SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 6, 1999
FIRST SECURITY CORPORATION
(Exact Name of Registrant as Specified in
Charter)
Delaware 1-6906 87-6118148
(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification No.)
Incorporation)
79 South Main, P.O. Box 30006 84130-0006
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (801)246-5976
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On June 6, 1999, First Security Corporation, a Delaware corporation
("First Security") and Zions Bancorporation, a Utah corporation ("Zions"),
announced that they had entered into an Agreement and Plan of Merger, dated as
of June 6, 1999 (the "Merger Agreement").
Pursuant to the Merger Agreement, (1) Zions shall merge with and
into First Security with First Security as the surviving corporation (the
"Surviving Corporation"), (2) immediately prior to the effectiveness of the
merger, each issued and outstanding share of First Security's common stock, par
value $1.25 per share (the "First Security Common Stock"), shall be reclassified
and converted into 0.442 of a validly issued, fully paid and nonassessable share
of the common stock of the Surviving Corporation, par value $1.25 per share
("Surviving Corporation Common Stock"), and (3) each issued and outstanding
share of Zions' common stock, no par value per share (the "Zions Common Stock"),
other than treasury stock, shall be converted into one validly issued, fully
paid and nonassessable share of Surviving Corporation Common Stock. First
Security and Zions have also entered into reciprocal stock option agreements
with respect to shares of their respective common stock. Each option is
triggered upon the occurrence of specified events set forth in the option
agreements. The merger is subject to regulatory and First Security and Zions
stockholder approvals.
A copy of the press release issued in connection with the
announcement is attached hereto as Exhibit 99.1 and is incorporated by reference
herein in its entirety.
In connection with entering into the Merger Agreement and the
reciprocal stock option agreements, First Security and First Chicago Trust
Company of New York, as Rights Agent (the "Rights Agent"), entered into an
amendment to the Shareholder Rights Agreement, dated as of August 28, 1989, as
amended, by and between First Security and the Rights Agent and an amendment to
the Shareholder Rights Agreement, dated as of October 27, 1998, by and between
First Security and the Rights Agent. Copies of these amendments are attached
hereto as Exhibit 4.1 and Exhibit 4.2 and are incorporated by reference herein
in their entirety.
<PAGE>
Item 7. Financial Statements and Exhibits.
(c) The following exhibits are filed with this report:
Exhibit Number Description
4.1 Amendment, dated as of June 6, 1999,
to Shareholder Rights Agreement, dated
as of August 28, 1989, as amended, by
and between First Security Corporation
and First Chicago Trust Company of New
York, as Rights Agent.
4.2 Amendment, dated as of June 6, 1999, to
Shareholder Rights Agreement, dated as
of October 27, 1998, by and between
First Security Corporation and First
Chicago Trust Company of New York, as
Rights Agent.
99.1 Press Release issued June 6, 1999
<PAGE>
SIGNATURES
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 hereunto duly authorized.
FIRST SECURITY CORPORATION
By:/s/ Brad D. Hardy
Name: Brad D. Hardy
Title: Executive Vice President
Corporate Services, General Counsel,
Chief Financial Officer and Secretary
Dated: June 8, 1999
AMENDMENT TO RIGHTS AGREEMENT
This AMENDMENT, dated as of June 6, 1999 (this "Amendment"), is
between First Security Corporation, a Delaware corporation (the "Corporation"),
and First Chicago Trust Company of New York, as Rights Agent (the "Rights
Agent").
