<PAGE> 1
ZIONS BANCORPORATION
1380 Kennecott Building, Salt Lake City, Utah 84133
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 26, 1996
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
South Main Street, Salt Lake City, Utah, on Friday, April 26, 1996, 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 the Zions Bancorporation Non-Employee Directors
Stock Option Plan (Proposal 2);
3. To approve the appointment of independent auditors for the
year 1996 (Proposal 3); and
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, 1995, 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, 1996
<PAGE> 2
PROXY STATEMENT
ZIONS BANCORPORATION
1380 Kennecott Building, Salt Lake City, Utah 84133
ANNUAL MEETING OF SHAREHOLDERS
April 26, 1996
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 Zions Bancorporation Non-Employee
Directors Stock Option Plan described in this Proxy Statement;
and
- 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, 1996.
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 14,500,299 shares of common
stock outstanding at the close of business on February 27, 1996, 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, 1996.
1
<PAGE> 3
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
four persons receiving the highest number of votes to be elected.
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
Jerry C. Atkin
Grant R. Caldwell
Roy W. Simmons
Dale W. Westergard
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE ELECTION
OF THE NOMINEES FOR DIRECTOR SET FORTH ABOVE.
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
DIRECTOR TERM
NOMINEES PRINCIPAL OCCUPATION DURING PAST FIVE YEARS SINCE EXPIRES AGE
- -------- ------------------------------------------- -------- ------- ---
<S> <C> <C> <C> <C>
Jerry C. Atkin(3) Chairman, President and Chief Executive 1993 1996 47
Officer, SkyWest Airlines, St. George, Utah.
Grant R. Caldwell(1) Retired, former Partner, KMG Main Hurdman, Salt 1993 1996 71
Lake City, Utah.
Roy W. Simmons(2,4) Chairman of the Company; Chairman of the Board 1961 1996 80
of Directors of Zions First National Bank;
Member of the Board of Directors of Beneficial
Life Insurance Co.; Director, Ellison Ranching
Co.
</TABLE>
2
<PAGE> 4
<TABLE>
<S> <C> <C> <C> <C>
Dale W. Westergard(3) Retired/Former Executive Vice President of the 1984 1996 70
Company; Member of the Board of Directors of
Zions First National Bank.
DIRECTORS WITH UNEXPIRED TERMS OF OFFICE
R. D. Cash(2) Chairman, President and Chief Executive Officer 1989 1997 53
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 Officer, ZCMI. 1994 1997 57
Roger B. Porter(1,3) IBM Professor of Business and Government, 1993 1998 49
Harvard, University; Assistant to the President
for Domestic and Economic Affairs, The White
House, 1989-1992.
Robert G. Sarver(4) Principal, Southwest Value Partners and 1994 1997 34
Affiliates; Chairman and Chief Executive
Officer of G B Bancorporation effective October
1995; President, National Bank of Arizona,
1992-1994; Vice Chairman, National Bank of
Arizona, 1990-1992.
Harris H. Simmons(2,5) President and Chief Executive Officer of the 1989 1997 41
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.
L.E. Simmons(4,5) President, SCF Investment Partners and L.E. 1978 1998 49
Simmons & Associates, Inc. (Private Equity
Investment Management), Houston, Texas.
I.J. Wagner(1,2) President, The Keystone Company (Corporate 1965 1998 80
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 eight meetings during the fiscal year
ending December 31, 1995. Of the Board's four standing committees, the Executive
Committee did not meet, the Audit Committee met four times, the Executive
Compensation Committee met once, and the Credit Review/Compliance Committee met
four times during the fiscal year ending December 31, 1995. 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 for, and results of,
the annual audit with the Company's independent auditors and approves non-audit
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>
OFFICER
INDIVIDUAL PRINCIPAL OCCUPATION DURING PAST FIVE YEARS** SINCE AGE
- ---------- --------------------------------------------- ------- ---
<S> <C> <C> <C>
Roy W. Simmons* Chairman of the Company; Chairman of the Board of 1961 80
Directors of Zions First National Bank; Member of the
Board of Directors of Beneficial Life Insurance Co.
