Document:

Form of Zions Bancorporation Value Sharing Plan, Subsidiary Banks

 
Exhibit 10.3

 
[FORM OF PLAN] 
 
ZIONS BANCORPORATION 
2003 - 2005 Value Sharing Plan 
Subsidiary Banks 
 
The Company
administers a senior management long term executive incentive compensation plan (2003-2005 Value Sharing Plan) for each of its subsidiary banks; namely, California Bank & Trust, The Commerce Bank of Washington, National Bank of Arizona, Nevada
State Bank, Vectra Bank Colorado, and Zions First National Bank in the form attached hereto. 

 
[FORM OF
PLAN] 
 
[Name of Subsidiary Bank]

2003 - 2005 Value Sharing Plan 
 
Objective: The purpose of the 2003 – 2005 [Name of Subsidiary Bank] Value Sharing Plan (the “Plan”) is
to provide a three-year incentive plan for selected members of the senior management group and other key managers of [Name of Subsidiary Bank] (the “Bank”) and its subsidiaries. It is designed to create long-term shareholder value by
focusing the Participant’s attention on improving the Bank’s financial results over a three-year period. 
 
Eligibility: Selected key members of the senior management group and other key managers in the Bank its subsidiaries as determined by the Zions
Bancorporation (the “Company”) Board of Directors (the “Board”) or its Executive Compensation Committee (the “Committee”). 
 
Effective Date: January 1, 2003, through December 31, 2005 (the “Award Period”). 
 
Frequency of Awards: Subject to the deferral provisions enumerated in
the Plan, the incentives, if any, earned under this Plan will be paid within ninety days after the end of the Award Period. 
 
Plan Administrator: The Plan is to be governed and interpreted by the Committee. 
 
How the Plan Works: 
 
A) Establishment of Award Fund 
 

	1)	 	An Award Fund will be established, the size of which will be based upon the cumulative pre-tax earnings of the Bank during the Award Period, and the achievement of
return on equity targets, as more fully outlined in the Appendix, and in “Calculation Methodology,” below. 

 
B) Participation Units 
 

	1)	 	Each Participant designated by the Committee shall be awarded a specific number of Participation Units (“Units”), representing a pro-rata claim, in
proportion to the total number of designated Units, on any Award Fund generated under this Plan during the Award Period. 

 
C) Calculation Methodology 
 

	1)	 	In order for any Award Fund to be established under this Plan, a minimum level of cumulative pre-tax earnings (“Qualifying Earnings”) and marginal return
on equity (“Marginal ROE”) must be achieved during the Award Period, as indicated in the Appendix. 

 

	2)	 	Qualifying Earnings is defined as the total of the following items during the Award Period: 

 

	 	a)	 	cumulative income before taxes; 

 

	 	b)	 	plus, a pre-tax equivalent adjustment for income from bank-qualified tax-exempt investments, or from qualifying tax credits, as determined by the Zions
Bancorporation Tax Department; 

 

	 	c)	 	plus, pre-tax equivalent income arising from any allocation of interest rate swap income which is not reflected on the Bank’s Call Report, but which is included
in the Bank’s operating segment income on the Company’s Form 10-K for any year during the Award Period; 

 

	 	[Note:	 	item d as follows is not included in the Zions First National Bank (Core Bank plan)] 

 

	 	d)	 	minus, any gain or loss from investment in Wasatch Venture Funds; 

 

	 	e)	 	minus (or plus), any adjustment required to bring the Bank’s Allowance for Loan and Lease Losses (“ALLL”) to a level which is not less than the
mid-point of the acceptable range as established by the Company’s Credit Examination Department. (In the event that the Credit Examination Department determines that the ALLL should be at a level greater than the midpoint of the low-high range,
then this adjustment shall be the amount which is required to bring the actual ALLL to the required level); 

 

	 	f)	 	minus, the amount by which the Bank’s ALLL at the inception of the Plan exceeds the mid-point of the low-high range established by the Credit Examination
Department at that point in time (as indicated in the Appendix). 

 

	 	g)	 	plus (or minus), any adjustment deemed necessary by the Committee to normalize Qualifying Earnings as a result of changes in internal cost or income allocations,
relative to the Base Period of 2002 (“Base Period”), arising from a change in allocations procedures which produce a change in costs (or income) which cannot be offset by a corresponding change in cost or income within the Bank.

 

	 	3)	 	Marginal ROE is defined as: 

 

	 	a)	 	The cumulative GAAP net income after tax for the three-year Award Period, less, three times the adjusted net income after tax for the base period of 2002
(“Base Period”) as indicated in the Appendix; 

 

	 	    	 	Divided by, 

 

	 	    	 	The sum of the average shareholders’ equity in each of the three years of the Award Period, less, three times the average shareholders’ equity in
the Base Period. 

 

	 	b)	 	 An adjustment shall be made to neutralize the effect on Marginal ROE of any dividends or additions to capital which have the effect of 

	 	 
artificially altering the ratio of average shareholders’ equity to average assets during the Award Period from the ratio in effect
during the Base Period. 

 

	 	4)	 	Other Adjustments 

 

	 	a)	 	In the event the Bank engages in one or more acquisitions during the Award Period, the Committee may make such adjustments to Qualifying Earnings and/or Marginal ROE
as are required to neutralize, to the extent possible, the effects of any such acquisition on the Award Fund. Such adjustments shall be made at the Committee’s sole discretion, but shall generally be based upon the pro-forma financial
projections presented to the Board in justification of the acquisition. 

 

	 	b)	 	Any Award Fund established under this Plan must be fully accrued and reflected in Qualifying Earnings. 

 

	 	c)	 	Unusual or “one-time” gains or losses may be subtracted from or added to Qualifying Earnings at the sole discretion of the Committee.

