<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________________ to ___________________
COMMISSION FILE NUMBER 0-2610
ZIONS BANCORPORATION
____________________
(Exact name of Registrant as specified in its charter)
UTAH 87-0227400
_________________________________ ___________________
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
ONE SOUTH MAIN, SUITE 1380
SALT LAKE CITY, UTAH 84111
_________________________________________ __________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 524-4787
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirement for the past 90 days. Yes X No_____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, without par value, outstanding at May 2, 1997
14,448,230 shares
1
<PAGE> 2
ZIONS BANCORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. Financial Statements (unaudited)
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Cash Flows 5
Consolidated Statements of Retained Earnings 6
Notes to Consolidated Financial Statements 7
ITEM 2. Management's Discussion and Analysis 8
PART II. OTHER INFORMATION
-----------------
ITEM 6. Exhibits and Reports on Form 8-K 20
SIGNATURES 20
- ----------
</TABLE>
2
<PAGE> 3
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31, March 31,
(In thousands, except share amounts) 1997 1996 1996
ASSETS ----------- ----------- -----------
<S> <C> <C> <C>
Cash and due from banks $ 361,580 $ 404,331 $ 394,495
Money market investments:
Interest-bearing deposits 51,037 47,746 37,002
Federal funds sold 64,135 260,023 198,069
Security resell agreements 902,547 305,660 802,754
Investment Securities:
Held to maturity at cost (approximate market value
$1,356,412, $1,331,081 and $1,157,977):
Taxable 1,157,431 1,096,921 943,561
Nontaxable 195,967 225,240 200,740
Available for sale at market:
Taxable 377,184 412,686 354,211
Nontaxable 40,030 40,765 40,521
Trading account at market 157,957 34,076 81,888
----------- ----------- -----------
1,928,569 1,809,688 1,620,921
Loans:
Loans held for sale at cost, which approximates market 170,521 150,467 153,589
Loans, leases and other receivables 3,569,722 3,340,557 2,850,530
----------- ----------- -----------
3,740,243 3,491,024 3,004,119
Less:
Unearned income and fees, net of related costs 37,520 38,481 33,086
Allowance for loan losses 69,297 69,954 67,625
----------- ----------- -----------
3,633,426 3,382,589 2,903,408
Premises and equipment, at cost, less accumulated depreciation 96,684 92,874 82,799
Amounts paid in excess of net assets of acquired businesses 38,408 37,091 21,335
Other real estate owned 1,039 138 788
Other assets 163,187 144,824 141,112
----------- ----------- -----------
Total assets $ 7,240,612 $ 6,484,964 $ 6,202,683
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand $ 1,106,096 $ 1,159,791 $ 936,262
Interest-bearing:
Savings and money market 2,575,274 2,474,821 2,295,557
Time under $100,000 625,498 635,568 646,782
Time over $100,000 185,199 167,545 181,488
Foreign 179,631 114,292 110,907
----------- ----------- -----------
4,671,698 4,552,017 4,170,996
Securities sold, not yet purchased 109,446 76,831 56,962
Federal funds purchased 195,635 155,407 173,667
Security repurchase agreements 1,331,070 771,361 1,126,039
Accrued liabilities 93,573 83,082 79,662
Federal Home Loan Bank advances and other borrowings:
Less than one year 14,887 13,533 18,414
Over one year 69,530 73,661 82,313
Long-term debt 251,204 251,620 56,008
----------- ----------- -----------
Total liabilities 6,737,043 5,977,512 5,764,061
----------- ----------- -----------
Shareholders' equity:
Capital stock:
Preferred stock, without par value; authorized 3,000,000
shares; issued and outstanding, none -- -- --
Common stock, without par value; authorized 30,000,000
shares; issued and outstanding, 14,544,404
14,729,720 and 14,555,191 shares 56,181 79,791 67,569
Net unrealized holding gains and losses on securities
available for sale (2,411) (1,835) 173
Retained earnings 449,799 429,496 370,880
----------- ----------- -----------
Total shareholders' equity 503,569 507,452 438,622
----------- ----------- -----------
Total liabilities and shareholders' equity $ 7,240,612 $ 6,484,964 $ 6,202,683
=========== =========== ===========
</TABLE>
3
<PAGE> 4
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
(In thousands, except per share amounts) 1997 1996
--------- ---------
<S> <C> <C>
Interest income:
Interest and fees on loans $ 77,893 $ 65,241
Interest on loans held for sale 2,845 2,740
Interest on money market investments 21,032 15,380
Interest on securities:
Held to maturity:
Taxable 18,754 15,687
Nontaxable 2,772 3,190
Available for sale:
Taxable 6,698 5,662
Nontaxable 561 562
Trading account 3,345 2,404
Lease financing 3,013 2,642
--------- ---------
Total interest income 136,913 113,508
--------- ---------
Interest expense:
Interest on savings and money market deposits 23,125 19,877
Interest on time deposits under $100,000 7,929 8,897
Interest on time deposits over $100,000 2,264 2,580
Interest on foreign deposits 1,581 1,157
Interest on securities sold, not yet purchased 1,244 990
Interest on borrowed funds 33,156 20,058
--------- ---------
Total interest expense 69,299 53,559
--------- ---------
Net interest income 67,614 59,949
Provision for loan losses 990 600
--------- ---------
Net interest income after provision for loan losses 66,624 59,349
--------- ---------
Noninterest income:
Service charges on deposit accounts 8,931 7,707
Other service charges, commissions and fees 9,292 6,841
Trust income 1,562 1,282
Investment securities gains, net 60 2
Trading account income 791 873
Loan sales and servicing income 9,091 7,110
Other income 2,061 2,262
--------- ---------
Total noninterest income 31,788 26,077
--------- ---------
Noninterest expense:
Salaries and employee benefits 31,688 26,995
Occupancy, net 3,025 2,784
Furniture and equipment 4,455 3,606
Other real estate expense (income) 176 (283)
Legal and professional services 1,457 739
Supplies 1,575 1,522
Postage 1,509 1,356
Advertising 1,626 1,482
FDIC premiums 127 5
Amortization of intangible assets 1,072 764
Other expenses 10,963 10,782
--------- ---------
Total noninterest expense 57,673 49,752
--------- ---------
Income before income taxes 40,739 35,674
Income taxes 14,037 12,003
--------- ---------
Net income $ 26,702 $ 23,671
========= =========
Weighted average common and common-equivalent shares 14,783 14,679
Net income per common share $ 1.81 $ 1.61
</TABLE>
4
<PAGE> 5
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
(In thousands) 1997 1996
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 26,702 $ 23,671
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Provision for loan losses 990 600
Write-downs of other real estate owned 97 --
Depreciation of premises and equipment 3,519 2,985
Amortization of premium on core deposits and
other intangibles 1,072 764
Amortization of net premium/discount on
investment securities 1,241 1,576
Accretion of unearned income and fees, net of
related costs (961) 2,133
Proceeds from sales of trading account securities 25,711,280 14,759,949
Increase in trading account securities (25,835,161) (14,778,130)
Net gain on sales of investment securities (60) (2)
Proceeds from loans held for sale 154,355 152,783
Increase in loans held for sale (172,731) (179,272)
Net gain on sales of loans, leases and other assets (8,140) (5,380)
Net gain (loss) on sales of other real estate owned 6 (281)
Change in accrued income taxes 13,534 12,051
Change in accrued interest receivable (5,144) (1,535)
Change in other assets (12,612) (5,778)
Change in accrued interest payable 5,851 1,668
Change in accrued liabilities (8,735) (6,096)
------------ ------------
Net cash (used in) operating
activities (124,897) (18,294)
------------ ------------
Cash flows from investing activities:
Net increase in money market investments (404,290) (350,574)
Proceeds from maturities of investment securities
held to maturity 99,624 62,932
Purchases of investment securities held to maturity (132,092) (130,474)
Proceeds from sales of investment securities
available for sale 261 739
Proceeds from maturities of investment securities
available for sale 69,151 69,282
Purchases of investment securities available for sale (34,060) (69,286)
Proceeds from sales of loans and leases 181,454 141,261
Net increase in loans and leases (408,033) (269,416)
Purchases of assets to be leased -- (8,514)
Proceeds from sales of premises and equipment 137 60
Purchases of premises and equipment (7,405) (4,222)
Proceeds from sales of other real estate owned 104 876
Proceeds from sales of mortgage servicing rights 223 623
Purchases of mortgage servicing rights (58) (1,441)
Proceeds from sales of other assets 150 195
Purchases of other assets (50) --
------------ ------------
Net cash (used in) investing
activities (634,884) (557,959)
------------ ------------
</TABLE>
5
<PAGE> 6
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
(In thousands) 1997 1996
--------- ---------
<S> <C> <C>
Cash flows from financing activities:
Net increase in deposits 119,681 73,882
Net change in short-term funds borrowed 634,064 495,096
Payments on FHLB advances over one year (4,131) (3,861)
Payments on long-term debt (416) (221)
Proceeds from issuance of common stock 356 854
Payments to redeem common stock (26,125) (7,099)
Dividends paid (6,399) (5,970)
--------- ---------
Net cash provided by
financing activities 717,030 552,681
--------- ---------
Net (decrease) in cash and due from banks (42,751) (23,572)
Cash and due from banks at beginning of period 404,331 418,067
--------- ---------
Cash and due from banks at end of period $ 361,580 $ 394,495
========= =========
</TABLE>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------
(In thousands) 1997 1996
-------- --------
<S> <C> <C>
Cash paid (received) for:
Interest $ 63,404 $ 51,870
Income taxes 80 (369)
Loans transferred to other real estate owned 1,108 291
</TABLE>
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
March 31, December 31,
--------- ---------
(In thousands) 1997 1996 1996
--------- --------- ---------
<S> <C> <C> <C>
Balance at beginning of period $ 429,496 $ 353,179 $ 353,179
Add:
Net income 26,702 23,671 101,350
--------- --------- ---------
456,198 376,850 454,529
Deduct cash dividends:
Preferred, paid by subsidiary to minority shareholder (9) (10) (36)
Common, per share $.44 in 1997
and $.41 and $1.70 in 1996 (6,390) (5,960) (24,997)
--------- --------- ---------
Balance at end of period $ 449,799 $ 370,880 $ 429,496
========= ========= =========
</TABLE>
6
<PAGE> 7
ZIONS BANCORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Basis of Presentation
The unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of Regulation
S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three months ended March 31, 1997 are not necessarily
indicative of the results that may be expected for the year ended December 31,
1997. For further information, refer to the consolidated financial statements
and footnotes thereto included in Zions Bancorporation's Annual Report to
Shareholders on Form 10-K for the year ended December 31, 1996.
7
<PAGE> 8
ZIONS BANCORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
FINANCIAL HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------------
(In thousands, except per share and ratio data) 1997 1996 % Change
---------- ---------- ----------
<S> <C> <C> <C>
EARNINGS
Net income $ 26,702 $ 23,671 12.80%
PER COMMON SHARE
Net income 1.81 1.61 12.42%
Dividends .44 .41 7.32%
Book value at March 31 34.62 30.19 14.67%
Market value at March 31 118.75 70.75 67.84%
Weighted average common and common-
equivalent shares outstanding 14,783,000 14,679,000
Common shares outstanding at March 31 14,544,404 14,528,191
BALANCES AT PERIOD END
Total assets $7,240,612 $6,202,683 16.73%
Money market investments 1,017,719 1,037,825 -1.94%
Securities 1,928,569 1,620,921 18.98%
Net loans and leases 3,702,723 2,971,033 24.63%
Allowance for loan losses 69,297 67,625 2.47%
Total deposits 4,671,698 4,170,996 12.00%
Shareholders' equity 503,569 438,622 14.81%
Nonperforming assets 11,107 9,393 18.25%
Loans past due 90 days or more 3,829 6,669 -42.59%
PERFORMANCE RATIOS
Return on average assets 1.42% 1.54%
Return on average common equity 21.52% 21.96%
Common dividend payout 23.93% 25.18%
Net interest margin 3.98% 4.36%
Efficiency ratio 57.07% 56.77%
Nonperforming assets to net loans and leases,
other real estate owned and other nonperforming assets at March 31 .30% .32%
CAPITAL RATIOS
Average equity to average assets 6.62% 7.02%
Leverage ratio at March 31 7.84% 6.20%
Tier I risk-based capital at March 31 14.03% 11.13%
Total risk-based capital at March 31 17.49% 13.89%
</TABLE>
8
<PAGE> 9
ZIONS BANCORPORATION AND SUBSIDIARIES
OPERATING RESULTS
Zions Bancorporation achieved record earnings for the first quarter.
Consolidated net income for the quarter ended March 31, 1997 was $26.7 million
or $1.81 per share, an increase of 12.8% and 12.4%, respectively, over the
$23.7 million or $1.61 per share earned in the first quarter of 1996. The
quarterly dividend per share increased to $0.44 from $0.41 in 1996.
The Company's first-quarter earnings relative to the same period a year ago
reflect a $7.6 million (12.8%) increase in net interest income, a $5.7 million
(21.9%) increase in noninterest income, partially offset by a $.4 million
(65.0%) increase in the provision for loan losses, a $7.9 million (15.9%)
increase in noninterest expense and a $2.0 million (16.9%) increase in income
tax expense.
The annualized return on average assets for the first quarter of 1997 was
1.42%, resulting in a return on average common shareholders' equity of 21.52%,
compared to 1.54% and 21.96%, respectively, reported in the first quarter of
1996.
NET INTEREST INCOME AND INTEREST RATE SPREADS
Net interest income for the first quarter of 1997, adjusted to a fully
taxable-equivalent basis, increased 12.5% to $69.3 million compared to $61.6
million for the first quarter of 1996. Net interest margin was 3.98%, as
compared to 4.36% for the first quarter of 1996.
The yield on average earning assets decreased 19 basis points during the first
quarter of 1997 as compared to the first quarter of 1996, and the average rate
paid this quarter on interest-bearing funds increased 17 basis points from the
first quarter of 1996. The spread on average interest-bearing funds for the
first quarter of 1997 was 3.27%, down from the 3.63% for the first quarter of
1996.
The Company manages its earnings sensitivity to interest rate movements, in
part, by matching the repricing characteristics of its assets and liabilities
and, to a lesser extent, through the use of off-balance sheet arrangements such
as caps, floors and interest rate exchange contracts. Net interest income from
the use of such off-balance sheet arrangements for the first quarter of 1997
was $.4 million compared to $.5 million for the first quarter of 1996.
The increased level of taxable-equivalent net interest income in the first
quarter of 1997, compared to the same period in 1996, resulted primarily from
the increase in average earning assets, principally driven by a 22.6% growth in
average loans and leases. The decrease in net interest margin resulted
primarily from interest expense of the $200 million trust preferred securities
issued in December 1996 and the arbitrage activity in money market investments
and short term borrowings to mitigate the reduction of net interest income from
the securities.
9
<PAGE> 10
ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 1997 March 31, 1996
---------------------------------------- ---------------------------------------
Average Amount of Average Average Amount of Average
(In thousands) Balance Interest 1 Rate Balance Interest 1 Rate
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Money market investments:
Interest-bearing deposits $ 49,888 $ 630 5.12% $ 35,926 $ 438 4.90%
Federal funds sold and security
resell agreements 1,520,898 20,402 5.44% 1,065,657 14,942 5.64%
----------- ----------- ----------- -----------
Total money market investments 1,570,786 21,032 5.43% 1,101,583 15,380 5.62%
----------- ----------- ----------- -----------
Investment securities:
Held to maturity:
Taxable 1,097,160 18,754 6.93% 935,696 15,687 6.74%
Nontaxable 194,172 3,960 8.27% 196,478 4,557 9.33%
Available for sale:
Taxable 397,535 6,698 6.83% 353,261 5,662 6.45%
Nontaxable 40,508 801 8.02% 41,230 803 7.83%
Trading account 232,576 3,345 5.83% 174,362 2,404 5.55%
----------- ----------- ----------- -----------
Total securities 1,961,951 33,558 6.94% 1,701,027 29,113 6.88%
----------- ----------- ----------- -----------
Loans:
Loans held for sale 154,483 2,845 7.47% 149,428 2,740 7.37%
Net loans and leases 2 3,370,267 81,137 9.76% 2,725,830 67,883 10.02%
----------- ----------- ----------- -----------
Total loans 3,524,750 83,982 9.66% 2,875,258 70,623 9.88%
----------- ----------- ----------- -----------
Total interest-earning assets $ 7,057,487 $ 138,572 7.96% $ 5,677,868 $ 115,116 8.15%
----------- -----------
Cash and due from banks 325,147 322,950
Allowance for loan losses (69,842) (67,451)
Other assets 292,100 244,949
----------- -----------
Total assets $ 7,604,892 $ 6,178,316
=========== ===========
LIABILITIES
Interest-bearing deposits:
Savings and NOW deposits $ 600,248 $ 4,608 3.11% $ 637,053 $ 4,903 3.10%
Money market super NOW deposits 1,922,695 18,517 3.91% 1,595,439 14,974 3.77%
Time deposits under $100,000 645,384 7,929 4.98% 663,867 8,897 5.39%
Time deposits $100,000 or more 154,168 2,264 5.96% 163,483 2,580 6.35%
Foreign deposits 141,366 1,581 4.54% 106,534 1,157 14.37%
----------- ----------- ----------- -----------
Total interest-bearing deposits 3,463,861 34,899 4.09% 3,166,376 32,511 4.13%
----------- ----------- ----------- -----------
Borrowed funds:
Securities sold, not yet purchased 87,336 1,244 5.78% 71,995 990 5.53%
Federal funds purchased and security
repurchase agreements 2,108,162 26,444 5.09% 1,362,078 17,131 5.06%
FHLB advances and other borrowings:
Less than one year 12,729 209 6.66% 22,300 360 6.49%
Over one year 71,520 1,072 6.08% 84,332 1,309 6.24%
Long-term debt 251,274 5,431 8.77% 56,141 1,258 9.01%
----------- ----------- ----------- -----------
Total borrowed funds 2,531,021 34,400 5.51% 1,596,846 21,048 5.30%
----------- ----------- ----------- -----------
Total interest-bearing liabilities $ 5,994,882 $ 69,299 4.69% $ 4,763,222 $ 53,559 4.52%
----------- -----------
Noninterest-bearing deposits 1,006,913 872,058
Other liabilities 99,909 109,472
----------- -----------
Total liabilities 7,101,704 5,744,752
Total shareholders' equity 503,188 433,564
----------- -----------
Total liabilities and shareholders' equity $ 7,604,892 $ 6,178,316
=========== ===========
Spread on average interest-bearing funds 3.27% 3.63%
====== ======
Net interest income and net yield on
interest-earning assets $ 69,273 3.98% $ 61,557 4.36%
=========== ====== =========== ======
</TABLE>
1 Taxable-equivalent rates used where applicable.
2 Net of unearned income and fees, net of related costs. Loans include
nonaccrual and restructured loans.
