_________________________________________________
PROXY DESIGNATION AND INSTRUCTION CARD
_________________________________________________
ZION'S COOPERATIVE MERCANTILE INSTITUTION
Salt Lake City, Utah 84137
THIS PROXY DESIGNATION AND INSTRUCTION IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
to be held on
May 24, 1995
The undersigned hereby appoints Richard H. Madsen and Keith C. Saunders, or
either of them, jointly or severally as agent and Proxy for the undersigned,
with full power of substitution to vote the shares of Zion's Cooperative
Mercantile Institution's common stock held by the undersigned to the same
extent which the undersigned would be entitled to vote such shares if
personally present at the Annual Meeting of Stockholders of Zion's Cooperative
Mercantile Institution, or any adjournment thereof, to be held in the
Memorial House in Memory Grove, 485 No. Canyon Road, Salt Lake City, Utah,
on Wednesday, the 24th day of May, 1995, at 2:30 o'clock P.M. for the purpose
of electing Directors and for the purpose of conducting any other business
properly brought before the Meeting.
Without limiting the general powers hereby conferred, the undersigned instructs
said Proxies to vote as specified on the reverse side hereof. Shares represented
by signed Proxy Designations & Instructions will be voted: (1) as specified on
the matters listed on the reverse side of this form; (2) in accordance with the
Directors' recommendations where a choice is not specified; and (3) in
accordance with the judgment of the Proxies on any other matters that
properly come before the meeting.
(Please complete and sign on reverse side)
1. ELECTION OF DIRECTORS FOR all nominees listed below (except)
WITHHOLD AUTHORITY to vote
(The Directors Recommend as marked to the contrary below) __
all nominees listed below __
a Vote FOR All Nominees)
(INSTRUCTION: TO VOTE FOR SOME BUT WITHHOLD AUTHORITY TO VOTE FOR ANY OTHER
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME
IN THE LIST BELOW AS TO WHICH YOU WITHHOLD AUTHORITY.)
R. Barry Arnold, Spencer F. Eccles, Lela Ence, A. Blaine Huntsman, James S.
Jardine, Patricia Madsen, Richard H. Madsen, O. Don Ostler, L. Tom Perry, and
Keith C. Saunders.
IMPORTANT: Please sign exactly as your name appears.
DATED:_____________________________, 1995
When shares are held by joint tenants, both should sign.
When signing as attorney, as executor, administrator,
__________________________________________
trustee or guardian, please give full title as such.
If(Stockholder's Signature) a corporation, please sign in full
corporate name
by__________________________________________
President or other authorized officer. If a partnership, (Joint Stockholder's
Signature {if any})
please sign in partnership name by authorized person.
___________________________________________________________
PLEASE MARK, SIGN, DATE AND
RETURN THIS PROXY
CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE.
PLEASE INDICATE ANY
CHANGE OF ADDRESS __________________________________________________
(Street and Number) __________________________________________________
(City) (State) (Zip Code)
ZION'S COOPERATIVE MERCANTILE INSTITUTION
2200 South 900 West
Salt Lake City, Utah 84137
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 24, 1995
To the Shareholders of
ZION'S COOPERATIVE MERCANTILE INSTITUTION
Pursuant to the laws of the State of Utah and its Bylaws, the Annual
Meeting of the Stockholders of Zion's Cooperative Mercantile Institution ("the
Corporation") will be held in the Memorial House in Memory Grove, 485 No. Canyon
Road, Salt Lake City, Utah, on Wednesday, May 24, 1995 at 2:30 p.m. for the
following purposes:
1. To elect a Board of Directors for the ensuing year, and
2. To transact such other business as may properly come before the
meeting and any adjournments thereof.
The close of business on Friday, April 14, 1995, was fixed by the Board of
Directors as the time for the determination of the shareholders of record
entitled to notice of and to vote at the Annual Meeting and any and all
adjournments thereof.
We hope that all shareholders who can conveniently do so will attend the
Annual Meeting in person. Whether or not you expect to attend, it will
facilitate the conduct of the Corporation's business if you will immediately
sign the enclosed proxy instruction card and return it in the envelope
provided in order that your shares may be represented at the Annual Meeting.