 

	D)	 	Other Administrative Provisions 

 

	 	(1)	 	This is a discretionary Plan governed and interpreted by the Committee, whose decisions shall be final. The intent of the Plan is to fairly reward Participants for
increasing shareholder value. If any adjustments need to be made to allow this Plan to accomplish its purpose, the Committee in its sole discretion can make those adjustments. 

 

	 	(2)	 	The Board may, at its sole discretion, alter the terms of the Plan at any time during an Award Period. 

 

	 	(3)	 	Participants will not vest in any benefits available under the Plan until the conclusion of the Award Period. 

 

	 	(4)	 	Participants must be employed by the Company or one of its subsidiaries at the time payment is made. Nevertheless, upon death, permanent disability, or normal or
early retirement (unless upon early retirement the Participant becomes employed by an entity which competes with Zions Bancorporation or any of its subsidiaries), Participant (or his/her estate) shall be eligible to receive a pro-rata incentive
payment at the conclusion of the Award Period. This award will be based upon the Participant’s calculated award as approved by the Board or Committee for the performance achieved for the number of full calendar quarters the Participant was
engaged as an officer of the Company or its subsidiaries prior to death, disability or retirement. 

 
If a Participant elects early retirement and becomes employed by a competitor, no payment will be made. 
 

	 	(5)	 	 Each Participant will be required to defer for one year any incentive payment amount in excess of 100% of his/her base salary (except that, in 

the event the deferred amount is less than $10,000, the entire amount shall be immediately
payable within ninety days of the end of the Award Period). Payment of the deferred amount will be paid by March 15, 2007, if conditions established in paragraph D) 4 above are met. 
 

	 	(6)	 	The Company shall retain the right to withhold payment of incentives to Participants in the event of a significant deterioration in the Bank’s or the
Company’s financial condition, or if so required by regulatory authorities, or for any other reason considered valid by the Board in its sole discretion. 

 

	 	(7)	 	Designation as a Participant in the Plan does not create a contract of employment for any specified time, nor shall such act to alter or amend the Company’s
“at-will” policy of employment. 

 

	 	(8)	 	In the event a Participant transfers within Zions Bancorporation during the Award Period, he/she will be eligible to receive a pro-rata award from each participating
Zions entity based on the number of months in each entity and each entity’s financial performance. 

 

	 	(9)	 	Units that are forfeited after a Participant is no longer eligible to participate in the Plan will not be transferable without the express approval of the Committee.

 

	 	(10)	 	In the event of a change in control of the Company (as defined in the Company’s Change in Control Plan), the Plan will be terminated and payments shall be made
in accordance with the provisions of section 3 (b) of the Change in Control Plan. 

 

	 	(11)	 	This document is intended to provide a guideline for the creation and distribution of incentive compensation. Nothing herein creates a contractual obligation binding
on the Board, and no Participant shall have any legal rights with respect to an Award until such Award is distributed. 

 

	 	[Note:	 	Item 12 as follows is part of the Zions First National Bank (Core Bank) Plan only] 

 

	 	(12)	 	Zions First National Bank (Core Bank) shall be defined to mean Zions First National Bank and its subsidiaries, excluding: 

 

	 	(a)	 	Division D121 (ZFNB Investment Non Bank); 

 

	 	(i)	 	Except that, cost centers 213 (ZFNB Investment ZIS) and 532 (ZFNB Investment—Wasatch Venture) shall be included; 

 

	 	(b)	 	Cost center 324 (ZFNB Corporate Funds Transfer Pricing) 

 

	 	(c)	 	Cost center 1345 (ZISI Corporate Trading) 

 

	 	(d)	 	Company 107 (Digital Signature Trust Co.—Inactive) 

 

	 	(e)	 	Company 122 (Kelling Northcross) 

 

	 	(f)	 	Company 129 (Enterprise Vault) 

 

	 	(g)	 	Company 136 (Zions Investment Management, Inc.) 

 

	 	(h)	 	Company 139 (Wasatch Venture Capital) 

 

	 	(i)	 	Company 148 (ZFNB SBIC LLC) 

 

	 	(j)	 	Company 154 (DST Holding Inc) 

 

	 	(k)	 	Tax adjustments and minority interests pertaining to DST, Enterprise Vault and Wasatch I. 

 
CALIFORNIA
BANK & TRUST 
 
APPENDIX

 

	 	•	 	Qualifying Earnings shall equal the cumulative pre-tax income of California Bank & Trust for the period January 1, 2003 through December 31, 2005, (as adjusted
in accordance with sections C and D of the Plan) 

 

	 	•	 	The minimum total Qualifying Earnings of California Bank & Trust which must be achieved for payment of awards under this Plan is $648,897,000, which represents
5% annual compounded growth in adjusted pre-tax income over the course of the Award Period. (Adjusted Base Period pre-tax income is $196,034,000.) 

 

	 	•	 	An Award Fund shall be established, equal to 5.52% of the Qualifying Earnings in excess of $588,102,000. 

 

	 	•	 	The minimum Marginal ROE of California Bank & Trust that must be achieved for payment of awards under this Plan is 11.00%. 

 

	 	•	 	The Award Fund shall be increased by a multiplier, based upon the achievement of Marginal ROE during the Award Period as follows: 

 

	 If the Marginal ROE is:

	  	 Then the multiplier is:

	 11.00% or less
	  	 – 0 –

	
	 14.00%
	  	 1.00

	
	 17.00%
	  	 1.50

	
	 20.00%
	  	 2.00

	
	 21.50% or greater
	  	 2.25

 
The multiplier will be interpolated for Marginal ROE levels falling between these benchmarks. 
 

	 	•	 	The maximum Award Fund that may be created under this Plan is $33,292,000. 

 

	 	•	 	The value of each Unit shall be equal to the total amount in the Award Fund, divided by 7,800,000. 