10
<PAGE> 11
ZIONS BANCORPORATION AND SUBSIDIARIES
PROVISION FOR LOAN LOSSES
The provision for loan losses increased 65.0% to $1.0 million for the first
quarter of 1997, as compared with $.6 million for the first quarter of 1996.
The provision for loan losses for the first quarter of 1997 and 1996 was
incurred in the Company's Arizona and Nevada bank subsidiaries. No provision
was recognized by the Company's Utah bank. Although the provision has
increased, annualized it is only .11% of average loans.
NONINTEREST INCOME
Noninterest income for the first quarter of 1997 was $31.8 million, an increase
of 21.9% over $26.1 million for the first quarter of 1996. Primary
contributors to the increase in noninterest income were service charges on
deposit accounts; other service charges, commissions and fees; and loan sales
and servicing income. Comparing the segments of noninterest income for the
first quarter of 1997 with the first quarter of 1996, service charges on
deposit accounts; other service charges, commissions and fees; trust income;
and loan sales and servicing income increased 15.9%, 35.8% 21.8% and 27.9%,
respectively, while trading account income decreased 9.4% and other income
decreased 8.9%.
NONINTEREST EXPENSE
Noninterest expense for the first quarter of 1997 was $57.7 million, an
increase of 15.9% over $49.8 million for the first quarter of 1996. Comparing
significant noninterst expense segments for the first quarter of 1997 with the
first quarter of 1996, salaries and employee benefits increased 17.4%,
occupancy increased 8.7% furniture and equipment expense increased 23.5%, and
FDIC premiums increased 244.0%. Significant increases were also reported for
other real estate expense, legal and professional services and amortization of
intangible assets for the first quarter of 1997.
In the first quarter of 1997, four new banking centers were opened, 71 ATMs
installed and additional investment in personnel was made in selected areas to
enhance future revenue growth.
The Company's "efficiency ratio," or noninterest expenses as a percentage of
total taxable-equivalent net revenues was 57.07% for the first quarter of 1997
as compared to 56.77 % for the first quarter of 1996.
INCOME TAXES
The Company's income taxes increased 16.9% to $14.0 million for the first
quarter of 1997 compared to $12.0 million for the first quarter of 1996. The
increase in the Company's income taxes was primarily due to the increase in
taxable income. The Company's effective income tax rate was 34.46% for the
first quarter of 1997, up slightly from 33.65% for the first quarter of 1996.
11
<PAGE> 12
ZIONS BANCORPORATION AND SUBSIDIARIES
ANALYSIS OF FINANCIAL CONDITION
EARNING ASSETS
Average earning assets increased 24.3% to $7,057.5 million in the three months
ended March 31, 1997, as compared to $5,677.9 million in the three months
ended March 31, 1996. Earning assets comprised 92.8% of total average assets
for the first three months of 1997, compared with 91.9% for the first three
months of 1996.
Average money market investments, consisting of interest-bearing deposits,
federal funds sold and security resell agreements increased 42.6% to $1,570.8
million as compared to $1,101.6 million in the first three months of 1996.
During the first three months of 1997, average securities increased 15.3% to
$1,962.0 million as compared to $1,701.0 million in the first three months of
1996. Average held to maturity securities increased 14.1%, available for sale
securities increased 11.0%, and average trading account securities increased
33.4%, as compared with the same period in 1996.
Average net loans and leases increased 22.6% to $3,524.8 million for the first
three months of 1997 as compared to $2,875.3 million in the first three months
of 1996, representing 49.9% of earning assets in the first quarter of 1997 as
compared to 50.6% in the first quarter of 1996. Average net loans and leases
were 78.8% of average total deposits for the three months ended March 31, 1997,
as compared to 71.2% for the three months ended March 31, 1996.
12
<PAGE> 13
ZIONS BANCORPORATION AND SUBSIDIARIES
INVESTMENT SECURITIES
The following table presents the Company's investment securities on March 31,
1997, December 31, 1996 and March 31, 1996.
<TABLE>
<CAPTION>
March 31, December 31, March 31,
1997 1996 1996
---------------------- ---------------------- ----------------------
Amortized Market Amortized Market Amortized Market
(In thousands) cost value cost value cost value
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Held to maturity
U.S. government agencies and corporations:
Small Business Administration
loan-backed securities $ 485,730 $ 491,143 $ 487,748 $ 491,785 $ 510,875 $ 523,172
Other agency securities 593,818 587,968 518,308 517,892 347,556 343,719
States and political subdivisions 214,234 216,950 255,321 259,560 228,230 232,895
Mortgage-backed securities 59,616 60,351 60,784 61,844 57,640 58,191
---------- ---------- ---------- ---------- ---------- ----------
$1,353,398 $1,356,412 $1,322,161 $1,331,081 $1,144,301 $1,157,977
---------- ---------- ---------- ---------- ---------- ----------
Available for sale
U.S. Treasury securities $ 10,158 $ 10,157 $ 14,655 $ 14,707 $ 14,162 $ 14,185
U.S. government agencies 88,904 83,791 120,620 116,500 83,035 82,567
States and political subdivisions 38,886 40,030 39,118 40,766 39,014 40,521
Mortgage-backed securities 84,323 85,041 86,007 84,865 68,299 67,926
---------- ---------- ---------- ---------- ---------- ----------
222,271 219,019 260,400 256,838 204,510 205,199
---------- ---------- ---------- ---------- ---------- ----------
Equity securities:
Mutual funds:
Accessor Funds, Inc. 109,518 107,926 109,071 109,100 108,939 108,141
Other -- -- -- -- 571 571
Stock:
Federal Home Loan Bank 81,004 81,004 79,593 79,593 73,598 73,598
Other 8,313 9,265 7,343 7,920 6,823 7,223
---------- ---------- ---------- ---------- ---------- ----------
198,835 198,195 196,007 196,613 189,931 189,533
---------- ---------- ---------- ---------- ---------- ----------
$ 421,106 $ 417,214 $ 456,407 $ 453,451 $ 394,441 $ 394,732
---------- ---------- ---------- ---------- ---------- ----------
Total $1,774,504 $1,773,626 $1,778,568 $1,784,532 $1,538,742 $1,552,709
========== ========== ========== ========== ========== ==========
</TABLE>
LOANS
The Company has structured its organization to separate the lending function
from the credit administration function to strengthen the control and
independent evaluation of credit activities. Loan policies and procedures
provide the Company with a framework for consistent underwriting and a basis
for sound credit decisions. In addition, the Company has well-defined
standards for grading its loan portfolio, and management utilizes the
comprehensive loan grading system to determine risk potential in the portfolio.
Another aspect of the Company's credit risk management strategy is the
diversification of the loan portfolio. The Company has a well-diversified loan
portfolio with no significant exposure to highly leveraged transactions and has
no foreign credits in its loan portfolio.
13
<PAGE> 14
ZIONS BANCORPORATION AND SUBSIDIARIES
The table below sets forth the amount of loans outstanding by type on March 31,
1997, December 31, 1996 and March 31, 1996.
<TABLE>
<CAPTION>
(In thousands)
March 31, December 31, March 31,
Types 1997 1996 1996
---------- ---------- ----------
<S> <C> <C> <C>
Loans held for sale $ 170,521 $ 150,467 $ 153,589
Commercial, financial, and agricultural 867,784 783,589 696,027
Real estate:
Construction 341,589 323,668 322,023
Other:
Home equity credit line 160,668 165,134 85,145
1-4 family residential 540,173 534,845 419,874
Other real estate-secured 1,131,846 1,057,962 822,006
---------- ---------- ----------
1,832,687 1,757,941 1,327,025
---------- ---------- ----------
2,174,276 2,081,609 1,649,048
Consumer:
Bankcard 27,267 37,089 43,728
Other 265,401 267,456 284,184
---------- ---------- ----------
292,668 304,545 327,912
Lease financing 158,140 159,825 144,609
Other receivables 76,854 10,989 32,934
---------- ---------- ----------
Total loans $3,740,243 $3,491,024 $3,004,119
========== ========== ==========
</TABLE>
Loans held for sale on March 31, 1997 increased 13.3% from year-end 1996. All
other loans, net of unearned income and fees increased 7.0% to $3,532.2 million
on March 31, 1997, compared to $3,302.1 million on December 31, 1996.
Commercial loans, construction loans, other real estate-secured loans,
and other receivables increased from year end 10.7%, 5.5%, 4.3% and 599.4%,
respectively, as consumer loans decreased 3.9% and lease financing decreased
1.1%. Within the other real estate-secured loan portfolio, home equity credit
line loans decreased 2.7%, 1-4 family residential loans increased 1.0% and all
other real estate loans increased 7.0% from year end.
On March 31, 1997, long-term first mortgage real estate serviced for others
totaled $1,644.9 million and consumer and other loan securitizations, which
relate primarily to loans sold under revolving securitization structures,
totaled $861.5 million. During the first quarter of 1997, the Company sold
$152.1 million of loans and held for sale and securitized and sold home equity
credit line loans, credit card receivables and automobile loans totaling $176.0
million.
14
<PAGE> 15
ZIONS BANCORPORATION AND SUBSIDIARIES
RISK ELEMENTS
The Company's nonperforming assets, which include nonaccruing loans,
restructured loans, other real estate owned and other nonperforming assets,
were $11.1 million on March 31, 1997, down from 12.5 million on December 31,
1996, but up from $9.3 million on March 31, 1996. Such nonperforming assets as
a percentage of net loans and leases, other real estate owned and other
nonperforming assets were .30%, .36% and .32% on March 31, 1997, December 31,
1996, and March 31, 1996, respectively.
Accruing loans past due 90 days or more totaled $3.8 million on March 31, 1997,
up from $3.6 million on December 31, 1996, but down from $6.7 million on March
31, 1996. These loans equaled .10% on March 31, 1997, as compared to .10% on
December 31, 1996 and .22% on March 31, 1996.
No loans were considered potential problem loans on March 31, 1997, December
31, 1996 or March 31, 1996. Potential problem loans are defined as loans
presently on accrual and current by their terms, but about which management has
serious doubt as to the future ability of the borrower to comply with present
repayment terms and which may result in the reporting of the loans as
nonperforming assets.
The Company's total recorded investment in impaired loans, in accordance with
Financial Accounting Standard statements, and included in nonaccrual loans and
leases, amounted to $5.4 million on March 31, 1997, as compared to $7.8 million
on December 31, 1996, and $4.8 million on March 31, 1996. The Company
considers a loan to be impaired when the accrual of interest has been
discontinued and meets other criteria under the statements. The amount of the
impairment is measured based on the present value of expected cash flows, the
observable market price of the loan, or the fair value of the collateral.
Impairment losses are included in the allowance for loan losses through a
provision for loan losses. Included in the allowance for loan losses on March
31, 1997, December 31, 1996, and March 31, 1996, is a required allowance of
$526 thousand, $25 thousand and $365 thousand, resepectively, on $2.2 million,
$1.0 million and $1.9 million, respectively, of the recorded investment in
impaired loans.
15
<PAGE> 16
ZIONS BANCORPORATION AND SUBSIDIARIES
The following table sets forth the nonperforming assets on March 31, 1997,
December 31, 1996, and March 31, 1996.
<TABLE>
<CAPTION>
March 31, December 31, March 31,
(In thousands) 1997 1996 1996
------- ------- -------
<S> <C> <C> <C>
Nonaccrual loans $ 9,216 $11,526 $ 8,360
Restructured loans 852 857 245
Other real estate owned and other
nonperforming assets 1,039 138 788
------- ------- -------
Total $11,107 $12,521 $ 9,393
======= ======= =======
% of net loans and leases*, other real estate
owned and other nonperforming assets .30% .36% .32%
Accruing loans past due 90 days or more $ 3,829 $ 3,553 $ 6,669
======= ======= =======
% of net loans and leases* .10% .10% .22%
*Includes loans held for sale
</TABLE>
ALLOWANCE FOR LOAN LOSSES
The Company's allowance for loan losses was 1.87% of net loans and leases on
March 31, 1997, compared to 2.03% on December 31, 1996, and 2.28% on March 31,
1996. Net charge-offs during the first quarter totaled $1.6 million, or .19%
on average net loans and leases, compared to $.5 million, or .07% of average
net loans and leases for the first quarter of 1996.
The allowance, as a percentage of nonaccrual loans and restructured loans, was
688.29% on March 31, 1997, compared to 564.92% on December 31, 1996, and 785.9%
on March 31, 1996. The allowance, as a percentage of nonaccrual loans and
accruing loans past due 90 days or more was 531.22% on March 31, 1997, compared
to 463.92% on December 31, 1996 and 450.0% on March 31, 1996.
On March 31, 1997, December 31, 1996, and March 31, 1996, the allowance for
loan losses includes an allocation of $7.8 million, $5.9 million and $6.6
million, respectively, related to commitments to extend credit on loans and
standby letters of credit. Commitments to extend credit on loans and standby
letters of credit on March 31, 1997, December 31, 1996 and March 31, 1996,
totaled $1,837.6 million, $1,906.9 million and $1,631.3 million, respectively.
16
<PAGE> 17
ZIONS BANCORPORATION AND SUBSIDIARIES
In analyzing the adequacy of the allowance for loan and lease losses,
management utilizes a comprehensive loan grading system to determine risk
potential in the portfolio, and considers the results of independent internal
and external credit review, historical charge-off experience, and changes in
the composition and volume of the portfolio. Other factors, such as general
economic conditions and collateral values, are also considered. Larger problem
credits are individually evaluated to determine appropriate reserve
allocations. Additions to the allowance are based upon the resulting risk
profile of the portfolio developed through the evaluation of the above factors.
The following table shows the changes in the allowance for loan losses and a
summary of loan loss experience.
<TABLE>
<CAPTION>
Twelve Months
Three Months Ended Ended
(In thousands) March 31, December 31,
---------------------------------- -----------
1997 1996 1996
----------- ----------- -----------
<S> <C> <C> <C>
Average loans* and leases outstanding
(net of unearned income) $ 3,524,750 $ 2,875,258 $ 3,126,899
=========== =========== ===========
Allowance for possible losses:
Balance at beginning of the period $ 69,954 $ 67,555 $ 67,555
Allowance of companies acquired -- -- 2,566
Provision charged against earnings 990 600 3,540
Loans and leases charged-off:
Loans held for sale -- -- --
Commercial, financial and agricultural (958) (317) (1,274)
Real estate (108) (242) (427)
Consumer (1,498) (1,883) (7,503)
Lease financing (32) -- (228)
Other receivables -- -- --
----------- ----------- -----------
Total (2,596) (2,442) (9,432)
----------- ----------- -----------
Recoveries:
Loans held for sale -- -- --
Commercial, financial and agricultural 206 637 2,411
Real estate 129 194 428
Consumer 613 690 2,344
Lease financing 1 391 542
Other receivables -- -- --
----------- ----------- -----------
Total 949 1,912 5,725
----------- ----------- -----------
Net loan and lease charge-offs (1,647) (530) (3,707)
----------- ----------- -----------
Balance at end of the period $ 69,297 $ 67,625 $ 69,954
=========== =========== ===========
*Includes loans held for sale
Ratio of net charge-offs to
average loans and leases .19% .07% .12%
</TABLE>
17
<PAGE> 18
ZIONS BANCORPORATION AND SUBSIDIARIES
DEPOSITS
Average total deposits of $4,470.8 million for the first three months of 1997
increased 10.7% over the $4,038.4 million for the first three months of 1996,
with average demand deposits increasing 15.5%. Average money market and super
NOW deposits and foreign deposits for the first three months of 1997 increased
20.5% and 32.7% respectively, from the first three months of 1996. Average
savings and NOW deposits decreased 5.8%, time deposits under $100,000 decreased
2.8% and time deposits over $100,000 decreased 5.7% during the first three
months of 1997, compared with the same period one year earlier.
