10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

COMMISSION FILE NUMBER 0-2610

ZIONS BANCORPORATION
(Exact name of registrant as specified in its charter)
UTAH	87-0227400
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
ONE SOUTH MAIN, SUITE 1134
SALT LAKE CITY, UTAH	84111
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code:  (801) 524-4787

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes   x No   o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes   x No   o

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, without par value, outstanding at May 2, 2003 90,141,139 shares

ZIONS BANCORPORATION AND SUBSIDIARIES

INDEX

				Page
PART I.		FINANCIAL INFORMATION
	ITEM 1.		Financial Statements (Unaudited)
			Consolidated Balance Sheets	3
			Consolidated Statements of Income	4
			Consolidated Statements of Changes in Shareholders’ Equity and Comprehensive Income (Loss)	6
			Consolidated Statements of Cash Flows	7
			Notes to Consolidated Financial Statements	9
	ITEM 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
	ITEM 3.		Quantitative and Qualitative Disclosures About Market Risk	27
	ITEM 4.		Controls and Procedures	27
PART II.		OTHER INFORMATION
	ITEM 1.		Legal Proceedings	27
	ITEM 6.		Exhibits and Reports on Form 8-K	27
SIGNATURES				29
CERTIFICATIONS				30

2

PART I.    FINANCIAL INFORMATION
ITEM 1.           FINANCIAL STATEMENTS (Unaudited)

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)	March 31, 2003		December 31, 2002		March 31, 2002
	(Unaudited)				(Unaudited)
ASSETS
Cash and due from banks	$	1,087,910	$	1,087,296	$	906,611
Money market investments:
Interest-bearing deposits		1,189		1,690		5,238
Federal funds sold		454,168		96,077		38,752
Security resell agreements		693,623		444,995		287,101
Investment securities:
Held to maturity, at cost (approximate market value $0, $0, and $79,651)		—		—		78,584
Available for sale, at market		3,328,412		3,304,341		3,140,897
Trading account, at market (includes $197,257, $110,886, and $95,870 transferred as collateral under repurchase agreements)		336,005		331,610		284,308
		3,664,417		3,635,951		3,503,789
Loans:
Loans held for sale		227,101		289,499		206,758
Loans, leases and other receivables		18,994,438		18,843,006		17,750,667
		19,221,539		19,132,505		17,957,425
Less:
Unearned income and fees, net of related costs		90,621		92,662		103,257
Allowance for loan losses		280,533		279,593		264,107
Net loans		18,850,385		18,760,250		17,590,061
Other noninterest bearing investments		595,238		601,641		651,771
Premises and equipment, net		401,827		393,630		370,472
Goodwill		730,069		730,031		734,334
Core deposit and other intangibles		79,368		82,920		104,576
Other real estate owned		18,231		31,608		13,490
Other assets		632,309		699,600		598,383
	$	27,208,734	$	26,565,689	$	24,804,578
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand	$	5,296,261	$	5,117,458	$	4,418,020
Interest-bearing:
Savings and money market		12,303,049		11,654,258		10,007,607
Time under $100,000		1,693,752		1,766,844		1,926,131
Time $100,000 and over		1,314,220		1,402,189		1,540,183
Foreign		193,723		191,231		108,401
		20,801,005		20,131,980		18,000,342
Securities sold, not yet purchased		221,936		203,838		188,894
Federal funds purchased		841,237		819,807		1,297,094
Security repurchase agreements		791,360		861,177		788,908
Accrued liabilities		479,778		535,044		450,323
Commercial paper		276,640		291,566		315,389
Federal Home Loan Bank advances and other borrowings:
One year or less		6,602		15,554		437,467
Over one year		239,958		240,698		241,219
Long-term debt		1,114,429		1,069,505		781,173
Total liabilities		24,772,945		24,169,169		22,500,809
Minority interest		23,285		22,677		20,769
Shareholders’ equity:
Capital stock:
Preferred stock, without par value; authorized 3,000,000 shares; issued and outstanding, none		—		—		—
Common stock, without par value; authorized 350,000,000 shares; issued and outstanding 90,215,449, 90,717,692, and 91,986,436 shares		1,012,532		1,034,888		1,092,735
Accumulated other comprehensive income		38,558		46,214		51,700
Retained earnings		1,361,414		1,292,741		1,138,565
Total shareholders’ equity		2,412,504		2,373,843		2,283,000
	$	27,208,734	$	26,565,689	$	24,804,578

3

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	Three Months Ended March 31,
(In thousands, except per share amounts)	2003			2002
Interest income:
Interest and fees on loans	$	297,349		$	305,705
Interest on loans held for sale		2,505			2,736
Lease financing		4,534			5,668
Interest on money market investments		3,937			3,679
Interest on securities:
Held to maturity – taxable		—			798
Available for sale – taxable		28,220			34,628
Available for sale – nontaxable		7,293			6,342
Trading account		5,561			5,434
Total interest income		349,399			364,990
Interest expense:
Interest on savings and money market deposits		32,629			38,455
Interest on time and foreign deposits		20,988			33,390
Interest on borrowed funds		29,574			36,935
Total interest expense		83,191			108,780
Net interest income		266,208			256,210
Provision for loan losses		17,550			18,090
Net interest income after provision for loan losses		248,658			238,120
Noninterest income:
Service charges on deposit accounts		31,412			28,420
Loan sales and servicing income		18,467			6,926
Other service charges, commissions and fees		20,589			19,637
Trust income		5,128			4,413
Income from securities conduit		6,866			4,139
Dividends and other investment income		5,997			8,207
Market making, trading and nonhedge derivative income		9,872			15,435
Equity securities gains (losses), net		(5,904	)		621
Fixed income securities gains, net		135			43
Other		3,777			5,985
Total noninterest income		96,339			93,826
Noninterest expense:
Salaries and employee benefits		123,586			113,885
Occupancy, net		16,847			16,649
Furniture and equipment		15,783			16,228
Legal and professional services		4,922			5,602
Postage and supplies		6,665			7,164
Advertising		3,980			5,663
Amortization of core deposit and other intangibles		3,551			3,335
Other		38,630			36,728
Total noninterest expense		213,964			205,254
Income from continuing operations before income taxes and minority interest		131,033			126,692
Income taxes		46,394			44,025
Minority interest		(2,737	)		(150	)
Income from continuing operations		87,376			82,817

4

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Continued)
(Unaudited)

	Three Months Ended March 31,
(In thousands, except per share amounts)	2003		2002
Discontinued operations:
Income (loss) from operations of discontinued subsidiaries	$	552	$	(5,176	)
Income taxes (benefit)		224		(1,990	)
Income (loss) on discontinued operations		328		(3,186	)
Income before cumulative effect of change in accounting principle		87,704		79,631
Cumulative effect of change in accounting principle, net of tax (1)		—		(32,369	)
Net income	$	87,704	$	47,262
Weighted average shares outstanding during the period:
Basic shares		90,529		92,055
Diluted shares		90,648		92,814
Net income per common share:
Basic:
Income from continuing operations	$	0.96	$	0.90
Income (loss) on discontinued operations		0.01		(0.03	)
Cumulative effect of change in accounting principle		—		(0.35	)
Net income	$	0.97	$	0.52
Diluted:
Income from continuing operations	$	0.96	$	0.89
Income (loss) on discontinued operations		0.01		(0.03	)
Cumulative effect of change in accounting principle		—		(0.35	)
Net income	$	0.97	$	0.51

(1) For the three months ended March 31, 2002, the cumulative effect adjustment relates to an impairment charge from the adoption of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, net of income tax benefit of $2,676.

5

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
    AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)

	Three Months Ended March 31, 2003
			Accumulated Other Comprehensive Income (Loss)
(In thousands)	Common Stock			Net Unrealized Gains (Losses) on Investments and Retained Interests			Net Unrealized Gains on Derivative Instruments		Minimum Pension Liability			Subtotal			Retained Earnings			Total Shareholders’ Equity
Balance, January 1, 2003	$	1,034,888		$	44,151		$	25,420	$	(23,357	)	$	46,214		$	1,292,741		$	2,373,843
Comprehensive income:
Net income for the period																87,704			87,704
Other comprehensive income, net of tax:
Net realized and unrealized holding losses during the period, net of income tax benefit of $5,516					(8,905	)							(8,905	)
Reclassification for net realized gains recorded in operations, net of income tax expense of $350					(565	)							(565	)
Net unrealized gains on derivative instruments, net of reclassification to operations of $9,575 and income tax expense of $1,090								1,814					1,814
Other comprehensive income (loss)					(9,470	)		1,814					(7,656	)					(7,656	)
Total comprehensive income																			80,048
Cash dividends--common, $.21 per share																(19,031	)		(19,031	)
Stock redeemed and retired		(24,227	)																(24,227	)
Stock options exercised, net of shares tendered and retired		1,871																	1,871
Balance, March 31, 2003	$	1,012,532		$	34,681		$	27,234	$	(23,357	)	$	38,558		$	1,361,414		$	2,412,504

	Three Months Ended March 31, 2002
				Accumulated Other Comprehensive Income (Loss)
(In thousands)	Common Stock			Net Unrealized Gains (Losses) on Investments and Retained Interests			Net Unrealized Gains (Losses) on Derivative Instruments			Minimum Pension Liability	Subtotal			Retained Earnings			Total Shareholders’ Equity
Balance, January 1, 2002	$	1,111,214		$	31,774		$	28,177			$	59,951		$	1,109,704		$	2,280,869
Comprehensive income:
Net income for the period															47,262			47,262
Other comprehensive income, net of tax:
Net realized and unrealized holding gains during the period, net of income tax expense of $640					1,033							1,033
Reclassification for net realized gains recorded in operations, net of income tax expense of $16					(27	)						(27	)
Net unrealized losses on derivative instruments, net of reclassification to operations of $13,285 and income tax benefit of $5,734								(9,257	)			(9,257	)
Other comprehensive income (loss)					1,006			(9,257	)			(8,251	)					(8,251	)
Total comprehensive income																		39,011
Cash dividends--common, $.20 per share															(18,401	)		(18,401	)
Stock redeemed and retired		(25,302	)															(25,302	)
Stock options exercised, net of shares tendered and retired		6,823																6,823
Balance, March 31, 2002	$	1,092,735		$	32,780		$	18,920			$	51,700		$	1,138,565		$	2,283,000

6

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Three Months Ended March 31,
(In thousands)	2003			2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	87,704		$	47,262
Adjustments to reconcile net income to net cash provided by operating activities:
Cumulative effect of change in accounting principle, net of tax		—			32,369
Provision for loan losses		17,550			18,090
Depreciation of premises and equipment		14,105			15,133
Amortization		6,990			4,609
Accretion of unearned income and fees, net of related costs		(2,041	)		651
Loss to minority interest		(2,737	)		(150	)
Equity securities losses (gains), net		5,904			(621	)
Fixed income securities gains, net		(135	)		(43	)
Proceeds from sales of trading account securities		74,535,530			64,820,193
Increase in trading account securities		(74,539,925	)		(65,001,605	)
Proceeds from sales of loans held for sale		159,994			116,990
Increase in loans held for sale		(97,596	)		(25,789	)
Net losses (gains) on sales of loans, leases and other assets		(10,821	)		696
Change in accrued income taxes		14,772			36,917
Change in accrued interest receivable		2,146			26,062
Change in other assets		64,931			(16,133	)
Change in other liabilities		(67,343	)		(79,743	)
Change in accrued interest payable		2,369			12,501
Other, net		4,016			1,867
Net cash provided by operating activities		195,413			9,256
CASH FLOWS FROM INVESTING ACTIVITIES:
Net increase in money market investments		(606,218	)		(48,511	)
Proceeds from maturities of investment securities held to maturity		—			948
Proceeds from sales of investment securities available for sale		2,241,245			5,124,533
Proceeds from maturities of investment securities available for sale		290,674			203,233
Purchases of investment securities available for sale		(2,549,627	)		(5,176,740	)
Proceeds from sales of loans and leases		107,996			177,860
Net increase in loans and leases		(272,418	)		(845,825	)
Payments on leveraged leases		(5,438	)		(5,585	)
Principal collections on leveraged leases		5,438			5,585
Proceeds from sales of premises and equipment		1,129			814
Purchases of premises and equipment		(23,557	)		(18,672	)
Proceeds from sales of other assets		19,119			4,167
Net cash paid for net liabilities on branches sold		—			(19,674	)
Net cash used in investing activities		(791,657	)		(597,867	)

7

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)

	Three Months Ended March 31,
(In thousands)	2003			2002
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits	$	650,553		$	241,491
Net change in short-term funds borrowed		(54,167	)		312,494
Proceeds from FHLB advances over one year		—			1,500
Payments on FHLB advances over one year		(740	)		(739	)
Proceeds from issuance of long-term debt		49,902			—
Payments on long-term debt		(6,981	)		(169	)
Proceeds from issuance of common stock		1,549			5,739
Payments to redeem common stock		(24,227	)		(25,302	)
Dividends paid		(19,031	)		(18,401	)
Net cash provided by financing activities		596,858			516,613
Net increase (decrease) in cash and due from banks		614			(71,998	)
Cash and due from banks at beginning of period		1,087,296			978,609
Cash and due from banks at end of period	$	1,087,910		$	906,611
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
Interest	$	82,733		$	81,636
Income taxes		26,071			1,785
Loans transferred to other real estate owned		6,285			7,693

8

ZIONS BANCORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

March 31, 2003

1.          BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Certain prior period amounts have been reclassified to conform to the current financial statement presentation.

Operating results for the three months ended March 31, 2003 are not necessarily indicative of the results that may be expected for the year ended December 31, 2003. The balance sheet at December 31, 2002 is from the audited financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Zions Bancorporation’s Annual Report on Form 10-K for the year ended December 31, 2002.

2.          STOCK-BASED COMPENSATION

In December 2002, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure. This Statement provides guidance to transition from the intrinsic value method of accounting for stock-based compensation under Accounting Principles Board Opinion 25 (“APB 25”), Accounting for Stock Issued to Employees, to the fair value method of accounting, if a company so elects, under SFAS 123, Accounting for Stock-Based Compensation. SFAS 148 also contains new requirements for disclosing the impact of applying the fair value method of SFAS 123.

The Company continues to account for its stock-based compensation plans based on the intrinsic value method under APB 25. Accordingly, no compensation expense has been recorded, as the exercise price of the stock was equal to its quoted market price on the date of grant.

9

ZIONS BANCORPORATION AND SUBSIDIARIES

The following disclosure required by SFAS 148 illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS 123 to stock-based employee compensation (in thousands, except per share amounts):

	Three Months Ended March 31,
	2003			2002
Net income, as reported	$	87,704		$	47,262
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(5,383	)		(4,403	)
Pro forma net income	$	82,321		$	42,859
Earnings per share:
Basic - as reported	$	0.97		$	0.52
Basic - pro forma		0.91			0.47
Diluted - as reported		0.97			0.51
Diluted - pro forma		0.91			0.46

3.          GUARANTEES

In November 2002, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 45 (“FIN 45”), Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. The disclosure requirements of FIN 45 were effective for the Company as of December 31, 2002 and required disclosure of the nature of the guarantee, the maximum potential amount of future payments that the guarantor could be required to make under the guarantee, and the current amount of the liability, if any, for the guarantor’s obligations under the guarantee. The initial recognition and measurement provisions of FIN 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The adoption of FIN 45 did not have any significant effect on the financial position or operations of the Company.

Financial and performance standby letters of credit are guarantees issued by the Company that come under the provisions of FIN 45. Total amounts of these guarantees are as follows (in thousands):

	March 31,
	2003		2002
Standby letters of credit:
Performance	$	90,414	$	80,613
Financial		287,017		203,196
	$	377,431	$	283,809

10

ZIONS BANCORPORATION AND SUBSIDIARIES

These letters of credit are conditional commitments issued by the Company generally to guarantee the performance of a customer to a third party. The guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. Terms of the guarantees can be as short as 30 days or as long as generally 5 years. The credit risk involved in issuing these guarantees is essentially the same as that involved in extending loan facilities to customers. The Company generally holds marketable securities and cash equivalents as collateral supporting those commitments for which collateral is deemed necessary. At March 31, 2003, the carrying value recorded by the Company as a liability for these guarantees was $2.5 million.

At March 31, 2003, the Company has guaranteed approximately $706 million of debt issued by various subsidiaries.

Zions First National Bank provides a liquidity facility for a fee to a qualified special purpose entity securities conduit (“conduit”). At March 31, 2003, the size of this liquidity facility was $5.1 billion. The conduit purchases U.S. Government and AAA rated securities. These assets are funded through the issuance of commercial paper. Pursuant to the liquidity contract, ZFNB is required to purchase securities from the conduit to provide funds for the conduit to repay maturing commercial paper upon the conduit’s inability to access the commercial paper market or upon a commercial paper market disruption as specified in governing documents to the conduit. At March 31, 2003, no amounts were outstanding under this liquidity facility and the market value of the conduit’s securities portfolio was approximately $3.9 billion.

4.          ACCOUNTING FOR VARIABLE INTEREST ENTITIES

In January 2003, the FASB issued Interpretation No. 46 (“FIN 46”), Consolidation of Variable Interest Entities. FIN 46 provides guidance on identifying a variable interest entity (“VIE”) and determining when the assets, liabilities, noncontrolling interests, and results of operations of a VIE are to be included in a company’s consolidated financial statements. FIN 46 also requires additional disclosures by primary beneficiaries and other significant variable interest holders. The provisions of FIN 46 are required immediately for companies with an interest in a VIE created after January 31, 2003. A public company with an interest in a VIE created before February 1, 2003 must apply the provisions of FIN 46 as of the beginning of the first interim or annual reporting period beginning after June 15, 2003.

Zions First National Bank holds variable interests in securitization structures as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002. All such structures are qualified special purpose entities, which are exempt from the consolidation requirements of FIN 46. The Company is currently assessing the impact that FIN 46 may have on one VIE. The impact, if any, is not expected to be significant.

11

ZIONS BANCORPORATION AND SUBSIDIARIES

5.          OPERATING SEGMENT INFORMATION

The Company manages its operations and prepares management reports with a primary focus on geographical area. All segments presented, except for the segment defined as “Other,” are based on commercial banking operations. Zions First National Bank operates 124 branches in Utah and 22 in Idaho. California Bank & Trust operates 90 branches in Northern and Southern California. Nevada State Bank operates 63 branches in Nevada. National Bank of Arizona operates 52 branches in Arizona. Vectra Bank Colorado operates 54 branches in Colorado and one branch in New Mexico. The Commerce Bank of Washington operates one branch in the state of Washington. The operating segment identified as “Other” includes the parent company, certain e-commerce subsidiaries, other smaller nonbank operating units, and eliminations of transactions between segments.

The accounting policies of the individual segments are the same as those of the Company. The Company allocates centrally provided services to the business segments based upon estimated usage of those services. The Company initiated a program in 2002 to allocate income between certain of its banking subsidiaries to better match revenues from hedging strategies to the operating units which gave rise to the exposures being hedged. Allocated income (expense) from this program included in net interest income of the banking subsidiaries for the three months ended March 31, 2003 and 2002, respectively, is as follows: Zions First National Bank – $(7.4) million and $(11.3) million, Nevada State Bank – $0.8 million and $3.4 million, National Bank of Arizona – $1.9 million and $1.8 million, Vectra Bank Colorado – $3.5 million and $5.2 million, and The Commerce Bank of Washington – $1.2 million and $0.9 million. The Company changed the method by which it allocates this hedge program income (expense) effective January 1, 2003; therefore, the amounts allocated to each segment in the quarters ended March 31, 2003 and March 31, 2002 are not directly comparable. Further, the amount of allocated hedge income is expected to decrease in subsequent quarters as the underlying hedges mature and new hedges are being recorded directly at the banking subsidiaries.

12

ZIONS BANCORPORATION AND SUBSIDIARIES

The following table presents selected operating segment information for the three months ended March 31, 2003 and 2002:

	Zions First National Bank and Subsidiaries					California Bank & Trust				Nevada State Bank				National Bank of Arizona
(In millions)	2003			2002		2003		2002		2003		2002		2003		2002
CONDENSED INCOME STATEMENT
Net interest income	$	84.1		$	75.9	$	94.8	$	92.6	$	29.6	$	31.9	$	30.2	$	27.2
Provision for loan losses		12.0			11.3		2.2		4.0		2.0		1.0		—		0.6
Net interest income after provision for loan losses		72.1			64.6		92.6		88.6		27.6		30.9		30.2		26.6
Noninterest income		56.7			50.2		18.2		20.9		7.1		6.8		5.5		4.8
Noninterest expense		75.0			72.6		57.9		59.4		21.2		20.1		19.8		16.0
Income from continuing operations before income taxes and minority interest		53.8			42.2		52.9		50.1		13.5		17.6		15.9		15.4
Income tax expense (benefit)		17.1			14.1		21.2		20.5		4.6		6.0		6.4		6.1
Minority interest		(0.1	)		—		—		—		—		—		—		—
Income from continuing operations		36.8			28.1		31.7		29.6		8.9		11.6		9.5		9.3
Income (loss) on discontinued operations		—			—		—		—		—		—		—		—
Income before cumulative effect adjustment		36.8			28.1		31.7		29.6		8.9		11.6		9.5		9.3
Cumulative effect adjustment		—			—		—		—		—		—		—		—
Net income (loss)	$	36.8		$	28.1	$	31.7	$	29.6	$	8.9	$	11.6	$	9.5	$	9.3
AVERAGE BALANCE SHEET DATA
Assets	$	11,453		$	10,010	$	8,716	$	8,346	$	2,726	$	2,489	$	2,783	$	2,600
Net loans and leases		6,706			6,263		6,117		5,717		1,850		1,556		1,973		1,804
Deposits		7,087			5,289		6,936		6,734		2,388		2,140		2,346		2,180
Shareholder’s equity		679			646		998		1,007		172		162		232		215

	Vectra Bank Colorado				The Commerce Bank of Washington				Other						Consolidated Company
(In millions)	2003		2002		2003		2002		2003			2002			2003			2002
CONDENSED INCOME STATEMENT
Net interest income	$	24.0	$	27.2	$	5.7	$	5.5	$	(2.2	)	$	(4.1	)	$	266.2		$	256.2
Provision for loan losses		1.4		0.9		—		0.3		—			—			17.6			18.1
Net interest income after provision for loan losses		22.6		26.3		5.7		5.2		(2.2	)		(4.1	)		248.6			238.1
Noninterest income		9.3		7.4		0.4		0.4		(0.9	)		3.3			96.3			93.8
Noninterest expense		25.3		25.2		3.0		2.5		11.7			9.4			213.9			205.2
Income from continuing operations before income taxes and minority interest		6.6		8.5		3.1		3.1		(14.8	)		(10.2	)		131.0			126.7
Income tax expense (benefit)		2.3		2.9		1.1		1.1		(6.4	)		(6.7	)		46.3			44.0
Minority interest		—		—		—		—		(2.6	)		(0.1	)		(2.7	)		(0.1	)
Income from continuing operations		4.3		5.6		2.0		2.0		(5.8	)		(3.4	)		87.4			82.8
Income (loss) on discontinued operations		—		—		—		—		0.3			(3.1	)		0.3			(3.1	)
Income before cumulative effect adjustment		4.3		5.6		2.0		2.0		(5.5	)		(6.5	)		87.7			79.7
Cumulative effect adjustment		—		—		—		—		—			(32.4	)		—			(32.4	)
Net income (loss)	$	4.3	$	5.6	$	2.0	$	2.0	$	(5.5	)	$	(38.9	)	$	87.7		$	47.3
AVERAGE BALANCE SHEET DATA
Assets	$	2,753	$	2,588	$	626	$	523	$	(1,743	)	$	(877	)	$	27,314		$	25,679
Net loans and leases		1,868		1,822		312		288		139			89			18,965			17,539
Deposits		1,903		1,718		434		370		(1,175	)		(756	)		19,919			17,675
Shareholder’s equity		441		439		46		39		(166	)		(237	)		2,402			2,271

13

ZIONS BANCORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FINANCIAL HIGHLIGHTS
(Unaudited)

	Three Months Ended March 31,
(In thousands, except per share and ratio data)	2003			2002			%Change
EARNINGS
Taxable-equivalent net interest income	$	271,980		$	261,305			4.09	%
Net interest income		266,208			256,210			3.90	%
Noninterest income		96,339			93,826			2.68	%
Provision for loan losses		17,550			18,090			(2.99	)%
Noninterest expense		213,964			205,254			4.24	%
Income before income taxes and minority interest		131,033			126,692			3.43	%
Income taxes		46,394			44,025			5.38	%
Minority interest		(2,737	)		(150	)		1,724.67	%
Income from continuing operations		87,376			82,817			5.50	%
Income (loss) on discontinued operations		328			(3,186	)		110.30	%
Cumulative effect of change in accounting principle		—			(32,369	)		100.00	%
Net income		87,704			47,262			85.57	%
PER COMMON SHARE
Net income (diluted)		0.97			0.51			90.20	%
Income from continuing operations (diluted)		0.96			0.89			7.87	%
Income (loss) on discontinued operations (diluted)		0.01			(0.03	)		133.33	%
Dividends		0.21			0.20			5.00	%
Book value		26.74			24.82			7.74	%
SELECTED RATIOS
Return on average assets		1.30	%		0.75	%
Return on average common equity		14.81	%		8.44	%
Efficiency ratio		58.11	%		59.48	%
Net interest margin		4.54	%		4.70	%

14

ZIONS BANCORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)

	Three Months Ended March 31,
(In thousands, except share and ratio data)	2003			2002			% Change
AVERAGE BALANCES
Total assets	$	27,313,646		$	25,679,029		6.37	%
Securities		3,911,833			4,079,827		(4.12	)%
Net loans and leases		18,964,880			17,538,937		8.13	%
Goodwill		730,101			735,194		(0.69	)%
Core deposit and other intangibles		81,731			107,202		(23.76	)%
Total deposits		19,918,741			17,675,111		12.69	%
Minority interest		22,981			18,546		23.91	%
Shareholders’ equity		2,402,132			2,270,697		5.79	%
Weighted average common and common-equivalent shares outstanding		90,647,613			92,813,828		(2.33	)%
AT PERIOD END
Total assets	$	27,208,734		$	24,804,578		9.69	%
Securities		3,664,417			3,503,789		4.58	%
Net loans and leases		19,130,918			17,854,168		7.15	%
Sold loans being serviced		2,401,930			2,526,076		(4.91	)%
Allowance for loan losses		280,533			264,107		6.22	%
Goodwill		730,069			734,334		(0.58	)%
Core deposit and other intangibles		79,368			104,576		(24.10	)%
Total deposits		20,801,005			18,000,342		15.56	%
Minority interest		23,285			20,769		12.11	%
Shareholders’ equity		2,412,504			2,283,000		5.67	%
Common shares outstanding		90,215,449			91,986,436		(1.93	)%
Average equity to average assets		8.79	%		8.84	%
Common dividend payout		21.70	%		38.93	%
Nonperforming assets		107,381			131,154		(18.13	)%
Loans past due 90 days or more		49,806			37,371		33.27	%
Nonperforming assets to net loans and leases, other real estate owned and other nonperforming assets at period end		0.56	%		0.73	%

15

ZIONS BANCORPORATION AND SUBSIDIARIES

OPERATING RESULTS

Zions Bancorporation and subsidiaries (“the Company”) achieved net income of $87.7 million, or $0.97 per diluted share for the first quarter of 2003, an increase of 85.6% and 90.2%, respectively, over the $47.3 million, or $0.51 per diluted share, in the first quarter of 2002. Net income for the first quarter of 2002 included an impairment charge of $32.4 million, or $0.35 per diluted share, recognized as a cumulative effect adjustment, from the required adoption of Statement of Financial Accounting Standards (“SFAS”) No. 142. This impairment charge resulted from an adjustment to the carrying value of the Company’s investments in certain e-commerce subsidiaries. Also included in net income for the first quarter of 2002 was a loss from discontinued operations of $3.2 million, or $0.03 per diluted share. For the same comparative periods, income from continuing operations was $87.4 million, or $0.96 per diluted share, an increase of 5.5% and 7.9 %, respectively, over $82.8 million or $0.89 per diluted share.

The improved earnings for the first quarter of 2003 compared to the first quarter of 2002 reflect the results of several actions commenced by Company management during 2002. As discussed in detail in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, the Company exited and restructured several e-commerce activities during 2002 in light of disappointing results and the difficult e-commerce market environment. The first quarter of 2002 included after-tax losses of approximately $5.6 million, or $0.06 per diluted share, from these e-commerce activities, excluding the impairment charges previously discussed, compared to after-tax losses of approximately $0.4 million for the first quarter of 2003. The Company also increased efforts during 2002 to control expenses and announced its intent to reduce by $50 million the annual run-rate of expenses by mid-2003. Actions taken by management to control expenses include the e-commerce restructuring activities, branch closures, operations consolidation and efforts to improve procurement processes.

The annualized return on average assets was 1.30% in the first quarter of 2003 compared to 0.75% in the first quarter of 2002. For the same comparative periods, the annualized return on average common equity was 14.81% compared to 8.44%. These comparisons reflect the 2002 cumulative effect adjustment and discontinued operations previously discussed. In addition, the efficiency ratio, defined as the percentage of noninterest expenses to the sum of taxable-equivalent net interest income and noninterest income, improved to 58.11% compared to 59.48%.

NET INTEREST INCOME AND INTEREST RATE SPREADS

Net interest income for the first quarter of 2003, adjusted to a fully taxable-equivalent basis, increased 4.1% to $272.0 million compared to $261.3 million for the first quarter of 2002. Net interest margin decreased to 4.54% for the first quarter of 2003, compared to 4.70% for the first quarter of 2002. However, it increased from 4.41% for the fourth quarter of 2002 due to increased interest rate swap income, reductions in deposit rates, a reduction in the average balances of low yielding money market investments, and the effect of the auto loan and credit card securitizations repurchased in December 2002.

The yield on average earning assets decreased 73 basis points during the first quarter of 2003 compared to the first quarter of 2002. The average rate paid this quarter on interest-bearing funds decreased 64 basis points from the first quarter of 2002. The spread on average interest-bearing funds for the first quarter of 2003 was 4.21%, down from 4.30% for the first quarter of 2002, and up from 4.01% for the fourth quarter of 2002.

