Document:

Zions Banc Deferred Compensation Plan for Directors

  EXHIBIT 10.2
 ZIONS BANCORPORATION
DEFERRED COMPENSATION PLAN FOR DIRECTORS
(as amended May 1, 1991)
 1.           Purpose of Plan.
 The purpose of the Deferred Compensation Plan for Directors (“Plan”) is to provide Directors of Zions Bancorporation (the “Company”) and Directors of subsidiary companies with an opportunity to defer compensation paid to
them for their services as Directors until their retirement from the Board of Directors.
 2.           Eligibility.
 Subject to the conditions specified in this Plan or otherwise set by the Executive Committee of the Company’s Board of Directors, all Directors, including senior Directors, of the Company who receive compensation for their service as
Directors are eligible to participate in the Plan. Eligible directors are referred to as “Directors” and participating directors are referred to as “Participants” in this Plan.
 3.           Administration.
 The Executive Committee of the Company’s Board of Directors shall administer the Plan and shall have full authority to make such rules and regulations deemed necessary or desirable to administer
the Plan and to interpret its provisions.
 4.           Election to Defer
Compensation.
 (a)  Time of Election. In order to participate in the Plan during 1986, a Director must
make an election to defer specified amounts of his compensation at or prior to the effective date of this Plan and can only make an election as to compensation to be paid for future services. For subsequent years of the Plan, a Director can elect to
defer future 
 
 

  compensation or to change the nature of his election for future compensation by submitting a notice prior to the beginning of the
calendar year. A newly elected Director may make a choice within five days of the date of his election to serve as a Director to defer payment of compensation for future service. An election shall continue in effect until the termination of the
Participant’s service as a Director or until the end of the calendar year during which the Director serves written notice of the discontinuance of his election.
 All notices of election, change of election, or discontinuance of election shall be made on forms prepared by the Corporate Secretary and shall be dated, signed, and filed with the Corporate Secretary. A notice of
change of election or discontinuance of election shall operate prospectively from the beginning of the calendar year, but any compensation deferred shall continue to be held and shall be paid in accordance with the notice of election under which it
was withheld.
 (b)  Amount of Deferral. A Participant may elect to defer receipt of all or a specified portion of the
compensation payable to him for serving as a Director and attending Board and committee meetings as a Director. For purposes of this Plan, compensation does not include any funds paid to a Director to reimburse him for expenses.
 (c)  Period of Deferral. When making an election to defer all or a specified percentage of his compensation, a Participant shall elect to
receive the deferred compensation in a lump-sum payment within 45 days following the end of his service as a Director or in a number of annual installments (not to exceed four), the first of which would be payable within 45 days following the end of
his service as a Director with each subsequent payment payable one year thereafter. Under an installment payout, the 
 

2

  Participant’s first installment shall be equal to a fraction of the balance in his Deferred Compensation Account as of the last day
of the calendar month preceding such payment, the numerator of which is one and the denominator of which is the total number of installments selected. The amount of each subsequent payment shall be a fraction of the balance in the Participant’s
Account as of the last day of the calendar month preceding each subsequent payment, the numerator of which is one and the denominator of which is the total number of installments elected minus the number of installments previously paid. The term
“balance,” as used herein, refers to the amount credited to a Participant’s Account or to the Fair Market Value [as defined in Section 5(a)] of the phantom shares of the Company’s Common Stock credited to his Account. The most
recently filed election as to payment will be used to determine the method in which all deferred compensation balances will be paid out to the Participant or his beneficiary. In no event shall cash be delivered to a Participant in respect of any
amount deferred hereunder as a Phantom Stock Option or any amount of dividends earlier than six months following the date of deferral of such amount, and any such amount required to be paid under any provision of this agreement shall be paid only
after the lapse of any such six-month period, except to the extent that such amount is payable after the death, retirement, disability or complete termination of employment of the Director in all capacities with the Company or its
subsidiaries.
 (d)  Phantom Stock Option and Unsecured Note Option. When making an election to defer all or a specified
percentage of his compensation, a participant shall choose between two methods of determining earnings on the deferred compensation. He may choose to have such earnings calculated as if the deferred compensation had been invested 
 

