, or similar event in which the
number or kind of shares is changed without the receipt or
payment of consideration by the Company.
(b) Transactions in which the Company is Not the
Surviving Entity. In the event of (i) the liquidation or
dissolution of the Company, (ii) a merger or consolidation in
which the Company is not the surviving entity, or (iii) the sale
or disposition of all or substantially all of the Company's
assets (any of the foregoing to be referred to herein as a
"Transaction"), all outstanding Awards, together with the
Exercise Prices thereof, shall be equitably adjusted for any
change or exchange of Shares for a different number or kind of
shares or other securities which results from the Transaction.
(c) Special Rule for ISOs. Any adjustment made pursuant
to subparagraphs (a) or (b)(1) hereof shall be made in such a
manner as not to constitute a modification, within the meaning
of Section 424(h) of the Code, of outstanding ISOs.
(d) Conditions and Restrictions on New, Additional, or
Different Shares or Securities. If, by reason of any adjustment
made pursuant to this Paragraph, a Participant becomes entitled
to new, additional, or different shares of stock or securities,
such new, additional, or different shares of stock or securities
shall thereupon be subject to all of the conditions and
restrictions which were applicable to the Shares pursuant to the
Award before the adjustment was made.
(e) Other Issuances. Except as expressly provided in
this Paragraph, the issuance by the Company or an Affiliate of
shares of stock of any class, or of securities convertible into
Shares or stock of another class, for cash or property or for
labor or services either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, shall not affect,
and no adjustment shall be made with respect to, the number,
class, or Exercise Price of Shares then subject to Awards or
reserved for issuance under the Plan.
12. NON-TRANSFERABILITY OF AWARDS.
Awards may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or
by the laws of descent and distribution. Notwithstanding the
foregoing, or any other provision of this Plan, a Participant
who holds Awards may transfer such Awards (but not Incentive
Stock Options) to his or her spouse, lineal ascendants, lineal
descendants, or to a duly established trust for the benefit of
one or more of these individuals. Awards so transferred may
thereafter be transferred only to the Participant who originally
received the grant or to an individual or trust to whom the
Participant could have initially transferred the Awards pursuant
to this Paragraph 12. Awards which are transferred pursuant to
this Paragraph 12 shall be exercisable by the transferee
according to the same terms and conditions as applied to the
Participant.
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13. TIME OF GRANTING AWARDS.
The date of grant of an Award shall, for all purposes, be
the later of the date on which the Committee makes the deter-
mination of granting such Award, and the Effective Date. Notice
of the determination shall be given to each Participant to whom
an Award is so granted within a reasonable time after the date
of such grant.
14. EFFECTIVE DATE.
The Plan shall become effective immediately upon its
approval by a favorable vote of stockholders owning at least a
majority of the total votes cast at a duly called meeting of the
Company's stockholders held in accordance with applicable laws.
No Awards may be made prior to approval of the Plan by the
stockholders of the Company.
15. MODIFICATION OF AWARDS.
At any time, and from time to time, the Board may autho-
rize the Committee to direct execution of an instrument
providing for the modification of any outstanding Award,
provided no such modification shall confer on the holder of said
Award any right or benefit which could not be conferred on him
by the grant of a new Award at such time, or impair the Award
without the consent of the holder of the Award.
16. AMENDMENT AND TERMINATION OF THE PLAN.
The Board may from time to time amend the terms of the
Plan and, with respect to any Shares at the time not subject to
Awards, suspend or terminate the Plan. No amendment, suspension
or termination of the Plan shall, without the consent of any
affected holders of an Award, alter or impair any rights or
obligations under any Award theretofore granted.
17. CONDITIONS UPON ISSUANCE OF SHARES.
(a) Compliance with Securities Laws. Shares of Common
Stock shall not be issued with respect to any Award unless the
issuance and delivery of such Shares shall comply with all
relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, any applicable state securities law, and
the requirements of any stock exchange upon which the Shares may
then be listed.
(b) Special Circumstances. The inability of the Company
to obtain approval from any regulatory body or authority deemed
by the Company's counsel to be necessary to the lawful issuance
and sale of any Shares hereunder shall relieve the Company of
any liability in respect of the non-issuance or sale of such
Shares. As a condition to the exercise of an Option or SAR, the
Company may require the person exercising the Option or SAR to
make such representations and warranties as may be necessary to
assure the availability of an exemption from the registration
requirements of federal or state securities law.
(c) Committee Discretion. The Committee shall have the
discretionary authority to impose in Agreements such
restrictions on Shares as it may deem appropriate or desirable,
including but not limited to the authority to impose a right of
first refusal or to establish repurchase rights or both of these
restrictions.
18. RESERVATION OF SHARES.
The Company, during the term of the Plan, will reserve and
keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
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19. WITHHOLDING TAX.