16

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)

	Three Months Ended March 31, 2003							Three Months Ended March 31, 2002
(In thousands)	Average Balance			Amount of Interest (1)		Average Rate		Average Balance			Amount of Interest (1)		Average Rate
ASSETS
Money market investments	$	1,402,979		$	3,937	1.14	%	$	930,734		$	3,686	1.61	%
Securities:
Held to maturity		—			—				79,143			798	4.09	%
Available for sale		3,259,889			39,440	4.91	%		3,349,833			44,385	5.37	%
Trading account		651,944			5,561	3.46	%		650,851			5,434	3.39	%
Total securities		3,911,833			45,001	4.67	%		4,079,827			50,617	5.03	%
Loans:
Loans held for sale		250,388			2,505	4.06	%		214,328			2,736	5.18	%
Net loans and leases (2)		18,714,492			303,728	6.58	%		17,324,609			313,048	7.33	%
Total loans and leases		18,964,880			306,233	6.55	%		17,538,937			315,784	7.30	%
Total interest-earning assets		24,279,692			355,171	5.93	%		22,549,498			370,087	6.66	%
Cash and due from banks		910,849							976,923
Allowance for loan losses		(281,264	)						(264,053	)
Goodwill		730,101							735,194
Core deposit and other intangibles		81,731							107,202
Other assets		1,592,537							1,574,265
Total assets	$	27,313,646						$	25,679,029
LIABILITIES
Interest-bearing deposits:
Savings and NOW	$	2,768,128			5,015	0.73	%	$	2,351,800			6,074	1.05	%
Money market super NOW		9,044,349			27,614	1.24	%		7,348,527			32,381	1.79	%
Time under $100,000		1,741,121			11,225	2.61	%		2,024,253			18,484	3.70	%
Time $100,000 and over		1,321,938			9,265	2.84	%		1,592,229			14,518	3.70	%
Foreign		189,535			498	1.07	%		101,258			388	1.55	%
Total interest-bearing deposits		15,065,071			53,617	1.44	%		13,418,067			71,845	2.17	%
Borrowed funds:
Securities sold, not yet purchased		481,990			4,654	3.92	%		392,271			3,702	3.83	%
Federal funds purchased and security repurchase agreements		2,422,087			6,447	1.08	%		3,127,698			12,893	1.67	%
Commercial paper		293,259			1,120	1.55	%		357,147			1,886	2.14	%
FHLB advances and other borrowings:
One year or less		7,178			34	1.92	%		394,901			1,809	1.86	%
Over one year		240,245			3,151	5.32	%		227,508			2,832	5.05	%
Long-term debt		1,099,333			14,168	5.23	%		793,828			13,815	7.06	%
Total borrowed funds		4,544,092			29,574	2.64	%		5,293,353			36,937	2.83	%
Total interest-bearing liabilities		19,609,163			83,191	1.72	%		18,711,420			108,782	2.36	%
Noninterest-bearing deposits		4,853,670							4,257,044
Other liabilities		425,700							421,322
Total liabilities		24,888,533							23,389,786
Minority interest		22,981							18,546
Total shareholders’ equity		2,402,132							2,270,697
Total liabilities and shareholders’ equity	$	27,313,646						$	25,679,029
Spread on average interest-bearing funds						4.21	%						4.30	%
Taxable-equivalent net interest income and net yield on interest-earning assets				$	271,980	4.54	%				$	261,305	4.70	%

(1) Taxable-equivalent rates used where applicable.

(2) Net of unearned income and fees, net of related costs.  Loans include nonaccrual and restructured loans.

17

ZIONS BANCORPORATION AND SUBSIDIARIES

PROVISION FOR LOAN LOSSES

The provision for loan losses was $17.6 million for the first quarter of 2003, compared to $15.8 million for the fourth quarter of 2002, and $18.1 million for the first quarter of 2002. Annualized, the provision is 0.38% of average loans for the first quarter of 2003, 0.34% for the fourth quarter of 2002, and 0.42% for the first quarter of 2002. The increased provision for the first quarter of 2003 compared to the fourth quarter of 2002 reflects management’s evaluation of its various portfolios, higher net loan losses, statistical trends and other economic factors, and its desire to maintain a strong coverage of nonperforming assets in a continued uncertain economic environment in the markets in which the Company operates. Further discussion is included in the Risk Elements and Allowance for Loan Losses sections following.

NONINTEREST INCOME

Noninterest income for the first quarter of 2003 of $96.3 million increased 2.7% from $93.8 million for the first quarter of 2002. Comparing the significant segments of the change, service charges on deposit accounts increased 10.5%, loan sales and servicing income increased 166.6%, other service charges, commissions and fees increased 4.8%, income from securities conduit increased 65.9%, dividends and other investment income decreased 26.9%, market making, trading and nonhedge derivative income decreased 36.0%, equity securities gains (losses) decreased 1,050.7%, and other noninterest income decreased 36.9%.

The increase in service charges on deposit accounts resulted mainly from increased internal core deposit growth. During the first quarter of 2002, the Company restructured certain derivatives related to loans. The restructuring resulted in a $13.6 million decrease in loan sales and servicing income and a corresponding increase in nonhedge derivative income. Without this transaction, loan sales and servicing income would have been approximately $20.5 million in the first quarter of 2002, compared to $18.5 million in the first quarter of 2003. In December 2002, the Company repurchased revolving auto loan and credit card securitizations resulting in a reclassification of income from loan sales and servicing income to interest income. Market making, trading and nonhedge derivative income was $9.9 million in the first quarter of 2003 compared to $1.8 million in the first quarter of 2002, excluding the $13.6 million adjustment. Trading income for 2003 was $6.2 million compared to $4.0 million for 2002 and nonhedge derivative income was $3.7 million compared to a loss of $2.2 million for 2002, excluding the $13.6 million adjustment. The increase in trading income reflects increased revenues from the Company’s electronic corporate bond trading business. Nonhedge derivative income for 2003 included fair value increases of $2.1 million compared to a decrease in the fair value of nonhedge derivatives of $6.7 million in 2002.

The increase in income from securities conduit resulted from the increased amount of securities in the conduit’s portfolio, which resulted in increased fees from providing liquidity, an interest rate agreement, and administrative services for the conduit. Dividends and other investment income consist of income from the Company’s bank-owned life insurance and dividends and equity in earnings from investments in unconsolidated companies. The decrease in dividends and other investment income results mainly from a $1.4 million decrease in dividend income from Federal Home Loan Bank (“FHLB”) investments resulting from decreased investments in FHLB stock and a $1.4 million decrease in equity in earning of unconsolidated companies. The decrease in equity securities gains (losses) results from $6.7 million of losses from investments made by venture capital funds (partially offset by $0.8 million of gains realized on the sale of marketable equity securities) compared to venture capital gains of $0.6 million in 2002. Net of minority interest and income taxes, the results of the venture capital funds reduced net income by approximately $3.0 million or $.03 per share in the first quarter of 2003.

The decrease in other income is explained principally by a pretax gain in 2002 from the sales of three

18

ZIONS BANCORPORATION AND SUBSIDIARIES

California branches for approximately $3.2 million, net of nondeductible goodwill write downs allocated to the branches sold. The after-tax gain from the sales was approximately $1.4 million.

NONINTEREST EXPENSE

Noninterest expense for the first quarter of 2003 of $214.0 million increased $8.7 million or 4.2% over $205.3 million for the first quarter of 2002. Comparing significant components of this change, salaries and employee benefits increased $9.7 million or 8.5%, legal and professional fees decreased 12.1%, postage and supplies decreased 7.0%, advertising decreased 29.7%, amortization of core deposit and other intangibles increased 6.5%, and the total of all other noninterest expenses increased 2.4%.

The increase in salaries and employee benefits includes an increase in the first quarter of 2003 of $3.6 million in employee health insurance costs and an increase of $3.0 million in retirement plan expenses. The decrease in legal and professional fees, postage and supplies, advertising, and the modest increase in other expense categories reflect the Company’s cost containment measures previously discussed.

At March 31, 2003, the Company had 7,914 full-time equivalent employees, 407 branches, and 579 ATMs, compared to 8,255 full-time equivalent employees, 408 branches, and 587 ATMs at March 31, 2002.

INCOME TAXES

The Company’s income taxes on continuing operations increased 5.4% to $46.4 million for the first quarter of 2003 compared to $44.0 million for the first quarter of 2002. The Company’s effective income tax rate was 35.4% for the first quarter of 2003 compared to 34.7% for the first quarter of 2002.

DISCONTINUED OPERATIONS

During the third quarter of 2002, the Company decided to discontinue the operations of certain e-commerce subsidiaries. The Company determined that its plan to offer all or part of these subsidiaries for sale met the held for sale and discontinued operations criteria of SFAS 144. The results of operations for the first quarter of 2002 were reclassified to reflect the discontinued operations of these subsidiaries.

The improvement in income (loss) on discontinued operations for the first quarter of 2003 compared to 2002 results mainly from the sale of one of the subsidiaries in December 2002 and significantly curtailed operations of the remaining subsidiary.

ANALYSIS OF FINANCIAL CONDITION

EARNING ASSETS

Average earning assets increased 7.7% to $24,280 million for the three months ended March 31, 2003 compared to $22,549 million for the three months ended March 31, 2002. Earning assets comprised 88.9% of total average assets for the first three months of 2003, compared with 87.8% for the first three months of 2002.

Average money market investments, consisting of interest-bearing deposits, federal funds sold and security resell agreements, increased 50.7% to $1,403 million for the first three months of 2003 compared to $931 million for the first three months of 2002. This increase resulted from a significant acceleration in the rate of deposit growth, particularly in the second half of 2002, relative to loan growth.

19

ZIONS BANCORPORATION AND SUBSIDIARIES

Average securities decreased 4.1% to $3,912 million for the first three months of 2003 compared to $4,080 million for the first three months of 2002. Average investment portfolio securities decreased 4.9% and average trading securities increased 0.2%.

Average net loans and leases increased 8.1% to $18,965 million for the first three months of 2003 compared to $17,539 million for the first three months of 2002, representing 78.1% of earning assets in the first three months of 2003 compared to 77.8% in the first three months of 2002. Average net loans and leases were 95.2% of average total deposits for the first three months of 2003 compared to 99.2% for the first three months of 2002.

INVESTMENT SECURITIES

The following table presents the Company’s held-to-maturity and available-for-sale investment securities:

	March 31, 2003				December 31, 2002				March 31, 2002
(In millions)	Amortized Cost		Estimated Market Value		Amortized Cost		Estimated Market Value		Amortized Cost		Estimated Market Value
HELD TO MATURITY
Mortgage-backed securities	$	—	$	—	$	—	$	—	$	79	$	80
AVAILABLE FOR SALE
U.S. Treasury securities		36		38		44		47		56		57
U.S. government agencies and corporations:
Small Business Administration loan-backed securities		757		760		752		756		706		707
Other agency securities		341		342		299		302		709		713
States and political subdivisions		666		670		640		645		530		537
Mortgage/asset-backed and other debt securities		1,306		1,326		1,187		1,208		851		856
		3,106		3,136		2,922		2,958		2,852		2,870
Equity securities:
Mutual funds		168		172		317		321		234		238
Stock		15		20		15		25		16		33
		183		192		332		346		250		271
		3,289		3,328		3,254		3,304		3,102		3,141
Total	$	3,289	$	3,328	$	3,254	$	3,304	$	3,181	$	3,221

LOANS

The Company has structured its organization to separate the lending function from the credit administration function to strengthen the control and independent evaluation of credit activities. Loan policies and procedures provide the Company with a framework for consistent underwriting and a basis for sound credit decisions. In addition, the Company has well-defined standards for grading its loan portfolio, and management utilizes the comprehensive loan grading system to determine risk potential in the portfolio. Another aspect of the Company’s credit risk management strategy is the diversification of the loan portfolio. The Company has a diversified loan portfolio with some emphasis in real estate (as set forth in the following table), but has no significant exposure to highly leveraged transactions. The commercial real estate loan portfolio is also well diversified by property type and collateral location.

20

ZIONS BANCORPORATION AND SUBSIDIARIES

The table below sets forth the amount of loans outstanding by type:

(In millions)	March 31,  2003		December 31, 2002		March 31, 2002
Loans held for sale	$	227	$	289	$	207
Commercial lending:
Commercial and industrial		4,052		4,124		3,893
Leasing		372		384		408
Owner occupied		3,182		3,018		2,520
Total commercial lending		7,606		7,526		6,821
Commercial real estate:
Construction		2,991		2,947		2,939
Term		3,293		3,175		3,227
Total commercial real estate		6,284		6,122		6,166
Consumer:
Home equity credit line		703		651		454
1-4 family residential		3,191		3,209		3,374
Bankcard and other revolving plans (1)		182		205		116
Other (2)		934		1,000		726
Total consumer		5,010		5,065		4,670
Foreign loans		20		5		24
Other receivables		75		126		69
Total loans	$	19,222	$	19,133	$	17,957

(1)	The increase in Bankcard and other revolving plans from 03/31/02 to 12/31/02 includes $68.5 million in credit card receivables repurchased from securitizations in December 2002.
(2)	The increase in Other consumer loans from 03/31/02 to 12/31/02 includes $361.7 million in auto loans repurchased from securitizations in December 2002.

Loan growth for the quarter was modest reflecting the soft economy and the Company’s caution regarding aggressive loan growth in the current economic environment. On-balance-sheet net loans and leases at March 31, 2003 were $19,131 million, an increase of 7.2% from March 31, 2002 and an annualized increase of 1.9% from December 31, 2002. On balance sheet and sold loans being serviced were $21,533 million at March 31, 2003, an increase of 5.7% from March 31, 2002 and an annualized increase of 0.3% from balances reported at December 31, 2002.

On March 31, 2003, long-term conforming first mortgage real estate loans serviced for others totaled $375 million, and consumer and other loan securitizations, which include loans sold under revolving securitization structures, totaled $2,402 million. During the first three months of 2003, the Company sold $160 million of loans classified in held for sale, and securitized and sold home equity credit line and other loans totaling $98 million. During the first three months of 2003, total loans sold were $258 million compared to total loans sold of $296 million during the first three months of 2002.

As of March 31, 2003, the following table shows that the Company had residual interests of $242 million recorded on its balance sheet related to the $2,402 million of loans sold to securitized trusts. The Company does not control or have any equity interest in the trusts. However, as is common with securitized transactions, the Company has retained subordinated interests of $144 million representing the Company’s junior position to other investors in the securities. The capitalized residual cash flows (sometimes called

21

ZIONS BANCORPORATION AND SUBSIDIARIES

“excess servicing”) of $98 million principally represent the present value of estimated excess cash flows over the life of the sold loans. These excess cash flows are subject to prepayment and credit risk.

	Sold loans being serviced				Residual interests on balance sheet at March 31, 2003
(In millions)	Sales for three months ended March 31, 2003		Outstanding balance at March 31, 2003		Subordinated retained interests		Capitalized residual cash flows		Total
Home equity credit lines	$	78	$	447	$	11	$	9	$	20
Nonconforming residential real estate loans		—		55		3		1		4
Small business loans		—		1,304		130		82		212
SBA 7(a) loans		—		187		—		1		1
Farmer Mac		20		409		—		5		5
Total	$	98	$	2,402	$	144	$	98	$	242

RISK ELEMENTS

The following table sets forth the Company’s nonperforming assets:

(In millions)	March 31, 2003			December 31, 2002			March 31, 2002
Nonaccrual loans	$	87		$	82		$	116
Restructured loans		2			2			1
Other real estate owned and other nonperforming assets		18			32			14
Total	$	107		$	116		$	131
% of net loans and leases*, other real estate owned and other nonperforming assets		0.56	%		0.61	%		0.73	%
Accruing loans past due 90 days or more	$	50		$	37		$	37
% of net loans and leases*		0.26	%		0.20	%		0.21	%
*Includes loans held for sale

For the first quarter of 2003, the Company experienced improving credit quality performance in a weak economic environment in certain of the Company’s markets. Other real estate owned and other nonperforming assets decreased from December 31, 2002 due primarily to the sale of an office building in Seattle and a retail location in Arizona. The increase in accruing loans past due 90 days or more was due primarily to two credits; subsequent to March 31, 2003, one credit has been repaid and the other has been placed on nonaccrual status.

The Company’s total recorded investment in impaired loans included in nonaccrual loans and leases amounted to $46 million on March 31, 2003 compared to $44 million on December 31, 2002 and $69 million on March 31, 2002. Loans are considered impaired when it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement, including scheduled interest payments. The amount of the impairment is measured based on the present value of expected cash flows, the observable market price of the loan, or the fair value of the collateral. Impairment losses are recognized by creating or adjusting an existing allocation of the allowance for loan losses. Included in the allowance for

22

ZIONS BANCORPORATION AND SUBSIDIARIES

loan losses on March 31, 2003, December 31, 2002, and March 31, 2002, is a required allowance of $4 million, $7 million and $9 million, respectively, on $14 million, $20 million and $28 million, respectively, of the recorded investment in impaired loans.

ALLOWANCE FOR LOAN LOSSES

The following table shows the changes in the allowance for loan losses and a summary of loan loss experience:

(In millions)	Three Months Ended March 31, 2003			Twelve Months Ended December 31, 2002			Three Months Ended March 31, 2002
Loans* and leases outstanding (net of unearned income) at end of period	$	19,131		$	19,040		$	17,854
Average loans* and leases outstanding (net of unearned income)	$	18,965		$	18,114		$	17,539
Allowance for loan losses:
Balance at beginning of year	$	280		$	260		$	260
Allowance of companies acquired		—			1			—
Allowance associated with repurchased revolving securitized loans		—			10			—
Provision charged against earnings		18			72			18
Loans and leases charged-off:
Commercial lending		(12	)		(54	)		(13	)
Commercial real estate		—			(10	)		(2	)
Consumer		(8	)		(20	)		(4	)
Total		(20	)		(84	)		(19	)
Recoveries:
Commercial lending		2			14			4
Commercial real estate		—			3			—
Consumer		1			4			1
Total		3			21			5
Net loan and lease charge-offs		(17	)		(63	)		(14	)
Balance at end of period	$	281		$	280		$	264
Ratio of annualized net charge-offs to average loans and leases		0.35	%		0.35	%		0.33	%
Ratio of allowance for loan losses to net loans and leases at end of period		1.47	%		1.47	%		1.48	%
Ratio of allowance for loan losses to nonperforming loans		314.7	%		332.4	%		224.5	%
Ratio of allowance for loans losses to nonaccrual loans and accruing loans past due 90 days or more		205.0	%		234.1	%		171.9	%
*Includes loans held for sale

Net loan and lease charge-offs, along with their annualized ratios to average loans and leases, are shown in the above table for the periods presented. The same respective amounts for the fourth quarter of 2002 were $12 million and 0.27%. Included in charge-offs for the first quarter of 2003 were approximately $2.4 million related to the auto loan and credit card securitizations repurchased in December 2002.

23

ZIONS BANCORPORATION AND SUBSIDIARIES

At March 31, 2003, the allowance for loan losses included an allocation of $10 million related to commitments to extend credit for which the Company could separate the credit risk from that of any related loans on the balance sheet and for standby letters of credit. Commitments to extend credit on loans and standby letters of credit on March 31, 2003, December 31, 2002, and March 31, 2002 totaled $7,922 million, $7,915 million, and $7,317 million, respectively.

In analyzing the adequacy of the allowance for loan and lease losses, management utilizes a comprehensive loan grading system to determine risk potential in the portfolio, and considers the results of independent internal and external credit reviews, historical charge-off experience, and changes in the composition and volume of the portfolio. Other factors, such as general economic conditions and collateral values, are also considered. Larger problem credits are individually evaluated to determine appropriate reserve allocations. Additions to the allowance are based upon the resulting risk profile of the portfolio developed through the evaluation of the above factors.

DEPOSITS

Deposit growth for the first quarter of 2003 continued to be very strong. Management continues to believe that part of the growth reflects an increase in market share; however, part of this growth may be a result of investors reducing their exposure to volatile market investments. Deposits increased 15.6% over balances reported one year ago to $20,801 million, and increased 13.3% annualized from balances reported at December 31, 2002. Core deposits, which exclude time deposits $100,000 and over, increased 18.4% from March 31, 2002 and at an annualized rate of 16.2% for the quarter. Subsequent to March 31, 2003, one large governmental deposit of approximately $350 million matured and was withdrawn, as expected, partially reversing some recent deposit growth.

Average total deposits of $19,919 million for the first three months of 2003 increased 12.7% compared to $17,675 million for the first three months of 2002, with average demand deposits increasing 14.0%. Average savings and NOW deposits increased 17.7% and average money market and super NOW deposits increased 23.1% during the first three months of 2003 compared to the same period in 2002. Average time deposits under $100,000 decreased 14.0% and time deposits $100,000 and over decreased 17.0% for the first three months of 2003 compared to the same period in 2002. Average foreign deposits increased 87.2% for these same periods.

LIQUIDITY AND INTEREST RATE SENSITIVITY

The Company manages its liquidity to provide adequate funds to meet its anticipated financial obligations, including withdrawals by depositors and debt service requirements, as well as to fund customers’ demand for credit. Liquidity is provided primarily by the regularly scheduled maturities of the Company’s investment and loan portfolios.

The Federal Home Loan Bank (“FHLB”) system is a major source of liquidity for each of the Company’s subsidiary banks. Zions First National Bank and The Commerce Bank of Washington are members of the FHLB of Seattle. California Bank & Trust, Nevada State Bank, and National Bank of Arizona are members of the FHLB of San Francisco. Vectra Bank Colorado is a member of the FHLB of Topeka. The FHLB allows member banks to borrow against their eligible loans to satisfy liquidity requirements.

As another source of liquidity, the Company’s core deposits, consisting of demand, savings and money market deposits and time deposits under $100,000, constituted 92.8% of total deposits on March 31, 2003, as compared to 92.1% on December 31, 2002 and 90.8% on March 31, 2002.

24

ZIONS BANCORPORATION AND SUBSIDIARIES

Maturing balances in loan portfolios provide flexibility in managing cash flows. Maturity management of those funds is an important source of medium to long-term liquidity. The Company’s ability to raise funds in the capital markets through the securitization process and by debt issuance provides the Company additional flexibility in meeting funding needs.

The parent company’s cash requirements consist primarily of debt service, operating expenses, income taxes, dividends to shareholders, and share repurchases. The parent’s cash needs are routinely met through dividends from subsidiaries, investment income, proportionate shares of current income taxes, management and other fees, unaffiliated bank lines, and debt issuance.

As discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, the Company filed a prospectus supplement with the Securities and Exchange Commission during the third quarter of 2002 for the issuance of up to $340 million of Senior Medium-Term Notes, Series A and Subordinated Medium-Term Notes, Series B. As of March 31, 2003, the Company had issued $96 million of Senior Medium-Term Notes, compared to $46 million outstanding at December 31, 2002.

At March 31, 2003, $203.4 million of dividend capacity was available from subsidiaries to pay to the parent without having to obtain regulatory approval. During the three months ended March 31, 2003, dividends from subsidiaries were $55.5 million. The parent also has a program to issue short-term commercial paper. At March 31, 2003, outstanding commercial paper was $276.6 million. Also at March 31, 2003, the parent had a revolving credit facility with a bank totaling $40 million and a margin borrowing facility totaling $11 million. No amounts were outstanding on either of these facilities at March 31, 2003.

Zions First National Bank provides a liquidity facility for a fee to a qualified special purpose entity securities conduit (“conduit”). At March 31, 2003, the size of this liquidity facility was $5.1 billion. The conduit purchases U.S. Government and AAA rated securities. These assets are funded through the issuance of commercial paper. Pursuant to the liquidity contract, ZFNB is required to purchase securities from the conduit to provide funds for the conduit to repay maturing commercial paper upon the conduit’s inability to access the commercial paper market or upon a commercial paper market disruption as specified in governing documents to the conduit. At March 31, 2003, no amounts were outstanding under this liquidity facility and the market value of the conduit’s securities portfolio was approximately $3.9 billion.

During the first quarter of 2003, the Company repurchased 578,480 shares of common stock at a cost of $24.2 million, or an average price of $41.88 per share. On April 25, 2003, the board of directors authorized the Company to repurchase $50 million of Company common stock, which superseded all previous buyback authorizations. During the first quarter of 2002, the Company repurchased 486,488 shares of common stock at a cost of $25.3 million.

Interest rate sensitivity measures the Company’s financial exposure to changes in interest rates. Interest rate sensitivity is, like liquidity, affected by maturities of assets and liabilities. The Company assesses its interest rate sensitivity using duration and simulation analysis. Duration is a measure of the weighted-average expected lives of the discounted cash flows from assets and liabilities. Simulation is used to estimate net interest income over time using alternative interest rate scenarios.

The Company, through the management of maturities and repricing of its assets and liabilities and the use of interest rate swap agreements, attempts to manage the effect on net interest income of changes in interest rates. The prime lending and the LIBOR (London Interbank Offer Rate) curve are the primary indices used for pricing the Company’s loans, and the 91-day Treasury bill rate is the index used for pricing many of the Company’s deposits. The Company does not hedge the prime/LIBOR/T-bill spread risk through the use of

25

ZIONS BANCORPORATION AND SUBSIDIARIES

derivative instruments.

CAPITAL RESOURCES AND DIVIDENDS

Total shareholders’ equity on March 31, 2003 was $2,413 million, an increase of 1.6% over the $2,374 million on December 31, 2002, and an increase of 5.7% over the $2,283 million on March 31, 2002. The Company’s capital ratios are as follows as of the dates indicated:

	March 31, 2003			December 31, 2002			March 31, 2002
Tangible common equity ratio		6.07	%		6.06	%		6.03	%
Average common equity to average assets (three months ended)		8.79	%		8.80	%		8.84	%
Risk-based capital ratios:
Tier 1 leverage		7.61	%		7.56	%		6.56	%
Tier 1 risk-based capital		9.33	%		9.26	%		8.31	%
Total risk-based capital		12.96	%		12.94	%		12.22	%

Dividends declared of $.21 per common share for the first quarter of 2003 were increased from $.20 per common share declared for each quarter during 2002. The common cash dividend payout of net income for the first quarter of 2003 was 21.7% compared to 28.6% for the year 2002 and 38.9% for the first quarter of 2002.

CRITICAL ACCOUNTING POLICIES

The Company has reviewed and made no significant changes in critical accounting policies and assumptions compared to the disclosures made in Zions Bancorporation’s Annual Report on Form 10-K for the year ended December 31, 2002.

FORWARD-LOOKING INFORMATION

Statements in Management’s Discussion and Analysis that are not based on historical data are forward- looking, including, for example, the projected performance of the Company and its operations. These statements constitute forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from the projections discussed in Management’s Discussion and Analysis since such projections involve significant risks and uncertainties. Factors that might cause such differences include, but are not limited to: the timing of closing proposed acquisitions being delayed or such acquisitions being prohibited; competitive pressures among financial institutions increasing significantly; economic conditions, either nationally or locally in areas in which the Company conducts its operations, being less favorable than expected; and legislation or regulatory changes which adversely affect the Company’s operations or business. The Company disclaims any obligation to update any factors or to publicly announce the results of revisions to any of the forward-looking statements included herein to reflect future events or developments.

26

ZIONS BANCORPORATION AND SUBSIDIARIES

ITEM 3.           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk is the most significant market risk regularly undertaken by the Company, and is closely monitored as previously discussed. The Company believes there have been no significant changes in market risk compared to the disclosures in Zions Bancorporation’s Annual Report on Form 10-K for the year ended December 31, 2002.