No postage is required if the proxy instruction card is mailed in the
United States.
By ORDER OF THE BOARD OF DIRECTORS
Dated at Salt Lake City, Utah
April 14, 1995
KEITH C. SAUNDERS
Executive Vice President and Secretary
<PAGE>
Z C M I
ZION'S COOPERATIVE MERCANTILE INSTITUTION
2200 South 900 West
Salt Lake City, Utah 84137
PROXY STATEMENT
May 1, 1995
GENERAL INFORMATION FOR SHAREHOLDERS
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Zion's Cooperative Mercantile Institution, a
Utah corporation (hereinafter called the "Corporation") of Proxy Designations
and Instructions for use at the Corporation's Annual Meeting of Stockholders
to be held in the Memorial House in Memory Grove, 485 No. Canyon Road,
Salt Lake City, Utah on Wednesday, May 24, 1995 at 2:30 p.m., and at any
and all adjournments thereof.
A Proxy Designation and Instruction Card ("Proxy Card") is enclosed for
your use in voting at the Annual Meeting. You are requested to date and
sign the enclosed Proxy Card, and to return it in the envelope provided.
All duly executed Proxy Cards received prior to the Annual Meeting will have
the shares represented thereby voted in accordance with the choices
specified therein. As to any matter for which no choice has been specified
in a duly executed Proxy Card, the shares represented thereby will be voted
at the Meeting or any adjournment thereof or election as directors all of
the nominees listed herein, and otherwise as deemed appropriate by the
Proxies on other business properly coming before the meeting. Any
shareholder signing a Proxy Card has the power to revoke his/her voting
directions at any time before the designated Proxies vote at the Annual
Meeting by notifying the Secretary of the Corporation in writing prior to
2:30 p.m. M.S.T. on May 24, 1995, or by voicing such revocation in person
at the Annual Meeting at the time voting occurs. If you wish to give your
proxy to someone other than the named Proxies on the enclosed Proxy Card,
you may do so by crossing out the names of all of the designated Proxies and
writing in the name of another person or persons (not more than two). The
signed Proxy Card must be presented at the Meeting by the person or persons
you have designated on the card.
The cost of preparing, assembling and mailing these proxy materials
will be borne by the Corporation. The solicitation of Proxy Designations
and Instructions by the Board of Directors is being made by mail, and in
addition may be made by officers and directors of the Corporation, or their
agents, in person or by telephone. No additional compensation will be given
to officers or directors for such solicitation. Non-employee agents of the
Board of Directors may be retained to assist in the proxy solicitation
process at a cost to the Corporation, if any, not expected to exceed $10,000.
Custodians of securities held for shareholders of record (e.g., banks,
brokers, etc.) may be paid their reasonable out-of-pocket expenses incurred in
forwarding proxy materials to shareholders.
This Proxy Statement, the enclosed Proxy Card, and the Corporation's
1994 Annual Report to Shareholders are being sent to Shareholders for delivery
beginning May 5, 1995. Shareholders who have not received a copy of any of
these materials should contact the Corporation at (801) 579-6404 to obtain a
copy.
VOTING AT THE ANNUAL MEETING
Shareholders of record will be entitled to one vote for each share of
Common Stock held at the close of business on April 14, 1995, which is the
record date for determination of the shareholders entitled to notice of and
to vote at the Annual Meeting and at any and all adjournments. Shares may
be voted, without cumulation, as to each Director-nominee, and as to any
other proposal for shareholder action as may properly come before the Annual
Meeting. On April 14, 1995, the Corporation had 2,149,851 shares (2,168,942
issued less 19,091 treasury shares) of Common Stock (par value $0.001)
issued and outstanding.
A plurality of votes cast at the Annual Meeting is required to elect each
Director. Only Proxies marked "FOR all nominees (except as marked to the
contrary below)" or "WITHHOLD AUTHORITY to vote all nominees below" will be
cast in the election of Directors and considered in determining the plurality
of votes in favor of a Director-nominee. Abstentions and broker non-votes
will not be counted in determining the shares voting or the plurality
of votes for any Director nominee.
