<PAGE>
 
                                                                  EXHIBIT 10(PP)



                          VALLEY NATIONAL CORPORATION

                                  401(+)(TM)

                     EXECUTIVE DEFERRED COMPENSATION PLAN


                           EFFECTIVE OCTOBER 1, 1988
<PAGE>
 
                               TABLE OF CONTENTS

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                                                                PAGE
                                                                ----
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ARTICLE I    PURPOSE..........................................   1
 
ARTICLE II   DEFINITIONS......................................   1
 
             2.1   Account....................................   1
             2.2   Average Annual Deferral Amount.............   1
             2.3   Beneficiary................................   1
             2.4   Board......................................   1
             2.5   Change in Control of the Employer..........   1
             2.6   Committee..................................   2
             2.7   Compensation...............................   2
             2.8   Deferral Commitment........................   3
             2.9   Deferral Period............................   3
             2.10  Determination Date.........................   3
             2.11  Early Retirement Date......................   3
             2.12  Employer...................................   3
             2.13  Financial Hardship.........................   3
             2.14  Interest...................................   3
             2.15  Normal Retirement Date.....................   3
             2.16  Participant................................   4
             2.17  Participation Agreement....................   4
             2.18  Plan Benefit...............................   4
             2.19  Qualified 401 (k) Plan.....................   4
             2.20  Qualified Pension Plan.....................   4
             2.21  Retirement.................................   4
             2.22  Retirement Account.........................   4
             2.23  Termination Account........................   4
             2.24  Total and Permanent Disability.............   4
             2.25  Additional Terms...........................   4
 
ARTICLE III  PARTICIPATION AND DEFERRAL COMMITMENTS...........   5
 
             3.1   Eligibility and Participation..............   5
             3.2   Form of Deferral Minimum Deferral..........   5
             3.3   Limitation on Deferral.....................   6
             3.4   Commitment Limited by Retirement...........   6
             3.5   Modification of Deferral Commitment........   6
 

ARTICLE IV   DEFERED COMPENSATION ACCOUNTS....................   6
 
             4.1   Types of Accounts..........................   6
             4.2   Elective Deferred Compensation.............   7
             4.3   Matching Contributions.....................   7
</TABLE> 
             

                                       i
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<TABLE> 
<S>                                                             <C> 
             4.4   Determination of Accounts..................   7
             4.5   Vesting of Accounts........................   7
             4.6   Statement of Accounts......................   7
 
ARTICLE V    PLAN BENEFITS....................................   8
 
             5.1   Retirement Benefit.........................   8
             5.2   Termination Benefit........................   8
             5.3   Death Benefit..............................   8
             5.4   Early Withdrawal Option....................   8
             5.5   Hardship Distributions.....................   9
             5.6   Forms of Benefit Payment...................   9
             5.7   Pension Make-Up Benefit....................   9
             5.8   Withholding Payroll Taxes..................  10
             5.9   Commencement of Payments...................  10
             5.10  Benefits Payable to Minor or Incompetence..  10
 
ARTICLE VI   BENEFICIARY DESIGNATION..........................  10
 
             6.1   Beneficiary Designation....................  10
             6.2   Amendments.................................  11
             6.3   No Beneficiary Designation.................  11
             6.4   Effect of Payment..........................  11
 
ARTICLE VII  ADMINSTRATION....................................  11
 
             7.1   Committee; Duties..........................  11
             7.2   Agents.....................................  11
             7.3   Binding Effect of Decisions................  12
             7.4   Indemnity of Committee.....................  12
 
ARTICLE VIII CLAIMS PROCEDURE.................................  12
 
             8.1   Claim......................................  12
             8.2   Denial of Claim............................  12
             8.3   Review of Claim............................  12
             8.4   Final Decision.............................  12
 
ARTICLE IX   AMENDMENT AND TERMINATION OF PLAN................  13
 
             9.1   Amendment..................................  13
             9.2   Employer's Right to Terminate..............  13
 
ARTICLE X    MISCELLANEOUS....................................  14
 
             10.1  Unfunded Plan..............................  14
             10.2  Unsecured General Creditor.................  14
             10.3  Trust Fund.................................  14
</TABLE> 
         
 
                                      ii
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<TABLE> 
            <S>                                                 <C>   
            10.4   Nonassignability...........................  14
            10.5   Not a Contract of Employment...............  15
            10.6   Protective Provisions......................  15
            10.7   Terms......................................  15
            10.8   Captions...................................  15
            10.9   Governing Law..............................  15
            10.10  Validity...................................  15
            10.11  Notice.....................................  15
            10.12  Successors.................................  15
</TABLE> 

                                      iii
<PAGE>
 
                          VALLEY NATIONAL CORPORATION

                                    401 (+)(TM)

                      EXECUTIVE DEFERRED COMPENSATION PLAN


                                   ARTICLE I

                                    PURPOSE
                                        
     The Purpose of this 401(+)(TM) Executive Deferred Compensation Plan
(hereinafter referred to as the "Plan") is to provide current tax planning
opportunities as well as supplemental funds for retirement or death for select
officers and key management employees (and their beneficiaries) of Valley
National Corporation.  It is intended that the Plan will aid in retaining and
attracting employees of exceptional ability by providing such individuals with
these benefits.  This plan shall be effective as of October 1, 1988.


                                   ARTICLE II

                                  DEFINITIONS

     For purposes of this Plan, the following words and phrases shall have the
meanings indicated, unless the context clearly indicates otherwise:

     2.1  ACCOUNT.  "Account" means either the Termination Account or the
Retirement Account maintained by the Employer in accordance with Article IV with
respect to any deferral of Compensation pursuant to this Plan.

     2.2  AVERAGE ANNUAL DEFERRAL AMOUNT.  "Average Annual Deferral Amount"
means, with respect to any Participant, and amount equal to the total dollar
amount deferred or to be deferred under all completed and uncompleted Salary and
Bonus Deferral Commitments made by a Participant, divided by the number of
Deferral Commitments entered into by the Participant.

