<PAGE> 1
ZIONS BANCORPORATION
1380 Kennecott Building, Salt Lake City, Utah 84133
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 28, 1995
To the Shareholders:
The Annual Meeting of the Shareholders of Zions Bancorporation (the
"Company") will be held in the Founders' Room of Zions First National Bank, One
Main Street, Salt Lake City, Utah, on Friday, April 28, 1995, at 1:30 p.m. for
the following purposes:
1. To elect directors for the terms specified in the attached
Proxy Statement (Proposal 1);
2. To approve amendments to the Zions Bancorporation Key Employee
Incentive Stock Option Plan, as set forth in the attached
Proxy Statement (Proposal 2);
3. To approve the appointment of independent auditors for the
year 1995 (Proposal 3);
4. To transact such other business as may properly come before
the meeting (Proposal 4).
Your proxy is being solicited by the Board of Directors. For the
reasons stated herein, your Board of Directors unanimously recommends that you
vote "for" these proposals.
A Proxy Statement, Proxy Card, and a copy of the Annual Report on the
Company's operations during the fiscal year ended December 31, 1994, accompany
this notice.
IT IS IMPORTANT THAT ALL SHAREHOLDERS BE REPRESENTED AT THE MEETING.
SHAREHOLDERS WHO ARE UNABLE TO ATTEND IN PERSON SHOULD IMMEDIATELY SIGN, DATE
AND MAIL THE ACCOMPANYING FORM OF PROXY IN THE ENCLOSED ENVELOPE WHICH REQUIRES
NO POSTAGE.
The prompt return of proxies will save the Company the expense of
further requests for proxies which might otherwise be necessary in order to
ensure a quorum.
By order of the Board of Directors
Gary L. Anderson
Secretary
Salt Lake City, Utah
March 27, 1995
<PAGE> 2
PROXY STATEMENT
ZIONS BANCORPORATION
1380 Kennecott Building, Salt Lake City, Utah 84133
ANNUAL MEETING OF SHAREHOLDERS
April 28, 1995
VOTING AT THE MEETING
Your proxy is solicited by your Board of Directors. It will be voted
as you direct. If no contrary direction is given, your proxy will be voted:
- FOR the election of directors listed below;
- FOR the approval of the amendments to the Zions Bancorporation
Key Employee Incentive Stock Option Plan described in this
Proxy Statement;
- FOR approval of the selection of KPMG Peat Marwick LLP,
Certified Public Accountants, as independent auditors for the
Company for the fiscal year ending December 31, 1995.
You may revoke your proxy at any time before it is voted by giving
written notice to the Secretary, Zions Bancorporation, or by mailing a
later-dated proxy or by voting in person at the meeting.
The only shares that may be voted are the 14,562,970 shares of common
stock outstanding at the close of business on February 27, 1995, the record
date for the meeting. Each share is entitled to one vote.
Shareholders may expressly abstain from voting on Proposals 2, 3 and 4
in the accompanying Notice of Annual Meeting of Shareholders. Where some or
all of the shares represented by the duly executed and returned proxy of a
broker or other nominee are not voted on one or more items pursuant to the
rules of the national securities exchange of which the nominee is a member or
of the National Association of Securities Dealers or otherwise, the shares will
be treated as represented at the meeting but not voted. On all matters other
than the election of directors, the action will be approved if a quorum is
present and the number of shares voted in favor of the action exceeds the
number of shares voted against the action.
The cost of soliciting proxies will be borne by the Company. The
Company will reimburse brokers and others who incur costs to send proxy
materials to beneficial owners of stock held in a broker or nominee name.
Directors, officers and employees of the Company may solicit proxies in person
or by mail, telephone, or telegraph, but will receive no extra compensation for
doing so. This Proxy Statement is first being mailed to the shareholders of
Zions Bancorporation on or about March 27, 1995.
NOMINATION AND ELECTION OF DIRECTORS
(PROPOSAL 1)
It is intended that the proxies received will be voted for the
election of nominees for director named herein unless otherwise indicated. In
case any of the nominees named herein is unable or declines to serve, an event
which management does not anticipate, proxies will then be voted for a nominee
who shall be designated by the present Board of Directors to fill such vacancy.
Directors are elected by a plurality of the votes cast at the meeting, with the
three persons receiving the highest number of votes to be elected.
1
<PAGE> 3
The following persons are nominated for election as directors for the
specified term, and until their successors are elected and qualified, and will,
together with other directors presently in office, constitute the entire
elected Board of Directors:
Three-year Term
---------------
Roger B. Porter
L. E. Simmons
I. J. Wagner
The following information is furnished with respect to each of the
nominees for election as directors, as well as for directors whose terms of
office will not expire prior to the Annual Meeting of Shareholders:
<TABLE>
<CAPTION>
PRESENT
PRINCIPAL OCCUPATION DIRECTOR TERM
NOMINEES DURING PAST FIVE YEARS SINCE EXPIRES AGE
- -------- ---------------------- ------- ------- ---
<S> <C> <C> <C> <C>
R. D. Cash(2) Chairman, President and Chief 1989 1997 52
Executive Officer of
Questar Corporation, Salt
Lake City, Utah;
Member of the Board of Directors
of Zions First National Bank.
Richard H. Madsen(1) President and Chief Executive 1994 1997 56
Officer, ZCMI;
Chairman, Chief Executive Officer
and Member of the Board of
Directors, Madsen Furniture
Galleries, prior to 1990.
Robert G. Sarver Principal, Southwest Value Partners 1994 1997 33
And Affiliates; President, National
Bank of Arizona, 1992-1994; Vice
Chairman, National Bank of Arizona,
1990-1992; Senior Vice President,
National Bank of Arizona, 1986-1990.
Harris H. Simmons(2,5) President and Chief Executive Officer 1989 1997 40
of the Company; President, Chief
Executive Officer, and Member of
the Board of Directors
of Zions First National Bank;
Member of the Board of Directors
of Questar Corporation.
</TABLE>
2
<PAGE> 4
DIRECTORS WITH UNEXPIRED
TERMS OF OFFICE
<TABLE>
<S> <C> <C> <C> <C>
Jerry C. Atkin(3) Chairman, President and Chief 1993 1996 46
Executive Officer, SkyWest Airlines,
St. George, Utah.
Grant R. Caldwell(1) Retired, former Partner, 1993 1996 70
KMG Main Hurdman,
Salt Lake City, Utah.
Roger B. Porter(1,3) IBM Professor of Business and 1993 1995 48
Government, Harvard University;
Assistant to the President for
Domestic and Economic Affairs,
The White House, 1989-1992.
Roy W. Simmons(2,4) Chairman of the Company; 1961 1996 79
Chairman of the Board of Directors of
Zions First National Bank;
Member of the Board of Directors of
Beneficial Life Insurance Co.;
Senior Director of
Questar Corporation.
Dale W. Westergard(3) Retired/Former Executive Vice 1984 1996 69
President of the Company; Member
of the Board of Directors
of Zions First National Bank.
L. E. Simmons(4,5) President, SCF Partners 1978 1995 48
(Corporate Financial Advisory
Services), Houston, Texas.
I. J. Wagner(1,2) President, The Keystone Company 1965 1995 79
(Corporate Investments),
Salt Lake City, Utah.
</TABLE>
(1) Member of the Audit Committee
(2) Member of the Executive Committee
(3) Member of the Executive Compensation Committee
(4) Member of the Credit Review/Compliance Committee
(5) Son of Roy W. Simmons
3
<PAGE> 5
COMPENSATION OF DIRECTORS
The Company's outside directors currently receive a $12,000 annual
retainer and $600 for each regular and special meeting attended. Members of
the committees receive $500 for each committee meeting attended. The Chairman
of the Audit Committee receives an additional $6,000 annual retainer and
members of the Audit Committee receive an additional $3,000 annual retainer.
Directors who are full-time compensated employees of the Company do not receive
either the retainer or any other compensation for meetings of the Board of
Directors or its committees.
The Company maintains a Deferred Compensation Plan for directors
whereby a director may elect to defer receipt of all or a portion of his
compensation until retirement or resignation from the Board. The director may
elect to invest the deferred fees in an interest-bearing unsecured note, or in
"phantom" stock, whereby the earnings will be calculated as if the deferred
compensation had been invested in the Company's common stock (although an
actual investment is not made and settlement is made only in cash).
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held six meetings during the fiscal year ending
December 31, 1994. Of the Board's four standing committees, the Executive
Committee did not meet, the Audit Committee met six times, the Executive
Compensation Committee met once, and the Credit Review/Compliance Committee met
four times during the fiscal year ending December 31, 1994. Membership in
these committees is indicated above in the listing of directors. Average
attendance at board and committee meetings held during the year was 97%. The
Company has no nominating committee, nor does any other established committee
act in that capacity.
The Executive Committee reviews projects or proposals which require
prompt action on the part of the Company. The Executive Committee is
authorized to exercise all powers of the Board of Directors with respect to
such projects or proposals for which it would not be practicable to delay
action pending approval of the entire Board. The Executive Committee does not
have authority to amend the Articles of Incorporation or Bylaws, adopt a plan
of merger, or to recommend to shareholders the sale of all or substantially all
of the Company's assets.