The Corporation of the President of the Church of Jesus Christ of
Latter-Day Saints holds in excess of 50% of the outstanding shares of the
Corporation's Common Stock, and any Director-nominee supported by the
Church's vote will be elected based on the Church's majority share ownership.
PRINCIPAL SHAREHOLDERS
The following table provides information with respect to any person
known to the Corporation to be the beneficial owner (within the meaning of
applicable governmental regulations) of five percent (5%) or more of any
class of the Corporation's voting securities as of April 14, 1995:
<TABLE>
Table 1
Amount and Nature of Percent
Name and Address Title of Class Beneficial Ownership of Class
<S> <C> <C> <C>
Corporation of the Common Stock 1,125,239 shares 52.34%
President, The Church
of Jesus Christ of
Latter-Day Saints
47 East South Temple
Salt Lake City, UT 84150
Richard H. Madsen & Common Stock 162,167 shares* 7.54%
Mary Louise M. Rawlings Co-TR
1300 Walker Center
175 South Main St.
Salt Lake City, UT 84111
_____________________
</TABLE>
*Includes 146,905 shares as to which Mr. Madsen shares voting and
investment power as a co-trustee of Francis A. Madsen Family Voting Trust.
MANAGEMENT OF THE CORPORATION
Board of Directors
The business of the Corporation is managed under the direction of its
Board of Directors. The Directors have responsibility for establishing broad
corporate policies and for the overall performance of the Corporation.
The Directors are not, however, involved in operating details on a day-to-day
basis. This day-to-day management is entrusted to the Executive Officers
elected by the Board of Directors. The Board is kept advised of the
Corporation's business through regular written reports, analyses, and
discussions with the Executive Officers of the Corporation.
The Board meets on a regularly scheduled basis during the year to review
significant developments affecting the Corporation and to act on matters
requiring Board approval. It also holds special meetings when an important
matter requires Board action between scheduled meetings. Members of senior
management are regularly invited to Board meetings to report on and discuss
their areas of responsibility. The Directors met six times as a full Board
during 1994. All Directors attended all of these meetings except Dr.
Huntsman who attended five meetings.
The Directors of the Corporation beneficially own, as a group, 258,184
shares of the Corporation's Common Stock (including 6,300 currently
exercisable but unexercised option shares), or 12% of the Corporation's
outstanding Common Stock as of April 14, 1995. Not included in this number
are the 1,125,239 shares held by the Church of Jesus Christ of
Latter-Day Saints as to which Mr. Perry disclaims beneficial ownership.
The Bylaws permit payment of Directors' expenses incurred in attending
meetings and some, but not all, of the Directors received reimbursement for
such expenses. Additionally, fees of $700 were paid to Directors for each
of the six meetings held.
The Executive Committee of the Board of Directors exercises the powers
of the Board in the management of the business and affairs of the Corporation
between the Board's regularly scheduled meetings. The Executive Committee
serves as the nominating committee for the election of Directors and,
although there are no formal procedures for shareholders to recommend
nominations, the Committee will consider any recommendations from
shareholders that may be made. The Executive Committee also functions as the
Retirement Committee and administers the plans and retirement programs of the
Corporation, including a review of the actuary reports, and reports to the
Board of Directors. Also, the Executive Committee makes compensation
recommendations to the Board for all corporate officers. The Executive
Committee keeps regular minutes of its meetings and reports to the Board at
the regular Directors' meetings. The Executive Committee met 11 times during
the year. All members attended all meetings except Mr. Jardine who attended
ten meetings. Members of the Executive Committee are paid an annual fee of
$6,000 for their service which is in addition to any other fees earned as a
Director of the Corporation.
The Audit Committee of the Board, which met twice during 1994, reports to
the Board of Directors with respect to various auditing and accounting
matters, the scope of the audit procedures, the performance of the internal
auditors, and accounting practices of the Corporation. All members attended
all meetings except Dr. Huntsman. Fees of $400 are paid to Committee
Members for each meeting held.