ITEM 4.           CONTROLS AND PROCEDURES

Within the 90-day period prior to the filing of this report, an evaluation was carried out under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities Exchange Act of 1934). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective. There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

PART II.    OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS

The Company is a defendant in various legal proceedings arising in the normal course of business. The Company does not believe that the outcome of any such proceedings will have a material adverse effect on its consolidated financial position, operations, or liquidity.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

a)	Exhibits
	Exhibit Number	Description
	3.1	Restated Articles of Incorporation of Zions Bancorporation dated November 8, 1993, incorporated by reference to Exhibit 3.1 of Form S-4 filed on November 22, 1993	*
	3.2	Articles of Amendment to the Restated Articles of Incorporation of Zions Bancorporation dated April 30, 1997, incorporated by reference to Exhibit 3.2 of Form 10-K for the year ended December 31, 2002	*
	3.3	Articles of Amendment to the Restated Articles of Incorporation of Zions Bancorporation dated April 24, 1998, incorporated by reference to Exhibit 3 of Form 10-Q for the quarter ended June 30, 1998	*
	3.4	Articles of Amendment to Restated Articles of Incorporation of Zions Bancorporation dated April 25, 2001, incorporated by reference to Exhibit 3.6 of Form S-4 filed July 13, 2001	*

27

ZIONS BANCORPORATION AND SUBSIDIARIES

	Exhibit Number			Description
	3.5			Restated Bylaws of Zions Bancorporation dated January 19, 2001, incorporated by reference to Exhibit 3.4 of Form S-4 filed February 5, 2001	*
	10.1			Zions Bancorporation PAYSHELTER 401(k) and Employee Stock Ownership Plan, Established and Restated Effective January 1, 2003 (filed herewith)
	10.2			Zions Bancorporation 2003 - 2005 Value Sharing Plan (filed herewith)
	10.3			Form of Zions Bancorporation 2003 - 2005 Value Sharing Plan, Subsidiary Banks (filed herewith)
	10.4			Zions Bancorporation 1998 Non-Qualified Stock Option and Incentive Plan (as amended April 25, 2003) (filed herewith)
			*	Incorporated by reference
b)	Reports on Form 8-K
	Zions Bancorporation filed the following reports on Form 8-K during the quarter ended March 31, 2003:
		Form 8-K filed on January 23, 2003 (Items 7 and 9) – Copy of Press Release issued January 23, 2003 announcing 2002 fourth quarter earnings.
		Form 8-K filed on March 20, 2003 (Items 7 and 9) – Copies of certifications by the Chief Executive Officer, Harris H. Simmons, and Chief Financial Officer, Doyle L. Arnold, to the Securities and Exchange Commission as required by 18 U.S.C. Section 1350 and adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, for the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

28

ZIONS BANCORPORATION AND SUBSIDIARIES

S I G N A T U R E S

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ZIONS BANCORPORATION
	/s/ HARRIS H. SIMMONS
	Harris H. Simmons, Chairman, President and Chief Executive Officer
	/s/ DOYLE L. ARNOLD
	Doyle L. Arnold, Executive Vice President and Chief Financial Officer
Dated May 14, 2003

29

ZIONS BANCORPORATION AND SUBSIDIARIES

C E R T I F I C A T I O N
Principal Executive Officer

I, Harris H. Simmons, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Zions Bancorporation;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
	a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
	c)	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
	a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6.	The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:  May 14, 2003	/s/ HARRIS H. SIMMONS
	Harris H. Simmons, Chairman, President and Chief Executive Officer

30

ZIONS BANCORPORATION AND SUBSIDIARIES

C E R T I F I C A T I O N
Principal Financial Officer

I, Doyle L. Arnold, certify that:

1.			I have reviewed this quarterly report on Form 10-Q of Zions Bancorporation;
2.			Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.			Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.			The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
		a)		designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
		b)		evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
		c)		presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.			The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
	a)			all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
	b)			any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6.			The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:   May 14, 2003	/s/ DOYLE L. ARNOLD
	Doyle L. Arnold, Executive Vice President and Chief Financial Officer

31

EX-10.1

Exhibit 10.1

ZIONS BANCORPORATION

PAYSHELTER 401(k) AND EMPLOYEE

STOCK OWNERSHIP PLAN

ESTABLISHED AND RESTATED EFFECTIVE JANUARY 1, 2003

TABLE OF CONTENTS

ARTICLE	TITLE	PAGE NO.
ARTICLE I		-1-
ESTABLISHMENT		-1-
1.01	Establishment	-1-
1.02	History	-1-
1.03	Intent	-1-
1.04	Transferee Plan	-2-
1.05	Limitation on Applicability	-2-
1.06	EGTRRA	-2-
ARTICLE II		-3-
DEFINITIONS OF TERMS		-3-
2.01	“Account”	-3-
2.02	“Accrued Benefit”	-4-
2.03	“Administrator” or “Plan Administrator”	-4-
2.04	“Affiliated Group”	-4-
2.05	“Age”	-5-
2.06	“Anniversary Date”	-5-
2.07	“Beneficiary”	-5-
2.08	“Board of Directors”	-5-
2.09	“Code”	-5-
2.10	“Compensation” or “Annual Compensation”	-5-
2.11	“Contingent Beneficiary”	-6-
2.12	“Disability”	-7-
2.13	“Disqualified Person”	-7-
2.14	“Distribution Date”	-7-
2.15	“Effective Date”	-7-
2.16	“Elective Deferral”	-7-
2.17	“Eligible Employee”	-7-
2.18	“Employee”	-7-
2.19	“Employer” or “Zions Employer”	-7-
2.20	“Employer Contribution”	-7-
2.21	“Employer Securities”	-8-
2.22	“Entry Date”	-8-
2.23	“ERISA”	-8-
2.24	“Excluded Employee”	-8-
2.25	“Exempt Loan”	-9-
2.26	“Fiduciary”	-9-
2.27	“Highly Compensated Employee”	-9-

i

ARTICLE	TITLE	PAGE NO.
2.28	“Inactive Participant”	-10-
2.29	“Investment Fund”	-10-
2.30	“Investment Manager”	-10-
2.31	“K-Test Average Contribution Percentage”	-11-
2.32	“K-Test Contribution Percentage”	-11-
2.33	“K-Test Contributions”	-11-
2.34	“Leased Employee”	-11-
2.35	“Leveraged Employer Securities”	-11-
2.36	“Limitation Year”	-11-
2.37	“M-Test Average Contribution Percentage”	-12-
2.38	“M-Test Contribution Percentage”	-12-
2.39	“M-Test Contributions”	-12-
2.40	“Matching Contribution”	-12-
2.41	“Named Fiduciary”	-12-
2.42	“Net Profit”	-13-
2.43	“Non-Highly Compensated Employee”	-13-
2.44	“Normal Retirement Age”	-13-
2.45	“Normal Retirement Date”	-13-
2.46	“Participant”	-13-
2.47	“Paysop”	-13-
2.48	“Plan”	-13-
2.49	“Plan Sponsor”	-13-
2.50	“Plan Year”	-13-
2.51	“Predecessor Plan”	-14-
2.52	“Prior Plan”	-14-
2.53	“Qualified Matching Contribution”	-14-
2.54	“Qualified Non-Elective Contribution”	-14-
2.55	“Transferred Benefits”	-14-
2.56	“Trust”	-14-
2.57	“Trust Fund”	-14-
2.58	“Trustee”	-14-
2.59	“Valuation Date”	-15-
2.60	“Vested Interest” or “Vested Accrued Benefit”	-15-
2.61	“Voluntary Contributions”	-15-
ARTICLE III		-16-
SERVICE DEFINITIONS AND RULES		-16-
3.01	“Eligibility Computation Period”	-16-
3.02	“Eligibility Service”	-16-
3.03	“Employment Commencement Date”	-16-
3.04	“Hour of Service”	-16-

ii

ARTICLE	TITLE	PAGE NO.
3.05	“One Year Break in Service”	-18-
3.06	“Re-employment Commencement Date”	-19-
3.07	“Termination of Employment”	-19-
3.08	“Vesting Computation Period”	-19-
3.09	“Year of Service”	-19-
3.10	“Year of Vesting Service”	-19-
3.11	Special Rules for Crediting Service	-19-
3.12	Qualified Military Service Rules	-20-
ARTICLE IV		-23-
ELIGIBILITY AND PARTICIPATION		-23-
4.01	Age and Service Requirements	-23-
4.02	Eligibility Information	-23-
4.03	Information to be Provided by Employee	-23-
4.04	Reclassification of an Eligible Employee or Excluded Employee	-23-
4.05	Re-employment and Commencement of Participation	-24-
4.06	No Waiver of Participation	-24-
4.07	Effect of Participation	-24-
ARTICLE V		-25-
PARTICIPANT AND EMPLOYER CONTRIBUTIONS		-25-
5.01	Elective Deferrals	-25-
5.02	Payment to Trustee	-26-
5.03	Suspension of Deferrals	-26-
5.04	After-tax Contributions by Participants	-27-
5.05	Rollover Contributions by Participants	-27-
5.06	Safe Harbor Employer Matching Contributions	-27-
5.07	Employer Non-Elective Contributions	-29-
5.08	Time and Method of Payment	-29-
5.09	Employer Contribution Accounts	-29-
5.10	Limitations on Contributions	-29-
5.11	Excess Contributions	-31-
5.12	Correction of Excess Contributions	-32-
ARTICLE VI		-33-
ALLOCATIONS TO ACCOUNT		-33-
6.01	Revaluation of Assets	-33-
6.02	Allocation of Contributions and Forfeitures	-33-
6.03	Adjustment of Accounts and Dividends on Employer Securities	-34-

iii

ARTICLE	TITLE	PAGE NO.
6.04	Eligibility for Allocation of Employer Matching and Non-Elective Contributions	-37-
6.05	Restriction on Certain Allocations	-38-
6.06	Participant Diversification of Investments	-38-
ARTICLE VII		-40-
LIMITATIONS ON ALLOCATIONS		-40-
7.01	Special Definitions	-40-
7.02	Coordination With Other Plans	-43-
7.03	Order of Limitations	-44-
7.04	Aggregation of Plans	-44-
7.05	Suspense Account	-44-
ARTICLE VIII		-46-
IN-SERVICE AND HARDSHIP WITHDRAWALS		-46-
8.01	In-Service Withdrawals, Withdrawals of Rollover Contributions and Withdrawals Due to Attainment of Age 59½, Disability or Hardship	-46-
8.02	Financial Hardship Distribution Rules	-47-
8.03	Determination of Immediate and Heavy Financial Need	-47-
8.04	In Service Withdrawals of Voluntary Contributions	-47-
8.05	Determination of Available Withdrawal Amount	-48-
8.06	Withdrawal of Rollover Contributions	-48-
ARTICLE IX		-50-
RETIREMENT BENEFITS		-50-
9.01	Normal or Late Retirement	-50-
9.02	Disability Retirement	-50-
9.03	Method of Payment	-50-
9.04	Time of Payment	-51-
9.05	Minimum Distribution Requirements	-51-
9.06	No Annuity Benefits	-54-
9.07	Distribution of Employer Securities	-54-
9.08	Special Distribution Rules	-55-
9.09	Distribution of Transferred Benefits	-56-
ARTICLE X		-57-
DEATH BENEFITS		-57-
10.01	Death Benefits Payable	-57-

iv

ARTICLE	TITLE	PAGE NO.
10.02	Designation of Beneficiary	-57-
10.03	Death Benefit Payment Procedure	-58-
10.04	Required Distributions Upon Death	-58-
ARTICLE XI		-62-
BENEFITS UPON OTHER TERMINATION OF EMPLOYMENT		-62-
11.01	Vested Amounts	-62-
11.02	Distribution of Vested Interest	-62-
11.03	Distribution of Small Amounts	-64-
11.04	Eligible Rollover Distributions	-64-
11.05	Breaks in Service and Vesting	-65-
11.06	No Increase in Pre-break Vesting	-65-
11.07	Disposition of Forfeitures	-65-
11.08	Distribution to Participants Who Are Less Than 100% Vested in Their Entire Account	-66-
11.09	Repayment of Distribution	-67-
11.10	Restoration of Accounts	-67-
11.11	Amendments to the Vesting Schedule	-68-
ARTICLE XII		-69-
FIDUCIARY DUTIES		-69-
12.01	General Fiduciary Duty	-69-
12.02	Allocation of Responsibilities	-69-
12.03	Delegation of Responsibilities	-69-
12.04	Liability for Allocation or Delegation of Responsibilities	-69-
12.05	Liability for Co-Fiduciaries	-69-
12.06	Same Person May Serve in More than One Capacity	-70-
12.07	Indemnification	-70-
ARTICLE XIII		-71-
THE PLAN ADMINISTRATOR		-71-
13.01	Appointment of Plan Administrator	-71-
13.02	Acceptance by Plan Administrator	-71-
13.03	Signature of Plan Administrator	-71-
13.04	Appointment of an Investment Manager	-71-
13.05	Duties of the Plan Administrator	-71-
13.06	Claims Procedure	-72-
13.07	Claims Review Procedure	-72-
13.08	Limitations of Actions on Claims	-73-

v

ARTICLE	TITLE	PAGE NO.
13.09	Compensation and Expenses of Plan Administrator	-73-
13.10	Removal or Resignation	-73-
13.11	Records of Plan Administrator	-74-
13.12	Other Responsibilities	-74-
ARTICLE XIV		-75-
THE TRUSTEE		-75-
14.01	Appointment of Trustee	-75-
14.02	Acceptance by Trustee	-75-
14.03	Provisions of Trust Agreement	-75-
14.04	Participant Voting Rights	-77-
14.05	Investment Committee	-77-
14.06	Payment of Plan Expenses	-77-
14.07	Payment From the Trust Fund	-78-
ARTICLE XV		-79-
THE EMPLOYER		-79-
15.01	Notification	-79-
15.02	Record Keeping	-79-
15.03	Bonding	-79-
15.04	Signature of Employer	-79-
15.05	Plan Counsel and Expenses	-79-
15.06	Other Responsibilities	-79-
15.07	Affiliated Groups	-79-
15.08	Employer Contributions	-80-
ARTICLE XVI		-81-
PLAN AMENDMENT OR MERGER		-81-
16.01	Power to Amend	-81-
16.02	Limitations on Amendments	-81-
16.03	Method of Amendment	-81-
16.04	Notice of Amendment	-82-
16.05	Merger or Consolidation	-82-
ARTICLE XVII		-83-
TERMINATION OR DISCONTINUANCE OF CONTRIBUTIONS		-83-
17.01	Right to Terminate	-83-
17.02	Effect of Termination	-83-

vi

ARTICLE	TITLE	PAGE NO.
17.03	Manner of Distribution	-83-
17.04	No Reversion	-84-
17.05	Termination of an Employer	-84-
17.06	Partial Termination	-84-
17.07	Effect of Partial Termination	-84-
ARTICLE XVIII		-85-
FUNDING POLICY FOR PLAN BENEFITS		-85-
18.01	Funding Method	-85-
18.02	Investment Policy	-85-
18.03	No Purchase of Life Insurance Contracts	-86-
18.04	General Investments and Dividend Accounts	-86-
18.05	Non-transferability of Annuity Contracts	-86-
18.06	Establishment of Separate Funds	-86-
ARTICLE XIX		-89-
TOP-HEAVY PROVISIONS		-89-
19.01	Application	-89-
19.02	Special Definitions	-89-
19.03	Top-Heavy or Super Top-Heavy Minimum Required Allocation	-94-
19.04	Non-forfeitability of Minimum Top-Heavy Allocation	-95-
19.05	Top Heavy Compensation Limitation	-96-
19.06	Minimum Vesting Provision	-96-
19.07	Adjustments to Limitations	-96-
19.08	Participant Elective Deferrals	-97-
19.09	EGTRRA Modification of Top-Heavy Rules	-97-
ARTICLE XX		-99-
PROVISIONS AFFECTING BENEFITS		-99-
20.01	Availability of Loans	-99-
20.02	Loan Administration	-99-
20.03	Amount of Loan	-99-
20.04	Collateral Requirements	-100-
20.05	Loan Terms	-100-
20.06	Accounting for Loans	-100-
20.07	Effect of Termination of Employment or Plan	-100-
20.08	No Spousal Consent	-100-
20.09	Anti-Alienation	-101-
20.10	Qualified Domestic Relations Orders	-101-

vii

ARTICLE	TITLE	PAGE NO.
20.11	QDRO Definitions	-101-
ARTICLE XXI		-103-
MULTIPLE EMPLOYER PROVISIONS		-103-
21.01	Adoption by Other Zions Employers	-103-
21.02	Requirements of Participating Zions Employers	-103-
21.03	Designation of Agent	-103-
21.04	Employee Transfers	-103-
21.05	Amendment	-104-
21.06	Discontinuance of Participation	-104-
21.07	Administrator's Authority	-104-
21.08	Participating Employer Contributions	-104-
ARTICLE XXII		-105-
PURCHASE OF EMPLOYER SECURITIES		-105-
22.01	No Put option	-105-
22.01	Purchase Price For Employer Securities	-105-
ARTICLE XXIII		-106-
MISCELLANEOUS		-106-
23.01	Participant’s Rights	-106-
23.02	Actions Consistent with Terms of Plan	-106-
23.03	Performance of Duties	-106-
23.04	Validity of Plan	-106-
23.05	Legal Action	-106-
23.06	Gender and Number	-106-
23.07	Uniformity	-106-
23.08	Headings	-106-
23.09	Receipt and Release for Payments	-107-
23.10	Payments to Minors, Incompetents	-107-
23.11	Missing Persons	-107-
23.12	Prohibition Against Diversion of Funds	-108-
23.13	Applicability of Plan	-108-
23.14	Misstatement of Age	-108-
23.15	Return of Contributions to the Employer	-108-
23.16	Counterparts	-108-

viii

ARTICLE I

ESTABLISHMENT

1.01 Establishment: This Plan is an amendment and restatement in full of the Zions Bancorporation Payshelter 401(k) Plan. This Plan is signed and executed on the day set forth at the end of this Plan, effective for all purposes (except as specifically set forth hereafter) as of January 1, 2003. This Plan is maintained by Zions Bancorporation, a corporation organized and existing under the laws of the State of Utah, with principal offices located at Salt Lake City, Utah, hereinafter referred to as the “Plan Sponsor,” for the benefit of its Employees and the Employees of those affiliated entities who also participate herein. With the consent of Zions Bancorporation this Plan may be adopted by other Employers affiliated with it.

1.02 History: Effective as of July 1, 1984, Zions Utah Bancorporation, as the sponsoring employer, established the Zions Utah Bancorporation Salary Reduction Arrangement Plan and executed a funding arrangement with Zions First National Bank as Trustee to provide retirement benefits for eligible Employees. The name of the Plan was changed effective July 17, 1987, to the Zions Bancorporation Salary Reduction Arrangement Plan. Effective December 29, 1988, Zions Bancorporation amended the Zions Bancorporation Payroll Stock Ownership Plan and merged that plan into the Zions Bancorporation Salary Reduction Arrangement Plan. Effective January 1, 1989, Zions Bancorporation further amended and restated the Plan and renamed the Plan the Zions Bancorporation Employee Investment Savings Plan. Effective September 18, 1998, Zions Bancorporation terminated the Zions Bancorporation Profit Sharing Plan and on July 22, 1999, that plan was merged into this Plan. Effective as of December 31, 2001, Zions Bancorporation merged the Zions Bancorporation Employee Stock Savings Plan into the Zions Bancorporation Employee Investment Savings Plan, which merger further served to restate and amend both the Zions Bancorporation Employee Stock Savings Plan and the Zions Bancorporation Employee Investment Savings Plan to comply with and satisfy GUST. With the merger and amendment Zions Bancorporation also changed the name of the Plan effective January 1, 2002, to the Zions Bancorporation Payshelter 401(k) Plan. The Zions Bancorporation Payshelter 401(k) Plan as merged and combined is referred to herein as the “Prior Plan.”

1.03 Intent: Zions Bancorporation intends by this Plan to restate in full the Prior Plan, as it previously existed following the merger which was effective December 31, 2001, and continue in part the retirement benefit program it has previously established for the benefit of its Employees who shall meet the eligibility requirements hereinafter set forth and for the benefit of the beneficiaries of such Employees, respectively, as hereinafter provided. Zions Bancorporation has designed this Plan to permit Employee Deferrals and Employer Matching Contributions which satisfy the “safe harbor” requirements of Code §§401(k)(12) and 401(m)(11). Zions Bancorporation also intends that this Plan shall be an employee stock ownership plan within the meaning of Code §4975(e)(7) and shall meet all other applicable requirements of the Internal Revenue Code of 1986 (“Code”) and the

1

Employee Retirement Income Security Act of 1974 (“ERISA”). The Plan shall be interpreted, wherever possible, to comply with the terms of the Code and ERISA and all formal regulations and rulings issued thereunder.

1.04 Transferee Plan: This Plan may include assets transferred from one or more other Plans (“Predecessor Plan” or “Plans”) sponsored by Zions Bancorporation or by a member of an Affiliated Group with Zions Bancorporation. In that event certain provisions of this Plan shall apply for purposes of insuring that the Predecessor Plan has complied and continues to comply with all requirements of recent legislation, known collectively as “GUST.”

1.05 Limitation on Applicability: The provisions of this Plan shall apply to all persons, whether or not employed by Zions Bancorporation or a member of an Affiliated Group on the Effective Date, who have an account in the Plan on or after the Effective Date. Prior to the Effective Date the terms of the Prior Plan shall govern.

1.06 EGTRRA: This Plan includes language which reflects certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”). These provisions are intended as good faith compliance with the requirements of EGTRRA and are to be construed in accordance with EGTRRA and guidance issued thereunder. Unless otherwise provided, provisions included in this Plan in compliance with EGTRRA shall be effective as of the Effective Date of this Plan. Provisions included in this Plan conforming to EGTRRA shall supersede all other provisions of the Plan to the extent those provisions are inconsistent with EGTRRA.

2

ARTICLE II

DEFINITIONS OF TERMS

As used in this Plan the following words and phrases shall have the meanings indicated, unless the context clearly requires another meaning.

2.01 “Account” shall mean the Account established and maintained by the Plan Administrator for a Participant with respect to the Participant’s interest in the Investment Fund. Each Participant’s Account shall be credited or charged with contributions, distributions, expenses, earnings and losses as provided herein. The following separate sub-accounts shall be established for each Participant, as applicable, and in the aggregate they shall constitute the Participant’s Account:

(a) “Participant Elective Deferral Account” shall mean the sub-Account which is attributable to the contributions made by the Employer pursuant to an election by the Participant under Section 5.01.

(b) “Participant Rollover Account” shall mean the sub-Account which is attributable to contributions received pursuant to Section 5.05.

(c) “Employer Matching Contribution Account” shall mean the sub-Account which is attributable to matching contributions made by the Employer pursuant to Section 5.06.

(d) “Employer Non-Elective Contribution Account” shall mean the sub-Account which is attributable to the Non-Elective Contributions made by the Employer pursuant to Section 5.07.

(e) “Participant Voluntary Contribution Account” shall mean the sub-Account which is attributable to Voluntary Contributions made by the Employee prior to the Effective Date. This sub-Account shall also reflect the Participant’s Voluntary Contributions used previously to acquire Company Stock.

(f) “Paysop Account” shall mean the sub-Account which is attributable to all amounts transferred to this Plan from the Paysop pursuant to that certain trust to trust transfer agreement effective December 29, 1988.

(g) “Employer Securities Account” shall mean the sub-Account maintained for each Participant to hold the Participant’s share of Employer Securities (including fractional shares) held by the Plan, regardless of origin to the Plan or contribution source, including, without limitation, Employer Securities purchased and paid for by the

3

Trust or contributed in kind by the Employer to the Trust, forfeitures of Employer Securities and stock dividends on Employer Securities. To the extent it holds Employer Securities the Dividend Account shall also be treated as part of the Employer Securities Account for all Plan purposes, including diversification under Section 6.06, but excepting vesting under Section 11.01.

(h) “General Investments Account” shall mean the Account which is attributable to all contributions made to the Plan for the benefit of the Participant which are not comprised of Employer Securities or used to purchase Employer Securities, together with all forfeitures, earnings and accruals thereon. This sub-Account shall hold all non-Employer Securities investments, regardless of origin to the Plan or contribution source.

(i) “Dividend Account” shall mean the Account which is maintained for the purpose of receiving and holding cash dividends paid by the Plan Sponsor on Employer Securities held by the Plan until distributed or invested in Employer Securities. Upon investment in Employer Securities, the Dividend Account shall be deemed a part of and treated in the same manner as the Employer Securities Account for all Plan purposes, including diversification under Section 6.06, but excepting vesting under Section 11.01.

(j) “Segregated Investment Account” shall mean the Account which is maintained for the benefit of a Participant pursuant to Section 6.06.

(k) “Predecessor Plan Account” shall mean the Account which is attributable to assets transferred from a Predecessor Plan (“Transferred Benefits”).

Certain sub-Accounts may include or incorporate assets from other sub-Accounts. The maintenance of separate sub-Accounts is for Plan accounting purposes only and segregation of the assets of the Plan shall not be required.

2.02 “Accrued Benefit” shall mean, as of any date, the sum of the values in a Participant’s Account as of the most recent preceding Valuation Date, plus any contributions to and minus any distributions from the Account since the Valuation Date.

2.03 “Administrator” or “Plan Administrator” shall mean the person, persons, or corporation administering this Plan, as provided in Article XIII hereof, and any successor or successors thereto.

2.04 “Affiliated Group” shall mean a group of corporations, trades or businesses which constitutes a controlled group of corporations, trades or businesses as defined in Code §§414(b) and

4

(c) and shall also include a group of corporations, partnerships or other organizations which constitutes an affiliated service group as defined in Code §414(m) or is treated as a single employer under Code §414(o) and the regulations thereunder.

2.05 “Age” shall mean a person’s attained age in completed years and months as of the date determined.

2.06 “Anniversary Date” shall be the first day of each Plan Year.

2.07 “Beneficiary” shall mean any person, persons, or trust designated by a Participant on a form as the Plan Administrator may prescribe to receive any death benefit that may be payable hereunder if such person or persons survive the Participant. This designation may be revoked at any time in similar manner and form. In the event of the death of the designated Beneficiary prior to the death of the Participant, the Contingent Beneficiary shall be entitled to receive any death benefit.

2.08 “Board of Directors” shall mean:

(a) In the case of a corporation, its Board of Directors; or

(b) In the case of a partnership or joint venture, its controlling partners.

2.09 “Code” shall mean the Internal Revenue Code of 1986, as amended.

2.10 “Compensation” or “Annual Compensation” shall mean the Participant’s wages, salaries, fees for professional service and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the Company to the extent that the amounts are includable in gross income (including, but not limited to, commission paid salesmen, compensation for services on insurance premiums, tips, and bonuses). Compensation will also include Participant contributions to any insurance program and elective contributions made by the Company on behalf of its Participants which are not includable in gross income under Code Sections 125, 402(e)(3), 402(h) or 403(b).

The term “Compensation” does not include:

(a) Company contributions to a plan of deferred compensation (other than elective contributions described above) to the extent that, before the application of the Code Section 415 limitations to that plan, the contributions are not includible in the gross income of the Participant for the taxable year in which contributed. Additionally, any distributions from a plan of deferred compensation are not considered as Compensation regardless of whether such amounts are includible in the gross income of the Participant when distributed. However, any amounts received by a Participant

5

pursuant to an unfunded nonqualified plan may be considered as Compensation in the year such amounts are includible in the gross income of the Participant;

(b) Amounts realized from the exercise of a nonqualified stock option, or when restricted stock (or property) held by a Participant either becomes freely transferable or is no longer subject to a substantial risk of forfeiture;

(c) Amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option;

(d) Other amounts which receive special tax benefits, such as premiums for group term life insurance (without regard to whether the premiums are includible in the gross income of the Participant);

(e) Reimbursements or other expense allowances, fringe benefits (cash and non-cash), moving expenses, parking or public transportation payments not includable in gross income by reason of Code §132(f)(4), welfare benefits, and any lump sum amounts paid at termination of employment (on account of such termination), such as severance pay, vacation and sick leave cash-outs; and

(f) Directors fees, if any, paid to Highly Compensated Employees.

The Participant’s Annual Compensation taken into account for any Plan Year shall not exceed one hundred fifty thousand dollars ($150,000), or such greater amount adjusted each Plan Year as provided in Code §401(a)(17)(B). Effective for Plan Years commencing on and after January 1, 1997, aggregation of family members’ compensation shall not be required or allowed when determining Annual Compensation.

Effective for Plan Years commencing on and after January 1, 2002, Annual Compensation of each Participant taken into account in determining allocations for any Plan Year shall not exceed two hundred thousand dollars ($200,000), as adjusted for cost-of-living increases in accordance with Code §401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year applies to Annual Compensation for the Plan Year that begins with or within the calendar year.

For any short Plan Year the Annual Compensation limit shall be an amount equal to the Annual Compensation limit for the calendar year in which the Plan Year begins, multiplied by the ratio obtained by dividing the number of full months in the short Plan Year by twelve (12).

2.11 “Contingent Beneficiary” shall mean the person, persons, or trust duly designated by the Participant to receive any death benefit from the Plan in the event the designated Beneficiary does not survive the Participant.

6

2.12 “Disability” shall mean when applied to any Participant who has not yet attained Normal Retirement Age, an impairment occurring due to sickness or injury which prevents the Participant from performing his or her material and substantial duties as an Employee and which can be expected (a) to last for a long-continued, indefinite period and (b) result in the Participant being unable to perform the duties of any gainful occupation for which he or she is reasonably fitted by education, training or experience. The Plan Administrator shall determine the existence of Disability under this Section by applying of foregoing standard in a manner consistent with the determination of disability under the long term disability plan sponsored by the Plan Sponsor. Eligibility to receive Social Security disability payments shall not automatically deem the Participant to be disabled without further determination by the Plan Administrator.

2.13 “Disqualified Person” shall mean a person defined under Code §4975(e)(2).

2.14 “Distribution Date” shall mean the first day of the first month for which an amount is payable, or the date on which a benefit is actually paid or begins to be paid.

2.15 “Effective Date” shall mean January 1, 2003. All provisions of this Plan shall be effective as of that date unless an alternative date is specifically provided.

2.16 “Elective Deferral” shall mean a contribution to the Plan under a cash or deferred arrangement as defined in Code §401(k) to the extent not includable in gross income, which is made pursuant to an election and authorization by a Participant through a Salary Deferral Agreement consistent with the provisions of Section 5.01.

2.17 “Eligible Employee” shall mean any Employee who is not an Excluded Employee.

2.18 “Employee” shall mean any individual who performs personal services directly for and with the consent and supervision of a Zions Employer in a capacity other than solely as a director. The term “Employee” shall also include a Leased Employee.

2.19 “Employer” or “Zions Employer“ shall mean the Plan Sponsor and any other entity who, with the authorization of the Plan Sponsor, may adopt this Plan. Solely for purposes of determining Eligibility Service, Years of Vesting Service and One Year Breaks in Service, any entity not adopting this Plan which, together with the Plan Sponsor, is a member of an Affiliated Group shall also be treated as an Employer for the period of time during which the entity was a part of the Affiliated Group. Each Zions Employer participating in this Plan shall be identified on a list attached as an addendum to this Plan or through separate participation agreements reflecting adoption of this Plan by the Zions Employer.

2.20 “Employer Contribution” shall mean any Employer contribution made to this Plan on behalf of an Employee.

7

2.21 “Employer Securities” shall mean common stock issued by the Plan Sponsor (or by a corporation which is a member of the controlled group of corporations of which the Plan Sponsor is a member) which is readily tradeable on an established securities market. Noncallable preferred stock shall be deemed to be “Employer Securities” if such stock is convertible at any time into stock which constitutes “Employer Securities” hereunder and if such conversion is at a conversion price which (as of the date of the acquisition by the Plan) is reasonable. Preferred stock shall be treated as noncallable if after the call there will be a reasonable opportunity for a conversion which meets the above requirement.

2.22 “Entry Date” shall mean, solely for purposes of participation under Article IV, the date an Employee became or becomes a Participant in the Plan. Under the Prior Plan Entry Dates occurred on January 1 April 1, July 1 and October 1 of each Plan Year. Effective January 1, 2002, the Prior Plan was amended to provide that Entry Dates occur on each day of the Plan Year. The Effective Date shall also be an Entry Date for this Plan.

2.23 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations issued thereunder.

2.24 “Excluded Employee” shall mean a member of that class of Employees who are not eligible to participate in the Plan or accrue any benefit under the Plan, regardless of the number of hours worked. The class of such Employees includes:

(a) Employees whose employment is governed by the terms of a collective bargaining agreement between Employee representatives and the Employer under which retirement benefits were the subject of good faith bargaining between the Employee representatives and the Employer.

(b) Employees who are non-resident aliens and who receive no earned income (within the meaning of Code §911(b)) from an Employer which constitutes income from sources within the United States.

(c) Employees whose services for the Employer are performed outside of the United States or whose principal base of operations is outside of the United States.

(d) Employees who are designated by the Employer to be in either of the following classifications:

(i) independent contractor, or

(ii) temporary employee or Leased Employee,

8

It is expressly intended that an individual identified by the Employer to be in one of the above classifications shall be ineligible to participate in the Plan without regard to whether a court or administrative agency subsequently determines that the individual was not or is not in fact in that classification.

(e) Employees who are employed by an entity which is part of a Affiliated Group with a Zions Employer, but which entity has not adopted and does not participate in this Plan.

2.25 “Exempt Loan” shall mean a loan made to this Plan by a Disqualified Person, or a loan to this Plan which a Disqualified Person guarantees, provided the loan satisfies the requirements of Treas. Reg. §54.4975-7(b).

2.26 “Fiduciary” shall mean and include the Trustee, Plan Administrator, Plan Sponsor, Investment Manager, and any other person or corporation who:

(a) Exercises any discretionary authority or discretionary control respecting management of the Plan or exercises any authority or control respecting management or disposition of its assets;

(b) Renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of the Plan, or has any authority or responsibility to do so;

(c) Has any discretionary authority or discretionary responsibility in the administration of the Plan; or

(d) Is described as a “fiduciary” in Sections 3(14) or (21) of ERISA or is designated to carry out fiduciary responsibilities pursuant to this agreement to the extent permitted by Section 405(c)(1)(B) of ERISA.

2.27 “Highly Compensated Employee” shall mean, for any Plan Year, an Employee, other than a non-resident alien receiving no earned income from the Employer from sources within the United States, who:

(a) was at any time during the Plan Year or the Look-back Year a Five Percent Owner (as defined in Section 19.02(c)); or

(b) received Compensation from the Employer in the Look-back Year in excess of ninety thousand dollars ($90,000) and was in the Top Paid Group for the Look-back Year.

