UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 for the fiscal year ended December 31, 2001
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the transition period from ________ to _________
Commission File Number ..................................................0-2610
A. Full title of the plan and address of the plan, if different from that
of the issuer named below:
ZIONS BANCORPORATION
EMPLOYEE INVESTMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
ZIONS BANCORPORATION
One South Main, Suite 1134
Salt Lake City, Utah 84111
FINANCIAL STATEMENTS AND EXHIBIT
a) Financial Statements Page
----
Report of Independent Auditors 1
Audited Financial Statements
Statements of Net Assets Available for Benefits -
December 31, 2001 and 2000 2
Statement of Changes in Net Assets Available for Benefits -
Year ended December 31, 2001 3
Notes to Financial Statements 4
Supplemental Schedule -
Schedule H, Line 4i - Schedule of Assets
(Held at End of Year) 10
Signature 11
(b) Exhibit - Consent of Independent Auditors 12
Report of Independent Auditors
The Benefits Committee
Zions Bancorporation Employee Investment Savings Plan
We have audited the accompanying statements of net assets available for benefits
of Zions Bancorporation Employee Investment Savings Plan as of December 31, 2001
and 2000, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2001. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 management, 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 the Plan at
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the year ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2001, is presented for purposes of
additional analysis and is not a required part of the financial statements but
is 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 schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/Ernst & Young
June 17, 2002
Zions Bancorporation Employee Investment Savings Plan
Statements of Net Assets Available for Benefits
December 31,
2001 2000
------------ ------------
Assets
Cash and cash equivalents ............. $ 15,154 $ 13,796
Investments, at fair value:
Zions Bancorporation common stock .. 186,392,998 112,586,800
Mutual funds ....................... 44,997,462 43,037,172
Participant loans .................. 1,929,899 1,606,640
------------ ------------
233,320,359 157,230,612
Receivables:
Participant contributions .......... 1,020,657 179,633
Employer contributions ............. 367,333 37,263
Interest ........................... 6,880 3,466
------------ ------------
1,394,870 220,362
------------ ------------
Net assets available for benefits ..... $234,730,383 $157,464,770
============ ============
See accompanying notes.
2
Zions Bancorporation Employee Investment Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2001
Additions
Investment income (loss):
Net depreciation in fair value of investments ............ $ (22,769,356)
Dividends ................................................ 2,361,084
Interest ................................................. 146,341
-------------
(20,261,931)
Contributions:
Participant .............................................. 9,635,267
Employer ................................................. 1,994,345
-------------
11,629,612
Transfers from nonaffiliated plans .......................... 2,618,451
Transfer of assets from Zions Bancorporation Employee Stock
Savings Plan ............................................. 93,034,428
-------------
Total additions ............................................. 87,020,560
Deductions
Benefits paid directly to participants ...................... 9,754,947
-------------
Net increase ................................................ 77,265,613
Net assets available for benefits:
Beginning of year ........................................ 157,464,770
-------------
End of year .............................................. $ 234,730,383
=============
See accompanying notes.
3
Zions Bancorporation Employee Investment Savings Plan
Notes to Financial Statements
December 31, 2001
1. Description of the Plan
The following description of the Zions Bancorporation Employee Investment
Savings Plan (the Plan) provides only general information. Participants should
refer to the Plan document for a more complete description of the Plan's
provisions.
General
The Plan is a single employer contributory plan that is designed to provide
retirement benefits for eligible employees under a pre-tax salary reduction
arrangement and, if employees so elect, 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. The
trust department of Zions First National Bank, a subsidiary of Zions
Bancorporation, is the trustee of the Plan. The Zions Bancorporation Benefits
Committee has responsibility for administering the Plan.
Eligibility
Participation in the Plan is voluntary. An employee is eligible to participate
on January 1, April 1, July 1, or October 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. In addition, the definition of one year of eligibility service includes
employees for whom one year has past since (a) the commencement date with a
previous employer that sponsored a similar plan in which the employee
participated or (b) the commencement date with a merged employer.