     2.3  BENEFICIARY.  "Beneficiary" means the person, persons or entity
designated by the Participant, as provided in Article VI, to receive any Plan
benefits payable after a Participant's death.

     2.4  BOARD.  "Board" means the Board of Directors of Valley National
Corporation.

     2.5  CHANGE IN CONTROL OF THE EMPLOYER.  "Change in Control" shall be
deemed to have occurred at the time (1) a report on Schedule 13D is filed with
the Securities and Exchange Commission pursuant to Section 13(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") disclosing that any person
(within the meaning of Section 13(d) of the 
<PAGE>
 
Exchange Act), other than the Employer (or one of its subsidiaries) or any
employee benefit plan sponsored by the Employer (or one of its subsidiaries), is
the beneficial owner, directly or indirectly, of 20 percent or more of the
combined voting power of the then outstanding securities of the Employer; (2)
any person (within the meaning of Section 13(d) of the Exchange Act), other than
the Employer (or one of its subsidiaries) or any employee benefit plan sponsored
by the Employer (or one of its subsidiaries), shall purchase securities pursuant
to a tender offer or exchange offer to acquire any common stock) for cash,
securities or any other consideration, provided that after consummation of the
offer, the person in question is the beneficial owner (as such term is defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of 20 percent or
more of the combined voting power of the then outstanding securities of the
Employer (as determined under paragraph (d) of Rule 13d-3 under the Exchange
Act, in the case of rights to acquire common stock); (3) the stockholders of the
Employer shall approve:

     (a)  Any consolidation or merger of the Employer:

          (i)   in which the Employer is not the continuing or surviving
                corporation,

          (ii)  pursuant to which shares of common stock of the Employer would
                be converted into cash, securities or other property, or

          (iii) with a corporation which prior to such consolidation or merger
     owned 20 percent or more of the cumulative voting power of the then
     outstanding securities of the Employer; or
 
     (b)  Any sale, lease, exchange or other transfer (in one transaction or a
          series of related transactions) of all or substantially all the assets
          of the Employer; or

     4) there shall have been a change in a majority of the member of the Board
of Directors of the company within a 12-month period, unless the election or
nomination for election by the company's stockholders of each new director
during such 12-month period was approved by the vote of two-thirds of the
directors then still in office who were directors at the beginning of such 12-
month period.

     2.6  COMMITTEE.  "Committee" means the Investment Compensation Committee of
the Board of Directors appointed by the Board to administer the Plan pursuant to
Article VII.  No member of the Committee may participate in any decision
regarding his or her own benefit.

     2.7  COMPENSATION.  "Compensation" means the salary and bonuses paid to an
Employee-Participant during the calendar year considered to be "wages" for
purposes of federal income tax withholding, before reduction for amounts
deferred pursuant to this Plan, the Valley Flex Benefits Plan, and the
Investment Incentive Plan or any other cash or deferred compensation arrangement
pursuant to Section 410(a) of the Internal Revenue Code.  Compensation does not
include expense reimbursements, or any form of non-cash compensation or
benefits.

                                       2
<PAGE>
 
     2.8  DEFERRAL COMMITMENT.  "Deferral Commitment" means a Salary Deferral
Commitment or a Bonus Deferral Commitment made by a Participant pursuant to
Article III for which a separate Participation Agreement has been entered into
by the Participant.

     2.9  DEFERRAL PERIOD.  "Deferral Period" means each calendar year or any
portion thereof.

     2.10 DETERMINATION DATE.  "Determination Date" means the last day of each
calendar month.

DELETED 2.11  EARLY RETIRMENT DATE.  "Early Retirement Date" means the date on
which the Participant actually terminates employment or Board service following
the first day of the month coinciding with or next following a Participant's
attainment of age fifty-five (55) and his completion of fifteen (15) Years of
Credited Service, but prior to his Normal Retirement Date.

     2.12 EMPLOYER.  "Employer" means Valley National Corporation, an Arizona
corporation, and any affiliated or subsidiary corporations designated by the
Board, or any successors to the business thereof.

     2.13 FINANCIAL HARDSHIP.  "Financial Hardship" means a severe financial
hardship to the Participant resulting from (a) a sudden and unexpected illness
or accident of the Participant or a dependent (as defined in Section 152 (a) of
the Internal Revenue Code) of the Participant; (b) loss of the Participant's
property due to casualty; or (c) other similar or extraordinary circumstances
arising from events beyond the control of the Participant.  Notwithstanding the
foregoing, the Committee may not direct payment of any amounts credited to the
Account of a Participant to the extent that such hardship is or may be relieved
through reimbursement or compensation by insurance or otherwise, by liquidation
of the Participant's assets to the extent that such liquidation would not cause
severe financial hardship, or by the cessation of deferrals under the Plan.  The
desire to send a Participant's  child to college or the desire to purchase a
residence shall not be considered a Financial Hardship.

     2.14 INTEREST. "Interest" means, with respect to any calendar month, either
the Termination Rate or the Retirement Rate as defined below:

          (a) TERMINATION RATE means the monthly equivalent of the annual yield
     of the Moody's Long Term Corporate Bond Yield Index for the preceding
     calendar month as published by Moody's Investor Service, Inc. (or any
     successor thereto) or, if such index is no longer published, a
     substantially similar index selected by the Board.

          (b) RETIREMENT RATE means the monthly equivalent of the effective
     annual yield on a Termination Account plus three percentage (3%) points.

DELETED 2.15  NORMAL RETIREMENT DATE.  "Normal Retirement Date" means the first
day of the month coinciding with or next following the date on which a
Participant attains age sixty-two (62).

                                       3
<PAGE>
 
     2.16 PARTICIPANT.  "Participant" means any individual who is participating
or has participated in this Plan as provided in Article III.

     2.17 PARTICIPATION AGREEMENT.  "Participation Agreement" means the
agreement entered into by a Participant with the Committee prior to the
beginning of the Deferral Period.  A new Participation Agreement shall be
entered into by the Participant with the Committee for each Deferral Commitment.