Recitals
WHEREAS, the Corporation and the Rights Agent are parties to a
Shareholder Rights Agreement, dated as of August 28, 1989, as amended by the
Amendment Agreement, dated as of September 26, 1989, and Amendment No. 2 to
Shareholder Rights Agreement, dated as of May 18, 1993 (as amended, the "Rights
Agreement"); and
WHEREAS, Zions Corporation, a Utah corporation ("Zions") and the
Corporation propose to enter into an Agreement and Plan of Merger (the "Merger
Agreement") pursuant to which Zions will merge with and into the Corporation
(the "Merger"), and a related Stock Option Agreement by and between the
Corporation, as issuer, and Zions, as grantee (the "Option Agreement"). The
Board of Directors of the Corporation has approved the Merger Agreement, the
Merger and the Option Agreement; and
WHEREAS, pursuant to Section 5.4 of the Rights Agreement, the
Company and the Rights Agent may from time to time supplement or amend the
Agreement in accordance with the provisions of such section. All acts and things
necessary to make this Amendment a valid agreement, enforceable according to its
terms, have been done and performed, and the execution and delivery of this
Amendment by the Company and the Rights Agent have been in all respects duly
authorized by the Company and the Rights Agent;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, the parties hereto agree as follows:
(a) Amendment of Section 1.1(a). Section 1.1(a) of the Rights
Agreement is amended to add the following sentence at the end thereof:
"Notwithstanding anything in this Agreement to the contrary, Zions
Bancorporation, a Utah corporation ("Zions"), shall not be deemed to be an
Acquiring Person by virtue of (i) the approval, execution or delivery of
the Agreement and Plan of Merger, dated as of June 6, 1999, by and between
Zions and the Corporation, as amended from time to time (the "Merger
Agreement") or the Stock Option Agreement, dated as of June 6, 1999, by
and between Zions, as grantee, and the Corporation, as issuer, as amended
from time to time or as
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replaced by a successor Stock Option Agreement (the "Option Agreement"),
(ii) the consummation of the Merger (as defined in the Merger Agreement),
(iii) the consummation of any of the other transactions contemplated in
the Merger Agreement and the Option Agreement, including, without
limitation, the exercise of the option granted by the Option Agreement, or
(iv) the public announcement of any of the foregoing."
(b) Amendment of Section 1.1(q). Section 1.1(q) of the Rights
Agreement is amended to add the following sentence at the end thereof:
"Notwithstanding anything in this Agreement to the contrary, a Separation
Time shall not be deemed to have occurred as the result of (i) the
approval, execution or delivery of the Merger Agreement or the Option
Agreement, (ii) the consummation of the Merger, (iii) the consummation of
any of the other transactions contemplated in the Merger Agreement and the
Option Agreement, including, without limitation, the exercise of the
option granted by the Option Agreement, or (iv) the public announcement of
any of the foregoing."
(c) Effectiveness. This Amendment shall be deemed effective as of
the date first written above, as if executed on such date. Except as amended
hereby, the Rights Agreement shall remain in full force and effect and shall be
otherwise unaffected hereby.
(d) Miscellaneous. This Amendment shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such state applicable
to contracts to be made and performed entirely within such state. This Amendment
may be executed in any number of counterparts, each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument. If any term, provision,
covenant or restriction of this Amendment is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Amendment
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated. It is the intent of the parties hereto to enforce the remainder
of the terms, provisions, covenants and restrictions to the maximum extent
permitted by law.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed, all as of the date and year first above written.
Attest: FIRST SECURITY CORPORATION
By:/s/ Brad D. Hardy By:/s/ Morgan J. Evans
Name: Brad D. Hardy Name: Morgan J. Evans
Title: Executive Vice President Title: President
Attest: FIRST CHICAGO TRUST COMPANY
OF NEW YORK AS RIGHTS AGENT
By:/s/ Mary E. Garcia By:/s/ Joanne Gorostiola
Name: Mary E. Garcia Name: Joanne Gorostiola
Title: Customer Service Officer Title: Assistant Vice President
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AMENDMENT TO SUCCESSOR RIGHTS AGREEMENT
This AMENDMENT, dated as of June 6, 1999 (this "Amendment"), is
between First Security Corporation, a Delaware corporation (the "Corporation"),
and First Chicago Trust Company of New York, as Rights Agent (the "Rights
Agent").
