Exhibit 10.1


 


Includes all amendments through 4/30/2004


 


ZIONS BANCORPORATION


 


KEY EMPLOYEE INCENTIVE STOCK OPTION PLAN


 


ARTICLE I


 


Purpose and Scope of the Plan


 


1.1                               Purpose


 


The purpose of the Plan is to promote the long-term success of Zions
Bancorporation by providing financial incentives to key employees who are in
positions to make significant contributions toward such success.  The Plan is designed to attract individuals
of outstanding ability to employment with Zions Bancorporation and to encourage
key employees to acquire a proprietary interest in Zions Bancorporation, to
continue employment with Zions Bancorporation, and to render superior
performance during such employment.


 


1.2                               Definitions


 


Unless the context clearly indicates otherwise, the following terms
have the meanings set forth below.


 


“Board of Directors” means the Board of Directors of the
Company.


 


“Cause” shall have the meaning set forth in the Zions
Bancorporation Change in Control Agreement entered into between the Company and
its senior executives from time to time.


 


“Change in Control” shall have the meaning set forth in the
Zions Bancorporation Change in Control Agreement entered into between the
Company and its senior executives from time to time.


 


“CIC Agreement” shall mean the Zions Bancorporation Change in
Control Agreements entered into between the Company and its senior executives
from time to time.


 


“Code” means the Internal Revenue Code of 1954, as amended.


 


“Committee” means the Executive Compensation Committee of the
Board of Directors, which committee shall be composed of at least three
directors who have not been eligible to receive an award under the Plan at any
time within a period of one year immediately preceding the date of their
appointment to such committee.


 


“Common Stock” means the common stock of the Company, without
par value, or such other class of shares or other securities as to which the
provisions of the Plan may be applicable.


 

















 


“Company” means Zions Bancorporation.


 


“Fair Market Value” of a share of Common Stock on any particular
date is the mean between the closing dealer “bid” and “ask” prices of a share
of Common Stock as quoted by NASDAQ.  If
no “bid” and “ask” prices are quoted for the date of grant, the Fair Market
Value of a share of Common Stock on such date shall be determined with
reference to such prices of a share of Common Stock on the first preceding date
on which such prices were quoted.  If
Common Stock is listed on an established stock exchange or exchanges, the Fair
Market Value shall be deemed to be the highest closing price of Common Stock on
such stock exchange or exchanges on the day the option is granted or, if no
sale of Common Stock has been made on any stock exchange on that day, the Fair
Market Value shall be determined by reference to such price for the next
preceding day on which a sale occurred. 
In the event that Common Stock is not traded on an established stock
exchange, and no closing dealer “bid” and “ask” prices are available, then the
purchase price shall be 100 percent of the Fair Market Value of one share of
Common Stock on the day the option is granted, as determined on the Committee
in good faith.


 


“Grant Date,” as used with respect to a particular Option, means
the date as of which such option is granted by the Committee pursuant to the
Plan.


 


“Grantee” means the individual to whom an Option is granted by
the Committee pursuant to the Plan.


 


“Incentive Stock Option” means an option, granted by the
Committee pursuant to Article II, to purchase shares of Common Stock in a
manner which qualifies as an Incentive Stock Option as described in
Section 422A of the Code of 1954, as amended.


 


“Option Period” means the period beginning on the Grant Date and
ending the day specified in the agreement for each option but in no event
longer than the tenth anniversary of the Grant Date.


 


“Plan” means the Zions Bancorporation Key Employee Incentive
Stock Option Plan as set forth herein and as may be amended from time to time.


 


“Retirement,” as applied to a Grantee, means the Grantee’s termination
of employment with Zions Bancorporation at a time when the Grantee receives an
immediately payable retirement benefit under the Zions Bancorporation
Retirement Plan or under any other retirement plan that is maintained by a
subsidiary of Zions Bancorporation and that is determined by the Committee to
be the functional equivalent of the Company’s Retirement Plan.  [Note:
This definition applies only to Options awarded prior to April 30, 2004.]


 


“Retirement,” as applied to a Grantee, means the Grantee’s
termination of employment with Zions Bancorporation other than for Cause and
the Grantee has reached the following age with the corresponding number of
years of service with the Company:


 


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  Age

  	
   

  	
  Years of
  Service

  
	
  55

  	
   

  	
  10

  
	
  56

  	
   

  	
  9

  
	
  57

  	
   

  	
  8

  
	
  58

  	
   

  	
  7

  
	
  59

  	
   

  	
  6

  
	
  60 and older

  	
   

  	
  5

  






 


[Note: This definition applies only to
Options awarded on or after April 30, 2004.]