	Example:	 	 

 
If a Participant in the California Bank & Trust 2003 – 2005 Value Sharing Plan is awarded 60,000 units, and the total Qualifying Earnings over the course of the three-year Award Period amount
to $783,000,000 and the Marginal ROE over the course of the Award Period is 17.5%, the amount of the incentive award would be: 
 
Unadjusted Award Fund: 
 
$783,000,000 
–588,102,000 
  194,898,000 
        X 5.52% 
$  10,758,370 
 
Multiplier: 
 
1.5 + (.175 – .17) X (2.0 – 1.5) = 1.5833 
                    (.20 – .17) 
 
Total Award Fund: 
 
$10,758,370 X 1.5833 = $17,033,727 
 
Individual Unit Value: 
 
$17,033,727 / 7,800,000 = $2.1838 
 
Total Value of Units: 
 
60,000 X $2.1838 = $131,028.00 

 
COMMERCE
BANK OF WASHINGTON 
APPENDIX 
 

	 	•	 	Qualifying Earnings shall equal the cumulative pre-tax income of Commerce Bank of Washington for the period January 1, 2003 through December 31, 2005, (as adjusted
in accordance with sections C and D of the Plan) 

 

	 	•	 	The minimum total Qualifying Earnings of Commerce Bank of Washington which must be achieved for payment of awards under this Plan is $50,377,000, which represents 5%
annual compounded growth in adjusted pre-tax income over the course of the Award Period. (Adjusted Base Period pre-tax income is $15,219,000.) 

 

	 	•	 	An Award Fund shall be established, equal to 4.80% of the Qualifying Earnings in excess of $45,657,000. 

 

	 	•	 	The minimum Marginal ROE of Commerce Bank of Washington that must be achieved for payment of awards under this Plan is 11.00%. 

 

	 	•	 	The Award Fund shall be increased by a multiplier, based upon the achievement of Marginal ROE during the Award Period as follows: 

 

	 If the Marginal ROE is:

	  	 Then the multiplier is:

	
	 11.00% or less
	  	 – 0 –

	
	 14.00%
	  	 1.00

	
	 17.00%
	  	 1.50

	
	 20.00%
	  	 2.00

	
	 21.50% or greater
	  	 2.25

 
The multiplier will be interpolated for Marginal ROE levels falling between these benchmarks. 
 

	 	•	 	The maximum Award Fund that may be created under this Plan is $2,246,000. 

 

	 	•	 	The value of each Unit shall be equal to the total amount in the Award Fund, divided by 530,000. 

	Example:	 	 

 
If a Participant in the Commerce Bank of Washington 2003 – 2005 Value Sharing Plan is awarded 60,000 units, and the total Qualifying Earnings over the course of the three-year Award Period amount
to $61,000,000 and the Marginal ROE over the course of the Award Period is 17.5%, the amount of the incentive award would be: 
 
Unadjusted Award Fund: 
 
$61,000,000 
–45,657,000 
  15,343,000 
        X 4.80% 
$    736,464 
 
Multiplier: 
 
1.5 + (.175–.17) X (2.0 – 1.5) = 1.5833 
                    (.20 –.17) 
 
Total Award Fund: 
 
$ 736,464 X 1.5833 = $1,166,043 
 
Individual Unit Value: 
 
$1,166,043 / 530,000 = $2.2001 
 
Total Value of Units: 
 
60,000 X $2.2001 = $132,006.00 

 
NATIONAL
BANK OF ARIZONA 
 
APPENDIX

 

	 	•	 	Qualifying Earnings shall equal the cumulative pre-tax income of National Bank of Arizona for the period January 1, 2003 through December 31, 2005, (as adjusted in
accordance with sections C and D of the Plan) 

 

	 	•	 	The minimum total Qualifying Earnings of National Bank of Arizona which must be achieved for payment of awards under this Plan is $194,199,000, which represents 5%
annual compounded growth in adjusted pre-tax income over the course of the Award Period. (Adjusted Base Period pre-tax income is $58,668,000.) 

 

	 	•	 	An Award Fund shall be established, equal to 6.04% of the Qualifying Earnings in excess of $176,004,000. 

 

	 	•	 	The minimum Marginal ROE of National Bank of Arizona that must be achieved for payment of awards under this Plan is 11.00%. 

 

	 	•	 	The Award Fund shall be increased by a multiplier, based upon the achievement of Marginal ROE during the Award Period as follows: 

 

	 If the Marginal ROE is:

	  	 Then the multiplier is:

	
	 11.00% or less
	  	 – 0 –

	
	 14.00%
	  	 1.00

	
	 17.00%
	  	 1.50

	
	 20.00%
	  	 2.00

	
	 21.50% or greater
	  	 2.25

 
The multiplier will be interpolated for Marginal ROE levels falling between these benchmarks. 
 

	 	•	 	The maximum Award Fund that may be created under this Plan is $10,907,000. 

 

	 	•	 	The value of each Unit shall be equal to the total amount in the Award Fund, divided by 2,560,000. 

 
Example: 
 
If a Participant in the
National Bank of Arizona 2003 – 2005 Value Sharing Plan is awarded 60,000 units, and the total Qualifying Earnings over the course of the three-year Award Period amount to $234,000,000 and the Marginal ROE over the course of the Award Period is
17.5%, the amount of the incentive award would be: 
 

	             Unadjusted Award Fund:

	
	             $    234,000,000

	              
–  176,004,000

	                     57,996,000

	                          X 6.04%

	                 $    3,502,958

	
	             Multiplier:

	
	             1.5 + (.175
– .17) X (2.0 – 1.5) = 1.5833

	                                     (.20 
 –.17)

	
	             Total
Award Fund:

	
	             $ 3,502,958 X
1.5833 = $5,546,233

	
	             Individual Unit Value:

	
	             $5,546,233 /
2,560,000 = $2.1665

	
	             Total
Value of Units:

	
	             60,000 X
$2.1665 = $129,990.00

 
NEVADA STATE
BANK 
 
APPENDIX 
 

	 	•	 	Qualifying Earnings shall equal the cumulative pre-tax income of Nevada State Bank for the period January 1, 2003 through December 31, 2005, (as adjusted in
accordance with sections C and D of the Plan) 

 

	 	•	 	The minimum total Qualifying Earnings of Nevada State Bank which must be achieved for payment of awards under this Plan is $198,663,000, which represents 5% annual
compounded growth in adjusted pre-tax income over the course of the Award Period. (Adjusted Base Period pre-tax income is $60,083,000.) 

