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EXHIBIT 99.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) Of The
Securities Exchange Act of 1934
For the Year Ended December 31, 1998
ZIONS BANCORPORATION
EMPLOYEE STOCK SAVINGS PLAN
ZIONS BANCORPORATION
One South Main, Suite 1380
Salt Lake City, Utah 84111
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ITEM 1. CHANGES IN THE PLAN
The Plan was completely amended and restated as of October 1, 1992, with certain
provisions retroactively effective as of January 1, 1989. In 1994, the Plan was
amended for the purpose of maintaining its qualification under the Internal
Revenue Code pursuant to the Tax Reform Act of 1986 and, in order to conform the
Plan to the requirements of the Unemployment Compensation Act of 1992 and the
Omnibus Budget Reconciliation Act of 1993. No changes were made in the Plan
during the year 1998.
ITEM 2. CHANGES IN INVESTMENT POLICY
No material changes were made during the fiscal year in the policy with respect
to the kind of securities and other investments in which funds held under the
plan may be invested.
ITEM 3. CONTRIBUTIONS UNDER THE PLAN
The Company's contributions are measured by reference to employee contributions
and are not discretionary.
ITEM 4. PARTICIPATING EMPLOYEES
There were 4,155 participating employees in the Plan on December 31, 1998.
ITEM 5. ADMINISTRATION OF THE PLAN
(a) Zions Bancorporation is the Plan administrator. The Company's Board of
Directors has appointed an Administrative Committee consisting of six
persons. The Committee has full power and authority to administer the
Plan and to interpret its provisions. The present members of the
Committee and their positions held are:
Member Position - Company
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Clark B. Hinckley, Chairman Senior Vice President of Zions Bancorporation
Harris H. Simmons President and Chief Executive Officer of Zions Bancorporation
Dale M. Gibbons Executive Vice President of Zions Bancorporation
W. David Hemingway Executive Vice President of Zions Bancorporation
Richard G. Crandall Vice President of Zions First National Bank
Russell W. Miller President of Zions Insurance Agency, Inc.
The address of each fiduciary listed above is One South Main, Suite 1380,
Salt Lake City, Utah 84111.
(b) No compensation is paid to the Committee members by the Plan. All
expenses of the Plan and its administration are paid by the Company.
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ITEM 6. CUSTODIAN OF INVESTMENTS
(a) Zions First National Bank, One South Main, Salt Lake City, Utah 84111 is
the custodian and trustee.
(b) The custodian and trustee receives no compensation from the Plan.
ITEM 7. REPORTS TO PARTICIPATING EMPLOYEES
Participating employees are furnished an annual statement reflecting the status
of their accounts as of the end of the fiscal year.
ITEM 8. INVESTMENT OF FUNDS
Substantially all of the assets of the Plan are invested in securities of the
Company.
ITEM 9. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements Page
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Independent Auditors' Report 4
Statements of Net Assets Available for Benefits - December 31, 1998 and 1997 5
Statements of Changes in Net Assets Available for Benefits - Years ended 6
December 31, 1998, 1997, and 1996
Notes to Financial Statements 7
Schedules - Schedules I, II, and III have been omitted for the reasons
that they are not required or are not applicable, or the required
information is shown in the financial statements or notes thereto.
(b) Exhibits - None
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INDEPENDENT AUDITORS' REPORT
The Trust Committee
Zions Bancorporation
Employee Stock Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of Zions Bancorporation Employee Stock Savings Plan as of December 31, 1998 and
1997, and the related statements of changes in net assets available for benefits
for each of the years in the three-year period ended December 31, 1998. These
financial statements are the responsibility of the plan administrator. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
plan administrator, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of Zions
Bancorporation Employee Stock Savings Plan as of December 31, 1998 and 1997, and
the changes in net assets available for benefits for each of the years in the
three-year period ended December 31, 1998, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions for the year ended December
31, 1998, are presented for purpose of additional analysis and are not a
required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedules have been subjected to the auditing procedures
applied in the audit of the basic 1998 financial statements and, in our opinion,
are fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ KPMG LLP
March 16, 1999
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ZIONS BANCORPORATION
EMPLOYEE STOCK SAVINGS PLAN
Statement of Net Assets Available for Benefits
December 31, 1998 and 1997
1998 1997
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Assets:
Cash and cash equivalents $ 51 173,627
Investments, at fair value:
Zions Bancorporation common stock (approximate cost
of $24,852,480 in 1998 and $18,067,701 in 1997) 90,567,426 63,033,316
Contributions receivable:
Employee 266,162 50,449
Employer 136,643 25,224
Dividends receivable 203,273 166,700
Interest receivable 579 333
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Total assets 91,174,134 63,449,649
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Liabilities:
Accounts payable -- 56,614
Excess contribution refunds 33,675 19,730
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Total liabilities 33,675 76,344
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Net assets available for benefits $91,140,459 63,373,305
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See accompanying notes to financial statements.
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ZIONS BANCORPORATION
EMPLOYEE STOCK SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
Years ended December 31, 1998, 1997, and 1996
1998 1997 1996
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Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments
in Zions Bancorporation common stock $24,594,856 26,586,307 7,966,631
Dividends 771,268 793,341 389,789
Interest 7,562 4,113 3,979
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25,373,686 27,383,761 8,360,399
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Contributions:
Employee 5,349,824 3,331,020 2,674,067
Employer 2,691,189 1,645,785 1,295,816
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8,041,013 4,976,805 3,969,883
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Rollover from nonaffiliated plan -- 89,279 --
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Total additions 33,414,699 32,449,845 12,330,282
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Deductions from net assets attributed to:
Benefits paid directly to participants 5,647,545 3,590,944 2,109,580
Rollover to affiliated plan -- -- 183,050
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5,647,545 3,590,944 2,292,630
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Total deductions 27,767,154 28,858,901 10,037,652
Net increase
Net assets available for benefits:
Beginning of year 63,373,305 34,514,404 24,476,752
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End of year $91,140,459 63,373,305 34,514,404
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See accompanying notes to financial statements.