     2.18 PLAN BENEFIT.  "Plan Benefit" means the benefit payable to a
Participant as calculated in Article V.

     2.19 QUALIFIED 401(k) PLAN.  "Qualified 401(k) Plan" means the Investment
Incentive Plan, any successor salary reduction plan, or a salary reduction plan
maintained by an affiliate of the Employer that qualifies under Section 401(a)
of the Internal Revenue code by satisfying the requirement of Section 401(k) of
the Code.

     2.20 QUALIFIED PENSION PLAN.  "Qualified Pension Plan" means the Retirement
Plan for Employees of the Valley National Bank of Arizona, any successor defined
benefit plan maintained by the Employer, or a defined benefit plan maintained by
an affiliate of the Employer that qualifies under Section 401(a) of the Internal
Revenue Code.

     2.21 RETIREMENT.  "Retirement" means the severance of employment with the
Employer at the Participant's Normal Retirement Date or Early Retirement Date as
applicable.  Participants who, after retirement, become, or continue to be
members of the Board shall not be considered to be retired, for purposes of this
plan, until the severance of service as an active Board member and as a Director
Emeritus.

     2.22 RETIREMENT ACCOUNT.  "Retirement Account" means the account maintained
on the books of account of the Employer and calculated pursuant to paragraph
4.5, using the Retirement Rate as stated in paragraph 2.14(b).

     2.23 TERMINATION ACCOUNT.  "Termination Account" means the account
maintained on the books of account of the Employer and calculated pursuant to
paragraph 4.5, using the Termination Rate as stated in paragraph 2.14(a).

     2.24 TOTAL AND PERMANENT DISABILITY.  "Total and Permanent Disability"
means a physical or mental condition that prevents the Participant from
satisfactorily performing the Participant's usual duties for the Employer.  The
Committee shall determine the existence of Disability and may rely on advice
from a medical examiner satisfactory to the Committee in making the
determination.

     2.25 ADDITIONAL TERMS.  In addition to the definitions set out above, the
following terms have been described throughout this document in the sections
indicated below:
 
     Salary Deferral Commitment           3.2(a)
     Bonus Deferral Commitment            3.2(b)

                                       4
<PAGE>
 
     Initial Account Balance              4.2
     Matching Contribution Credit         4.4
     Pension Make-up Benefit              5.7



                                  ARTICLE III

                     PARTICIPATION AND DEFERRAL COMMITMENTS

     3.1  ELIGIBILITY AND PROTECTION.

          (a)  ELIGIBILITY. Eligibility to participate in the Plan is limited to
     a select group of management or highly compensated employees recommended by
     the Committee from time to time.

          (b)  PARTICIPATION. An eligible employee may elect to participate in
     the Plan with respect to any Deferral Period by submitting a Participation
     Agreement with the Committee by December 15 of the calendar year
     immediately preceding the Deferral Period, provided that employees making
     Bonus Deferral Commitments must do so prior to the Board meeting in which a
     provisional or full payment of such bonus is authorized. In the event that
     an individual first becomes eligible to participate during a calendar year,
     a Participation Agreement must be entered into with the Committee no later
     than thirty (3) days following notification of the individual by the
     Committee of his eligibility to participate, and such Participation
     Agreement shall be effective only with regard to Compensation earned or
     payable following the submission of the Participation Agreement with the
     Committee.

AMENDED   3.2  FORM OF DEFERRAL COMMITMENT.  For each Deferral Period, a
Participant may make the following Deferral Commitments in separate
Participation Agreements.

          (a)  SALARY DEFERRAL COMMITMENT.  A Participant may elect to defer any
     portion of his base salary for the year following the calendar year in
     which the Participation Agreement is submitted.  The amount to be deferred
     shall be stated as a percentage of base salary but must not be less than
     two thousand dollars ($2,000) during the Deferral Period.  The percentage
     of salary to be deferred may be stated in one-half percent (1/2%)
     increments.

          (b)  BONUS DEFERRAL COMMITMENT. A Participant may elect to defer all
     or a portion of the bonus amounts to be paid by the Employer in the
     calendar year following the calendar year in which the Participation
     Agreement is submitted. The amount to be deferred shall be stated as a flat
     dollar amount, as a percentage of the bonus, or as a amount in excess of a
     stated dollar amount, but must not be less than two thousand dollars
     ($2,000), unless the Participant also elects to make a Salary Deferral
     Commitment, in which case there shall be no minimum Bonus Deferral
     Commitment.

                                       5
<PAGE>
 
          In the event a Participant enters this Plan at any time other than
January 1 of any calendar year, the minimum Deferral Commitment shall be a pro
rata portion of the minimum Deferral Commitment set forth in subparagraphs (a),
(b) and (c) above, based on the full or partial months remaining in the Deferral
Period.

     3.3  LIMITATION ON DEFERRAL.  Notwithstanding paragraph 3.2, the Committee
may increase the minimum deferral amount or impose a maximum deferral amount
from time to time by giving proper written notice to all Participants.

     3.4  COMMITMENT LIMITED BY RETIREMENT.  If a Participant intends to
terminate employment due to Retirement prior to the end of the Salary Deferral
Period the Participant may elect, with the Committee's consent, an alternative
Deferral Commitment as follows:

          (a)  If, at the time of entering into the Participation Agreement with
     the Committee, the Participant's Retirement occurs prior to the end of the
     Deferral Period, the Participant may elect to defer over a period which
     ends at the date of his intended Retirement. The Minimum Deferral provided
     in paragraph 3.2 above shall apply.

          (b)  If, subsequent to the entering into a Participation Agreement
     with the Committee, the Participant decides to terminate employment due to
     Retirement prior to the end of the Deferral Period, the Participant may
     elect to accelerate the deferral of the remaining balance of his Deferral
     Commitment. The accelerated deferrals shall be made over the period from
     the first day of the calendar year following such election to the date of
     the Participant's Retirement. However, the election to accelerate under
     this alternative must be made prior to December 15 of the year which
     precedes the calendar year(s) in which such remaining balance is to be
     deferred.