9

“Look-back Year” means the Plan Year immediately preceding the Plan Year for which the determination is being made. An Employee is in the “Top Paid Group” if the Employee is in the group consisting of the top twenty percent (20%) of Employees when ranked on the basis of Compensation paid during the Look Back Year. When calculating the number of Employees in the Top Paid Group the following Employees shall be excluded: (i) Employees who have not completed 6 months of service; (ii) Employees who normally work less than 17½ hours per week; (iii) Employees who normally work not more than 6 months during any year; (iv) Employees who have not attained Age 21; and (v) Employees who are Excluded Employees by reason of Section 2.24(a). If permitted by IRS regulations or rulings, the Employer may use shorter periods and hours and a lower age when calculating the Top Paid Group. The ninety thousand dollar ($90,000) amount in (b) above shall be adjusted for cost of living as provided under Code §415(d), except that the base period shall be the calendar quarter ending September 30, 1996.

A former Employee who was a Highly Compensated Employee upon Termination of Employment or at any time after attaining Age fifty-five (55) shall be treated as a Highly Compensated Employee. For any Plan Year, including the Look-back Year, no family aggregation rules shall apply when determining who is a Highly Compensated Employee and no Employee who is a family member of any Highly Compensated Employee shall be required or considered to be a single Employee with the Highly Compensated Employee.

For purposes of this Section, Compensation is defined as in Section 7.01(b) of this Plan, but shall include contributions made by the Employer to a plan of deferred compensation otherwise excluded in Section 7.01(b).

2.28 “Inactive Participant” shall mean an individual who retains and is entitled to receive an Accrued Benefit under the Plan, but who is not currently eligible to make Elective Deferral Contributions or receive an allocation of Employer Contributions or forfeitures, without regard to whether the individual has incurred a Termination of Employment.

2.29 “Investment Fund” shall mean all assets of the Trust Fund.

2.30 “Investment Manager” shall mean any Fiduciary (other than a Trustee or Named Fiduciary) who:

(a) Has the power to manage, acquire or dispose of any asset of the Plan;

(b) Is (1) registered as an investment advisor under the Investment Advisors Act of 1940; (2) a bank as defined in that Act; or (3) is an insurance company qualified to perform services described in Subsection (a) above under the laws of more than one state; and

(c) Has acknowledged in writing that he is a Fiduciary with respect to the Plan.

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2.31 “K-Test Average Contribution Percentage” shall mean the average (expressed as a percentage) of the K-Test Contribution Percentages of the Participants in a group.

2.32 “K-Test Contribution Percentage” shall mean the ratio (expressed as a percentage) of a Participant’s K-Test Contributions for a Plan Year to the Participant’s Compensation for the Plan Year. The K-Test Contribution Percentage for a Participant who is a Highly Compensated Employee shall be determined by combining all cash or deferred arrangements under which the Highly Compensated Employee is eligible to participate (other than those which may not be permissively aggregated) with this Plan as though they were a single arrangement. For this purpose, Compensation is defined as in Section 7.01(b) of the Plan. The K-Test Contribution Percentage for a Participant who has made no Elective Deferral contributions and who is not credited with any K-Test Contributions for the Plan Year shall be zero (0).

2.33 “K-Test Contributions” shall mean, for any Plan Year, a Participant’s Elective Deferrals, plus, if so elected by the Employer, part or all of the Qualified Non-Elective Contributions and Qualified Matching Contributions allocated to the Participant for such year, provided that, any Qualified Non-Elective Contributions included as K-Test Contributions shall not increase the difference between the K-Test Average Contribution Percentage for Highly Compensated Employees and the K-Test Average Contribution Percentage for Non-Highly Compensated Employees; and, further provided that, no Qualified Non-Elective Contributions or Qualified Matching Contributions included as K-Test Contributions shall be included as M-Test Contributions. In determining the amount of a Participant’s Elective Deferrals under this Section the Plan Administrator shall take into account elective deferrals made by the Participant under any other plan which is aggregated with this Plan for purposes of Code §401(a)(4) or Code §410(b) (other than Code §410(b)(2)(A)(ii)) and any other plan satisfying Code §401(k)(3) and Reg. §1.401(k)-1(b)(3) which the Employer elects to permissively aggregate with this Plan, by treating all such plans and this Plan as a single plan.

2.34 “Leased Employee” shall mean any person who, pursuant to an agreement between the Zions Employer and the Plan Sponsor or any other person or organization (leasing organization), has performed services for the Zions Employer (or for the Zions Employer and related persons determined in accordance with Code §414(n)(6)) and such services are performed under the primary direction or control of the Zions Employer.

2.35 “Leveraged Employer Securities” shall mean Employer Securities acquired by the Trust with the proceeds of an Exempt Loan and which satisfy the definition of “qualifying employer securities” under Code §4975(e)(8).

2.36 “Limitation Year” shall mean the Plan Year, unless the Employer elects a different twelve (12) month period.

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2.37 “M-Test Average Contribution Percentage” shall mean the average (expressed as a percentage) of the M-Test Contribution Percentages of the Participants in a group.

2.38 “M-Test Contribution Percentage” shall mean the ratio (expressed as a percentage) of a Participant’s M-Test Contributions for a Plan Year to the Participant’s Compensation for the Plan Year. The M-Test Contribution Percentage for a Participant who is a Highly Compensated Employee shall be determined by combining all plans subject to Code §401(m) under which the Highly Compensated Employee is eligible to participate (other than those which may not be permissively aggregated) with this Plan as though they were a single plan. For this purpose, Compensation is defined as in Section 7.01(b) of the Plan. The M-Test Contribution Percentage for a Participant who has made no Elective Deferral contributions and who is not credited with any M-Test Contributions for the Plan Year shall be zero (0).

2.39 “M-Test Contributions” shall mean for any Plan Year Matching Contributions made pursuant to Section 5.06 less any of the Participant’s Qualified Matching Contributions included as K-Test Contributions. If so elected by the Employer, part or all of the Qualified Non-Elective Contributions allocated to the Participant for such year shall be included as an M-Test Contribution, provided that any Qualified Non-Elective Contributions included as M-Test Contributions shall not increase the difference between the M-Test Average Contribution Percentage for Highly Compensated Employees and the M-Test Average Contribution Percentage for Non-Highly Compensated Employees; and, further provided that, no Qualified Non-Elective Contributions included as M-Test Contributions shall be included as K-Test Contributions. In determining the amount of M-Test Contributions under this Section the Plan Administrator shall take into account all employee voluntary contributions made by the Participant and all matching contributions made by the Employer under any other plan which is aggregated with this Plan for purposes of Code §401(a)(4) or Code §410(b) (other than Code §410(b)(2)(A)(ii)) and any other plan satisfying Code §401(k)(3) and Reg. §1.401(k)-1(b)(3) which the Employer elects to permissively aggregate with this Plan, by treating all such plans and this Plan as a single plan.

2.40 “Matching Contribution” shall mean any Employer contribution made to the Plan on behalf of an Employee on account of an Employee’s Elective Deferral, but excluding, for Plan Years beginning after December 31, 1988, any contribution used to meet the minimum required allocation under Section 19.03. For Plan Years commencing after December 31, 2001, Matching Contributions may be used to satisfy the minimum required contribution requirements of Section 19.03 to the extent provided in Section 19.09, if the Employer fails to or elects not to provide benefits to Participants under this Plan on a safe harbor basis, as defined herein.

2.41 “Named Fiduciary” shall mean the Plan Administrator and any Committee appointed and so designated by the Plan Administrator.

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2.42 “Net Profit” for any year shall mean the current and accumulated earnings of the Employer as reflected by its books of account for the particular fiscal year prior to the provision for federal and state income tax, without increase or decrease due to corrections or adjustments subsequently made, but excluding the cost of contributions made under this Plan or any other qualified plan.

2.43 “Non-Highly Compensated Employee” shall mean an Employee who is not a Highly Compensated Employee.

2.44 “Normal Retirement Age” shall mean Age sixty-five (65).

2.45 “Normal Retirement Date” shall mean the first day of the calendar month coinciding with or next following a Participant’s Normal Retirement Age.

2.46 “Participant” shall mean any Eligible Employee who has satisfied all of the Age and service requirements of Section 4.01. Such an Eligible Employee shall be deemed to be a Participant in the Plan for purposes of any applicable non-discrimination test, including the K-Test and M-Test defined in this Plan, without regard to whether he has executed a Salary Reduction Agreement and agreed to have contributions made to this Plan through Elective Deferrals. A Participant may nevertheless be considered “active” or “inactive” depending on whether he is eligible to make Elective Deferral Contributions or receive an allocation of Employer Contributions. A Participant who has an Account in the Plan but is an Inactive Participant because he or she has incurred a Termination of Employment shall not be treated as a Participant in the Plan for purposes of any applicable non-discrimination test, including the K-Test and M-Test defined in this Plan in any Plan Year following the Plan Year in which the Participant’s Termination of Employment has occurred.

2.47 “Paysop” shall mean the Zions Bancorporation Payroll Stock Ownership Plan, a tax-credit employee stock ownership plan within the meaning of Code §409(a), which was merged into this Plan pursuant to that certain trust to trust transfer agreement effective December 29, 1988.

2.48 “Plan” shall mean the Plan as stated herein and as may be amended from time to time, denominated the “Zions Bancorporation Payshelter 401(k) and Employee Stock Ownership Plan.” The Employer intends the Plan to satisfy the requirements of Code Section 401(k) and to be an employee stock ownership plan within the meaning of Code §4975(e)(7), for all purposes of the Code

2.49 “Plan Sponsor” shall mean Zions Bancorporation.

2.50 “Plan Year” shall mean the one year period commencing each January1 and ending the following December 31.

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2.51 “Predecessor Plan” shall mean any Plan which has been previously amended or restated for GUST and whose assets have been transferred to this Plan pursuant to a merger or trust to trust transfer. The benefits which are funded by the transferred assets shall be protected benefits within the meaning of Code §411(d)(6) and the regulations thereunder and prior to their transfer to this Plan shall be subject to all provisions of the Predecessor Plan, including any transitional rules required by prior legislation such as GUST and applicable IRS regulations.

2.52 “Prior Plan” shall mean the Zions Bancorporation Payshelter 401(k) Plan, as it existed immediately prior to the Effective Date.

2.53 “Qualified Matching Contribution” shall mean a Matching Contribution with respect to which the requirements of Reg. §1.401(k)-1(b)(5) and Code §§401(k)(2)(B) and (C) are met.

2.54 “Qualified Non-Elective Contribution” shall mean any Employer contribution to the Plan other than a Matching Contribution with respect to which the Employee may not elect to have the contribution paid to the Employee in cash instead of being contributed to the Plan and (if treated as K-test Contributions) the requirements of Reg. §1.401(k)-1(b)(5) and Code §§401(k)(2)(B) and (C) are met or (if treated as M-Test Contributions) the requirements of Reg. §1.401(m)-1(b)(5) are met.

2.55 “Transferred Benefits” shall mean those benefits funded by assets transferred to the Plan from a Predecessor Plan. Transferred Benefits shall include all optional forms of benefits available under the Predecessor Plan(s) from which the Transferred Benefits were received, unless otherwise provided in this Plan.

2.56 “Trust” shall mean the Trust originally created in conjunction with the Plan, previously named effective January 1, 2002, the Zions Bancorporation Payshelter 401(k) Plan Trust. As of the Effective Date the Trust is designated as the “Zions Bancorporation Payshelter 401(k) and Employee Stock Ownership Plan Trust.”

2.57 “Trust Fund” shall mean all cash, Employer Securities, securities, annuity contracts, real estate and any other property held by the Trustee pursuant to the terms of the Trust and this Plan, together with investment earnings or losses thereon, less any applicable expenses of the Plan and Trust.

2.58 “Trustee” shall mean the bank, trust company or other corporation possessing trust powers under applicable state or federal law, or one or more individuals, or any combination thereof named as Trustee or Trustees under the Trust.

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2.59 “Valuation Date” shall mean the date on which the Trust Fund and Accounts are valued, as provided in this Plan. The following shall be Valuation Dates:

(a) the last day of each Plan Year (the “Annual Valuation Date”), and

(b) every other business day during the Plan Year on which trading activity occurs or could occur with respect to the Employer Securities held by the Plan. The Plan Administrator shall interpret this Section as it deems necessary or advisable to provide for the orderly and equitable administration of the Plan.

2.60 “Vested Interest” or “Vested Accrued Benefit” shall mean the portion of a Participant’s Accrued Benefit which is non-forfeitable.

2.61 “Voluntary Contributions” shall mean after-tax contributions previously made by a Participant under a Salary Reduction Agreement with the Employer. As of the Effective Date Voluntary Contributions are no longer permitted to be made to the Plan.

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ARTICLE III

SERVICE DEFINITIONS AND RULES

3.01 “Eligibility Computation Period” shall mean the period used to measure Eligibility Service and Breaks in Service for purposes of eligibility to begin and maintain participation in the Plan. As of January 1, 2002, the Plan does not apply any minimum Eligibility Computation Period.

3.02 “Eligibility Service” shall mean service for any period during which an Employee receives credit for Hours of Service for a Zions Employer.

3.03 “Employment Commencement Date” shall mean the date on which the Employee first performs an Hour of Service for a Zions Employer.

3.04 “Hour of Service” shall mean and be determined as follows:

(a) Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Employer. These hours shall be credited to the Employee for the year or years in which the duties are performed.

(b) Each hour for which an Employee is paid, or entitled to payment, by the Employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or Leave of Absence. Notwithstanding the preceding sentence:

(1) No more than five hundred and one (501) Hours of Service are required to be credited under this paragraph during which the Employee performs no duties (whether or not such period occurs in a single computation period);

(2) An hour for which an Employee is directly or indirectly paid, or entitled to payment, on account of a period during which no duties are performed is not required to be credited to the Employee if such payment is made or due under a plan maintained solely for the purpose of complying with applicable worker’s compensation or unemployment compensation or disability insurance laws; and

(3) Hours of Service are not required to be credited for a payment which solely reimburses an Employee for medical or medically related expenses incurred by the Employee.

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For purposes of this paragraph (b), a payment shall be deemed to be made by or due from an Employer regardless of whether such payment is made by or due from the Employer directly, or indirectly through, among others, a trust fund or insurer to which Employer contributes or pays premiums and regardless of whether contributions made or due to the trust fund, insurer or other entity are for the benefit of particular Employees or are on behalf of a group of Employees in the aggregate. Hours under this paragraph (b) shall be calculated and credited pursuant to DOL Reg. §2530.200b-2, paragraphs (b) and (c), which are incorporated herein by this reference.

(c) Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer. The same Hours of Service shall not be credited both under paragraph (a) or paragraph (b), as the case may be, and under this paragraph (c). These hours shall be credited to the Employee for the year or years to which the award or agreement pertains rather than the year in which the award, agreement or payment is made.

(d) Hours of Service shall be determined on the basis of actual hours for which an Employee is paid, entitled to payment or for which back pay is awarded or agreed to.

(e) In the case of an Employee who is absent from work for any period:

(1) By reason of the pregnancy of the Employee;

(2) By reason of the birth of a child of the Employee;

(3) By reason of the placement of a child with the Employee in connection with the adoption of such child by such Employee; or

(4) For purposes of caring for such child for a period beginning immediately following such birth or placement;

Hours of Service shall include the Hours of Service which otherwise would normally have been credited to such Employee but for such absence; or in any case in which the Plan is unable to determine the Hours of Service to be credited, eight (8) Hours of Service for each regularly scheduled work day of such absence. The total number of hours treated as Hours of Service under this Section by reason of any pregnancy or placement shall not exceed five hundred and one (501) hours less the number of Hours of Service credited to an Employee pursuant to Subsections (a) through (e) above, for an absence described in this Subsection (f). The hours described in this Subsection (f) shall be treated as Hours of Service only in the

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computation period in which the absence from work begins, if an Employee would be prevented from incurring a One-Year Break in Service in such computation period solely because the period of absence is treated as Hours of Service as provided herein; or in any other case, in the immediately following computation period. Notwithstanding the foregoing, no credit will be given pursuant to this Subsection (f) unless the Employee furnishes to the Plan Administrator such timely information as the Plan Administrator may reasonably require to establish that the absence from work is for reasons referred to herein, and the number of days for which there was such an absence.

(f) Hours of Service shall be aggregated for service with all Zions Employers, however, in no event shall duplicate credit be given for the same Hours of Service.

(g) The Plan Administrator may use any records to determine Hours of Service which it considers an accurate reflection of the facts.

(h) When crediting Hours of Service for Employees who are paid on an hourly basis the Plan Administrator shall use the “actual” method. For purposes of the Plan, “actual” method shall mean the determination of Hours of Service from records of hours worked and hours for which the Employer makes payment or for which payment is due from the Employer. When crediting Hours of Service for Employees who are not paid on an hourly basis, the Plan Administrator shall use the “salaried earnings” method. With respect to an Employee whose Compensation consists primarily of periodic salary payments, “salaried earnings” method shall mean the determination of Hours of Service from records showing payments made to the Employee or payments due to the Employee from the Employer. In applying the “salaried earnings” method, an Employee who has at least four hundred thirty five (435) hours or eight hundred seventy (870) hours shall be credited with five hundred (500) Hours of Service and one thousand (1000) Hours of Service, respectively.

3.05 “One Year Break in Service” shall mean a twelve (12) consecutive month period during which an Employee has not completed more than five hundred (500) Hours of Service, regardless of whether the Employee has incurred a Termination of Employment. For purposes of vesting, such twelve (12) consecutive month periods shall be measured on the same basis as Years of Vesting Service. For purposes of eligibility to participate, the Plan shall not apply any break in service rule. The following types of absence shall not constitute a One-Year Break in Service:

(a) Temporary leave of absence granted by the Employer for sickness, or extended vacation, provided that persons under similar circumstances shall be treated alike;

(b) Absence due to illness or accident while regular remuneration is paid;

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(c) Absence for military service or significant civilian service for the United States, provided that with respect to civilian service, the absent Employee returns to service with the Employer within thirty (30) days of his release from the civilian service or any longer period during which his right to re-employment is protected by law and with respect to military service, the absent Employee returns to service within the period described in Section 3.12, or any longer period during which his right to re-employment is protected by law.

3.06 “Re-employment Commencement Date” shall mean the date on which an Employee, who has both incurred a Termination of Employment from the Employer and has had a One Year Break in Service as a result of that termination, first performs an Hour of Service for the Employer following such Break in Service.

3.07 “Termination of Employment” with respect to any Employee or Participant shall occur upon the separation from service (effective January 1, 2002, severance from employment) of the Employee or Participant due to the resignation, discharge, death, retirement, failure to return to active work at the end of an authorized leave of absence or the authorized extension(s) thereof, failure to return to active work when duly called following a temporary layoff, or upon the happening of any other event or circumstance which, under the then current policy of the Zions Employer results in the termination of the employer-employee relationship. Termination of Employment shall not be deemed to occur merely because of a transfer between Zions Employers.

3.08 “Vesting Computation Period” shall mean the twelve (12) consecutive month period used to measure Years of Vesting Service and Breaks in Service for purposes of vesting. The twelve (12) consecutive month period used for the Vesting Computation Period shall be the Plan Year.

3.09 “Year of Service” shall mean a twelve (12) consecutive month period during which an Employee has completed at least one thousand (1000) Hours of Service.

3.10 “Year of Vesting Service” shall mean a Vesting Computation Period during which an Employee has completed at least one thousand (1000) Hours of Service. Subject to Section 11.05 a Participant’s Years of Vesting Service shall be determined based on all Vesting Computation Periods containing or beginning after his Employment Commencement Date or Re-employment Commencement Date, provided that service prior to the date an Employee has attained Age 18 shall not be taken into account. Any individual who was a Leased Employee and who subsequently becomes an Eligible Employee shall be credited with all Years of Service as a Leased Employee for purposes of determining Years of Vesting Service.

3.11 Special Rules for Crediting Service. In crediting Service under the Plan for any Employee who is or was employed by a Participating Employer the rules for crediting Service as set

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forth in each respective Participation Agreement or as set forth in this Section shall apply. When crediting service under the Plan for Employees who are employed by certain members of an Affiliated Group or who are former employees of entities acquired by the Employer, the following special rules for crediting service shall apply:

(a) Discount Corporation of New York: Each Employee of Discount Corporation of New York (“Discount”) who, as of August 10, 1993, satisfied the Plan’s minimum age and service requirements shall be eligible to participate in the Plan on August 11, 1993 (which shall be deemed a “Plan Entry Date” for this purpose) or on any subsequent Plan Entry Date if employed by the Employer or any member of the Affiliated Group who participate in the Plan on that date. All service of the Employee with Discount and any member of the affiliated Group shall be credited for purposes of the above participation rule. For purposes of benefit accrual, no prior service with Discount shall be taken into account.

3.12 Qualified Military Service Rules: The following rules shall apply to an Employee who has Qualified Military Service while employed by the Employer.

(a) “Qualified Military Service” shall mean service by an Employee in the uniformed services of the United States (as defined in chapter 43 title 38 of the United States Code), provided:

(1) the employee provides advance notice of the service to the Zions Employer, when such notice is practical;

(2) the employee is not dishonorably discharged;

(3) the employee is re-employed by the Zions Employer within thirty (30) days following the completion of the service or any longer period during which his or her or her right to re-employment is protected by law; and

(4) the cumulative length of the Employee’s absence from employment due to the service does not exceed five (5) years.

(b) An Employee’s Qualified Military Service shall be treated as service for the Employer for all purposes under the Plan. An Employee’s imputed Hours of Service during Qualified Military Service shall be:

(1) the Hours of Service the Employee would have worked but for his or her or her Qualified Military Service; and

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(2) if the Hours of Service cannot reasonably be determined, the Hours of Service the Employee would have worked had he or she worked during his or her or her Qualified Military Service at his or her or her average rate during the twelve (12) month period immediately preceding his or her or her Qualified Military Service or, if shorter, his or her or her entire period of employment preceding the Qualified Military Service.

(c) Compensation (as defined in Section 2.10) shall include imputed compensation during an Employee’s Qualified Military Service. Imputed compensation shall be:

(1) the compensation the Employee would have received but for his or her or her Qualified Military Service; or

(2) if the compensation is not reasonably certain, the compensation the Employee would have received had he or she received compensation during his or her qualified Military Leave at his or her or her average rate during the twelve (12) month period immediately preceding his or her or her Qualified Military Service, or, if shorter, his or her or her entire period of employment preceding his or her or her Qualified Military Service.

(d) A Participant who returns to employment after any Qualified Military Service shall be entitled to make additional Elective Deferrals to the Plan up to the maximum amount of the Elective Deferrals the Participant would have been permitted to make based upon his or her or her imputed compensation during the Qualified Military Service, taking into account any other Elective Deferrals made by the Participant during the Qualified Military Service. The period during which the additional Elective Deferrals may be made shall commence on the date the Participant returns to employment and shall extend until the expiration of the lesser of (i) the period which is three (3) times the length of the Participant’s Qualified Military Service or (ii) five (5) years. Payment of Matching Contributions attributable to Elective Deferrals of imputed compensation during Qualified Military Service shall be made at the same time as other Matching Contributions, based on the time the Elective Deferrals are actually paid to the Plan. The Matching Contributions need not include earnings which would have accrued had the Participant continued performing his or her or her duties for the Employer during Qualified Military Service.

(e) Elective Deferrals of a Participant’s imputed compensation during his or her or her Qualified Military Service shall be treated as Elective Deferrals and as K-Test Contributions with respect to the Plan Year to which the imputed compensation relates, if this Plan Year is not the same Plan Year in which the Elective Deferrals are received by the Plan. Any Matching Contributions based on Elective Deferrals of a

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Participant’s imputed compensation during his or her or her Qualified Military Service shall be treated as M-Test Contributions with respect to the Plan Year to which the Elective Deferrals relate, if this Plan Year is not the same Plan Year in which the Elective Deferrals are received by the Plan.

(f) Repayment of any Participant loan from the Plan shall be suspended during Qualified Military Service and the loan repayment period shall be extended by the length of the Qualified Military Service. Interest shall continue to accrue on the loan during the suspension period at a rate equal to the lesser of the current rate on the loan or the maximum rate allowed by applicable law. Upon recommencing loan payments the additional accrued interest shall be taken into account in determining the total amount remaining and due on the loan.

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ARTICLE IV

ELIGIBILITY AND PARTICIPATION

4.01 Age and Service Requirements: From and after the Effective Date an Eligible Employee shall be eligible initially to participate in this Plan on the first Entry Date coincident with or next following the date on which he satisfies the following requirements:

(a) attains age twenty-one (21), and

(b) is employed on the Entry Date.

An Eligible Employee who has satisfied the requirements above shall commence participation in the Plan on the applicable Entry Date. An Eligible Employee who has attained Age twenty-one (21) and is employed on the Effective Date shall participate in this Plan on the Effective Date, without regard to the other requirements of this Section. Prior to the Effective Date Eligible Employees shall participate as provided in the Prior Plan.

An Eligible Employee who becomes a Participant and who also executes a Salary Deferral Agreement in the manner set forth in procedures issued by the Plan Administrator (which may include use of electronic technologies) shall be considered to be an active Participant. An Eligible Employee shall not be required to execute a Salary Deferral Agreement in order to be considered a Participant in the Plan, however, as a condition to participation in Salary Deferral Contributions the Eligible Employee shall first execute a written Salary Deferral Agreement in the manner set forth in procedures issued by the Plan Administrator. An Employee who is a Participant in a Predecessor Plan on the day before the effective date of the merger of the Predecessor Plan into this Plan shall continue as a Participant in this Plan on the effective date of merger.

4.02 Eligibility Information: As soon as practicable after the date each Employee’s Employment Commencement Date, the Plan Administrator shall verify the Entry Date when the Employee shall first become eligible to participate in the Plan and shall notify each Employee of his/her eligibility, and of any application or other requirements for participation.

4.03 Information to be Provided by Employee: At the request of the Plan Administrator, each Eligible Employee shall furnish such information as is not available from the Employer. As a condition to participation in making Elective Deferrals to the Plan, the Employee shall first complete, execute and deliver a written Salary Deferral Agreement as reasonably required by the Plan Administrator.

4.04 Reclassification of an Eligible Employee or Excluded Employee: Any Eligible Employee, whether or not he has previously participated in the Plan, who was previously classified

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as an Excluded Employee and is reclassified as an Eligible Employee shall be eligible to enter the Plan as an active Participant on the later of the date of his reclassification or the Entry Date he would otherwise join if he had not been classified as an Excluded Employee, provided he has otherwise satisfied the requirements of Section 4.01.

Any Participant who is reclassified as an Excluded Employee shall be treated as an Excluded Employee on the date of reclassification for purposes of determining his eligibility for any Employer Contributions in the Plan Year of reclassification. If, prior to the date of reclassification, the Participant had executed a Salary Deferral Agreement and is deferring Compensation in the Plan Year in which the reclassification occurs, the Participant’s Salary Deferral Agreement and all Elective Deferrals thereunder shall automatically terminate as of the last day of the payroll period which commenced immediately prior to the date the Participant is reclassified as an Excluded Employee.

4.05 Re-employment and Commencement of Participation: An Eligible Employee who had met the requirements of Section 4.01(a) and (b) but terminated employment prior to his Entry Date shall be eligible to become a Participant on the date he is re-employed by the Employer, but in no event earlier than the Entry Date he would have joined had he not ceased employment. An Eligible Employee who was a Participant shall again become a Participant on the date he is re-employed by the Employer.

4.06 No Waiver of Participation: An Eligible Employee who has satisfied all criteria for participation in this Plan shall be deemed a Participant and may not waive or reject participation.

4.07 Effect of Participation: A Participant who has satisfied all eligibility criteria and commenced active participation in this Plan shall be conclusively deemed to have assented to this Plan and to any subsequent amendments, and shall be bound thereby with the same force and effect as if he had formally executed this Plan.

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ARTICLE V

PARTICIPANT AND EMPLOYER CONTRIBUTIONS

5.01 Elective Deferrals:

(a) Each Participant may elect to defer any percentage of the Participant’s Compensation described in subsection (1) below, subject to a minimum of one percent (1%) of the Participant’s Compensation per pay period. The maximum percentage amount shall be fifty percent (50%) of the Participant’s Compensation. The amount of the deferral shall be contingent on the Participant electing and authorizing the Elective Deferral amount through a Salary Deferral Agreement. The Salary Deferral Agreement and the Participant’s authorization thereunder may be evidenced by a document executed by the Participant and filed with the Administrator in the manner prescribed for this purpose, which may include a Salary Deferral Agreement completed and executed by the Participant through any approved electronic means. The Salary Deferral Agreement shall be subject to the following rules:

(1) The Salary Deferral Agreement shall apply to each payroll period during which it is in effect and has not been rescinded. The Salary Deferral Agreement shall be applicable to all forms of the Participant’s Annual Compensation, regardless of how paid or characterized.

(2) The amount by which the Participant’s Annual Compensation is reduced under the Salary Deferral Agreement may be changed (increased, decreased or ceased) by a Participant at any time during the Plan Year. A change shall be evidenced by a written document, by oral instructions directly from the Participant with written confirmation in accordance with rules and procedures established by the Administrator or through any electronic means or method approved by the Plan Administrator.

(3) A Salary Deferral Agreement and or an amendment to a Salary Deferral Agreement shall be effective as soon as administratively feasible after the Salary Deferral Agreement or the amendment is executed, orally authorized or electronically completed by the Participant and received and confirmed by the Administrator.

(4) The Administrator may amend or revoke a Salary Reduction Agreement with any Participant at any time if the Administrator determines that a revocation or amendment is necessary to ensure that the Participant’s Elective Deferral for any Plan Year will not exceed any Plan limitations.

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(5) The Administrator may revoke its Salary Reduction Agreements with all Participants or amend its Salary Reduction Agreements with all Participants on a uniform basis if it determines that such action is necessary in order to comply with the terms of the Plan or any applicable law or regulation.

(b) The Elective Deferral amounts designated by the Participant in the Salary Deferral Agreement shall be withheld and contributed to the Plan by the Employer without regard to Net Profits to the Participant’s Elective Deferral Account. Unless otherwise approved by the Plan Administrator, Elective Deferrals made through payroll deductions shall be pursuant to the Salary Deferral Agreement executed by the Participant or orally authorized by the Participant and confirmed by the Plan Administrator or authorized by any other electronic means or method approved by the Plan Administrator.

(c) Commencing January 1, 2002, and for all Plan Years thereafter an Employee who is eligible to make Elective Deferrals under this Plan and who attains age 50 before the close of the Plan Year shall be eligible to make catch-up contributions in accordance with, and subject to the limitations of, Code §414(v). Catch-up contributions shall not be taken into account for purposes of the provisions of the Plan implementing the required limitations of Code §§402(g) and 415. The Plan Administrator shall not treat catch up contributions as failing to satisfy any provisions of the Plan implementing the requirements of Code §§401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416, as applicable.

5.02 Payment to Trustee: The Employer shall transmit to the Trustee the amounts withheld by it pursuant to Section 5.01 above as soon as administratively feasible, but in no event later than the fifteenth (15th) business day of the month following the month in which the amounts are withheld or received by the Employer. However, the Employer shall not transmit to the Trustee any amounts withheld by it during the Plan Year pursuant to a deferral election under Section 5.01, which in the Plan Administrator’s opinion would cause the Plan to fail to meet the limitations described in Section 5.10 for that Plan Year. Such amounts withheld and not transmitted to the Trustee shall be returned by the Employer to the respective Participants.