The Company's obligation to deliver Shares upon exercise
of Options and/or SARs shall be subject to the Participant's
satisfaction of all applicable federal, state and local income
and employment tax withholding obligations. The Committee, in
its discretion, may permit the Participant to satisfy the
obligation, in whole or in part, by irrevocably electing to have
the Company withhold Shares, or to deliver to the Company Shares
that he already owns, having a value equal to the amount
required to be withheld. The value of the Shares to be
withheld, or delivered to the Company, shall be based on the
Market Value of the Shares on the date the amount of tax to be
withheld is to be determined. As an alternative, the Company
may retain, or sell without notice, a number of such Shares
sufficient to cover the amount required to be withheld.
20. NO EMPLOYMENT OR OTHER RIGHTS.
In no event shall an Employee's or Director's eligibility
to participate or participation in the Plan create or be deemed
to create any legal or equitable right of the Employee,
Director, or any other party to continue service with the
Company, the Association, or any Affiliate of such corporations.
Except to the extent provided in Paragraphs 6(b) and 9(a), no
Employee or Director shall have a right to be granted an Award
or, having received an Award, the right to again be granted an
Award. However, an Employee or Director who has been granted an
Award may, if otherwise eligible, be granted an additional Award
or Awards.
21. GOVERNING LAW.
The Plan shall be governed by and construed in accordance
with the laws of the State of Colorado, except to the extent
that federal law shall be deemed to apply.
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Exhibit B
HIGH COUNTRY BANCORP, INC.
MANAGEMENT RECOGNITION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
1.01 The Company hereby establishes this Plan upon the
terms and conditions hereinafter stated.
1.02 Through acceptance of their appointment to the
Committee, each member of the Committee hereby accepts his or
her appointment hereunder upon the terms and conditions
hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to reward and retain
personnel of experience and ability in key positions of
responsibility by providing Employees and Directors of the
Company, the Association, and their Affiliates with a
proprietary interest in the Company, and as compensation for
their past contributions to the Association, and as an incentive
to make such contributions in the future.
ARTICLE III
DEFINITIONS
The following words and phrases when used in this Plan
with an initial capital letter, shall have the meanings set
forth below unless the context clearly indicates otherwise.
Wherever appropriate, the masculine pronoun shall include the
feminine pronoun and the singular shall include the plural.
3.01 "Affiliate" shall mean any "parent corporation" or
"subsidiary corporation" of the Company, as such terms are
defined in Section 424(e) and (f), respectively, of the Internal
Revenue Code of 1986, as amended.
3.02 "Association" means Salida Building & Loan
Association.
3.03 "Beneficiary" means the person or persons designated
by a Participant to receive any benefits payable under the Plan
in the event of such Participant's death. Such person or
persons shall be designated in writing on forms provided for
this purpose by the Committee and may be changed from time to
time by similar written notice to the Committee. In the absence
of a written designation, the Beneficiary shall be the
Participant's surviving spouse, if any or if none, his estate.
3.04 "Board" means the Board of Directors of the Company.
3.05 "Change in Control" shall mean any one of the
following events: (i) the acquisition of ownership, holding or
power to vote more than 25% of the voting stock of the
Association or the Holding Company thereof, (ii) the acquisition
of the ability to control the election of a majority of the
Association's or the Company's Directors, (iii) the acquisition
of a controlling influence over the management or policies of
the Association or of the Company by any person or by persons
acting as a "group" (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934), or (iv) during any period of
two consecutive years, individuals (the "Continuing Directors")
who at the beginning of such period constitute the Board of
Directors of the Association or of the Company (the "Existing
Board") cease for any reason to constitute at least two-thirds
thereof, provided that any individual whose election or
nomination for election as a member of the Existing Board was
approved by a vote of at least two-thirds of the
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Continuing Directors then in office shall be considered a
Continuing Director. For purposes of this paragraph only, the
term "person" refers to an individual or a corporation,
partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein.
Notwithstanding the foregoing, a "Change in Control" shall
not be deemed to occur solely by reason of a transaction in
which the Association converts to the stock form of
organization, or creates an independent holding company in
connection therewith. The decision of the Board as to whether a
Change in Control has occurred shall be conclusive and binding.
3.06 "Committee" means the Management Recognition Plan
Committee appointed by the Board pursuant to Article IV hereof.
3.07 "Common Stock" means shares of the common stock of
the Company.
3.08 "Company" means High Country Bancorp, Inc.
3.09 "Continuous Service" shall mean the absence of any
interruption or termination of service as an Employee or
Director of the Company or an Affiliate. Continuous Service
shall not be considered interrupted in the case of sick leave,
military leave or any other leave of absence approved by the
Company in the case of transfers between payroll locations of
the Company or between the Company, an Affiliate or a successor,
or in the case of a Director's performance of services in an
emeritus or advisory capacity.