 

	 	•	 	An Award Fund shall be established, equal to 4.17% of the Qualifying Earnings in excess of $180,249,000. 

 

	 	•	 	The minimum Marginal ROE of Nevada State Bank that must be achieved for payment of awards under this Plan is 11.00%. 

 

	 	•	 	The Award Fund shall be increased by a multiplier, based upon the achievement of Marginal ROE during the Award Period as follows: 

 

	 If the Marginal ROE is:

	  	 Then the multiplier is:

	
	 11.00% or less
	  	 –0–

	
	 14.00%
	  	 1.00

	
	 17.00%
	  	 1.50

	
	 20.00%
	  	 2.00

	
	 21.50% or greater
	  	 2.25

 
The multiplier will be interpolated for Marginal ROE levels falling between these benchmarks. 
 

	 	•	 	The maximum Award Fund that may be created under this Plan is $7,616,000. 

 

	 	•	 	The value of each Unit shall be equal to the total amount in the Award Fund, divided by 1,800,000. 

 
Example: 
 
If a Participant in the Nevada
State Bank 2003 – 2005 Value Sharing Plan is awarded 60,000 units, and the total Qualifying Earnings over the course of the three-year Award Period amount to $240,000,000 and the Marginal ROE over the course of the Award Period is 17.5%, the
amount of the incentive award would be: 
 

	             Unadjusted Award Fund:

	
	             $    240,000,000

	             –  180,249,000

	                     59,751,000

	                         X 4.17%

	              $      2,491,617

	
	             Multiplier:

	
	             1.5 + (.175
– .17) X (2.0 – 1.5) = 1.5833

	                                   (.20 –
..17)

	
	             Total
Award Fund:

	
	             $ 2,491,617 X
1.5833 = $3,944,977

	
	             Individual Unit Value:

	
	             $3,944,977 /
1,800,000 = $2.1917

	
	             Total
Value of Units:

	
	             60,000 X
$2.1917 = $131,502.00

 
VECTRA BANK
COLORADO 
 
APPENDIX

 

	 	•	 	Qualifying Earnings shall equal the cumulative pre-tax income of Vectra Bank Colorado for the period January 1, 2003 through December 31, 2005, (as adjusted in
accordance with sections C and D of the Plan) 

 

	 	•	 	The minimum total Qualifying Earnings of Vectra Bank Colorado which must be achieved for payment of awards under this Plan is $101,975,000, which represents 5%
annual compounded growth in adjusted pre-tax income over the course of the Award Period. (Adjusted Base Period pre-tax income is $30,807,000.) 

 

	 	•	 	An Award Fund shall be established, equal to 7.58% of the Qualifying Earnings in excess of $92,421,000. 

 

	 	•	 	The minimum Marginal ROE of Vectra Bank Colorado that must be achieved for payment of awards under this Plan is 11.00%. 

 

	 	•	 	The Award Fund shall be increased by a multiplier, based upon the achievement of Marginal ROE during the Award Period as follows: 

 

	 If the Marginal ROE is:

	    	 Then the multiplier is:

	
	 11.00% or less
	    	 -0-

	
	 14.00%
	    	 1.00

	
	 17.00%
	    	 1.50

	
	 20.00%
	    	 2.00

	
	 21.50% or greater
	    	 2.25

 
The multiplier will be interpolated for Marginal ROE levels falling between these benchmarks. 
 

	 	•	 	The maximum Award Fund that may be created under this Plan is $7,185,000. 

 

	 	•	 	The value of each Unit shall be equal to the total amount in the Award Fund, divided by 1,690,000. 

 
Example: 
 
If a Participant in the Vectra
Bank Colorado 2003 – 2005 Value Sharing Plan is awarded 60,000 units, and the total Qualifying Earnings over the course of the three-year Award Period amount to $123,000,000 and the Marginal ROE over the course of the Award Period is 17.5%, the
amount of the incentive award would be: 
 

	             Unadjusted Award Fund:

	
	             $  123,000,000

	             –  92,421,000

	                   30,579,000

	                       X 7.58%

	             $     2,317,888

	
	             Multiplier:

	
	             1.5 + (.175
– .17) X (2.0 – 1.5) = 1.5833

	                                   (.20 –
..17)

	
	             Total
Award Fund:

	
	             $ 2,317,888 X
1.5833 = $3,669,912

	
	             Individual Unit Value:

	
	             $3,669,912 /
1,690,000 = $2.1715

	
	             Total
Value of Units:

	
	             60,000 X
$2.1715 = $130,290.00

 
ZIONS FIRST
NATIONAL BANK (CORE BANK) 
 
APPENDIX

 

	 	•	 	Qualifying Earnings shall equal the cumulative pre-tax income of Zions First National Bank (Core Bank) for the period January 1, 2003 through December 31, 2005, (as
adjusted in accordance with sections C and D of the Plan) 

 

	 	•	 	The minimum total Qualifying Earnings of Zions First National Bank (Core Bank) which must be achieved for payment of awards under this Plan is $626,702,000, which
represents 5% annual compounded growth in adjusted pre-tax income over the course of the Award Period. (Adjusted Base Period pre-tax income is $189,329,000.) 

 

	 	•	 	An Award Fund shall be established, equal to 5.28% of the Qualifying Earnings in excess of $567,987,000. 

 

	 	•	 	The minimum Marginal ROE of Zions First National Bank (Core Bank) that must be achieved for payment of awards under this Plan is 11.00%. 