5.03 Suspension of Deferrals: A Participant may notify the Plan Administrator electronically, orally (with written confirmation) or in writing of his intention to suspend his election to have a portion of his Annual Compensation deferred. The suspension shall be effective as soon as administratively feasible after the date the notice of suspension is received shall apply to each payroll period thereafter, until a new Salary Deferral Agreement is entered into by the Participant. The Participant shall be considered a Participant hereunder for all other purposes if his employment continues, however, he shall not be considered to be an active Participant.

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5.04 After-tax Contributions by Participants: From and after the Effective Date no Participant shall be permitted or required to make after-tax or Voluntary Contributions to the Plan.

5.05 Rollover Contributions by Participants: A Participant (or an Employee who is expected to become a Participant) may make a rollover contribution directly to this Plan of an “eligible rollover distribution,” as that term is defined under Code §401(a)(31)). The Plan will accept participant rollover contributions and/or direct rollovers of distributions made after December 31, 2001, from any qualified plan described in Code §401(a) or Code §403(a), an annuity contract described in Code §403(b) or an eligible plan under Code §457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state. The Plan will also accept a participant rollover contribution of the portion of a distribution from an individual retirement account or annuity described in Code §408(a) or (b) that is eligible to be rolled over and would otherwise be includable in gross income. The Plan will not accept rollovers which include after-tax employee contributions. The rollover amount shall be credited to his Participant Rollover Contribution Account, provided:

(a) The Participant provides adequate evidence to the Plan Administrator that the amount satisfies the requirements of Code §402(c) regarding amounts that may be rolled over;

(b) If the amount is rolled over indirectly to this Plan through an individual retirement account, annuity, or bond, the amount does not include life insurance policies, amounts contributed (or deemed to have been contributed) by the Participant or amounts distributed from a Plan not described above; and

(c) It is received by this Plan as a direct transfer pursuant to Code §402(e)(6) or rolled over after distribution to the Participant within sixty (60) days following its distribution.

5.06 Safe Harbor Employer Matching Contributions: For each Plan Year the Employer may contribute to the Plan an amount, determined without regard to Net Profits, which will be sufficient to credit the Employer Matching Contribution Account of each Participant who is a Non-Highly Compensated Employee and who satisfies the requirements of Section 6.04, with amounts which satisfy the Employer’s Matching Contribution percentage as determined by the Employer on a discretionary basis for the Plan Year. In no event however, shall the Employer Matching Contribution for any Participant who is a Non-Highly Compensated Employee in a Plan Year, when determined as a percentage of the Participant’s Compensation for the Plan Year, ever be less than the percentage amounts shown in the following table:

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Participant’s Elective Deferral percentage:	Percentage of Employer Matching Contribution:
0%	0.0%
1%	1.0%
2%	2.0%
3%	3.0%
4%	3.5%
5%	4.0%

The Employer may also contribute to the Plan an amount, determined without regard to Net Profits, which will be sufficient to credit the Employer Matching Contribution Account of each Participant who is a Highly Compensated Employee and who satisfies the requirements of Section 6.04, with amounts which satisfy the Employer’s Matching Contribution percentage as determined by the Employer on a discretionary basis for the Plan Year. In no event however, shall the rate of Matching Contributions with respect to Elective Deferrals made by any Highly Compensated Employee exceed the rate of Matching Contributions with respect to Elective Deferrals made by any Participant who is a Non-Highly Compensated Employee. Excess Matching Contributions for Employees of the Sponsoring Employer or a Participating Zions Employer shall be determined each Plan Year by the Sponsoring Employer and each Participating Zions Employer respectively, or shall be as set forth in the Supplemental Participation Agreement executed by the Participating Zions Employer. If the Employer or Participating Zions Employer makes a Matching Contribution in excess of that set forth in the table in this Section, in no event shall the rate of Matching Contributions increase as the rate of the Participant’s Elective Deferrals increase.

The Employer Matching Contribution amount shall be determined solely by reference to the ratio percentage of the Participant’s Elective Deferral compared to the aggregate of the forms of the Participant’s Compensation which are subject to the Salary Deferral Agreement as specified in Section 5.01. If the Employer makes a Matching Contribution to the Plan at any time during the Plan Year (such as on a calendar quarter basis), any limit on the amount of Employer Matching Contribution shall not be determined by reference to Annual Compensation for the Plan Year, but by reference to Compensation paid only during the period to which the Matching Contribution relates. Notwithstanding the previous sentence, no contribution in excess of the maximum amount which would constitute an allowable deduction for federal income tax purposes under the applicable provisions of the Code, as now in force or hereafter amended, shall be required to be made by the Employer under this Section.

The Employer Matching Contribution may be made in cash or in kind, provided however, that if the Matching Contribution is made in cash the Plan shall immediately acquire Employer Securities with the entire amount of the contribution and if the Matching Contribution is made in kind, it shall be made in the form of Employer Securities only.

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5.07 Employer Non-Elective Contributions: The Employer may contribute, without regard to Net Profits, an amount determined by its Board of Directors as an Employer Non-Elective Contribution. The Employer may make the Non-Elective Contribution in cash or in kind, provided however, that if the Non-Elective Contribution is made in cash the Plan shall immediately acquire Employer Securities with the entire amount of the contribution and if the Non-Elective Contribution is made in kind, it shall be made in the form of Employer Securities only. The Employer reserves the right to increase or decrease the amount from year to year of the Non-Elective Contribution, as determined by the Board of Directors. Notwithstanding the previous sentence, no contribution in excess of the maximum amount which would constitute an allowable deduction for federal income tax purposes under the applicable provisions of the Code, as now in force or hereafter amended, shall be required to be made by the Employer under this Section.

The amount of the contribution to be credited to the Employer Non-Elective Contribution Accounts of the Participants may be stated in terms of a gross contribution, in which case the amount shall be reduced by any non-vested forfeitures from Employer Non-Elective Contribution Accounts of the Participants to be allocated during the Plan Year pursuant to Section 11.05; or the amount may be stated in terms of a net contribution, in which case the amount shall be in addition to any such non-vested forfeitures. In the absence of a direction as to whether the amount of the contribution is in terms of a gross contribution or a net contribution, it shall be deemed to be a gross contribution.

5.08 Time and Method of Payment: All payments of Employer Matching and Non-Elective Contributions shall be made directly to the Trustee and shall be paid no later than the time prescribed by law (including any extensions) for filing the Employer’s federal income tax return for the Plan Year for which they are made. The Employer may in its sole discretion, at any time during the Plan Year, make one or more partial payments to the Trustee on an estimated basis. Any amount so paid in advance shall be applied against the amount thereafter determined to be payable by the Employer and shall be credited by the Plan Administrator to the Participants’ Employer Contribution Accounts as of the end of the calendar quarter for which the payment is made.

5.09 Employer Contribution Accounts: The Plan Administrator shall establish and maintain an Employer Matching Contribution Account, as defined in Section 2.01(c) and an Employer Non-Elective Contribution Account as defined in Section 2.01(d) for each Participant eligible to receive an Employer Matching Contribution and an Employer Non-Elective Contribution. The establishment of the accounts is for record keeping purposes only, and a physical segregation of assets shall not be required.

5.10 Limitations on Contributions: All Elective Deferral Contributions to this Plan shall be subject to the limitations in subsection (a). Notwithstanding any other provisions of this Plan, if for any Plan Year the Elective Deferral and Matching Contributions to the Plan do not satisfy the

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requirements of Code §§401(k)(12) and 401(m)(11), then the Elective Deferral and Matching Contributions to this Plan shall be subject to the further limitations in subsections (b) and (c) below.

(a) The total amount of a Participant’s Elective Deferrals during any calendar year shall not exceed twelve thousand dollars ($12,000), which amount shall be adjusted annually, consistent with the provisions of Code §402(g) and thereafter indexed at the same time and in the same manner as the dollar limitation for defined benefit plans in Code §415(b)(1)(A). For this purpose a Participant’s Elective Deferrals to this Plan plus the Participant’s elective deferrals pursuant to any other Code §401(k) arrangement, elective deferrals under a simplified employee pension plan and salary reduction contributions to a tax-sheltered annuity, irrespective of whether the Employer or any member of an Affiliated Group to which the Employer belongs maintains the arrangement, plan or annuity, shall be aggregated.

(b) The K-Test Average Contribution Percentage of Participants who are Highly Compensated Employees shall not exceed in any Plan Year the greater of:

(1) The K-Test Average Contribution Percentage for the prior Plan Year of Participants who are Non-Highly Compensated Employees multiplied by 1.25; or

(2) The lesser of the K-Test Average Contribution Percentage for the prior Plan Year of Participants who are Non-Highly Compensated Employees multiplied by two (2) or the K-Test Average Contribution Percentage for the prior Plan Year of Participants who are Non-Highly Compensated Employees plus two (2).

(c) The M-Test Average Contribution Percentage for Participants who are Highly Compensated Employees shall not exceed in any Plan Year the greater of:

(1) The M-Test Average Contribution Percentage for the prior Plan Year of Participants who are Non-Highly Compensated Employees multiplied by 1.25; or

(2) The lesser of the M-Test Average Contribution Percentage for the prior Plan Year of Participants who are Non-Highly Compensated Employees multiplied by two (2) or the M-Test Average Contribution Percentage for the prior Plan Year of Participants who are Non-Highly Compensated Employees plus two (2).

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For purposes of applying the tests in (b) and (c) above in any Plan Year, the K-Test Average Contribution Percentage and the M-Test Average Contribution Percentage for Participants who are Non-Highly Compensated Employees shall be based on the prior Plan Year. The Employer may not aggregate this Plan with any other plan when applying the tests in (b) and (c) above.

5.11 Excess Contributions: In accordance with the limitations on contributions described in Section 5.10, the following amounts shall be treated as excess contributions under this Plan:

(a) Excess Deferrals: with respect to any calendar year, amounts identified as Excess Deferrals, whether determined by the Administrator or designated by a Participant in writing no later than March 1 following the end of the calendar year, in accordance with such procedures as the Plan Administrator shall specify, less any Excess K-Test Contributions previously distributed or recharacterized for the Plan Year beginning in the calendar year in which the Excess Deferral is made, pursuant to Section 5.12(b).

(b) Excess K-Test Contributions: with respect to any Plan Year, the excess of the aggregate amount of K-Test Contributions actually made on behalf of Highly Compensated Employees for such Plan Year over the maximum amount of such contributions permitted under Section 5.10(b). The Excess K-Test Contributions of an individual Highly Compensated Employee shall be determined (i) by calculating the total dollar amount resulting from a reduction of the K-Test Contributions made on behalf of Highly Compensated Employees in order of the K-Test Contribution Percentages, beginning with the highest percentage, until the limitations of Section 5.10(b) are met, and (ii) by reducing the K-Test Contributions made on behalf of Highly Compensated Employees in order of the dollar amount of K-Test Contributions for each Highly Compensated Employee, beginning with the highest dollar amount, and subtracting such amounts from the total dollar amount determined in (i) above until the total dollar amount is exhausted. The Excess K-Test Contributions allocated to a Participant shall be reduced by any Excess Deferrals previously distributed for the calendar year ending with or within the Plan Year in which the Excess K-Test Contributions arose, pursuant to Section 5.12(a).

(c) Excess M-Test Contributions: with respect to any Plan Year, the excess of the aggregate amount of M-Test Contributions actually made on behalf of Highly Compensated Employees for such Plan Year over the maximum amount of such contributions permitted under Section 5.10(c). Effective January 1, 1997, the Excess M-Test Contributions of an individual Highly Compensated Employee shall be determined (i) by calculating the total dollar amount resulting from a reduction of the M-Test Contributions made on behalf of Highly Compensated Employees in order of the M-Test Contribution Percentages, beginning with the highest percentage, until

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the limitations of Section 5.10(c) are met, and (ii) by reducing the M-Test Contributions made on behalf of Highly Compensated Employees in order of the dollar amount of M-Test Contributions for each Highly Compensated Employee, beginning with the highest dollar amount, and subtracting such amounts from the total dollar amount determined in (i) above until the total dollar amount is exhausted.

5.12 Correction of Excess Contributions: The Plan provides the following methods for correcting excess contributions as described in Section 5.11:

(a) Excess Deferrals: The Plan Administrator shall direct the Trustee to distribute to a Participant from his Participant Elective Deferral Account an amount equal to the Participant’s Excess Deferral plus income, if any, allocable thereto. Such distribution shall be designated by the Plan Administrator as a distribution of an Excess Deferral and shall be made not earlier than the date on which the Trustee receives the Excess Deferral and not later than the first April 15 following the end of the calendar year in which the Excess Deferral is made.

(b) Excess K-Test Contributions: The Plan Administrator shall direct the Trustee to distribute to a Participant his Excess K-Test Contribution plus income, if any, allocable thereto. The distribution shall be designated by the Plan Administrator as a distribution of an excess contribution and shall be made any time during or after the Plan Year in which the excess contribution arose, but within twelve (12) months after the end of the Plan Year.

If the Employer has made a Matching Contribution attributable to any portion of the Participant’s Excess K-Test Contribution distributed to the Participant pursuant to the above, the Plan Administrator shall treat the Matching Contribution as a forfeiture. The forfeited amount shall be used to reduce the Employer’s Matching Contribution otherwise required for the Plan Year or for any subsequent Plan Year.

(c) Excess M-Test Contributions: The Plan Administrator shall direct the Trustee to hold the excess M-Test Contribution Amount and shall use this Amount to reduce any future Matching Contribution obligation of the Employer to the Plan.

For purposes of the above, income shall include realized and unrealized gains and losses for the Plan Year and for the period from the end of the Plan Year to the date of distribution (the “gap period”) and shall be allocated to excess contributions in accordance with all appropriate Code and Regulation provisions. Distributions of excess contributions pursuant to the above shall be made without regard to any consent by the Participant otherwise required under this Plan.

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ARTICLE VI

ALLOCATIONS TO ACCOUNTS

6.01 Revaluation of Assets: Not less frequently than as of the Annual Valuation Date each year, the Plan Administrator shall re-value the net assets of all Participants’ General Investments Accounts and Employer Securities Accounts in the Investment Fund. The valuation shall determine the current fair market value. At the Plan Administrator’s discretion, applied on a consistent basis, the Plan Administrator may similarly re-value the Investment Fund at the end of a semi-annual, quarterly, monthly or more frequent period, which may be as frequent as the close of each business day. The last day of each valuation period shall be referred to as an Interim Valuation Date. The net investment income or loss on the Investment Fund since the previous Annual or Interim Valuation Date shall then be determined. An independent appraiser meeting requirements similar to those prescribed by Treasury regulations under Code §170(a)(1) must perform all valuations of Employer Securities which are not readily tradeable on an established securities market. The valuation requirement of the immediately preceding sentence applies to all Employer Securities acquired by the Plan.

6.02 Allocation of Contributions and Forfeitures: Contributions and forfeitures for any period shall be credited to the Accounts of Participants in the following manner:

(a) With respect to Elective Deferral contributions made pursuant to Section 5.01, an amount equal to the Participant’s Elective Deferral since the previous Annual or Interim Valuation Date shall be allocated and credited to his Elective Deferral Account.

(b) Matching Contributions made pursuant to Section 5.06, if any, shall be allocated on each Annual Valuation Date (or if the Employer makes Matching Contributions on a calendar quarter or other periodic basis, on the last day of each calendar quarter or other period) to each Participant’s Account who satisfies the requirements of Section 6.04(a), in an amount equal to the Employer Matching Contribution percentage determined by the Employer for the Plan Year, but in no event less than the percentage required under Section 5.06. If the Employer makes a Matching Contribution to the Plan at any time during the Plan Year, any limit on the percentage amount shall not be determined by reference to Annual Compensation for the Plan Year, but by reference to Compensation paid only during the period to which the Matching Contribution relates.

(c) Employer Non-Elective Contributions made pursuant to Section 5.07 shall be allocated on each Annual Valuation Date to each Participant’s Account who satisfies the requirements of Section 6.04(b). The Employer’s Non-Elective Contribution shall be credited to the Accounts of eligible Participants in an amount equal to that

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percentage of each annual Employer Non-Elective Contribution to this Plan which is in the same proportion that each Participant’s Annual Compensation for the Plan Year for which the Employer makes the Non-Elective Contribution bears to the total Annual Compensation of all Participants for the Plan Year. For purposes of this Section 6.02(c) only Compensation paid to the Employee during the portion of the Plan Year during which the Employee is a Participant in the Plan shall be taken into account. At the time the Employer makes its Non-Elective Contribution the Employer shall designate to the Administrator the Plan Year for which the Non-Elective Contribution shall be deemed to have been made (which may be the current Plan Year or the immediately prior Plan Year, as the Employer deems appropriate). If the Employer makes no designation, the Employer’s Non-Elective Contribution shall be deemed to have been made for the Plan Year which begins concurrent with or within the taxable year of the Employer for which the Employer claims a deduction under Code §404.

(d) Forfeitures from Employer Non-Elective Contribution Accounts to be reallocated pursuant to Section 11.06, shall be allocated as of each Annual Valuation Date to each Participant who satisfies the requirements of Section 6.04(b). Subject to Section 5.07 such allocated amounts shall be credited to the Non-Elective Contribution Accounts of such Participants in the same manner provided for allocation of Employer Non-Elective Contributions in Section 6.02(c) above.

(f) With respect to Rollover Contributions made pursuant to Section 5.05, an amount equal to the Participant’s rollover contributions since the previous Annual or Interim Valuation Date shall be credited to the Participant’s Rollover Contribution Account.

(g) Contributions by the Employer of Employer Securities or of cash which is immediately used to purchase Employer Securities shall be allocated solely to the Employer Securities Account. All other contributions, whether by the Employer or any Participant, shall be allocated solely to the General Investments Account.

6.03 Adjustment of Accounts and Dividends on Employer Securities: As of each Annual or Interim Valuation Date all Participants’ and Former Participants’ Accounts shall be adjusted to reflect contributions, income and dividends received, profits and losses, distributions from and expenses of the Trust Fund since the previous Annual or Interim Valuation Date. The adjustments shall be made in the following manner and order:

(a) Each Account shall be charged with all forfeitures, withdrawals and distributions from the Account since the previous Annual or Interim Valuation Date. In making a forfeiture reduction under this Section 6.03(a) the Plan Administrator, to the extent possible, first must forfeit from a Participant’s General Investments Account before making a forfeiture from his Employer Securities Account.

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(b) Each Account shall be charged with any administrative costs or expenses incurred and paid by the Plan which are allocable to the Account since the previous Annual or Interim Valuation Date. All administrative costs and expenses, to the extent possible, shall be paid from a Participant’s General Investments Account before being paid from his Employer Securities Account

(c) Each Participant’s General Investments Account which has a non-zero balance after the application of (a) and (b) above, shall be credited (or charged) with its proportionate share of the net investment income (or loss) and expenses since the previous Annual or Interim Valuation Date. The amount to be credited or charged to each Account shall be determined based on the ratio that: (i) the balance in the Account on the previous Annual or Interim Valuation Date less any forfeitures, withdrawals or distributions from the Account since that date bears to (ii) the total of such amounts determined for all Accounts. Notwithstanding the previous sentence, in the sole discretion of the Plan Administrator, the method of allocating the net investment income (or loss) of the General Investment Account may be adjusted to reflect the effect of cash flows into and out of such Accounts (such as contributions, payments on Participant loans, distributions, etc.) based on the length of time between the date of such cash flow and the current Annual or Interim Valuation Date. Any such adjustment pursuant to the previous sentence shall be made in a uniform and non-discriminatory manner among Participants and/or the types of Accounts.

(d) Each Account shall be credited with the contributions allocated to it since the previous Annual or Interim Valuation Date, subject to the following rules:

(1) The Employer Securities Account maintained for each Participant shall be credited with the Participant’s allocable share of Employer Securities (including fractional shares) purchased and paid for by the Trust or contributed in kind to the Trust, with any forfeitures of Employer Securities and with any stock dividends on Employer Securities allocated to his Employer Securities Account. Employer Securities acquired with an Exempt Loan under Section 14.03 shall be allocated in accordance with that Section, subject however, to the provisions of this Section 6.03. Except as otherwise specifically provided in Section 14.03, the Plan Administrator will base allocations to the Participant’s Employer Securities Account on dollar values expressed as shares of Employer Securities or on the basis of actual shares, assuming there is only a single class of Employer Securities.

(2) The General Investments Account maintained for each Participant shall be credited with the Participant’s allocable share of Elective Deferrals and any

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Employer Contribution not attributable to Employer Securities, according to the provisions of Section 6.02.

(e) Cash dividends the Employer pays with respect to Employer Securities held by the Plan shall be allocated pro-rata to the Dividend Account of each Participant according to the number of Employer Securities in the Participant’s Employer Securities Account as of the dividend date of record, less any Employer Securities allocated to or acquired for the Participant’s Employer Securities Account on or after the immediately preceding ex-dividend date. The Plan Administrator will not allocate to a Dividend Account any cash dividends the Employer directs the Trustee to apply to the payment of an Exempt Loan nor any cash dividends the Employer directs the Trustee to distribute directly to a Participant in accordance with Section 9.07.

Each Participant who is entitled to receive an allocation of a cash dividend to his Dividend Account shall have the option to invest all or any portion of the cash dividend in Employer Securities or withdraw from the Plan the portion of the cash dividend not so invested. The Participant’s election shall be subject to the following rules:

(1) The Participant shall have an annual election during each Plan Year to invest the allocable share of dividends in Employer Securities or withdraw as cash.

(2) The initial period during which a Participant may exercise the annual election shall extend from April 15, 2003, to May 15, 2003, for all individuals who are Participants in the Plan on April 15, 2003. Commencing January 1, 2004, and for each Plan Year thereafter the annual election period shall extend from January 1 to January 31 for all individuals who are Participants in the Plan on January 1. For an Employee who becomes a Participant in the Plan on any day after April 15, 2003, during the 2003 Plan Year or after January 1 in any subsequent Plan Year the annual election period shall commence on the Participant’s Entry Date and end on the one month anniversary thereof.

(3) If the Participant does not choose by the expiration of the election period to withdraw his allocable share of dividends in cash, his share shall be invested automatically in Employer Securities. Upon expiration of the election period the Participant’s election (or failure to elect) shall become irrevocable for all dividends declared or paid during the Plan Year.

(4) The Participant may elect and revoke any prior election without limitation during the election period. The Participant shall indicate his election by any means acceptable to the Plan Sponsor, which may include electronic notice

36

or written notification delivered or, if mailed, post-marked no later than the last day of the election period.

(5) Dividends to be invested in Employer Securities shall be so invested as soon as administratively feasible following their receipt by the Plan. Withdrawal of any cash dividends must occur no later than ninety (90) days after the close of the Plan Year in which the dividends were paid.

(6) Until invested in Employer Securities or distributed in cash, dividends in a Dividend Account shall be held and invested as provided in Section 18.04.

If the Employer directs the Trustee to apply cash dividends on Employer Securities to the payment of an Exempt Loan, the Plan Administrator will first allocate the released Employer Securities to the Participants’ Employer Securities Accounts in the same ratio, determined on the dividend declaration date, that Employer Securities allocated to a Participant’s Employer Securities Account bear to the Employer Securities allocated to all Employer Securities Accounts. This first allocation of released Employer Securities must equal the greater of: (1) the shares of released Employer Securities equal to the fair market value of the cash dividends attributable to the allocated Employer Securities; or (2) the number of shares of all released Employer Securities attributable to the cash dividends on allocated Employer Securities. If any released Employer Securities remain unallocated after the first allocation, the Plan Administrator will allocate these remaining released Employer Securities as if the Employer has made an Employer Contribution equal to the amount of the cash dividend attributable to the unallocated Employer Securities.

6.04 Eligibility for Allocation of Employer Matching and Non-Elective Contributions: The eligibility of Participants to receive allocations of Employer Matching and Non-Elective Contributions for each Plan Year shall be determined in the following manner:

(a) The Administrator shall determine allocations of Matching Contributions on the basis of the Plan Year, unless the Employer makes its Matching Contributions during the Plan Year on a periodic basis, such as monthly or according to payroll periods, in which case the Matching Contribution shall be allocated during the Plan year on the same periodic basis as made. That is, in allocating Matching Contributions to a Participant’s Account, the Administrator shall take into account only the Compensation paid the Participant during the specific period during the Plan Year to which the allocation applies and a valid, executed Salary Reduction Agreement is in effect and on file with the Administrator for the period, subject, however, to the maximum amount of Annual Compensation which may be taken into account under Code §401(a)(17). Matching Contributions, whether or not made on a periodic basis

37

during the Plan Year, shall be allocated to Accounts of Participants without regard to any minimum Service or specific day employment requirement.

(b) Except as otherwise provided in this Section 6.04, the Administrator shall determine allocations of Employer Non-Elective Contributions on the basis of the Plan Year. In allocating Employer Non-Elective Contributions to a Participant’s Account, the Administrator shall take into account only Compensation paid the Employee during the period he is a Participant in the Plan. Employer Non-Elective Contributions shall be allocated only to Accounts of Participants who complete at least one thousand (1000) Hours of Service during the Plan Year and who are employed by the Employer on the last day of the Plan Year.

6.05 Restriction on Certain Allocations: To the extent a shareholder sells Employer Securities to the Trust and is eligible for and elects (with the consent of the Employer) non-recognition of gain under Code §1042, the Plan Administrator will not, either directly or indirectly, allocate under the Plan at any time any portion of the purchased Employer Securities to:

(a) the selling shareholder,

(b) the selling shareholder’s spouse, brothers or sisters (whether by the whole or half blood), ancestors or lineal descendants; or

(c) any shareholder owning (as determined under Code §318(a)) more than 25% in value of any class of Employer Securities.

For purposes of this Section 6.05 the term “shareholder” includes the shareholder’s executor and the term “purchased Employer Securities” includes any dividends or other income attributable to the purchased Employer Securities. A shareholder of Employer Securities of a Zions Employer shall not be eligible to elect non-recognition of gain under Code §1042 as long as the Employer Securities are readily tradeable on an established securities market.

6.06 Participant Diversification of Investments: Except as specifically provided in this Section 6.06 and in Section 18.06, the Plan does not permit individual direction of investment by Participants of their Employer Securities Accounts.

(a) Each Qualified Participant may direct the investment into a Segregated Investment Account of up to twenty five percent (25%) of the value of the Participant’s Eligible Account within 90 days after the Accounting Date of each Plan Year (to the extent a direction amount exceeds the amount to which a prior direction under this Section 6.06 applies) during the Participant’s Qualified Election Period. For the last Plan Year in the Participant’s Qualified Election Period, “fifty percent (50%)” shall be substituted for “twenty five percent (25%)” in the immediately preceding sentence.

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The Qualified Participant must make his direction in writing or in another form acceptable to the Plan Administrator, which may include any approved electronic means. The direction may be effective no later than 180 days after the close of the Plan Year to which the direction applies, and the direction must specify which, if any, of the investment options the Participant selects.

(b) A Qualified Participant may choose one of the following alternative investment options:

(1) The distribution of the portion of his Eligible Accrued Benefit covered by the election. The Administrator will direct the distribution within 90 days after the last day of the period during which the Qualified Participant may make the election. The provisions of this Plan applicable to a distribution of Employer Securities, including the put option requirements of Article XI, apply to this investment option.

(2) The liquidation and transfer of the portion of his Eligible Accrued Benefit covered by the election to the General Investment Account in the Plan. The Trustee will make the transfer no later than 90 days after the last day of the period during which the Qualified Participant may make the election.

(c) The Participant’s Segregated Investment Account shall alone receive all income it earns and bear all expense or loss it incurs.

(d) For purposes of this Section 6.06 the following definitions apply:

(1) “Eligible Account” shall mean that portion of the Participant’s total Account which consists of the Employer Securities Account.

(2) “Qualified Participant” means a Participant who has attained age 55 and who has completed at least 10 years of participation in the Plan (without regard to the Participant’s years of participation in a Predecessor Plan, but taking into account the Participant’s years of participation in the Prior Plan). A “year of participation” means a Plan Year in which the Participant was eligible for an allocation of Employer contributions, irrespective of whether the Employer actually contributed to the Plan for that Plan Year.

(3) “Qualified Election Period” means the six-Plan-Year period beginning with the Plan Year in which the Participant first becomes a Qualified Participant.

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ARTICLE VII

LIMITATIONS ON ALLOCATIONS

7.01 Special Definitions: The following terms shall be defined as follows:

(a) “Annual Additions” shall mean the sum of the following amounts allocated on behalf of a Participant for a Limitation Year:

(1) Employer contributions; and

(2) Employee contributions; and

(3) Forfeitures available for reallocation, if applicable.

Participant Elective Deferrals shall be considered to be Employer contributions. Amounts reapplied to reduce Employer contributions and amounts reapplied from a suspense account (if any) under Section 7.02 as well as contributions allocated to any Individual Medical Benefit Account which is part of a defined benefit plan shall also be included as Annual Additions.

For purposes of this Article, an Annual Addition is credited to the Account of a Participant for a particular Limitation Year if it is allocated to the Participant’s Account as of any day within such Limitation Year. Employer contributions will not be deemed credited to a Participant unless the contributions are actually made to the Plan no later than the end of the period described in Code §404(a)(6) applicable to the taxable year with or within which the particular Limitation Year ends.

“Annual Additions” do not include any Employer Contributions applied by the Plan Administrator (not later than the due date, including extensions, for filing the Employer’s federal income tax return for the Plan Year) to pay interest (charged to a Participant’s Account) on an Exempt Loan, and any Leveraged Employer Securities the Plan Administrator allocates as forfeitures; provided however, the provisions of this sentence do not apply in a Limitation Year for which the Plan Administrator allocates more than one-third of the Employer Contributions applied to pay principal and interest on an Exempt Loan to Highly Compensated Employee-Participants. The Plan Administrator may reallocate the Employer Contributions in accordance with Section 6.02 to the Accounts of non-Highly Compensated Employee-Participants to the extent necessary in order to satisfy this special limitation.

(b) “Compensation” for purposes of this Article VII (compliance with Code §415) and for purposes of compliance with any applicable non-discrimination test, including the determination of an Employee’s status as a Highly Compensated Employee and the K-Test and M-Test procedures described in Section 5.10, shall mean and be determined as follows:

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(1) The term “Compensation” shall include:

(A) The Participant’s wages, salaries, fees for professional service and other amounts received (whether or not paid in cash) for personal services actually rendered in the course of employment with an Employer maintaining the plan (including, but not limited to, commissions paid to salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, reimbursements and expense allowances).

(B) In the case of a Participant who is an employee within the meaning of Code §401(c)(1), the Participant’s earned income as described in Code §401(c)(2).