Harris H. Simmons* President and Chief Executive Officer of the Company; 1981 41
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 and 1988 53
Secretary of the Company; Executive Vice President
and Secretary of the Board of Directors of Zions
First National Bank.
Danne L. Buchanan Senior Vice President of the Company; President 1995 38
of Zions Data Service Company; prior to March 1995,
Senior Vice President and General Manager of Zions
Data Service Company.
Gerald J. Dent Senior Vice President of the Company; Executive Vice 1987 54
President of Zions First National Bank.
John J. Gisi Senior Vice President of the Company; Chairman and 1994 50
Chief Executive Officer of National Bank of Arizona.
Clark B. Hinckley Senior Vice President of the Company; prior to 1994 48
March 2, 1994, President of Zions First National Bank
of Arizona.
George Hofmann III Senior Vice President of the Company; President and 1995 46
Chief Executive Officer of Nevada State Bank; Prior
to April 1995, Senior Vice President of Zions First
National Bank.
</TABLE>
5
<PAGE> 7
*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, 1996, 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 614,132 4.24%
Harris H. Simmons, I. J. Wagner,
and Louis H. Callister, Jr., as
Voting Trustees(1)
One South Main Street
Salt Lake City, Utah 84111
Roy W. Simmons Record and Beneficial 423,721 2.91%
One South Main Street Beneficial(2) 635,238 4.36%
Salt Lake City, Utah 84111 --------- -----
1,058,959 7.27%
Zions First National Bank Record(3) 1,107,956 7.64%
One South Main Street
Salt Lake City, Utah 84111
</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 regarding 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 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.,
900 Kennecott Building, Salt Lake City, Utah.
(2) Includes Roy W. Simmons' beneficial ownership interest in 89,084
shares deposited with the voting trust referred to in note (1) above,
and 497,844 shares held by a company in which Mr. Simmons serves as a
director.
(3) These shares are owned of record as of February 27, 1996, 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 776,743 shares (5.36% of the class) it holds as trustee for
the Zions Bancorporation Employee Stock Savings Plan, the Zions
Bancorporation Employee Investment Savings Plan, and the Zions
Bancorporation Profit Sharing Plan. Zions First National Bank also
acts as trustee for the Zions Bancorporation Dividend Reinvestment
Plan, which holds 253,136 shares (1.75% of the class) and the Zions
Bancorporation PAYSOP Plan, which holds 78,077 shares (.54% of the
class) as to which Zions First National Bank does not have or share
voting power.
6
<PAGE> 8
Set forth below is the beneficial ownership, as of February 27, 1996,
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 49,129 *(1)
Roger B. Porter -- *(1)
Robert G. Sarver 115,577 *(1)
Harris H. Simmons 578,381(2)(4) 3.97
L. E. Simmons 535,288(2)(4) 3.67
Roy W. Simmons 1,058,959(2)(4) 7.27
I. J. Wagner 103,028(2) *(1)
Dale W. Westergard 40,391 *(1)
All directors and officers
as a group (32 persons) 2,344,408(3) 16.09
</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
(525,048 shares); Harris H. Simmons (606,772 shares); and I. J. Wagner
(554,132 shares). Such persons disclaim beneficial ownership in such
shares.
(3) Includes all 614,132 shares held by the Zions Bancorporation 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 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, 1995 through December
31, 1995, its officers and directors were in compliance with all applicable
filing requirements, except that Mr. John J. Gisi filed an amended report
correcting
7
<PAGE> 9
his disclosure of the number of shares held in his behalf in the Zions 401-K
plan as of December 31, 1994, and Mr. W. David Hemmingway filed a late report
on the exercise of stock options.