The Audit Committee reviews and discusses the plan and results of the
annual audit with the Company's independent auditors and approves nonaudit
services provided by them. The Committee also reviews the Company's internal
auditing, control and accounting systems. In addition, the Committee makes
recommendations to the Board concerning the selection of independent auditors.
The Executive Compensation Committee fixes the compensation of
corporate executive officers and approves any employment or consulting
contracts with corporate officers who are not also directors.
The Credit Review/Compliance Committee is a joint committee of the
Company and Zions First National Bank. The Committee monitors the results of
internal credit examinations, and reviews adherence to policies established by
the Board and by management with respect to lending, as well as with respect to
general management issues.
4
<PAGE> 6
EXECUTIVE OFFICERS OF THE COMPANY
The following information is furnished with respect to certain of the
executive officers of the Company.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OFFICER
INDIVIDUAL DURING PAST FIVE YEARS** SINCE AGE
- ---------- ------------------------ ------- ---
<S> <C> <C> <C>
Roy W. Simmons * Chairman of the Company; 1961 79
Chairman of the Board of Directors of
Zions First National Bank;
Member of the Board of Directors of
Beneficial Life Insurance Co.;
Senior Director of
Questar Corporation.
Harris H. Simmons * President and Chief Executive Officer 1981 40
of the Company; President, Chief
Executive Officer and Member of
the Board of Directors
of Zions First National Bank;
Member of the Board of Directors
of Questar Corporation.
Gary L. Anderson Senior Vice President, Chief Financial Officer 1988 52
and Secretary of the Company; Executive Vice
President and Secretary of the Board of Directors
of Zions First National Bank.
Gerald J. Dent Senior Vice President of the Company; 1987 53
Executive Vice President of
Zions First National Bank.
Clark B. Hinckley Senior Vice President of the Company. Prior to 1994 47
March 2, 1994, President of Zions First National
Bank of Arizona.
James W. Rail Senior Vice President of the Company; 1976 60
(Retired February 28, 1995) President of Zions Data Service Company.
John J. Gisi Senior Vice President of the Company; 1994 49
Chairman and Chief Executive Officer of
National Bank of Arizona.
</TABLE>
5
<PAGE> 7
<TABLE>
<S> <C> <C> <C>
Richard H. Carlson Senior Vice President of the Company; 1994 61
(Retired February 28, 1995) President and Chief Executive Officer of
Nevada State Bank.
Danne L. Buchanan Senior Vice President of the Company; 1995 37
(Effective March 3, 1995) General Manager of Zions Data Service
Company.
</TABLE>
*Roy W. Simmons (Chairman of the Company) is the father of L. E. Simmons (a
member of the Board of Directors of the Company) and Harris H. Simmons
(President and Chief Executive Officer of the Company).
**Officers are elected for indefinite terms of office and may be replaced at
the discretion of the Board of Directors.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth as of February 27, 1995, the record and
beneficial ownership of the Company's common stock by the principal common
shareholders of the Company.
<TABLE>
<CAPTION>
Common Stock
Name and Address Type of Ownership No. of Shares % of Class
- ---------------- ----------------- ------------- ----------
<S> <C> <C> <C>
Roy W. Simmons, David E. Simmons, Record 1,135,226 7.80%
Harris H. Simmons, I. J. Wagner,
and Louis H. Callister, Jr., as
Voting Trustees.(1)
One Main Street
Salt Lake City, Utah 84133
Roy W. Simmons Record and Beneficial 415,051 2.85%
One Main Street Beneficial(2) 635,804 4.37%
Salt Lake City, Utah 84133 --------- -----
1,050,855 7.22%
Corporation of the President of the Beneficial 776,445 5.33%
Church of Jesus Christ of
Latter-day Saints
47 East South Temple Street
Salt Lake City, Utah 84150
Zions First National Bank Record(3) 1,071,528 7.36%
One Main Street
Salt Lake City, Utah 84133
- -------------------------------------
</TABLE>
(1) The voting trust will expire on December 31, 1996, unless sooner
terminated by a vote of two-thirds of the shares deposited under the
voting trust. The voting trustees, three of the five of whom are
directors of Zions and/or its subsidiaries, have exclusive voting
rights with respect to the shares, and have the further right to sell
any or all of the shares after consultation with the beneficial owners
as to their desires to such sale and the price thereof. The
beneficial owners may transfer their voting trust certificates, but
are prohibited from selling any of the underlying shares held by the
voting trustees without the consent of a majority of the voting
trustees. The addresses of the voting trustees are as follows: Roy W.
Simmons, 1 South Main Street, Salt Lake City, Utah; David
6
<PAGE> 8
E. Simmons, 1000 Kennecott Building, Salt Lake City, Utah; Harris H.
Simmons, 1 South Main Street, Salt Lake City, Utah; I. J. Wagner, 680
Kennecott Building, Salt Lake City, Utah; and Louis H. Callister, Jr.,
800 Kennecott Building, Salt Lake City, Utah.
(2) Includes Roy W. Simmons' beneficial ownership interest in 586,928
shares deposited with the voting trust referred to in note (1) above.
(3) These shares are owned of record as of February 27, 1995, by Zions
First National Bank, a subsidiary of the Company, in its capacity as
fiduciary for various trust and advisory accounts. Of the shares
shown, Zions First National Bank has sole voting power with respect to
a total of 827,867 shares (5.69% of the class) it holds as trustee for
the Zions Bancorporation Employee Stock Savings Plan and the Zions
Bancorporation Employee Investment Savings Plan. Zions First National
Bank also acts as trustee for the Zions Bancorporation Dividend
Reinvestment Plan, which holds 243,661 shares (1.67% of the class) as
to which Zions First National Bank does not have or share voting
power.
Set forth below is the beneficial ownership, as of February 27, 1995,
of the Company's common stock by each of the Company's directors and all
directors and officers as a group.
<TABLE>
<CAPTION>
No. of Shares % of
Directors Beneficially Owned Class
--------- ---------------------- -------
<S> <C> <C>
Jerry C. Atkin 1,700 *(1)
R. D. Cash 6,000 *(1)
Grant R. Caldwell 1,000 *(1)
Richard H. Madsen 57,141 *(1)
Roger B. Porter -- *(1)
Robert G. Sarver 131,485 *(1)
Harris H. Simmons 576,745(2)(4) 3.95
L. E. Simmons 534,863(2) 3.67
Roy W. Simmons 1,050,855(2) 7.22
I. J. Wagner 120,000(2) *(1)
Dale W. Westergard 39,884 *(1)
All directors and officers
as a group (34 persons) 2,422,523(3) 16.51
- -------------------------------------
</TABLE>
(1) Immaterial percentage of ownership
(2) Totals shown do not include shares of which the following persons may
be deemed beneficial owners as trustees of the Zions Bancorporation
Voting Trust in the respective amounts as follows: Roy W. Simmons
(548,298 shares); Harris H. Simmons (629,172 shares); and I. J. Wagner
(1,075,226 shares). Such persons disclaim beneficial ownership in such
shares.
(3) Includes all 1,135,226 shares held by the Zions Voting Trust.
(4) Totals include 497,844 shares attributed to each individual through
serving as a director in a company holding such shares in the Company.
Of such 497,844 shares attributed to Harris H. Simmons, Mr. Simmons
holds an option to acquire 46,698 shares, all of which are vested and
presently exercisable.
Section 16(a) of the Securities Exchange Act of 1934 requires officers
and directors of the Company and persons who own more than 10% of a registered
class of the Company's equity securities to file reports of ownership and
changes in their ownership with the Securities and Exchange Commission. The
secretary of the Company acts as a compliance officer for such filings of its
officers and directors, and prepares reports for such
7
<PAGE> 9
persons based on information supplied by them. Based solely on its review of
such information, the Company believes that for the period from January 1, 1994
through December 31, 1994, its officers and directors were in compliance with
all applicable filing requirements, except that Mr. Jerry C. Atkin filed late
reports of two purchases in 1993 and one purchase in 1994, and until his latest
report filed in March 1995, Mr. Harris H. Simmons inadvertently omitted from
his ownership reports 9,000 shares subject to an option gifted to him in 1985.
