<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) Of The Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ZIONS BANCORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
PRELIMINARY
ZIONS BANCORPORATION
One South Main, Suite 1380, Salt Lake City, Utah 84111
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 25, 1997
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 25, 1997, 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 an increase in the number of authorized shares of
Capital Stock of the Company (Proposal 2);
3. To approve the appointment of independent auditors for the
year 1997 (Proposal 3); and
4. To transact such other business as may properly come before
the shareholders (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" proposals 1, 2 and 3 and "authority" for proposal 4.
A Proxy Statement, Proxy Card, and a copy of the Annual Report on the
Company's operations during the fiscal year ended December 31, 1996, 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
Dale M. Gibbons
Secretary
Salt Lake City, Utah
March 26, 1997
<PAGE> 3
PRELIMINARY
PROXY STATEMENT
ZIONS BANCORPORATION
One South Main, Suite 1380, Salt Lake City, Utah 84111
ANNUAL MEETING OF SHAREHOLDERS
April 25, 1997
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 increase in the number of authorized capital shares as
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, 1997.
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 14,576,026 shares of common
stock outstanding at the close of business on February 24, 1997, the record
date for the meeting. Each share is entitled to one vote.
Shareholders may expressly abstain from voting on Proposals 2 and 3 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 or telephone, 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 26, 1997.
1
<PAGE> 4
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
---------------
R. D. Cash
Richard H. Madsen
Robert G. Sarver
Harris H. Simmons
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>
R.D. Cash(2) Chairman, President and Chief Executive Officer 1989 1997 54
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 58
Robert G. Sarver(4) Executive Director, Southwest Value Partners 1994 1997 35
and Affiliates; Chairman and Chief Executive
Officen of G B Bancorporation; Director,
Monterey Homes Corporation; President, National
Bank of Arizona, 1992-1994; Vice Chairman,
National Bank of Arizona, 1990-1992.
</TABLE>
2
<PAGE> 5
<TABLE>
<S> <C> <C> <C>
Harris H. Simmons(2)(5) President and Chief Executive Officer of the 1989 1997 42
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 and O.C.
Tanner Co.
DIRECTORS WITH UNEXPIRED TERMS OF OFFICE
Jerry C. Atkin(3) Chairman, President and Chief Executive 1993 1999 48
Officer, SkyWest Airlines, St. George, Utah.
Grant R. Caldwell(1) Retired, former Partner, KMG Main Hurdman, Salt 1993 1999 72
Lake City, Utah.
Roger B. Porter(1)(3) IBM Professor of Business and Government, 1993 1998 50
Harvard University; Assistant to the President
for Domestic and Economic Affairs, The White
House, 1989-1992.
L.E. Simmons(4)(5) President, SCF Investment Partners and L.E. 1978 1998 50
Simmons & Associates, Inc. (Private Equity
Investment Management), Houston, Texas.
Roy W. Simmons(2)(4) Chairman of the Company; Chairman of the Board 1961 1999 81
of Directors of Zions First National Bank;
Member of the Board of Directors of Beneficial
Life Insurance Co.; Director, Ellison Ranching
Co.
I.J. Wagner(1)(2) President, The Keystone Company (Corporate 1965 1998 81
Investments), Salt Lake City, Utah.
Dale W. Westergard(3) Retired/Former Executive Vice President of the 1984 1999 71
Company; Member of the Board of Directors of
Zions First National Bank.
</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> 6
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 seven meetings during the fiscal year
ending December 31, 1996. Of the Board's four standing committees, the
Executive Committee met once, the Audit Committee met five times, the Executive
Compensation Committee met once, and the Credit Review/Compliance Committee met
four times during the fiscal year ending December 31, 1996. Membership in
these committees is indicated above in the listing of directors. Average
attendance at Board and committee meetings held during the year was 98%. The
Company has no nominating committee and no other established committee acts 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> 7
EXECUTIVE OFFICERS OF THE COMPANY
The following information is furnished with respect to certain of the
executive officers of the Company.
<TABLE>
<CAPTION>
INDIVIDUAL PRINCIPAL OCCUPATION DURING PAST FIVE YEARS** OFFICER SINCE AGE
---------- --------------------------------------------- ------------- ---
<S> <C> <C> <C>
Roy W. Simmons* Chairman of the Company; Chairman of the Board of Directors 1961 81
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 42
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 and O.C. Tanner
Co.