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows compensation earned from
the Company for services rendered during fiscal years 1995, 1994 and 1993 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 $100,000 in 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term
Annual Compensation
Compensation(1) Awards
----------------- ------------------
Securities All Other
Salary Bonus Value- Underlying Compensation
Name and Principal Position Year ($)(2)(3)(4) ($)(4)(5) ($)Share(7) Options(#)(6) ($)(4)(8)(9)(10)
- --------------------------- ---- ------------- ---------- -------- ------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Harris H. Simmons 1995 355,326 170,000 84,950 5,000 19,790
President and Chief Executive 1994 322,524 155,000 0 5,000 10,132
Officer, Zions Bancorporation 1993 289,531 170,000 0 0 8,151
John J. Gisi(11)(12) 1995 194,904 90,000 0 5,000 10,560
Senior Vice President, Zions 1994 200,335 80,000 0 3,250 67,367
Bancorporation; Chairman and 1993 0 0 0 0 0
Chief Executive Officer of
National Bank of Arizona
A. Scott Anderson 1995 190,349 87,500 67,960 2,000 9,449
Executive Vice President, 1994 184,199 70,000 0 3,500 10,580
Zions First National Bank 1993 175,489 58,000 0 0 10,310
John B. D'Arcy 1995 152,897 58,000 67,960 1,750 14,284
Executive Vice President, 1994 147,428 56,000 0 2,750 11,185
Zions First National Bank 1993 132,580 55,000 0 0 9,265
W. David Hemmingway 1995 162,689 73,000 67,960 1,750 12,918
Executive Vice President, 1994 158,100 0 0 3,500 13,869
Zions First National Bank 1993 143,078 70,000 0 0 6,987
</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) See "Certain Relationships and Related Transactions" regarding
non-qualified stock option income for Harris H. Simmons and John J. Gisi
recognized in 1995.
8
<PAGE> 10
(3) 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.
(4) 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,
approximately 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 1995, 1994 and 1993 were as follows, respectively: Mr.
Simmons, $14,316, $6,031 and $1,948; Mr. Anderson, $3,160, $5,158 and
$2,936; Mr. D'Arcy, $8,144, $4,975 and $2,401; Mr. Hemmingway, $6,995,
$8,786 and $1,137. For Mr. Gisi, who joined the Company in 1994, the amount
accrued for 1995 and 1994 was $7,200 and $4,620.
(5) 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.
(6) 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 six years.
(7) 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, 1994, and 1995 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. A payout occurred under the plan in 1995. Payouts are reported in the
above table under "Long-term Compensation Awards." For each of the persons
named above, the amounts accrued for 1995, 1994 and 1993 were as follows,
respectively: Mr. Simmons, $211,192, $127,731 and $101,024; Mr. Anderson,
$151,769, $95,793 and $78,632; Mr. D'Arcy, $147,845, $95,793 and $78,632;
Mr. Hemmingway, $147,845, $95,793, and $78,632. For Mr. Gisi, who joined
the Company in 1994, the amount accrued for 1995 and 1994 was $76,013 and
$19,372. See "Long-term Incentive Plan Awards in Fiscal 1995," that
follows.
(8) 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 1995, 1994 and
1993 were as follows, respectively: Mr. Simmons, $1,503, $1,391 and $1,288;
Mr. Anderson, $2,929, $2,712 and $2,511; Mr. D'Arcy, $3,780, $3,500 and
$3,241; Mr. Hemmingway, $2,563, $2,373 and $2,197. Mr. Gisi, who joined the
Company in 1994, does not participate in the Supplemental Retirement Plan.
(9) 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
<PAGE> 11
(10) 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 stock. For each of the persons
named above, the amounts accrued for 1995, 1994 and 1993 were as follows,
respectively: Mr. Simmons, $3,360, $2,710 and 4,915; Mr. Anderson, $3,360,
$2,710 and $4,863; Mr. D'Arcy, $3,360, $2,710 and $3,623; Mr. Hemmingway,
$3,360, $2,710 and $3,653. For Mr. Gisi, who joined the Company in 1994,
the amounts accrued for 1995 and 1994 were $3,360 and $0.
(11) Includes $62,747 in moving expenses paid to Mr. Gisi in 1994 preparatory to
changing corporate headquarters for a subsidiary of the Company.
(12) Mr. Gisi's employment by the Company commenced with the acquisition by the
Company of National Bancorp of Arizona, Inc. on January 14, 1994.