Information on Executive Officers
Set forth in Table 2, below, are the names, ages, positions and
beneficial ownership of shares (as of April 14, 1995) in the Corporation of
all Executive Officers, other than Messrs. Madsen, Saunders, and Arnold whose
biographical information is disclosed together with the other nominees for
Director in Table 6, below. Executive Officers serve until the election of
their successors by the Board of Directors.
Table 2 - Executive Officers of the Corporation
Ronald L. Culverwell, 59, is Treasurer and Assistant Secretary of the
Corporation. Mr. Culverwell is the beneficial owner of 150 shares of the
Corporation's Common Stock.
Nancy Mortensen, 52, is the Corporation's Vice President-Marketing.
Ms. Mortensen is the beneficial owner of 5,550 shares of the Corporation's
Common Stock, including 4,000 option shares exercisable within 60 days but
not yet exercised.
Darrell F. Robinette, 68, is the Corporation's Vice President-Stores.
Mr. Robinette is the beneficial owner of 8,000 shares of the Corporation's
Common Stock, including 1,000 option shares exercisable within 60 days but
not yet exercised.
All current Executive Officers as a group (7 persons), beneficially own
185,346 shares, or 8.6%, of the Corporation's Common Stock (of which 11,300
shares are option shares exercisable within 60 days but not yet exercised.)
COMPENSATION OF EXECUTIVE OFFICERS
The Executive Committee acts as the Compensation Committee of the Board of
Directors as to compensation of Executive Officers. Messrs. Madsen and
Saunders do not vote on Executive Officers compensation matters.
BASE SALARY. In assessing salaries and salary increases the primary
factors considered are: performance on the job, comparable salaries of
like jobs of similar size retail companies, and compensation that will help
attract, motivate and retain qualified executives.
Chief Executive Officer Salary Action. In an effort to pay Mr. Madsen a
salary more in line with the Commitee's view of his position, Mr. Madsen
was given base salary raises of 16.2%, 3%, and 8.6% respectively in 1992,
1993, and 1994.
Other Named Executive Officers. The other Executive Officers named in
Table 3 received increases ranging between 3% and 15.4% based on
subjective evaluations made by the Committee in consultation with
Mr. Madsen.
SHORT-TERM INCENTIVES. All the named Executive Officers participate in an
annual cash bonus plan. The bonuses awarded are 3% of the increase or
decrease in the Corporation's pretax profits from year to year added to or
subtracted from the previous year's bonus. Bonuses are distributed between
the officers based on base salary and rating points determined by an
officer's position in the Corporation. No bonuses were awarded in 1991
or 1992. Bonuses awarded in 1993 and 1994 amounted to $90,000 and $191,950
respectively, for all executive officers combined.
LONG-TERM INCENTIVES. Stock options have been awarded based on a plan
approved by shareholders in 1982 at exercise prices ranging from $11.83 to
$16.50. The approved stock options have all been awarded. Because of the
continuing negative spread between the market price and the option price,
these options continue to provide a long-term incentive. (See Table 5)
The Committee believes that this compensation mix is in the best interests
of the shareholders and supports the business and financial objectives of
the organization.
L. Tom Perry, Chairman
Patricia Madsen
James S. Jardine
Richard H. Madsen
Keith C. Saunders
Table 3, below, is a statement of compensation paid by the Corporation
during 1994 to its Chief Executive Officer and to each of the four (4)
Executive Officers who were paid in excess of $100,000 in salary and bonus
during the year.