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ZIONS BANCORPORATION
EMPLOYEE STOCK SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(1) PLAN DESCRIPTION
The following description of the Zions Bancorporation Employee Stock
Savings Plan (the Plan) provides only general information. Participants
should refer to the Plan agreement for a more complete description of the
Plan's provisions.
(a) GENERAL
The Plan is a single employer contributory plan that is designed
to provide retirement benefits for eligible employees under either
a pre-tax or post-tax salary reduction arrangement by offering
employees an opportunity to acquire stock ownership in Zions
Bancorporation (the Company). The Plan is subject to the
provisions of the Employee Retirement Income Security Act (ERISA)
of 1974.
(b) ELIGIBILITY
Participation in the Plan is voluntary. An employee is eligible to
participate on January 1, or July 1, whichever coincides with, or
immediately follows, the latter of the date on which the employee
completes at least 1,000 hours of service during 12 continuous
months and attains the age of 21. As of December 31, 1998 and
1997, there were 4,155 and 3,240 participants, respectively, in
the Plan.
(c) EMPLOYEE AND COMPANY CONTRIBUTIONS
Each eligible employee who elects to participate makes
contributions ranging from one to five percent of their total
compensation. Company contributions are equal to 50 percent of the
amount contributed by the employee. The maximum amount a
participant may contribute to the Plan in a calendar year, in
conjunction with the Employee Investment Savings Plan, is $10,000
for 1998.
(d) ALLOCATION OF INCOME OR LOSS
Investment income is allocated to each participant's account in
proportion to the investment shares held in that participant's
account to the total of investment shares held in the Plan.
(e) VESTING AND PAYMENT OF BENEFITS
Employee contributions and the employees' share of the Company
contributions are 100 percent vested at all times. Benefits are
paid upon death, disability, retirement, or earlier subject to
certain restrictions. Benefits are paid in shares of stock.
(continued)
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ZIONS BANCORPORATION
EMPLOYEE STOCK SAVINGS PLAN
Notes to Financial Statements
(f) PLAN TERMINATION
Although the Company has not expressed intent to do so, it has the
right under the Plan to discontinue contributions at any time and
to terminate the Plan subject to provisions of ERISA.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Plan in the preparation of its financial statements:
(a) BASIS OF PRESENTATION
The Plan's financial statements are presented on the accrual basis
of accounting.
(b) COSTS OF ADMINISTRATION
All costs of administration are currently being absorbed by the
Company.
(c) INVESTMENTS
The investment in common stock of the Company is carried at its
quoted market price in the accompanying financial statements.
Purchases and sales of investments are recorded on a
settlement-date basis which does not materially differ from using
the trade-date basis required by generally accepted accounting
principles.
Net unrealized appreciation represents the difference between the
book value and the market value of investments held at year-end.
Book value is the market value at the end of the previous fiscal
year, or cost if the investment was purchased during the year.
The following investment represents five percent or more of the
net assets available for plan benefits at December 31:
1998 1997
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Zions Bancorporation common stock $ 90,567,426 63,033,316
(d) USE OF ESTIMATES
The preparation the financial statements and supplemental
schedules in conformity with generally accepted accounting
principles requires the Plan administrator to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the statement of net assets available for benefits and
supplemental schedules and the changes in net assets during the
reporting period. Actual results could differ from those
estimates.
(continued)
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ZIONS BANCORPORATION
EMPLOYEE STOCK SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(e) CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash and short-term investments
with maturity dates of 90 days or less.
(f) RECLASSIFICATIONS
Certain reclassifications have been made in the 1997 financial
statements to conform with the 1998 presentation.
(3) TAX STATUS
The Plan obtained its latest determination letter on June 5, 1996, in
which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the
Internal Revenue Code (IRC). The Plan has been amended since receiving
the determination letter. However, the Plan administrator and the Plan's
tax counsel believe that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the IRC.
(4) ZIONS BANCORPORATION COMMON STOCK
At December 31, 1998 and 1997, the investment in common stock of the
Company consisted of 1,451,944 and 1,389,164 shares, respectively.
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ZIONS BANCORPORATION
EMPLOYEE STOCK SAVINGS PLAN
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
(a) (e)
Party in (b) (c) (d) Current
interest Issuer Investment description Cost (1) value
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Investments at fair value determined by
quoted market prices:
* Zions Bancorporation Zions Bancorporation common stock $24,852,480 90,567,426
Notes:
* Party-in-interest
There were no nonexempt party-in-interest transactions.
There were no assets which were both acquired and
disposed of during the year.
(1) Cost is determined using the average-cost method applied on a
participant-by-participant basis.
Line 27d - Schedule of Reportable Transactions
Year ended December 31, 1998
(h)
Current
(a) value
Identity of (c) (g) of asset
party (b) Purchase (d) Cost of on trans (i)
involved Description of asset price Selling price asset -action date Net gain
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Zions Zions Bancorporation
Bancorporation common stock
$ 5,424,957 1,980,516 5,424,957 3,444,441
-
Zions Bancorporation
common stock
8,623,415 - - 8,623,415 -
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