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows compensation earned
from the Company for services rendered during fiscal years 1994, 1993 and 1992
for the person who was chief executive officer at the end of the last fiscal
year, and the four most highly compensated executive officers of the Company
whose salaries and bonuses exceeded $100,000 in 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term
Annual Compensation
Compensation(1) Awards
----------------- --------------
Securities All Other
Salary Bonus Underlying Compensation
Name and Principal Position Year ($)(2)(3) ($)(4)(6) Options(#)(5) ($)(3)(7)(8)(9)(10)
--------------------------- ---- ---------- ---------- ------------- -------------------
<S> <C> <C> <C> <C> <C>
Harris H. Simmons 1994 $322,524 $155,000 5,000 $12,337
President and Chief Executive 1993 289,531 170,000 0 8,152
Officer, Zions Bancorporation 1992 259,885 125,000 10,000 11,596
John J. Gisi 1994 200,335 80,000 3,250 67,367
Senior Vice President, Zions 1993 0 0 0 0
Bancorporation; Chairman and Chief 1992 0 0 0 0
Executive Officer of National Bank
of Arizona(11)
A. Scott Anderson 1994 184,199 70,000 3,500 12,757
Executive Vice President, 1993 175,489 58,000 0 10,310
Zions First National Bank 1992 177,369 55,000 7,000 8,753
John B. D'Arcy 1994 147,428 56,000 2,750 12,115
Executive Vice President, 1993 132,580 55,000 0 9,265
Zions First National Bank 1992 129,597 40,000 7,000 7,354
James W. Rail 1994 137,212 50,000 3,500 24,649
Senior Vice President, Zions 1993 129,003 42,000 0 22,210
Bancorporation; President, Zions 1992 123,442 37,000 5,500 21,213
Data Service Company
- -------------------------------------
</TABLE>
(1) The column for other annual compensation has been omitted since the
only items reportable thereunder for the named persons are
perquisites, which did not exceed the lesser of $50,000 or 10% of
salary and bonus for any of the named persons.
(2) Includes all contributions to the Company's Employee Stock Savings
Plan, Employee Investment Savings Plan, and Employee Medical Plan made
through salary reductions and deferrals.
8
<PAGE> 10
(3) All employees of the Company who have at least one year of service,
have worked at least 1,000 hours in the previous twelve months, and
are at least twenty-one years of age are eligible to participate in
the Company's Employee Stock Savings Plan and the Company's Employee
Investment Savings Plan, which are defined contribution plans
qualified under 401(k) of the Internal Revenue Code. The plans
require contributions from participants in increments of one percent
of compensation, up to a maximum of fifteen percent. Contributions
made under the Employee Stock Savings Plan are aggregated with
contributions made under the Employee Investment Savings Plan for
purposes of establishing the maximum contribution limitation, which is
fifteen percent. If the participant elects to have his contributions
invested in the Company's common stock through the Employee Stock
Savings Plan, the Company shall contribute to the participant's
account an amount equal to fifty percent of the participant's
contribution, up to five percent of the participant's compensation.
The Company shall contribute an additional amount equal to twenty-five
percent of the participant's contribution to the Employee Investment
Savings Plan from five to ten percent of the participant's
compensation. Additional contributions of up to five percent of
compensation may be made by a participant but are not matched by the
Company. The Company's contributions are determined by reference to
the employees' contributions and are not discretionary. Vesting
occurs upon contribution; however, distribution of Company
contributions is made only upon retirement, permanent disability,
death, termination of employment, or special hardship situations.
Participant contributions are included in amounts shown as "Salary,"
above. The Company's matching contributions are included under "All
Other Compensation," above. For each of the persons named above, the
amounts accrued for 1994, 1993 and 1992 were as follows, respectively:
Mr. Simmons, $6,031, $1,948 and $3,600; Mr. Anderson, $5,158, $2,936
and $2,200; Mr. D'Arcy, $4,975, $2,401 and $1,461; Mr. Rail, $5,813,
$3,392 and $2,952. For Mr. Gisi, who joined the Company in 1994, the
amount accrued for 1994 was $4,620.
(4) Cash bonuses are reported in the year earned but are paid in the
following year. Bonuses for Mr. Harris H. Simmons are established by
the Executive Compensation Committee of the Board of Directors (the
"Compensation Committee"). Bonuses for the other named officers are
recommended by Mr. Simmons and approved by the Compensation Committee.
Bonuses are discretionary, but are generally based upon the operating
results of the Company and the performance of the individuals.
(5) Options shown were issued under the Company's Incentive Stock Option
Plan. The plan is administered by the Compensation Committee.
Options granted have an exercise price equal to the fair market value
on the date of grant, vest over a term of three to five years, and
expire in four to six years.
(6) Does not include amounts accrued by the Company against its potential
future liability under the Senior Management Value- Sharing Plan, a
deferred bonus plan for senior management. Awards funds were
established under the plan in 1991, 1992, 1993 and 1994, and members
of senior management were granted units of participation in each award
fund. Payouts under the plan with respect to each award fund occur
four years following the establishment of such fund, and are
determined by applying a formula established in connection with each
award fund to the Company's average return on equity and average
per-share earnings during the four-year period. The Company intends
to establish award funds on similar terms in future years. The
Company estimates its annual accrual against future payout under the
plan each year by applying the formula established for each award fund
by the Board of Directors to the Company's performance in the year.
Through December 31, 1994, no amounts were paid out under the plan.
Payouts are to be reported in the above table under "Long-term
Compensation." For each of the persons named above, the amounts
accrued for 1994, 1993 and 1992 were as follows, respectively: Mr.
Simmons, $127,731, $101,024 and $56,240; Mr. Anderson, $95,793,
$78,632 and $45,008; Mr. D'Arcy, $95,793, $78,632 and $45,008; Mr.
Rail, $71,239, $58,199 and $33,778. For Mr. Gisi, who joined the
Company in 1994, the amount accrued for 1994 was $19,372. See
"Long-term Incentive Plan Awards in Fiscal 1994," that follows.
(7) Includes amounts accrued under the Company's noncontributory
Supplemental Retirement Plan for officers of the Company and officers
of certain subsidiary companies who are second vice presidents or
above. Benefits to be paid at normal retirement age (65) are $5,000
per year for a period of ten years for second vice presidents or
equivalent other rank, $10,000 per year for a period of ten years for
vice presidents or equivalent other rank, and $20,000 per year plus a
discretionary portion for all senior vice presidents and above. These
benefits do not vest prior to attainment of normal retirement age, and
will not normally be paid if the employee terminates for any reason
prior to normal retirement age other than death, or, in the discretion
of the Board of Directors, upon early retirement. For each of the
persons named above, the amounts accrued for 1994, 1993 and 1992 were
as follows, respectively: Mr. Simmons, $1,391, $1,288 and $1,192; Mr.
Anderson, $2,712, $2,511 and $2,325; Mr. D'Arcy, $3,500, $3,241 and
$3,001; Mr. Rail, $15,292, $15,292 and $15,292. Mr. Gisi, who joined
the Company in 1994, does not participate in the Supplemental
Retirement Plan.
(8) Amounts of All Other Compensation are amounts contributed or accrued
for the named officers under the Company's Employee Stock Savings
Plan, Employee Investment Savings Plan, Supplemental Retirement Plan,
and Employee Profit Sharing Plan.
(9) In 1992, the Board of Directors adopted the Zions Bancorporation
Employee Profit Sharing Plan, a defined contribution plan, pursuant to
which an award is made to all employees as a percentage of salary and
bonus when the Company achieves annual profits representing a return
on equity (net income divided by average shareholders' equity) target
established by the Board of Directors of at least 14%. The minimum
award is 1% of covered payroll at 14% return on equity, with the award
to be a greater percentage of covered payroll if the return on equity
is greater. Amounts accrued to the accounts of employees are invested
in Company common
9
<PAGE> 11
stock. For each of the persons named above, the amounts accrued for
1994, 1993 and 1992 were as follows, respectively: Mr. Simmons,
$4,915, $4,915 and $6,804; Mr. Anderson, $4,887, $4,863 and $4,227;
Mr. D'Arcy, $3,639, $3,623 and $2,891; Mr. Rail, $3,543, $3,526 and
$2,969. For Mr. Gisi, who joined the Company in 1994, there was no
accrual for 1994.
(10) Includes $62,747 in moving expenses paid to John J. Gisi preparatory
to changing corporate headquarters for a subsidiary of the Company.
(11) Mr. Gisi's employment by the Company commenced with the acquisition by
the Company of National Bancorp of Arizona, Inc. on January 14, 1994.
STOCK OPTION GRANTS IN FISCAL YEAR 1994
The following table shows the number of shares with respect to which
options were granted during 1994 to each of the named persons, together with
the percentage of all grants to employees which the grant to the named person
represents, the exercise price of such option, and the expiration date of the
option.
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual
Rates of Stock Price
Appreciation for
Individual Grants Option Term(1)
------------------------------------- ------------------------------------
% of Total
Options
Options Granted to Exercise
Name Granted Employees Price Expiration
----
(2) in Fiscal Year ($/Sh) Date 5% ($) 10% ($)
------- -------------- ----------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Harris H. Simmons 5,000 4.80 $ 39.75 03-17-2000 $ 67,600 $153,350
John J. Gisi 3,250 3.12 39.75 03-17-2000 43,937 99,676
A. Scott Anderson 3,500 3.36 39.75 03-17-2000 47,320 107,345
John B. D'Arcy 2,750 2.64 39.75 03-17-2000 37,180 84,343
James W. Rail 3,500 3.36 39.75 03-17-2000 47,320 107,345
- -------------------------------------
</TABLE>
(1) Potential unrealized value is based on an assumption that the stock
price of the common stock appreciates at the annual rate shown
(compounded annually) from the date of grant until the end of the
six-year option term. These numbers are calculated based on the
requirements promulgated by the Securities and Exchange Commission and
do not reflect the Company's estimate of future stock price growth.