Total deposits increased 2.6% to $4,671.7 million on March 31, 1997, as
compared to $4,552.0 million on December 31, 1996. Comparing March 31, 1997 to
December 31, 1996, savings and money market deposits, time deposits over
$100,000 and foreign deposits increased 4.1%, 10.5% and 57.2%, respectively,
while demand deposits decreased 4.6% and time deposits under $100,000 decreased
$1.6%.
LIQUIDITY AND INTEREST RATE SENSITIVITY
The Company manages its liquidity to provide adequate funds to meet its
financial obligations, including withdrawals by depositors, and debt service
requirements as well as to fund customers' demand for credit. Liquidity is
primarily provided by the regularly scheduled maturities of the Company's
investment and loan portfolios. The Company's liquidity is enhanced by the
fact that cash, money market securities and liquid investments, net of
short-term or "purchased" liabilities and wholesale deposits, totaled $1,198.5
million or 27.8% of core deposits at March 31, 1997.
The Company's core deposits, consisting of demand, savings and money market
deposits and time deposits under $100,000, constituted 92.2% of total deposits
at March 31, 1997 as compared to 93.8% on December 31, 1996 and 93.0% at March
31, 1996.
Maturing balances in loan portfolios provide flexibility in managing cash
flows. Maturity management of those funds is an important source of medium- to
long-term liquidity. The Company's ability to raise funds in the capital
markets through the securitization process and by debt issuances allows the
Company to take advantage of market opportunities to meet funding needs at
reasonable cost.
The parent company's cash requirements consist primarily of principal and
interest payments on its borrowings, dividend payments to shareholders,
operating expenses and income taxes. The parent company's cash needs are
routinely satisfied through payments by subsidiaries of dividends, management
and other fees, principal and interest payments on subsidiary borrowings from
the parent company and proportionate shares of current income.
18
<PAGE> 19
ZIONS BANCORPORATION AND SUBSIDIARIES
Interest rate sensitivity measures the Company's financial exposure to changes
in interest rates. Interest rate sensitivity is, like liquidity, affected by
maturities of assets and liabilities. Interest rate sensitivity measures the
Company's financial exposure to changes in interest rates. The Company
assesses its interest rate sensitivity using duration, simulation, and gap
analysis. Duration is a measure of the weighted average expected lives of the
discounted cash flows from assets and liabilities. Simulation is used to
estimate net interest income over time using alternative interest rate
scenarios. Gap analysis compares the volumes of assets and liabilities whose
interest rates are subject to reset within specified periods.
The Company, through the management maturities and repricing of its assets and
liabilities and the use of off-balance sheet arrangments such as interest rate
caps, floors, futures, options, and interest rate exchange agreements, attempts
to minimize the effect on net income of changes in interest rates. The
Company's management exercises its best judgment in making assumptions with
respect to loan and security prepayments, early deposit withdrawals and other
noncontrollable events in managing the Company's exposure to changes in
interest rates. The interest rate risk position is actively managed and
changes daily as the interest rate environment changes; therefore, positions at
the end of any period may not be reflective of the Company's interest rate
position in subsequent periods. The prime lending rate is the primary basis
used for pricing the Company's loans and the short-term Treasury rate is the
index used for pricing many of the Company's deposits. The Company, however,
is unable to economically hedge the prime/91-day T-bill spread risk through the
use of off-balance sheet financial instruments.
CAPITAL RESOURCES AND DIVIDENDS
During the first quarter of 1997, the Company repurchased and retired 223,602
shares of its common stock at a cost of $26.1 million. In March 1997, the
Company's board of directors authorized an additional repurchase of its common
shares in the amount of $25 million.
Total shareholders' equity on March 31, 1997 was $503.6 million, a decrease of
.8% from the $507.5 million on Deceber 31, 1996, and an increase of 14.8% over
the $438.6 million on March 31, 1996. The ratio of average equity to average
assets for the first three months of 1997 was 6.62% as compared to 7.02% for
the same period in 1996. On March 31, 1997, the Company's Tier I risk-based
capital ratio was 14.03%, as compared to 14.38% on December 31, 1996 and 11.13%
on March 31, 1996. On March 31, 1997 the Company's total risk-based capital
ratio was 17.49%, as compared to 18.31% on December 31, 1996 and 13.89% on
March 31, 1996. The Company's leverage ratio on March 31, 1997 was 7.84%, as
compared to 8.77% on December 31, 1996 and 6.20% on March 31, 1996.
Dividends declared per common share for the first quarter of 1997 of $.44
increased 7.3%, as compared to $.41 for the first quarter of 1996. The common
cash dividend payout of net income for the first three months of 1997 was
23.93%, as compared to 25.18% for the first three months of 1996.
19
<PAGE> 20
ZIONS BANCORPORATION
MERGERS AND ACQUISITIONS
Zions Bancorporation has received regulatory approvals and now awaits
shareholders' approval to acquire Aspen Bancshares, Inc. and its banking
subsidiaries, in a purchase transaction to be paid through the exchange of
Zions Bancorporation common stock for Aspen Bancshares, Inc. stock. The
transaction is expected to be consummated during the second quarter of 1997.
On March 7, 1997, the Company announced an agreement to purchase the deposits
and branch facilities of 32 Wells Fargo offices in Arizona, Idaho, Nevada and
Utah. The offices have deposits of approximately $550 million. The Company
expects this transaction to close in July, 1997, subject to regulatory
approvals and other conditions of closing.
On May 1, 1997, the Company entered into an agreement to acquire Tri-State Bank
in Montpelier, Idaho. Tri-State Bank has two offices and $24 million in
assets. The transaction is to be accounted for as a purchase and is expected
to close in July 1997, subject to regulatory approvals and shareholders'
approval.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
Exhibit 10 Zions Bancorporation Penion Plan
Amended and Restated Effective April 1, 1997
Exhibit 27 Article 9 Financial Schedules for Form 10-Q
b) Reports on Form 8-K
A report on Form 8-K was filed March 11, 1997, containing the
Company's audited Consolidated Financial Statements for the
year ended December 31, 1996.
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ZIONS BANCORPORATION
/s/ Harris H. Simmons Harris H.
---------------------------------------
Simmons, President and Chief
Executive Officer
/s/ Dale M. Gibbons Dale M. Gibbons,
---------------------------------------
Senior Vice President
20
<PAGE> 1
EXHIBIT 10
ZIONS BANCORPORATION PENSION PLAN
Amended and Restated Effective April 1, 1997
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
<S> <C>
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Article 1 -- Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Accrued Benefit Attributable to the Old Plan Account . . . . . . . . . . . . . . . . . . . . 2
1.3 Accrued Benefit Attributable to Company Contributions . . . . . . . . . . . . . . . . . . . 2
1.4 Actuarial Equivalence or Actuarial Equivalent . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Affiliate or Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.6 Authorized Period of Absence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.7 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.8 Break in Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.9 Cash Balance Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.10 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.11 Committee or Retirement Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.12 Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.13 Controlled Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.14 Disability Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.15 Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.16 Early Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.17 Eligible Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.18 Eligible Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.19 Eligibility Computation Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.20 Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.21 Employment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.22 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.23 Hour of Service, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.24 Investment Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.25 Late Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.26 Military Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.27 Nonvested Former Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.28 Normal Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.29 Old Plan Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.30 Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.31 Participation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.32 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.33 Plan Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.34 Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
1.35 Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.36 Singe Life Annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.37 Termination of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.38 Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.39 Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.40 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.41 Year of Vesting Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Article 2 -- Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.1 Participation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.2 Reinstatement of Active Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Article 3 -- Establishment and Maintenance of Cash Balance Account . . . . . . . . . . . . . . . . . . . . 14
3.1 Initial Establishment of Cash Balance Account . . . . . . . . . . . . . . . . . . . . . . . 14
3.2 Earnings Credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.3 Interest Credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.4 Maintenance of Account after Termination of Employment until Benefit Commencement . . . . . 15
3.5 Establishment of new Account if Reemployed after Benefit Commencement . . . . . . . . . . . 15
Article 4 -- Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.1 Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.2 Cash Balance Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.3 Minimum Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.4 Grandfathered Minimum Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.5 Accrued Benefit Attributable to the Old Plan Account . . . . . . . . . . . . . . . . . . . . 17
4.6 Accrued Benefit Attributable to Company Contributions . . . . . . . . . . . . . . . . . . . 17
4.7 Old Plan Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Article 5 -- Amount of Retirement Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.1 Monthly Retirement Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.2 Normal Retirement Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.3 Early Retirement Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.4 Late Retirement Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.5 Disability Retirement Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.6 Application for Retirement Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.7 Forms of Retirement Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.8 Reemployment After Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.9 Commencement of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
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<TABLE>
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Article 6 -- Termination and Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.1 Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.2 Termination Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.3 Reemployment After Termination of Employment . . . . . . . . . . . . . . . . . . . . . . . . 24
Article 7 -- Disability Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.1 Determination of Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.2 Eligibility for Disability Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.3 Disability Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.4 Disability Retirement Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Article 8 -- Death Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.1 Death after Commencement of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.2 Death Prior to Commencement of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.3 Effect of Old Plan Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.4 Return of Old Plan Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Article 9 -- Financing The Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.1 Company Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.2 Return of Company Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.3 Employee Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Article 10 -- Termination of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.1 Termination of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.2 Procedures Upon Termination of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Article 11 -- Top-Heavy Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.1 Top-Heavy Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.2 Definition of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.3 Modification of Vesting Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.4 Minimum Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.5 Modification of Maximum Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Article 12 -- Administration of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.1 Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.2 Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
12.3 Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
12.4 Delegation of Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
12.5 Information Available . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
12.6 Claims Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
12.7 Fiduciary Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
12.8 Committee Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
</TABLE>
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Article 13 -- General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.1 Amendment of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.2 Employment Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.3 Mergers or Consolidations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.4 Provision Against Anticipation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
13.5 Facility of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
13.6 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
13.7 Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
13.8 Payment of Small Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
13.9 Maximum Retirement Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
13.10 Additional Benefit Limits for Highly Compensated Employees . . . . . . . . . . . . . . . . . 42
13.11 Eligible Rollover Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
13.12 Procedures with Respect to Domestic Relations Orders . . . . . . . . . . . . . . . . . . . . 45
Appendix I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Appendix II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Appendix III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
</TABLE>
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Introduction
The Zions Bancorporation Pension Plan became effective on January 1, 1968. The
Plan has been amended and restated from time to time. This document amends and
restates the Plan, effective April 1, 1997, except where another effective date
is specifically provided.
Except as specifically provided in the Plan, the rights and benefits of any
Participant who terminates or retires prior to the effective date of this
restatement or any other amendment to the Plan will be determined pursuant to
the provisions of the Plan in effect on the earlier of his or her date of
retirement or termination.
The Plan and Trust thereunder are created and maintained for the primary
purpose of providing retirement benefits for eligible employees of the Zions
Bancorporation and its affiliates. It is intended that the Plan and Trust
qualify under Sections 401(a) and 501(a) of the Internal Revenue Code of 1986,
as amended, and that they meet the requirements of the Employee Retirement
Income Security Act of 1974, as amended.
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Article 1
Definitions
1.1 Accrued Benefit
Accrued Benefit means the monthly amount of benefit credited to a
Participant in accordance with Article 4 on the basis of an annuity
payable for life beginning on his or her Normal Retirement Date or,
the current date, if later.
1.2 Accrued Benefit Attributable to the Old Plan Account
Accrued Benefit Attributable to the Old Plan Account is defined in
Sections 4.2 and 5.3.
1.3 Accrued Benefit Attributable to Company Contributions
Accrued Benefit Attributable to Company Contributions is defined in
Section 4.3.
1.4 Actuarial Equivalence or Actuarial Equivalent
Actuarial Equivalence or Actuarial Equivalent means equality in value
of the aggregate amounts expected to be received under different forms
of payment computed on the following bases:
(a) For purposes of determining the monthly benefits under
Sections 4.2, 4.5, 5.3 and 8.2, the value of the Old Plan
Account at Normal Retirement Date, and the value of lump sum
payments under Sections 5.7 and 13.8, actuarial equivalence
will be calculated in accordance with Appendix II.
(b) For purposes of determining the maximum retirement benefit in
Section 13.9, actuarial equivalence will be calculated using
the following basis:
(1) The mortality assumption is the applicable mortality
table prescribed by the Secretary of the Treasury under
Code Section 417(e)(3)(A)(ii)(I). (Effective January
1, 1995 the applicable mortality table is a table
constructed by using 50% of the mortality rates from
the 1983 Group Annuity Mortality Table for males and
50% of the mortality rates from the 1983 Group Annuity
Mortality Table for females).
(2) Except as otherwise specified in Section 13.9,
effective on or after January 1, 1995, the interest
assumption will be the rate specified in Appendix II
for lump sum payments after May 31, 1995 and 6% for
other purposes.
(c) Except as otherwise specified in the Plan, for all other
purposes actuarial equivalency will be calculated using the
following basis:
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<PAGE> 8
(1) The mortality assumption will be the 1984
Unisex Pensioners Mortality Table.
(2) The interest assumption will be 6%.
1.5 Affiliate or Subsidiary
Affiliate or Subsidiary means a member of a controlled group of
corporations (as defined in Code Section 1563(a), determined without
regard to Code Sections 1563(a)(4) and (e)(3)(C)), a group of trades
or businesses (whether incorporated or not) which are under common
control within the meaning of Code Section 414(c), or an affiliated
service group (as defined in Code Sections 414(m) or 414(o)) of which
Zions Bancorporation is a part. With respect to the Maximum
Retirement Benefit defined in Section 13.9, in determining whether a
corporation is a member of a controlled group of corporations the
phrase "more than 50 percent" will be substituted for the phrase "at
least 80 percent" each place it appears in Code Section 1563(a)(1).
1.6 Authorized Period of Absence
Authorized Period of Absence means an absence authorized by the
Company for one or more of the following reasons:
(a) Approved leave of absence.
(b) Pregnancy.
(c) Jury duty.
(d) Military Service as defined in Section 1.26.
(e) Illness or injury, including disability.
Any discretion of the Company under the provisions of this definition
will be exercised without discrimination and in accordance with
definitely established rules uniformly applicable to Employees or
Participants whose approved periods of absence were occasioned by
similar circumstances.
1.7 Beneficiary
Beneficiary means the person or persons designated by a Participant to
receive any benefit payable from the Plan under Section 8.3 or Section
13.8 upon the death of the Participant.
If no Beneficiary designation is filed with the Committee or if the
designated Beneficiary does not survive the Participant, the
Participant will be deemed to have designated the following as
Beneficiaries with priority in the order named:
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<PAGE> 9
(a) Surviving spouse,
(b) The Participant's estate.
1.8 Break in Service
Break in Service means an interruption in service due to a person's
failure to complete at least 501 Hours of Service during a calendar
year or during an Eligibility Computation Period. A Break in Service
will not occur during an Authorized Period of Absence unless the
Employee fails to return to work for at least 30 days with the Company
or any member of the Controlled Group after the expiration of the
Authorized Period of Absence.
1.9 Cash Balance Account
Cash Balance Account means the separate bookkeeping account
established and maintained for each Participant as provided in
Article 3.
1.10 Code
Code means the Internal Revenue Code of 1986, as amended.
1.11 Committee or Retirement Committee
Committee or Retirement Committee means the Committee which will
administer the plan as described in Article 12.
1.12 Company
Company means Zions Bancorporation and any Affiliate or Subsidiary
which adopts this Plan with the consent of the Board of Directors of
Zions Bancorporation.
1.13 Controlled Group
Controlled Group means Zions Bancorporation and any Affiliate or
Subsidiary. All employees of the Controlled Group will be treated as
employed by a single employer for purposes of applying the provisions
of qualification of the Plan; of minimum participation standards of
the Plan; of minimum vesting standards of the Plan; and of limitation
of benefits under the Plan.
1.14 Disability Retirement Date
Disability Retirement Date is defined in Section 7.3.
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<PAGE> 10
1.15 Earnings
Earnings means the Participant's wages, salaries, fees for
professional service and other amounts received (without regard to
whether or not an amount is paid in cash) for personal services
actually rendered in the course of employment with the Company to the
extent that the amounts are includible in gross income (including, but
not limited to, commissions paid salesmen, compensation for services
on insurance premiums, tips, and bonuses). Earnings will also include
Participant contributions to any insurance program and elective
contributions made by the Company on behalf of its Participants which
are not includible in gross income under Code Sections 125, 402(e)(3),
402(h) or 403(b).
The term "Earnings" does not include:
(a) Company contributions to a plan of deferred compensation
(other than elective contributions described above) to the
extent that, before the application of the Code Section 415
limitations to that plan, the contributions are not includible
in the gross income of the Participant for the taxable year in
which contributed. Additionally, any distributions from a
plan of deferred compensation are not considered as Earnings
regardless of whether such amounts are includible in the gross
income of the Participant when distributed. However, any
amounts received by a Participant pursuant to an unfunded
nonqualified plan may be considered as Earnings in the year
such amounts are includible in the gross income of the
Participant;
(b) Amounts realized from the exercise of a nonqualified stock
option, or when restricted stock (or property) held by a
Participant either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(c) Amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option;
(d) Other amounts which receive special tax benefits, such as
premiums for group term life insurance (without regard to
whether the premiums are includible in the gross income of the
Participant);
(e) Reimbursements or other expense allowances, fringe benefits
(cash and non-cash), moving expenses, welfare benefits, and
any lump sum amounts paid at termination of employment (on
account of such termination), such as severance pay, vacation
and sick leave cash-outs; and
(f) Directors fees, if any, paid to Highly Compensated Employees
as defined in Section 13.10.