     3.5  MODIFICATION OF DEFERRAL COMMITMENT.  A Deferral Commitment shall be
irrevocable except that notwithstanding the minimum deferral amounts under
Section 3.2, the Committee may permit a Participant to reduce the amount to be
deferred, or waive the remainder of the Deferral Commitment, upon a finding that
the Participant has suffered a Financial Hardship.

                                   ARTICLE IV

                         DEFERRED COMPENSATION ACCOUNTS

     4.1  TYPES OF ACCOUNTS.  A Retirement Account and a Termination Account
shall be maintained for each Participant, and the Accounts shall be bookkeeping
devices utilized for the sole purpose of determining the benefits payable under
the Plan and shall not constitute a separate fund of assets.  The amount of the
Elective Deferred Compensation Matching Contribution Credit and Interest thereon
shall be credited to each of these Accounts.  The Employer shall be under no
obligation to maintain specific assets for the purpose of providing the benefits
under this Plan.  The maintenance of the bookkeeping accounts provided in this

                                       6
<PAGE>
 
section shall not alter Employer's obligation under the Plan, which is an
unfunded and unsecured promise of Employer to pay money in the future.

     4.2  ELECTIVE DEFERRED COMPENSATION.  The amount of Compensation that a
Participant elects to defer shall be deferred from each payment of compensation
and credited to the Participant's Account as the non-deferred portion of the
compensation becomes or would have become payable.  Any withholding of taxes or
other amounts with respect to deferred Compensation which is required by state,
federal or local law shall be calculated separately for Salary and Bonus
Deferral Commitments.  The amounts required to be withheld shall be first
withheld from the non-deferred portion of the salary or bonus which relates to
the Deferral Commitment and, if insufficient, shall then be drawn from the
corresponding Deferral Commitments.

     AMENDED 4.3    MATCHING CONTRIBUTIONS.  Employer shall credit a Matching
Contribution to the Participant's Account equal to 60% of the first 6% of
Compensation deferred by the Participant under this Plan and under the Qualified
401(k) Plan during a Deferral period, but not to exceed 3.6% of the
Participant's Compensation before such deferrals.  The Matching Contribution
credited to this Plan shall be reduced by the amount, if any, Employer has
contributed as a matching contribution for the Participant to the Qualified
401(k) Plan for the Deferral Period.  The Matching Contribution shall be
credited to the Account as of the same day corresponding matching contributions
to the Qualified 401(k) Plan are credited to accounts in that Plan.  A
Participant shall be eligible to receive a Matching Contribution under this Plan
with respect to those amounts which, if not deferred, would have been payable
after the Participant is eligible to participate in the Qualified 401(k) Plan.

     The Employer may credit additional discretionary Matching Contributions to
Participant's Accounts at such time and in such amounts as the Board shall
determine.  The amounts of the Matching Contributions shall be determined as of
the end of every calendar year and shall be credited to such Participant's
Account at that time.

     4.4  DETERMINATION OF ACCOUNTS.  Each Participant's Retirement Account and
Termination Account as of each Determination Date shall consist of the balance
of the Participant's Account as of the immediately preceding Determination Date
(including any Initial Account Balance), plus the Participant's Elective
Deferred Compensation credited, any Matching Contribution  Credit, and any
Interest earned, minus the amount of any distributions made since the
immediately preceding Determination Date.  Interest earned shall be calculated
as of each Determination Date based upon the average daily balance of the
account since the preceding Determination Date and shall be credited to the
Participant's Account at that time.

     4.5  VESTING OF ACCOUNTS.  A Participant shall be 100% vested at all times
in the amounts deferred, any Matching Contribution Credit and the appropriate
Interest credited thereon.

     4.6  STATEMENT OF ACCOUNTS.  The Committee shall submit to each
Participant, within one hundred twenty (120) days after the close of each
calendar year and at 

                                       7
<PAGE>
 
such other time as determined by the Committee, a statement setting forth the
balance to the credit of each Account maintained for a Participant.


                                   ARTICLE V

                                 PLAN BENEFITS

     5.1  RETIREMENT BENEFIT.  The Employer shall pay a Plan Benefit equal to
the Participant's Retirement Account to each Participant who:

          (a)  terminates employment by reason of Retirement or Total and
     Permanent Disability,

          (b)  terminates within two years of Change in Control for reason other
     than Death.

     5.2  TERMINATION BENEFIT.  The Employer shall pay a Plan Benefit equal to
the Participant's Termination Account to each employee Participant who
terminates employment for reasons other than those listed in paragraphs 5.1
above and 5.3 below.

     5.3  DEATH BENEFIT.  Upon the death of a Participant, the Employer shall
pay to the Participant's Beneficiary an amount determined as follows.

          (a) If the Participant dies after termination of employment or service
     with the Employer, the amount payable shall be equal to the remaining
     unpaid balance of the Participant's Account paid in the same manner being
     used prior to the Participant's death.

          (b) If the Participant dies prior to termination of employment with
     the Employer, the amount payable shall be greater of:

              (i)  the sum of Participant's Retirement Account balance; or

              (ii) an amount equal to the Participant's Average Annual Deferral
              Amount times ten (10).

     5.4  EARLY WITHDRAWAL OPTION.  Participants shall be permitted to elect to
withdraw amounts from their Accounts subject to the following restrictions:

          (a)  TIMING OF ELECTION TO WITHDRAW.  The election to man an early
     withdrawal must be made at the same time the Participant enters into a
     Participation Agreement for a Deferral Commitment.
 
          (b)  AMOUNT OF WITHDRAWAL. The amount which a Participant can elect to
     withdraw with respect of any Deferral Commitment, shall be one hundred
     percent (100%) of the amount of such Deferral Commitment without Interest.