 


“Zions” means the Company, any stock corporation of which a
majority of the voting common or capital stock is owned directly or indirectly
by the Company, and any other company designated as such by the Committee, but
only during the period of such ownership or designation.


 


“Total and Permanent Disability,” as applied to a Grantee, means
that the Grantee; (i) has established to the satisfaction of the Company that
the Grantee is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for
a continuous period of not less than 12 months (all within the meaning of
Section 105[d][4] of the Code); and (ii) has satisfied any requirement
imposed by the Committee.


 


1.3                               Aggregate
Limitation


 


(a)                                  The aggregate number
of shares of Common Stock with respect to which Incentive Stock Options may be
granted under the Plan shall not exceed 806,000 shares of Common Stock, subject
to adjustment in accordance with Section 3.1.


 


(b)                                 Any shares of Common
Stock to be delivered by the Company upon the exercise of Incentive Stock
Options shall be issued from the Company’s authorized but unissued shares of
Common Stock or from Treasury Stock acquired by the Company at the discretion
of the Board of Directors.


 


(c)                                  In the event that any
Incentive Stock Option lapses or otherwise terminates prior to being fully
exercised, any share of Common Stock allocable to the unexercised portion of
such option may again be made subject to an Incentive Stock Option.


 


1.4                               Administration
of the Plan


 


(a)                                  The Plan shall be
administered by the Committee which shall have the authority:


 


(i)                                     to determine key
employees of Zions and its subsidiaries to whom, and the times as which,
Incentive Stock Options shall be granted and the number of shares of Common
Stock to be subject to each such option taking into account the nature of the
services rendered by the particular employee, the employee’s potential
contribution to the long-term success of the Corporation


 


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and/or any of its subsidiaries and such other factors as the Committee
in its discretion shall deem relevant;


 


(ii)                                  to interpret the Plan
and to establish rules and regulations relating to it;


 


(iii)                               to prescribe the terms
and provisions of the agreements for the grant of Incentive Stock Options; and


 


(iv)                              to make all other
determinations necessary or advisable in order to administer the Plan.


 


(b)                                 All decisions of the
Committee upon questions concerning the Plan or any Incentive Stock Option
shall be conclusive.


 


1.5                               Eligibility
for Awards


 


The Committee shall designate from time to time the key employees of
Zions and its subsidiaries who are to be granted Incentive Stock Options.  In no event may a member of the Committee or
any nonemployee Director be granted an Incentive Stock Option.


 


1.6                               Effective
Date and Duration of Plan


 


The Plan shall become effective as of December 28, 1981, upon its
adoption by the Board of Directors; provided, that any grant of Incentive Stock
Options is subject to the approval of the Plan by the shareholders of the
Company within twelve months of adoption by the Board of Directors.  Unless previously terminated by the Board of
Directors, the Plan shall terminate on March 3, 2005.


 


ARTICLE II


 


STOCK OPTIONS


 


2.1                               Grant
of Incentive Stock Options


 


The Committee may from time to time, subject to the provisions of the
Plan, grant Incentive Stock Options to key employees to purchase shares of
Common Stock allotted in accordance with Section 1.3.


 


2.2                               Option
Requirements


 


(a)                                All
Incentive Stock Options are intended to qualify as an “incentive stock options”
within the meaning of Subsection (b) of Section 422A of the Code.


 


(b)                               An
Incentive Stock Option shall be evidenced by a written instrument specifying
the number of shares of Common Stock that may be purchased by its exercise, the
Option Period and any other such terms and conditions consistent with the Plan
as the Committee shall determine.


 


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(c)                                An
Incentive Stock Option shall not be granted on or after the tenth anniversary
of the date upon which the Plan was adopted by the Board of Directors.


 


(d)                               An
Incentive Stock Option shall not be granted to an individual who, on the date
of grant, owns stock possessing more than ten percent of the total combined
voting power of all classes of stock of Zions or any subsidiary corporation.


 


(e)                                An
Incentive Stock Option shall not be exercisable after the expiration of the
Option Period.


 


(f)                                  [deleted]


 


(g)                               The
Committee may provide, in the instrument evidencing an Incentive Stock Option,
for the lapse of the Incentive Stock Option, prior to the expiration of the
Option Period, upon the occurrence of any event specified by the Committee.