(2) The Company's Incentive Stock Option Plan is administered by the
Compensation Committee of the Board of Directors. The committee
determines the eligibility of employees, the number of shares to be
granted and the terms of such grants. All stock options granted in
fiscal year 1994 are incentive stock options, have an exercise price
equal to the fair market value on the date of grant, vest 25% per year
beginning one year after date of grant, and have a term of six years.
The Plan also provides for same-day sales, i.e. cashless exercises.
10
<PAGE> 12
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth the number of shares acquired by any of
the named persons upon exercise of stock options in 1994, the value realized
through the exercise of such options, and the number of unexercised options
held by such person, including both those which are presently exercisable, and
those which are not presently exercisable.
<TABLE>
<CAPTION>
Shares Number of
Acquired Shares Underlying Value of Unexercised
Upon Unexercised In-the-
Option Value Options Money Options
Name Exercise(#)(1) Realized($) at 12-31-94(#)(2) at 12-31-94(1)
---- -------------- ----------- ---------------------------------------------------
Not Not
Exercisable Exercisable Exercisable Exercisable
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Harris H. Simmons 0 $ 0 7,500 7,500 $ 88,125 $ 29,375
John J. Gisi 0 0 27,000 22,000 710,073 473,382
A. Scott Anderson 5,000 96,250 5,250 5,250 61,687 20,563
John B. D'Arcy 3,500 48,563 1,750 5,250 20,562 20,563
James W. Rail 1,376 18,404 0 4,126 0 16,168
- -------------------------------------
</TABLE>
(1) Potential unrealized value is (i) the fair market value at fiscal 1994
year end ($35.875) less the option exercise price times (ii) the
number of shares.
(2) Of the shares shown as underlying unexercised options for John J.
Gisi, a total of 27,000 exercisable and 18,000 unexercisable represent
options received in exchange for options of National Bancorp of
Arizona, Inc. upon its acquisition by the Company.
LONG-TERM INCENTIVE PLAN AWARDS IN FISCAL 1994
The following table sets forth certain information regarding awards
made in 1994 pursuant to the Company's Senior Management Value-Sharing Plan,
which is a deferred bonus plan intended to encourage the creation of long-term
shareholder value and promote teamwork among subsidiaries and divisions. The
plan was established in 1991 by the Board of Directors upon the recommendation
of the Compensation Committee. At that time, the Board established the 1991
award fund under the plan. Members of senior management were granted units of
participation in the 1991 award fund. Payouts under the plan are to be
determined by allocating the award fund among the holders of units of
participation in proportion to the number of units held by the participant.
The size of the award fund is to be determined according to a formula
established for the award fund which uses the Company's average return on
shareholders' equity (net income divided by average shareholders' equity) over
the four-year period, beginning with fiscal 1991, to determine the amount of
the award fund, with an adjustment based on the Company's aggregate earnings
per share over that period. Relatively higher average returns on shareholders'
equity, and relatively higher earnings per share will make the award fund
larger. An additional award fund is proposed to be established each year,
although future awards are subject to the discretion of the Compensation
Committee and the Board of Directors. Such additional award funds were
established in 1992, 1993 and 1994.
11
<PAGE> 13
The award fund established in 1994 is to range in amount from $0 for
an average return on shareholders' equity ("AROE") of 14% over the four years
beginning in 1994, to a maximum of $3,964,400, corresponding to an AROE of 22%
for such period. The award fund will then be adjusted by a factor determined
by the aggregate earnings per share for such period ("AEPS"). If the AEPS is
less than $18.20, the factor will be 0, and there will be no amounts paid under
the plan. If the AEPS is greater than $18.20, the factor will be a number
between 1 and a maximum of 1.33. Accordingly, the maximum aggregate of all
payments possible under the 1994 award fund is $5,272,440. Adjustments are to
be made for stock splits, stock dividends and other changes to the Company's
capitalization.
Each member of senior management designated by the Compensation
Committee to participate in the award fund established for a given period has
been awarded a number of performance units in the plan out of 106,000 units in
total. The following table sets forth estimated future payouts for the named
individuals under the award fund established in 1994 based on the following
assumptions, respectively: the threshold amount represents the minimum amount
payable under the plan ($0); the target amount represents a calculation based
on the assumptions that the Company's AROE for each of fiscal years 1995-1997
will be equivalent to the Company's AROE in fiscal 1994 (as to which there can
be no assurance) and that the minimum AEPS will be achieved, which is greater
than was achieved in 1994 (also as to which there can be no assurance); and the
maximum amount represents the maximum possible amount payable to the named
individuals from the award fund established under the plan in 1994.
<TABLE>
<CAPTION>
Number of Performance Estimated Future Payout
Performance Period Until Under Non-stock Price-based Plans
Units Payout ---------------------------------
----------- ------ Threshold Target Maximum
Name ($) ($) ($)
-------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Harris H. Simmons 7,000 4 Years $ 0 $136,570 $348,180
John J. Gisi 4,000 4 Years 0 78,040 198,960
A. Scott Anderson 4,750 4 Years 0 92,673 236,265
John B. D'Arcy 4,750 4 Years 0 92,673 236,265
James W. Rail 3,600 4 Years 0 70,236 179,064
</TABLE>
RETIREMENT PLAN
The Company's retirement plan covers substantially all full-time
employees who have five years or more of service with the Company. The
retirement plan is a defined benefit plan. It provides a retirement income for
participating employees according to a formula which takes into account an
employee's average annual compensation and years of service with the Company.
Compensation for these purposes includes salary, bonuses and payouts under
incentive plans. Subject to certain minimum provisions, the annual benefit
payable upon normal retirement at age 65 is:
1. The number of years of benefit service that the employee has accrued
in the plan up to December 31, 1991, multiplied by the average of the
highest consecutive five years of compensation up to December 31,
1991, and multiplied by a factor of .0165.
12
<PAGE> 14
Plus
2. Each year's annual compensation subsequent to December 31, 1991,
individually multiplied by a factor of .0165.
The maximum benefits payable pursuant to the Company's retirement plan
are limited by Sections 415 and 401(a)(17) of the Internal Revenue Code of
1986, as amended. Under current regulations, annual benefits would be capped
at $120,000 per year and earnings for the purpose of determining benefits
cannot exceed $150,000. On December 28, 1994, to be effective from January 1,
1994, the Company adopted its Executive Management Pension Plan, which is a
supplemental executive retirement plan (the "SERP"), to restore pension
benefits limited by the Code sections referred to above. The SERP is an
unfunded, nonqualified plan under which benefits are paid from the Company's
general assets. The Board of Directors determines the participants in the SERP
from among those employees of the Company who are or have been, on or after the
effective date of the SERP, members of the Company's Executive Management
Committee and who (1) are employed in a management position with the Company
having principal responsibility for the management, direction and success of
the Company as a whole or a particular business unit thereof, or (2) are highly
compensated employees of the Company within the meaning of ERISA Section 401.
The following table illustrates the estimated annual benefits payable
under the plan in various classifications as to remuneration and years of
service upon retirement.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Years of Service
----------------------------------------------------------------------------------------
6 Yrs to '91 6 Yrs to '91 6 Yrs to '91 6 Yrs to '91 6 Yrs to '91
Average 9 Yrs after '91 14 Yrs after '91 19 Yrs after '91 24 Yrs after '91 29 Yrs after '91
Annual Earnings 15 Years 20 Years 25 Years 30 years 35 years
--------------- --------------- ---------------- --------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C>
$600,000 $148,500 $195,000 $247,500 $297,000 $346,500
500,000 123,750 165,000 206,250 247,500 288,750
400,000 99,000 132,000 165,000 198,000 231,000
350,000 86,625 115,500 144,375 173,250 202,125
300,000 74,250 99,000 123,750 148,500 173,250
250,000 61,875 82,500 103,105 123,750 144,375
200,000 49,500 66,000 82,500 99,000 115,500
150,000 37,125 49,500 61,875 74,250 86,625
100,000 24,750 33,000 41,250 49,500 57,750
</TABLE>
The estimated years of credited service at retirement for the
individuals listed in the Summary Compensation Table are 38 years for Harris H.
Simmons, 16 years for John J. Gisi, 21 years for A. Scott Anderson, 18 years
for John B. D'Arcy and 19 years for James W. Rail, all of whom are presently
participants in the SERP. The benefit amounts listed in the table reflect
differences due to accrued benefits attained under a formula in effect during
previous years, and thus are subject to adjustment. Under current regulations,
annual benefits would be capped at $120,000 per year and earnings for the
purpose of determining benefits cannot exceed $150,000 under the retirement
plan, but such caps would have no effect on annual benefits payable to
participants in the SERP.
13
<PAGE> 15
SUPPLEMENTAL RETIREMENT PLAN
The Company's Supplemental Retirement Plan is a fixed benefit plan
which provides additional retirement benefits for a select group of officers of
the Company and certain subsidiaries having the rank of second vice president
or above. Benefits to be paid at normal retirement age (65) are $5,000 per
year for a period of ten years for second vice presidents or equivalent other
rank, $10,000 per year for a period of ten years for vice presidents or
equivalent other rank, and $20,000 per year plus a discretionary portion for
all senior vice presidents and above. These benefits do not vest prior to
attainment of normal retirement age, and will not normally be paid if the
employee terminates for any reason prior to normal retirement age other than
upon death. In the event of death prior to normal retirement age, the plan
pays the equivalent benefit, without reduction, for a period of ten years.