                                       8
<PAGE>
 
          (c)  TIMING OF EARLY WITHDRAWALS.  The amount elected to be withdrawn
     shall be paid in a lump sum.  In no event shall the commencement of benefit
     payments under this section be prior to the seventh (7/th/) anniversary of
     the Deferral Commitment for which the Participant elected the early
     withdrawal option.

     Amounts paid to a Participant pursuant to this section shall be treated as
distributions from the Participant's account.

     5.5  HARDSHIP DISTRIBUTIONS.  Upon finding that a Participant has suffered
a Financial Hardship, the Committee may, in its sole discretion, make
distributions from the Participant's Account prior to the time specified for
payment of benefits under the Plan.  The amount of such distribution shall be
limited to the amount reasonably necessary to meet the Participant's
requirements during the Financial Hardship.

     AMENDED  5.6 FORM OF BENEFIT PAYMENT.  The Plan Benefits shall be paid in
the form elected by the Participant on his Deferral Commitment.  The most
recently filed election shall control the form of benefit payment with respect
to the Participant's entire Account.  If, upon termination, the Participant's
most recent election as to the form of benefit was made within one year of such
termination, then the prior election shall be used to determine the form of
payment.  The methods of payment from which a Participant may elect are limited
to the following:

          (a)  Lump sum payment.

          (b)  Equal monthly installments of the Account and Interest amortized
     over a period of 60, 120, 180, or 240 months. Interest on the unpaid
     balance shall be equal to the Retirement Rate or Termination Rate,
     whichever is applicable, and shall be credited monthly. Installments shall
     be redetermined each January 1, based on the appropriate crediting rate as
     of the last day of the preceding September, the remaining account balance,
     and the remaining number of payment periods.

          (c)  Any other method which is actuarially equivalent to the
     Participant's Account balance and is approved by the Committee, in its sole
     discretion.

     5.7  PENSION MAKE-UP BENEFIT.  The Employer shall provide to each
Participant a separate benefit equal to the amount by which the Participant's
benefit under the Qualified Pension Plan has been reduced as a result of
deferrals under this Plan.  The amount of this benefit shall be the difference
between:

          (a)  The Normal Benefit which would have been available under the
     Qualified Pension Plan if no deferrals had been made under this Plan; and

          (b)  the Normal Benefit actually available under the Qualified Pension
     Plan.

                                       9
<PAGE>
 
     The benefit shall be paid in the time and manner as applicable to the
Participant under the Qualified Pension Plan.

     5.8  WITHHOLDING; PAYROLL TAXES.  The employer shall withhold from payments
made hereunder any taxes required to be withheld from payments made hereunder
any taxes required to be withheld from a Participant's wages for the federal or
any state or local government.

AMENDED  5.9   COMMENCEMENT OF PAYMENTS.  Benefit payments shall commence on the
first day of the first month which begins not less than sixty (60) days after
Retirement, Termination, Total and Permanent Disability or death.  All
subsequent payments shall be made as of the first day of the month.

     5.10 BENEFITS PAYABLE TO MINORS OR INCOMPETENTS.  Every person receiving or
claiming benefits under the Plan shall be conclusively presumed to be mentally
competent and of age until the date on which the Commitment receives a written
notice, in a form and manner acceptable to the Committee, that such person is
incompetent or a minor, for whom a guardian  or other person legally vested with
the care of his person or estate has been appointed; provided, however, that if
the Committee shall find that any person to whom a benefit is payable under the
Plan is unable to care for his affairs because of incompetency, or is a minor,
any payment due (unless a prior claim therefor shall have been made by a duly
appointed legal representative) may be paid to the spouse, a child, a parent or
a brother or sister, or to any person or institution deemed by the Committee to
have incurred expenses for the person otherwise entitled to payment.  To the
extent permitted by law, any such payment so made shall be a complete discharge
or liability therefor under the Plan.

     In the event a guardian of the estate of any person receiving or claiming
benefits under the Plan shall be appointed by a court of competent jurisdiction,
benefit payments may be made to such guardian, provided that proper proof of
appointment and continuing qualification is furnished in a form and manner
acceptable to the Committee.  To the extent permitted by law, any such payment
so made shall be a complete discharge of any liability therefor under the Plan.
 
                                   ARTICLE VI

                            BENEFICIARY DESIGNATION

     6.1  BENEFICIARY DESIGNATION.  Each Participant shall have the right, at
any time, to designate any person or persons as his Beneficiary or Beneficiaries
(both principal as well as contingent) to whom benefits under this Plan shall be
paid in the event of Participant's death prior to complete distribution of the
benefits due under the Plan.  Each beneficiary designation shall be in a written
form prescribed by the Committee and will be effective only when filed with the
Committee during the Participant's lifetime.  To be effective, a designation of
a beneficiary other than the Participant's spouse shall require the written
consent of the spouse on the beneficiary designation form filed with the
Committee.

                                       10
<PAGE>
 
     6.2  AMENDMENTS.  Any Beneficiary designation may be changed by a
Participant without the consent of any designated Beneficiary by the filing of a
new Beneficiary Designation with the Committee.  The filing of a new Beneficiary
Designation form will cancel all Beneficiary Designations previously file.

     6.3  NO BENEFICIARY DESIGNATION.  If any Participant fails to designate a
Beneficiary in the manner  provided above, or if the Beneficiary designated by a
decreased Participant dies before the Participant or before complete
distribution of the Participant's benefits, the Participant's Designated
Beneficiary shall be deemed to be the person in the first of the following
classes in which there is a survivor:

          (a)  the surviving spouse;

          (b)  the Participant's children, except that if any of the children
     predeceases the Participant but leave issue surviving, then such issue
     shall take by right of representation the share the parent would have taken
     if living;

          (c)  the Participant's estate.

     6.4  EFFECT OF PAYMENT.  Payment to the deemed Beneficiary shall completely
discharge Employer's obligations under this Plan.