Except as provided in Section 2.1 (c) of Appendix III, earnings will
not exceed $200,000 for years prior to 1990. Each January 1
thereafter, this $200,000 limit will automatically
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<PAGE> 11
be adjusted to the new dollar limit prescribed by the Secretary of the
Treasury for that calendar year.
Except as provided in Section 2.1 (a) or 2.1 (b) of Appendix III,
effective January 1, 1994, annual Earnings will not exceed $150,000 for
1994 or prior years. On January 1 of each calendar year in which the
Secretary of the Treasury prescribes a new dollar limit, this $150,000
limit will automatically be adjusted to that new limit. If a period
over which Earnings is determined under the Plan (determination period)
is less than 12 months, the $200,000 and the $150,000 limitations for
that period will be multiplied by a fraction, the numerator of which is
the number of months in the determination period, and the denominator
of which is 12. For this purpose, a determination period will not be
considered to be less than 12 months merely because a Participant is an
Active Participant for less than a full Plan Year except that Earnings
will be determined for the full Plan Year.
1.16 Early Retirement Date
A Participant may retire prior to his or her Normal Retirement Date on
an Early Retirement Date which, subject to his or her election, may be
the first day of any month coincident with or following the latest of:
(a) the Participant's 55th birthday, (b) the date on which the
Participant completes ten Years of Vesting Service, or (c) the date of
the Participant's Termination of Employment.
1.17 Eligible Employee
Eligible Employee means any Employee of the Company except an Employee
represented by a collective bargaining agent unless the terms of the
collective bargaining agreement covering such Employee specifically
provide for coverage under the Plan. The term "Eligible Employee" does
not include a leased employee as defined in Code Section 414(n).
1.18 Eligible Spouse
Eligible Spouse means the legal spouse of the Participant at the time
of the Participant's death except that a former spouse may be treated
as an Eligible Spouse to the extent provided in a qualified domestic
relations order as defined in Code Section 414(p).
1.19 Eligibility Computation Period
Eligibility Computation Period means a 12-consecutive-month period
beginning on an Employee's Employment Date. However, if such Employee
fails to complete at least 1,000 Hours of Service during his or her
initial 12-consecutive-month period, the Eligibility Computation
Period becomes the Plan Year commencing with the Plan Year in which
such initial period ends.
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<PAGE> 12
1.20 Employee
Employee means any person who is employed by any member of the
Controlled Group.
1.21 Employment Date
Employment Date means the date on which an Employee first performs an
Hour of Service for any member of the Controlled Group.
1.22 ERISA
ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
1.23 Hour of Service,
Hour of Service means:
(a) each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Company;
(b) each hour for which an Employee is paid, or entitled to
payment, by the Company on account of a period of time during
which no duties are performed (whether or not the employment
relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury
duty, military duty or leave of absence; provided, however,
that an Employee will not be credited with more than 501
Hours of Service under this sentence for any continuous
period during which he or she performs no duties for the
Company. Notwithstanding the preceding provisions of this
paragraph, no credit will be given:
(1) for an Hour of Service for which the individual is
directly or indirectly paid, or entitled to payment, on
account of a period during which no duties are
performed if such payment is made or due under a plan
maintained solely for the purpose of complying with
applicable workers' compensation, unemployment
compensation or disability insurance laws (except as
specifically provided for in Article 7); or
(2) for an Hour of Service for which a payment is made
which solely reimburses the individual for medical or
medically related expenses incurred;
(c) each hour not otherwise credited under the Plan for which
back pay, irrespective of mitigation of damages, is either
awarded or agreed to by the Company.
(d) Hours of Service will be credited for employment with other
members of an affiliated service group, a controlled group of
corporations, or a group of trades or businesses under common
control of which the Company is a member.
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<PAGE> 13
(e) Hours of Service will also be credited for any individual
considered an employee under Code Section 414(n).
(f) Solely for purposes of determining whether a Break in Service
has occurred, an individual who is absent from work will
receive credit for the Hours of Service which would have been
credited to the individual but for such absence if the absence
is (1) because of the pregnancy of the individual, (2) because
of the birth of a child of the individual, (3) because of the
placement of a child with the individual in connection with
the adoption of such child by such individual, (4) for
purposes of caring for such child for a period beginning
immediately following such birth or placement, or (5) for
family or medical leave required to be provided under the
Family and Medical Leave Act of 1993. Where such hours cannot
be determined, eight Hours of Service per day of such absence
will be used. The Hours of Service credited under this
paragraph will be credited in the computation period in which
the absence begins if the crediting is necessary to prevent a
Break in Service in that period. In all other cases, such
hours will be credited in the following computation period.
(g) The foregoing notwithstanding, Participants whose pay is
solely on a commission basis will be credited with Hours of
Service as follows:
(1) If the Participant's Earnings for a Plan Year are at least
750 multiplied by the lowest hourly rate of compensation
payable to employees in the same job classification as the
Participant, then the Participant will be credited with
1,000 Hours of Service for that Plan Year.
(2) If the Participant's Earnings for a Plan Year are less
than 750 multiplied by the lowest hourly rate of
compensation payable to employees in the same job
classification as the Participant, then the Participant
will not be credited with any Hours of Service for that
Plan Year.
(h) The crediting of Hours of Service under this Plan will be
applied under the rules of paragraphs (b) and (c) of the
Department of Labor Regulation 2530.200b-2 and clause
(f)(3)(ii) of the Department of Labor Regulation 2530.200b-3
which, by this reference, are specifically incorporated in
full within this Plan.
1.24 Investment Manager
Investment Manager means any fiduciary (other than a trustee, the
Company or the Committee):
(a) which has the power to manage, acquire, or dispose of any
assets of the Plan; and
(b) which (1) is registered as an investment adviser under the
Investment Advisers Act of 1940, or (2) is a bank, as defined
in that Act, or (3) is an insurance
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<PAGE> 14
company qualified to perform services described in item (a)
above under the laws of more than one state; and
(c) which has acknowledged in writing that it is a fiduciary with
respect to the Plan.
1.25 Late Retirement Date
If a Participant continues in the service of the Company or any member
of the Controlled Group beyond Normal Retirement Date, his or her Late
Retirement Date will be the first day of any month coincident with or
following the date of the Participant's Termination of Employment. A
Participant's Late Retirement Date will not be later than the required
beginning date described in Section 5.9(c) even if his or her
employment continues after such date.
1.26 Military Service
Military Service means the period of time during which a person is
absent from active work for the Company or any member of the
Controlled Group serving as a member of the Armed Forces of the United
States in time of war or other emergency or under the laws of
conscription in time of peace. Military Service includes time when
such person has a right to reemployment at his or her former position
or a substantially similar position upon separation from such Military
Service, and such period of time, not exceeding 90 days, immediately
following such Military Service as such person remains absent from
active work for the Company or any member of the Controlled Group.
1.27 Nonvested Former Participant
Nonvested Former Participant means a prior Participant who has
incurred a Termination of Employment and who does not have a vested
interest in accordance with Section 6.1.
1.28 Normal Retirement Date
A Participant's Normal Retirement Date will be the first day of the
month coincident with or next following his or her Normal Retirement
Age. If the Participant's Participation Date is on or after July 1,
1994, his or her Normal Retirement Age is the later of: (a) his or her
65th birthday, or (b) the earlier of: (1) the date the Participant
completes five Years of Vesting Service, or (2) the fifth anniversary
of his or her Participation Date provided the Participant is an
Employee on or after the later of such date or his or her 65th
birthday and earns at least one Year of Vesting Service after any
Break in Service. If the Participant first participated in the Plan
before July 1, 1994, the Participant's Normal Retirement Age is 65.
1.29 Old Plan Account
Old Plan Account is defined in Section 4.4.
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1.30 Participant
Participant means an Active Participant, Inactive Participant,
Terminated Vested Participant, Disabled Participant, or Retired
Participant, as defined below:
(a) "Active Participant" means an Eligible Employee who has met
the requirements for participation described in Article 2.
(b) "Inactive Participant" means a prior Active Participant who is
on an Authorized Period of Absence, or who is employed by a
member of the Controlled Group other than the Company, or who
is employed by the Company but is not an Eligible Employee.
(c) "Terminated Vested Participant" means a prior Eligible
Employee who has incurred a Termination of Employment, who
retains a vested interest in accordance with Section 6.1, and
who is not currently receiving benefit payments under the
Plan.
(d) "Disabled Participant" means a prior Active Participant who
has a total and permanent disability as determined under
Article 7.
(e) "Retired Participant" means a prior Eligible Employee who is
receiving benefit payments under the Plan.
1.31 Participation Date
Participation Date is defined in Section 2.1.
1.32 Plan
Plan means the Zions Bancorporation Pension Plan.
1.33 Plan Administrator
Plan Administrator means the Committee which will administer the plan
as described in Article 12.
1.34 Plan Year
Plan Year means a calendar year.
1.35 Retirement Date
Retirement Date means the date the Participant's benefits commence.
Benefits may begin at the Participant's Early, Normal, Late or
Disability Retirement Date.
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1.36 Singe Life Annuity
Single Life Annuity means an annuity providing level monthly payments
over the life of the annuitant.
1.37 Termination of Employment
Termination of Employment means cessation of employment with the
Company or any member of the Controlled Group due to:
(a) voluntary or involuntary termination or separation of
employment, or
(b) failure to return to work for at least 30 days upon the
expiration of any Authorized Period of Absence from the
Company or any member of the Controlled Group, in which event
cessation of active work will be deemed to have occurred at
the time such Authorized Period of Absence expired.
Transfer of employment, without interruption, between members of the
Controlled Group will not be deemed a Termination of Employment.
1.38 Trust Agreement
Trust Agreement means the agreement between the Company and the
Trustee.
1.39 Trust Fund
Trust Fund means all money or property held by the Trustee pursuant to
the Trust Agreement.
1.40 Trustee
Trustee means the trustee appointed by the Board of Directors of the
Company and named as such in the Trust Agreement.
1.41 Year of Vesting Service
Year of Vesting Service means a calendar year after December 31, 1988
during which an Employee completes 1,000 or more Hours of Service
except as follows:
(a) For Plan Years from December 31, 1994 to December 31, 1997,
an Employee shall be credited with a partial Year of Vesting
Service (measured in calendar months) in a Plan Year in which
the Employee completes less than 1,000 Hours of Service but
in which the Employee has a Benefit Service Date or in which
the Employee retires, dies, or incurs a Termination of
Employment if the Employee completes 83.33 Hours of Service
multiplied by the number of calendar months during such Plan
Year in which the Employee completes at least one Hour of
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<PAGE> 17
Service. The Employee will be credited with months of
Service equal to the number of calendar months during the
Plan Year in which the Employee completes at least one Hour
of Service. Twelve months of Service will equal a Year of
Vesting Service.
(b) Year of Vesting Service also include Years of Vesting Service
earned before January 1, 1989 under the terms of the Plan in
effect as of December 31, 1988.
(c) A Participant shall be credited in the 1989 calendar year with
190 Hours of Service for each month in which the Participant
earned at least one Hour of Service in his or her partial Year
of Vesting Service (if any) ending on December 31, 1988.
(d) The foregoing notwithstanding, a Participant must be at least
age 18 before he or she can earn a Year of Vesting Service.
(e) The foregoing notwithstanding, if a Participant who has no
vested interest in the Plan incurs a Break in Service, Years
of Vesting Service will not include:
(1) service prior to a Break in Service which is not followed
by a Year of Vesting Service, and
(2) service prior to five or more consecutive one year Breaks
in Service if the number of consecutive one year Breaks
in Service equals or exceeds the number of prior Years of
Vesting Service.
-12-
<PAGE> 18
Article 2
Participation
2.1 Participation Date
(a) An Eligible Employee who was an Active Participant in the
Plan on March 31, 1997 will continue to be an Active
Participant on April 1, 1997.
(b) Any other Eligible Employee will become an Active Participant
in the Plan on the January 1 or July 1 coinciding with or
next following the later of (1) the date on which the
Employee completes an Eligibility Computation Period during
which he or she completes at least 1,000 Hours of Service, or
(2) the Employee's 21st birthday. Not withstanding the
above, in the case of an Employee who is employed by an
affiliate or subsidiary who either adopts this Plan with the
consent of the Company or merges with the Company, service
prior to this date will be used to determine the
Participation Date and "January or July 1" will become the
first day of the month.
Participation Date means the date a Participant first becomes an
Active Participant, provided that the Participation Date of a
Nonvested Former Participant who is reinstated under Section 2.2
after five or more consecutive one year Breaks in Service shall be
the date of reinstatement.
2.2 Reinstatement of Active Participation
A Terminated Vested Participant, a Retired Participant, an Inactive
Participant, or a Nonvested Former Participant who again becomes an
Eligible Employee or who returns from an Authorized Period of Absence
will be reinstated as an Active Participant on the day he or she is
reinstated as an Eligible Employee or returns from such Authorized
Period of Absence.
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<PAGE> 19
Article 3
Establishment and Maintenance of Cash Balance Account
3.1 Initial Establishment of Cash Balance Account
(a) A Cash Balance Account will be established for each
Participant on the date he or she first becomes a Participant.
The initial balance in the Cash Balance Account will be zero.
With respect to each person who is an Active Participant or a
Disabled Participant on March 31, 1997, a Cash Balance Account
will be established as of January 1, 1997. The initial
balance in the Participant's Cash Balance Account will equal
the present value of the Active or Disabled Participant's
accrued benefit under the Plan as of December 31, 1996,
expressed in the form of a Single Life Annuity. The present
value will be determined using a 7% interest rate and the
Participant's age on December 31, 1996, and the mortality
table described in Section 1.4(b)(1).
(b) With respect to each Inactive Participant and Terminated
Vested Participant on March 31, 1997 who becomes an Active
Participant on or after April 1, 1997 and each Nonvested
Former Participant on March 31, 1997 who becomes an Active
Participant and does not lose his or her prior vested
interested in accordance with Section 1.41(e), a Cash Balance
Account will be established on the date he or she again
becomes an Active Participant. The initial balance in the
Participant's Cash Balance Account will equal the present
value of the Participant's accrued benefit under the Plan as
of December 31, 1996, expressed in the form of a Single Life
Annuity. The present value will be determined using a 7%
interest rate, the Participant's age on the date he or she
again becomes an Active Participant, and the mortality table
described in Section 1.4(b)(1).
3.2 Earnings Credits
(a) As of the last day of each Plan Year the Cash Balance Account
of each Participant who is employed on that date and who has
completed at least 1,000 Hours of Service during the Plan Year
will be credited with an amount equal to the product obtained
by multiplying the Participant's Earnings for the Plan Year by
a percentage from the following table, which percentage is
based upon the Participant's age as of the last day of the
Plan Year:
<TABLE>
<CAPTION>
Attained Age Percentage
<S> <C>
Less than 30 years 2.25%
At least 30 years, but less than 40 years 3.00%
At least 40 years, but less than 50 years 4.00%
At least 50 years, but less than 55 years 5.25%
At least 55 years, but less than 60 years 7.00%
60 or more years 9.25%
</TABLE>
-14-
<PAGE> 20
(b) The Cash Balance Account of a Participant who is not an
Employee on the last day of the Plan Year but who has
completed at least 1,000 Hours of Service during the Plan Year
will be credited as of the last day of the Plan Year or, if
earlier, as of the date on which the Participant's benefit is
paid or commences to be paid, with an amount calculated in the
manner described in Section 3.2(a), but based upon the
Participant's Earnings for the Plan Year and the age of the
Participant as of the date on which he or she incurs a
Termination of Employment.
3.3 Interest Credits
As of the last day of each calendar quarter the Cash Balance Account
of each Participant who has a Cash Balance Account on that date will
be credited with interest on the balance in the account as of the
first day of the Plan Year. Interest will be credited at the rate of
25% of the annual rate of interest on 30-year Treasury securities for
November of the previous Plan Year. If a Participant's benefit
commences prior to the end of a calendar quarter, no interest will be
credited for the quarter.
3.4 Maintenance of Account after Termination of Employment until Benefit
Commencement
After Termination of Employment, a Participant's Cash Balance Account
will continue to be maintained and credited with interest pursuant to
Section 3.3, until the Participant's benefit commences to be paid or
is deemed to be paid under Section 6.3.
3.5 Establishment of new Account if Reemployed after Benefit Commencement
(a) If a nonvested former Participant's Cash Balance Account has
ceased to be maintained due to the deemed receipt (under
Section 6.3) of his or her entire interest under the Plan, he
or she becomes an Active Participant prior to incurring five
consecutive Breaks in Service, and he or she completes a Year
of Vesting Service following the Break in Service period,
then, as of the date of becoming an Active Participant, the
Participant's Cash Balance Account will be restored to the
balance in the Cash Balance Account as of the previous
termination of employment date, increased for interest in
accordance with Section 3.3 for the period from the
termination date to the date the Participant again became an
Active Participant.