3.10 "Date of Conversion" means the date of the
conversion of the Association from mutual to stock form.
3.11 "Director" means a member of the Board, and any
member of the board of directors of an Affiliate whose members
the Board has by resolution designated as being eligible for
participation in this Plan.
3.12 "Disability" shall mean a physical or mental
condition, which in the sole and absolute discretion of the
Committee, is reasonably expected to be of indefinite duration
and to substantially prevent a Participant from fulfilling his
or her duties or responsibilities to the Company or an
Affiliate.
3.13 "Effective Date" means the date on which the Plan
first becomes effective, as determined under Section 8.07
hereof.
3.14 "Employee" means any person who is employed by the
Company or an Affiliate.
3.15 "Non-Employee Director" shall have the meaning
provided in Rule 16b-3 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended.
3.16 "Participant" means an Employee or Director who
holds a Plan Share Award.
3.17 "Plan" means this High Country Bancorp, Inc.
Management Recognition Plan.
3.18 "Plan Shares" means shares of Common Stock held in
the Trust which are awarded or issuable to a Participant
pursuant to the Plan.
3.19 "Plan Share Award" means a right granted under this
Plan to receive Plan Shares.
3.20 "Plan Share Reserve" means the shares of Common
Stock held by the Trustee pursuant to Sections 5.02 and 5.03.
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3.21 "Trust" and "Trust Agreement" mean that agreement
entered into pursuant to the terms hereof between the Company
and the Trustee, and "Trust" means the trust created thereunder.
3.22 "Trustee" means that person(s) or entity appointed
by the Board pursuant to the Trust Agreement to hold legal title
to the Plan assets for the purposes set forth herein.
3.23 "Year of Service" shall mean a full twelve-month
period, measured from the date of a Plan Share Award and each
annual anniversary of that date, during which a Participant's
Continuous Service has not terminated for any reason.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 ROLE AND POWERS OF THE COMMITTEE. The Plan shall
be administered and interpreted by the Committee, which shall
consist of not less than two members of the Board who are Non-
Employee Directors. In the absence at any time of a duly
appointed Committee, the Plan shall be administered by those
members of the Board who are Non-Employee Directors, and by the
Board if there are less than two Non-Employee Directors.
The Committee shall have all of the powers allocated to it
in this and other Sections of the Plan. Except as limited by
the express provisions of the Plan or by resolutions adopted by
the Board, the Committee shall have sole and complete authority
and discretion (i) to make Plan Share Awards to such Employees
as the Committee may select, (ii) to determine the form and
content of Plan Share Awards to be issued under the Plan, (iii)
to interpret the Plan, (iv) to prescribe, amend and rescind
rules and regulations relating to the Plan, and (v) to make
other determinations necessary or advisable for the
administration of the Plan. The Committee shall have and may
exercise such other power and authority as may be delegated to
it by the Board from time to time. Subject to Section 4.02, the
interpretation and construction by the Committee of any
provisions of the Plan or of any Plan Share Award granted
hereunder shall be final and binding. The Committee shall act
by vote or written consent of a majority of its members, and
shall report its actions and decisions with respect to the Plan
to the Board at appropriate times, but in no event less than one
time per calendar year. The Committee may recommend to the
Board one or more persons or entity to act as Trustee(s) in
accordance with the provisions of this Plan and the Trust.
4.02 ROLE OF THE BOARD. The members of the Committee
shall be appointed or approved by, and will serve at the
pleasure of, the Board. The Board may in its discretion from
time to time remove members from, or add members to, the
Committee. The Board shall have all of the powers allocated to
it in this and other Sections of the Plan, may take any action
under or with respect to the Plan which the Committee is
authorized to take, and may reverse or override any action taken
or decision made by the Committee under or with respect to the
Plan, provided, however, that the Board may not revoke any Plan
Share Award already made or impair a participant's vested rights
under a Plan Share Award. Members of the Board who are eligible
for or who have been granted Plan Share Awards (other than
pursuant to Section 6.04) may not vote on any matters affecting
the administration of the Plan or the grant of Plan Shares or
Plan Share Awards (although such members may be counted in
determining the existence of a quorum at any meeting of the
Board during which actions with regard thereto are taken).
Further, with respect to all actions taken by the Board in
regard to the Plan, such action shall be taken by a majority of
the Board where such a majority of the directors acting in the
matter are Non-Employee Directors.
4.03 LIMITATION OF LIABILITY. No member of the Board or
the Committee or the Trustee(s) shall be liable for any
determination made in good faith with respect to the Plan or any
Plan Shares or Plan Share Awards granted under it. If a member
of the Board or the Committee or any Trustee is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of anything done or
not done by him in such capacity under or with respect to the
Plan, the Company shall indemnify such member, subject to the
indemnification provisions of 12 C.F.R. Section 545.121, against
expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably
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incurred by him or her in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he
or she reasonably believed to be in the best interests of the
Company and its Affiliates and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful.