 

	 	•	 	The Award Fund shall be increased by a multiplier, based upon the achievement of Marginal ROE during the Award Period as follows: 

 

	 If the Marginal ROE is:

	  	 Then the multiplier is:

	
	 11.00% or less
	  	 –0–

	
	 14.00%
	  	 1.00

	
	 17.00%
	  	 1.50

	
	 20.00%
	  	 2.00

	
	 21.50% or greater
	  	 2.25

 
The multiplier will be interpolated for Marginal ROE levels falling between these benchmarks. 
 

	 	•	 	The maximum Award Fund that may be created under this Plan is $30,785,000. 

 

	 	•	 	The value of each Unit shall be equal to the total amount in the Award Fund, divided by 7,200,000 

 
Example: 
 
If a
Participant in the Zions First National Bank (Core Bank) 2003 – 2005 Value Sharing Plan is awarded 60,000 units, and the total Qualifying Earnings over the course of the three-year Award Period amount to $756,000,000 and the Marginal ROE over
the course of the Award Period is 17.5%, the amount of the incentive award would be: 
 
 

	             Unadjusted Award Fund:

	
	             $    756,000,000

	             –    567,987,000

	                   188,013,000

	                         X 5.28%

	                 $    9,927,086

	
	             Multiplier:

	
	             1.5 +
(.175–.17) X (2.0 – 1.5) = 1.5833

	                                  
 (.20–.17)

	
	             Total
Award Fund:

	
	             $ 9,927,086 X
1.5833 = $15,717,555

	
	             Individual Unit Value:

	
	             $15,671,100 /
7,200,000 = $2.1830

	
	             Total
Value of Units:

	
	             60,000 X
$2.1830 = $130,980.00Zions Bancorporation 1998 Non-Qualified Stock Option

Exhibit 10.4 
 
Zions Bancorporation 
 
a Utah corporation 
 
1998 Non-Qualified Stock Option and Incentive Plan 
(as amended April 25, 2003) 
 
ARTICLE I—GENERAL 
 
I.1. Purpose. 
 
The purposes of this Zions Bancorporation 1998 Non-Qualified Stock Option and Incentive Plan (the “Plan”) are to: (1)
substitute the Plan in place of the Company’s employee profit sharing plan; (2) closely associate the interests of certain key employees of Zions Bancorporation, a Utah corporation, and its affiliates (collectively referred to as the
“Company”) with the shareholders of the Company, by reinforcing the relationship between participants’ rewards and shareholder gains; (3) provide such key employees with an equity ownership in the Company commensurate with
Company performance, as reflected in increased shareholder value; (4) maintain competitive compensation levels; and (5) provide an incentive to certain key employees to remain with the Company and to put forth maximum efforts for the success of its
business. Executive officers and directors are not eligible to receive any grants under this Plan. 
 
I.2. Administration. 
 
(a) The Board of Directors of the Company, or the Employee Health, Benefits and Pension Committee of the Company (whether the full Board, or a committee, referred to herein as the
“Committee”), shall administer the Plan and shall approve any transaction under the Plan involving a grant, award or other acquisition from the Company. Once appointed, the Committee shall continue to serve until otherwise directed
by the Board. From time to time, the Board may increase or change the size of the Committee, and appoint new members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies, however caused, or
remove all members of the Committee. 
 
(b) The
Committee shall have the authority, without limitation, in its sole discretion, subject to and not inconsistent with the express provisions of the Plan, and from time to time, to: 
 
(i) Administer the Plan and to exercise all the powers and authorities either specifically
granted to it under the Plan or necessary or advisable in the administration of the Plan; 
 
(ii) Designate the employees or classes of employees or others eligible to participate in the Plan from among those
described in Section 1.3 below; 
 
(iii) Grant awards provided in the Plan in such form, amount and under such terms as the Committee shall determine; 
 
(iv) Determine the purchase price of shares of Common Stock covered by each Option (the “Option Price”);

 
(v) Determine the Fair Market
Value of Common Stock for purposes of Options; 

 
(vi) Determine the time or times at which Options shall be granted; 
 
(vii) Determine the terms and provisions of the Option agreements (none of which need be identical or uniform) evidencing
Options granted under the Plan and to impose such limitations, restrictions and conditions upon any such award as the Committee shall deem appropriate; and 
 
(viii) Interpret the Plan, adopt, amend and rescind rules and regulations relating to the Plan, and make all other
determinations and take all other action necessary or advisable for the implementation and administration of the Plan. 
 
The Committee may delegate to one or more of its members or to one or more agents such administrative duties as it may deem advisable, and
the Committee or any delegate may employ one or more persons to render advice with respect to any responsibility the Committee or such person may have under the Plan. 
 
(c) All decisions, determinations and interpretations of the Committee on all matters relating to the Plan
shall be in its sole discretion and shall be final, binding and conclusive on all Optionees and the Company. 
 
(d) One member of the Committee shall be elected by the Committee as chairman. The Committee shall hold its meetings at such times and
places as it shall deem advisable. All determinations of the Committee shall be made by a majority of its members either present in person or participating by conference telephone at a meeting or by written consent. The Committee may appoint a
secretary and make such rules and regulations for the conduct of its business as it shall deem advisable, and shall keep minutes of its meetings. 
 
(e) No member of the Board or Committee shall be liable for any action taken or decision or determination made in good faith with respect
to any Option award hereunder. 
 
(f) Unless such
holding period is waived by the Company, any employees of the Company who are subject to the short-swing profits provisions of Section 16 of the Securities Exchange Act of 1934 (the “34 Act”) and who acquire shares of Company stock
pursuant to this Plan, must hold such shares for a period of six months following the date of acquisition, provided that this condition shall be satisfied with respect to stock options or other derivative securities granted to such employees if at
least six months elapse from the date of grant of the Option to the date of disposition by such employee of the Option (other than upon exercise), or the shares of Common Stock underlying the Option. 
 