(b) If a Retired Participant is reemployed by the Company and
again becomes an Active Participant in the Plan after his or
her Cash Balance Account has ceased to be maintained pursuant
to Section 3.4, a new Cash Balance Account, with an initial
balance of zero, will be established as of the last day of the
Plan Year in which he or she again becomes an Active
Participant. The Cash Balance Account will credited with
earnings and interest as provided in Sections 3.2 and 3.3.
-15-
<PAGE> 21
Article 4
Accrued Benefit
4.1 Accrued Benefit
A Participant's Accrued Benefit is equal to the larger of the benefit
described in Sections 4.2, 4.3, or 4.4. Notwithstanding anything to
the contrary herein, in no event will the benefit payable a
Participant who was a Participant in the Plan on March 31, 1997 be
less than the benefit accrued by such Participant under the Plan on
March 31, 1997.
4.2 Cash Balance Accrued Benefit
A Participant's cash balance accrued benefit is a monthly benefit in
the form of a Single Life Annuity commencing on his or her Normal
Retirement Date, or the current date, if later, which is the Actuarial
Equivalent of the balance in the Participant's Cash Balance Account as
of his or her Normal Retirement Date, or the current date, if later.
For purposes of determining a Participant's cash balance accrued
benefit:
(a) The balance in the Participant's Cash Balance Account as of
the Participant's Normal Retirement Date, if the Participant
has not yet reached that date, will be determined by
projecting the balance in the Participant's Cash Balance
Account at the determination date to the Participant's Normal
Retirement Date. The projection will be accomplished by
applying the interest credits specified in Section 3.3 from
the determination date (the date on which benefits are being
determined) to the Participant's benefit commencement date
(the date on which benefits commence) and by applying the
interest credit in Section 3.3 during the year of benefit
commencement for each year from the benefit commencement date
to the Participant's Normal Retirement Date.
(b) The monthly benefit in the form of a Single Life Annuity will
be determined by using the assumptions for Actuarial
Equivalence described in Section 1.4(a) and the age of the
Participant as of his or her Normal Retirement Date, or the
current date, if later.
4.3 Minimum Accrued Benefit
A Participant's minimum accrued benefit is the monthly benefit accrued
by such Participant under the Plan on March 31, 1997, as defined in
Section 2.1 of Appendix III.
4.4 Grandfathered Minimum Accrued Benefit
Any Active Participant or Disabled Participant on March 31, 1997 who,
as of December 31, 1997, has attained 55 years of age and has
completed 10 Years of Vesting Service is
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<PAGE> 22
eligible to receive a grandfathered minimum accrued benefit described
in Section 2.2 of Appendix III.
4.5 Accrued Benefit Attributable to the Old Plan Account
The Accrued Benefit Attributable to the Old Plan Account as of the
Participant's Normal Retirement Date, or current date if later, will
be equal to the Participant's Old Plan Account expressed as a monthly
benefit under a Single Life Annuity commencing on his or her Normal
Retirement Date, or current date if later, using Actuarial Equivalence
as provided in Section 1.4(a).
The Accrued Benefit Attributable to the Old Plan Account as of the
Participant's Early Retirement Date will be equal to the monthly
benefit determined under the foregoing paragraph and, reduced by 5/9
of 1% for each of the first 60 months by which the Early Retirement
Date precedes his or her Normal Retirement Date and by 5/18 of 1% for
each of the next 60 such months.
4.6 Accrued Benefit Attributable to Company Contributions
The Accrued Benefit Attributable to Company Contributions will be
equal to the excess, if any, of the Accrued Benefit over the Accrued
Benefit Attributable to the Old Plan Account.
4.7 Old Plan Account
A Participant's Old Plan Account is his or her individual account
balance under this Plan which resulted from the transfer of funds from
a terminated plan formerly sponsored by the Employer. The Old Plan
Account shall include interest from the transfer date to the earlier
of the Participant's Retirement Date or the date on which the
Participant's Old Plan Account is otherwise payable pursuant to the
provisions of this Plan (the determination date) as follows: The rate
of interest shall be compounded annually. For Plan Years beginning
before January 1, 1988 and continuing to the determination date, the
interest rate shall be 5%. For each Plan Year beginning on or after
January 1, 1988 and continuing to the determination date, the interest
rate shall be 120% of the federal mid-term rate (as defined in Code
Section 1274) in effect on the first day of such Plan Year. For
purposes of determining the Accrued Benefit Attributable to the Old
Plan Account, the Old Plan Account shall also include interest,
compounded annually, at the Actuarial Equivalent interest rate
(Section 1.4(a)) applicable to the determination date year, for each
Plan Year from the determination date to the Participant's Normal
Retirement Date. In no event can a Participant's Old Plan Account be
withdrawn prior to Termination of Employment, death or retirement.
This section is effective January 1, 1995.
-17-
<PAGE> 23
Article 5
Amount of Retirement Income
5.1 Monthly Retirement Income
A Participant's monthly retirement income commencing on his or her
Normal Retirement Date, Early Retirement Date, Late Retirement Date,
or Disability Retirement Date will be equal to his or her benefit
described in Sections 5.2, 5.3, 5.4, or 5.5.
5.2 Normal Retirement Income
The monthly amount of retirement income payable to a participant
retiring on his or her Normal Retirement Date will be equal to the
Accrued Benefit earned to his or her Normal Retirement Date. This
amount is reduced by the Accrued Benefit Attributable to the Old Plan
Account if the Participant has previously taken a lump sum payment of
the Old Plan Account under Section 5.7(d). This Retirement Income
will be subject to adjustment depending on the Form of Retirement
Income elected in accordance with Section 5.7.
5.3 Early Retirement Income
The monthly amount of retirement income payable to a Participant
retiring on an Early Retirement Date is the greater of:
(a) The Actuarial Equivalent value of the Participant's
Cash Balance Account as of the Early Retirement Date
using the assumptions for Actuarial Equivalence
described in Section 1.4(a) and the age of the
Participant as of the Early Retirement Date.
(b) The Minimum Early Retirement Benefit as described in
Article 3 of Appendix III.
The above amount is reduced by the Accrued Benefit Attributable to the
Old Plan Account as of the Participant's Early Retirement Date, as
determined under Section 4.5 if the Participant has previously taken a
lump sum payment of the Old Plan Account under Section 5.7(d).
This Retirement Income will be subject to adjustment depending on the
Form of Payment elected in accordance with Section 5.7.
5.4 Late Retirement Income
The monthly amount of Retirement Income payable to a Participant
retiring on a Late Retirement Date will be equal to the Participant's
Accrued Benefit earned to the Late Retirement Date. This amount is
reduced by the Accrued Benefit Attributable to the Old
-18-
<PAGE> 24
Plan Account if the participant has previously taken a lump sum
payment of the Old Plan Account under Section 5.7(d). This Retirement
Income will be subject to adjustment depending on the Form of
Retirement Income elected in accordance with Section 5.7.
5.5 Disability Retirement Income
Disability Retirement Income is described in Section 7.4.
5.6 Application for Retirement Income
Each Participant must notify the Committee in writing of his or her
intent to retire. Upon receipt of such notification, each Participant
will receive a written explanation of the terms and conditions of the
various Forms of Retirement Income and the financial effect of
electing each Form of Retirement Income. A Participant will have the
right to elect or revise a previously elected Form of Retirement
Income at any time during his or her Election Period.
A Participant's Election Period is the 90 day period ending on the
date his or her Retirement Income is to begin. The Committee will
make Election Information available to a Participant within a
reasonable period of time prior to the date Retirement Income is to
begin. In no event will a Participant's Election Period end prior to
the 30th day next following the day on which Election Information and
the information provided in accordance with the first paragraph of
this Section 5.6 are first made available to him. For purposes of the
Plan, Election Information will include:
(a) a written explanation of each form of Retirement Income and
the relative financial effect of the payment of Monthly
Retirement Income in that form; and
(b) a notification that Retirement Income payments will be made in
the 50% Spouse Option form (or the Life Annuity Form if the
Participant is not married) unless he or she elects otherwise
during the Election Period and his or her spouse consents to
such election.
The Participant must elect a form of payment in writing. An election
of a form of payment other than a Spouse Option will not be valid
without the written consent of the Participant's spouse. The spouse's
consent must acknowledge the effect of the election and must be
witnessed by a plan representative or notary public. The Participant
may change his or her election at any time, and any number of times,
during the 90 day period ending on the date his or her Retirement
Income is to begin. The Participant may not change the form of
payment without further spousal consent unless the spouse expressly
permits such changes. The requirement for spouse's consent will be
waived if the participant establishes to the satisfaction of the
Committee that such consent cannot be obtained because there is no
spouse, the spouse cannot be located or because of such other
circumstances as the Secretary of the Treasury may by regulations
prescribe.
-19-
<PAGE> 25
The election by the Participant and the consent of the spouse must be
obtained no more than 90 days prior to the date benefit payments
commence. If the spouse of a Participant who has elected a Spouse
Option dies before Retirement Income payments begin, the Retirement
Income will be paid to the Participant in the form of the Life
Annuity.
5.7 Forms of Retirement Income
A Participant retiring on his or her Normal, Early, Late, or
Disability Retirement Date may elect one of the following Forms of
Retirement Income payment:
(a) Spouse Option. A Spouse Option provides for a monthly payment
during the Participant's life. After the Participant's death
a percentage of the Participant's Retirement Income will be
paid for life to the Participant's spouse. The percentage to
be paid to the Participant's spouse will be 50%, 66 2/3% or
100% as elected by the Participant. The monthly payment under
the Spouse Option will be equal to the Actuarial Equivalent of
the amount payable under the Life Annuity form using the
factors from Appendix I.
(b) Life Annuity. The Life Annuity form provides for a monthly
payment during the Participant's life, with the last payment
being made for the month in which the Participant's death
occurs.
(c) Lump Sum Payment Option. The Lump Sum Payment Option provides
for a single payment equal to the greater of the balance in
the Participant's Cash Balance Account as of the Participant's
Retirement Date or the Lump Sum value of his or her Accrued
Benefit using the Actuarial Equivalent basis for lump sums
provided under Section 1.4(a). If a Participant took a lump
sum payment of his or her Old Plan Account before retirement,
the Lump Sum Payment Option shall be based on the Accrued
Benefit Attributable to Company Contributions as described in
Section 4.6. If a Participant maintains an Old Plan Account
on his or her Retirement date, the lump sum shall not be less
than the sum of the Old Plan Account on the Retirement Date
and the Lump Sum Payment Option amount using the Accrued
Benefit Attributable to Company Contributions as described in
Section 4.6.
(d) Lump Sum Payment of Old Plan Account Option. The Lump Sum
Payment of Old Plan Account Option provides for a lump sum
payment of the Participant's Old Plan Account as of the
Participant's Retirement Date. The Participant's Accrued
Benefit Attributable to Company Contributions is paid in a
Life Annuity, Spouse Option, or Lump Sum Payment Option form
as elected by the Participant. This form of payment is
available to a Participant only one time, at the earlier of
his or her retirement or Termination of Employment.
(e) For purposes of this article, "spouse" means the legal spouse
of the Participant on the date benefit payments commence.
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<PAGE> 26
5.8 Reemployment After Retirement
In order to retire, a Participant must have a Termination of
Employment. Effective January 1, 1992, if a Retired Participant is
rehired by the Company, his or her Retirement Income, if being paid in
a Life Annuity form, will not be suspended. The Retired Participant
may earn additional benefits as provided in Article 3. The benefit
attributable to service during the Participant's reemployment that is
not yet in payment status will be paid, or commence to be paid upon
the earlier of the Participant's subsequent retirement or the
Participant's required beginning date described in Section 5.9(c).
Such benefit may be paid in any form elected by the Participant, which
form may be different from the form in which benefits are currently
being paid.
If the Participant dies during such period of reemployment, any death
benefits attributable to service during the Participant's reemployment
will be determined in accordance with Article 8. Any death benefit
attributable to service before the Retired Participant's reemployment
will be determined in accordance with the provisions of the applicable
Form of Retirement Income elected at his or her original retirement.
5.9 Commencement of Benefits
(a) Retirement Income payments will begin on the later of the
Retirement Date elected by the Participant or the first day of
the month following the date on which the Participant applies
for a retirement benefit.
(b) Unless a Participant elects otherwise, Retirement Income
payments will begin not later than the 60th day after the end
of the Plan Year in which:
(1) the Participant's Normal Retirement Age, or
(2) the Participant's Termination of Employment occurs,
whichever is later.
(c) The required beginning date described in this paragraph (c)
will apply regardless of any election made by the Participant.
(1) Except as provided by subparagraphs (2), (3) and (4)
below, Retirement Income payments will begin not
later than April 1 of the calendar year following the
calendar year in which the Participant attains age
70-1/2 whether or not such Participant's employment
has terminated.
(2) A Participant who attained age 70-1/2 in 1988, who is
not a 5% owner, and who has not retired by January 1,
1989, will be treated as having retired on January 1,
1989. Retirement Income payments will begin not
later than April 1, 1990 for such Participants.
(3) Retirement Income payments for a Participant who
attained age 70-1/2 before January 1, 1988, and who
is not a 5% owner will begin not later than
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<PAGE> 27
April 1 of the calendar year following the later of
(A) the calendar year in which the Participant
attained age 70- 1/2, or (B) the calendar year in
which the Participant retires.
(4) Retirement Income payments for a Participant who
attained age 70-1/2 before January 1, 1988, and who
is a 5% owner will begin not later than April 1 of
the calendar year following the later of (A) the
calendar year in which the Participant attained age
70-1/2, or (B) the earlier of (i) the calendar year
within which ends the Plan Year in which the
Participant becomes a 5% owner, or (ii) the calendar
year in which the Participant retires.
(5) A Participant is treated as a 5% owner for purposes
of this paragraph (c), if such Participant is a 5%
owner as defined in Code Section 416(i) at any time
during the Plan Year ending within the calendar year
in which such owner attains age 66-1/2 or any
subsequent Plan Year. Once a Participant is
described in this subparagraph, distributions will
continue to such Participant even if such Participant
ceases to own more than 5% of the Company in a
subsequent year.
(6) If a Participant receives payments under this
paragraph (c), such payments will be determined as if
the Participant's Late Retirement Date were the date
by which Retirement Income payments must be made
under this paragraph (c). If the Participant
continues to earn additional Accrued Benefits after
this date, his or her Monthly Retirement Income will
be redetermined on each January 1 following the date
benefit payments commence. This redetermined benefit
will be payable under the Form of Retirement Income
elected as of the Late Retirement Date in accordance
with Section 5.7.
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<PAGE> 28
Article 6
Termination and Vesting
6.1 Vesting
A Participant's vested Accrued Benefit will be equal to the sum of (a)
and (b) below:
(a) The Participant's Accrued Benefit Attributable to the Old Plan
Account determined in accordance with Section 4.2.
(b) Effective January 1, 1989, the Participant's Accrued Benefit
Attributable to Company Contributions determined in accordance
with Section 4.3 multiplied by the vested percentage shown in
the following table:
<TABLE>
<CAPTION>
Years of Vesting Service Vested Percentage
------------------------ -----------------
<S> <C>
Less than 5 0%
5 or more 100%
</TABLE>
In addition, an Employee's Accrued Benefit will be 100% vested on and
after his or her Normal Retirement Age. A Participant will receive
vesting credit for Military Service to the extent required by the
Military Selective Service Act (or any prior or subsequent
corresponding law).
6.2 Termination Benefit
(a) A Terminated Vested Participant will have the option of:
(1) withdrawing his or her Old Plan Account, in which
event the Participant would be entitled to his or her
vested Accrued Benefit Attributable to Company
Contributions commencing on Normal or Early
Retirement Date, or
(2) leaving his or her Old Plan Account in the Plan, in
which event the Participant would be entitled to his
or her vested Accrued Benefit commencing on Normal or
Early Retirement Date.
(b) The monthly amount of Retirement Income payable to a
Terminated Vested Participant who retires on his or her Normal
Retirement Date will be equal to the vested Accrued Benefit
(or, if the Old Plan Account has been withdrawn, the vested
Accrued Benefit Attributable to Company Contributions) earned
to the date of Termination of Employment. This Retirement
Income will be subject to adjustment depending on the Form of
Retirement Income elected in accordance with Section 5.7.
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<PAGE> 29
(c) The monthly amount of Retirement Income payable to a
Terminated Vested Participant who retires on an Early
Retirement Date is equal to the Early Retirement Income
described in Section 5.3.
(d) Except as provided in Section 13.8, the Old Plan Account of a
Participant will not be distributed pursuant to this Section
6.2 unless the Participant elects such distribution and the
spouse of the Participant consents to the distribution not
more than 90 days prior to the date of such distribution. The
spouse's consent must acknowledge the effect of the election
and must be witnessed by a plan representative or notary
public. The requirement for spouse's consent will be waived
if the Participant establishes to the satisfaction of the
Committee that such consent cannot be obtained because there
is no spouse, the spouse cannot be located or because of such
other circumstances as the Secretary of the Treasury may by
regulations prescribe.
6.3 Reemployment After Termination of Employment
(a) If a Terminated Vested Participant is subsequently reinstated
as an Active Participant, his or her Retirement Income will be
based on the Participant's Accrued Benefit under the
provisions of the Plan in effect as of his or her subsequent
termination, or retirement except that it may not be less than
the Participant's Accrued Benefit as of the prior termination.