                                  ARTICLE VII

                                 ADMINISTRATION

     7.1  COMMITTEE; DUTIES.  This Plan shall be administered by the
Compensation Committee of the Board of Directors.  The Committee may delegate
some or all of its responsibilities for the day-to-day operation of the Plan to
an Administrative Committee.  Members of the Committee may be Participants under
this Plan.  The Committee shall have responsibility for the general
administration of the Plan and for carrying out its intent and provisions.  The
Committee shall have such powers and duties as may be necessary to discharge its
responsibilities.  These powers shall include, but not be limited to:

          (a) Interpretation of the Plan provisions;

          (b) Determination of amounts due to any Participant, the rights of any
     Participant or Beneficiary under this Plan, the right to require any
     necessary information from any Participants or determine the amounts
     credited to Participant's Accounts and Interest earned, and

          (c) Any other activities deemed necessary or helpful.

     7.2  AGENTS.  The Committee may, from time to time, employ other agents and
delegate to them such administrative duties as it sees fit, and may from time to
time consult with counsel who may be counsel to the Employer.

                                       11
<PAGE>
 
     7.3  BINDING EFFECT OF DECISIONS.  The decision or action of the Committee
with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and conclusive and binding upon
all persons having any Interest in the Plan.

     7.4  IMDEMNITY OF COMMITTEE. The Employer shall indemnify and hold harmless
          the member of the Committee against any and all claims, loss damage,
          expense or liability arising from any action or failure to act with
          respect to this Plan, except in the case of gross negligence or
          willful misconduct, to the extent the claims, loss, damage or
          liability is not otherwise reimbursed by insurance.

                                  ARTICLE VIII

                                CLAIMS PROCEDURE

     8.1  CLAIM.  Any person claiming a benefit, requesting an interpretation or
ruling under the Plan, or requesting information under the Plan shall present
the request in writing to the Committee, which shall respond in wiring as soon
as practicable.

     8.2  DENIAL OF CLAIM.  If the claim or request is denied, the written
notice of denial shall state:

          (a)  The reasons for denial, with specific reference to the Plan
     provisions on which the denial is base,

          (b)  A description of any additional material or information required
     and an explanation of why it is necessary

          (c)  An explanation of the Plan's claim review procedure.

     8.3  REVIEW OF CLAIM.  Any person whose claim or request is denied or who
has not received a response within thirty (30) days may request review by notice
given in writing to the Committee.  The claim or request shall be reviewed by
the Committee who may, but shall not be required to, grant the claimant a
hearing.  On review, the claimant may have representation, examine pertinent
documents, and submit issues and comments in writing.
 
     8.4  FINAL DECISION.  The decision on review shall normally be made within
sixty (60) days.  If an extension of time is required for a hearing or other
special circumstances, the claimant shall be notified and the time limit shall
be one hundred twenty (120) days.  The decision shall be in writing and shall
state the reasons and the relevant plan provisions.  All decisions on review
shall be final and bind all parties concerned.

                                       12
<PAGE>
 
                                   ARTICLE IX

                       AMENDMENT AND TERMINATION OF PLAN

     9.1  AMENDMENT.  The Board may at any time amend the Plan in whole or in
part, provided, however, that no amendment shall be effective to decrease or
restrict the amount accrued to the date of Amendment in any Account maintained
under the Plan.  Any change in the definition of "Interest" as defined herein
shall be made only upon the following terms and conditions:
 
          (a)  Any change in the Interest rate shall not become effective until
     the first day of the calendar year which follows the adoption of the
     amendment and providing at least thirty (30) days' written notice of the
     amendment to the Participant.
 
     9.2  EMPLOYER'S RIGHT TO TERMINATE.  The Board may at any time partially or
completely terminate the Plan if, in its judgment, the tax, accounting, or other
effects of the continuance of the Plan, or potential  payments thereunder would
not be in the best interests of the Employer.
 
          (a)  PARTIAL TERMINATION. The Board may partially terminate the Plan
     by instructing the Committee not to accept any additional Deferral
     Commitments. In the event of such a Partial Termination, the Plan shall
     continue to operate and be effective with regard to Deferral Commitments
     entered into prior to the effective date of such Partial Termination.
 
          (b)  COMPLETE TERMINATION. The Board may completely terminate the Plan
     by instructing the Committee not to accept any additional Deferral
     Commitments, and terminate all ongoing Deferral Commitments. In the event
     of such a Complete Termination, the Plan shall cease to operate and the
     Committee shall pay out to each Participant the appropriate Account as if
     that Participant had terminated service as of the effective date of such
     Complete Termination in equal monthly installments over the period listed
     below based on the Account balance:

Appropriate Account Balance                 Payout Period
---------------------------               ----------------
Less than $10,000                             2 Years
$10,000 but less than $50,000                 5 Years
More than $50,000                            10 Years

     Interest earned on the unpaid balance in each Participant's Account shall
be the applicable Interest rate on the Determination Date immediately preceding
the effective date of such Complete Termination.

                                       13
<PAGE>
 
                                   ARTICLE X

                                 MISCELLANEOUS

     10.1 UNFUNDED PLAN.  This Plan is intended to be an unfunded plan
maintained primarily to provide deferred Compensation benefits for a select
group of management employees or highly compensated employees.  This Plan is not
intended to create an investment contract, but to provide tax planning
opportunities and retirement benefits to eligible individuals who have elected
to participate in the Plan.  Eligible individuals are select members of
management who, by virtue of their position with the Employer, are uniquely
informed as to the Employer's operations and have the ability to materially
affect the Employer's profitability and operations.

     10.2 UNSECURED GENERAL CREDITOR.  Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights, Interest
or claims in any property or assets of Employer, nor shall they be beneficiaries
of, or have any rights, claims or interests in any life insurance policies,
annuity contracts or the proceeds therefrom owned or which may be acquired by
Employer ("Policies").  Except as provided under Section 10.3, such Policies or
other assets of Employer shall not be held under any trust for the benefit of
Participants, their Beneficiaries, heirs, successors or assigns are held in any
way as collateral security for the fulfilling of the obligations of Employer
under this Plan.  Any and all of Employer's assets and Policies shall be, and
remain, the general, unpledged, unrestricted assets of Employer.  Employer's
obligation under the Plan shall be that of an unfunded and unsecured promise of
Employer to pay money in the future.