I.3. Eligibility for Participation 
 
Participants in the Plan shall be selected by the Committee,
and awards under the Plan, as described in Section 1.4 below, may be granted by the Committee, to employees of the Company who have been employed by the Company for at least one full year prior to the date of grant and work at least 20 hours per
week; provided, however, that executive officers and directors are not eligible to receive any grants under this Plan. For purposes of this Plan, an employee’s prior employment with an entity that has been acquired by the Company shall
be counted towards the one-year employment requirement set forth herein. 
 

 
I.4. Types of Awards Under
Plan. 
 
Awards under the Plan shall be in the
form of non-qualified stock options, the tax consequences of which are governed by the provisions of Section 83 of the Internal Revenue Code of 1986 (the “Code”), as described in Article II. 
 
I.5. Aggregate Limitation on Awards. 
 
(a) Except as may be adjusted pursuant to Section 4.10 below,
shares of stock which may be issued upon exercise of Options under the Plan shall be authorized and unissued or treasury shares of Common Stock of the Company (“Common Stock”). The number of shares of Common Stock the Company shall reserve
for issuance upon exercise of Options to be granted from time to time under the Plan, and the maximum number of shares of Common Stock which may be issued under the Plan, shall not exceed in the aggregate Three Million Six Hundred Thousand
(3,600,000) shares of Common Stock. In the absence of an effective registration statement under the Securities Act of 1933 (the “Act”), all Stock Options granted and shares of Common Stock subject to their exercise will be restricted as to
subsequent resale or transfer, pursuant to the provisions of Rule 144 promulgated under the Act. 
 
(b) For purposes of calculating the maximum number of shares of Common Stock which may be issued under the Plan: 
 
(i) All the shares issued (including the shares, if any, withheld for tax withholding
requirements) shall be counted when cash is used as full payment for shares issued upon exercise of an Option; and 
 
(ii) Only the net shares issued (including the shares, if any, withheld for tax withholding requirements) shall be counted
when shares of Common Stock are used as full or partial payment for shares issued upon exercise of an Option. 
 
(c) Shares tendered by a participant as payment for shares issued upon exercise of an Option shall be available for issuance under the
Plan. Any shares of Common Stock subject to an Option, which for any reason is canceled, terminated, unexercised or expires in whole or in part shall again be available for issuance under the Plan. 
 
I.6. Effective Date and Term of Plan. 
 
(a) The Plan shall become effective as of the 19th day of September 1998 (the “Effective Date”). 
 
(b) No awards shall be granted under the Plan after or on the 19th day of September 2008, which date is ten (10) years after the Effective Date (the “Plan Termination Date”); provided, however, that
the Plan and all awards made under the Plan prior to such Plan Termination Date shall remain in effect until such awards have been satisfied or terminated in accordance with the Plan and the terms of such awards. 
 

3 

 
ARTICLE
II—STOCK OPTIONS 
 
II.1. Award of Stock Options.

 
The Committee may from time to time, and
subject to the provisions of the Plan, and such other terms and conditions as the Committee may prescribe, grant to any participant in the Plan one or more options to purchase for cash or for Company shares the number of shares of Common Stock
allotted by the Committee (“Stock Options”). The date a Stock Option is granted shall mean the date selected by the Committee as of which the Committee allots a specific number of shares to a participant pursuant to the Plan.

 
II.2. Stock Option Agreements. 
 
The grant of a Stock Option shall be evidenced by a writing
which shall set forth, at a minimum, the name of the grantee, the date of the grant, the amount of options granted and the Option Price. Any such writing shall be in a form which the Committee shall determine appropriate under the circumstances.

 
II.3. Stock Option Price. 
 
The Option Price per share of Common Stock deliverable upon
the exercise of a Stock Option shall be at least 100% of the Fair Market Value of a share of Common Stock on the date the Stock Option is granted, unless the Committee shall determine, in its sole discretion, that there are circumstances which
reasonably justify the establishment of a lower Option Price. 
 
II.4. Term, Vesting and Exercise. 
 
Unless otherwise provided by the Committee or in the Stock Option Agreement pertaining to the Stock Options, each Stock Option shall be exercisable beginning one year after the date of its grant and ending not later than four years
after the date of grant thereof (the “Option Term”). No Stock Option shall be exercisable after the expiration of its Option Term. All Stock Options shall be subject to three-year vesting. One-third (1/3) shall vest on the first
anniversary of the grant; one- third (1/3) shall vest on the second anniversary of the grant; and the final one-third (1/3) shall vest on the third anniversary of the grant. 
 
II.5. Manner of Payment. 
 
The Committee shall establish a procedure governing the exercise of the Stock Options granted hereunder, which shall provide that, upon
such exercise in respect of any shares of Common Stock subject thereto, the Optionee shall pay to the Company, in full, the Option Price for such shares with cash or with Common Stock previously owned by Optionee. 
 
II.6. Death of Optionee. 
 
(a) Upon the death of the Optionee, any rights to the extent
exercisable on the date of death shall immediately vest and may be exercised by the Optionee’s estate, or by a person who acquires the right to exercise such Stock Option by bequest or inheritance or by reason of the death of the Optionee,
provided that such exercise occurs within both the remaining effective term of the Stock Option and one year after the Optionee’s death. 
 
(b) The provisions of this Section shall apply notwithstanding the fact that the Optionee’s employment may have terminated prior to
death, but only to the extent of any rights exercisable on the date of death. 
 

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II.7. Retirement,
Disability or Termination of Employment. 
 
Upon termination of the Optionee’s employment, whether voluntarily or involuntarily, by reason of retirement or permanent disability (as each is determined by the Committee), the Optionee may, within ninety (90) days from the
date of termination, exercise any Stock Options to the extent such options are exercisable during such ninety-day period. 
 
II.8. Termination for Cause. 
 
If an Optionee’s employment is terminated for cause, as determined in the sole discretion of the Committee, all Stock Options shall
immediately terminate and may not be exercised. 
 