STOCK OPTION GRANTS IN FISCAL YEAR 1995
The following table shows the number of shares with respect to which
options were granted during 1995 to each of the named persons, together with the
percentage of all grants to employees which the grant to the named person
represents, the exercise price of such option, and the expiration date of the
option.
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term(1)
--------------------------------------- ---------------------------------
% of Total
Options
Options Granted to Exercise
Granted Employees Price Expiration
Name (#)(2) in Fiscal Year ($/Sh) Date 5% ($) 10% ($)
---- --------- -------------- ----------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Harris H. Simmons 5,000 7.20 42.625 04-27-2001 72,475 164,425
John J. Gisi 5,000 7.20 42.625 04-27-2001 72,475 164,425
A. Scott Anderson 2,000 2.88 42.625 04-27-2001 28,990 65,770
John B. D'Arcy 1,750 2.52 42.625 04-27-2001 25,366 57,549
W. David Hemmingway 1,750 2.52 42.625 04-27-2001 25,366 57,549
</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 Compensation
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 1995 were 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 1995, 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(#) Realized($) at 12-31-95(#)(1) at 12-31-95($)(2)
---- ----------- ----------- ------------------------- -------------------------
Not Not
Exercisable Exercisable Exercisable Exercisable
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Harris H. Simmons 12,500 388,500 7,750 8,750 415,438 340,000
John J. Gisi 20,000 807,632 13,212 20,038 909,710 1,177,738
A. Scott Anderson 3,500 199,500 4,375 4,625 231,875 181,563
John B. D'Arcy 2,500 60,513 1,875 4,375 91,563 172,056
W. David Hemmingway 7,000 307,500 2,675 11,575 152,438 640,156
</TABLE>
- -------------------------
(1) Of the shares shown as underlying unexercised options for Mr. Gisi, a
total of 12,400 exercisable and 12,600 unexercisable represent options
received in exchange for options of National Bancorp of Arizona, Inc.
upon its acquisition by the Company.
(2) Potential unrealized value is (i) the fair market value at fiscal 1995
year-end ($80.25) less the option exercise price, times (ii) the
number of shares.
LONG-TERM INCENTIVE PLAN AWARDS IN FISCAL 1995
The following table sets forth certain information regarding awards
made in 1995 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
11
<PAGE> 13
Committee and the Board of Directors. Such additional award funds were
established in 1992, 1993, 1994, and 1995.
The award fund established in 1995 is to range in amount from $0 for an
average return on shareholders' equity ("AROE") of 14% over the four years
beginning in 1995, to a maximum of $4,616,000, 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 $20.76, the factor will be 0, and there will be no amounts paid under the
plan. If the AEPS is greater than $20.76, the factor will be a number between 1
and a maximum of 1.33. Accordingly, the maximum aggregate of all payments
possible under the 1995 award fund is $6,139,280. 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 120,000 units in
total. The following table sets forth estimated future payouts for the named
individuals under the award fund established in 1995 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 1996-1998 will
be equivalent to the Company's AROE in fiscal 1995 (as to which there can be no
assurance) and that an AEPS of $22.12 will be achieved, which is the equivalent
of the 1995 EPS being earned in each of the four years (also as to which there
can be no assurance); and the maximum amount represents the maximum possible
amount payable to the named individuals from the award fund established under
the plan in 1995.
<TABLE>
<CAPTION>
Estimated Future Payout
Under Non-stock Price-based Plans
---------------------------------
Number of Performance
Performance Period Until Threshold Target Maximum
Name Units Payout ($) ($) ($)
-------- ----------- ------------ ----------- --------- ---------
<S> <C> <C> <C> <C> <C>
Harris H. Simmons 7,800 4 Years 0 237,276 399,126
John J. Gisi 5,000 4 Years 0 152,100 255,850
A. Scott Anderson 5,500 4 Years 0 167,310 281,435
John B. D'Arcy 5,000 4 Years 0 152,100 255,850
W. David Hemmingway 5,000 4 Years 0 152,100 255,850
</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:
12
<PAGE> 14
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;
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 based on a combination of the basic pension plan and the
SERP.