Persons who are older than 55 when first achieving rank covered by the plan
will normally receive a lesser benefit under the plan, determined at the
discretion of the Board of Directors. Early retirement under the plan may be
allowed, in which case benefits may be reduced at the discretion of the Board
of Directors.
Effective July 1, 1994, the Supplemental Retirement Plan was
terminated with respect to new or additional grants, with no effect on existing
participants. The annual benefit payable to Messrs. Simmons, Anderson, D'Arcy
and Rail upon retirement will be $20,000. Mr. Gisi, who joined the Company in
1994, does not participate in the Supplemental Retirement Plan.
EMPLOYMENT AGREEMENT
In connection with the acquisition in January 1994 by the Company of
National Bancorp of Arizona, Inc. and its subsidiary, National Bank of Arizona,
the Company entered into an Employment Agreement with Mr. John J. Gisi. The
Employment Agreement has a term of three years, provides for an initial base
salary of $200,000, and a minimum bonus of $53,000 payable if the performance
of the Company's Arizona banking subsidiary continues at the level experienced
by National Bank of Arizona prior to the acquisition. Under the Employment
Agreement, salary and bonus are subject to annual review and adjustment by the
Executive Compensation Committee in accordance with the compensation policies
of the Company. Mr. Gisi is also entitled to reimbursement of automobile
expenses, certain country club membership fees, and to participate in all
employee benefit plans, long-term incentive plans and stock bonus plans as
applicable to officers of the Company. While Mr. Gisi's employment can be
terminated by the Company, termination under certain circumstances will entitle
Mr. Gisi to a lump-sum payment equivalent to two years' salary. Under the
Employment Agreement, certain options for the stock of National Bancorp of
Arizona, Inc. held by Mr. Gisi were converted to options for the Company's
common stock.
PROPOSAL TO AMEND THE ZIONS BANCORPORATION
INCENTIVE STOCK OPTION PLAN
(PROPOSAL 2)
The Board of Directors proposes to amend the Zions Bancorporation
Incentive Stock Option Plan (the "Plan"), solely with respect to options
granted after March 3, 1995, to increase the number of shares issuable under
the Plan from 506,000 to 806,000, an increase of 300,000, and to extend the
term of the Plan to March 3, 2005,
14
<PAGE> 16
which represents an extension of approximately an additional five (5) years
over the present term of the Plan. The extension and amendment of the Plan
will affect only option awards made after March 3, 1995. All options
theretofore granted under the Plan will expire at various times through the
year 2000, of which there were options outstanding as of December 31, 1994
covering 393,821 shares.
The primary purpose of the amendment is to provide additional shares
with respect to which awards may be made under the Plan. The Company has used
most of the shares left for issuance under the Plan. The Board of Directors
also proposes to extend the Plan to the maximum term permissible under current
tax law, which is ten years from the date of adoption of the amendments. The
Plan was most recently extended in 1990 for ten years from that date.
The Board of Directors believes that the Plan serves as an effective
means to award key employees for their services to the Company and its
subsidiaries, to provide additional incentives to further long-term growth and
performance of the Company, and to enable the Company to attract and retain the
services of competent employees.
The Plan was adopted to provide for the grant of options which qualify
as "incentive stock options" under the Economic Recovery Tax Act of 1981, as
set forth in Section 422A of the Internal Revenue Code of 1986, as amended.
The significant features of the Plan, as it is proposed to be amended, are as
follows:
1. After amendment, the total number of shares of the Company's
no-par value common stock available for issuance upon the
exercise of options will be 308,175, with respect to which
options for 67,375 shares have been approved for grant by the
Executive Compensation Committee, subject to approval by the
Board of Directors of the grants and shareholder approval of
the proposed amendments. If options lapse or terminate
without exercise, the shares covered thereby will be available
for subsequent options.
2. Incentive stock options may not be granted to individuals who
own more than certain specified percentages of the voting
power of all classes of stock of the Company or any of its
subsidiaries.
3. The Plan is administered by the Executive Compensation
Committee of the Board of Directors. The Committee may grant
incentive stock options to key employees of Zions and its
subsidiaries. Members of the Executive Compensation Committee
and other nonemployee Directors of the Company are not
eligible to receive options. The Executive Compensation
Committee has complete discretion to select the grantees and
to establish the terms and conditions of each option, subject
to the provisions of the Plan. However, the purchase price
under each option shall not be less than one hundred percent
(100%) of the fair market value of the Company's stock on the
date such option is granted, and the term of an option cannot
exceed ten years. Options will contain appropriate
antidilution provisions for adjustment of the number of shares
subject to options and the option price in the event of stock
splits, stock dividends and certain other events described in
the Plan. The market value of the Company's common stock as
of March 15, 1995 was $39.00, represented by the closing price
as published in the Wall Street Journal.
4. The Plan provides that options may become exercisable at such
times and in such installments as the Executive Compensation
Committee may determine. Upon the exercise of any option, the
full purchase price must be paid in cash or in such other form
as the Board of Directors may approve,
15
<PAGE> 17
including shares of common stock of the Company valued at the
fair market value on the date of exercise of the option.
5. The options are not transferable except to the grantee's
estate in the event of death. In the event of voluntary
termination of employment by the employee, or termination for
cause by the Company, all options shall lapse immediately. In
the event of retirement, options shall lapse at the earlier of
the option term or three months after retirement. In the
event of death or permanent disability, options shall lapse at
the earlier of the option term or one year after the event of
death or disability.
6. Nothing in the Plan shall confer upon any employee the right
to continue in the employment of the Company, nor shall the
right of the Company or any of its subsidiaries to terminate
the employment of any employee be affected.
7. The Board of Directors may amend the Plan without shareholder
approval, except in regard to the number of shares that may be
issued in connection with the exercise of options, the option
exercise price, the effective period of the Plan, and certain
other provisions as described in the Plan.
FEDERAL INCOME TAX CONSEQUENCES
Based on management's understanding of existing federal income tax
laws, the principal consequences of the grant and exercise of incentive stock
options is summarized as follows. The grant of an incentive stock option does
not ordinarily have any income tax consequences to the optionee. If the shares
are held at least one year after exercise and are not disposed of within two
years from the date of grant, the optionee does not recognize taxable income
upon exercise, but the amount by which the fair market value of the stock at
the time of exercise exceeds the exercise price will be an item of tax
preference which may be subject to the alternative minimum tax. Any gain or
loss recognized upon the disposition of such shares by the optionee after the
two-year and one-year periods described above will be treated as long-term
capital gain or loss. If the option is treated as an incentive option, the
Company does not receive a tax deduction.
If the employee disposes of common stock received upon exercise of an
incentive stock option before the one and two-year periods have elapsed (a
"Disqualifying Disposition"), the employee recognizes ordinary income in an
amount which will vary depending upon the disposition made, but which will not
be more than the excess of the fair market value of the common stock on the
date of exercise over the exercise price. In case of a Disqualifying
Disposition, the Company is ordinarily entitled, upon compliance with certain
withholding rules, to a deduction in the amount of ordinary income recognized
by the employee.
16
<PAGE> 18
NEW PLAN BENEFIT TABLE
The foregoing amendments may be deemed equivalent to the creation of a
new stock option plan. The following table sets forth information regarding
options approved for grant by the Executive Compensation Committee, but subject
to Board approval of the grants and shareholder approval of the proposed
amendment, for each person named in the Summary Compensation Table and for the
indicated groups:
<TABLE>
<CAPTION>
Name and Principal Position Dollar Value ($)(1) Number of Units
------------------------------- ---------------------- -------------------
<S> <C> <C>
Harris H. Simmons $ 0 5,000
President and Chief Executive
Officer, Zions Bancorporation
John J. Gisi 0 5,000
Senior Vice President, Zions
Bancorporation; Chairman and
Chief Executive Officer,
National Bank of Arizona
A. Scott Anderson 0 2,000
Executive Vice President,
Zions First National Bank
John B. D'Arcy 0 1,750
Executive Vice President,
Zions First National Bank
James W. Rail 0 0
Senior Vice President, Zions
Bancorporation; President,
Zions Data Service Company
All executive officers 0 22,375
All directors who are not executive 0 0
officers
All employees who are not executive 0 45,000
officers
</TABLE>
_____________________________________
(1) The options will be granted with an exercise price equal to the then
current market value of the stock.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ADOPTION OF THE PROPOSED AMENDMENTS TO THE ZIONS BANCORPORATION KEY EMPLOYEE
INCENTIVE STOCK OPTION PLAN.