ARTICLE III—INCENTIVE STOCK OPTIONS 
 
III.1. Award of Incentive Stock Options. 
 
There shall be no Incentive Stock Options awarded under this Plan. 
 
ARTICLE IV—MISCELLANEOUS 
 
IV.1. General Restriction. 
 
Each award under the Plan shall be subject to the requirement that, if at any time the Committee shall determine that (i) the listing, registration or qualification of the shares of Common Stock subject or related thereto upon any
securities exchange or under any state or Federal law, or (ii) the consent or approval of any government regulatory body, or (iii) an agreement by the grantee of an award with respect to the disposition of shares of Common Stock, is necessary or
desirable as a condition of, or in connection with, the granting of such award or the issue or purchase of shares of Common Stock thereunder, such award may not be exercised or consummated in whole or in part unless and until such listing,
registration, qualification, consent, approval or agreement shall have been effected or obtained free of any conditions not acceptable to the Committee. 
 
IV.2. Withholding Taxes. 
 
Whenever the Company proposes or is required to issue or transfer shares of Common Stock under the Plan, the Company shall, to the extent
permitted or required by law, have the right to require the Optionee, as a condition of exercise of its Options, to remit to the Company no later than the date of issuance or exercise, or make arrangements satisfactory to the Committee regarding
payment of, any amount sufficient to satisfy any Federal, state and/or local taxes of any kind, including, but not limited to, withholding tax requirements prior to the delivery of any certificate or certificates for such shares. If the participant
fails to pay the amount required by the Committee, the Company shall have the right to withhold such amount from other amounts payable by the Company to the participant, including but not limited to, salary, fees or benefits, subject to applicable
law. Alternatively, the Company may issue or transfer such shares of Common Stock net of the number of shares sufficient to satisfy any such taxes, including, but not limited to, withholding tax requirements. For withholding tax purposes, the shares
of Common Stock shall be valued on the date the withholding obligation is incurred. 
 

5 

 
IV.3. Right to Terminate
Employment. 
 
Nothing in the Plan or in any
agreement entered into pursuant to the Plan shall confer upon any participant the right to continue in the employment of the Company or affect any right which the Company may have to terminate the employment of such participant. 
 
IV.4. Non-Uniform Determinations. 
 
The Committee’s determinations under the Plan
(including, without limitation, determinations of the persons to receive awards, the form, amount and timing of such awards, the terms and provisions of such awards and the agreements evidencing same) need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, awards under the Plan, whether or not such persons are similarly situated. 
 
IV.5. Rights as a Shareholder. 
 
The recipient of any award under the Plan shall have no rights as a shareholder with respect thereto unless and until certificates for
shares of Common Stock are issued to him or her. 
 
IV.6.
Fractional Shares. 
 
Fractional shares shall
not be granted under this Plan. 
 
IV.7. Definitions.

 
As used in this Plan, the following words
and phrases shall have the meanings indicated in the following definitions: 
 
(a) “Affiliate” means any person or entity which directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Company.

 
(b) “Disability” shall mean an
Optionee’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous
period of not less than one year. 
 
(c) “Fair
Market Value” per share in respect of any share of Common Stock as of any particular date shall mean (i) the closing price per share of Common Stock reflected on a national securities exchange for the last preceding date on which there was a
sale of such Common Stock on such exchange; or (ii) if the shares of Common Stock are then traded on an over-the-counter market, the average of the closing bid and asked prices for the shares of Common Stock in such over-the-counter market for the
last preceding date on which there was a sale of such Common Stock in such market; or (iii) in case no reported sale takes place, the average of the closing bid and asked prices on the National Association of Securities Dealers’ Automated
Quotations System (“NASDAQ”) or any comparable system, or if the shares of Common Stock are not listed on NASDAQ or comparable system, the closing sale price or, in case no reported sale takes place, the average of the closing bid
and asked prices, as furnished by any member of the National Association of Securities Dealers, Inc. selected from time to time by the Company for that purpose; or (iv) if the shares of Common Stock are not then listed on a national securities
exchange or traded in an over-the-counter market, such value as the Committee in its discretion may determine in any such other manner as the Committee may deem appropriate. 
 

6 

In no event shall the Fair Market Value of any share of Common Stock be less than its par value. The Fair Market Value of the Common Stock
shall be so discounted as determined by the Committee. 
 
(d) “Option” means a Stock Option. 
 
(e) “Option Price” means the purchase price per share of Common Stock deliverable upon the exercise of an Option. 
 
(f) “Parent Corporation” shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with
the Optionee’s employer corporation if, at the time of granting an Option, each of the corporations other than the Optionee’s employer corporation owns stock possessing 50% or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain. 
 
(g) “Subsidiary Corporation” shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Optionee’s employer corporation if, at the time of granting an Option, each of
the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
 
IV.8. Leaves of Absence. 
 
The Committee shall be entitled to make such rules,
regulations and determinations as it deems appropriate under the Plan in respect of any leave of absence taken by the recipient of any Option. Without limiting the generality of the foregoing, the Committee shall be entitled to determine (i) whether
or not any such leave of absence shall constitute a termination of employment within the meaning of the Plan and (ii) the impact, if any, of such leave of absence on awards under the Plan theretofore made to any recipient who takes such leave of
absence. 
 
IV.9. Newly Eligible Employees. 
 
The Committee shall be entitled to make such rules, regarding
eligibility to participate in the Plan, after the commencement of an award period. 
 
IV.10. Adjustments. 
 
If there is any change in the number of shares of Common Stock through the declaration of stock dividends, or through recapitalization resulting in stock splits, or combinations or exchanges of such shares, the number of shares of
Common Stock available for awards under the Plan pursuant to Section 1.5 above, the number of such shares covered by the outstanding Options and the price per share of such Options shall be proportionately adjusted by the Committee to reflect any
increase or decrease in the number of issued shares of Common Stock; provided, however, that any fractional shares resulting from such adjustment shall be eliminated. 
 