3

  in the Company’s Common Stock at the Fair Market Value [as defined in Section 5(a)] of such stock as of the date such compensation
amount would have otherwise been payable to him (“Phantom Stock Option”); or he may choose to have earnings calculated as if the deferred compensation had been invested in certificates of deposit at the time such compensation would
otherwise be payable to him (“Unsecured Note Option”).
 The Participant must choose between the two options for all of the
compensation he elects to defer in any given year. He may change the option for future compensation by filing the appropriate notice with the Corporate Secretary before the first day of each calendar year, but such change shall not affect the method
of determining earnings for any compensation deferred in a prior year.
 5.          Deferred Compensation Account.
 A Deferred Compensation Account (Account) shall be established for each
Participant.
 (a)  Phantom Stock Option Account. If a Participant elects the Phantom Stock Option, his Account will include the
number of shares and partial shares of the Company’s Common Stock (to four decimals) that could have been purchased on the date such compensation would have otherwise been payable to him. The purchase price for such stock is the Fair Market
Value of such stock, i.e., the closing price of such stock as reported in the Wall Street Journal for such date of the next preceding day on which sales took place if no sales occurred on the actual
payable date.
 The Participant’s Account shall also include the dividends that would have become payable during the deferral period if
actual purchases of Common Stock had been made, 
 

4

  with such dividends treated as if invested in Common Stock as of the payable date for such dividends.
 (b)  Unsecured Note Option Account. If a Participant elects the Unsecured Note Option, his Account will be credited with any compensation deferred by
the Participant at the time such compensation would otherwise be payable and with interest calculated at the monthly average Federal Reserve Discount Rate. The interest credited to each Account shall be based on the amount held in the Account at the
beginning of each particular month.
 6.          Statement of Deferred Compensation
Account.
 (a)  Phantom Stock Option Account. A statement will be sent to each Participant electing the
Phantom Stock Option by the 15th of February of each year listing the number of Phantom Shares of Common Stock credited to his Account and the Fair Market Value of such shares as of the end of the prior calendar year.
 (b)  Unsecured Note Option Account. A statement will be sent to each Participant electing the Unsecured Note Option by the 15th of February of each
year listing the balance (deferred compensation and interest) in his Account as of the end of the prior calendar year.
 7.          Payment of Deferred Compensation.
 (a)  Phantom Stock Option. Any Participant choosing the Phantom Stock Option shall receive payment by having the phantom shares of the Company’s Common Stock credited to his Account converted to cash
using the Fair Market Value of such stock on the date of withdrawal. No right is given under the Plan to any Participant to receive shares of the Company’s Common Stock in settlement of the Participant’s Account.
 (b)  Unsecured Note Option. The amount payable to the Participant choosing the
 

5

  Unsecured Note Option shall include the interest on all sums credited to the Account, with such interest credited to the date of
withdrawal.
 (c)  The date of withdrawal for both the Phantom Stock Option Account and the Unsecured Note Option Account shall be
the last day of the calendar month preceding payment or if payment is made because of death, the date of death.
 (d)  The payment
shall be made in the manner (lump sum or installment) chosen by the Participant. In the event of a Participant’s death, payment shall be made within 45 days of the Participant’s death to the beneficiary designated by the Participant or, in
the absence of such designation, to the Participant’s estate.
 8.          Amendment and Termination of Plan.
 The Plan may be amended, modified or terminated by the Company’s
Board of Directors. No amendment, modification, or termination shall adversely affect a Participant’s rights with respect to amounts accrued in his Account. In the event that the Plan is terminated, the Board has the right to make lump-sum
payments of all Account balances on such date as it may determine.
 

6

  9.          Nonassignability of Plan.
 The right of a Participant to receive any unpaid portion of his Account shall not be assigned, transferred, pledged or encumbered
or be subject in any manner to alienation or attachment.
 10.        No Creation of
Rights.
 Nothing in this Plan shall confer upon any Participant the right to continue as a Director. The right of a
Participant to receive any unpaid portion of his Account shall be an unsecured claim against the general assets and will be subordinated to the general obligations of the Company.
 Nothing contained in this agreement nor any action taken pursuant to this agreement shall be construed as creating a trust between the Company and any Participant in this Plan or any beneficiary of
any Participant.
 11.        Effective Date.
 The Plan shall become effective on April 23, 1986, and shall remain in effect until it is discontinued by action of the Company’s Board of
Directors.
 
 7Zions Banc Senior Managament Value Sharing Plan, Award Period 2002-2005

 
EXHIBIT 10.7 
 
Zions
Bancorporation 
Senior Management Value Sharing Plan 
Award Period: 2002 – 2005 
 
Objective:  
 
To provide an ongoing multi-year incentive for the senior managers of Zions Bancorporation and its subsidiaries which: 
 
A. Focuses managers’ attention on the creation of
long-term shareholder value; 
 
B. Creates an
incentive that promotes teamwork across departments and subsidiaries, and which encourages managers to balance profit center accountability with Company-wide goals; and, 
 
C. Complements annual bonuses which reflect the achievement of annual objectives and the Company’s
short-term profitability. 
 