17
<PAGE> 19
<TABLE>
PERFORMANCE GRAPH FOR ZIONS BANCORPORATION
INDEXED COMPARISON OF 5-YEAR CUMULATIVE TOTAL
RETURN
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
S&P 500 100 96.78 127.12 134.73 144.76 146.87
KBW 50 Index 100 71.81 113.65 144.84 152.86 145.05
Zions Bancorporation 100 120.47 160.71 241.95 241.66 241.47
</TABLE>
Note: Assumes $100 invested on 12-31-89 in Zions Bancorporation, S&P 500 stock
market index and Keefe, Bruyette & Woods (KBW) 50 bank stock index.
Assumes reinvestment of dividends on a quarterly basis.
ZIONS BANCORPORATION
RETURN ON AVERAGE EQUITY
PERCENTAGE
1990 1991 1992 1993 1994
---- ---- ---- ---- ----
14.9 14.6 19.6 20.3 18.8
18
<PAGE> 20
COMPENSATION COMMITTEE REPORT
SUMMARY OF COMPENSATION POLICIES FOR EXECUTIVE OFFICERS
The Executive Compensation Committee (the "Compensation Committee") of the
Board of Directors has furnished the following report on executive
compensation:
Under the supervision of the Compensation Committee, the Company has
developed and implemented compensation policies, plans and programs which
attempt to enhance the profitability of the Company, and thus shareholder
value, by aligning closely the financial interests of the Company's senior
managers with those of its shareholders. In the Company, return on average
shareholders' equity is a critical focus in the establishment of long-term
incentive programs. Due to the Company's relatively modest compensation
structure, the Compensation Committee has not yet adopted a policy regarding
recent changes in the federal tax laws relating to deductibility of certain
executive compensation. The process involved in the executive compensation
determination for fiscal 1994 is summarized below:
- - Compensation for each of the persons named in the Summary Compensation
Table, as well as other senior executives, consists of a base salary,
an annual bonus and long-term incentive compensation. Long-term
incentives consist primarily of annual grants of units of
participation under the Company's Senior Management Value-Sharing
Plan, supplemented by occasional grants of Incentive Stock Options.
The Value-Sharing Plan is closely tied to Company performance as
measured by return on shareholders' equity and earnings per share.
See "Long-term Incentive Plan Awards in Fiscal 1994."
- - The Compensation Committee determines base salaries and annual bonuses
after a subjective evaluation of various factors, including salaries
paid to senior managers with comparable qualifications, experience and
responsibilities at other institutions, individual job performance,
local market conditions and the Committee's perception of the overall
financial performance of the Company (particularly operating results),
without considering specific performance targets or objectives, and
without assigning particular weight to individual factors. As to
executive officers other than the chief executive officer, the
Compensation Committee also considers the recommendations made by the
chief executive officer.
- - Information regarding salaries paid by other financial institutions is
provided annually through an independent survey, and every three years
by an independent consultant (most recently in 1993). The consultant
compares the Company's compensation levels with a peer group of
financial institutions selected by asset size from the consultant's
data base. In its most recent study, the consultant selected fifteen
institutions with asset size ranging from $2.8 billion to $10.6
billion. The study indicated based on a regression analysis that the
base and annual bonus compensation in total for the Company's chief
executive officer and the other executive officers was somewhat below
the median total compensation level for the peer group as adjusted for
institution size. This peer group is not the same peer group used in
the chart on page 13.
- - Units of participation in the Value-Sharing Plan's award funds are
granted on a discretionary basis, in a laddered structure reflecting
the position and proportionate responsibility for overall corporate
results of each executive officer in the Company. The allocation of
units is not based on any measure of Company performance, but is based
on a subjective evaluation of individual performance and the scope of
individual
19
<PAGE> 21
responsibilities. The Committee reviewed and approved the
Value-Sharing Plan's target levels of return on equity and earnings
per share for the 1994 award fund as well as the corresponding
variation in size of the award fund. In 1994, as in every year since
the Value-Sharing Plan was first adopted, the Company's AROE and AEPS
have been within ranges which, if continued throughout the applicable
four- year period covered by each award fund, would provide payouts
under the plan. The Company's consultant has reported that in
comparison to the peer group selected by the consultant, the Company's
compensation package provides proportionately less compensation
through salary and bonus, and proportionately more compensation
through long-term incentive compensation, consisting of the
Value-Sharing Plan and incentive stock options. Consultant reports
are merely one factor taken into consideration by the Committee in the
process of making an independent and subjective determination as to
compensation.
- - The Compensation Committee reviews the salary of the chief executive
officer and compares it to those in peer positions in companies of
similar size and performance levels, using information obtained
through the Company's independent compensation consultant concerning
salary competitiveness, and extrapolating from information obtained in
previous years when no survey has been conducted for the latest year.
The Compensation Committee establishes the chief executive officer's
base salary and annual bonus based on the Compensation Committee's
subjective assessment of the chief executive officer's past
performance, its expectation as to his future contributions in leading
the Company, and the information provided by the compensation
consultant. A similar process is used by the Compensation Committee
to determine the number of units of participation the chief executive
officer receives in the Value-Sharing Plan.
- - The Company periodically grants incentive stock options to executives.
Grants were made in March 1994. Such grants are discretionary with
the Compensation Committee, and are typically made in a laddered
structure reflecting the position of each executive officer in the
Company and that person's proportionate responsibility for overall
corporate performance. Typically, the chief executive officer
recommends the quantity and terms of options to be granted to the
executive officers other than the chief executive officer. The
allocation of stock options among executive officers is not based on
any measure of Company performance, but is based on a subjective
evaluation of individual performance and the scope of the individual's
responsibilities. Information regarding the quantity and terms of
stock options granted by other financial institutions has been
provided by the Company's independent consultant with respect to the
peer group selected by the consultant.
EXECUTIVE COMPENSATION COMMITTEE
Jerry C. Atkin, Chairman
Roger B. Porter
Dale W. Westergard
Robert N. Sears
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Executive Compensation Committee was comprised of Jerry C. Atkin, Chairman,
Roger B. Porter and Dale W. Westergard beginning in April 1994. Prior to April
1994, the Compensation Committee was comprised of Robert N. Sears, Chairman,
Jerry C. Atkin, and Dale W. Westergard. Mr. Dale W. Westergard is a former
20
<PAGE> 22
executive vice president of the Company and is presently a member of the Board
of Directors of Zions First National Bank, the Company's largest subsidiary.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain directors and officers and/or their affiliates borrow from
time to time from Zions First National Bank and other subsidiaries of the
Company, at regular rates and terms, and are subject to all rules and
regulations applicable to banks. Aggregate loans to the directors, executive
officers and principal shareholders of the Company in excess of $60,000 to any
such person as of December 31, 1994 comprised approximately 3.12% of total
shareholders' equity of the Company. Such borrowings were made in the ordinary
course of business, do not involve more-than-normal risks of collectability,
and are made on terms comparable to borrowings by others of similar credit
risk.
RELATIONSHIP WITH INDEPENDENT AUDITORS
(PROPOSAL 3)
KPMG Peat Marwick LLP, Certified Public Accountants, has served as
independent auditor for the Company and its subsidiaries since 1965.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
Annual Meeting of Shareholders, and will have the opportunity to make a
statement, if they desire to do so, and will be available to respond to
appropriate questions.
The Board of Directors, upon the recommendation of the Audit
Committee, has appointed KPMG Peat Marwick LLP as the firm of independent
certified public accountants to audit the books and accounts of the Company and
its subsidiaries for the year to end December 31, 1995, subject to ratification
by the shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ABOVE PROPOSAL.
OTHER MATTERS
Except as set forth herein, management has no knowledge of any matters
to come before the meeting. If, however, any other matters of which management
is now unaware properly come before this meeting, it is the intention of the
persons named in the Proxy to vote the Proxy in accordance with their judgment
on such matters.
DATE OF SUBMISSION OF SHAREHOLDER PROPOSALS
FOR 1996 SHAREHOLDERS' MEETING
The date by which shareholders' proposals must be submitted to the
Company for inclusion in the Proxy Statement for the 1996 Shareholders' Meeting
is December 16, 1995.
21
<PAGE> 23
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH SHAREHOLDER, ON WRITTEN
REQUEST, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR 1994, INCLUDING
THE FINANCIAL STATEMENTS AND SCHEDULES THERETO, AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION. WRITTEN REQUESTS FOR SUCH INFORMATION SHOULD BE
DIRECTED TO THE CORPORATE SECRETARY, 1380 KENNECOTT BUILDING, SALT LAKE CITY,
UTAH 84133.
ZIONS BANCORPORATION - 1380 KENNECOTT BUILDING - SALT LAKE CITY, UTAH 84133 -
(801) 524-4787
22
<PAGE> 24
<TABLE>
<CAPTION>
<S> <C> <C>
ZIONS BANCORPORATION
SOLICITED ON BEHALF OF
PROXY THE BOARD OF DIRECTORS
The undersigned hereby appoints A. SCOTT ANDERSON, GARY L. ANDERSON and W. DAVID HEMINGWAY or any of them with full power of
substitution, the lawful attorneys and proxies of the undersigned, to vote all of the shares held by the undersigned in Zions
Bancorporation at the Annual Shareholder's Meeting to be held on April 28, 1995 and at all adjournments thereof upon the
matters listed below.