<TABLE>
Table 3 - SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation Awards
Name & Year Salary(1) Bonus Stock Options/ All Other
Principal Awards SARS Compensation
Position
<S> <C> <C> <C> <C> <C> <C>
Richard H 1994 $206,593 $65,044 -0- -0- $4,161
Madsen President 1993 $194,145 $30,575 -0- -0- $3,533
& CEO 1992 $193,439(3) $ -0- -0- -0- $2,899
Keith C.Saunders 1994 $144,890 $43,324 -0- -0- $2,769
Executive Vice 1993 $140,342 $20,583 -0- -0- $2,413
President, 1992 $142,605(3) $ -0- -0- -0- $2,058
Secretary & CFO
R. Barry Arnold 1994 $117,366 $32,603 -0- -0- $2,302
Vice President 1993 $110,329 $15,256 -0- -0- $1,956
1992 $110,131(3) $ -0- -0- -0- $1,669
Darrell F. 1994 $100,045 $27,201 -0- -0- $1,923
Robinette 1993 $ 95,856 $12,758 -0- -0- $1,708
Vice President 1992 $ 91,355(3) $ -0- -0- -0- $1,503
Nancy Mortensen 1994 $ 97,110 $23,778 -0- -0- $1,920
Vice President 1993 $ 84,603 $10,828 -0- -0- $1,575
1992 $ 80,307(3) $ -0- -0- -0- $1,341
</TABLE>
1 Amounts shown as Salary include directors' fees, if any, paid by
the Corporation, but do not include expenditures for company cars
or merchandise or service discounts made available to the Executive
Officers, or other expenses paid by the Corporation on behalf of
or reimbursed to Executive Officers, which the Corporation believes
constitute ordinary and necessary business-related expenses. All
such expenses are paid or reimbursed by the Corporation in the
interest of assisting those individuals to do their jobs
effectively, and to attract and retain qualified personnel and
clients, and do not exceed $25,000 per Executive Officer per year.
2 Amounts shown include contributions by the Corporation to the
Employee Savings Plan (a 401(k) plan open to all full-time
employees of the Corporation). The named Executive Officers were
able to contribute up to 4% of their annual salary to this plan in
1994, up to the IRS limitation of $9,240 and the Corporation
contributed a matching amount equal to 37 1/2% of the Executive
Officers contribution.
3 In 1992 all ZCMI employees received 27 bi-weekly pay checks instead
of the usual 26. This once-a-decade event, caused by normal phases
of the calendar, resulted in each employee receiving approximately
3.5% more in salary during calendar-year 1992 than in an ordinary
calendar year.
Compensation/Benefit Plans.
Compensation and benefit plans available generally for employees of the
Corporation that are available to Executive Officers are as follows:
Retirement Plan. After one year of employment, employees of the
Corporation who are age 21 and older and who work 1,000 hours or more each
year become participants in the ZCMI Retirement Plan, which is fully funded
by the Corporation. At the time of a participant's retirement, the
benefit payable is equal to the sum of the benefit earned as of April 30,
1990, plus, commencing May 1, 1990, the total of 1% of taxable earnings
for each year of Credited Service. The benefit for retirement prior to age 65
is actuarily adjusted for the age difference. The Plan allows vesting of
employer contributions after five (5) years of service.
The figures shown in Table 4, below, are estimated annual benefits as of
December 31, 1994, based upon retirement at age 65 under the Retirement Plan.
<TABLE>
Table 4 - Annualized Retirement Plan Projection
Yearly 10 Years 15 Years 20 Years 25 Years 30 Years
Salary of Service of Service of Service of Service of Service
<S> <C> <C> <C> <C> <C>
$ 75,000 $ 7,500 $11,250 $15,000 $18,750 $22,500
$ 95,000 $ 9,500 $14,250 $19,000 $23,750 $28,500
$100,000 $10,000 $15,000 $20,000 $25,000 $30,000
$125,000 $12,500 $18,750 $25,000 $31,250 $37,500
$150,000 $15,000 $22,500 $30,000 $37,500 $45,000
$200,000 $20,000 $30,000 $40,000 $50,000 $60,000
</TABLE>
These estimated annual benefits on Retirement have been computed on the basis
of assumed continuation of remuneration at their respective rates as received
for 1991 until retirement at age 65 and the earned benefit frozen as of
December 31, 1989. The Corporation does not have any supplemental retirement
plan for its Executive Officers. Salary for purposes of the Retirement Plan
does not include Directors' fees. Benefits shown on Table 4 are in addition
to the "frozen" benefit calculated at December 31, 1989. For Messrs.
Saunders, Arnold, and Robinette this amount is $25,352.88, $18,999.82, and
$24,409.09 respectively. For Ms. Mortensen this amount is $13,461.69. As of
December 31, 1994 the credited years of service under the retirement plan for
the Executive Officers named in Table 3 were five years for Mr. Madsen, 20
years for Mr. Saunders, 26 years for Mr. Arnold, 20 years for Mr. Robinette, and
32 years for Ms. Mortensen.