Danne L. Buchanan Senior Vice President of the Company; President of Zions 1995 39
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 55
President of Zions First National Bank.
Dale M. Gibbons Senior Vice President, Chief Financial Officer and Secretary 1996 36
of the Company; Executive Vice President and Secretary of
Zions First National Bank; prior to August 1996, Senior Vice
President of First Interstate Bancorp.
John J. Gisi Senior Vice President of the Company; Chairman and 1994 51
Chief Executive Officer of National Bank of Arizona; Director,
ASR Investments Corp.
Clark B. Hinckley Senior Vice President of the Company; prior to March 2, 1994 49
1994, President of Zions First National Bank of Arizona.
George Hofmann III Senior Vice President of the Company; President and Chief 1995 47
Executive Officer of Nevada State Bank; prior
to April 1995, Senior Vice President of Zions First
National Bank.
</TABLE>
* Roy W. Simmons (Chairman of the Company) is the father of
Harris H. Simmons (President and Chief Executive Officer
of the Company) and L. E. Simmons (a member of the Board of
Directors of the Company).
** Officers are elected for indefinite terms of office and
may be replaced at the discretion of the Board of
Directors.
5
<PAGE> 8
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth as of February 24, 1997, 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 Record and Beneficial 569,203 3.90%
One South Main Street Beneficial(1) 497,844 3.42%
Salt Lake City, Utah 84111 ------- -----
1,067,047 7.32%
Zions First National Bank Record(2) 1,128,003 7.74%
One South Main Street
Salt Lake City, Utah 84111
</TABLE>
- -------------------------------------
(1) Represents Roy W. Simmons' beneficial ownership interest in 497,844
shares held by a company in which Mr. Simmons serves as a director.
(2) These shares are owned of record as of February 24, 1997, 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 799,344 shares (5.48% 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 253,689 shares (1.74% of the class) and the Zions
Bancorporation PAYSOP Plan, which holds 74,970 shares (.52% of the
class) as to which Zions First National Bank does not have or share
voting power.
6
<PAGE> 9
Set forth below is the beneficial ownership, as of February 24, 1997,
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 1,950 *(1)
R. D. Cash 6,250 *(1)
Grant R. Caldwell 1,250 *(1)
Richard H. Madsen 49,905 *(1)
Roger B. Porter 250 *(1)
Robert G. Sarver 103,210 *(1)
Harris H. Simmons 580,895(2) 3.98
L. E. Simmons 535,581(2) 3.67
Roy W. Simmons 1,067,047(2) 7.32
I. J. Wagner 70,750 *(1)
Dale W. Westergard 40,438 *(1)
All directors and officers
as a group (32 persons) 1,869,679 12.75
- -------------------------------------
</TABLE>
(1) Immaterial percentage of ownership
(2) 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, 1996 through December
31, 1996, its officers and directors were in compliance with all applicable
filing requirements, except that Mr. Richard H. Madsen and, Mr. Clark B.
Hinckley filed late reports on shares given as gifts and Ms. Susan Mooney
Johnson, a director of Zions First National Bank, filed a late report on shares
purchased.
7
<PAGE> 10
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows compensation earned
from the Company for services rendered during fiscal years 1996, 1995 and 1994
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 $100,000 in 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term
Annual Compensation
Compensation(1) Awards
----------------- ------------------
Value- Securities All Other
Salary Bonus Sharing Underlying Compensation
Name and Principal Position Year ($)(2)(3)(4) ($)(4)(5) ($)(7) Options(#)(6) ($)(4)(8)(9)(10)
- --------------------------- ---- ------------- ---------- ------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Harris H. Simmons 1996 353,103 $--------- 144,950 5,000 8,734
President and Chief Executive 1995 355,326 170,000 84,950 5,000 19,179
Officer, Zions Bancorporation 1994 322,524 155,000 0 5,000 10,132
John J. Gisi(11)(12) 1996 216,500 $--------- 0 3,000 8,986
Senior Vice President, Zions 1995 194,904 90,000 0 5,000 10,560
Bancorporation; Chairman and 1994 200,335 80,000 0 3,250 67,367
Chief Executive Officer of
National Bank of Arizona
A. Scott Anderson 1996 197,647 $--------- 115,960 3,000 8,365
Executive Vice President, 1995 190,349 87,500 67,960 2,000 9,449
Zions First National Bank 1994 184,199 70,000 0 3,500 10,580
W. David Hemingway 1996 173,688 $--------- 115,960 2,250 11,482
Executive Vice President, 1995 162,689 73,000 67,960 1,750 12,918
Zions First National Bank 1994 158,100 0 0 3,500 13,869
John B. D'Arcy 1996 158,773 $--------- 115,960 1,800 13,068
Executive Vice President, 1995 152,897 58,000 67,960 1,750 14,284
Zions First National Bank 1994 147,428 56,000 0 2,750 11,185
</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 John J. Gisi recognized in 1995 and
1996.