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>
13
<PAGE> 15
*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 39 years for W. David Hemmingway, 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.
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 to the named
beneficiary 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 Hemmingway 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.
14
<PAGE> 16
PROPOSAL TO APPROVE THE ZIONS BANCORPORATION
NON-EMPLOYEE DIRECTORS STOCK
OPTION PLAN
(PROPOSAL 2)
The Board of Directors proposes the adoption of the Zions
Bancorporation Non-Employee Directors Stock Option Plan (the "Plan"), the
approval of 100,000 shares to be set aside for and be issuable under the Plan,
and the approval of the term of the Plan to April 26, 2005.
The primary purpose of the Plan is to provide shares issuable under the
Plan to non-employee directors who are responsible for reviewing and monitoring
the performance of the Company and the performance of the Company's officers;
thereby encouraging such Directors to acquire stock ownership in the Company.
The Plan is intended to grant options which are "non-qualified" options
within the meaning of the applicable sections of the Internal Revenue Code, as
amended. (See "Federal Income Tax Consequences.") The significant features of
the Plan, as it is proposed, are as follows:
1. Upon adoption, the total number of shares of the Company's
no-par value common stock available for issuance upon the
exercise of options will be 100,000. Management currently
does not contemplate registering the stock set aside for
issuance under the Plan with the Securities and Exchange
Commission. Thus, after a non-employee director exercises an
option, he must hold the stock he receives for at least 2
years before that stock may be sold in the market. If options
lapse or terminate without exercise, the shares covered
thereby will be available for subsequent options.
2. Stock options can be granted only to voting directors of the
Company who are not currently serving as employees of the
Company or any of its affiliates.
3. The Plan is administered by the Pension and Benefits Committee
which consists of officers of the Company. The Committee
shall interpret the Plan and prescribe such rules, regulations
and procedures in connection with the operation of the Plan as
it shall deem to be necessary. Notwithstanding the above, the
committee shall have no discretion about such matters as the
selection of the directors to whom options are to be granted,
the timing of such grants, the number of shares subject to any
option, the exercise price of any option, or the periods and
term of any option.
4. The Plan provides that options of 1,000 shares will be granted
annually to each non-employee director which will vest and
become exercisable in four equal installments of 250 shares
beginning six months from the date of grant and continuing at
one-year intervals thereafter. Each option grant shall be for
a term of ten years. The purchase price of each option share
shall not be less than one hundred percent (100%) of the fair
market value of the Company's stock on the date of the option
grant. Options will contain appropriate antidilution
provisions for adjustment of the
15
<PAGE> 17
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 February 27, 1996 was $73.25 per
share, represented by the closing price as published in the
Wall Street Journal.
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 director, or termination for
cause, all options shall lapse immediately. In the event of
death or disability, any outstanding options shall be
exercisable for a period of one (1) year after such death or
disability.
6. The Board of Directors may at any time terminate, annul,
modify or suspend the Plan, subject to the following
conditions: No termination shall terminate any outstanding
options granted under the Plan, no change can be made without
stockholder approval if the change increases the maximum
number of shares which may be granted under the Plan or alters
the method by which the option price is determined, extends
the option period longer than ten (10) years or materially
modifies the requirements as to eligibility for participation
in the Plan, provides for the administration of the Plan by a
committee that is not composed entirely of officers of the
Company who are not eligible to participate in the Plan or
causes the options granted under the Plan not to qualify for
the exemption provided by Rule 16b-3 of the Securities
Exchange Act of 1934.
FEDERAL INCOME TAX CONSEQUENCES
Based on management's understanding of existing federal income tax
laws, the principal consequences of the grant and exercise of non-qualifying
stock options is summarized as follows. The grant of a non-qualifying option
does not ordinarily have any income tax consequences to the optionee. Upon
exercise of the option, the optionee will realize ordinary income for income tax
purposes equal to the difference between the fair market value of the shares
received at the date of exercise less the option price. If the optionee holds
the shares for a period of at least one year after the date of exercise, any
additional gain or loss will be treated as a long-term capital gain or loss for
federal income tax purposes. The Company will ordinarily be entitled to a tax
deduction equal to the income recognized by the optionee at the date of
exercise.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE ADOPTION
OF THE PROPOSED ZIONS BANCORPORATION NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN.