Employee Savings Plan. The Corporation's 401(k) salary deferral plan
allows covered employees to make pre-tax contributions of up to 16% of salary
(but no more than $9240 for 1994) to their Plan account. To meet requirements
of applicable law, highly paid employees were limited to a maximum salary
deferral of 4% of salary in 1994. The Corporation contributes a matching
amount equal to 50% of the eligible employee's contribution for the first 2%
of pay contributed and a 25% match on amounts over 2% of pay, up to a maximum of
2% of a participating employee's salary. Covered employees have a choice of
six (6) investment plans into which they may direct their contributions and
the matching employer contribution in the Plan. An employee is fully vested
in the employer contribution to the Plan after 3 years of service.
Incentive Stock Option Plan. Approved by the shareholders in 1982, the Plan
reserved a total of 75,000 shares of the Corporation's Common Stock to be
issued under stock options to Executive Officers and other key employees. The
Plan Committee, comprised of non-participating Directors, determines who is
eligible to participate in the Plan, as well as the individual awards under the
Plan. As of April 14, 1995, the Corporation had issued all available options
under this Plan. These options were granted at exercise prices ranging from
$11.83 to $16.50 per share, and have expiration dates ranging from July 21,
1992 to July 15, 1997. The balance of options that have not expired or been
exercised as of April 14, 1995 is 28,100. To date 10,210 shares have been
acquired by employees through exercise of options under the Plan, and 46,190
shares have been forfeited under lapsed or terminated options.
Table 5, below, shows the status of options granted to the five (5) Executive
Officers identified in Table 3 during the year, as well as for all Executive
Officers as a group. All of the options granted to date are exercisable at
vesting schedules of 2 years from the date of grant, within a 10-year option
term. No options have been granted since 1987.
<TABLE>
Table 5 - Options
Name Number of Weighted Shares Acquired Exercise Net Value Total Number
Option Average Through Average Realized of Unexercised
Shares Exercise Exercise of Price of (Market Option Shares
Granted Price Per Options in Options Value less held as of
During Share of 1994 Exercised Exercise 1/28/95
1994 Options in 1994 Price) of
Granted Options
in 1994 Exercised
in 1994
<S> <C> <C> <C> <C> <C> <C>
Richard -0- -0- -0- -0- -0- -0-
H Madsen
Keith C -0- -0- -0- -0- -0- 2,000
Saunders
R Barry -0- -0- -0- -0- -0- 4,300
Arnold
Darrell F -0- -0- -0- -0- -0- 1.000
Robinette
Nancy -0- -0- -0- -0- -0- 4,000
Mortensen
All Executive -0- -0- -0- -0- -0- 7,300
Officers as
a Group(Seven
Persons,including
those named above)
</TABLE>
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Some of the Directors and Executive Officers of the Corporation, members
of their immediate families, and corporations and organizations of which they
are executive officers or in which they or their immediate families have at
least a 10% interest, are customers of, or service providers to, the
Corporation. Between January 1, 1994 and December 31, 1994, these persons have
had immaterial business transactions in the ordinary course of business with the
Corporation, all of which were on substantially the same terms as those
prevailing at the time for comparable transactions with unaffiliated persons,
and did not involve more than the normal risk of collectibility or present other
unfavorable features. The Corporation expects to continue to have such
transactions on similar terms in the future.
LAST YEAR'S (1994) ANNUAL MEETING
The 1994 Annual Meeting of the Shareholders was held on May 18, 1994 in Salt
Lake City, Utah. There were 1,847,828 shares of Common Stock present at the
1994 Annual Meeting in person or by proxy, which number was 86% of those
entitled to vote, and thus constituted a legal quorum. Each of the nominees
to the Board of Directors was voted upon separately, and each was elected by
the affirmative vote of more than 82% of the shares present and voting.
PROPOSALS FOR SHAREHOLDER ACTION
Election of Directors
The persons named in Table 6, below, have been nominated by the Executive
Committee for election to the Board of Directors of the Corporation, to serve
until the next Annual Meeting or until their successors are elected and
qualified. Additional nominations will be accepted from the floor at the
Annual Meeting, and interested shareholders are invited to suggest names to the
Executive Committee from time to time for nomination as a Director of the
Corporation.