(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
8
<PAGE> 11
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 1996, 1995 and
1994 were as follows, respectively: Mr. Simmons, $3,750, $14,316 and
$6,031; Mr. Gisi, $5,625, $7,200 and $4,620; Mr. Anderson, $1,841, $3,160
and $5,158; Mr. Hemingway, $5,353, $6,995 and $8,786; and Mr. D'Arcy,
$5,625, $8,144 and $4,975.
(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, 1995 and 1996 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 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.
Payout occurred under the plan in 1996 and 1995. Payouts are reported in
the above table under "Long-term Compensation Awards." For each of the
persons named above, the amounts accrued for 1996, 1995 and 1994 were as
follows, respectively: Mr. Simmons, $390,165, $211,192 and $127,731; Mr.
Gisi, $199,173, $76,013 and $19,372; Mr. Anderson, $274,519, $151,769 and
$95,793; Mr. Hemingway, $259,941, $147,845 and $95,793; and Mr. D'Arcy,
$259,941, $147,845 and $95,793. See "Long-term Incentive Plan Awards in
Fiscal 1996," 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 1996, 1995
and 1994 were as follows, respectively: Mr. Simmons, $1,623, $1,503 and
$1,391; Mr. Anderson, $3,163, $2,929 and $2,712; Mr. Hemingway, $2,768,
$2,563 and $2,373; and Mr. D'Arcy, $4,082, $3,780 and $3,500. 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.
(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 1996, 1995 and 1994
were as follows, respectively: Mr. Simmons, $3,361, $3,360 and $2,710;
Mr. Gisi, $3,361, $3,360 and $0; Mr. Anderson, $3,361, $3,360 and $2,710;
Mr. Hemingway, $3,361, $3,360 and $2,710; and Mr. D'Arcy, $3,361, $3,360
and $2,710.
9
<PAGE> 12
(11) Includes $62,747 in moving expenses paid to Mr. Gisi in 1994 preparatory
to changing corporate headquarters for a subsidiary of the Company.
(12) Mr. Gisi's employment by the Company commenced with the acquisition by the
Company of National Bancorp of Arizona, Inc. on January 14, 1994.
STOCK OPTION GRANTS IN FISCAL YEAR 1996
The following table shows the number of shares with respect to which
options were granted during 1996 to each of the named persons, together with
the percentage of all grants to employees which the grant to the named person
represents, the exercise price of such option, and the expiration date of the
option.
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term(1)
------------------------------------ --------------------------------
% of Total
Options
Options Granted to Exercise
Granted Employees in Price Expiration
Name (#)(2) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
---- -------- ------------- --------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Harris H. Simmons 5,000 5.73 72.50 03-07-2002 123,300 279,730
John J. Gisi 3,000 3.44 72.50 03-07-2002 73,980 167,838
A. Scott Anderson 3,000 3.44 72.50 03-07-2002 73,980 167,838
W. David Hemingway 2,250 2.58 72.50 03-07-2002 55,485 125,878
John B. D'Arcy 1,800 2.06 72.50 03-07-2002 44,388 100,703
- -------------------------------------
</TABLE>
(1) Potential unrealized value is based on an assumption that the 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 1996 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.
In accordance with the terms of the Non-Employee Directors Stock Option Plan,
non-qualified options were granted to each non-employee director in 1996. Each
grant is an option to purchase 1,000 shares at $75.00 per share. The options
vest and become exercisable in four equal installments of 250 shares beginning
six months after the date of grant and continuing at one-year intervals
thereafter. The 1996 options expire on April 26, 2006.
10
<PAGE> 13
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth the number of shares acquired by any of
the named persons upon exercise of stock options in 1996, the value realized
through the exercise of such options, and the number of unexercised options
held by such person, including both those which are presently exercisable, and
those which are not presently exercisable.