ARTICLE V
CONTRIBUTIONS; PLAN SHARE RESERVE
5.01 AMOUNT AND TIMING OF CONTRIBUTIONS. The Board shall
determine the amounts (or the method of computing the amounts)
to be contributed by the Company to the Trust, provided that the
Association may also make contributions to the Trust. Such
amounts shall be paid to the Trustee at the time of
contribution. No contributions to the Trust by Employees shall
be permitted.
5.02 INVESTMENT OF TRUST ASSETS; MAXIMUM PLAN SHARE
Awards. The Trustee shall invest Trust assets only in
accordance with the Trust Agreement; provided that the Trust
shall not purchase, and Plan Share Awards shall not be made with
respect to, more than 39,675 Plan Shares, which equals three
percent (3%) of the number of Shares issued on the Date of
Conversion. Common stock purchased by the Trust may be newly
issued shares, treasury shares, or shares held in a grantor
trust.
5.03 EFFECT OF ALLOCATIONS, RETURNS AND FORFEITURES UPON
PLAN SHARE RESERVES. Upon the allocation of Plan Share Awards
under Section 6.02, the Plan Share Reserve shall be reduced by
the number of Shares subject to the Awards so allocated. Any
Shares subject or attributable to an Award which may not be
earned because of a forfeiture by the Participant pursuant to
Section 7.01 shall be added to the Plan Share Reserve.
ARTICLE VI
ELIGIBILITY; ALLOCATIONS
6.01 ELIGIBILITY. Except as otherwise provided in
Section 6.04 hereof, the Committee shall make Plan Share Awards
only to Employees. In selecting those Employees to whom Plan
Share Awards will be granted and the number of shares covered by
such Awards, the Committee shall consider the position, duties
and responsibilities of the eligible Employees, the value of
their services to the Company and its Affiliates, and any other
factors the Committee may deem relevant.
6.02 ALLOCATIONS. The Committee will determine which
Employees will be granted discretionary Plan Share Awards, and
the number of Shares covered by each Plan Share Award, provided
that in no event shall any Awards be made which will violate the
governing instruments of the Association or its Affiliates or
any applicable federal or state law or regulation. In the event
Plan Shares are forfeited for any reason or additional shares of
Common Stock are purchased by the Trustee, the Committee may,
from time to time, determine which of the Employees referenced
in Section 6.01 above will be granted additional Plan Share
Awards to be awarded from the forfeited or acquired Plan Shares.
6.03 FORM OF ALLOCATION. As promptly as practicable
after a determination is made pursuant to Section 6.02 that a
Plan Share Award is to be made, the Committee shall notify the
Participant in writing of the grant of the Award, the number of
Plan Shares covered by the Award, and the terms upon which the
Plan Shares subject to the Award may be earned. The date on
which the Committee so notifies the Participant shall be
considered the date of grant of the Plan Share Awards. The
Committee shall maintain records as to all grants of Plan Share
Awards under the Plan.
6.04 AUTOMATIC GRANTS TO NON-EMPLOYEE DIRECTORS.
Notwithstanding any other provisions of this Plan, each Director
who is not an Employee but is a Director on the Effective Date
shall receive, on said date, a Plan Share Award for 1,983
Shares. Directors, including Non-Employee Directors who join
the Board after the Effective Date, are eligible to receive
discretionary Awards under the Plan. Plan Share Awards received
under the provisions of this Section shall become vested and
nonforfeitable according to the general rules set forth in
subsections (a), and (b) of
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Section 7.01, and the Committee shall have no discretion to
alter or accelerate said vesting requirements. Unless otherwise
inapplicable or inconsistent with the provisions of this
Section, the Plan Share Awards to be granted hereunder shall be
subject to all other provisions of this Plan.
6.05 AUTOMATIC GRANTS TO EMPLOYEES. On the Effective
Date, each of the following individuals shall receive a Plan
Share Award as to the number of Plan Shares listed below,
provided that such award shall not be made to an individual who
is not an Employee on the Effective Date:
Shares Subject to Plan
Employee Share Award
-------- ----------------------
Larry D. Smith 9,918
Scott G. Erchul 7,935
Frank L. DeLay 5,951
Plan Share Awards received under the provisions of this
Section shall become vested and nonforfeitable according to the
general rules set forth in subsections (a) and (b) of Section
7.01, and the Committee shall have no discretion to alter said
vesting requirements. Unless otherwise inapplicable or
inconsistent with the provisions of this Section, the Plan Share
Awards to be granted hereunder shall be subject to all other
provisions of this Plan.