16
<PAGE> 18
PERFORMANCE GRAPH FOR ZIONS BANCORPORATION
INDEXED COMPARISON OF 5-YEAR CUMULATIVE TOTAL
RETURN
[GRAPH]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
S & P 500 100 130.48 140.41 154.56 156.6 215.45
KBW 50 Index 100 158.27 201.68 212.85 201.99 323.52
Zions Corporation 100 140.24 254.17 253.43 253.36 581.41
- ----------------------------------------------------------------------
</TABLE>
Note: Assumes $100 invested on 12-31-90 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
[GRAPH]
<TABLE>
<CAPTION>
- --------------------------------------------------
1991 1992 1993 1994 1995
- --------------------------------------------------
<S> <C> <C> <C> <C>
14.59% 19.64% 20.33% 18.82% 20.47%
- --------------------------------------------------
</TABLE>
17
<PAGE> 19
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 1995 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 (the "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 1995."
. 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 normally 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 Performance Graphs.
. 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
18
<PAGE> 20
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 responsibilities. The
Committee reviewed and approved the Value-Sharing Plan's target levels of
return on equity and earnings per share for the 1995 award fund as well as
the corresponding variation in size of the award fund. In 1995, 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. A payout occurred under the Value-Sharing Plan in 1995. (See
"Summary Compensation Table," n.7.) 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 April 1995. 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
19
<PAGE> 21
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Dale W. Westergard is a former 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 persons as of
December 31, 1995, comprised approximately 2.5% 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.
In March 1995, Roy W. Simmons (Chairman of the Company) made a gift of
certain non-qualified stock options which had been granted to him by the Company
(the "Gift Options") to his son, Harris H. Simmons (President and Chief
Executive Officer of the Company). The transfer of the Gift Options to Harris H.
Simmons was not compensatory in any way, but was merely a gift from father to
son. During 1995, Harris H. Simmons exercised certain of the Gift Options which
resulted in Harris H. Simmons recognizing $189,000 of non-qualified stock option
income.
In September 1993, the Company acquired National Bancorp of Arizona,
Inc. ("NBA"). As part of the acquisition of NBA by the Company, the Company
agreed to convert all options for the purchase of NBA common stock into options
for purchase of common stock of the Company. At the time of the NBA acquisition,
John J. Gisi held an option for the purchase of 80,000 shares of NBA common
stock (the "NBA Option"). Pursuant to a Stock Option Agreement between the
Company and Mr. Gisi, the NBA Option was replaced by an option entitling Mr.
Gisi to purchase up to 36,000 shares of the Company (the "New Option"). During
1995, Mr. Gisi exercised certain of the New Options which resulted in Mr. Gisi
recognizing $807,632 of non-qualified stock option income.
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.
20
<PAGE> 22
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, 1996, subject to ratification by the
shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ABOVE PROPOSAL.
OTHER MATTERS
(PROPOSAL 4)
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 1997 SHAREHOLDERS' MEETING
The date by which shareholders' proposals must be submitted to the
Company for inclusion in the Proxy Statement for the 1997 Shareholders' Meeting
is December 16, 1996.
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 1995, 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
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 26, 1996 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:
Jerry C. Atkin Grant R. Caldwell Roy W. Simmons Dale W. Westergard
2. To approve the Zions Bancorporation Non-Employee Directors Stock Option
Plan. FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To approve the appointment of KPMG Peat Marwick LLP as independent auditors
for the year 1996. 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 THE
ELECTION OF THE DIRECTORS and IN FAVOR OF ITEMS 2, 3 and 4.
(L.S.)
-------------------------------
Dated , 1996. -------------------------------(L.S.)
--------------------------- Please sign exactly as name
appears on reverse side