1. To elect Directors
ALL NOMINEES LISTED BELOW (except as marked to the contrary) FOR / / WITHHOLD AUTHORITY / /
INSTRUCTION: To withhold authority for any individual, cross a line through the nominee's name in
the list below:
Roger B. Porter L.E. Simmons I.J. Wagner
2. To approve amendments to the Zions Bancorporation Key Employee Incentive Stock
Option Plan. FOR / / AGAINST / / ABSTAIN / /
3. To approve the appointment of independent auditors for the year 1995. FOR / / AGAINST / / ABSTAIN / /
4. To transact any other such business as may properly come before the meeting. FOR / / AGAINST / / ABSTAIN / /
UNLESS A CONTRARY CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR ELECTION OF THE DIRECTORS and IN FAVOR OF ITEMS 2,
3 and 4.
_____________________________________________(L.S.)
Dated ________________________________________, 1995. _____________________________________________(L.S.)
Please sign exactly as name appears on reverse side
</TABLE>
<PAGE> 25
ZIONS UTAH BANCORPORATION
KEY EMPLOYEE INCENTIVE STOCK OPTION PLAN
ARTICLE I
Purpose and Scope of the Plan
1.1 Purpose
The purpose of the Plan is to promote the long-term success of Zions
Utah Bancorporation by providing financial incentives to key
employees who are in positions to make significant contributions
toward such success. The Plan is designed to attract individuals of
outstanding ability to employment with Zions Utah Bancorporation and
to encourage key employees to acquire a proprietary interest in Zions
Utah Bancorporation, to continue employment with Zions Utah
Bancorporation, and to render superior performance during such
employment.
1.2 Definitions
Unless the context clearly indicates otherwise, the following terms
have the meanings set forth below.
"Board of Directors" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1954, as amended.
"Committee" means the Executive Compensation Committee of the Board
of Directors, which committee shall be composed of at least three
directors who have not been eligible to receive an award under the
Plan at any time within a period of one year immediately preceding
the date of their appointment to such committee.
"Common Stock" means the common stock of the Company, without par
value, or such other class of shares or other securities as to which
the provisions of the Plan may be applicable.
"Company" means Zions Utah Bancorporation.
"Fair Market Value" of a share of Common Stock on any particular date
is the mean between the closing dealer "bid" and "ask" prices of a
share of Common Stock as quoted by NASDAQ. If no "bid" and "ask"
prices are quoted for the date of grant, the Fair Market Value of a
share of Common Stock on such date shall be determined with reference
to such prices of a share of Common Stock on the first
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preceding date on which such prices were quoted. If Common Stock is
listed on an established stock exchange or exchanges, the Fair Market
Value shall be deemed to be the highest closing price of Common Stock
on such stock exchange or exchanges on the day the option is granted
or, if no sale of Common Stock has been made on any stock exchange on
that day, the Fair Market Value shall be determined by reference to
such price for the next preceding day on which a sale occurred. In
the event that Common Stock is not traded on an established stock
exchange, and no closing dealer "bid" and "ask" prices are available,
then the purchase price shall be 100 percent of the Fair Market Value
of one share of Common Stock on the day the option is granted, as
determined on the Committee in good faith.
"Grant Date," as used with respect to a particular Option, means the
date as of which such option is granted by the Committee pursuant to
the Plan.
"Grantee" means the individual to whom an Option is granted by the
Committee pursuant to the Plan.
"Incentive Stock Option" means an option, granted by the Committee
pursuant to Article II, to purchase shares of Common Stock in a
manner which qualifies as an Incentive Stock Option as described in
Section 422A of the Code of 1954, as amended.
"Option Period" means the period beginning on the Grant Date and
ending the day specified in the agreement for each option but in no
event longer than the tenth anniversary of the Grant Date.
"Plan" means the Zions Utah Bancorporation Key Employee Incentive
Stock Option Plan as set forth herein and as may be amended from time
to time.
"Retirement," as applied to a Grantee, means the Grantee's
termination of employment with Zions Utah Bancorporation at a time
when the Grantee receives an immediately payable retirement benefit
under the Zions Utah Bancorporation Retirement Plan or under any
other retirement plan that is maintained by a subsidiary of Zions
Utah Bancorporation and that is determined by the Committee to be the
functional equivalent of the Company's Retirement Plan.
"Zions" means the Company, any stock corporation of which a majority
of the voting common or capital stock is owned directly or indirectly
by the Company, and any other company designated as such by the
Committee, but only during the period of such ownership or
designation.
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"Total and Permanent Disability," as applied to a Grantee, means that
the Grantee; (i) has established to the satisfaction of the Company
that the Grantee is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less
than 12 months (all within the meaning of Section 105[d][4] of the
Code); and (ii) has satisfied any requirement imposed by the
Committee.
1.3 Aggregate Limitation
(a) The aggregate number of shares of Common stock with respect
to which Incentive Stock Options may be granted shall not
exceed 256,000 shares of Common Stock, subject to adjustment
in accordance with Section 3.1.
(b) Any shares of Common Stock to be delivered by the Company
upon the exercise of Incentive Stock Options shall be issued
from the Company's authorized but unissued shares of Common
Stock or from Treasury Stock acquired by the Company at the
discretion of the Board of Directors.
(c) In the event that any Incentive Stock Option lapses or
otherwise terminates prior to being fully exercised, any
share of Common Stock allocable to the unexercised portion of
such option may again be made subject to an Incentive Stock
Option.
1.4 Administration of the Plan
(a) The Plan shall be administered by the Committee which shall
have the authority:
(i) to determine key employees of Zions and its
subsidiaries to whom, and the times as which,
Incentive Stock Options shall be granted and the
number of shares of Common Stock to be subject to
each such option taking into account the nature of
the services rendered by the particular employee, the
employee's potential contribution to the long-term
success of the Corporation and/or any of its
subsidiaries and such other factors as the Committee
in its discretion shall deem relevant;
(ii) to interpret the Plan and to establish rules and
regulations relating to it;
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(iii) to prescribe the terms and provisions of the
agreements for the grant of Incentive Stock Options;
and
(iv) to make all other determinations necessary or
advisable in order to administer the Plan.
(b) All decisions of the Committee upon questions concerning the
Plan or any Incentive Stock Option shall be conclusive.
1.5 Eligibility for Awards
The Committee shall designated from time to time the key employees of
Zions and its subsidiaries who are to be granted Incentive Stock
Options. In no event may a member of the Committee or any
nonemployee Director be granted an Incentive Stock Option.
1.6 Effective Date and Duration of Plan
The Plan shall become effective as of December 28, 1981, upon its
adoption by the Board of Directors; provided, that any grant of
Incentive Stock Options is subject to the approval of the Plan by the
shareholders of the Company within twelve months of adoption by the
Board of Directors. Unless previously terminated by the Board of
Directors, the Plan shall terminate on the tenth anniversary of the
effective date.
ARTICLE II
STOCK OPTIONS
2.1 Grant of Incentive Stock Options
The Committee may from time to time, subject to the provisions of the
Plan, grant Incentive Stock Options to key employees to purchase
shares of Common Stock allotted in accordance with Section 1.3.
2.2 Option Requirements
(a) All Incentive Stock Options are intended to qualify as an
"incentive stock options" within the meaning of Subsection
(b) of Section 422A of the Code.
(b) An Incentive Stock Option shall be evidenced by a written
instrument specifying the number of shares of Common Stock
that may be purchased by its exercise, the Option Period and
any other such terms and
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conditions consistent with the Plan as the Committee shall
determine.
(c) An Incentive Stock Option shall not be granted on or after
the tenth anniversary of the date upon which the Plan was
adopted by the Board of Directors.
(d) An Incentive Stock Option shall not be granted to an
individual who, on the date of grant, owns stock possessing
more than ten percent of the total combined voting power of
all classes of stock of Zions or any subsidiary corporation.
(e) An Incentive Stock Option shall not be exercisable after the
expiration of the Option Period.
(f) An Incentive Stock Option shall not be exercisable while
there is outstanding (within meaning of Section 422A[c][7] of
the Code) any other "incentive stock option," within the
meaning of Subsection (b) of Section 422A of the Code, which
was granted before the granting of the Incentive Stock Option
to the Grantee to purchase stock in Zions Utah Bancorporation
or in a corporation which, on the Grant Date, is a parent or
subsidiary corporation of Zions Utah Bancorporation or is a
predecessor corporation of any of such corporations.
(g) The Committee may provide, in the instrument evidencing an
Incentive Stock Option, for the lapse of the Incentive Stock
Option, prior to the expiration of the Option Period, upon
the occurrence of any event specified by the Committee.
(h) The option price per share of Common Stock shall be equal to
the Fair Market Value of a share of Common Stock on the Grant
Date.
(i) The aggregate Fair Market Value, determined on the Grant
Date, of the shares of Common Stock with respect to
which any Grantee may be granted one or more Incentive
Stock Options under the Plan (within the meaning of
Subsection [b] of Section 422A of the Code) in any
calendar year shall not exceed $100,000.00 plus any
"unused limit carryover" to such year, determined in
accordance with Section 422A(c)(4) of the Code.