(b) If a Participant's employment with the Company terminates
prior to the Participant's becoming vested in his or her
Accrued Benefit, the Participant will be deemed to have
received a distribution of his or her entire vested interest
under the Plan. The Participant's unvested interest will be
forfeited on his or her termination date. A Participant whose
benefit has been so forfeited will be deemed "cashed out" from
the Plan. If the former Participant is reemployed before
incurring five consecutive Breaks in Service and after
completing a Year of Vesting Service, his or her Cash Balance
Account will be restored in accordance with Sections 3.4 and
3.5.
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<PAGE> 30
Article 7
Disability Benefits
7.1 Determination of Disability
A Participant has a total and permanent disability if:
(a) the Participant is no longer capable of performing the duties
assigned to him or her by the Company due to physical or
mental disability,
(b) the Participant is entitled to disability retirement income
payments under Title II of the Federal Social Security Act, and
(c) the Participant is eligible for disability benefits under the
Company's Long Term Disability Plan.
It will be the responsibility of the Participant to submit proof of
disability satisfactory to the Committee.
7.2 Eligibility for Disability Benefits
A Disabled Participant or former Disabled Participant may retire on a
Disability Retirement Date if the Participant has completed five Years
of Vesting Service as of the date first disabled under Section 7.1.
7.3 Disability Retirement Date
If the Participant's total and permanent disability continues until
the Participant's Normal Retirement Date, the Participant's Disability
Retirement Date shall be the Normal Retirement Date. If a Disabled
Participant's total and permanent disability ends before the Normal
Retirement Date, the Participant may retire on an Early, Normal, or
Late Retirement Date, whichever applies, and such date will be his or
her Disability Retirement Date.
7.4 Disability Retirement Income
A Disabled Participant will be entitled to a monthly Disability
Retirement Income beginning on his or her Disability Retirement Date.
The amount will be equal to the retirement income from Sections 5.2,
5.3, or 5.4 on the Disability Retirement Date. While disabled, as
defined under Section 3.1, Earnings will be credited (assuming 1,000
or more Hours of Service are worked) in the amount equal to Earnings
in the most recent year prior to the year of initial disability in
which 1,000 Hours of Service were worked. Disability Retirement
Income will be subject to adjustment depending on the Form of
Retirement Income elected in accordance with Section 5.7.
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Article 8
Death Benefits
8.1 Death after Commencement of Benefits
Death Benefits for a Retired Participant will be determined in
accordance with the provisions of the applicable Form of Retirement
Income elected.
8.2 Death Prior to Commencement of Benefits
(a) If a Participant, whose vested Accrued Benefit is calculated
under Section 4.2, dies before his or her Retirement Date, the
Participant's Eligible Spouse, if any, will receive a benefit
commencing on the first day of the month following the
Participant's death. The Eligible Spouse may elect to defer
payment until the first day of any month on or before the
Participant's Normal Retirement Date. The Eligible Spouse
will receive a monthly benefit equal to the Actuarial
Equivalent amount, as of the date the benefit commences, of
the Participant's Cash Balance Account, based upon the
Eligible Spouse's age as of the date the benefit commences.
This amount will not be less than the Minimum Death Benefit
described in Article 4 of Appendix III. This benefit will
continue to the death of the Eligible Spouse. Instead of
receiving the benefit in the form of a Life Annuity, the
Eligible Spouse may elect to receive the benefit in the Lump
Sum Payment Option, described in Section 5.7(c). If the
Participant does not have an Eligible Spouse who survives him
or her, the Cash Balance Account as of the Participant's death
will be paid on the first of the month following death to the
Participant's estate.
(b) If a Participant, whose vested Accrued Benefit is calculated
under Plan provisions in effect prior to April 1,1997, dies
before his or her Retirement Date, the Participant's Eligible
Spouse, if any, will receive a death benefit in accordance
with the prior provisions.
8.3 Effect of Old Plan Account
The Eligible Spouse of a Participant who has an Old Plan Account at
death may elect to receive it in a lump sum immediately following
death. If the Eligible Spouse elects to receive monthly payments in
addition to this lump sum in accordance with Section 8.2(a), the
monthly amount payable will equal the monthly amount before
consideration of the Old Plan Account reduced by the Accrued Benefit
attributable to the Old Plan Account, as described in Section 4.5.
For Participants who die with 10 or more Years of Vesting Service, the
Accrued Benefit Attributable to the Old Plan Account commencing prior
to the first of the month following what would have been the
Participant's earliest Early Retirement Date is the Actuarial
Equivalent of the Accrued Benefit Attributable to the Old Plan Account
at that earliest Early Retirement Date.
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8.4 Return of Old Plan Account
Upon the death of the Participant or, if later, the death of the
Eligible Spouse entitled to payments under Sections 8.1 or 8.2, the
Participant's remaining Old Plan Account, if any, will be paid to the
Participant's Beneficiary. For purposes of this Section 8.4, the
Participant's remaining Old Plan Account will be equal to the excess,
if any, of:
(a) the Participant's Old Plan Account as of his or her date of
death or, if earlier, Retirement Date over
(b) the sum of all amounts previously paid from the Trust Fund on
such Participant's behalf.
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Article 9
Financing The Plan
9.1 Company Contributions
(a) The Company expects to make the contributions necessary to
provide the benefits of the Plan. Such contributions will not
be less than the amount necessary to meet the minimum funding
standards of ERISA.
(b) All contributions will be deposited in the Trust Fund and will
be disbursed in accordance with the provisions of the Plan and
the Trust Agreement. All benefit payments under the Plan will
be paid from the Trust Fund. No person will have any interest
in, or right to, any part of the assets of the Plan except as
expressly provided in the Plan.
(c) Gains arising from experience under the Plan will not serve to
increase the benefits otherwise due any Participant, but will
be used to reduce future Company contributions.
9.2 Return of Company Contributions
(a) Except as provided below and in Section 10.2, the assets of
the Plan will never inure to the benefit of the Company and
will be held for the exclusive purposes of providing benefits
to Participants of the Plan and their Beneficiaries and
defraying reasonable expenses of administering the Plan.
(b) If a contribution is made by the Company by a mistake of fact,
such contribution will be returned to the Company provided
this is done within one year after the payment of such
contribution. Earnings attributable to the excess
contribution may not be returned, but losses attributable
thereto shall reduce the amount to be returned.
(c) Contributions are conditioned upon their current deductibility
under Code Section 404. If a contribution deduction is
disallowed, to the extent the deduction is disallowed, such
contribution will be returned to the Company within one year
after the disallowance.
9.3 Employee Contributions
The Company pays the entire cost of the Plan. No employee
contributions or rollovers are required or permitted.
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Article 10
Termination of the Plan
10.1 Termination of Plan
The Company expects to continue the Plan indefinitely but reserves the
right to terminate the Plan in whole or in part.
10.2 Procedures Upon Termination of Plan
Upon termination of the Plan, the following provisions will apply:
(a) Upon complete termination of the Plan, the Accrued Benefit of
each Active or Inactive Participant will become fully vested
and nonforfeitable (to the extent funded). No additional
Employees will become Participants.
Upon partial termination of Plan, the Accrued Benefit of each
Active or Inactive Participant who is affected by such partial
termination will become fully vested and nonforfeitable (to
the extent funded).
(b) The assets of the Plan available to provide benefits will be
allocated among Participants and their Beneficiaries in the
manner and order prescribed by ERISA Section 4044.
If any assets of the Plan remain after all liabilities of the
Plan to Participants and their Beneficiaries have been
satisfied or provided for, any residual assets will be paid
to the Company, provided such payment does not contravene any
provision of law.
(c) Upon termination of the Plan, benefits of missing Participants
shall be treated in accordance with ERISA Section 4050.
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Article 11
Top-Heavy Provisions
11.1 Top-Heavy Plan
Notwithstanding any other provision of this Plan to the contrary, this
article will apply if the Plan is a Top-Heavy Plan. The Plan will be
a Top-Heavy Plan if, as of the Determination Date, the present value
of the cumulative accrued benefits of Key Employees exceeds sixty
percent of the present value of the cumulative accrued benefits under
the Plan of all Participants and Beneficiaries (but excluding the
value of the accrued benefits of former Key Employees and individuals
who have not performed any services for the Company during the five
year period ending on the Determination Date). This percentage will
be computed in accordance with Code Section 416(g).
In determining whether this Plan is a Top-Heavy Plan, all employers
that are aggregated under Code Sections 414(b), (c) and (m) will be
treated as a single employer. In addition, all plans that are part of
the Aggregation Group will be treated as a single plan. In
determining present values, mortality will be based on the 1984 Unisex
Pension Mortality Table and the interest rate utilized will be five
percent.
11.2 Definition of Terms
For purposes of this article only, the following terms will have the
following meanings:
(a) "Aggregation Group" means the Required Aggregation Group or, at
the election of the Company, the Permissive Aggregation Group.
(b) "Average Compensation" means the Participant's Compensation
averaged over the five consecutive Plan Years in which the
Participant earned a Year of Vesting Service (if such Year of
Vesting Service is not disregarded pursuant to Section 11.4)
and in which the Participant's aggregate Compensation was the
greatest. If the Participant received Compensation in fewer
than five such Plan Years, his or her Compensation will be
averaged over such lesser number of Plan Years.
(c) "Compensation" for purposes of this article and Section 13.9
only means a Participant's wages from the Company within the
meaning of Code Section 3401(a), and all other payments of
compensation to the Participant by the Company (in the course
of the Company's trade or business), for which the Company is
required to furnish a written statement to the Participant
under Code Sections 6041(d) and 6051(a)(3) (IRS Form W-2 -
wages, tips and other compensation).
(d) Compensation will also be limited by the $200,000 and $150,000
limits as described in Section 1.15.
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<PAGE> 36
(e) "Determination Date" means the last day of the preceding Plan
Year. This date will also be the valuation date for
determining present values.
(f) "Key Employee" means an Employee, a former Employee, or the
Beneficiary of a former Employee who, in the Plan Year
containing the Determination Date, or any of the four
preceding Plan Years, is:
(1) An officer of the Company having an annual
compensation from the Company greater than 50 percent
of the amount in effect under Code Section
415(b)(1)(A) for the calendar year in which any such
Plan Year ends. Not more than fifty Employees (or,
if fewer, the greater of three Employees or ten
percent of the Employees not excluded under Code
Section 414(q)(8)), including those Employees
included under paragraphs (2), (3) and (4) below,
will be considered as officers for purposes of this
subparagraph.
(2) One of the ten Employees having an annual
Compensation from the Company greater than the amount
in effect under Code Section 415(c)(1)(A) for the
calendar year in which any such Plan Year ends and
owning (or considered as owning within the meaning of
Code Section 318) both more than a one-half percent
interest and the largest interests in the Company.
(3) A five-percent owner of the Company.
(4) A one-percent owner of the Company having an annual
Compensation from the Company of more than $150,000
for a Plan Year.
Whether an Employee is a five-percent owner or a one-percent
owner will be determined in accordance with Code Section
416(i).
Neither the aggregation rules nor the rules under Code
Sections 414(b), (c) and (m) will apply in determining whether
an Employee is a five-percent owner or a one-percent owner.
(g) "Non-key Employee" means an Employee (and any Beneficiary of
an Employee) who is not a Key Employee.
(h) "Permissive Aggregation Group" means the Required Aggregation
Group of plans plus any other plan or plans of the Company
which, when considered as a group with the Required
Aggregation Group, would continue to satisfy the requirements
of Code Sections 401(a)(4) and 410.
(i) "Required Aggregation Group" means:
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(1) Each stock bonus, pension, or profit sharing plan of
the Company in which a Key Employee participates in
the Plan Year containing the Determination Date or
any of the four preceding Plan Years which is
intended to qualify under Code Section 401(a); and
(2) Each other such stock bonus, pension or profit
sharing plan of an employer which enables any plan in
which a Key Employee participates to meet the
requirements of Code Sections 401(a)(4) or 410.
(j) "Top-Heavy Group" means the Aggregation Group if the sum of
(1) and (2) below exceeds sixty percent of a similar sum
determined for all Employees (excluding former Key Employees
and individuals who have not performed any services for the
Company during the five year period ending on the
Determination Date):
(1) The present value of the cumulative accrued benefit
for Key Employees under all defined benefit plans
included in such group.
(2) The aggregate of the accounts of Key Employees under
all defined contribution plans included in such
group.
In a Top-Heavy Group, all plans in the Required Aggregation
Group are Top-Heavy regardless of whether or not the
individual plans are Top-Heavy.
11.3 Modification of Vesting Schedule
If the Plan is a Top-Heavy Plan in a Plan Year, a Participant who is
credited with an Hour of Service in such Plan Year will have his or
her Vested Percentage for Accrued Benefit Attributable to Company
Contributions determined in accordance with the following schedule if
it produces a higher Vested Percentage than the schedule in Section
6.1(b).
<TABLE>
<CAPTION>
Years of Vesting Service Vested Percentage
------------------------ -----------------
Less than 2 0%
<S> <C>
2 20%
3 40%
4 60%
5 80%
6 or more 100%
</TABLE>
A Participant's vested Accrued Benefit Attributable to Company
Contributions will not be less than that determined as of the last day
of the last Plan Year in which the Plan was a Top-Heavy Plan.
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If the Plan ceases to be Top-Heavy, each Participant with three or
more Years of Vesting Service (determined as of the first day of the
Plan Year in which the Plan ceases to be Top- Heavy) will continue to
have his or her Vested Percentage for Accrued Benefit Attributable to
Company Contributions determined in accordance with this Section 11.3.
11.4 Minimum Benefit
If the Plan is Top-Heavy in a Plan Year, the Accrued Benefit as of the
last day of such Plan Year for any Participant who is not a Key
Employee, but who is employed or on an Authorized Period of Absence in
such Plan Year, will not be less than the Actuarial Equivalent of an
annual benefit payable in the form of a straight life annuity
beginning on the Participant's Normal Retirement Date equal to the
lesser of (i) two percent of the Participant's Average Compensation
multiplied by Years of Vesting Service or (ii) twenty percent of the
Participant's Average Compensation. For purposes of this Section
11.4, any Years of Vesting Service will be disregarded if:
(a) the Plan was not a Top-Heavy Plan for any Plan Year ending
during such Years of Vesting Service, or
(b) such Year of Vesting Service ended in a Plan Year beginning
before January 1, 1984.
A Participant's Accrued Benefit as of any subsequent date will not be
less than that determined as of the last day of the Plan Year in which
the Plan was a Top-Heavy Plan.
11.5 Modification of Maximum Benefit
If the Plan is a Top-Heavy Plan in a Plan Year, Sections 13.9(i)(1)(B)
and 13.9(i)(2)(B) will be amended for such Plan Year by substitution
of "100%" for "125%" where such percentage appears therein.
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Article 12
Administration of the Plan
12.1 Administration
(a) The Retirement Committee ("Committee") will consist of three
or more individuals who will be appointed by the Board of
Directors of the Company. The Committee will serve as Plan
Administrator and as the named fiduciary pursuant to ERISA.
The Committee will have complete control of the administration
of the Plan, subject to the provisions hereof, with all powers
necessary to enable it to carry out its duties properly in
that respect. Not in limitation, but in amplification of the
foregoing, it will have the power to interpret the Plan and to
determine all questions that may arise hereunder, including
all questions relating to the eligibility of Employees to
participate in the Plan and the amount of benefit to which any
Participant or Beneficiary may become entitled. Its decisions
upon all matters within the scope of its authority will be
final.
(b) The Committee will establish rules and procedures to be
followed by Participants and Beneficiaries in filing
applications for benefits, in furnishing and verifying proofs
necessary to determine age or marital status, and in any other
matters required to administer the Plan.
(c) The Committee will receive all applications for benefits and
will determine all facts necessary to establish the right of
the applicant to benefits under the provisions of the Plan and
the amount thereof.
(d) The Committee will maintain accounts showing the fiscal
transactions of the Plan, and will keep data required for the
valuation of the assets and liabilities of the Plan. The
Committee will also prepare an annual report showing in
reasonable detail the assets and liabilities of the Plan and
giving a brief account of the operation of the Plan for each
year. The Committee will make the annual report available to
each Participant as required by law.
(e) The Committee will appoint an enrolled actuary to make
actuarial valuations of the liabilities of the Plan, to
recommend the amount of contributions to be made by the
Company and to perform such other services as the Committee
will deem necessary or desirable in connection with the
administration of the Plan. The Committee may also appoint
such accountants, counsel, consultants and other persons the
Committee deems necessary or desirable in connection with the
administration of the Plan.
(f) The Committee will have the power to appoint or remove any
Investment Manager or Managers and to manage (including the
power to acquire and dispose of) any assets of the Plan.
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(g) The Committee will have the power to appoint or remove the
Trustee.
(h) The Committee will be entitled to rely upon all tables,
valuations, certificates and reports furnished by the
accountant, consultant, administrator or actuary appointed by
the Committee and upon all opinions given by any counsel
selected or approved by it.
12.2 Records
All acts and determinations of the Committee and the Company regarding
this Plan will be duly recorded and all such records, together with
such other documents as may be necessary for the administration of the
Plan, will be preserved in the custody of the Committee.