(C) Any amounts contributed by the Employer or received by the Participant pursuant to an unfunded, non-qualified plan of deferred compensation to the extent such amounts are includable in the gross income of the Participant for the Limitation Year.

(D) Any amount contributed or deferred by the Employer at the election of the Participant and which is not includable in the gross income of the Participant by reason of Code §§125, 401(k), 403(b) or 457.

(E) Elective amounts that are not includable in the gross income of the Employee by reason of Code §132(f)(4).

(2) The term “Compensation” does not include items such as:

(A) Except as provided in subparagraph (1)(D) above, any Employer contributions to a qualified retirement plan and any Employer contributions to any other retirement plan which receive special tax benefits to the extent the contributions are not includable in the gross income of the Participant for the taxable year in which made; and any distributions from any qualified retirement plan, regardless of whether the distributions are includable in the gross income of the Participant.

(B) Employer contributions made on behalf of a Participant to a simplified employee pension described in Code §408(k) to the extent such contributions are deductible by the Employer under Code §219(b)(7).

(C) Except as provided in subparagraph (1)(D) above, other forms of compensation which receive special tax benefits, such as premiums for group health insurance and group term life insurance (but only to

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the extent that the compensation is not includable in the gross income of the Participant).

(D) Amounts realized from the exercise of a non-qualified stock option, or when restricted stock (or property) held by a Participant either becomes freely transferable or is no longer subject to a substantial risk of forfeiture (see Code §83 and the regulations thereunder).

(E) Amounts realized from the sale, exchange, or other disposition of stock acquired under a qualified stock option.

(F) Compensation in excess of two hundred thousand dollars ($200,000), or such greater amount as adjusted by the Secretary of the Treasury for increases in the cost of living in accordance with Code §401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year applies to determine the Compensation limit for the Limitation Year that begins with or within such calendar year.

(3) Compensation actually paid or made available to a Participant within the Limitation Year shall be the Compensation used for the purposes of applying the limitations of this Article and Code §415. In the case of a group of Employers which constitutes an Affiliated Group, all Employers shall apply this same rule.

(c) “Defined Contribution Dollar Limitation” shall mean the lesser of:

(1) forty thousand dollars ($40,000), as adjusted for increases in the cost-of-living under Code §415(d), or

(2) one hundred percent (100%) of the Participant’s Compensation, as defined in this Section 7.01, for the Limitation Year. The Compensation limit referred to in this sub-section 7.01(c)(2) shall not apply to any contribution for medical benefits after separation from service (within the meaning of Code §401(h) or Code §419A(f)(2)) which is otherwise treated as an Annual Addition.

(d) “Employer” shall mean the Employer that adopts this Plan and, in the case of a group of employers which constitutes an Affiliated Group, all such employers shall be considered a single Employer for purposes of applying the limitations of this Article.

(e) “Excess Amount” shall mean the excess of the Participant’s Annual Additions for the Limitation Year over the Maximum Permissible Amount for such Limitation Year.

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(f) “Individual Medical Benefit Account” shall mean any separate account which is established for a Participant under a defined benefit plan and from which benefits described in Code §401(h) are payable solely to such Participant, his spouse or his dependents.

(g) “Limitation Year” shall mean the twelve (12) consecutive month period specified in Article II.

The Limitation Year may be changed by amending the election previously made by the Employer. Any change in the Limitation Year must be a change to a twelve (12) month period commencing with any day within the current Limitation Year. The limitations of this Article (and Code §415) are to be separately applied to a limitation period which begins with the first day of the current Limitation Year and which ends on the day before the first day of the first Limitation Year for which the change is effective.

The dollar limitation on Annual Additions with respect to this limitation period is determined by multiplying the applicable dollar limitation for the calendar year in which the limitation period ends by a fraction, the numerator of which is the number of months (computed to the nearest whole month) in the limitation period and the denominator of which is twelve (12).

The Limitation Year for all years prior to the effective date of Code §415 shall, as applied to this Plan, be the twelve (12) consecutive month period selected as the Limitation Year for the first Limitation Year after the effective date of Code §415.

(h) “Maximum Permissible Amount” shall mean, for a given Limitation Year, the Defined Contribution Dollar Limitation. If a short Limitation Year is created because of an amendment changing the Limitation Year to a different twelve (12) consecutive month period, the Maximum Permissible Amount for such short Limitation Year shall not exceed the amount in (1) above multiplied by a fraction, the numerator of which is the number of months in the short Limitation Year (computed to the nearest whole month) and the denominator of which is twelve (12).

7.02 Coordination With Other Plans:

(a) If the Employer maintains any other qualified cash or deferred arrangement (“401(k) Plan”) covering Participants in this Plan and if the Annual Additions to a Participant’s Account in this Plan and the annual additions to the Participant’s account in the 401(k) Plan would result in the allocation on an allocation date of this Plan which coincides with an allocation date of the 401(k) Plan of an Excess Amount, the Excess Amount attributed to this Plan shall be determined by the Plan Administrator on a uniform and non-discriminatory basis, considering the amount of elective deferrals

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and Employer contributions made to each Participant’s account in the 401(k) Plan, and the anticipated allocation of the Employer Contribution to this Plan. The Plan Administrator shall coordinate its actions with those of the plan administrator of the 401(k) Plan to provide for the maximum possible allocation to all Participants in both plans, taking into account the provisions of the 401(k) Plan allowing for distribution of elective deferrals to reduce an Excess Amount. In this regard, the Plan Administrator, whenever possible, shall allow for the allocation and distribution of elective deferrals from the 401(k) Plan so as to eliminate or reduce the possibility of creating a suspense account under this Plan or under the 401(k) Plan. If, after distributing all amounts which may be distributed from the 401(k) Plan, there still remains an Excess Amount, the Plan Administrator will attribute the total Excess Amount to the 401(k) Plan.

(b) If the Employer maintains another qualified defined contribution plan during any Limitation Year which covers Participants in this Plan and as a consequence of the requirements of Section 7.04 an Excess Amount is allocated to a Participant’s Account in this Plan on an allocation date which coincides with an allocation date in the other plan, the total Excess Amount shall be deemed allocated to the other plan.

7.03 Order of Limitations: If, pursuant to this Article, it is necessary to limit or reduce the amount of Contributions credited to a Participant under this Plan during a Limitation Year, the limitation or reduction shall be made:

(a) First, from the Participant’s General Investment Account, in the following order:

(1) Unmatched Participant Elective Deferrals;

(2) Employer Matching Contributions (if any have been allocated to the General Investments Account);

(3) Matched Participant Elective Deferrals;

(4) Employer Non-Elective Contributions.

(b) Second, from Employer Non-Elective Contributions to the Participant’s Employer Securities Account.

7.04 Aggregation of Plans: For purposes of applying the limitations of this Article applicable to a Participant for a particular Limitation Year, all qualified defined contribution plans ever maintained by the Employer shall be treated as one defined contribution plan and any Employee contributions to a defined benefit plan shall be treated as a defined contribution plan.

7.05 Suspense Account: If, as a result of the allocation of forfeitures, a reasonable error in estimating a Participant’s Compensation for the Limitation Year, or under other limited facts and circumstances allowed under Reg. §1.415-6(b), the Annual Additions to this Plan would cause an

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allocation to the Account of a Participant in excess of the Maximum Permissible Amount for the Limitation Year, the Plan Administrator shall deal with the Excess Amount as follows:

(a) First, the Plan Administrator shall distribute to the Participant his Elective Deferrals for the Limitation Year to the extent that the distribution reduces the Excess Amount, provided that the Plan Administrator shall not distribute any Elective Deferral to the Participant which would cause the Plan to make a concurrent reduction in the amount of Employer Matching Contributions allocated to the Participant’s Account. A distribution under this provision shall include earnings or gains attributable to the returned Elective Deferrals. All distributions shall be made no later than and in the manner provided in Section 5.10(d).

(b) Second, to the extent there remains an Excess Amount after application of Section 7.05(a), the Plan Administrator shall hold the Excess Amount in a suspense account and allocate and reallocate the amount in the suspense account in the following Limitation Year (and in succeeding Limitation Years, if necessary) to reduce Employer Non-Elective Contributions, Employer Matching Contributions and Elective Deferrals (in that order) to the Account of that Participant if that Participant is covered by the Plan as of the end of the Limitation Year. If the Participant is not covered, the excess amount shall be allocated and reallocated in the next Limitation Year to all Participants’ Accounts in the Plan before any Employer Non-Elective Contributions, Employer Matching Contributions and Elective Deferrals (in that order) which would constitute Annual Additions are made to the Plan for the Limitation Year, or at the option of the Zions Employer, the Excess Amount shall be used to reduce Employer Non-Elective Contributions and Employer Matching Contributions to the Plan for the Limitation Year by the amount in the suspense account which is allocated and reallocated during the Limitation Year. The suspense account shall be an unallocated account equal to the sum of all Excess Amounts for all Participants in the Plan during the Limitation Year. The suspense account shall not share in any earnings or losses of the Trust Fund. The Plan may not distribute any amounts in the suspense account to any Participant whether before or after Termination of Employment or termination of the Plan.

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ARTICLE VIII

IN-SERVICE AND HARDSHIP WITHDRAWALS

8.01 In-Service Withdrawals, Withdrawals of Rollover Contributions and Withdrawals Due to Attainment of Age 59½, Disability or Hardship: Subject to the provisions of Article XXII and except as otherwise provided in this Section 8.01 and Section 8.04, no amounts may be withdrawn by a Participant from any Account held for his benefit prior to termination of employment with the Employer.

(a) A Participant may make in-service withdrawals from his Voluntary Contribution Account to the extent permitted in Section 8.04.

(b) A Participant who has attained Age 59½ may withdraw all or any portion of his Account.

(c) A Participant who suffers a Disability as defined in Section 2.13 may withdraw all or any portion of his Account without regard to the Participant’s Age or whether he has incurred a Termination of Employment.

(d) A Participant may elect to withdraw an amount credited to his Elective Deferral Account without regard to the Participant’s Age, but only if he obtains prior approval from the Plan Administrator, which approval shall be granted only upon a determination of Financial Hardship. In the case of a withdrawal due to Financial Hardship, the amount of the withdrawal shall be limited to the total amount in the Participant’s Elective Deferral Account, including income allocable thereto as of December 31, 1988. A Participant shall be entitled to a withdrawal from his Participant Elective Deferral Account under this Plan only after receiving as a hardship withdrawal all amounts available first, from his Rollover Account and second, from his Voluntary Contribution Account. Upon granting approval, the Plan Administrator shall direct the Trustee to distribute the indicated portion of the Participant’s Elective Deferral Account to the Participant.

(e) In the event a Participant has previously made any Rollover Contribution to the Plan, the Participant shall, upon written notice to the Plan Administrator, be entitled to withdraw at any time, without regard to the Participant’s Age, any amount up to the balance of the Rollover Contributions held in his Rollover Contribution Account. Withdrawals shall have no effect upon any benefits provided under any other provisions of this Plan.

(f) Whenever a withdrawal is permitted from more than one sub-account under this Section 8.01 the withdrawal shall be made (to the extent permitted under Code §72) in the following order: first, from the Participant Voluntary Contribution Account and second, from the Participant Elective Deferral Account. Withdrawals shall also

46

be made from a Participant’s General Investments Account before being taken from his Employer Securities Account whenever possible.

8.02 Financial Hardship Distribution Rules: The Plan adopts the deemed hardship distribution standards set forth in Reg. §1.041(k)-1(d)(2)(iv). As a consequence, the Plan Administrator shall not approve any distribution on account of Financial Hardship unless the distribution is determined by the Administrator to be necessary to meet an immediate and heavy financial need of the Participant. The distribution will be deemed necessary if:

(a) The distribution is not in excess of the amount of the immediate and heavy financial need of the Participant, including amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the distribution; and

(b) Other resources of the Participant are not reasonably available to meet this need.

The condition in (b) above is deemed to be met if the Participant has obtained all distributions, other than hardship distributions, and all nontaxable loans currently available under all plans maintained by the Employer, provided however, if in the judgment of the Plan Administrator the issuance of a loan from the Plan to the Participant will result in further financial hardship to the Participant, all loans currently available from the Plan shall be deemed to have been made. A participant who has received or who receives a distribution on account of Financial Hardship shall be prohibited from making Elective Deferrals under this and all other plans of the Employer (as set forth above) until (6) months after receipt of the distribution.

8.03 Determination of Immediate and Heavy Financial Need: For purposes of Section 8.02, a distribution shall be deemed to be on account of an immediate and heavy financial need if the distribution is for:

(a) Expenses for medical care described in Code §213(d) incurred by the Participant, the Participant’s spouse or any dependent of the Participant or expenses necessary for these persons to obtain such medical care;

(b) Payment of tuition and related educational fees for the next twelve (12) months of post-secondary education for the Participant, the Participant’s spouse or any dependent of the Participant;

(c) Costs directly related to purchase (excluding mortgage payments) a principal residence for the Participant; or

(d) Payments necessary to prevent the eviction of the Participant from his principal residence or foreclosure of the mortgage on that residence.

8.04 In Service Withdrawals of Voluntary Contributions: Notwithstanding any other provisions of this Article VIII a Participant may withdraw in the manner and at the times provided in this Section 8.04 all or any part of his Accrued Benefit attributable to Voluntary Contributions

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which were made to the Plan before October 1, 1992, together with earnings accrued thereon after December 31, 1986. To effect a withdrawal under this Section 8.04 the Participant shall notify the Plan Administrator in writing of his request at least fifteen (15) days prior to any Entry Date. The Plan Administrator shall notify the Trustee to make distribution as soon as administratively feasible after those dates. A Participant may not exercise his withdrawal right under this Section 8.04 more than once during any Plan Year. The determination of the amount available for withdrawal shall be made in accordance with the requirements of Section 8.05.

If the Participant’s Accrued Benefit is not more than five thousand dollars ($5,000), without regard to whether the amount in the Participant’s Account has ever exceeded that amount at the time of any prior distribution, the withdrawal shall be permitted without regard to any Participant consent requirement or the requirements of Section 9.06. For purposes of the foregoing sentence the amount of the Accrued Benefit in the Participant’s Account shall be determined without regard to that portion of the Account that is attributable to rollover contributions (and earnings allocable thereto) within the meaning of Code §§402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16).

8.05 Determination of Available Withdrawal Amount: The amount which a Participant may withdraw under Section 8.04 shall be the total of the Participant’s Voluntary Contributions to the Plan as of December 31, 1986, including earnings thereon, plus the Participant’s Voluntary Contributions to the Plan after that date but prior to October 1, 1992, together with earnings thereon. No Voluntary Contributions after September 30, 1992 or earnings thereon shall be available for in-service withdrawal or included in any calculation of amount available for withdrawal. Upon any withdrawal pursuant to Section 8.04 the Plan shall first charge the amount (to the extent possible) to the balance of Voluntary Contributions determined as of December 31, 1986, which shall be considered a return of Voluntary Contributions under the “grandfather rule” of Notice 87-13, Q&A-13. All Voluntary Contributions to the Plan after December 31, 1986 and prior to October 1, 1992 together with earnings thereon, shall be considered by the Plan to be a “separate contract” within the meaning of Code §72(d). Allocations between investment in the contract and earnings with respect to any withdrawal including amounts attributable to the “separate contract” shall be made in accordance with Code §72(e)(8) and Notice 87-13. The Plan Administrator shall maintain such records of a Participant’s Voluntary Contributions as may be necessary to ensure compliance with this Section 8.05.

8.06 Withdrawal of Rollover Contributions: If a Participant has a Rollover Contribution Account in the Plan, and if the Participant’s Accrued Benefit is not more than five thousand dollars ($5,000), without regard to whether the amount in the Participant’s Account has ever exceeded that amount at the time of any prior distribution, the withdrawal shall be permitted without regard to any Participant consent requirement or the requirements of Section 9.06. Withdrawals from the Rollover Contribution Account on account of hardship shall have no effect upon any benefits provided under any other provisions of this Plan. All hardship distributions from the Rollover Contribution Account shall be administered in a uniform and non-discriminatory manner.

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The amount withdrawn shall be distributed to the Participant in the manner and form provided in Section 11.02 as if the amount were distributed on account of the Participant’s Termination of Employment or, if the Participant is eligible for Normal Retirement, in the manner and form provided in Article IX as if the amount were distributed on account of the Participant’s Retirement. If the spousal consent rules of Section 9.06 apply to any amount in the Participant’s Account, then no amount shall be withdrawn unless prior to the withdrawal the Participant’s spouse, if any, consents to the withdrawal.

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ARTICLE IX

RETIREMENT BENEFITS

9.01 Normal or Late Retirement: A Participant shall be eligible for Normal Retirement on reaching his Normal Retirement Date. A Participant who has not become an Excluded Employee may continue in the service of the Employer as a Participant hereunder beyond his Normal Retirement Date. In the event such a Participant continues in the service of the Employer, he shall continue to be treated in all respects as a Participant until his actual retirement. When any Participant has a Termination of Employment following his Normal Retirement Date he shall be considered a retired Participant and he shall be entitled to receive the entire amount of his Accrued Benefit, distributed as set forth below.

9.02 Disability Retirement: Upon any Participant incurring a Disability, he shall be considered a disabled Participant and entitled to begin receiving his Vested Accrued Benefit, without regard to whether he has also incurred a Termination of Employment. Such amount shall be distributed as provided in Section 9.03, or deferred until such later date as elected by the disabled Participant and then distributed as provided in Section 9.03.

9.03 Method of Payment: Subject to the rules of Section 9.07, upon receipt of a claim for benefits a retired or disabled Participant’s Vested Accrued Benefit shall be payable, as elected in writing or other appropriate electronic means by the Participant, in one or a combination of the following forms:

(a) A single lump sum payment. The amount of the lump sum payment shall be equal to the entire Vested Interest of the Participant in his Account on the date payment is made.

(b) Substantially equal monthly, quarterly or annual installments over any period not exceeding the life expectancy of the Participant or the Participant and his or her spouse, if longer, until the Participant’s Vested Accrued Benefit has been fully distributed. Fractional share installment amounts of Employer Securities shall be withheld and accumulated until a whole share of Employer Securities can be distributed. Any fractional share remaining upon payment of the final installment shall be paid in cash.

Not less than thirty (30) days nor more than ninety (90) days before the Distribution Date, the Plan Administrator shall notify the Participant of the terms, conditions and forms of payment available from the Plan, including a description of the election procedures under this Section and a general explanation of the financial effect on a Participant’s Accrued Benefit of the election. The minimum thirty (30) day waiting period after the notification is provided until the Distribution Date may be disregarded if the Plan Administrator informs the Participant of his or her right to the full minimum thirty (30) day waiting period, and the Participant elects in writing (or by other means acceptable to the Plan Administrator) to waive the minimum thirty (30) day waiting period.

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If a Participant fails to elect a form of payment, payment of the Participant’s benefits shall be paid in the form of a lump sum. Except as permitted in Section 9.04, no payment shall be made to a Participant prior to his Normal Retirement Age unless the Participant consents in writing (or by other means acceptable to the Plan Administrator) to the payment not more than ninety (90) days prior to his Distribution Date.

If the lump sum amount that would be payable to a Participant (whether disabled or retired) is not more than five thousand dollars ($5,000), without regard to whether the amount in the Participant’s Account has ever exceeded that amount at the time of any prior distribution, the benefit shall be paid as a single lump sum payment as soon as administratively feasible following the end of the month in which his Termination of Employment occurs without any requirement of participant consent. However, a single lump sum payment shall not be made to a Participant after his Distribution Date unless the Participant consents in writing to the payment. If the Participant dies prior to the complete distribution of the Participant’s Accrued Benefit to him, then the Plan Administrator, upon notice of the Participant’s death, shall direct the Trustee to make payment in accordance with the provisions of Article X.

9.04 Time of Payment: Payment of the retired or disabled Participant’s Vested Accrued Benefit shall commence as soon as administratively feasible following the Participant’s Termination of Employment on account of retirement or disability, or if later, as soon as administratively feasible following the date a claim for benefits is submitted by the Participant to the Plan Administrator. Unless a Participant elects otherwise (and failure to submit a claim for benefits shall be deemed such an election) payment of benefits under this Plan will commence not later than sixty (60) days after the close of the Plan Year in which the latest of the following events occurs:

(a) The attainment by the Participant of Age sixty-five (65); or

(b) The tenth (10th) anniversary of the Participant’s Entry Date; or

(c) The date the Participant has a Termination of Employment from the Employer.

If the amount of the payment required to commence on the date determined above cannot be ascertained by such date, or if it is not possible to make such payment on such date because the Plan Administrator has been unable to locate the Participant after making reasonable efforts to do so, a payment retroactive to such date may be made no later than sixty (60) days after the earliest date on which the amount of such payment can be ascertained or the date the Participant is located, whichever is applicable.

9.05 Minimum Distribution Requirements: This Section 9.05 and Section 10.04 shall take precedence over any inconsistent provisions of this Plan. All distributions required to be made under this Section 9.05 (life distributions) or under Section 10.04 (death distributions) will be determined and made in accordance with the Treasury regulations under Code §401(a)(9).

(a) Effective Date. This Section and Section 10.04 will apply for purposes of determining required minimum distributions for all calendar years beginning with the

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Effective Date. Required minimum distributions for the 2002 calendar year under this Section and Section 10.04 will be determined as follows. If the total amount of 2002 required minimum distributions under the Plan made to a Participant or Beneficiary prior to the effective date of this Section equals or exceeds the required minimum distributions determined under this Section, then no additional distributions will be required to be made for the 2002 calendar year on or after such date to the Participant or Beneficiary. If the total amount of the 2002 calendar year required minimum distributions under the Plan made to the Participant or Beneficiary prior to the effective date of this Section is less than the amount determined under this Section, then required minimum distributions for the 2002 calendar year on and after such date will be determined so that the total amount of required minimum distributions for the 2002 calendar year made to the Participant or Beneficiary will be the amount determined under this Section.

(b) Time and Manner of Distribution.

(1) Required Beginning Date. The Participant’s entire Vested Accrued Benefit will be distributed, or begin to be distributed, to the Participant no later than the participant’s Required Beginning Date.

(2) Death of Participant Before Distributions Begin. If the Participant dies before distributions begin, the Participant’s entire Vested Accrued Benefit will be distributed, or begin to be distributed, as provided in Section 10.04.

(3) Forms of Distribution. Unless the participant’s interest has been distributed in the form of a single sum on or before the Required Beginning Date, as of the first Distribution Calendar Year distributions will be made in accordance with Section 9.05(c).

(c) Required Minimum Distributions During Participant’s Lifetime

(1) Amount of Required Minimum Distribution For Each Distribution Calendar Year. During the participant’s lifetime, the minimum amount that will be distributed for each Distribution Calendar Year is the lesser of:

(A) the quotient obtained by dividing the Participant’s Account Balance by the distribution period in the Uniform Lifetime Table set forth in Treas. Reg. Section 1.401(a)(9)-9, using the Participant’s age as of the Participant’s birthday in the Distribution Calendar Year; or

(B) if the Participant’s sole Designated Beneficiary for the Distribution Calendar Year is the Participant’s spouse, the quotient obtained by dividing the Participant’s Account Balance by the number in the Joint and Last Survivor Table set forth in Treas. Reg. Section 1.401(a)(9)-9, using the Participant’s and spouse’s attained ages as of

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the participant’s and spouse’s birthdays in the Distribution Calendar Year.

(2) Lifetime Required Minimum Distributions Continue Through Year of Participant’s Death. Required minimum distributions will be determined under this Section 9.05(c) beginning with the first Distribution Calendar Year and up to and including the Distribution Calendar Year that includes the Participant’s date of death.

(d) Definitions. For purposes of this Section 9.05 and Section 10.04 the following definitions shall apply.

(1) “Designated Beneficiary” shall mean the individual who is designated as the Beneficiary under Section 10.02 of the Plan and is the Designated Beneficiary under Code §401(a)(9) Treas. Reg. Section 1.401(a)(9)-1, Q&A-4.

(2) “Distribution Calendar Year” shall mean a calendar year for which a minimum distribution is required. For distributions beginning before the Participant’s death, the first Distribution Calendar Year is the calendar year immediately preceding the calendar year which contains the Participant’s Required Beginning Date. For distributions beginning after the Participant’s death, the first Distribution Calendar Year is the calendar year in which distributions are required to begin under Section 10.04. The required minimum distribution for the Participant’s first Distribution Calendar Year will be made on or before the Participant’s Required Beginning Date. The required minimum distribution for other Distribution Calendar Years, including the required minimum distribution for the Distribution Calendar Year in which the Participant’s Required Beginning Date occurs, will be made on or before December 31 of that Distribution Calendar Year.

(3) “Life Expectancy” shall mean Life Expectancy as computed by use of the Single Life Table in Treas. Reg.§1.401(a)(9)-9.

(4) “Participant’s Account Balance” shall mean the balance in the Participant’s Account as of the last valuation date in the calendar year immediately preceding the Distribution Calendar Year (valuation calendar year) increased by the amount of any contributions made and allocated or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. The account balance for the valuation calendar year includes any amounts rolled over or transferred to the plan either in the valuation calendar year or in the Distribution Calendar Year if distributed or transferred in the valuation calendar year.

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(5) “Required Beginning Date” shall mean, if a Participant is a more than five percent (5%) owner in the Plan Year ending in or with the calendar year in which the Participant attains Age 70½, April 1st following that calendar year. For any other Participant the Required Beginning Date is April 1st following the close of the calendar year in which the Participant attains Age 70½, or, if later, April 1st following the close of the calendar year in which the Participant has a Termination of Employment.

(6) “Five percent (5%) owner” shall have the meaning set forth in Reg. §1.401(a)(9)-1, Q&A-2(c).

(e) Form of Benefit Payment. If payment of the Participant’s Accrued Benefit commences under this Section 9.05, it shall be distributed to the Participant (consistent with the Participant’s election and the requirements of Section 9.03):

(1) In the form of a cash lump sum payment of the Participant’s entire Accrued Benefit; or

(2) In the form of minimum annual cash installment payments over a period not extending beyond the life expectancy of the Participant, or the joint life expectancy of the Participant and his Beneficiary.

(f) Redetermination of Life Expectancy. For purposes of determining the amount of any minimum annual cash installment payments the life expectancy of the Participant and his spouse, but not of his non-spouse Beneficiary, shall be redetermined annually, unless otherwise elected by the Participant. Notwithstanding the above, any distribution required under the incidental death benefit requirements of Code §401(a) shall be treated as a required distribution.

9.06 No Annuity Benefits: Accrued Benefits payable from this Plan shall not be paid in any form of annuity.

9.07 Distribution of Employer Securities and Cash:

(a) If so elected by the Participant, distributions of benefits from the Plan may be made entirely in Employer Securities, valued at fair market value at the time of distribution, or, effective March 1, 2003, entirely in cash. If the Participant elects a distribution which is part cash and part Employer Securities, the distribution shall be consist only of the Employer Securities in the Employer Securities Account and the cash value of the General Investments Account at the time the payment is made. A Participant who elects a distribution method other than a lump sum may designate prior to payment of the first installment the amount of the first and each subsequent installment which will be Employer Securities and which will be cash. Any fractional security share to which a Participant or his Beneficiary is entitled shall be paid in cash. If the

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Participant makes no election, then the Participant’s Account shall be distributed in cash and in Employer Securities, according to the ratio of investment in the Participant’s Account in the General Investments and Employer Securities Accounts, respectively.

(b) Notwithstanding the provisions of Section 9.07(a), if a Participant has elected under Section 6.03(e) to withdraw (rather than reinvest) the cash dividends on Employer Securities allocated or allocable to his Account, the Plan Administrator shall direct the Trustee to pay to the Participant in cash the cash dividends on Employer Securities so allocated or allocable to the Participant’s Employer Securities Account, irrespective of whether the Participant is fully vested in his Employer Securities Account. The Plan Administrator’s direction must state whether the Trustee is to pay the cash dividend distributions currently, or within the 90 day period following the close of the Plan Year in which the Employer pays the dividends to the Trust. The Plan Administrator may also request the Employer to pay cash dividends on Employer Securities directly to Participants.

9.08 Special Distribution Rules: Unless the Participant elects in writing other distribution provisions of the Plan or unless other distribution provisions of the Plan require earlier distribution of the Participant’s Accrued Benefit, the Participant shall commence receiving the portion of the Participant’s Accrued Benefit attributable to Employer Securities (the “Eligible Portion”) at the time prescribed by this Section 9.08, irrespective of any other provision of the Plan. The distribution provisions of this Section 9.08 are subject to the consent and form of distribution requirements of Section 9.03.

(a) If the Participant incurs a Termination of Employment after attainment of Age 65 or by reason of death or disability, distribution of the Eligible Portion shall commence not later than one (1) year after the close of the Plan Year in which the applicable event occurs.

(b) If the Participant incurs a Termination of Employment for any reason not specified in (a), distribution of the Eligible Portion shall commence not later than one (1) year after the close of the fifth (5th) Plan Year following the Plan Year in which the Participant incurred the Termination of Employment. If the Participant resumes employment with the Employer on or before the last day of the fifth (5th) Plan Year following the Plan Year of his separation from Service, the mandatory distribution provisions of this paragraph (b) do not apply.

For purposes of this Section 9.08, a distribution to a Participant of the Eligible Portion shall not include any Employer Securities acquired with the proceeds of an Exempt Loan until the close of the Plan Year in which the Exempt Loan is paid in full.

The distributions required under this Section 9.08 shall be made over a period not exceeding five (5) years unless the Participant otherwise elects under the other distribution provisions of the

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Plan. If a Participant’s Eligible Portion exceeds $500,000, the maximum payment period, subject to a contrary election by the Participant, is five years plus one additional year (but no more than five additional years) for each $100,00 (or fraction of $100,000) by which the Eligible Portion exceeds $500,000. The $500,000 and $100,000 amounts set forth in this Section shall be adjusted at the same time and in the same manner as the factor prescribed by the Secretary of the Treasury under Code §415(d). In no event will the distribution period exceed the period permitted under Section 9.05 of the Plan.

9.09 Distribution of Transferred Benefits: To the extent not already provided under the terms of this Plan, and notwithstanding any other provisions to the contrary, this Plan guarantees to each Participant whose Account includes Transferred Benefits (and to each Beneficiary thereof) the right to receive all Transferred Benefits in any optional form of benefit (including time, manner and method of distribution) protected under Code §411(d)(6). The extent and nature of the optional forms of benefits so protected shall be determined by reference to the Predecessor Plan(s).

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ARTICLE X

DEATH BENEFITS

10.01 Death Benefits Payable: If a Participant who has not received a distribution of his entire Vested Interest dies, whether before or after his Distribution Date, the death benefit payable to the Beneficiary, Contingent Beneficiary or estate (as the case may be) of the Participant shall be all amounts credited (or to be credited) to his Accounts then held by the Trustee for the Participant’s benefit, without regard to the Participant’s Vested Percentage and which have yet to be distributed. If an Inactive Participant who has not received a distribution of his entire Vested Interest dies, whether before or after his Distribution Date, the death benefit payable to the Beneficiary, Contingent Beneficiary or estate (as the case may be) of the Inactive Participant shall be the remaining Vested Interest in the Inactive Participant’s Accounts then held by the Trustee for the Inactive Participant’s benefit.