6.06 ALLOCATIONS NOT REQUIRED. Notwithstanding anything
to the contrary in Sections 6.01 and 6.02, but subject to
Sections 6.04 and 6.05, no Employee or Director shall have any
right or entitlement to receive a Plan Share Award hereunder,
such Awards being at the total discretion of the Committee, nor
shall any Employees or Directors as a group have such a right.
The Committee may, with the approval of the Board (or, if so
directed by the Board) return all Common Stock in the Plan Share
Reserve to the Company at any time, and cease issuing Plan Share
Awards.
ARTICLE VII
EARNINGS AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 EARNING PLAN SHARES; FORFEITURES.
(a) GENERAL RULES. Unless the Committee specifically
eliminates any vesting requirement or imposes a different
vesting schedule, twenty-five percent (25%) of the Plan Shares
subject to a Plan Share Award shall be earned and become non-
forfeitable by each Participant upon the Effective Date, and an
additional 25% of the Plan Shares subject to a Plan Share Award
shall be earned and become non-forfeitable upon the
Participant's completion of each of three Years of Service after
the date of the Award.
(b) EXCEPTION FOR TERMINATIONS DUE TO RETIREMENT, DEATH,
DISABILITY, OR CHANGE IN CONTROL. Notwithstanding the general
rule contained in Section 7.01(a) above: (i) all Plan Shares
subject to a Plan Share Award held by a Participant whose
service with the Company or an Affiliate terminates due to the
Participant's retirement at or after age 55 with at least 15
years of service, death, or Disability shall be deemed earned
and 100% vested as of the Participant's last day of service with
the Company or an Affiliate, and (ii) all Plan Shares subject to
a Plan Share Award held by a Participant shall be deemed earned
and 100% vested as of a Change in Control or, if earlier, the
execution of an agreement to effect a Change in Control.
7.02 ACCRUAL OF DIVIDENDS. Whenever Plan Shares are paid
to a Participant or Beneficiary under Section 7.03, such
Participant or Beneficiary shall also be entitled to receive,
with respect to each Plan Share paid, an amount equal to any
cash dividends (including special large and nonrecurring
dividends, including one that has the effect of a return of
capital to the Company's stockholders) and a number of shares of
Common Stock equal to any stock dividends, declared and paid
with respect to a share of Common Stock between the date the
relevant Plan Share Award was initially granted to such
Participant and the date the Plan Shares are being distributed.
There shall also
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be distributed an appropriate amount of net earnings, if any, of
the Trust with respect to any cash dividends so paid out.
7.03 DISTRIBUTION OF PLAN SHARES.
(a) TIMING OF DISTRIBUTIONS: GENERAL RULE. Except as
provided in Subsections (c), and (d) below, the Trustee shall
distribute Plan Shares and accumulated cash from dividends and
interest to the Participant or his Beneficiary, as the case may
be, as soon as practicable after they have been earned. No
fractional shares shall be distributed.
(b) FORM OF DISTRIBUTION. The Trustee shall distribute
all Plan Shares, together with any shares representing stock
dividends, in the form of Common Stock. One share of Common
Stock shall be given for each Plan Share earned. Payments
representing cash dividends (and earnings thereon) shall be made
in cash.
(c) WITHHOLDING. The Trustee shall withhold from any
cash payment made under this Plan sufficient amounts to cover
any applicable withholding and employment taxes, and if the
amount of such cash payment is not sufficient, the Trustee shall
require the Participant or Beneficiary to pay to the Trustee the
amount required to be withheld as a condition of delivering the
Plan Shares. The Trustee shall pay over to the Company or
Affiliate which employs or employed such Participant any such
amount withheld from or paid by the Participant or Beneficiary.
(d) TIMING: EXCEPTION FOR 10% SHAREHOLDERS.
Notwithstanding Subsections (a) and (b) above, no Plan Shares
may be distributed prior to the date which is five (5) years
from the Date of Conversion to the extent the Participant or
Beneficiary, as the case may be, would after receipt of such
Shares own in excess of ten percent (10%) of the issued and
outstanding shares of Common Stock unless such action is
approved in advance by a majority vote of non-employee directors
of the Board. To the extent this limitation would delay the
date on which a Participant receives Plan Shares, the
Participant may elect to receive from the Trust, in lieu of
vested Plan Shares, a cash amount equal to the fair market value
of such Plan Shares. Any Plan Shares remaining undistributed
solely by reason of the operation of this Subsection (d) shall
be distributed to the Participant or his Beneficiary on the date
which is five years from the Date of Conversion.
(e) REGULATORY EXCEPTIONS. No Plan Shares shall be
distributed unless and until all of the requirements of all
applicable law and regulation shall have been fully complied
with, including the receipt of approval of the Plan by the
stockholders of the Company by such vote, if any, as may be
required by applicable law and regulations.