     10.3 TRUST FUND.  The Employer shall be responsible for the payment of all
benefits provided under the Plan.  At its discretion, the Employer may establish
one or more trusts, with such trustees as the Board may approve, for the purpose
of providing for the payment of such benefits.  Such trust or trusts may be
irrevocable, but the assets thereof shall be subject to the claims of the
Employer's creditors.  To the extent any benefits provided under the Plan are
actually paid from any such trust, the Employer shall have no further obligation
with respect thereto, but to the extent not so paid, such benefits shall remain
the obligation o, and shall be paid by, the Employer.

     10.4 NONASSIGNABILITY.  Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate or convey in advance of actual
receipt the amounts, if any, payable hereunder, or any part thereof, which are,
and all rights to which are, expressly declared to be unassignable and non-
transferable.  No part of the amounts payable shall, prior to actual payment, be
subject to seizure of sequestration for the payment of any debts, judgments,
alimony or separate maintenance owed by a Participant or any other person, nor
be transferable by operation of law in the event of a Participant's or any other
person's bankruptcy or insolvency, except to the extent provided under
applicable law regarding community property rights.

                                       14
<PAGE>
 
     10.5   NOT A CONTRACT OF EMPLOYMENT.  The terms and conditions of this Plan
shall not be deemed to constitute a contract of employment between the Employer
and the Participant, and the Participant (or his Beneficiary) shall have no
rights against the Employer except as may otherwise be specifically provided
herein.  Moreover, nothing in this Plan shall be deemed to give a Participant
the right to be retained in the service of the Employer to discipline or
discharge him at any time.

     10.6   PROTECTIVE PROVISIONS. A Participant will cooperate with the
Employer by furnishing any and all information requested by the Employer, in
order to facilitate the payment of benefits hereunder, and by taking such
physical examinations as the Employer may deem necessary and taking such other
action as may be requested by the Employer. Notwithstanding the other provisions
of this Plan, no death benefits in excess of the Retirement Account balance
shall be paid if death occurs as a result of suicide.

     10.7   TERMS.  Whenever any words are used herein in the masculine, they
shall be construed as though they were used in the feminine in all cases where
they would so apply; and wherever any words are used herein in the singular or
in the plural, they shall be construed as though they were used in the plural or
the singular, as the case may be, in all cases where they would so apply.

     10.8   CAPTIONS.  The captions of the articles, sections and paragraphs of
thin Plan are for convenience only and shall not control or affect the meaning
of construction of any of its provisions.

     10.9   GOVERNING LAW.  The provisions of this Plan shall be construed and
interpreted according to the law of the State of Arizona.

     10.10  VALIDITY.  In case any provision of this Plan shall be held illegal
or invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal and invalid provision had never been inserted herein.

     10.11  NOTICE.  Any notice of filing required or permitted to be given to
the Committee under the Plan shall be sufficient if in writing and hand
delivered, or sent by registered or certified mail, to any member of the
Committee, or Secretary of the Employer.  Such notice shall be deemed given as
of the date of delivery or, if delivery is made by mail, as of the date shown on
the postmark on the receipt for registration or certification.

     10.12  SUCCESSORS.  The provisions of this Plan shall bind and inure to the
benefit of the Employer and its successors and assigns.  The term successors as
used herein shall include any corporate or other business entity which shall,
whether by merger, consolidation, purchase or otherwise acquire all or
substantially all of the business and assets of the Employer, and successors of
any such corporation or other business entity.

                                       15
<PAGE>
 
     IN WITNESS WHEREOF, and pursuant to resolution of the Board of Directors of
Valley National Corporation such corporation has caused this instrument to be
executed by its duly authorized officers effective as of October 1, 1988.
 
                                    VALLEY NATIONAL CORPORATION
 
                                    By:  /s/ Richard J. Lehmann
                                       -------------------------
                                         President
 
 
                                    By:  /s/ William J. Ramsey
                                       ------------------------
                                         Secretary
 
 
                                    Dated:  December 1, 1988
                                          ------------------
 
 

                                       16
<PAGE>
 
                                  AMENDMENT 1
                          VALLEY NATIONAL CORPORATION
                      EXECUTIVE DEFERRED COMPENSATION PLAN

THIS AMENDMENT to the Valley National Corporation Executive Deferred
Compensation Plan (the "Plan") is made and entered into this 20/th/ day of
December, 1989, by Valley National Corporation, an Arizona Corporation, (the
"Company");

WHEREAS, the Company has established the Plan as effective October 1, 1988; and

WHEREAS, the Company desires to make certain changes; and

WHEREAS, pursuant to Section 9.1 of the Plan, the right to amend the Plan is
reserved to the Company; and

WHEREAS, the Company has approved the amendments to the Plan as provided below;

NOW, THEREFORE, the Plan is hereby amended as follows:

FIRST: Section 2.6 shall be amended to read as follows:
 
   2.5    COMMITTEE.  "Committee" means the Compensation Committee of the Board
of Directors appointed by the Board to administer the Plan pursuant to Article
VII.  No member of the committee may participate in any decision regarding his
or her own benefit.

SECOND:   Section 2.11 Early Retirement Date and Section 2.15 Normal Retirement
Date shall be deleted in their entirety.

THIRD:    Section 2.21 shall be amended to read as follows:

          2.21 RETIREMENT: "Retirement"  means the severance of employment with
the Employer at  the Participant's Early, Advanced, Normal or Late Retirement
Date as applicable.  Participants who, after retirement, become, or continue to
be members of the Board shall not be considered to be retired, for purposes of
this plan, until the severance of service as an active Board member and as a
Director Emeritus.

For purposes of this provision:

       (a)  EARLY RETIREMENT DATE. "Early Retirement Date" means the date on
which the Participant attains the status of early retirement under the personnel
procedures of the Employer.