10.02 Designation of Beneficiary: Each Participant or Inactive Participant may designate a Beneficiary and Contingent Beneficiary who shall be entitled to receive the death benefit payable under Section 10.01. From time to time the Participant or Inactive Participant may file with the Plan Administrator a new or revised designation, provided that his or her spouse shall be his or her Beneficiary unless his or her spouse has consented in writing to the designation of a Beneficiary other than his or her spouse or it is established to the satisfaction of the Plan Administrator that the consent of the spouse may not be obtained because there is no spouse, the spouse cannot be located or because of such other circumstances as may be set forth in Regulations issued pursuant to Code §417(a)(2)(B). The change in marital status of a Participant from married to unmarried or vice versa shall void any outstanding beneficiary designation and require the completion and execution of a new beneficiary designation consistent with the provisions of this Section. Beneficiary designations shall be completed in the manner approved by the Plan Administrator or set forth in writing on a form provided by the Plan Administrator.

If upon the Participant’s death his designated Beneficiary does not survive him, the Contingent Beneficiary shall become the Beneficiary and any death benefit payable under Section 10.01 shall be paid to him or her. If a deceased Participant is not survived by a designated Beneficiary or Contingent Beneficiary, or if no Beneficiary was designated, the benefits shall be paid to the person (or in equal shares to the persons) in the first of the following classes of successive preference beneficiaries then surviving: the Participant’s (a) widow or widower, (b) children per stirpes, (c) parents, (d) brothers and sisters, (e) executor or administrator of his estate. For purposes of determining the right of a Beneficiary, Contingent Beneficiary, surviving spouse or other survivor to receive a benefit on account of the death of a Participant, he or she shall not be deemed to have survived the Participant unless he or she shall survive the Participant by at least thirty (30) days.

If the Beneficiary, Contingent Beneficiary or surviving spouse survives the Participant and is entitled to receive benefits under this Section 10.02, but dies prior to receiving the entire death benefit payable to him or her, the remaining portion of the death benefit shall be paid to the person’s named beneficiary or, if none, to the person’s estate subject to the right of commutation.

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10.03 Death Benefit Payment Procedure: Upon receipt of a claim for benefits, the Participant’s death benefit shall be paid by the Trustee to the Beneficiary designated by the Participant pursuant to Section 10.02. The Beneficiary of a Participant may elect to receive death benefits payable hereunder in any form of payment provided in Section 9.03, subject to the right to receive the distribution in cash or in Employer Securities as provided in Section 9.07. The Beneficiary’s election to receive distribution shall be made in the same manner provided under Articles IX and XI for distribution to Participants. Subject to the small benefit distribution rules in the next paragraph of this Section 10.03, the Plan shall distribute the death benefit according to the required distribution rules in Section 10.04.

If the lump sum benefit otherwise payable to the Beneficiary is not more than five thousand dollars ($5,000) and payment of benefits to the deceased Participant has not previously commenced, the benefit shall be paid as a single lump sum payment, subject to the distribution rules of Section 9.07. Payment of any death benefits under this paragraph shall commence as soon as administratively feasible following the Participant’s date of death. However, if the amount of the benefit required to be paid on the date determined above cannot be ascertained by that date, or if it is not possible to make the payment on that date because the Plan Administrator has been unable to ascertain or locate the Beneficiary after making reasonable efforts to do so, a payment retroactive to such date may be made as soon as administratively feasible after the earliest date on which the Beneficiary or amount of the payment can be ascertained or the date the Beneficiary is located, whichever is applicable.

10.04 Required Distributions Upon Death : Notwithstanding any other provisions of this Plan, payment of death benefits shall be subject to the following rules:

(a) Death of Participant Before Distributions Begin. If the Participant dies before distributions begin, the Participant’s entire Vested Accrued Benefit will be distributed, or begin to be distributed no later than as follows:

(1) If the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary, then unless otherwise provided herein, distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70½, if later.

(2) If the Participant’s surviving spouse is not the Participant’s sole Designated Beneficiary, then except as otherwise provided herein, distributions to the Designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died.

(3) If there is no Designated Beneficiary as of September 30 of the year following the year of the Participant’s death, the Participant’s entire Vested

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Accrued Benefit will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

(4) If the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this Section 10.04(a), other than sub-Section (a)(1), will apply as if the surviving spouse were the Participant.

For purposes of this Section 10.04(a) and Sections 10.04(e)and (f), unless Section 10.04(a)(4) applies, distributions are considered to begin on the participant’s Required Beginning Date. If Section 10.04(a)(4) applies, distributions are considered to begin on the date distributions are required to begin to the surviving spouse under Section 10.04(a)(1).

(b) Forms of Distribution. Unless the participant’s interest has been distributed in the form of a single sum on or before the Required Beginning Date, as of the first Distribution Calendar Year distributions will be made in accordance with Sections 10.04(e) and (f).

(c) Beneficiaries’ Election of Five Year Rule. Beneficiaries may elect on an individual basis whether the five year rule or the Life Expectancy rule in Sections 10.04(a) and (f) applies to distributions after the death of a Participant who has a Designated Beneficiary. The election must be made no later than the earlier of September 30 of the calendar year in which distribution would be required to begin under Section 10.04(a) or by September 30 of the calendar year which contains the fifth anniversary of the Participant’s (or, if applicable, surviving spouse’s) death. If neither the Participant nor Beneficiary makes an election under this sub-Section, distributions will be made in accordance with Sections 10.04(a) and (f).

(d) Transition Rule for Designated Beneficiary Receiving Distributions Under Five Year Rule to Elect Life Expectancy Distributions. A Designated Beneficiary who is receiving payments under the five year rule may make a new election to receive payments under the Life Expectancy rule until December 31, 2003, provided that all amounts that would have been required to be distributed under the Life Expectancy rule for all Distribution Calendar Years before 2004 are distributed by the earlier of December 31, 2003, or the end of the five year period.

(e) Death On or After Date Distributions Begin.

(1) Participant Survived by Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the longer of the remaining Life

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Expectancy of the Participant or the remaining Life Expectancy of the Participant’s Designated Beneficiary, determined as follows:

(A) The Participant’s remaining Life Expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.

(B) If the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary, the remaining Life Expectancy of the surviving spouse is calculated for each Distribution Calendar Year after the year of the Participant’s death using the surviving spouse’s age as of the spouse’s birthday in that year. For Distribution Calendar Years after the year of the surviving spouse’s death, the remaining Life Expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse’s birthday in the calendar year of the spouse’s death, reduced by one for each subsequent calendar year.

(C) If the Participant’s surviving spouse is not the Participant’s sole Designated Beneficiary, the Designated Beneficiary’s remaining Life Expectancy is calculated using the age of the Beneficiary in the year following the year of the Participant’s death, reduced by one for each subsequent year.

(2) No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after the year of the Participant’s death, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the Participant’s remaining Life Expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.

(f) Death Before Date Distributions Begin.

(1) Participant Survived by Designated Beneficiary. If the Participant dies before the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account Balance by the remaining Life Expectancy of the Participant’s Designated Beneficiary, determined as provided in Section 10.04(e).

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(2) No Designated Beneficiary. If the Participant dies before the date distributions begin and there is no Designated Beneficiary as of September 30 of the year following the year of the Participant’s death, distribution of the Participant’s entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.

(3) Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin. If the Participant dies before the date distributions begin, the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under Section 10.04(a)(1), this Section 10.04(f) will apply as if the surviving spouse were the Participant.

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ARTICLE XI

BENEFITS UPON OTHER TERMINATION OF EMPLOYMENT

11.01 Vested Amounts: A Participant shall become one hundred (100%) vested in his Accrued Benefit on attainment of Normal Retirement Age while employed by a Zions Employer. Prior to his Normal Retirement Age a Participant shall have a Vested Interest in his Accrued Benefit equal to the sum of the following:

(a) One hundred percent (100%) of the balance in his Participant Elective Deferral Account and in his Employer Matching Contribution Account, as adjusted for any contributions or distributions since the preceding Valuation Date; and

(b) One hundred percent (100%) of the balance in his Participant Rollover Contribution Account and in his Voluntary Contribution Account, if any, as adjusted for any contributions or distributions since the preceding Valuation Date; and

(c) One hundred percent (100%) of the balance in his Dividend Account if any (whether cash or Employer Securities), as adjusted for any contributions or distributions since the preceding Valuation Date; and

(d) His vested percentage of the balance in his Employer Non-Elective Contribution Account, as adjusted for any contributions or distributions since the preceding Valuation Date, according to the Participant’s Years of Vesting Service, and consistent with the following schedule:

Years of Vesting Service	Percent of Vested Accrued Benefit
Less than five (5) years	none
At least five (5) years	100%

(e) A Participant’s Predecessor Plan Account (if any) shall be vested pursuant to the vesting rules set forth in the Predecessor Plan Account.

The percentage of the Participant’s Accrued Benefit attributable to the Participant’s Employer Contribution and Predecessor Plan Accounts in which he is not vested shall be forfeited by him as provided in Section 11.06.

11.02 Distribution of Vested Interest: Subject to the rules of Section 9.07, a Participant who incurs a Termination of Employment for any reason other than retirement, death or disability may elect in writing or other appropriate electronic means one or a combination of the following forms of distribution of his Vested Interest:

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(a) A single lump sum payment. The amount of the lump sum payment shall be equal to the Participant’s Vested Interest in his or her Account on the date payment is made.

(b) Substantially equal monthly, quarterly or annual installments over any period not exceeding the life expectancy of the Participant or the Participant and his or her spouse, if longer, until the Participant’s Vested Accrued Benefit has been fully distributed. Fractional share installment amounts of Employer Securities shall be withheld and accumulated until a whole share of Employer Securities can be distributed. Any fractional share remaining upon payment of the final installment shall be paid in cash.

Distribution shall commence no later than the time specified in Section 9.08 unless the Participant fails to elect a form or time of payment or elects a deferred payment, then payment of the Participant’s Accrued Benefit shall be deferred to the subsequent date elected by the Participant, which may be no later than the latest date permitted under Section 9.05, and then distributed in accordance with the provisions of Section 9.03. If the Participant elects later payment of the Participant’s Vested Accrued Benefit, distribution shall commence as soon as administratively feasible following the date a claim for benefits is submitted by the Participant to the Plan Administrator, which may be no later than the earlier of the date permitted under Sections 9.04 and 9.05. If at that time the Participant has attained Normal Retirement Age or incurred a disability, or if the Participant dies before his Normal Retirement Age or if earlier, before his Distribution Date, the Plan Administrator, upon notice of the attainment of Retirement Age or of death, shall direct the Trustee to make payment of the Participant’s Vested Interest to him (or to his Beneficiary if the Participant is deceased) in accordance with the provisions of Article X in the case of death, or Section 9.03 in the case of disability or attainment of Normal Retirement Age.

Not less than thirty (30) days nor more than ninety (90) days before the Distribution Date, the Plan Administrator shall notify the Participant of the terms, conditions and forms of payment available from the Plan, including a description of the election procedures under this Section and a general explanation of the financial effect on a Participant’s Accrued Benefit of the election. The minimum thirty (30) day waiting period after the notification is provided until the Distribution Date may be disregarded if the Plan Administrator informs the Participant of his or her right to the full minimum thirty (30) day waiting period, and the Participant elects in writing (or by other means acceptable to the Plan Administrator) to waive the minimum thirty (30) day waiting period.

If the Participant elects immediate distribution following Termination of Employment, whether as a single lump sum payment or term certain payments, payment shall be made as soon as administratively feasible following Termination of Employment. However, if a Participant terminates employment in a month that is the end of a quarter of the calendar year (i.e., March, June, September, December), then the distribution of the Participant’s Account shall be made on the 25th day of the second month following the Participant’s Termination of Employment. If the Former Participant dies or incurs a Disability before his Normal Retirement Date, the Plan Administrator, upon notice of the death or Disability, shall direct the Trustee to make payment of the Participant’s

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Vested Interest to him (or to his Beneficiary if the Participant is deceased) in accordance with the provisions of Article X in the case of death, or Section 9.02 in the case of Disability.

Notwithstanding the above, if a terminated Participant is re-employed by the Employer prior to distribution of his Vested Interest, distribution shall not be made until his employment is again terminated or until the occurrence of another event permitting distribution under the terms of the Plan.

11.03 Distribution of Small Amounts: Notwithstanding the provisions of Section 11.02 if a Participant incurs a Termination of Employment for any reason other than retirement, death or disability and if the Vested Accrued Benefit that would be payable to a Participant is not more than five thousand dollars ($5,000), without regard to whether the amount in the Participant’s Account has ever exceeded that amount at the time of any prior distribution, then the Plan shall make distribution to the Participant in a single lump sum cash payment pursuant to the provisions of Sections 9.07 and 9.08 without first obtaining the Participant’s written consent.

11.04 Eligible Rollover Distributions: Notwithstanding any provision of this Plan to the contrary, a Distributee may elect, at the time and in the manner prescribed by the Plan Administrator, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover. For purposes of this Section 11.04 the following definitions shall apply:

(a) “Eligible Rollover Distribution” shall mean any distribution of all or any portion of the balance to the credit in the Account of the Distributee, except that an Eligible Rollover Distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee’s designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code §401(a)(9), and the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). Any amount that is distributed on account of hardship (without regard to whether the hardship withdrawal is attributable to Elective Deferrals) shall not be an eligible rollover distribution and the Distributee may not elect to have any portion of such a distribution paid directly to an eligible retirement plan.

(b) “Eligible Retirement Plan” shall mean an individual retirement account described in Code §408(a), an individual retirement annuity described in Code §408(b), an annuity plan described in Code §403(a), a qualified trust described in Code §401(a), that accepts the Distributee’s Eligible Rollover Distribution, an annuity contract described in Code §403(b) and an eligible plan under Code §457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to

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separately account for amounts transferred into such plan from this Plan. This definition of Eligible Retirement Plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relation order, as defined in Code §414(p).

(c) “Distributee” shall mean an Employee or former Employee. In addition, the Employee’s or former Employee’s surviving spouse and the Employee’s or former Employee’s spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code §414(p), are Distributees with regard to the interest of the spouse or former spouse.

(d) “Direct Rollover” shall mean a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.

11.05 Breaks in Service and Vesting: If a Participant has a One Year Break in Service, the Participant’s Years of Vesting Service before the One Year Break in Service shall not be included in computing Years of Vesting Service until the Participant shall have completed one Year of Vesting Service after the One Year Break in Service. If an Employee terminated employment prior to becoming a Participant and incurred a One Year Break in Service, or if a Participant did not have any Vested Interest derived from Employer contributions prior to a One Year Break in Service, Years of Vesting Service before a One Year Break in Service shall not be included in Years of Vesting Service calculated after the Participant’s One Year Break in Service if the number of consecutive One Year Breaks in Service equals or exceeds the greater of five (5) or the aggregate number of such Years of Vesting Service before the One Year Break in Service.

Solely for the purpose of determining the vested percentage of a Participant’s Accrued Benefit derived from Employer contributions which accrued prior to a five (5) consecutive one (1) year Break in Service period, the Plan shall disregard any Year of Service subsequent to such five (5) consecutive one (1) year Breaks in Service period.

If a Participant has a One Year Break in Service, and the break does not arise on account of Termination of Employment, the Participant shall not be credited with a Year of Vesting Service for that Plan Year. However, no amounts in the Participant’s Accounts shall be forfeited.

11.06 No Increase in Pre-break Vesting: For purposes of Section 11.01, Years of Vesting Service after a Termination of Employment which resulted in five (5) consecutive One Year Breaks in Service shall not increase the vested percentage of a Participant’s Account which was earned before such five (5) consecutive One Year Breaks in Service.

11.07 Disposition of Forfeitures: Amounts forfeited by terminated Participants from their Employer Non-Elective Contribution Accounts shall be used to reduce the amount of the Employer’s Non-Elective Contribution otherwise made pursuant to Section 5.07. The forfeited amounts shall be allocated in accordance with Section 6.02(c).

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To the extent possible, the Plan Administrator must forfeit from a Participant’s General Investments Account before making a forfeiture from his Employer Securities Account.

Forfeiture of the Participant’s non-vested interest in his or her Employer Non-Elective Contribution Account shall occur:

(a) In the case of a Participant who receives a lump sum distribution of his Vested Interest on account of Termination of Employment, on the day the Participant receives the distribution.

(b) In the case of a Participant who has a Vested Interest derived from Employer Contributions and does not receive a total distribution of such Vested Interest, on the last day of the Plan Year in which the Participant incurs five (5) consecutive One Year Breaks in Service.

(c) In the case of a Participant who has no Vested Interest derived from Employer Contributions, regardless of the sub-Account to which the Employer Contributions have been allocated, on the day the Participant incurs the Termination of Employment.

Non-vested interests of terminated Participants shall be held by the Trustee in the respective Accounts of the Participant until the date determined above and shall then be forfeited by the Participant and allocated in accordance with this Section.

11.08 Distribution to Participants Who Are Less Than 100% Vested in Their Entire Account: In the event a Participant who is less than one hundred percent (100%) vested hereunder incurs a Termination of Employment and returns to the employ of the Employer before a forfeiture of his non-vested interest shall have occurred, and prior to his re-employment was paid a portion of his Vested Interest, a separate account for the Participant’s remaining interest in the Plan as of the time of the distribution shall be maintained. At any relevant time, the Participant’s vested portion of the separate account shall be an amount “X” determined by the following formula:

X = P (AB+(RxD)) – (RxD)

For purposes of applying the formula:

P is the vested percentage at the relevant time;

AB is the account balance at the relevant time;

D is the amount of the distribution;

R is the ratio of the account balance at the relevant time to the account balance after distribution.

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In the event a Participant who is less than one hundred percent (100%) vested hereunder incurs a Termination of Employment and returns to the employ of the Employer after a forfeiture of his non-vested interest but prior to incurring five (5) consecutive One Year Breaks in Service, and prior to his re-employment was paid his Vested Interest, the non-vested portion of his Accrued Benefit which was forfeited by the Participant shall be disregarded in computing his Accrued Benefit after re-entry into the Plan, unless the Participant repays, pursuant to Section 11.08, the amounts distributed from his Account from which an amount was forfeited. If a Participant does repay the distribution, the balance in such Account shall be restored as provided in Section 11.09.

In the event a Participant who had no Vested Interest in his Employer Regular Contribution Account separated from service and returns to the employ of the Employer after a forfeiture of his non-vested interest but prior to incurring five (5) consecutive One Year Breaks in Service, any non-vested amounts forfeited by the Participant shall be restored, as provided in Section 11.09, to the Account from which an amount was forfeited.

11.09 Repayment of Distribution: A Participant described in the second paragraph of Section 11.07 who received a lump sum distribution of less than one hundred percent (100%) of his Accrued Benefit shall be entitled to repay the amount so distributed from the Employer Contribution Account in which he was less than one hundred percent (100%) vested. The repayment must be for the full amount distributed from the Account and must be made not later than the earlier of:

(a) The date on which the Participant incurs five (5) consecutive One Year Breaks in Service after the date of distribution.

(b) The end of the five (5) year period beginning with the date the Participant is re-employed by the Employer.

Any repayment shall not be included in applying the limitations of Article V or Article VIII hereunder.

11.10 Restoration of Accounts: Any amount repaid pursuant to Section 11.08 shall be credited to the Participant’s Accounts for which it is repaid, with credit to be made as of the date of repayment. The Account shall also be credited with the amount previously forfeited from the Account, with credit to be made as of the last day of the Plan Year in which repayment is made.

In the case of a Participant to whom the third paragraph of Section 11.07 applies, the Participant’s Accounts from which amounts were previously forfeited shall be credited with the amount so forfeited, with credit to be made as of the last day of the Plan Year in which the Participant resumes participation in the Plan.

Any previously forfeited amounts which are credited to Participants’ Accounts pursuant to this Section shall be derived from the following sources in the following order of priority:

(a) First, the amount, if any, to be credited to such types of Accounts for the Plan Year pursuant to Section 11.05;

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(b) Second, Employer contributions for the Plan Year, if any, which are not required to be credited to such types of Accounts for other Participants; and

(c) Third, an additional Employer contribution for the Plan Year, regardless of whether the Employer has any Net Profits for the year.

If for any Plan Year, the Accounts of more than one Participant are required to be restored, then restorations shall be derived from the above sources in the same proportion that the amount to be restored to each Participant bears to the total amount to be restored to all such Participants for the Plan Year. Any such amounts credited to a Participant’s Accounts shall not be included in applying the limitations of Article V or Article VIII hereunder.

11.11 Amendments to the Vesting Schedule: No amendment to the vesting schedule or provisions of Section 11.01, or to this Plan which directly or indirectly affects the computation of a Participant’s Accrued Benefit, shall deprive a Participant of a vested right to the benefits accrued to the effective date of the amendment. Furthermore, if the vesting schedule or provisions of Section 11.01 are amended, each Participant with at least three (3) Years of Vesting Service (determined as of the later of the date the amendment is adopted or the date the amendment is effective) may elect to have his vesting percentage computed under the Plan without regard to the amendment. The period during which the election may be made shall commence with the date the amendment is adopted and shall end on the latest of:

(a) Sixty (60) days after the amendment is adopted;

(b) Sixty (60) days after the amendment becomes effective; or

(c) Sixty (60) days after the Participant is issued written notice of the amendment by the Employer or Plan Administrator.

In the absence of any written notice under (c) above, any Participant who has at least three (3) Years of Vesting Service (as determined above) shall at all times receive a Vested Interest under whichever vesting schedule provides the greatest Vested Interest.

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ARTICLE XII

FIDUCIARY DUTIES

12.01 General Fiduciary Duty: A Fiduciary, whether or not a Named Fiduciary, shall discharge his duties solely in the interest of the Participants and their Beneficiaries hereunder. All assets of this Plan shall be devoted to the exclusive purpose of providing benefits to Participants and their Beneficiaries and defraying the reasonable expenses of administering the Plan. Each Fiduciary, whether or not a Named Fiduciary, shall discharge his duties with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. Each Fiduciary shall also discharge his duties in a manner consistent with the documents and instruments governing the Plan to the extent such documents and instruments are consistent with law. No Fiduciary, whether or not a Named Fiduciary, shall engage in any prohibited transactions with a Disqualified Person or party-in-interest as those terms and transactions are defined herein and by ERISA.

12.02 Allocation of Responsibilities: Each Named Fiduciary shall have only those duties and responsibilities expressly allocated under the terms of this Plan. No other duties or responsibilities shall be implied.

12.03 Delegation of Responsibilities: Each Named Fiduciary may delegate the fiduciary responsibilities other than Trustee responsibilities allocated to such Fiduciary under this Plan to any person other than a Named Fiduciary. If any duties or responsibilities are delegated under this section, the person to whom the duties or responsibilities are delegated shall acknowledge the fact in writing and shall specify in writing the duties and responsibilities so delegated. All other duties and responsibilities shall be deemed not to have been delegated.

12.04 Liability for Allocation or Delegation of Responsibilities: A Named Fiduciary shall not be liable for the acts or omissions of a person to whom responsibilities or duties are allocated or delegated in accordance with Section 12.02 or Section 12.03 except to the extent such Named Fiduciary breaches his obligation under Section 12.01:

(a) With respect to the allocation or delegation;

(b) With respect to establishing or implementing a procedure for allocation or delegation; or

(c) By continuing the allocation or delegation.

Nothing in this section shall relieve a Fiduciary from liability incurred under Section 12.05.

12.05 Liability for Co-Fiduciaries: In addition to the liability a Fiduciary may incur for the breach of his duty under Section 12.01 or 12.04, a Fiduciary shall be liable for a breach of Fiduciary duty committed by another Fiduciary in the following circumstances:

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(a) If he participates knowingly in, or knowingly undertakes to conceal, an act or omission of such other Fiduciary knowing such act or omission is a breach;

(b) If, by his failure to comply with Section 12.01 he has enabled such other Fiduciary to commit a breach;

(c) If he has knowledge of a breach by such other Fiduciary, unless he makes reasonable efforts under the circumstances to remedy the breach.

12.06 Same Person May Serve in More than One Capacity: Nothing herein shall prevent any person from serving in more than one Fiduciary capacity.

12.07 Indemnification: The Plan Sponsor shall hold harmless and indemnify to the fullest extent permitted by ERISA each non-Trustee Fiduciary of the Plan with respect to the consequences of all actions or failures to act of the Fiduciary while carrying out his or her responsibilities under the Plan. The Plan Sponsor shall further hold harmless and indemnify each Fiduciary who is subjected to any claim or action or who is made a party in any threatened, pending or completed proceeding, including, without limitation, any proceeding brought by or in the name of the Plan or by any participant thereof or by any governmental agency. The Employer’s indemnification shall include any and all expenses (including attorney’s and/or consultant’s fees), costs, damages, judgments, fines, interest, penalties (including any which may be imposed under ERISA §502(l)) and/or amounts paid in settlement and that are actually and reasonably incurred by a Fiduciary in connection with the investigation, defense, settlement, preparation for trial, trial, or appeal of any proceeding, claim or action. Notwithstanding the foregoing, the Employer shall not be obligated to hold harmless or indemnify a Fiduciary of the Plan if indemnification is inconsistent with applicable law or if the act(s) or omission(s) of the Fiduciary to be indemnified are determined to have involved intentional misconduct, gross negligence or a knowing violation of ERISA or other applicable law by the Fiduciary.

To the extent a Fiduciary is a named insured under any policy of liability insurance maintained by the Plan or the Employer, the policy and the payment obligations of the insurance company under the policy shall be deemed primary and in lieu of the Employer’s obligations under this Section 12.07, but only to the extent of the coverage provided in the policy. No insurer under any policy shall claim any right to reimbursement or refund from the Employer and no obligation of the Employer hereunder shall be deemed to inure to the benefit of any third party.

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ARTICLE XIII

THE PLAN ADMINISTRATOR

13.01 Appointment of Plan Administrator: The Board of Directors of the Plan Sponsor shall appoint the Plan Administrator, which may be the Plan Sponsor. If the Plan Sponsor is appointed as Plan Administrator, the Plan Sponsor may appoint one or more Committees to carry out the duties of the Plan Administrator under this Plan. In that event all references in the Plan to the Plan Administrator shall be deemed to refer to the appointed Committee. The duties of the Committees shall be divided as the Plan Administrator deems appropriate and may be designated by separate instrument. The Committees shall act by majority vote except that they shall act by unanimous vote at any time when there are only two members comprising the Committee.

13.02 Acceptance by Plan Administrator: The Plan Administrator shall accept its appointment by joining with the Employer in the execution of this Agreement.

13.03 Signature of Plan Administrator: All persons dealing with the Plan Administrator may rely on any document executed by the Plan Administrator; or, in the event of appointment of a Committee or Committees, such persons may rely on any document executed by at least one member of the appropriate Committee as being the act of the Plan Administrator.

13.04 Appointment of an Investment Manager: The Plan Administrator may appoint an Investment Manager or Managers to manage, acquire and dispose of any assets of the Plan. In the event responsibility for appointment of Investment Managers is delegated by the Plan Administrator to a named Committee, that delegation shall carry with it the authority of the Committee to act as a Named Fiduciary for purposes of ERISA in appointing an Investment Manager. The Investment Manager shall accept his appointment by written agreement executed by the Plan Administrator and Investment Manager. This written agreement shall specify the Plan assets for which the Investment Manager is responsible and such written instrument shall be kept with the other documents governing the operation of the Plan. The Trustee shall be entitled to rely on written instructions from the Investment Manager and shall be under no obligation to invest or otherwise manage any asset of the Plan subject to the management of the Investment Manager.

13.05 Duties of the Plan Administrator: The Plan Administrator shall be responsible for the general administration of the Plan including, but not limited to, the following:

(a) To prepare an annual report, summary plan description and modifications thereto, and summary annual report;

(b) To complete and file the various reports and tax forms with the appropriate government agencies as required by law;

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(c) To distribute to Plan Participants and/or their Beneficiaries the summary plan description and reports sufficient to inform such Participants or Beneficiaries of their Accrued Benefit and their Vested Accrued Benefit as required by law;

(d) To determine annually, or more frequently if necessary, which Employees are eligible to participate in the Plan;

(e) To determine the benefits to which Participants and their Beneficiaries are entitled and to approve or deny claims for benefits;

(f) To provide Plan Participants with a written explanation of the effect of electing an optional form of benefit payment;

(g) To retain copies of all documents or instruments under which the Plan operates in its own office, the principal place of business of the Plan Sponsor and such other place as the Secretary of Labor or his delegate may by regulation prescribe; to make all such documents and instruments governing the operation of the Plan available for inspection by Plan Participants and/or their Beneficiaries; and to furnish copies of such documents or instruments to Plan Participants and/or their Beneficiaries on request, charging only the cost thereof as prescribed by regulation of the Secretary of Labor or his delegate;

(h) To interpret Plan provisions as needed and in this regard to have complete and total discretion in the interpretation of the Plan; and

(i) To act as the Plan’s agent for the service of legal process, unless another agent is designated by the Plan Sponsor and to act on behalf of the Plan in all matters in which the Plan is or may be a party.

13.06 Claims Procedure: A claim for benefits under the Plan may be filed with the Plan by any Participant or Beneficiary on a form supplied by the Plan Sponsor for that purpose or through any other communication medium approved by the Plan Administrator. Written notice of the disposition of a claim shall be furnished to the claimant within ninety (90) days after the application thereof is filed. In the event the claim is denied, the reasons for the denial shall be specifically set forth in the notice in language calculated to be understood by the claimant, pertinent provisions of the Plan shall be cited, and, where appropriate, an explanation as to how the claimant may perfect the claim shall be provided. In addition, the claimant shall be furnished with an explanation of the Plan’s claim review procedure.

13.07 Claims Review Procedure: Any Participant or Beneficiary whose benefit claim submitted pursuant to Section 13.06 has been denied (whether in full or in part) shall be entitled to request further consideration to his claim by filing an appeal with the Plan Administrator, which may

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be in the form of a request for reconsideration. The request, together with a written statement of the reasons why the claimant believes his appeal should be allowed, shall be filed with the Plan Administrator no later than sixty (60) days after receipt of the written notification provided for in Section 13.06. The Plan Administrator shall conduct the review of the appeal. The Plan Administrator, in its sole discretion, may order a hearing at which the claimant may be represented by an attorney or any other representative of his choosing and at which the claimant shall have an opportunity to submit written and oral evidence and arguments in support of his claim. During the appeal review period or at the hearing (upon five (5) business days prior written notice to the Plan Administrator) the claimant or his representative shall have an opportunity to review all documents in the possession of the Plan which are pertinent to the claim at issue and its disallowance. A final decision on the claim shall be made by the Plan Administrator within sixty (60) days of receipt of the appeal unless (i) because of special circumstances there has been an extension of sixty (60) days which has been communicated in writing to the claimant, or (ii) a hearing is held, in which event the final decision shall be made within one hundred twenty (120) days of receipt of the appeal. The communication containing the Plan Administrator’s decision shall be in writing and shall be written in a manner calculated to be understood by the claimant. The communication shall include specific reasons for the Plan Administrator’s decision and specific references to the pertinent Plan provisions on which the decision is based. The communication shall also inform the claimant of the limitation on any further action by the claimant set forth in Section 13.08.