12.3 Payment of Expenses
All expenses that arise in connection with the administration of the
Plan, including, but not limited to, the compensation of any enrolled
actuary, accountant, legal counsel, consultant or other person who
will be employed by the Committee in connection with the
administration thereof, may be paid from the assets of the Plan.
12.4 Delegation of Authority
The administrative duties and responsibilities set forth in Section
12.1 may be delegated by the Committee in whatever manner and extent
it chooses to such person or persons as it selects. It will notify
the Company and the Trustee of the authority conferred upon such
person or persons.
12.5 Information Available
Any Participant in the Plan or any Beneficiary receiving benefits
under the Plan may examine copies of the Plan description, latest
annual report, any bargaining agreement, the Plan, the Trust Agreement
or any other instrument under which the Plan was established or is
operated. The Committee will maintain all of these items in its
office, or in such other place or places as it may designate from time
to time for examination during reasonable business hours. Upon the
written request of a Participant or Beneficiary receiving benefits
under the Plan, the Committee will furnish a copy of any item listed
in this Section 12.5. The Committee may make a reasonable charge to
the requesting person for the copy furnished.
12.6 Claims Procedure
The Committee will adopt procedures for the presentation of claims for
benefits and for the review of the denial of such claims by the
Committee. Detailed information regarding such procedures may be
obtained by writing to the Retirement Committee.
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<PAGE> 41
The decision of the Committee upon such review will be final, subject
to appeal rights provided by law.
12.7 Fiduciary Capacity
Any person may serve in more than one fiduciary capacity with respect
to this Plan.
12.8 Committee Liability
The members of the Committee will use ordinary care and diligence in
the performance of their duties, but no member will be personally
liable by virtue of any contract, agreement, or other instrument made
or executed as a member of the Committee, nor for any mistake of
judgment made by him or her or by any other member, nor for any loss
unless resulting from willful misconduct or failure to exercise good
faith. No member of the Committee will be liable for the neglect,
omission, or wrongdoing of any other member or of the agents or
counsel of the Committee. The Company will indemnify each member of
the Committee against, and hold him or her harmless from any and all
expenses and liabilities arising out of any act or omission to act as
a member of the Committee, except such liabilities and expenses as are
due to willful misconduct or failure to exercise good faith.
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<PAGE> 42
Article 13
General Provisions
13.1 Amendment of Plan
(a) The Company may amend the Plan at any time. Such amendments
may include any remedial retroactive changes to comply with
the requirements of any law or regulation issued by any
governmental agency to which the Company is subject. No
amendment will diminish or adversely affect any accrued
interest or benefit of Participants or their Beneficiaries,
except as may be required to comply with the requirements of
any law or regulation issued by any governmental agency to
which the Company is subject.
(b) If any amendment to the Plan changes the vesting schedule,
each Participant who is an Employee with at least three Years
of Vesting Service may elect to remain under the vesting
schedule of the Plan prior to such amendment. If the
Participant does not make the election within a reasonable
time (as may be determined pursuant to governmental
regulations from time to time), such Participant will be
subject to the vesting schedule under the Plan as amended. In
no event will the vesting percentage of the Participant's
Accrued Benefit be reduced below the percentage attained by
the Participant prior to such amendment.
(c) In no event will a Participant who terminates or retires on or
after the date any amendment to the Plan is effective receive
less than his or her vested percentage multiplied by the
Accrued Benefit prior to such date. This amount will be
adjusted for the date of retirement and form of payment on the
basis in effect prior to such amendment. This paragraph (c)
shall not apply to the amendment to the basis for determining
the Actuarial Equivalent value for purposes of Section 13.8
effective June 1, 1995.
(d) If any amendment to the Plan eliminates an optional form of
payment, a Participant may continue to elect such form of
payment with respect to any Accrued Benefit earned prior to
the effective date of such amendment.
13.2 Employment Status
Nothing contained in the Plan will be deemed to give any Employee the
right to be retained in the employ of the Company or to interfere with
the rights of the Company to discharge any Employee at any time.
13.3 Mergers or Consolidations
If this Plan merges or consolidates with, or transfers its assets or
liabilities to any other qualified plan of deferred compensation, no
Participant will, as a result of such merger, consolidation or
transfer, be entitled to a benefit on the day following such event
which
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<PAGE> 43
is less than the benefit to which he or she is entitled on the day
preceding such event. For purposes of this Section 13.3, the benefit
to which a Participant is entitled will be calculated based upon the
assumption that a Plan termination and distribution of assets occurred
on the day as of which the Participant's entitlement is being
determined.
13.4 Provision Against Anticipation
No benefit under the Plan will be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge or other legal process, and any attempt to do so
will be void. The preceding sentence will not apply to a qualified
domestic relations order pursuant to Code Section 414(p).
13.5 Facility of Payment
If any Participant or Beneficiary is physically or mentally incapable
of giving a valid receipt for any payment due him and no legal
representative has been appointed for such Participant or Beneficiary,
the Committee may direct the Trustee to make such payment to any
person or institution maintaining such Participant or Beneficiary and
the release of such person or institution will be a valid and complete
discharge for such payment. Any final payment or distribution to any
Participant, the legal representative of the Participant, or to any
Beneficiaries of such Participant in accordance with the provisions
herein will be in full satisfaction of all claims against the Plan,
the Committee, the Trustee and the Company arising under or by virtue
of the Plan.
13.6 Construction
The validity of the Plan or any of its provisions will be determined
under and will be construed according to federal law and, to the
extent permissible, according to the laws of the State of Utah. If
any provision of the Plan is held illegal or invalid for any reason,
such determination will not affect the remaining provisions of the
Plan and the Plan will be construed and enforced as if said illegal or
invalid provision had never been included.
13.7 Legal Actions
The Committee will be the necessary party to any action or proceeding
involving the assets held with respect to the Plan or the
administration thereof. No Employee, Participant, former Participant
or their Beneficiaries, or any other person having or claiming to have
an interest in the Plan will be entitled to any notice or process.
Any final judgment that may be entered in any such action or
proceeding will be binding and conclusive on all persons having or
claiming to have any interest in the Plan.
13.8 Payment of Small Benefits
If a Participant terminates employment, dies, or retires and the
Actuarial Equivalent value of the benefit payable under the Plan to
such Participant or his or her Beneficiary does not exceed $3,500, the
Committee will pay the Actuarial Equivalent value of such
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<PAGE> 44
benefit to the Participant or Beneficiary in a lump sum. Except in
the case of death of the Participant, this payment must be made before
the first day of the first period for which an amount is payable as an
annuity unless the Participant and the Participant's spouse, if any,
give written consent. If a lump sum payment is made, no other benefit
under the Plan will be due to the Participant or Beneficiary.
If the Participant's Vested Percentage is zero, the Participant will
be deemed to have received a distribution of the Vested Percentage of
his or her Accrued Benefit and to have forfeited the nonvested
percentage of his or her Accrued Benefit.
If the Actuarial Equivalent value of the Participant's benefit at the
time of a distribution exceeds $3,500, then such value at any
subsequent time will be deemed to exceed $3,500.
13.9 Maximum Retirement Benefit
(a) For purposes of this Section 13.9 only, the following
definitions will apply:
(1) "Annual Benefit" means a retirement benefit payable
annually in the form of a straight life annuity. A
benefit payable in a form other than a straight life
annuity will be adjusted to be the Actuarial
Equivalent of a straight life annuity before applying
the limitations of this Section 13.9. However, no
actuarial adjustment will be made for the value of a
qualified joint and survivor annuity or the value of
benefits that are not directly related to retirement
benefits.
(2) "Compensation" has the meaning defined in Section
11.2(c).
(3) "Limitation Year" means a Plan Year.
(4) "Social Security Retirement Age" means the age used
as the retirement age for a Participant under Section
216(l) of the Social Security Act except that such
section will be applied without regard to the age
increase factor, and as if the early retirement age
under Section 216(l)(2) of such Act were 62.
(b) The Annual Benefit of a Participant may not at any time within
a Limitation Year exceed the lesser of (1) or (2) below:
(1) $125,000 for 1997. Each January 1 this $125,000
limitation will automatically be adjusted to the new
dollar limitation prescribed by the Secretary of the
Treasury for that calendar year. The new limitation
will apply to Limitation Years ending within the
calendar year of the date of adjustment.
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<PAGE> 45
(2) 100% of the annual average of the Participant's
Compensation from the Company for the three
consecutive Limitation Years (or all Limitation
Years, if fewer than three), which give the highest
average.
(c) If the Annual Benefit payable to a Participant under this Plan
and all other defined benefit plans of the Company does not
exceed $10,000 and the Company has not maintained a defined
contribution plan in which the Participant participated, the
maximum otherwise imposed by this Section 13.9 will not apply.
(d) Service or participation less than ten years
(1) If a Participant has completed less than ten years of
participation in the Plan the limit otherwise imposed
by Section 13.9(b)(1) will be multiplied by the ratio
of the Participant's years (or part thereof) of
participation in the Plan to ten. This ratio will
not be less than one- tenth.
(2) If a Participant has completed less than ten Years of
Vesting Service, the limits otherwise imposed by
Sections 13.9(b)(2) and 13.9(c) will be multiplied by
the ratio of the Participant's Years of Vesting
Service (or part thereof) to ten. This ratio will
not be less than one-tenth.
(3) To the extent provided by the Secretary of the
Treasury, this Section 13.9(d) will be applied
separately with respect to each change in the benefit
structure of the Plan.
(e) If a Participant's benefit payments are to commence before the
Participant's Social Security Retirement Age, the maximum
benefit amount will be reduced as follows:
(1) If the Participant's benefit payments are to commence
at or after age 62 and the Participant's Social
Security Retirement age is 65, the amount described
in Section 13.9(b)(1) will be reduced by five-ninths
of one percent for each month by which benefits
commence before the month in which the Participant
attains age 65 or,
(2) If the Participant's benefit payments are to commence
at or after age 62 and the Participant's Social
Security Retirement age is greater than 65, the
amount described in Section 13.9(b)(1) will be
reduced by five-ninths of one percent for each of the
first 36 months and five twelfths of one percent for
each of the additional months (up to 24) by which
benefits commence before the month in which the
participant attains Social Security Retirement Age.
(3) If the Participant's benefit payments are to commence
prior to the month in which the Participant attains
age 62, the maximum benefit amount
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described in Section 13.9(b)(1) will reduced to the
Actuarial Equivalent of the limit at age 62
determined pursuant to Sections 13.9(e)(1) or
13.9(e)(2). For purposes of Sections 13.9(e) and
13.9(f) only, actuarial equivalence will be computed
using an interest rate of 5% and the 1984 Unisex
Pension Mortality Table.
(f) If a Participant's benefit payments are to commence after the
Participant's Social Security Retirement Age, the maximum
benefit amount described in Section 13.9(b)(1) will be
actuarially increased using the assumptions for Section
13.9(e)(3).
(g) If the Accrued Benefit of any Participant as of the close of
the last Limitation Year beginning before January 1, 1987
exceeds the benefit limitations under Code Section 415(b)
then, for purposes of Code Section 415(b) and (e) such
Participant's defined benefit dollar limitation under Code
Section 415(b)(1) will be equal to his or her Accrued Benefit,
determined as of such date as if the Participant had separated
from service on that date. For purposes of this paragraph,
any changes in the terms and conditions of the Plan or cost of
living adjustments occurring after May 5, 1986 will be
disregarded.
(h) All defined benefit plans of the Company, terminated or not,
will be considered as one plan for purposes of the limitations
specified under this Section 13.9, and all entities of a
controlled group of entities will be considered as one
employer.
(i) In any case in which a person is a Participant in both a
defined benefit plan and a defined contribution plan
maintained by the Company or any Affiliate or Subsidiary of
the Company, the sum of (1) and (2) below for any Limitation
Year may not exceed 1.0:
(1) The defined benefit plan fraction for such Limitation
Year is equal to the quotient of (A) divided by (B)
below:
(A) The Annual Benefit of the Participant under
the Plan and all other defined benefit plans
(determined as of the close of such
Limitation Year).
(B) The lesser of 125% of the amount described in
Section 13.9(b)(1) and 140% of the amount
described in Section 13.9(b)(2).
If the Employee was a participant in one or more
defined benefit plans maintained by the Company, or
any Affiliate or Subsidiary of the Company, which
were in existence on May 5, 1986, the amount
calculated in (B) will not be less than 125% of the
Employee's accrued benefit under such defined benefit
plans as of December 31, 1986, determined without
regard to any change in the terms or conditions of
the plan made after May 5,
-41-
<PAGE> 47
1986, and without regard to any cost of living
adjustment occurring after May 5, 1986. The
preceding sentence only applies if the defined
benefit plans individually and in the aggregate
satisfied the requirement of Code Section 415 as in
effect on December 31, 1986.
(2) The defined contribution plan fraction for such
Limitation Year is equal to the quotient of (A)
divided by (B) below:
(A) The aggregate of the annual additions to the
Participant's account under said defined
contribution plan as of the close of such
Limitation Year.
(B) The lesser of 125% of the maximum annual
additions to such account for all Years of
Vesting Service with the Company, or 1.4
multiplied by 25% of the Participant's
Compensation for all Years of Vesting Service
with the Company.
If the Plan satisfied the applicable requirements of Code
Section 415 as in effect for the last Plan Year beginning
before January 1, 1987, an amount will be subtracted from the
amount calculated in (A) (but not reducing the amount in (A)
to less than zero) so that the sum of the defined benefit
fraction and defined contribution fraction computed under Code
Section 415(e)(1) does not exceed 1.0 for such Plan Year
(determined as if the changes to Code Section 415 made by the
Tax Reform Act of 1986 and any technical corrections to such
act were in effect for such Plan Year).
(3) If the sum of (1) and (2) exceeds 1.0, the Annual
Benefit under this Plan will be limited to such
amount as will reduce such sum to 1.0.
13.10 Additional Benefit Limits for Highly Compensated Employees
(a) For purposes of this Section 13.10 only, the following
definitions will apply:
(1) "Benefit" means benefits under the Plan and includes
any loans in excess of the amounts set forth in Code
Section 72(p)(2)(A), any annual periodic income, any
withdrawal values payable to a living Employee and
any death benefits not provided by insurance on the
Employee's life.
(2) "Current Liabilities" is defined in Code Section
412(l)(7) provided that the Company may elect to use
the value of current liabilities as reported on
Schedule B of the Plan's most recent timely filed
Form 5500 or Form 5500 C/R. Alternatively, the
Company may determine current liabilities as of a
later date.
-42-
<PAGE> 48
(3) "Highly Compensated Employee" means:
(A) Any Employee who performs services for the
controlled Group during the determination
year and who received Earnings in excess of
$80,000 (as adjusted by the Secretary of the
Treasury for the relevant year) during the
look-back year.
(B) Any Employee who is a 5% owner (as defined in
code Section 416(8)(1)(A)(iii)) of the
Employer at any time during the look-back
year or the determination year.
(C) For purposes of this section the following
definitions apply. The determination year is
the Plan Year. The look-back year is the
12-month period immediately preceding the
determination year.
(4) "Highly Compensated Former Employee" means any former
Employee who was a Highly Compensated Employee for a
separation year (as defined in Treasury Regulation
section 1.414(q)-1T) or for any determination year
ending on or after the Employee attains age 55, as
provided by Code Section 414(q)(9) and the
regulations thereunder.
(5) "Restricted Amount" is the excess of the accumulated
amount of distributions to a Restricted Employee over
the accumulated amount of the payments that would
have been paid under:
(A) a straight life annuity that is the actuarial
equivalent of the Restricted Employee's
Benefit (other than a social security
supplement), plus
(B) the amount of the payments that the
Restricted Employee is entitled to receive
under a social security supplement.
For this purpose, an "accumulated amount" is the
amount of a payment increased by a reasonable amount
of interest from the date the payment was made (or
would have been made) until the date for the
determination of the Restricted Amount.
(6) "Restricted Employee" for any Plan Year means one of
the 25 Highly Compensated Employees or Highly
Compensated Former Employees with the greatest
compensation.
(b) In the event the Plan is terminated, the Benefit payable to
any Highly Compensated Employee and any Highly Compensated
Former Employee will be limited to a benefit which is
nondiscriminatory under Code Section 401(a)(4).
(c) Prior to Plan termination, the annual payment to a Restricted
Employee under the Plan will be limited to an amount equal to
the annual payment that would have
-43-
<PAGE> 49
been paid under a straight life annuity that is the actuarial
equivalent to the Restricted Employee's Benefit (not including
any social security supplement) plus the amount of any social
security supplement payments the Restricted Employee is
entitled to receive.
(d) Section 13.10(c) will not apply if:
(1) after payment of all Benefits to the Restricted
Employee, the value of Plan assets is 110% or more of
the value of Current Liabilities,
(2) the value of Benefits payable to the Restricted
Employee is less than one percent of the value of
Current Liabilities, or
(3) the present value of the Benefits payable to the
Restricted Employee is $3,500 or less, or
(4) upon receipt of a distribution from the Plan, the
Restricted Employee deposits in escrow property
having a fair market value equal to at least 125% of
the Restricted Amount or, alternatively, posts a bond
or letter of credit in an amount equal to at least
100% of the Restricted Amount.
13.11 Eligible Rollover Distribution
(a) This Section 13.11 applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the plan to
the contrary that would otherwise limit a distributee's
election under this Section 13.11, a distributee may elect, at
the time and in the manner prescribed by the plan
administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
(b) Definitions.