7.04 VOTING OF PLAN SHARES. All shares of Common Stock
held by the Trust (whether or not subject to a Plan Share Award)
shall be voted by the Trustee in the same proportion as the
trustee of the Company's Employee Stock Ownership Plan votes
Common Stock held in the trust associated therewith, and in the
absence of any such voting, shall be voted in the manner
directed by the Board.
7.05. DEFERRAL ELECTIONS BY PARTICIPANTS. At any time
that is at least six months prior to the date on which a
Participant becomes vested in the first 25% of his or her Plan
Share Award, the Participant may irrevocably elect, on the form
attached hereto as Exhibit "A" (the "Election Form"), to defer
the receipt of all or a percentage of the Plan Shares that would
otherwise be transferred to the Participant upon the vesting of
such award (the "Deferred Shares"). The MRP Committee shall
establish and maintain an individual account in the name of each
Participant who files an Election Form for the purpose of
tracking deferred earnings attributable to cash dividends paid
on Deferred Shares (the "Cash Account"). On the last day of
each fiscal year of the Company, the Committee shall credit to
the Participant's Cash Account earnings on the balance of the
Cash Account at a rate equal to the yield on Common Stock, as
determined from time to time by the MRP Committee in its sole
discretion.
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The Deferred Shares, together with any cash or stock
dividends attributable thereto (the "Deferred Earnings"), will
be distributed to the Participant in accordance with the
deferral schedule (the "Deferral Schedule") selected by the
Participant in his or her Election Form. The Trustees shall
hold each Participant's Deferred Shares and Deferred Earnings in
the Trust until distribution is required pursuant to the
election set forth in the Participant's Election Form.
The Trustee shall distribute a Participant's Deferred
Shares and Deferred Earnings in accordance with the
Participant's Election Form, unless the Participant terminates
Continuous Service for a reason other than the Participant's (i)
death, (ii) Disability, (iii) early retirement after age 55 and
completion of 15 or more years of Continuous Service, or (iv)
normal retirement after age 65. Within 90 days after receiving
notice of a Participant's death, the Trustee shall distribute
any balance of the Participant's Deferred Shares and Deferred
Earnings to the Participant's designated beneficiary, if living,
or if such designated beneficiary is deceased or the Participant
failed to designate a beneficiary, to the Participant's estate.
If a Participant's Continuous Service terminates for a reason
other than the Participant's death, Disability, early
retirement, or normal retirement, the Participant's Deferred
Shares and Deferred Earnings shall be distributed to the
Participant in a lump sum occurring as soon as reasonably
practicable. The distribution provisions of a Participant's
Election Form shall become irrevocable on the date that occurs
(i) one year before the Participant's termination of Continuous
Service for a reason other than death, and (ii) on the
Participant's death if that terminates the Participant's
Continuous Service.
Notwithstanding any other provision of the Plan or a
Participant's Election Form, in the event the Participant
suffers an unforeseeable emergency hardship within the
contemplation of this paragraph, the Participant may apply to
the Committee for a distribution of all or a portion of his
Deferred Shares and Deferred Earnings prior to the basis for any
such distribution. The hardship must result from a sudden and
unexpected illness or accident of the Participant or a dependent
of the Participant, casualty loss of property, or other similar
conditions beyond the control of the Participant. Examples of
purposes which are not considered hardships include post-
secondary school expenses or the desire to purchase a residence.
In no event will a distribution be made to the extent the
hardship could be relieved through reimbursement or compensation
by insurance or otherwise, or by liquidation of the
Participant's nonessential assets to the extent such liquidation
would not itself cause a severe financial hardship. The amount
of any distribution hereunder shall be limited to the amount
necessary to relieve the Participant's financial hardship. The
determination of whether a Participant has a qualifying hardship
and the amount which qualifies for distribution, if any, shall
be made by the Committee in its sole discretion. The Committee
may require evidence of the purpose and amount of the need, and
may establish such application or other procedures as it deems
appropriate.
No Participant may assign his or her claim to Deferred
Shares and Deferred Earnings during his or her lifetime, and any
deferral election made hereunder shall be irrevocable. A
Participant's right to Deferred Shares and Deferred Earnings
shall at all times constitute an unsecured promise of the
Company to pay benefits as they come due. The right of the
Participant or his or her beneficiary to receive benefits
hereunder shall be solely an unsecured claim against the general
assets of the Company. Neither the Participant nor his or her
beneficiary shall have any claim against or rights in any
specific assets or other fund of the Company, and any assets in
the Trust shall be deemed general assets of the Company.