The Bylaws of the Corporation provide for a Board of Directors of up to 20
members. Ten (10) Directors are being nominated by the Executive Committee for
election at the 1995 Annual Meeting. The Board knows of no reason why any
nominee may be unable to serve as a Director. If any nominee is unable to
serve, the shares represented by all valid proxies will be voted for the
election of such other person as the Board may recommend, or the Board may
reduce the number of Directors to eliminate the vacancy. It is the intention
of the Proxies to vote FOR the election of ALL of the nominees listed in
Table 6, below, in the absence of contrary direction. All of the nominees are
current Directors, and were elected to their present term of office by a vote
of shareholders at the 1994 Annual Meeting.
There is set forth below, in Table 6, as to each of the ten (10) nominees
for election as a Director, his/her age, the year he/she became a Director of
the Corporation, his/her principal occupation, his/her business experience
during the past five years, other directorships held at this time and
beneficial stock ownership in the Corporation. Directors serving on the
Executive (*) or Audit (+) Committees of the Board are also so identified:
Table 6 - Nominees for Director
R. BARRY ARNOLD, 50, has been a Director of the Corporation since 1990.
He is Vice President and General Merchandise Manager of the Corporation. Mr.
Arnold beneficially owns 4,667 shares of the Corporation's Common Stock,
including 4,300 option shares exercisable within 60 days but not yet exercised.
+SPENCER F. ECCLES, 60, has been a Director of the Corporation since 1976.
He is Chairman, Chief Executive Officer, and a Director of First Security
Corporation (a bank holding company). Mr. Eccles is also a Director of Anderson
Lumber Company and Union Pacific Corporation. He is the beneficial owner of
7,500 shares of the Corporation's Common Stock.
LELA "LEE" ENCE, 67, has been a Director of the Corporation since 1987. She
retired as Executive Director of the University of Utah Alumni Association in
1989, and is a Director of West One Bank - Utah, a subsidiary of West One
Bancorp. Mrs. Ence beneficially owns 491 shares of the Corporation's Common
Stock.
+A. BLAINE HUNTSMAN, 58, has been a Director of the Corporation since 1977.
He is Chairman and Chief Executive Officer of Olympus Capital Corporation, the
holding company of Olympus Bank, (formerly Prudential Financial Services
Corporation). He is also a Director of Geneva Steel Company and the Kahler
Corporation. Mr. Huntsman is a former professor and dean of the College of
Business at the University of Utah. Mr. Huntsman beneficially owns 3,700 shares
of the Corporation's common Stock.
*JAMES S. JARDINE, 48, has been a Director of the Corporation since 1985. He
is the managing partner of the law firm of Ray, Quinney & Nebeker (which acts
as legal counsel to the Corporation). Mr. Jardine beneficially owns 400 shares
of the Corporation's Common Stock.
*+PATRICIA MADSEN, 66, has been a Director of the Corporation since 1976. She
is President of Sterling Furniture Company, and beneficially owns 74,347 shares
of the Corporation's Common Stock.2,4
*RICHARD H. MADSEN, 56, has been a Director of the Corporation since 1988 and is
currently the President and Chief Executive Officer of the Corporation and the
Vice Chairman of the Board. He was formerly Chairman and Chief Executive
Officer and is currently a Director of Madsen Furniture Galleries. He is also
a Director of Zions Bancorporation. Mr. Madsen beneficially owns 162,167 shares
of the Corporation's Common Stock.3,4
O. DON OSTLER, 64, has been a Director of the Corporation since 1994. He is
Chief Executive Officer and Vice Chairman of O.C. Tanner Incorporated. Mr.
Ostler beneficially owns 100 shares of the Corporation's Common Stock.4
*L. TOM PERRY, 72, has been a Director of the Corporation since 1975. He
serves as Chairman of the Board of the Corporation, and is also a member of the
Quorum of the Twelve Apostles, The Church of Jesus Christ of Latter-Day Saints.