Contributions
Each year participants may make voluntary contributions up to 15 percent of
their pre-tax annual compensation, as defined in the Plan document, limited by
participant contributions made to the Zions Bancorporation Employee Stock
Savings Plan. The Company may contribute an amount up to 2.5 percent of the
participant's compensation. The maximum pre-tax amount participants may
contribute to the Plan in a calendar year is the lesser of 15 percent of their
compensation or, in conjunction with the Zions Employee Stock Savings Plan,
$10,500 for 2001. Upon enrollment, a participant may direct participant and
Company contributions into any of the Plan's fund options. Rollovers from other
qualifying plans, including plans from acquired entities, are allowed by the
Plan.
4
Zions Bancorporation Employee Investment Savings Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Participant Accounts
Each participant's account is credited with the participant's contributions and
allocations of (a) the Company's contributions and (b) plan earnings. Investment
income or loss is allocated to each participant's account in proportion to the
investment shares held in that participant's account to the total investment
shares held in the Plan.
Vesting and Payment of Benefits
Participants are fully vested in their participant accounts, inclusive of
Company contributions, at all times. Benefits payments are paid upon death,
disability, retirement, termination of employment, or earlier, subject to
certain restrictions, as defined in the Plan document. Benefit payments are paid
in shares of stock and/or cash pursuant to the nature of the investment vehicle
selected by the participant.
Participant Loans
Participants may borrow from their fund accounts up to a maximum equal to
the lesser of $50,000 or 50 percent of their vested account balance. Loan terms
range from 1-5 years or up to 10 years for the purchase of a primary residence.
The loans are secured by the balance in the participant's account and bear
interest at a rate commensurate with the Zions First National Bank prime rate
plus 1%. Principal and interest is paid ratably through bi-weekly payroll
deductions.
Plan Termination
Although the Company has not expressed any intent to do so, it has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. If the Plan is terminated, each
participant shall receive a distribution of assets equal to the value of the
participant's account.
2. Significant Accounting Policies
Basis of Presentation
The accompanying financial statements are prepared on the accrual basis of
accounting.
5
Zions Bancorporation Employee Investment Savings Plan
Notes to Financial Statements (continued)
2. Significant Accounting Policies (continued)
Cash and Cash Equivalents
Cash and cash equivalents include cash and short-term investments with original
maturity dates of 90 days or less.
Valuation of Investments and Income Recognition
The Plan's investments are stated at fair value. Common stocks are valued at the
last reported sales price on the last business day of the Plan year. Mutual
funds are valued at market prices, which represent the net asset value of shares
held by the Plan at year-end. Participant loans are valued at cost, which
approximates fair value.
Purchases and sales of investments are recorded on a trade-date basis. Dividend
income is recorded on the ex-dividend date. Interest income is recorded on the
accrual basis.
Administrative Expenses
Administrative expenses are currently being paid by the Company; however, the
Plan may bear the costs of administration.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
Concentration of Investments
Included in the Plan's net assets available for benefits at December 31, 2001
and 2000 are investments in common stock of the Company amounting to
$186,392,998 and $112,586,800, respectively, whose value could be subject to
change based upon market conditions. These investments represent a 3.80 percent
and 2.07 percent ownership of the Company's outstanding common stock at December
31, 2001 and 2000, respectively. At December 31, 2001 and 2000, the investment
in common stock of the Company consisted of 3,544,941 shares and 1,803,192
shares, respectively.
6
Zions Bancorporation Employee Investment Savings Plan
Notes to Financial Statements (continued)
2. Significant Accounting Policies (continued)
Reclassifications
Certain reclassifications have been made to the December 31, 2000 Statement of
Net Assets Available for Benefits to conform to the current year presentation.
3. Plan Amendment and Merger
Effective December 31, 2001, the Plan was amended and the Zions Bancorporation
Employee Stock Savings Plan was merged into the Plan and the assets of the
Employee Stock Savings Plan were legally transferred into the Plan on that date.
Accordingly, the net assets available for benefits from the Employee Stock
Savings Plan are reflected in the financial statements of the Plan at December
31, 2001, which increased the net assets available for benefits by approximately
$93 million.
4. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
dated June 5, 1996, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the Code) and, therefore, the related trust is exempt
from taxation. Subsequent to this issuance of the determination letter, the Plan
was amended. Once qualified, the Plan is required to operate in conformity with
the Code to maintain its qualification. The plan administrator believes the Plan
is being operated in compliance with the applicable requirements of the Code
and, therefore, believes that the Plan, as amended, is qualified and the related
trust is tax exempt.