Eligibility: 
 
Participants
in the Plan will consist of specified members of the senior management group (and certain other key managers) of the Company and its major subsidiaries. Participants for each Award Period shall be specifically identified by the Company’s Board
of Directors (the “Board”) or its Executive Compensation Committee (the “Committee”). 
 
Allocation of Awards: 
 
It is anticipated that during the first quarter of each year in which the Plan operates, the Board of Directors shall approve the
establishment of a pool of Award Funds to be generated during the Award Period, according to the general formula outlined below. Participants shall be designated by the Board or the Committee. Claims against the pool of Award Funds for each Award
Period shall be represented by Participation Units (“Units”), and each participant shall be allocated a specific number of Units by the Committee. The Units shall represent a pro-rata claim, in proportion to the total Units designated for
that Award Period, on any Award Funds generated by the Plan during the Award Period. 

Term: 
 
Each Award Period shall consist of a continuous four-calendar-year period. The Plan is intended to constitute
a “moving four-year-average” incentive plan, with the anticipation that a new Award Period would be designated each year, with multiple Award Periods overlapping one another. Nevertheless, the establishment of a new Award Period each year
is subject to the Board’s discretion. 
 
Determination of Award Funds: 
 
The amount of Award Funds in the pool for each Award Period shall be a function of the Aggregate Cash Earnings Per Share (“ACEPS”) during the Award Period, together with the mathematical Average Tangible Return On
Shareholders’ Equity (“TROE”) for each of the four years in the Award Period, 
 
Aggregate Cash Earnings Per Share (“ACEPS”) shall be defined as the aggregate, over the four year Award Period, of each year’s Net Cash Income divided by average diluted shares
outstanding. Net Cash Income shall be defined as net income before the cumulative effect of changes in accounting principles, plus the after-tax cost of amortized goodwill and core deposit (and similar) intangible assets, plus the after-tax cost of
merger charges realized during the period. 
 
Tangible Return on Shareholders’ Equity (“TROE”) shall be defined as the average, for each of the four years in the Award Period, of the Company’s Net Cash Income divided by the average Tangible Equity. Tangible
Equity shall mean total common shareholders’ equity, less goodwill and core deposit (and similar) intangible assets. 
 
Each year, the Committee shall establish minimum targets for TROE and ACEPS for the Award Period. These minimum targets are both be
required to be reached in order for any Award Funds to be earned. Additionally, the Committee may designate Award Fund allocation amounts based upon the achievement of higher levels of TROE, with upward adjustments possible if higher levels of ACEPS
are achieved. The Committee may also designate other conditions and adjustment factors to ensure the Plan’s integrity and consistency with shareholder and depositor interests. 
 
The 2002-2005 Award Period formula for the determination of the value of Units is as indicated in the
Appendix. 

 
For the
2002-2005 Award Period, the following parameters shall be established, and adjustments made to the Company’s earnings calculations, for purposes of determining Award Funds available under the Plan: 
 
1). The Plan is intended to create an incentive for increasing
shareholder value. However, this is not to be accomplished by reducing capital levels or assuming extraordinary or unwarranted risks. Accordingly, it is expected that total risk-based capital levels shall be maintained at a level at least 125% of
“well-capitalized” regulatory requirements, and average Tangible Equity shall be maintained at a level of not less than 6.0% of average tangible assets. For purposes of determining ACEPS and TROE, pro-forma charges to income in amounts
sufficient to reflect any deficit in these capital ratios shall be made in the event these capital levels are not maintained. 
 
2). The Company’s reserve levels are to be conservatively maintained. To the extent that the consolidated Allowance for Loan and
Lease Losses is less than 100% of the peer group level, as expressed in terms of reserves/non-current loans as reported in the most current Uniform Bank Performance Report available at December 31, 2005, an appropriate adjustment shall be made to
after-tax earnings (for purposes of calculating Award Funds only) to compensate for any deficit relative to the 100% minimum target level. Actual reserve levels are, of course, subject to Board and/or regulatory decisions. No upward adjustments
shall be made in “pro forma” earnings in the event actual reserve levels exceed 100% of the peer group target. 
 
3). With respect to any business combinations completed by Zions involving the exchange of Zions’ shares in pooling-of-interests
transactions (prior to January 1, 2002), financial results prior to the acquisition dates shall, for the purpose of calculating ACEPS and TROE during the Award Period, be determined using Zions’ un-restated numbers. 
 
Other Terms and Conditions:

 
The Plan is to be governed and interpreted by
the Committee, whose decisions shall be final. The terms of the Plan are subject to change or termination at their sole discretion. 
 
The Company shall retain the right to withold payment of Award Funds to participants in the event of a significant deterioration in 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. 