He is a Director of Zions First National Bank and of American Stores. Mr. Perry
is the beneficial owner of 600 shares of the Corporation's Common Stock.1
*KEITH C. SAUNDERS, 52, has been a Director of the Corporation since 1981, and
is Executive Vice President, Chief Financial Officer and Secretary of the
Corporation. Mr. Saunders beneficially owns 4,212 shares of the Corporation's
Common Stock, including 2,000 option shares exercisable within 60 days but not
yet exercised.
______________________
1Does not include 1,125,239 shares of the Corporation's Common Stock owned
by the Church of Jesus Christ of Latter-day Saints, as to which Elder Perry
disclaims beneficialownership.
2Includes 30,972 shares as to which Ms. Madsen shares voting and
investment power as a co-trustee or controlling partner of various Madsen family
trusts and partnerships, but not including any shares shown for Richard Madsen,
as co-trustee, above.
3Includes 146,905 shares held of record by the Francis A. Madsen Family
Voting Trust, as to which Mr. Madsen is Co-Trustee.
4Madsen Furniture Galleries and Sterling Furniture Co., of which Mr. Madsen
and Ms. Madsen are directors, respectively, compete with the Corporation's
furniture sales. O.C. Tanner Incorporated, of which Mr. Ostler is an executive
officer and director, competes with the Corporation's fine and custom jewelry
and gift businesses.
Performance Graph
The following graph compares the cumulative total shareholder return on ZCMI
common stock over a six-year period commencing December 31, 1989, to that of
Standard & Poor's 500 Stock Index and the average of the high and low stock
prices of the Standard & Poor's Retail Stores Composite stock price index.
<TABLE>
Measure 1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
ZCMI Stock 100.00 106.72 94.10 77.40 95.60 111.55
S & P 500 100.00 108.39 132.99 147.06 166.00 166.88
S&P Retail 100.00 117.33 163.95 195.70 188.61 174.65
Store Index
</TABLE>
VOTE REQUIRED
The presence in person or by proxy of the holders of a majority of the
outstanding voting shares is required to constitute a quorum at the Annual
Meeting. The election of Directors will require the affirmative vote of the
holders of a majority of the shares present or represented by Proxies at the
Annual Meeting, once a quorum is declared to be present at the Meeting. Certain
shareholders beneficially owning, as a group, in excess of 50% of the
outstanding shares have indicated an intention to vote in favor of all
nominations for director. Such votes, if cast, will be determinative of the
voting results.
OTHER BUSINESS
Management does not know of any other business to be presented at the
Meeting. However, if any other business is presented, it is the intention of
the Proxies to vote according to their best judgment with respect to such other
business.
On written request, the Corporation will provide, without charge, a copy
of the Corporation's Form 10-K Report for 1994 filed with the Securities and
Exchange Commission (including the financial statements and the schedules
thereto and a list briefly describing the exhibits thereto) to any shareholder.
The reports will be available for mailing in May, 1995, and requests should be
sent to: Keith C. Saunders, Executive Vice President and Chief Financial
Officer, 2200 South 900 West, Salt Lake City, Utah 84137.
INDEPENDENT AUDITORS
Upon recommendation of its Audit Committee, the Board of Directors has
appointed Deloitte & Touche LLP as the independent auditors to examine the
accounts of the Corporation and its subsidiaries for the year ending January
31, 1996. This firm has audited the Corporation's accounts for many years and
is one of the largest and best known firms of independent certified public
accountants. A member of the firm will be in attendance at the Annual Meeting
to make a statement on behalf of the firm if he so desires and to answer
appropriate questions, if any, from shareholders.
DEADLINE FOR SHAREHOLDER PROPOSALS
If any shareholder wishes to present a proposal for action at the 1996
Annual Meeting of the Shareholders, the shareholder must comply with applicable
Securities and Exchange Commission Regulations, including adequate notice to
the Corporation. Any proposal must be submitted in writing by Certified Mail
- - -- Return Receipt Requested, to Zion's Cooperative Mercantile Institution,
Attention: Secretary of the Corporation, 2200 South 900 West, Salt Lake City,
Utah, 84137, on or before December 31, 1995.