(1) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any
portion of the balance to the credit of the
distributee, except that an eligible rollover
distribution does not include: any distribution that
is one of a series of substantially equal periodic
payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or
the joint lives (or joint life expectancies) of the
distributee and the distributee's designated
beneficiary, or for a specified period of ten years
or more; any distribution to the extent such
distribution is required under Code Section
401(a)(9); and the portion of any distribution that
is not includible in gross income (determined without
regard to the exclusion for net unrealized
appreciation with respect to employer securities).
-44-
<PAGE> 50
(2) Eligible retirement plan: An eligible retirement plan
is an individual retirement account described in Code
Section 408(a), an individual retirement annuity
described in Code Section 408(b), an annuity plan
described in Code Section 403(a), or a qualified
trust described in Code Section 401(a) that accepts
the distributee's eligible rollover distribution.
However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account
or individual retirement annuity.
(3) Distributee: A distributee includes an employee or
former employee. In addition, the employee's or
former employee's surviving spouse and the employee's
or former employee's spouse or former spouse who is
the alternate payee under a qualified domestic
relations order, as defined in Code Section 414(p),
are distributees with regard to the interest of the
spouse or former spouse.
(4) Direct rollover: A direct rollover is a payment by
the plan to the eligible retirement plan specified by
the distributee.
13.12 Procedures with Respect to Domestic Relations Orders
(a) In the event that a domestic relations order is received by
the Plan, the Committee shall promptly notify the affected
Participant and any alternate payee (or such payee's
designated representative) of the receipt of such order and
the Plan's procedures for determining the qualified status of
such order under Code Section 414(p). The Committee shall
then, within a reasonable period after receipt of such order,
determine whether such order is a qualified domestic relations
order and notify the Participant and each alternate payee (or
such payee's designated representative) of its determination.
If a Participant or an alternate payee is dissatisfied with
the determination of the Committee, the Participant may appeal
the Committee's decision by following the Plan procedure for
appealing denied claims.
(b) The term "domestic relations order" as used herein means any
judgment, decree, or order (including approval of a property
settlement agreement) which relates to the provision of child
support, alimony payments, or marital property rights to a
spouse, former spouse, child, or other dependent of a
Participant, and is made pursuant to State law. The term
"qualified domestic relations order" means a domestic
relations order which assigns to an alternate payee the right
to receive all or a portion of the benefits payable with
respect to a Participant under the Plan, and meets the
following requirements:
(1) A qualified domestic relations order must clearly
specify:
(A) Then name and last known mailing address of
the Participant and of each alternate payee,
-45-
<PAGE> 51
(B) The amount or percentage of the Participant's
benefit to be paid by the Plan to each
alternate payee, or the manner in which such
percentage is to be determined,
(C) The number of payments or period to which
such order applies, and
(D) Each plan of the Company to which it applies.
(2) A qualified domestic relations order may not require
the Plan to provide:
(A) Increased benefits (on the basis of actuarial
value),
(B) Benefits to an alternate payee which are
required to be paid to another alternate
payee under another order previously
determined to be a qualified domestic
relations order, or
(C) Any type or form of benefit, or any option,
not otherwise provided under the Plan except
that benefits (to the extent vested) may be
paid to an alternate payee on or after the
date which is ten years before the
Participant's Normal Retirement Age without
regard to whether the Participant has
terminated employment.
(c) During any period in which the qualified status of a domestic
relations order is being determined, the Committee shall
direct the Trustee to separately account for the amounts
(referred to as "segregated amounts") which would have been
payable to the alternate payee during such period if the order
had been determined to be qualified. If within 18 months the
order (or modification thereof) is determined to be a
qualified domestic relations order, the Committee shall allow
payment of such segregated amounts to the alternate payee.
Otherwise, the segregated amounts shall be paid without regard
to the court order.
Executed this 21st day of March, 1997 at Salt Lake City, Utah.
ZIONS BANCORPORATION
by /s/ Harris H. Simmons
----------------------------
ATTEST: Harris H. Simmons
/s/ Dale M. Gibbons
- -------------------------------
Secretary Dale M. Gibbons
-46-
<PAGE> 52
Appendix I
ZIONS BANCORPORATION
PENSION PLAN
Joint and Survivor Option Factors
A Participant retiring at any age will have the following factors applied to
his or her Accrued Benefit.
<TABLE>
<CAPTION>
Joint & Survivor Option
50% 66 2/3% 100%
------------------------------------------
<S> <C> <C> <C>
Spouse same age as Employee .880 .850 .790
For each year the Spouse is younger than the
Employee subtract
-.005 -.006 -.008
For each year the Spouse is older than the
Employee add
.005 .006 .008
</TABLE>
The maximum adjustment for age differential is limited to 20 years.
-47-
<PAGE> 53
Appendix II
ZIONS BANCORPORATION
PENSION PLAN
Actuarial Equivalence for Monthly Benefits and Lump Sums
For the purpose of computing the annuity value of a Participant's cash balance
account, the annuity value of a Participant's Old Plan Account, and lump sums:
(a) The mortality assumption is the applicable mortality table
prescribed by the Secretary of the Treasury under Code
Section 417(a)(3)(A)(ii)(I). (Effective June 1, 1995, the
applicable mortality table is a table constructed by using
50% of the mortality rates from the 1983 Group Annuity
Mortality Table for males and 50% of the mortality rates from
the 1983 Group Annuity Mortality Table for females.)
(b) The interest assumption is the annual rate of interest on
30-year Treasury securities for November of the year prior to
the Plan Year in which the lump sum is paid or the monthly
benefit commences.
(c) In no event shall such lump sum be less than the present
value as of December 31, 1985 of a Participant's Accrued
Benefit as of December 31, 1985 on the basis of the following
actuarial factors used prior to December 31, 1985 valuing a
deferred annuity of $1 per year commencing at age 65 and
payable in monthly installments:
<TABLE>
<CAPTION>
Age Factor Age Factor
--- ------ --- ------
<S> <C> <C> <C>
32 0.6404 49 2.4180
33 0.6920 50 2.6182
34 0.7479 51 2.8357
35 0.8082 52 3.0721
36 0.8735 53 3.3292
37 0.9441 54 3.6090
38 1.0205 55 3.9138
39 1.1031 56 4.2458
40 1.1925 57 4.6080
41 1.2892 58 5.0034
42 1.3939 59 5.4356
43 1.5073 60 5.9088
44 1.6301 61 6.4279
45 1.7632 62 6.9983
46 1.9075 63 7.6261
47 2.0639 64 8.3184
48 2.2337 65 9.0836
</TABLE>
-48-
<PAGE> 54
Appendix III
Article 1
Definitions
Whenever used in this Appendix III, the following terms will have the meanings
set forth below, unless a different meaning is clearly required by the context.
Any capitalized terms that are used in this Appendix III, but that are not
defined below, will have the meaning set forth in Article 1 of the Plan, unless
a different meaning is clearly required by the context. References in this
Appendix to "Article" and "Section," unless indicated otherwise, mean Articles
and Sections appearing in this Appendix III.
1.1 Covered Compensation
Covered Compensation for a Plan Year means the average of the Social
Security Taxable Wage Bases for each year in the 35-year period
ending with the last day of the year in which the Participant attains
(or will attain) Social Security Retirement Age as determined under
the exact tables provided by the Commissioner of Internal Revenue.
Covered Compensation for any Plan Year after 1991 will be equal to
1991 Covered Compensation. Social Security Taxable Wage Base means
the contribution and benefit base in effect under Section 230 of the
Social Security Act for the specified calendar year.
For purposes of this Section 1.1, a Participant's Social Security
Retirement Age is determined based on the following table:
<TABLE>
<CAPTION>
YEAR OF SOCIAL SECURITY
BIRTH RETIREMENT AGE
------- --------------
<S> <C>
Before 1938 65
1938 to 1954 66
1955 and after 67
</TABLE>
1.2 Credited Service
Credited Service means service used to determine a Participant's
Accrued Benefit and is determined as follows:
(a) Credited Service shall be measured in calendar years and
months. Each month shall be equal to one-twelfth of a year
of Credited Service. Except as otherwise stated in this
Section 1.2, Credited Service for Plan Years beginning after
December 31, 1988 means the sum of an Employee's calendar
years and months (or parts thereof) as an Eligible Employee
during the period beginning on his or
-49-
<PAGE> 55
her Benefit Service Date. For purposes of this section,
Benefit Service Date means the later of:
(1) the Participant's employment date,
(2) the first day of the month following the Participant's
21st birthday, or
(3) in the case of an Employee who is not credited with at
least 1,000 Hours of Service in his or her first
Eligibility Computation Period, the first day of the
first Plan Year in which the Employee is credited with
at least 1,000 Hours of Service.
(b) No Credited Service will be earned during a Plan Year
beginning after December 31, 1988 unless the Employee
completes at least 1,000 Hours of Service during that Plan
Year except as follows, through the period ending on December
31, 1997. In order to earn Credited Service during the Plan
Year in which the Employee has a Benefit Service Date or
during the Plan Year in which the Employee retires or dies,
the Employee must complete 83.33 Hours of Service multiplied
by the number of calendar months during such Plan Year in
which the Employee completes at least one Hour of Service.
Effective January 1, 1995, the foregoing sentence shall also
apply to a Plan Year in which the Employee incurs a
Termination of Employment.
(c) Except as otherwise stated in this Section 1.2, Credited
Service for Plan Years beginning before January 1, 1989 means
benefit service as defined under the terms of the Plan in
effect on December 31, 1988.
(d) Credited Service will not include service earned during a
period for which Years of Vesting Service are disregarded
pursuant to Section 1.41(e) of the Plan.
(e) In the case of an Employee who is employed by an Affiliate or
Subsidiary which either adopts this Plan with the consent of
the Company or merges with the Company, Credited Service will
not include service prior to the date of merger or adoption
unless an earlier date is specifically designated for this
purpose by the Board of Directors of Zions Bancorporation.
1.3 Final Average Earnings
Final Average Earnings means the average of the Participant's
Earnings as an Eligible Employee for the period of five consecutive
calendar years ending on or before December 31, 1991 which produces
the highest average. If the Participant has not been an Eligible
Employee for five years, Final Average Earnings means the average of
the Participant's Earnings over the Participant's full period of
employment as an Eligible Employee before December 31, 1991.
-50-
<PAGE> 56
In determining Final Average Earnings, Plan Years after 1988 during
which the Participant earns fewer than 1,000 Hours of Service will be
disregarded and will not interrupt the consecutiveness of the prior
and subsequent Plan Years.
In determining Final Average Earnings, Earnings will be annualized in
the Plan Year of hire if the employee earned 1,000 Hours of Service
during the one-year period beginning on the Employee's Employment
Date. Earnings are annualized by dividing actual earnings for the
Plan Year (excluding bonuses) by the number of months of actual
earnings, then multiplying the result by 12 then adding bonuses.
Article 2
Accrued Benefits
2.1 Prior Plan Benefit Formula
A Participant's monthly retirement income is equal to one twelfth of
the greater of:
(a) the sum of:
(1) the sum of the following determined without regard to
the $150,000 limitation under Section 1.15 of the
Plan:
(A) 1.65% of Final Average Earnings determined as
of December 31, 1991 multiplied by Credited
Service earned as of December 31, 1991, and
(B) 1.65% of Earnings for each Plan Year
beginning after December 31, 1991 and before
January 1, 1994 in which the Participant
earns a full or partial year of Credited
Service.
(2) 1.65% of Earnings for each Plan Year after December
31, 1993 in which the Participant earns a full or
partial year of Credited Service.
(b) the sum of the following, determined as of December 31, 1991
and without regard to the $150,000 limitation under Section
1.15 of the Plan:
(1) 1.15% of Final Average Earnings up to Covered
Compensation multiplied by Credited Service up to 35
years.
(2) 1.65% of Final Average Earnings in excess of Covered
Compensation multiplied by Credited Service up to 35
years.
(3) 1.0% of Final Average Earnings multiplied by Credited
Service in excess of 35 years.
-51-
<PAGE> 57
(c) the annual accrued benefit on December 31, 1988 under the
terms of the Plan as then in effect determined without regard
to the $200,000 or $150,000 limitations under Section 1.15 of
the Plan.
A Participant will receive an Accrued Benefit for Military Service to
the extent required by the Military Selective Service Act (or any
prior or subsequent corresponding law).
2.2 Minimum Accrued Benefit
The minimum accrued benefit is the amount determined under Section 2.1
of this Appendix, for Credited Service before January 1, 1998, except
Earnings for 1997 will be Earnings during the period from January 1,
1997 to March 31, 1997.
2.3 Grandfathered Minimum Accrued Benefit
The minimum grandfathered accrued benefit is the amount determined
under Section 2.1 of this Appendix with Credited Service and Earnings
calculated through December 31, 2001.
Article 3
Minimum Early Retirement Benefits
The minimum early retirement benefit equals the greater of the amount in
Section 2.2 and 2.3 of this Appendix, reduced by 1/3 of 1% for each month by
which the Early Retirement Date precedes the Normal Retirement Date.
Article 4
Minimum Death Benefit
4.1 Death After Eligibility for Retirement
If a Participant (other than a Retired Participant) dies on or after
the earliest date on which he or she could retire in accordance under
the Plan, his or her Eligible Spouse, if any, will receive a monthly
benefit equal to the amount the Eligible Spouse would have been
entitled to under Article 2 of this Appendix if the Participant had
elected the 50% Spouse Option and retired on the first day of the month
coinciding with or following the date of death. This benefit will be
payable monthly to the Eligible Spouse beginning on the first day of
the month coinciding with or next following the Participant's death and
will continue until the death of the Eligible Spouse.
4.2 Death Before Eligibility for Retirement
If a Participant who has a vested interest in his or her Accrued
Benefit dies prior to the earliest date on which the Participant could
retire under the Plan, his or her Eligible Spouse, if any, will
receive a monthly benefit equal to the amount the Eligible Spouse
-52-
<PAGE> 58
would have been entitled to under Article 2 of this Appendix below if
the Participant had:
(a) terminated employment on his or her date of death (if the
Participant was an Employee on the date of death),
(b) survived to the earliest date on which he or she could retire
in accordance with Article 3 (the "Earliest Retirement Date"),
(c) elected the 50% Spouse Option and retired on such Earliest
Retirement Date, and
(d) died immediately after retiring.
This benefit will be payable monthly to the Eligible Spouse beginning
on the Participant's Earliest Retirement Date and will continue until
the death of the Eligible Spouse.
4.3 Alternate Death Benefit For Old Plan Accounts
In lieu of the benefit described in Sections 4.1 or 4.2, the Eligible
Spouse of a Participant who has an Old Plan Account may elect to
receive payment of the Old Plan Account as a lump sum payment as soon
a practicable after the Participant's death. The Participant's
Accrued Benefit Attributable to Company Contributions will be paid in
accordance with (a) or (b), whichever applies.
4.4 Other
(a) Benefits under this Article will be paid as soon as
practicable after the Participant's death except that the
Eligible Spouse may elect to defer commencement of the
benefit described in Sections 4.1, 4.2, or 4.3 until any date
which is before the Participant's Normal Retirement Date. An
Eligible Spouse who makes an election under Section 4.3 may
not defer receipt of the Old Plan Account.
(b) The benefit under Sections 4.1 or 4.2 will apply to
Terminated Vested Participants even if their Termination of
Employment occurred prior to the effective date of these
paragraphs.
-53-
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1997 AND THE RELATED
UNAUDITED CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31,
1997 INCLUDED IN THE COMPANY'S FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 1997 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 361,580
<INT-BEARING-DEPOSITS> 51,037
<FED-FUNDS-SOLD> 966,682
<TRADING-ASSETS> 157,957
<INVESTMENTS-HELD-FOR-SALE> 417,214
<INVESTMENTS-CARRYING> 1,353,398
<INVESTMENTS-MARKET> 1,356,412
<LOANS> 3,702,723
<ALLOWANCE> 69,297
<TOTAL-ASSETS> 7,240,612
<DEPOSITS> 4,671,698
<SHORT-TERM> 1,651,038
<LIABILITIES-OTHER> 93,573
<LONG-TERM> 320,734
0
0
<COMMON> 56,181
<OTHER-SE> 447,388
[TOTAL-LIABILITY-AND-EQUITY] 7,240,612
<INTEREST-LOAN> 83,751
<INTEREST-INVEST> 53,162
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 136,913
<INTEREST-DEPOSIT> 34,899
<INTEREST-EXPENSE> 69,299
<INTEREST-INCOME-NET> 67,614
<LOAN-LOSSES> 990
<SECURITIES-GAINS> 60
<EXPENSE-OTHER> 57,673
<INCOME-PRETAX> 40,739
<INCOME-PRE-EXTRAORDINARY> 26,702
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26,702
<EPS-PRIMARY> 1.81
<EPS-DILUTED> 1.81
<YIELD-ACTUAL> 3.89
<LOANS-NON> 9,216
<LOANS-PAST> 3,829
<LOANS-TROUBLED> 852
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 69,954
<CHARGE-OFFS> 2,596
<RECOVERIES> 949
<ALLOWANCE-CLOSE> 69,297
<ALLOWANCE-DOMESTIC> 17,510
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 51,787
</TABLE>