A dissolution or liquidation of the Company shall cause each outstanding option to terminate. A merger or
consolidation in which the Company is not the surviving corporation shall cause each outstanding option to be substituted into options of the surviving corporation. 
 

7 

 
IV.11. Amendment of the
Plan. 
 
The Committee may, at any time and
from time to time, terminate or modify or amend the Plan in any respect, including in response to changes in securities, tax or other laws or rules, regulations or regulatory interpretations thereof applicable to this Plan or to comply with stock
exchange rules or requirements. The termination or any modification or amendment of the Plan shall not, without the consent of a participant, affect his or her other rights under an award previously granted to him or her. 
 
IV.12. General Terms and Conditions of Options. 
 
Each Option shall be evidenced by a writing between the
Company and the Optionee, which agreement, unless otherwise stated in Article II of the Plan, shall comply with and be subject to the following terms and conditions: 
 
(a) Number of Shares. Each Option Agreement shall state the number of shares of Common Stock to which
the Option relates. 
 
(b) Option Price.
Each Option Agreement shall state the Option Price which shall be not less than 100% of the undiscounted Fair Market Value of the shares of Common Stock of the Company on the date of grant of the Option. The Option Price shall be subject to
adjustment as provided in Section 4.10 hereof. The date on which the Committee adopts a resolution expressly granting an Option shall be considered the day on which such Option is granted. No Options shall be granted under the Plan more than 10
years after the date of adoption of the Plan by the Board, but the validity of Options previously granted may extend and be validly exercised beyond that date. Options granted under the Plan shall be for a period determined by the Committee.

 
(c) Medium and Time of Payment. The
Option Price shall be paid in full at the time of exercise in cash or in shares of Common Stock having a Fair Market Value equal to such Option Price or in a combination of cash and such shares, and may be effected in whole or in part with monies
received from the Company at the time of exercise as a compensatory cash payment; provided, however, that each such method and time for payment shall be permitted by and be in compliance with applicable law. Options shall be exercisable over
the exercise period as and at the times and upon the conditions that the Committee may determine, as reflected in the Option Agreement. The exercise period shall be determined by the Committee for all Options; provided, however that such
exercise period shall not exceed 10 years from the date of grant of such Option. The exercise period shall be subject to earlier termination as provided herein. An Option may be exercised, as to any or all full shares of Common Stock as to which the
Option has become exercisable, by giving written notice of such exercise to the Committee; provided, however, that an Option may not be exercised at any one time as to fewer than 100 shares (or such number of shares as to which the Option is
then exercisable if such number of shares is less than 100). 
 
(d) Termination. Unless otherwise specifically provided by the Plan, an Option may not be exercised unless the Optionee is then in the employ of the Company or a Parent, division or Subsidiary Corporation (or a corporation
issuing or assuming the Option in a transaction to which Code Section 424(a) applies), and unless the Optionee has remained continuously so employed since the date of grant of the Option. No Option may be exercised after the expiration of its term.

 
(e) Non-transferability of Options. For
the purpose of preserving to the Company the right and ability to register the exercise of Options on Form S-8 under the Act, including exercises of Options by former employees and the executors, administrators or beneficiaries of the estates of
deceased employees, Options granted under the Plan shall not be transferable otherwise than (i) by Will; (ii) by the laws of descent and 
 

8 

distribution; or (iii) to a revocable inter vivos trust for the primary benefit of the Optionee and his or her spouse. Options may be
exercised, during the lifetime of the Optionee, only by the Optionee, his or her guardian, legal representative or the Trustee of an above described trust. Except as permitted by the preceding sentences, or unless the Committee determines that the
ability to register the underlying shares on Form S-8 need not be preserved, no Option granted under the Plan or any of the rights and privileges thereby conferred shall be transferred, assigned, pledged, or hypothecated in any way (whether by
operation of law or otherwise), and no such Option, right, or privilege shall be subject to execution, attachment, or similar process. Upon any attempt so to transfer, assign, pledge, hypothecate, or otherwise dispose of the Option, or of any right
or privilege conferred hereby, contrary to the provisions of this Plan, or upon the levy of any attachment or similar process upon such Option, right, or privilege, the Option and such rights and privileges shall immediately become null and void.

 
(f) Effect of Certain Changes.

 
(i) In the event of a change in
the Common Stock of the Company as presently constituted which is limited to a change of all of its authorized shares with par value into the same number of shares with a different par value or without par value, the shares resulting from any such
change shall be deemed to be the Common Stock within the meaning of the Plan. 
 
(ii) Except as hereinbefore expressly provided in this Plan, the Optionee shall have no rights by reason of any subdivision or consolidation of shares of stock or any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of any class or by reason of any dissolution, liquidation, merger, consolidation or other reorganization or spin-off of assets or stock of another corporation; and any issue
by the Company of shares of stock of any class shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of price of shares of Common Stock subject to the Option. The grant of an Option pursuant to the Plan
shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structures or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all
or part of its business or assets. 
 
(g) Rights
as a Shareholder. An Optionee or a transferee of an Option shall have no right as a shareholder with respect to any shares covered by the Option until the date of the issuance of a certificate evidencing such shares. No adjustment shall be made
for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distribution of other rights for which the record date is prior to the date such certificate is issued, except as provided in the immediately preceding
Section hereof. 
 
IV.13. Effects of Headings 
 
The Section and Subsection headings contained herein are for
convenience only and shall not affect the construction hereof. 
 
ADOPTED BY RESOLUTION OF THE BOARD OF DIRECTORS, ON SEPTEMBER 18, 1998. AMENDED BY RESOLUTION OF THE SHAREHOLDERS, ON APRIL 25, 2003. 
 

9 

 

	
	 /s/    DOYLE L.
ARNOLD        

	 Doyle L. Arnold, Secretary

 

10

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