       (b)  ADVANCED RETIREMENT DATE. "Advanced Retirement Date" means the date
on which the Participant actually terminates employment following the first day
of the month coinciding with or next following a Participant's attainment of age
sixty-two (62), but prior to his Normal Retirement Date.

<PAGE>
 
       (c)  NORMAL RETIREMENT DATE. "Normal Retirement Date" means the date on
which the Participant actually terminates employment following the first day of
the month coinciding with or next following a Participant's attainment of age
sixty-five (65).

       (d)  LATE RETIREMENT DATE. "Late Retirement Date" means the date on which
the Participant actually terminates employment following the first day of any
month following the Participant's Normal Retirement Date.

FOURTH:   Section 3.2(a) shall be amended to read as follows:

          (a) SALARY DEFERRAL COMMITMENT.  A Participant may elect to defer any
     portion of his base salary for the year following the calendar year in
     which the Participation Agreement is submitted.  The amount to be deferred
     shall be started as a flat dollar amount or as a percentage of base salary
     but must not be less than two thousand dollars ($2,000) during the Deferral
     Period.  The percentage of salary to be deferred may be stated in one-half
     percent (1/2%) increments.
 
FIFTH:    Section 5.6 shall be amended by adding subsection (d) to read as
follows

          (d) Notwithstanding the form of payment elected by the Participant, in
     the event the applicable account balance is less than ten thousand dollars
     ($10,000) at the time payment is to commence, the form of benefit payment
     shall be a lump sum payment.
     
SIXTH:    Section 5.9 shall be amended in its entirety to read as follows:

     5.9  COMMENCEMENT OF PAYMENTS.  Benefit payments shall commence no later
     than sixty days following Retirement, Termination, Total and Permanent
     Disability or death.  All subsequent payments shall be made as of the first
     day of the month.
 
SEVENTH:  Except as provided herein, all other Plan provisions shall remain in
full force and effect.

EIGHTH:   The Amendment to the Plan provided for herein shall be effective as of
the 20/th/ day of December.

IN WITNESS WHEREOF, the Company has caused this instrument to be executed as of
the day and year first above written.

                              VALLEY NATIONAL CORPORATION
 
                              By:  /s/ Richard J. Lehmann
                                 -------------------------
 
                              Its:  Chairman of the Board and Chief Executive
                                    Officer

<PAGE>
 
                                AMENDMENT NO. 2

                         TO VALLEY NATIONAL CORPORATION

                      EXECUTIVE DEFERRED COMPENSATION PLAN


THIS AMENDMENT to the Valley National Corporation 401(+)(TM) Executive Deferred
Compensation Plan (the "Plan") is made and entered into this 19/th/ day of
November, 1991 by Valley National Corporation, and Arizona Corporation, (the
"Company");

WHEREAS the Company established the Plan as effective October 1, 1986.

WHEREAS the Company previously amended the Plan by execution of an amendment No.
1; and

WHEREAS the Company desires to make an additional change; and

WHEREAS pursuant to Section 9.1 of the Plan, the right to amend the Plan is
reserved to the Company; and

WHEREAS the Company has approved the amendments to the Plan as provided below;

NOW THEREFORE the Plan is hereby amended as follows:

FIRST:    Section 5.1 is hereby amended in its entirety to provide as follows:

          5.1 Retirement Benefit.  The Employer shall pay a Plan Benefit equal
to the Participant's Retirement Account to each participant who:

               (a)  terminates employment by reason of Retirement or Total and
          Permanent Disability,
          
               (b)  terminates employment within two years of Change in Control
          for a reason other than Death.

          The Employer shall also pay a Plan Benefit equal to the Participant's
     Retirement Account in the event that the "regulatory capital ratio", as
     such a term is defined by the Office of the Comptroller of the Currency, of
     The Valley National Bank of Arizona becomes less than three Percent (3%).
 
SECOND:   Section 5.9 is hereby amended in its entirety to provide as follows:

     5.9  Commencement of Payments.  Benefit payments shall commence on the
     first day of the first month which begins not less than sixty (60) days
     after Retirement, Termination, Total and Permanent Disability or death.  In
     the event that payment is due 

<PAGE>
 
     under Section 5.1 on account of the change in regulatory capital described
     in Section 5.1, benefit payments shall commence on the first day of the
     first month which begins not less than sixty (60) days after the later of
     (a) the effective date of such event of (b) the date of determination by
     the Committee of such event. All subsequent payments shall be made as of
     the first day of the month.
     
THIRD:    Except as provided herein, all other Plan Provisions shall remain in
full force and effect.

FOURTH:   The Amendment to the Plan Provided for here in shall be effective as
of the 1/st/ day of January, 1992.

IN WITNESS WHEREOF, the Company has caused this instrument to be executed as of
the day and year first above written.


                              VALLEY NATIONAL CORPORATION

                              BY:______________________________________

                              ITS:______________________________________

ATTEST:

BY:________________________________

ITS:________________________________

<PAGE>
 
                                   RESOLUTION

                                     401(+)(TM)

                          VALLEY NATIONAL CORPORATION

     RESOLVED that the Valley National Corporation (the corporation) hereby
adopts Amendment No. 2 to the Corporation's 401 (+)(TM) Executive Deferred
Compensation Plan, a copy of which is attached hereto as Amendment No. 2 and by
this reference is incorporated herein; and be it further

     RESOLVED, that the President or a Vice President and the Secretary of the
Corporation be, and the same hereby are, authorized, empowered, and directed to
execute such amendment with such changes, modifications, additions or deletions
as they may approve, their execution thereof to evidence their approval; be it
further

     RESOLVED, that the acts and deeds of the officers of the Corporation
necessary to carry out the intent and purposes of these resolutions be, and the
same hereby are ratified, confirmed and adopted as the acts and deeds of this
corporation.


               _______________________________________________________

PURPOSE:  To amend the plan to pay a Plan Benefit equal to the Participant's
Retirement Account in the event that the "regulatory capital ratio" of The
Valley National Bank of Arizona becomes less than three percent (3%).

                                       1