All distributions made by the Company and/or the Trustees
pursuant to elections made hereunder shall be subject to
applicable federal, state, and local tax withholding and to such
other deductions as shall at the time of such payment be
required under any income tax or other law, whether of the
United States or any other jurisdiction, and, in the case of
payments to a beneficiary, the delivery to the Committee and/or
Trustees of all necessary waivers, qualifications and other
documentation.
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ARTICLE VIII
MISCELLANEOUS
8.01 ADJUSTMENTS FOR CAPITAL CHANGES.
(a) RECAPITALIZATIONS; STOCK SPLITS, ETC. The number
and kind of shares which may be purchased under the Plan, and
the number and kind of shares subject to outstanding Plan Share
Awards, shall be proportionately adjusted for any increase,
decrease, change or exchange of shares of Common Stock for a
different number or kind of shares or other securities of the
Company which results from a merger, consolidation, recapita-
lization, reorganization, reclassification, stock dividend,
split-up, combination of shares, or similar event in which the
number or kind of shares is changed without the receipt or
payment of consideration by the Company.
(b) TRANSACTIONS IN WHICH THE COMPANY IS NOT THE
SURVIVING ENTITY. In the event of (i) the liquidation or
dissolution of the Company, (ii) a merger or consolidation in
which the Company is not the surviving entity, or (iii) the sale
or disposition of all or substantially all of the Company's
assets (any of the foregoing to be referred to herein as a
"Transaction"), all outstanding Plan Share Awards shall be
adjusted for any change or exchange of shares of Common Stock
for a different number or kind of shares or other securities
which results from the Transaction.
(c) CONDITIONS AND RESTRICTIONS ON NEW, ADDITIONAL, OR
DIFFERENT SHARES OR SECURITIES. If, by reason of any adjustment
made pursuant to this Section, a Participant becomes entitled to
new, additional, or different shares of stock or securities,
such new, additional, or different shares of stock or securities
shall thereupon be subject to all of the conditions and
restrictions which were applicable to the shares pursuant to the
Plan Share Award before the adjustment was made. In addition,
the Committee shall have the discretionary authority to impose
on the Shares subject to Plan Share Awards to Employees such
restrictions as the Committee may deem appropriate or desirable,
including but not limited to a right of first refusal, or
repurchase option, or both of these restrictions.
(d) OTHER ISSUANCES. Except as expressly provided in
this Section, the issuance by the Company or an Affiliate of
shares of stock of any class, or of securities convertible into
shares of Common Stock or stock of another class, for cash or
property or for labor or services either upon direct sale or
upon the exercise of rights or warrants to subscribe therefor,
shall not affect, and no adjustment shall be made with respect
to, the number or class of shares of Common Stock then subject
to Plan Share Awards or reserved for issuance under the Plan.
8.02 AMENDMENT AND TERMINATION OF PLAN. The Board may,
by resolution, at any time amend or terminate the Plan; provided
that no amendment or termination of the Plan shall, without the
written consent of a Participant, impair any rights or
obligations under a Plan Share Award theretofore granted to the
Participant.
The power to amend or terminate the Plan in accordance
with this Section 8.02 shall include the power to direct the
Trustee to return to the Company all or any part of the assets
of the Trust, including shares of Common Stock held in the Plan
Share Reserve. However, the termination of the Trust shall not
affect a Participant's right to earn Plan Share Awards and to
receive a distribution of Common Stock relating thereto,
including earnings thereon, in accordance with the terms of this
Plan and the grant by the Committee or the Board.
8.03 NONTRANSFERABILITY. Plan Share Awards may not be
sold, pledged, assigned, hypothecated, transferred or disposed
of in any manner other than by will or by the laws of descent
and distribution. Notwithstanding the foregoing, or any other
provision of this Plan, a Participant who holds Plan Share
Awards may transfer such Awards to his or her spouse, lineal
ascendants, lineal descendants, or to a duly established trust
for the benefit of one or more of these individuals. Plan Share
Awards so transferred may thereafter be transferred only to the
Participant who originally received the grant or to an
individual or trust to whom the Participant could have initially
transferred the Awards pursuant to this Section 8.03. Plan
Share Awards which are transferred pursuant to this Section 8.03
shall be exercisable by the transferee according to the same
terms and conditions as applied to the Participant.
B-8
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<PAGE>
8.04 NO EMPLOYMENT OR OTHER RIGHTS. Neither the Plan nor
any grant of a Plan Share Award or Plan Shares hereunder nor any
action taken by the Trustee, the Committee or the Board in
connection with the Plan shall create any right, either express
or implied, on the part of any Employee or Director to continue
in the service of the Company, the Association, or an Affiliate
thereof.
8.05 VOTING AND DIVIDEND RIGHTS. No Participant shall
have any voting or dividend rights or other rights of a
stockholder in respect of any Plan Shares covered by a Plan
Share Award prior to the time said Plan Shares are actually
distributed to him.