 
Participants
shall not vest in any benefits available under the Plan until the conclusion of each Award Period. 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), participants (or their estates) shall be eligible to receive a proportionate share of Award Funds based upon the number of Units granted, and 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. 
 
The Units shall not be transferable without the express approval of the Committee, except to a spouse or immediate family members for the
purposes of estate planning. 
 
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. 
 
The Board may, at its sole discretion, alter the terms of the
Plan at any time during an Award Period. 
 
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. 
 
Earnings per
share calculations shall be adjusted to reflect any stock splits, stock dividends, or other such changes in capitalization, at the discretion of the Committee. 
 
The award of Units to any participant shall not confer any right with respect to continuance of employment by the Company or its
subsidiaries, nor limit in any way the right of the Company to terminate his or her employment at any time, with or without cause. 

 
APPENDIX 
 
ZIONS BANCORPORATION
VALUE – SHARING PLAN: 2002 – 2005 
 
Calculation of Participation Unit Value 
 
Aggregate Cash Earnings Per Share (“ACEPS”) 
 
If the ACEPS is: 
 

	 Over –

	    	 But not over –

	  	 The basic value of a Participation Unit is –

	 $16.56
	    	 $16.97
	  	 $.3793 plus $.0190
	  	 per each cent of the amount over $16.56

	 $16.97
	    	 $17.38
	  	 $1.1530 plus $.0285
	  	 per each cent of the amount over $16.97

	 $17.38
	    	 $17.81
	  	 $2.3362 plus $.0379
	  	 per each cent of the amount over $17.38

	 $17.81
	    	 $18.24
	  	 $3.9446 plus $.0474
	  	 per each cent of the amount over $17.81

	 $18.24
	    	 $18.68
	  	 $5.9940 plus $.0569
	  	 per each cent of the amount over $18.24

	 $18.68
	    	 $19.13
	  	 $8.5009 plus $.0664
	  	 per each cent of the amount over $18.68

	 $19.13
	    	 $19.59
	  	 $11.4817 plus $.0759
	  	 per each cent of the amount over $19.13

	 $19.59
	    	 $20.05
	  	 $14.9534 plus $.0854
	  	 per each cent of the amount over $19.59

	 $20.05
	    	 $20.53
	  	 $18.9333 plus $.0948
	  	 per each cent of the amount over $20.05

	 $20.53
	    	 $21.01
	  	 $23.4391 plus $.1043
	  	 per each cent of the amount over $20.53

	 $21.01
	    	 $21.51
	  	 $28.4888 plus $.1138
	  	 per each cent of the amount over $21.01

	 $21.51
	    	 $22.01
	  	 $34.1006 plus $.1137
	  	 per each cent of the amount over $21.51

	 $22.01
	    	 $22.52
	  	 $39.8109 plus $.1137
	  	 per each cent of the amount over $22.01

	 $22.52
	    	 $23.04
	  	 $45.6270 plus $.1137
	  	 per each cent of the amount over $22.52

	 $23.04
	    	 $23.57
	  	 $51.5504 plus $.1024
	  	 per each cent of the amount over $23.04

	 $23.57
	    	 $24.11
	  	 $56.9848 plus $.1024
	  	 per each cent of the amount over $23.57

	 $24.11
	    	 $24.66
	  	 $62.5184 plus $.0819
	  	 per each cent of the amount over $24.11

 
 

5 

 

	 $24.66
	  	 $
	 25.22
	  	 $67.0257 plus $.0614
	  	 per each cent of the amount over $24.66

	 $25.22
	  	 $
	 25.79
	  	 $70.4673 plus $.0410
	  	 per each cent of the amount over $25.22

	 $25.79
	  	 	 	  	 $72.8030
	  	 

 
Tangible Return on Shareholders’ Equity (“TROE”) Modifier: 
 
The basic Participation Unit value determined above shall be adjusted as follows: 
 

	•	 	If TROE for 2002 – 2005 is less than 15.00%, the Participation Units shall have no value. 

 

	•	 	If TROE is equal to or greater than 15.00% but less than 19.00%, the basic value of a Participation Unit shall be multiplied by a factor of 1.00.

 

	•	 	If TROE is equal to or greater than 19.00% but less than 26.00%, the basic value of a Participation Unit shall be multiplied by the following factor: 1+(TROE –
..19)5.7143. 

 
If TROE is 26.00% or more, the basic
value of a Participation Unit shall be multiplied by 1.40. 
 
****************************** 
 
Example: If ACEPS
is $20.60 and TROE is 23.70%, each Participation Unit would be worth $30.66. 
 
[$23.4391+100($20.60 – $20.53)$.1043]    x    [1+(.2370 – .19)5.7143] = $30.66

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00048-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00048-of-00352.parquet"}]]