(j) An Incentive Stock Option shall not be transferable
other than by will or the laws of descent and
distribution and, during the Grantee's lifetime,
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shall be exercisable only by the Grantee; except, that
the Committee may permit:
(i) exercise, during Grantee's lifetime, by Grantee's
guardian or legal representative; and
(ii) transfer, upon Grantee's death, to beneficiaries
designated by Grantee in a manner authorized by the
Company; provided that the Committee determines that
such exercise and such transfer are consonant with
requirements for exemption from Section 16(b) of the
Securities Exchange Act of 1934, as amended, and with
the requirements of Section 422A(b)(5) of the Code.
(k) In the event of retirement, the option to exercise shall
lapse at the earlier of the Option Period of the Incentive
Stock Option or three months after retirement. In the event
of voluntary termination of employment at the election of the
employee or termination for cause at the election of the
Company, all Incentive Stock Options shall lapse forthwith.
In the event of termination due to death or total and
permanent disability, any Incentive Stock Options shall lapse
at the earlier of the appropriate Option Period or one year
after termination due to such causes.
(l) A person electing to exercise an Incentive Stock Option
shall give written notice, in such form as the Committee
may require, of such election to the Company and shall
tender to the Company the full specified option purchase
price of the shares of Common Stock for which the
election is made. Payment of the purchase price shall
be made in cash or in such other form as the Board of
Directors may approve, including shares of Common Stock
of the Company valued at the Fair Market Value on the
date of exercise of the Option.
ARTICLE III
General Provisions
3.1 Adjustment Provisions
(a) If:
(i) any recapitalization, reclassification, split-up or
consolidation of Common Stock is effected;
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(ii) the outstanding shares of Common Stock are exchanged, in
connection with a merger or consolidation of the Company
or a sale by the Company of all or a part of its assets,
for a different number or class of shares of stock or
other securities of the Company or for shares of the
stock or other securities of any other corporation;
(iii) new, different or additional shares or other securities
of the Company or of another corporation are received by
the holders of Common Stock; or
(iv) any distribution is made to the holders of Common Stock
other than a cash dividend; then the Committee shall
make appropriate adjustments to:
(A) The number and class of shares or other securities that
may be issued or transferred pursuant to Incentive Stock
Options, and
(B) The purchase price to be paid per share under
outstanding options.
(b) Upon the dissolution or liquidation of the Company, the Plan
shall terminate, and all options previously granted shall
lapse on the date of such dissolution or liquidation of the
Company.
(c) Adjustments under Subsection (a) shall be made according to
the sole discretion of the Committee, and its decision shall
be binding and conclusive.
(d) Except as provided in subparagraphs (a) and (b), the issuance by
the Company of shares of stock of any class, or securities
convertible into shares of stock of any class shall not affect
the Incentive Stock Options.
3.2 Additional Conditions
Any shares of Common Stock issued or transferred under any provision
of the Plan may be issued or transferred subject to such conditions,
in addition to those specifically provided in the Plan, as the
Committee or Company may impose.
3.3 No Right to Employment
Nothing in the Plan or in any instrument executed pursuant thereto
shall confer upon any employee any right to continue in the employ of
Zions Utah Bancorporation or any
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of its subsidiaries or shall affect the right of Zions Utah
Bancorporation or a subsidiary thereof to terminate the employment of
any employee, with or without cause.
3.4 Legal Restrictions
The Company will not be obligated to issue shares of Common Stock or
make any payment if counsel to the Company determines that such
issuance or payment would violate any law or regulation of any
governmental authority or any agreement between the Company and any
national securities exchange upon which the Common Stock may be
listed. In connection with any stock issuance or transfer, the
person acquiring the shares shall, if requested by the Company, give
assurances satisfactory to counsel to the Company regarding such
matters as the Company may deem desirable to assure compliance with
all legal requirements. The Company shall in no event be obliged to
take any action in order to cause the exercise of any Incentive Stock
Option.
3.5 No Rights as Shareholders
No Grantee, and no beneficiary or other person claiming through a
Grantee, shall have any interest in any shares of Common Stock
allocated for the purposes of the Plan or subject to any Incentive
Stock Option until such shares of Common Stock shall have been
transferred to the Grantee or such person. Furthermore, the
existence of the Incentive Stock Options shall not affect: the right
or power of the Company or its stockholders to make adjustments,
recapitalizations, reorganizations or other changes in the Company's
capital structure or its business; any issue of bonds, debentures,
preferred or prior preference stocks affecting the Common Stock of
the Company or the rights thereof; the dissolution or liquidation of
the Company, or sale or transfer of any part of its assets or
business; or any other corporate act, whether of a similar character
or otherwise.
3.6 Withholding Taxes
The Company may require Grantee, as a condition of exercise of an
Incentive Stock Option, to pay or reimburse any taxes which it
determines it is required to withhold in connection with the grant or
exercise of the Incentive Stock Option.
3.7 Choice of Law
The validity, interpretation and administration of the Plan and of
any rules, regulations, determinations or decisions made thereunder,
and the rights of any and all persons
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having or claiming to have any interest therein or thereunder, shall
be determined exclusively in accordance with the laws of the State of
Utah. Without limiting the generality of the foregoing, the period
within which any action in connection with the Plan must be commenced
shall be governed by the Laws of the State of Utah; without regard to
the place where the act or omission complained of took place, the
residence of any party to such action or the place where the action
may be brought.
3.8 Amendment, Suspension and Termination of Plan
The Board of Directors may at any time terminate, suspend or amend
the Plan; however, no such amendment shall, without the approval of
the shareholders of the Company:
(a) increase the aggregate number of shares which may be issued
in connection with Incentive Stock Options;
(b) change the Incentive Stock Option exercise price;
(c) increase the maximum period during which Incentive Stock
Options may be exercised;
(d) extend the effective period of the Plan; or
(e) materially modify the requirements as to eligibility for
participation in the Plan.
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ZIONS BANCORPORATION
AMENDMENT NO. 1 TO
KEY EMPLOYEE INCENTIVE STOCK OPTION PLAN
The Key Employee Incentive Stock Option Plan (the "Plan"), maintained by
Zions Utah Bancorporation under the name Zions Utah Bancorporation Key Employee
Incentive Stock Option Plan, as adopted on December 28, 1981 by the Board of
Directors of the Company and approved on April 28, 1982 by the shareholders of
the Company, shall be and hereby is amended as follows:
1. All references in the Plan to Zions Utah Bancorporation shall be
deemed to refer to Zions Bancorporation, and the Plan may
hereinafter be referred to as the Zions Bancorporation Key
Employee Incentive Stock Option Plan.
2. Paragraph 1.3(a) of the Plan shall be and hereby is amended to
read in its entirety, as follows:
(a) The aggregate number of shares of Common Stock with
respect to which Incentive Stock Options may be granted
under the Plan shall not exceed 506,000 shares of Common
Stock, subject to adjustment in accordance with Section
3.1.
3. Paragraph 1.6 of the Plan shall be and hereby is amended to read
in its entirety as follows:
The Plan shall become effective as of December 28, 1981,
upon its adoption by the Board of Directors; provided, that any
grant of Incentive Stock Options is subject to the approval of
the Plan by the shareholders of the Company within twelve months
of adoption by the Board of Directors. Unless previously
terminated by the Board of Directors, the Plan shall terminate on
the 20th anniversary of the effective date.
4. Paragraph 2.2(f) of the Plan shall be deleted in its entirety and
shall be of no further force or effect whatsoever.
5. These amendments shall not in any way be deemed to cause or
effect an amendment of any Incentive Stock Options (as defined in
the Plan) outstanding as of the date hereof.
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ZIONS BANCORPORATION
AMENDMENT NO. 2 TO
KEY EMPLOYEE INCENTIVE STOCK OPTION PLAN
(Proposed Form)
The Key Employee Incentive Stock Option Plan (the "Plan"), maintained by
Zions Utah Bancorporation (the "Company"), as adopted on December 28, 1981 by
the Board of Directors of the Company and approved on April 28, 1982 by the
shareholders of the Company, shall be and hereby is amended effective as of
March 3, 1995, subject to approval by the shareholders of the Company at the
next succeeding Annual Meeting of the Shareholders of the Company, as follows:
1. Paragraph 1.3(a) of the Plan shall be and hereby is amended to
read in its entirety, as follows:
(a) The aggregate number of shares of Common Stock with
respect to which Incentive Stock Options may be granted
under the Plan shall not exceed 806,000 shares of Common
Stock, subject to adjustment in accordance with Section
3.1.
2. Paragraph 1.6 of the Plan shall be and hereby is amended to read
in its entirety as follows:
The Plan shall become effective as of December 28, 1981,
upon its adoption by the Board of Directors; provided, that any
grant of Incentive Stock Options is subject to the approval of
the Plan by the shareholders of the Company within twelve months
of adoption by the Board of Directors. Unless previously
terminated by the Board of Directors, the Plan shall terminate on
March 3, 1005.
3. These amendments shall not in any way be deemed to cause or
effect an amendment of any Incentive Stock Options (as defined in
the Plan) outstanding as of the date hereof.