 


(h)                               The
option price per share of Common Stock shall be equal to the Fair Market Value
of a share of Common Stock on the Grant Date.


 


(i)                                   The
aggregate Fair Market Value, determined on the Grant Date, of the shares of
Common Stock with respect to which any Grantee may be granted one or more
Incentive Stock Options under the Plan (within the meaning of
Subsection [b] of Section 422A of the Code) in any calendar year
shall not exceed $100,000.00 plus any “unused limit carryover” to such year,
determined in accordance with Section 422A(c)(4) of the Code.


 


(j)                                   An
Incentive Stock Option shall not be transferable other than by will or the laws
of descent and distribution and, during the Grantee’s lifetime, shall be
exercisable only by the Grantee; except, that the Committee may permit:


 


(i)                                   exercise,
during Grantee’s lifetime, by Grantee’s guardian or legal representative; and


 


(ii)                                transfer,
upon Grantee’s death, to beneficiaries designated by Grantee in a manner
authorized by the Company; provided that the Committee determines that such
exercise and such transfer are consonant with requirements for exemption from
Section 16(b) of the Securities Exchange Act of 1934, as amended, and with
the requirements of Section 422A(b)(5) of the Code.


 


[Note: Section 2.2(k) below is only
applicable to Options granted prior to April 30, 2004]


 


(k)                                In
the event of retirement or involuntary termination of employment without cause,
the option to exercise shall lapse at the earlier of the Option Period of the
Incentive Stock Option or three months after retirement.  In the event of voluntary termination of
employment at the election of the employee or termination for cause at the
election


 


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of the Company, all Incentive Stock Options shall lapse forthwith.  In the event of termination due to death or
total and permanent disability, any Incentive Stock Options shall lapse at the
earlier of the appropriate Option Period or one year after termination due to
such causes.


 


[Note: Section 2.2(k) below is only
applicable to Options granted on or after April 30, 2004]


 


(k)                                In
the event of Retirement, the time period during which all Incentive Stock
Options may be exercised shall lapse at the earlier of:


 


(i)                                   the
full remaining term of the Option Period,


 


(ii)                                the
date the Grantee begins employment with another company that is in the
financial services industry unless such employment is specifically approved by
the Committee, or


 


(iii)                             up to
three years, as determined by the Committee, after Retirement.


 


In the event of involuntary termination of employment without Cause,
the Option shall lapse at the earlier of the end of the Option Period of the
Incentive Stock Option or three months after such involuntary termination.  In the event of voluntary termination of
employment at the election of the employee or termination for cause at the
election of the Company, all Incentive Stock Options shall lapse
forthwith.  In the event of termination
due to death or total and permanent disability, any Incentive Stock Options
shall lapse at the earlier of the end of the appropriate Option Period or one
year after termination due to such causes.


 


(l)                                   A
person electing to exercise an Incentive Stock Option shall give written
notice, in such form as the Committee may require, of such election to the
Company and shall tender to the Company the full specified option purchase
price of the shares of Common Stock for which the election is made.  Payment of the purchase price shall be made
in cash or in such other form as the Board of Directors may approve, including
shares of Common Stock of the Company valued at the Fair Market Value on the
date of exercise of the Option.


 


(m)                             Notwithstanding
anything contained herein to the contrary, upon Retirement of any Grantee, the
exercise period for any outstanding Options the exercise price of which on
January 18, 2002 was greater than the Fair Market Value of the Company’s
Common Stock on such date shall be extended to equal the lesser of 3 years from
the date of Retirement or the full remaining term of the Option Period.


 


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ARTICLE III


 


General Provisions


 


3.1                                 Adjustment
Provisions


 


(a)                                If:


 


(i)                                   any
recapitalization, reclassification, split-up or consolidation of Common Stock
is effected;


 


(ii)                                the
outstanding shares of Common Stock are exchanged, in connection with a merger
or consolidation of the Company or a sale by the Company of all or a part of
its assets, for a different number or class of shares of stock or other
securities of the Company or for shares of the stock or other securities of any
other corporation;


 


(iii)                             new,
different or additional shares or other securities of the Company or of another
corporation are received by the holders of Common Stock; or


 


(iv)                            any
distribution is made to the holders of Common Stock other than a cash dividend;
then the Committee shall make appropriate adjustments to:


 


(A)                              The number and class of
shares or other securities that may be issued or transferred pursuant to
Incentive Stock Options, and


 


(B)                                The purchase price to
be paid per share under outstanding options.