Recitals
WHEREAS, the Corporation and the Rights Agent are parties to a
Shareholder Rights Agreement, dated as of October 27, 1998 (the "Rights
Agreement"); and
WHEREAS, Zions Corporation, a Utah corporation ("Zions") and the
Corporation propose to enter into an Agreement and Plan of Merger (the "Merger
Agreement") pursuant to which Zions will merge with and into the Corporation
(the "Merger"), and a related Stock Option Agreement by and between the
Corporation, as issuer, and Zions, as grantee (the "Option Agreement"). The
Board of Directors of the Corporation has approved the Merger Agreement, the
Merger and the Option Agreement; and
WHEREAS, pursuant to Section 5.4 of the Rights Agreement, the Board
of Directors of the Corporation has determined that an amendment to the Rights
Agreement as set forth herein is necessary and desirable in connection with the
foregoing and the Corporation and the Rights Agent desire to evidence such
amendment in writing;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, the parties hereto agree as follows:
(a) Amendment of Section 1.1(a). Section 1.1(a) of the Rights
Agreement is amended to add the following sentence at the end thereof:
"Notwithstanding anything in this Agreement to the contrary, Zions
Bancorporation, a Utah corporation ("Zions") shall not be deemed to be an
Acquiring Person by virtue of (i) the approval, execution or delivery of
the Agreement and Plan of Merger, dated as of June 6, 1999, by and between
Zions and the Corporation, as amended from time to time (the "Merger
Agreement") or the Stock Option Agreement, dated as of June 6, 1999, by
and between Zions, as grantee, and the Corporation, as issuer, as amended
from time to time or as replaced by a successor Stock Option Agreement
(the "Option Agreement"), (ii) the consummation of the Merger (as defined
in the Merger Agreement), (iii) the consummation of any of the other
transactions contemplated in the Merger Agreement and the Option
Agreement, including, without limitation, the exercise
<PAGE>
of the option granted by the Option Agreement, or (iv) the public
announcement of any of the foregoing."
(b) Amendment of Section 1.1(q). Section 1.1(q) of the Rights
Agreement is amended to add the following sentence at the end thereof:
"Notwithstanding anything in this Agreement to the contrary, a Separation
Time shall not be deemed to have occurred as the result of (i) the
approval, execution or delivery of the Merger Agreement or the Option
Agreement, (ii) the consummation of the Merger, (iii) the consummation of
any of the other transactions contemplated in the Merger Agreement and the
Option Agreement, including, without limitation, the exercise of the
option granted by the Option Agreement, or (iv) the public announcement of
any of the foregoing."
(c) Effectiveness. This Amendment shall be deemed effective as of
the date first written above, as if executed on such date. Except as amended
hereby, the Rights Agreement shall remain in full force and effect and shall be
otherwise unaffected hereby.
(d) Miscellaneous. This Amendment shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such state applicable
to contracts to be made and performed entirely within such state. This Amendment
may be executed in any number of counterparts, each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument. If any term, provision,
covenant or restriction of this Amendment is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Amendment
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated. It is the intent of the parties hereto to enforce the remainder
of the terms, provisions, covenants and restrictions to the maximum extent
permitted by law.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed, all as of the date and year first above written.
Attest: FIRST SECURITY CORPORATION
By:/s/ Brad D. Hardy By:/s/ Morgan J. Evans
Name: Brad D. Hardy Name: Morgan J. Evans
Title: Executive Vice President Title: President
Attest: FIRST CHICAGO TRUST COMPANY
OF NEW YORK AS RIGHTS AGENT
By:/s/ Mary E. Garcia By:/s/ Joanne Gorostiola
Name: Mary E. Garcia Name: Joanne Gorostiola
Title: Customer Service Officer Title: Assistant Vice President
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FIRST NEWS ZIONS BANCORPORATION
SECURITY
FOR IMMEDIATE RELEASE Contacts: First Security -- Brad Hardy
June 6, 1999 801-246-5976
Zions -- David Hemingway
801-524-4640
Zions -- Steve Thomas
801-524-2125
ZIONS & FIRST SECURITY AGREE TO MERGE,
CREATING $40 BILLION WESTERN BANKING FRANCHISE;
TRANSACTION EXPECTED TO RESULT IN 10% EPS ACCRETION IN 2000, 14% IN 2001
Zions Bancorporation (Nasdaq: ZION) and First Security Corporation (Nasdaq:
FSCO) today announced a strategic merger that will create a financial services
enterprise uniquely positioned in the best growth markets in the country. With
assets of approximately $40 billion, the combination will result in the nation's
20th largest bank holding company. Under the terms of a definitive merger
agreement, the two companies will merge in a stock-for-stock transaction valued
at approximately $5.9 billion. The new organization will be known as First
Security Corporation and headquartered in Salt Lake City. The new First Security
will provide a full line of consumer and commercial banking products to
customers in the western United States.