<TABLE>
<CAPTION>
Number of
Shares Underlying Value of Unexercised
Unexercised In-the-
Shares Options Money Options
Acquired at 12-31-96(#)(1) at 12-31-96($)(2)
Upon ------------------------ ------------------------
Option Value Not Not
Name Exercise(#) Realized($) Exercisable Exercisable Exercisable Exercisable
---- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Harris H. Simmons 6,500 325,813 3,750 11,250 237,344 548,281
John J. Gisi 14,200 909,824 6,474 15,876 521,369 1,109,743
A. Scott Anderson 3,500 171,937 2,250 6,250 143,062 298,938
W. David Hemingway - - 6,349 10,151 476,461 725,445
John B. D'Arcy 2,000 77,380 1,187 4,863 75,008 249,723
</TABLE>
- -------------------------------------
(1) Of the shares shown as underlying unexercised options for Mr. Gisi, a
total of 3,600 exercisable and 7,200 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 1996
year-end ($104.00) less the option exercise price, times (ii) the
number of shares.
LONG-TERM INCENTIVE PLAN AWARDS IN FISCAL 1996
The following table sets forth certain information regarding awards
made in 1996 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. Members of senior management were granted units
of participation in each annual 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 each award fund is determined according to a formula which uses the
Company's average return on shareholders' equity (net income divided by average
shareholders' equity) over a four-year period 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 award funds have been established
annually since the plan's inception.
11
<PAGE> 14
The award fund established in 1996 is to range in amount from $0 for
an average return on shareholders' equity ("AROE") of 14% over the four years
beginning in 1996, to a maximum of $5,038,200, 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 $25.01, the factor will be 0, and there will be no amounts paid under
the plan. If the AEPS is greater than $25.01, the factor will be a number
between 1 and a maximum of 1.33. Accordingly, the maximum aggregate of all
payments possible under the 1996 award fund is $6,700,806. 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. The following table
sets forth estimated future payouts for the named individuals under the award
fund established in 1996 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 1997-1999 will be equivalent to the
Company's AROE in fiscal 1996 (as to which there can be no assurance) and that
an AEPS of $27.36 will be achieved, which is the equivalent of the 1996 EPS
being earned in each of the four years (also as to which there can be no
assurance); and the maximum amount represents the maximum possible amount
payable to the named individuals from the award fund established under the plan
in 1996.
<TABLE>
<CAPTION>
Estimated Future Payout
Under Non-stock Price-based Plans
Number of Performance ----------------------------------
Performance Period Until Threshold Target Maximum
Name Units Payout ($) ($) ($)
---- ----------- ------------ --------- ------- --------
<S> <C> <C> <C> <C> <C>
Harris H. Simmons 8,755 4 Years 0 356,775 434,554
John J. Gisi 5,625 4 Years 0 229,224 279,196
A. Scott Anderson 6,175 4 Years 0 251,637 306,496
W. David Hemingway 5,625 4 Years 0 229,224 279,196
John B. D'Arcy 5,625 4 Years 0 229,224 279,196
</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;
PLUS
12
<PAGE> 15
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. Effective January 1, 1994, the Company adopted its
Executive Management Pension Plan, which is a supplemental executive retirement
plan (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>
*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, 39 years for W.
David Hemingway and 18 years for John B. D'Arcy, 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> 16
On December 20, 1996, the Board of Directors approved changes in the
Company's defined benefit plan. These changes will result in the benefit plan
being defined as a lump sum cash value rather than an annuity at age 65. Under
these changes, a participant in the plan can elect to receive an annuity equal
to the actuarial equivalent value of participant's cash balance account. A
participant's cash balance account is equal to the sum of the initialized
account balance, cash balance pay credits, and interest credits. The
initialized account balance is the January 1, 1997, present value of the
December 31, 1996, approved benefit. Present value is based upon 7% interest
and the IRS unisex mortality table. For each year of credited service, cash
balance pay credits are equal to the participant's earnings multiplied by the
applicable pay credit percentage shown in the chart below. Annual interest
credits are based on the GATT 30-year bond rate (6.48% for 1997).