8.06 GOVERNING LAW. The Plan and Trust shall be governed
and construed under the laws of the State of Colorado to the
extent not preempted by Federal law.
8.07 EFFECTIVE DATE. The Plan shall become effective
immediately upon its approval by a favorable vote of
stockholders of the Company who own at least a majority of the
total votes cast at a duly called meeting of the Company's
stockholders held in accordance with applicable laws. In no
event shall Plan Share Awards be made prior to the Effective
Date.
8.08 TERM OF PLAN. This Plan shall remain in effect
until the earlier of (i) termination by the Board, or (ii) the
distribution of all assets of the Trust. Termination of the
Plan shall not affect any Plan Share Awards previously granted,
and such Awards shall remain valid and in effect until they have
been earned and paid, or by their terms expire or are forfeited.
8.09 TAX STATUS OF TRUST. It is intended that (i) the
Trust associated with the Plan be treated as a grantor trust of
the Company under the provisions of Section 671 et seq. of the
Code, as the same may be amended from time to time, and (ii)
that in accordance with Revenue Procedure 92-65 (as the same may
be amended from time to time), Participants have the status of
general unsecured creditors of the Company, the Plan constitutes
a mere unfunded promise to make benefit payments in the future,
the Plan is unfunded for tax purposes and for purposes of Title
I of the Employee Retirement Income Security Act of 1974, as
amended, and the Trust has been and will continue to be
maintained in conformity with Revenue Procedure 92-64 (as the
same may be amended from time to time).
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REVOCABLE PROXY
HIGH COUNTRY BANCORP, INC.
______________________________
ANNUAL MEETING OF STOCKHOLDERS
December 15, 1998
______________________________
The undersigned hereby appoints Larry D. Smith, Robert B.
Mitchell, and Timothy R. Glenn with full powers of substitution
to act, as attorneys and proxies for the undersigned, to vote
all shares of Common Stock of High Country Bancorp, Inc. which
the undersigned is entitled to vote at the Annual Meeting of
Stockholders (the "Annual Meeting"), to be held at the Salida
Senior Citizens Center, 305 F Street, Salida, Colorado on
Tuesday, December 15, 1998 at 5:00 p.m., local time, and at any
and all adjournments thereof, as indicated below and in
accordance with the determination of a majority of the Board of
Directors with respect to other matters which come before the
Annual Meeting.
VOTE
FOR WITHHELD
--- --------
1. The election as directors of all
nominees listed below (except as
marked to the contrary below). [ ] [ ]
For three-year Terms:
Scott G. Erchul
Philip W. Harsh
For a one-year Term:
Richard A. Young
INSTRUCTION: TO WITHHOLD YOUR VOTE
FOR ANY INDIVIDUAL NOMINEE, INSERT THAT
NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
_____________________
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
2. Approval of the High Country Bancorp, Inc.
1998 Stock Option and Incentive Plan. [ ] [ ] [ ]
3. Approval of the High Country Bancorp, Inc.
Management Recognition Plan. [ ] [ ] [ ]
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ABOVE
LISTED PROPOSITIONS.
________________________________________________________________
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ABOVE LISTED
PROPOSITIONS. IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL
MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY
IN ACCORDANCE WITH THE DETERMINATION OF A MAJORITY OF THE BOARD
OF DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS
OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING.
THIS PROXY CONFERS DISCRETIONARY AUTHORITY ON THE HOLDERS
THEREOF TO VOTE WITH RESPECT TO THE ELECTION OF ANY PERSONS AS
DIRECTORS WHERE THE NOMINEES ARE UNABLE TO SERVE OR FOR GOOD
CAUSE WILL NOT SERVE AND MATTERS INCIDENT TO THE CONDUCT OF THE
ANNUAL MEETING.
________________________________________________________________
<PAGE>
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the
Annual Meeting or at any adjournment thereof and after notifica-
tion to the Secretary of the Company at the Annual Meeting of
the stockholder's decision to terminate this proxy, then the
power of said attorneys and proxies shall be deemed terminated
and of no further force and effect. The undersigned hereby
revokes any and all proxies heretofore given with respect to the
shares of Common Stock held of record by the undersigned.
The undersigned acknowledges receipt from the Company prior
to the execution of this proxy of a Notice of Annual Meeting,
the Company's Proxy Statement for the Annual Meeting, dated
November 16, 1998, and an Annual Report to Stockholders for the
1998 fiscal year.
Dated: _______________________, 1998
__________________________ __________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
__________________________ __________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on the envelope in
which this card was mailed. When signing as attorney, executor,
administrator, trustee or guardian, please give your full title.
If shares are held jointly, each holder should sign.
________________________________________________________________
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PREPAID ENVELOPE.
________________________________________________________________