Under the terms of the agreement, which has been approved by the boards of
directors of both companies, First Security shareholders will receive 0.442 of a
share of new First Security common stock for each share of First Security common
stock and Zions shareholders will receive one share of new First Security common
stock in exchange for each share of Zions common stock, in a tax-free exchange
to be accounted for as a pooling-of-interests. Based on Zions' closing common
stock price on June 4, 1999, the transaction values each First Security share at
$28.90, a premium of 55% to First Security's closing price of $18.38 per share
on that date, and a multiple of 20.2 times First Security's 1999 estimated
earnings per share, based on the consensus analyst estimate.
Harris H. Simmons, president and chief executive officer of Zions, will serve as
the president, co-chief executive officer and chief operating officer of the new
First Security. Mr. Simmons will also serve as the chief executive officer of
the new First Security's principal banking unit. Spencer F. Eccles, chairman and
chief executive officer of First Security, will become chairman and co-chief
executive officer of the new First Security. In April 2002, Mr. Simmons will
become sole chief executive officer. Dale M. Gibbons, chief financial officer of
Zions, will become chief financial officer of the new First Security. Roy W.
Simmons, chairman of Zions, will become chairman emeritus of the new First
Security. The board of directors of the new
<PAGE>
company will be comprised of 11 representatives from Zions and 11
representatives from First Security.
Following the transaction, Zions and First Security shareholders will own
approximately 49% and 51% of the combined company, respectively, on a diluted
basis. The transaction will be immediately accretive to Zions' earnings per
share. The new company expects substantially accretive earnings per share. The
transaction is expected to be 10% accretive to the combined company's earnings
in 2000 and 14% accretive in 2001.
After the closing, the combined company expects to pay dividends at an annual
rate of $1.16 per common share. Adjusted for the exchange ratio, this dividend
level is equivalent to 91% of the current annualized dividend of $0.56 paid on
First Security common shares. For shareholders of Zions, the new dividend level
would represent an increase of 107% from the current $0.56 annualized dividend
paid on Zions shares. It is anticipated that Zions will increase its dividend to
this rate at its June board meeting.
Zions and First Security estimate that they will reduce their non-interest
expenses by approximately $108 million on a pre-tax basis, with half of these
savings to be achieved in 2000 and the remainder in 2001. These cost savings
represent approximately 8% of the new company's current expense base. The cost
savings opportunities include centralization of administrative functions;
consolidation of data processing and operations; and optimization of delivery
systems. Systems conversion will begin in 2000. In connection with the
integration, the combined company will incur a one-time pre-tax merger charge of
$210 million.
Mr. Simmons said, "This merger is primarily the result of the vision of Spence
Eccles, who had the foresight to recognize the potential for a second major
banking organization in the western half of the United States, headquartered in
Salt Lake City. By creating one of the country's leading banks, and by securing
Salt Lake City's place as a major financial center, Spence has achieved a goal
beyond the accomplishments of his illustrious banking ancestors. It is
particularly fitting that under Spence's leadership the first bank holding
company in this country now becomes one of the strongest."