<TABLE>
<CAPTION>
AGE PAY CREDIT
<S> <C>
Less than 30 2.25%
30-39 3%
40-49 4%
50-54 5.25%
55-59 7%
60 or over 9.25%
</TABLE>
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, as
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,
Hemingway and D'Arcy upon retirement will be $20,000 each. Mr. Gisi, who
joined the Company in 1994, does not participate in the Supplemental Retirement
Plan.
14
<PAGE> 17
PERFORMANCE GRAPH FOR ZIONS BANCORPORATION
INDEXED COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
S & P 500 100 107.61 118.46 120.02 165.12 203.03
KBW 100 127.42 134.48 127.62 204.41 289.15
Zions Bancorporation 100 180.23 180.14 180.31 410.42 538.33
</TABLE>
Note: Assumes $100 invested on 12-31-91 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
1992 19.64%
1993 20.33%
1994 18.82%
1995 20.47%
1996 21.63%
15
<PAGE> 18
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 adopted a policy regarding the
federal tax deductibility of certain executive compensation. The process
involved in the executive compensation determination for fiscal 1996 is
summarized below:
o 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 1996."
o 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.
o 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 for 1996). 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 23 institutions
with asset sizes ranging from $2.5 billion to $20.1 billion. Zions ranked
in the 43rd percentile among the peer group in terms of asset size. 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.
16
<PAGE> 19
o 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 responsibilities.
The Committee reviewed and approved the Value-Sharing Plan's target levels
of return on equity and earnings per share for the 1996 award fund as well
as the corresponding variation in size of the award fund. In 1996, 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
1996. (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, for the Executive Officers
as a group, provides proportionately less compensation through salary and
bonus, and an appropriately competitive level of 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.
o 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.
o The Company periodically grants incentive stock options to executives.
Grants were made in April 1996. 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
17
<PAGE> 20
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, 1996, comprised less than 1.0% 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 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 1996 and 1995, Mr. Gisi exercised certain of the New Options
which resulted in Mr. Gisi recognizing $937,524 and $807,632 of non-qualified
stock option income.
PROPOSAL TO APPROVE AN INCREASE IN THE NUMBER OF AUTHORIZED SHARES
OF CAPITAL STOCK OF THE COMPANY
(PROPOSAL 2)
The authorized capital stock of the Company now consists of 33,000,000
shares divided into classes as follows: (1) 30,000,000 shares of Common Stock,
without par value, of which 14,576,026 are outstanding as of the record date,
(2) 3,000,000 shares of preferred stock, without par value, none of which are
outstanding as of the record date.
18
<PAGE> 21
The Board of Directors believes it would be in the best interests of
the Company and its shareholders to amend the Articles of Incorporation to
increase the authorized capital stock from 33,000,000 shares without par value
to 103,000,000 shares divided into 100,000,000 shares of Common Stock without
par value, and 3,000,000 shares of Preferred Stock without par value. To
effect this change, Article VIII of the Articles of Incorporation would be
amended to read in its entirety as follows:
ARTICLE VIII
The aggregate number of shares of capital stock which
this corporation shall have authority to issue is 103,000,000, divided
into two classes as follows:
(1) 100,000,000 shares of Common Stock, without par value, which
shares shall be entitled to one vote per share.
(2) 3,000,000 shares of Preferred Stock, without par value.
The Board of Directors of this corporation is expressly vested
with the authority to determine, with respect to any class of
Preferred Stock, the dividend rights (including rights as to
cumulative, noncumulative or partially cumulative dividends) and
preferences, dividend rate, conversion rights, voting rights, rights
and terms or redemption (including sinking fund provisions),
redemption price or prices, and the liquidation preferences of any
such class of Preferred Stock. As to any series of Preferred Stock,
the Board of Directors is authorized to determine the number of shares
constituting such series, and to increase or decrease (but not below
the number of shares of such series then outstanding) the number of
shares of that series.
The Board of Directors of this corporation is expressly vested
with the authority to divide the above-described class of Preferred
Stock into series and to fix and determine the variations in the
relative rights and preferences of the shares of Preferred Stock of
any series so established, including, without limitation, the
following:
(i) the rate of dividend;
(ii) the price at and the terms and conditions on which shares
may be redeemed;
(iii) the amount payable upon shares in event of involuntary
liquidation;
(iv) the amount payable upon shares in event of voluntary
liquidation;
(v) sinking fund provisions for the redemption or purchase of
shares;
(vi) the terms and conditions on which shares may be converted,
if the shares of any series are issued with the privilege
of conversion; and
(vii) such other variations in the relative rights and
preferences of such shares which at the time of the
establishment of such series are not prohibited by law.