5. Investments
Zions First National Bank (the trustee) holds the Plan's investments and
executes all investment transactions. Investments that represent five percent or
more of the fair value of the Plan's net assets available for benefits are as
follows:
December 31,
2001 2000
------------ ------------
Zions Bancorporation common stock . $186,392,998 $112,586,800
Accessor growth mutual fund ....... 12,859,703 12,791,059
7
Zions Bancorporation Employee Investment Savings Plan
Notes to Financial Statements (continued)
5. Investments (continued)
During 2001, the Plan's investments (including investments purchased and sold,
as well as held during the year) depreciated in fair value as determined by
quoted market prices as follows:
Zions Bancorporation common stock . $(17,545,674)
Mutual funds ...................... (5,223,682)
------------
$(22,769,356)
============
6. Differences Between Financial Statements and Form 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
December 31,
2001 2000
------------- -------------
Net assets available for benefits per the financial
statements ....................................... $ 234,730,383 $ 157,464,770
Amounts allocated to withdrawn participants ......... (1,073,173) (361,515)
------------- -------------
Net assets available for benefits per the Form 5500 . $ 233,657,210 $ 157,103,255
============= =============
The following is a reconciliation of benefits paid directly to participants per
the financial statements to the Form 5500:
Year Ended
December 31,
2001
------------
Benefits paid directly to participants per the financial
statements ............................................ $ 9,754,947
Add: Amounts allocated on Form 5500 to withdrawn
participants at December 31, 2001 ..................... 1,073,173
Less: Amounts allocated on Form 5500 to withdrawn
participants at December 31, 2000 ..................... (361,515)
------------
Benefits paid directly to participants per the Form 5500 . $ 10,466,605
============
Amounts allocated to withdrawn participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
year-end but not yet paid.
8
Zions Bancorporation Employee Investment Savings Plan
Notes to Financial Statements (continued)
7. Transactions with Parties-in-Interest
During 2001, the Plan received dividends from Zions Bancorporation of
$1,433,576. Purchases of Zions Bancorporation common stock amounted to
$7,284,432 and sales of Zions Bancorporation common stock were $2,632,898 in
2001.
8. Subsequent Event
Effective January 1, 2002, the Plan was amended and restated to change the name
of the Plan to the Zions Bancorporation Payshelter 401(k) Plan.
9
Zions Bancorporation Employee Investment Savings Plan
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
EIN: 87-0227400 Plan: 006
December 31, 2001
(b)
Identity of Issue,
Borrower, Lessor, or (c) (e)
(a) Similar Party Description of Investment (1) Current Value
--- -------------------- -------------------------------------------- -------------
* Zions Bancorporation Zions Bancorporation common stock (3,544,941
shares) $ 186,392,998
Accessor Accessor International Equity (ACIEX)
Accessor mutual fund (333,593 shares) 3,779,612
Accessor Accessor Growth (AGROX)
Accessor mutual fund (566,756 shares) 12,859,703
Accessor Accessor Intermediate Fixed Income (AIFIX)
Accessor mutual fund (408,931 shares) 4,862,194
Accessor Accessor Mortgage (AMSFX)
Accessor mutual fund (157,893 shares) 2,005,244
Accessor Accessor Short Fixed Income (ASIFX)
Accessor mutual fund (130,963 shares) 1,588,581
Accessor Accessor Small/Mid Cap (ASMCX)
Accessor mutual fund (441,086 shares) 7,564,633
Accessor Accessor Value/Income (AVAIX)
Accessor mutual fund (372,672 shares) 6,663,373
Accessor Accessor U.S. Government Money
Accessor mutual fund (5,674,122 shares) 5,674,122
* Participant loans Interest rates ranging from 6% to 10.5% 1,929,899
-------------
$ 233,320,359
=============
* Indicates party-in-interest to the plan.
(1) Cost information is not provided as all investments are
participant-directed.
10
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Benefits Committee has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
June 27, 2002 ZIONS BANCORPORATION
EMPLOYEE INVESTMENT SAVINGS PLAN
By: /s/ Harris H. Simmons
-----------------------------
Name: HARRIS H. SIMMONS, Chairman,
President and Chief Executive Officer of
Zions Bancorporation
11