 


(b)                               Upon
the dissolution or liquidation of the Company, the Plan shall terminate, and
all options previously granted shall lapse on the date of such dissolution or
liquidation of the Company.


 


(c)                                Adjustments
under Subsection (a) shall be made according to the sole discretion of the
Committee, and its decision shall be binding and conclusive.


 


(d)                               Except
as provided in subparagraphs (a) and (b), the issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any
class shall not affect the Incentive Stock Options.


 


3.2                               Additional
Conditions


 


Any shares of Common Stock issued or transferred under any provision of
the Plan may be issued or transferred subject to such conditions, in addition
to those specifically provided in the Plan, as the Committee or Company may
impose.


 


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3.3                               No
Right to Employment


 


Nothing in the Plan or in any instrument executed pursuant thereto
shall confer upon any employee any right to continue in the employ of Zions
Bancorporation or any of its subsidiaries or shall affect the right of Zions
Bancorporation or a subsidiary thereof to terminate the employment of any
employee, with or without cause.


 


3.4                               Legal
Restrictions


 


The Company will not be obligated to issue shares of Common Stock or
make any payment if counsel to the Company determines that such issuance or
payment would violate any law or regulation of any governmental authority or
any agreement between the Company and any national securities exchange upon
which the Common Stock may be listed. 
In connection with any stock issuance or transfer, the person acquiring
the shares shall, if requested by the Company, give assurances satisfactory to
counsel to the Company regarding such matters as the Company may deem desirable
to assure compliance with all legal requirements.  The Company shall in no event be obliged to take any action in
order to cause the exercise of any Incentive Stock Option.


 


3.5                               No
Rights as Shareholders


 


No Grantee, and no beneficiary or other person claiming through a
Grantee, shall have any interest in any shares of Common Stock allocated for
the purposes of the Plan or subject to any Incentive Stock Option until such
shares of Common Stock shall have been transferred to the Grantee or such
person.  Furthermore, the existence of
the Incentive Stock Options shall not affect: the right or power of the Company
or its stockholders to make adjustments, recapitalizations, reorganizations or
other changes in the Company’s capital structure or its business; any issue of
bonds, debentures, preferred or prior preference stocks affecting the Common
Stock of the Company or the rights thereof; the dissolution or liquidation of
the Company, or sale or transfer of any part of its assets or business; or any
other corporate act, whether of a similar character or otherwise.


 


3.6                               Withholding
Taxes


 


The Company may require Grantee, as a condition of exercise of an
Incentive Stock Option, to pay or reimburse any taxes which it determines it is
required to withhold in connection with the grant or exercise of the Incentive
Stock Option.


 


3.7                               Choice
of Law


 


The validity, interpretation and administration of the Plan and of any
rules, regulations, determinations or decisions made thereunder, and the rights
of any and all persons having or claiming to have any interest therein or
thereunder, shall be determined exclusively in accordance with the laws of the
State of Utah.  Without limiting the
generality of the foregoing, the period within which any action in connection
with the Plan must be commenced shall be governed by the Laws of the State of
Utah; without regard to the place


 


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where the act or omission complained of took place, the residence of
any party to such action or the place where the action may be brought.


 


3.8                               Amendment,
Suspension and Termination of Plan


 


The Board of Directors may at any time terminate, suspend or amend the
Plan; however, no such amendment shall, without the approval of the
shareholders of the Company:


 


(a)                                  increase the
aggregate number of shares which may be issued in connection with Incentive
Stock Options;


 


(b)                                 change the Incentive
Stock Option exercise price;


 


(c)                                  increase the maximum
period during which Incentive Stock Options may be exercised;


 


(d)                                 extend the effective
period of the Plan; or


 


(e)                                  materially modify the
requirements as to eligibility for participation in the Plan.


 


ARTICLE IV


 


Change in Control


 


4.1                               Vesting
Upon a Change in Control


 


Notwithstanding anything contained herein to the contrary, upon a
Change in Control, all unvested options outstanding under the Plan shall vest
immediately.


 


4.2                               Termination
Other Than For Cause


 


Notwithstanding anything contained herein to the contrary, if any
Grantee is terminated from employment, other than for Cause, within 2 years
following a Change in Control, the exercise period for such Grantee’s
outstanding options under the Plan shall automatically be extended to the full
remaining term of such options.


 


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