19
<PAGE> 22
The only change effected in Article VIII by the proposed amendment
will be to increase the authorized shares of capital stock from 33,000,000 to
103,000,000 and accordingly increase the authorized shares of Common Stock from
30,000,000 to 100,000,000. The remaining text of Article VIII as set forth
above is unchanged from the text as presently in effect.
The Board of Directors is proposing to increase the authorized Common
Stock to enable to Board to split the Common Stock and to afford the Board of
Directors flexibility in responding promptly to future financing requirements
of the Company, including, without limitation, acquisitions of other businesses
for shares of capital stock on the most favorable terms as opportunities may
arise from time to time in the future, the raising of additional capital, and
issuance pursuant to stock option or other employee benefit or incentive
compensation plans. If authorization of any increase in the capital stock is
postponed until a specific need arises, the delay and expense incident to
obtaining the approval of stockholders at that time could impair the Company's
ability to meet its objectives. Other than upon exercise of stock options,
issuance for existing employee benefit plans, and in connection with
acquisitions periodically considered by the Company, there are no plans for, or
negotiations relating to, any issuance of capital stock. There is no present
intention to issue any of the Preferred Stock.
If the proposed amendment is approved, the additional shares of
capital stock would be generally available for issuance without further action
by the shareholders. The additional shares of Common Stock issued hereafter
would be identical to the Common Stock currently outstanding. No stockholder
has any preemptive rights, and issuance of the additional Common Stock could
dilute the voting rights of present holders of Common Stock. It is possible,
depending upon the transaction in which either Common Stock or Preferred Stock
is issued, that issuance of such capital stock could have a dilutive effect on
shareholders' equity and earnings per share attributable to present holders.
The Board of Directors could issue the additional (as well as the
existing authorized but unissued) capital stock to impede any unsolicited bid
for control of the Company which the Board believed was not in the best
interests of the Company and its stockholders. The availability of the
additional capital stock as a defensive response to a takeover attempt was not
a motivating factor in the Board's approval of the proposed amendment to
Article VIII, and the Board is not aware of any effort to obtain control of the
Company.
The affirmative vote of a majority of the outstanding Common Stock is
required for approval of the proposed amendment to Article VIII.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
PROPOSED AMENDMENTS OF ARTICLE VIII OF THE RESTATED ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
20
<PAGE> 23
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, 1997, subject to ratification
by the shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ABOVE PROPOSAL.
OTHER BUSINESS
(PROPOSAL 4)
Except as set forth herein, management has no knowledge of any
business 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 1998 SHAREHOLDERS' MEETING
The date by which shareholders' proposals must be submitted to the
Company for inclusion in the Proxy Statement for the 1998 Shareholders' Meeting
is December 15, 1997.
21
<PAGE> 24
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 1996, 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, ONE SOUTH MAIN, SUITE 1380, SALT LAKE
CITY, UTAH 84111.
ZIONS BANCORPORATION - ONE SOUTH MAIN, SUITE 1380 - SALT LAKE CITY, UTAH 84111 -
(801) 524-4787
22
<PAGE> 25
PRELIMINARY
ZIONS BANCORPORATION
SOLICITED ON BEHALF OF
PROXY THE BOARD OF DIRECTORS
The undersigned hereby appoints A. SCOTT ANDERSON, DALE M. GIBBONS 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 Shareholders' Meeting to be
held on April 25, 1997 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:
R. D. Cash Richard H. Madsen Robert G. Sarver Harris H. Simmons
2. To approve the increase in the number of authorized shares of Capital Stock
of the Company.
FOR / / AGAINST / / ABSTAIN / /
3. To approve the appointment of KPMG Peat Marwick LLP as independent auditors
for the year 1997.
FOR / / AGAINST / / ABSTAIN / /
4. To transact any other business as may properly come before the meeting.
AUTHORITY / / WITHHHOLD AUTHORITY / /
UNLESS A CONTRARY CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE DIRECTORS, IN FAVOR OF PROPOSALS 2 and 3, and OTHERWISE IN THE
DISCRETION OF ANY OF THE APPOINTEES AS PROXIES.
________________________________
Dated _________________, 1997. ________________________________
Please sign exactly as name
appears on reverse side