Mr. Simmons continued, "This new bank is Spence's dream and it is essential he
play a leading role in its future. He will serve not only as co-CEO until April
2002, but will continue to serve as chairman of the new organization. In that
position, he will continue in the important leadership role that he has
performed for First Security. Spence is a great leader in the Intermountain
West, and in my opinion, the most community-minded business leader in Utah. That
position is of inestimable value to both the state and the bank. Likewise,
Spence has for many years been one of the country's true leaders in shaping
national banking and financial policy through his leadership role in the major
bank trade associations."
Mr. Simmons concluded, "I look forward to working with Spence as his partner.
Our strengths and skills complement each other well. Having known Spence for a
number of years, I am convinced that there is no one I could work with so
closely and with so much confidence in creating a successful combination of our
two organizations."
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<PAGE>
Mr. Eccles said, "Harris shares my vision, not only for this great new
enterprise, but for the communities we serve. He has demonstrated his
leadership, not only in a very successful banking institution, but in numerous
community activities and industry associations. He will be a great leader for
this organization, surrounded by a tremendous team of professionals from both of
our banks."
Mr. Eccles added, "Harris has overseen the growth of one of the country's most
dynamic and highly respected banks. I, too, look forward to working with Harris
as partners. I am confident that there is no better banker to manage the
operations of our merged companies."
The transaction is subject to shareholder and regulatory approvals. In
connection with the merger agreement, Zions and First Security have each granted
the other customary reciprocal stock options. The transaction is expected to
close in the fourth quarter of 1999. The companies said they expect to divest a
number of branches and deposits in Utah in order to receive regulatory approval
for the transaction.
Zions was advised in this transaction by the investment bank of Goldman, Sachs
& Co. and the law firm of Sullivan & Cromwell. First Security was advised by
the investment bank of J. P. Morgan and the law firm of Wachtell, Lipton, Rosen
& Katz.
Under local management teams and community identities, Zions Bancorporation
operates full-service banking offices in Arizona, California, Colorado, Idaho,
Nevada, New Mexico, Utah and Washington. It also offers a comprehensive array of
investment, mortgage, insurance, and electronic commerce services and is a
leader in providing innovative financing solutions for small businesses
nationwide. Investor information can be accessed via the Internet at
www.zionsbank.com.
First Security is the West's second largest independent bank holding company and
is the nation's oldest multistate bank holding company, having been incorporated
on June 15, 1928. At March 31, 1999, First Security banks operated 324 full
service domestic bank offices in Utah, Idaho, Oregon, Wyoming, New Mexico,
Nevada and California. Non-bank subsidiaries include a residential mortgage loan
company, a leasing company, two insurance subsidiaries, an investment management
company, a full-service retail securities broker/dealer, a "Section 20"
full-service securities broker/dealer, a bankcard transaction processing
company, an information technology subsidiary and a small business investment
corporation. Investor information can be accessed via the Internet at
www.firstsecuritybank.com.
This news release contains statements regarding the projected performance of
Zions and First Security assuming the merger of these companies. These
statements constitute forward-looking information within the meaning of the
Private Securities Litigation Reform Act. Actual results of achievements may
differ materially from the projections provided in this release since such
projections involve significant known and unknown risks and uncertainties.
Factors that might cause such differences include, but are not limited to: the
timing of closing the proposed merger and new operations being delayed or such
merger of activities being prohibited; competitive pressures among financial
institutions increasing significantly; economic conditions,
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<PAGE>
either nationally or locally in areas in which Zions and First Security conduct
their operations, being less favorable than expected; the cost and effort
required to integrate the companies being more difficult than expected or the
required divestitures of branches or deposits being greater than expected;
expected cost savings from the proposed merger not being fully realized or
realized within the expected time frame; legislation or regulatory changes which
adversely affect the ability of the combined company to conduct, or the
accounting for, business combinations and new operations; and the impact of the
transition to the year 2000 on the operations of First Security, Zions or the
combined company. Zions and First Security disclaim any obligation to update any
such factors or to publicly announce the result of any revisions to any of the
forward-looking statements included herein to reflect future events or
developments.
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