13.08 Limitations of Actions on Claims: The delivery to the claimant of the final decision of the Plan Administrator with respect to a claim for benefits under Section 13.06 which has been reviewed and considered under the appeal procedures of Section 13.07 shall commence the period during which the claimant may bring legal action under ERISA for judicial review of the Plan Administrator’s decision. No civil action with respect to the claim for benefits or the subject matter thereof may be commenced by the claimant, whether such action is pursued through litigation, arbitration or otherwise, prior to the completion of the claims and claims review process set forth in Sections 13.06 and 13.07, nor following the expiration of two (2) years from the date of delivery of the final decision of the Plan Administrator to the claimant under Section 13.07.

13.09 Compensation and Expenses of Plan Administrator: The Plan Administrator may engage the services of any person, including counsel, whose services, in the opinion of the Plan Administrator, are necessary to assist it in carrying out its responsibilities under the Plan. The Employer may direct the Trustee to pay any expenses properly and actually incurred for such services from the Trust Fund, including such reasonable compensation for services provided by the Plan Administrator as shall have been agreed upon between them, or, alternatively, the Employer may pay such expenses or compensation directly; provided, however, that no individual acting as Plan Administrator shall receive any compensation if he already receives full-time pay from the Employer.

13.10 Removal or Resignation: A Plan Administrator may be removed by the Board of Directors of the Plan Sponsor upon thirty (30) days written notice, and may resign upon thirty (30) days written notice to the Board of Directors. Upon such removal or resignation, or the inability of

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the Plan Administrator for any other reason to act as Plan Administrator, the Board of Directors shall appoint a successor Plan Administrator. The successor Plan Administrator, upon written acceptance, shall have all the duties and responsibilities of a Plan Administrator herein. The former Plan Administrator shall deliver to the successor Plan Administrator all records and documents which it holds relating to the Plan upon removal or resignation.

13.11 Records of Plan Administrator: The Plan Sponsor shall have access, upon request, to all the records of the Plan Administrator that relate to the Plan.

13.12 Other Responsibilities: Nothing in this Article shall be construed to limit the responsibilities and duties allocated to the Plan Administrator in other Articles of this Plan.

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ARTICLE XIV

THE TRUSTEE

14.01 Appointment of Trustee: The Board of Directors of the Plan Sponsor shall appoint the Trustee. Nothing in this Plan shall prevent the Plan Sponsor from appointing multiple Trustees or creating multiple Trust Funds, each with separate Trustees. If more than one person is appointed as Trustee of a single Trust Fund, they shall act by majority vote; provided, however, that they shall act by unanimous vote at any time when there are only two Trustees. In the event there is more than one Trustee, the reference to Trustee shall be deemed to refer to all the Trustees.

14.02 Acceptance by Trustee: The Trustee shall accept its appointment by executing a separate trust agreement in a form acceptable to the Trustee and Employer. Subject to Section 14.03, the provisions of the separate Trust Agreement shall control over those in this Plan, to the extent such provisions define the duties of the Trustee with respect to the Trust Fund.

14.03 Provisions of Trust Agreement: The separate Trust Agreement shall authorize and empower the Trustee to invest up to one hundred percent (100%) of the Trust Fund in Employer Securities. The Trust Agreement shall also authorize and empower the Trustee to engage in Exempt Loan transactions on behalf of the Plan. An Exempt Loan transaction is a loan to the Trust which satisfies the following terms and conditions:

(a) The Trustee will use the proceeds of the loan, within a reasonable time after receipt, only for any or all of the following purposes: (i) to acquire Employer Securities, (ii) to repay such loan, or (iii) to repay a prior Exempt Loan. Except as provided under Article XXII, no Employer Security acquired with the proceeds of an Exempt Loan may be subject to a put, call or other option, or buy-sell or similar arrangement while held by and when distributed from this Plan, whether or not this Plan is then an employee stock ownership plan.

(b) The interest rate of the Exempt Loan may not be more than a reasonable rate of interest.

(c) Any collateral the Trustee pledges to the creditor must consist only of the assets purchased by the borrowed funds and those assets the Trust used as collateral on the prior Exempt Loan repaid with the proceeds of the current Exempt Loan.

(d) The creditor may have no recourse against the Trust under the Exempt Loan except with respect to such collateral given for the Exempt Loan, contributions (other than contributions of Employer Securities) that the Employer makes to the Trust to meet its obligations under the Exempt Loan, and earnings attributable to such collateral and the investment of such contributions. The payment made with respect to an Exempt Loan by the Plan during a Plan Year must not exceed an amount equal to the sum of such contributions and earnings received during or prior to the year less such payments in prior years. The Advisory Committee and the Trustee must account

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separately for such contributions and earnings in the books of account of the Plan until the Trust repays the Exempt Loan.

(e) In the event of default upon the loan, the value of Plan assets transferred in satisfaction of the Exempt Loan must not exceed the amount of the default, and if the lender is a Disqualified Person, the Exempt Loan must provide for transfer of Plan assets upon default only upon and to the extent of the failure of the Plan to meet the payment schedule of the Exempt Loan.

(f) The Trustee must add and maintain all assets acquired with the proceeds of an Exempt Loan in a Suspense Account. In withdrawing assets from the Suspense Account, the Trustee will apply the provisions of Treas. Reg. §§54.4975-7(b)(8) and (15) as if all securities in the Suspense Account were encumbered. Upon the payment of any portion of the loan, the Trustee will effect the release of assets in the Suspense Account from encumbrances. For each Plan Year during the duration of the Exempt Loan, the number of Employer Securities released must equal the number of encumbered Employer Securities held immediately before release for the current Plan Year multiplied by a fraction. The numerator of the fraction is the amount of principal and interest paid for the Plan Year. The denominator of the fraction is the sum of the numerator plus the principal and interest to be paid for all future Plan Years. The number of future Plan Years under the loan must be definitely ascertainable and must be determined without taking into account any possible extension or renewal periods. If the interest rate under the Exempt Loan is variable, the interest to be paid in future Plan Years must be computed by using the interest rate applicable as of the end of the Plan Year. If collateral includes more than one class of Employer Securities, the number of Employer Securities of each class to be released for a Plan Year must be determined by applying the same fraction to each such class. The Plan Administrator will allocate assets withdrawn from the Suspense Account to the Accounts of Participants who otherwise share in the allocation of the Employer’s Contribution for the Plan Year for which the Trustee has paid the portion of the Exempt Loan resulting in the release of the assets. The Plan Administrator will make this allocation consistently as of each Accounting Date on the basis of non-monetary units, taking into account the relative Compensation of all such Participants for such Plan Year.

(g) The loan must be for a specific term and may not be payable at the demand of any person except in the case of default.

(h) Notwithstanding the fact this Plan ceases to be an employee stock ownership plan, Employer Securities acquired with the proceeds of an Exempt Loan will continue after the Trustee repays the loan to be subject to the provisions of Treas. Reg. §§54.4975-7(b)(4), (10), (11) and (12) relating to put, call or other options and to buy-sell or similar arrangements, except to the extent these regulations are inconsistent with Code §409(h).

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14.04 Participant Voting Rights: The separate Trust Agreement shall provide for voting Employer Securities by Participants in the following manner.

(a) With respect to the voting of Employer Securities which are not part of a registration-type class of securities (as defined in Code §409(e)(4)), a Participant (or Beneficiary) has the right to direct the Trustee regarding the voting of such Employer Securities allocated to his Employer Securities Account with respect to any corporate matter which involves the approval or disapproval of any corporate merger or consolidation, recapitalization, reclassification, liquidation, dissolution, sale of substantially all assets of a trade or business, or such similar transaction as the Treasury may prescribe in regulations.

(b) With respect to Employer Securities allocated to the Participant’s Employer Securities Account which are part of a registration type class of securities, a Participant’s right to direct the Trustee to vote such Employer Securities shall extend to all corporate matters requiring a vote of stockholders. The Plan Administrator shall cause to be prepared and delivered to each Participant a notice of the stockholders’ meeting with a descriptive statement of the items upon which the Participant may exercise his right to direct the Trustee’s vote. Each Participant shall be given notice that if he fails to exercise his voting rights, the Trustee may elect to vote the Employer Securities allocated to the Participant’s Account.

The Trustee may vote any Employer Securities described in subsection (b) as to which a Participant (or Beneficiary) fails to direct a vote as authorized by this Section 14.04. The Trustee shall not vote any Employer Securities described in subsection (a) as to which a Participant is entitled to direct the Trustee to vote and the Trustee receives no direction from the Participant.

14.05 Investment Committee: In the event of appointment of an Investment Committee by the Plan Administrator, then except to the extent responsibility for certain Plan assets has been allocated to an Investment Manager as provided in Section 13.04, the Investment Committee is authorized and empowered to direct investment of the Trust Fund, consistent with the terms of the separate Trust Agreement. The Investment Committee shall direct investment and reinvestment of the Trust Fund to keep the Trust Fund invested without distinction between principal and income and in such securities or property, real or personal, wherever situated, as the Committee shall deem advisable consistent with the investment policy of the Plan established under Article XVIII. The Committee shall give due regard to any limitations imposed by the Code or ERISA so that at all times this Plan may qualify as a qualified Plan and Trust.

14.06 Payment of Plan Expenses: The Plan specifically permits the payment of Plan administration and operation expenses from the Plan’s Trust Fund. The Plan Sponsor shall determine in its sole discretion the extent to which Plan administration and operation expenses shall be paid from the Trust Fund, provided that all such payments shall comply with ERISA and all regulations and other guidance issued by the Department of Labor. Further, the Plan Sponsor shall be entitled to reimbursement from the Plan for payment of all Plan expenses advanced by the Plan

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Sponsor which are reasonably subject to reimbursement pursuant to ERISA and DOL regulations and other guidance.

14.07 Payment From the Trust Fund: At the direction of the Plan Administrator, the Trustee shall, from time to time, in accordance with the terms of the Plan, make payments out of the Trust Fund. The Trustee shall not be responsible in any way for the application of such payments.

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ARTICLE XV

THE EMPLOYER

15.01 Notification: The Plan Sponsor shall notify the Plan Administrator and the Trustee in writing if a new Plan Administrator or Trustee has been appointed hereunder.

15.02 Record Keeping: Each participating Zions Employer shall maintain records with respect to each Employee sufficient to enable the Plan Administrator and Trustee to fulfill their duties and responsibilities under the Plan.

15.03 Bonding: The Plan Administrator shall procure bonding to insure the Plan against risk of loss. The persons to be bonded and the amount necessary shall be determined in accordance with ERISA and regulations thereunder. No bonding shall be required pursuant to state law.

15.04 Signature of Employer: All persons dealing with the Plan may rely on any document executed in the name of the Plan Sponsor by its corporate President, Vice-President, or other duly authorized corporate officer, or by any other individual duly authorized by its Board of Directors, whether retroactive or prospective.

15.05 Plan Counsel and Expenses: The Plan Sponsor may engage the service of any person or organization, including counsel, whose services, in the opinion of the Plan Sponsor are necessary for the establishment or maintenance of this Plan. The expenses incurred or charged by a person or organization engaged by the Plan Sponsor pursuant to the previous sentence shall be paid by the Plan Sponsor, or alternatively, the Plan Sponsor may direct the Trustee to pay such expenses from the Trust Fund.

15.06 Other Responsibilities: Nothing in this Article shall be construed to limit the responsibilities or duties allocated to the Plan Sponsor and Zions Employers in other Articles of the Plan.

15.07 Affiliated Groups:

(a) For purposes of crediting Hours of Service, all employees of all corporations or entities which are members of an Affiliated Group and all employees of any other entity required to be aggregated with the Employer pursuant to regulations under Code §414(o) shall be treated as employed by a single Employer for purposes of Article III (Service), Article IV (Eligibility), Article V (Contributions) and Article XI, (Vesting). Except as provided in Section 7.01, all employees of all corporations or entities which are members of an Affiliated Group and all employees of any other entity required to be aggregated with the Employer pursuant to regulations under Code §414(o) shall be treated as employed by a single Employer.

(b) If the Employer is a member of a Affiliated Group and if such group maintains more than one qualified retirement plan that is integrated with Social Security, only a

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single integration level shall be applicable to each Participant who is a Participant in one or more integrated plans. The integration level for each Participant shall be prorated in each integrated plan in the ratio that the Annual Compensation received by the Participant from the member of the group maintaining the integrated plan bears to the Annual Compensation received by the Participant from all members of the group maintaining all such integrated plans.

(c) If more than one Employer has adopted this Plan and if all such Employers are members of the same Affiliated Group:

(1) The provisions of Articles XVI and XVII shall be applicable to each adopting Employer as an individual Employer;

(2) The provisions of Section 15.07(a) through (c) shall not be applicable to such adopting Employers; and

(3) The “effective date” for any adopting Employer who adopts this Plan on other than the Effective Date shall be the first day of the Plan Year in which such adopting Employer shall first elect to be covered by this Plan.

15.08 Employer Contributions: Each participating Zions Employer shall contribute to the Plan that Employer’s share of Employer Contributions, as determined by the Plan Administrator.

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ARTICLE XVI

PLAN AMENDMENT OR MERGER

16.01 Power to Amend: The Plan Sponsor and the Plan Administrator shall each have the power to amend, alter, or wholly revise the Plan, prospectively or retrospectively, at any time, and the interest of every Participant is subject to the power so reserved. The Plan Administrator shall not exercise its power to amend without consent of the Plan Sponsor unless the Plan Sponsor has ceased to operate as a viable business entity or has filed or is subject to a petition under Chapter 7 of the U.S. Bankruptcy Code.

16.02 Limitations on Amendments: Upon execution of any amendment, the Employer, Plan Administrator, Trustees, Participants and their Beneficiaries shall be bound thereby; provided, however, that no amendment:

(a) Shall enlarge the duties or responsibilities of the Plan Administrator or Trustee without its consent; or

(b) Shall cause any part of the assets contributed to the Plan to be diverted to any use or purpose other than for the exclusive benefit of the Participants and their Beneficiaries (including the reasonable cost of administering the Plan) prior to the satisfaction of all liabilities (fixed and contingent) under the Plan to Participants and their Beneficiaries; or

(c) Shall reduce the vesting percentage of any Participant, Former Participant, or Beneficiary; or

(d) Shall reduce or restrict the Account Balance of any Participant, Former Participant or Beneficiary; or

(e) Shall eliminate an optional form of benefit, with respect to benefits attributable to service before the amendment.

Notwithstanding the above, any amendment may be made which may be or become necessary in order that the Plan will conform to the requirements of Code §401(a), or of any generally similar successor provision, or in order that all of the provisions of the Plan will conform to all valid requirements of applicable federal and state laws.

16.03 Method of Amendment: If the Plan is amended by the Plan Sponsor, the amendment shall be stated in an instrument in writing signed in the name of the Plan Sponsor by a duly authorized corporate officer, or by any other individual duly authorized by the Plan Sponsor, whether retroactive or prospective. If the Plan is amended by the Plan Administrator, the amendment shall be stated in an instrument in writing signed in the name of the Plan Administrator by the individual duly authorized by the Plan Administrator for that purpose, whether retroactive or prospective.

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16.04 Notice of Amendment: Written notice of each amendment shall be given promptly by the Plan Sponsor to any other Employers, the Plan Administrator and the Trustee.

16.05 Merger or Consolidation: This Plan and Trust may be merged or consolidated with, or its assets or liabilities may be transferred to, any other plan only if the benefits which would be received by each Participant of this Plan, in the event of a termination of the Plan immediately after such merger, consolidation or transfer, are at least equal to the benefits the Participant would have received if the Plan had terminated immediately before the merger, consolidation or transfer. The Trustee possesses the specific authority to enter into merger agreements or direct transfer of assets agreements with the Trustees of other retirement plans described in Code §401(a) and to accept the direct transfer of Plan assets, or to transfer Plan assets, as a party to any such agreement. Notwithstanding the foregoing, this Plan shall not enter into any merger or transfer agreement to transfer assets to this Plan from a plan which is subject to the provisions of Code §417.

The Trustee may accept a direct transfer of Plan assets on behalf of an Employee prior to the date the Employee satisfies the Plan’s eligibility condition(s). If the Trustee accepts such a direct transfer of Plan assets, the Advisory Committee and Trustee shall treat the Employee as a Participant for all purposes of the Plan except the Employee may not make Elective Deferral contributions under Article V nor shall the Employee share in Employer contributions or Participant forfeitures under Article VI until he actually becomes a Participant in the Plan.

The Trustee shall hold, administer and distribute the transferred assets as a part of the Trust Fund and the Trustee shall maintain a separate Predecessor Plan Account for the benefit of the Employee on whose behalf the Trustee accepted the transfer in order to reflect the value of the transferred assets.

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ARTICLE XVII

TERMINATION OR DISCONTINUANCE OF CONTRIBUTIONS

17.01 Right to Terminate: The Plan Sponsor may terminate the Plan at any time by a written resolution by the Board of Directors specifying the termination date. The Plan Sponsor shall promptly notify the Plan Administrator, Trustee and any other Employers of such action. Further, the Plan Sponsor shall notify all Participants and Former Participants of such action, and shall file all required reports with federal agencies, in accordance with applicable regulations.

17.02 Effect of Termination: In the event of a Plan termination or a complete discontinuance of Employer Contributions, the rights of all affected Participants to their Accrued Benefits as of the date of such termination shall be fully vested and shall not thereafter be subject to forfeiture, except to the extent that law or regulation may preclude such vesting in order to prohibit discrimination in favor of officers, shareholders, or highly compensated Employees. For purposes of the preceding sentence, a Participant who has terminated employment with the Employer and incurred five consecutive One Year Breaks in Service as of the termination date shall not be considered to be affected by such Plan termination, and shall be vested in his Accrued Benefit only to the extent provided in the other applicable Articles of this Plan. All rights of Participants in this Plan affecting Employer Securities held in trust for the benefit of Participants shall continue notwithstanding any Plan termination.

17.03 Manner of Distribution: In the event of a Plan termination, the Plan Administrator shall direct the Trustee to distribute the Accrued Benefits of all Participants, Former Participants, and Beneficiaries in accordance with Article IX or Article XI.

Notwithstanding the above, no payment shall be made to a Participant from his Participant Elective Deferral Account (or any other Account the contributions to which have been included in the Deferral Account for the Participant) unless or until such time as the Participant:

(a) Is eligible for Retirement Benefits as provided in Article IX;

(b) Dies;

(c) Has a severance from employment;

(d) Attains the age of fifty-nine and one-half (59½);

(e) Incurs a Disability; or

(e) Incurs a Financial Hardship.

All Elective Deferral Accounts shall be maintained by the Trustee and distributed at such time and in such manner as previously provided herein. Alternatively, the balance in such Accounts may be transferred to another plan maintained or established by the Employer which qualifies under

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Code §401(a) as provided above, but only if such other plan contains the same restrictions on the distribution of such transferred amounts as described in the preceding paragraph.

17.04 No Reversion: No termination or amendment of this Plan and Trust and no other action shall divert any part of the funds to any purpose other than the exclusive benefit of Participants, Former Participants or their Beneficiaries except, and notwithstanding any other provision of this Plan to the contrary, any amount held in an unallocated suspense account which cannot be allocated to any Participant due to the limitations of Article VIII may be returned to the Employer upon termination of the Plan.

17.05 Termination of an Employer: An Employer, other than the Plan Sponsor, may terminate its participation in the Plan at any time by a written resolution by the Board of Directors specifying the termination date. The Employer shall promptly notify the Plan Sponsor, Plan Administrator and Trustee of any such action or direction. The participation of an Employer in the Plan shall also terminate in the event of a complete discontinuance of contributions by such Employer.

17.06 Partial Termination: A partial termination of the Plan may be deemed to have occurred if a significant percentage of Participants are excluded from coverage by reason of amendment of the Plan, severance by an Employer or termination of an Employer, or if the Plan is amended to adversely affect the rights of employees to vest in benefits under the Plan or to reduce or eliminate future benefit accruals under the Plan. The determination of whether a partial termination has occurred shall be made on the basis of the facts and circumstances in a particular case.

17.07 Effect of Partial Termination: In the event of a partial termination of the Plan, the provisions of Section 17.02 shall apply to those Participants affected by the partial termination.

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ARTICLE XVIII

FUNDING POLICY FOR PLAN BENEFITS

18.01 Funding Method: The benefits provided by this Plan shall be funded by contributions of the Employer. Employer Non-Elective contributions may consist entirely of Employer Securities. Elective Deferral Contributions and Employer Matching Contributions shall be made in cash only. All Employer Contribution amounts shall be determined as provided in this Plan.

18.02 Investment Policy: This Plan has been established for the sole purpose of providing benefits to the Participants and their Beneficiaries. In determining investment directions hereunder, the Investment Committee shall take account the investment policy rules and limitations provided in the Plan, the advice provided by the Plan Administrator as to funding policy, and the short and long-range needs of the Plan based on the evident and probable requirements of the Plan as to the time benefits shall be payable and the requirements therefor. Benefits may be provided through any combination of investment media designed to provide the requisite liquidity, growth and security appropriate to this Plan.

The following rules shall apply as of the Effective Date with respect to the investment of contributions to the Plan (regardless of source) and existing Accounts in the Plan.

(a) No Participant shall direct investment into or out of Employer Securities in any Account.

(b) Contributions to the Participant Elective Deferral Account shall be invested exclusively in the General Investments Account. Amounts in a Participant Elective Deferral Account as of the Effective Date, including earnings and dividends thereon, may not be transferred between the General Investments Account and Employer Securities Account.

(c) Contributions to the Employer Matching Contribution Account shall be invested exclusively in the Employer Securities Account.

(d) Contributions to the Participant Voluntary Contribution Account shall be invested exclusively in the Employer Securities Account.

(e) Contributions to the Participant Rollover Account shall be invested exclusively in the General Investments Account. Amounts in the Participant Rollover Account as of the Effective Date, including earnings and dividends thereon, may not be transferred between the General Investments Account and Employer Securities Account.

(f) Amounts in the Paysop Account as of the Effective Date, including earnings and dividends thereon, shall remain in the Employer Securities Account and may not be

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transferred between the General Investments Account and Employer Securities Account.

(g) Contributions to the Employer Non-Elective Contribution Account shall be invested exclusively in the Employer Securities Account.

18.03 No Purchase of Life Insurance Contracts: Unless authorized by the Plan Sponsor pursuant to amendment to this Article XVIII, no insurance contracts shall be purchased by the Trustee on the life of any Participant.

18.04 General Investments and Dividend Accounts: Benefits for Participants, to the extent not funded through Employer Securities, shall be funded through the General Investments and Dividend Accounts. The General Investments Account may consist of any investment media offered by the Trustee or through the purchase of shares in any regulated investment company as defined in Code §851(a), or through any investment proper and appropriate to be made by the Trustee in accordance with Article XIV, or through any combination of such investments other than Employer Securities. Rules and procedures for the operation of the General Investments Account and Participant direction of investment therein are set forth in Section 18.06.

All cash dividends received and held in a Participant’s Dividend Account shall be invested in the stable asset fund described in section 18.06(b) until invested in Employer Securities or distributed in cash pursuant to the Participant’s election under Section 6.03(e). Except to determine whether the Dividend Account shall be distributed in cash or invested in Employer Securities, a Participant shall have no investment direction right with respect to the Dividend Account.

18.05 Non-transferability of Annuity Contracts: In the event the assets of the Trust Fund include allocated annuity contracts, all incidents of ownership in such contracts may be exercised by the Trustee, as directed by the Plan Administrator, except to the extent any death benefits payable thereunder may be paid to the Beneficiary designated by the Participant. All such contracts shall provide that the owner may not change the ownership of the contract, nor may it be sold, assigned or pledged as collateral for a loan, as security for the performance of an obligation, or for any other purpose to anyone. No annuity contract may be delivered to a Participant as a distribution from the Plan.

18.06 Establishment of Separate Funds: There is hereby reserved to the Plan Administrator (or the Committee designated by the Plan Administrator for this purpose) the right to direct the Trustee to establish separate investment funds within the General Investments Account. The Plan Administrator (or Committee) may follow different investment policies with respect to each investment fund so established. In the sole discretion of the Sponsoring Employer a Participant, Inactive Participant, Beneficiary or Alternate Payee shall be allowed to direct the Trustee to invest the amounts in his or her General Investments Account, consistent with the rules in this Section 18.06, in any or all of the investment Funds. The following administrative rules shall apply if such Funds are established:

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(a) Income, gains and losses from each investments Fund will be reinvested in the same Fund and credited only to the General Investments Accounts of those Participants who have a balance in such Fund, in a manner consistent with Section 6.03.

(b) At least one Fund shall be a stable asset fund which invests in cash equivalent securities and contracts. For this purpose “cash equivalent securities and contracts” shall mean short term U. S. Government obligations, prime commercial paper, certificates of deposit, savings accounts in banks or savings and loan associations, guaranteed interest contracts and pooled funds which invest exclusively in some or all of the foregoing.

(c) Each Participant shall be entitled to direct the portion of the contributions made to his General Investments Account which are to be invested in each of the Funds available. Upon the occurrence of any event which results in the deletion of any Fund, which replaces any Fund with another Fund, or which adds a new Fund, and each new Participant upon entry in the Plan shall direct the Plan Administrator in writing as to the portion of his General Investments Account and the portion of the contributions made to his General Investments Account which are to be invested in each of the Funds then available. Until specific direction is made by the Participant, or Beneficiary (including any Beneficiary by virtue of a Qualified Domestic Relations Order) or if specific direction is not made, all contributions shall be invested in the Fund described in (b) above.

(d) Each Participant shall have the right to change the portion of succeeding contributions to be invested in each Fund and the right to direct that the asset balance or any portion thereof in any Funds in his General Investments Account be liquidated and the proceeds thereof transferred to any other Fund. Changes in Fund investments pursuant to Participant direction shall be made effective as provided under procedures negotiated between the Plan and the Trustee (or custodian, if appointed by the Plan Administrator or Trustee), which procedures may include daily movement of General Investment Account moneys between Funds, provided valuation of the Funds is also conducted daily.

(e) A Participant may not direct any investment into the Employer Securities Account or the liquidation or sale of any Employer Securities in that Account.

(f) The Plan Administrator may establish reasonable rules regarding:

(1) The number and types of Funds which shall be available to the General Investments Account.

(2) The maximum number of Funds which may be utilized by an individual Participant or by the General Investments Account.

(3) The minimum, maximum and incremental percentages of contributions which may be invested in a particular Fund.

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(4) The minimum, maximum and incremental percentages of the current balance in the General Investments Account in any Fund which may be transferred to another Fund.

These rules shall be in writing and shall be administered in a uniform and non-discriminatory manner.

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ARTICLE XIX

TOP-HEAVY PROVISIONS

19.01 Application: If this Plan is or becomes Top-Heavy for any Plan Year, the provisions of this Article shall supersede any conflicting provisions contained in any other Article of this Plan.

19.02 Special Definitions: For purposes of this Article and related Plan provisions, the following terms shall have the following meanings unless a different meaning is plainly required by the context:

(a) “Determination Date” shall mean, for any plan year subsequent to the first plan year, the last day of the preceding plan year for such plan; for the first plan year of a plan, the last day of that plan year.

(b) “Determination Period” shall mean the plan year containing the Determination Date and the four (4) preceding plan years for such plan.

(c) “Five Percent Owner” shall mean:

(1) If the Employer is a corporation, any person who owns (or is considered as owning within the meaning of Code §318) more than five percent (5%) of the outstanding stock of the corporation or stock possessing more than five percent (5%) of the total combined voting power of all stock of the corporation.

(2) If the Employer is not a corporation, any person who owns more than five percent (5%) of the capital or profits interest in the Employer.

(d) “Key Employee” shall mean any Employee or former Employee (and any Beneficiary of such Employee) who at any time during the Determination Period was:

(1) An officer of the Employer during a Plan Year in which he received Top-Heavy Compensation greater than fifty percent (50%) of the amount in effect under Code §415(b)(1)(A) for such Plan Year. For purposes of this Paragraph, no more than fifty (50) Employees (or, if lesser, the greater of three (3) or ten percent (10%) of the number of Employees) shall be treated as officers; or

(2) One of the ten (10) Employees owning (or considered as owning within the meaning of Code §318) both more than one-half percent (1/2%) interest and the largest interests in the Employer during a Plan Year in which he received

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Top-Heavy Compensation greater than the amount in effect under Code §415(c)(1)(A) for such Plan Year; or

(3) A Five Percent Owner of the Employer; or

(4) A One Percent Owner of the Employer during a plan year in which he received Top-Heavy Compensation greater than one hundred fifty thousand dollars ($150,000).

The determination of who is a Key Employee shall be made in accordance with Code §416(i)(1) and the Regulations thereunder. For purposes of determining who is a One Percent Owner, Five Percent Owner, or ten largest owner, the rules of Code §414(b), (c) and (m) shall not apply. Beneficiaries of Employees shall be treated as a Key Employee or Non-Key Employee based on the Key Employee status of such Employee; inherited benefits shall retain the Key Employee or Non-Key Employee status of the Employee.

The term “Non-Key Employee” shall mean any Employee or former Employee (and any Beneficiary of such Employee) who is not a Key Employee. Non-Key Employees include Employees who are former Key Employees.

(e) “One Percent Owner” shall mean:

(1) If the Employer is a corporation, any person who owns (or is considered as owning within the meaning of Code §318) more than one percent (1%) of the outstanding stock of the corporation or stock possessing more than one percent (1%) of the total combined voting power of all stock of the corporation; or

(2) If the Employer is not a corporation, any person who owns more than one percent (1%) of the capital or profits interest in the Employer.

(f) “Permissive Aggregation Group” shall mean the Required Aggregation Group of plans plus any other plan or plans of the Employer which, when considered as a group with the Required Aggregation Group, would continue to satisfy the requirements of Code §§401(a)(4) and 410.

(g) “Present Value” shall mean the actuarial present value of an amount or series of amounts determined based on the Top-Heavy determination provisions of a defined benefit plan that is part of a Required Aggregation Group or Permissive Aggregation Group with this Plan.

(h) “Required Aggregation Group” shall mean:

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(1) Each qualified plan of the Employer including any plan terminated within the last five years ending on the determination date, in which at least one Key Employee participates in the plan year containing the determination date, or any of the four preceding plan years; and

(2) Any other qualified plan of the Employer which enables a plan described in Item (1) to meet the requirements of Code §§401(a)(4) or 410.

(i) “Super Top-Heavy”: This Plan is Super Top-Heavy if the Plan would be Top-Heavy if “ninety percent (90%)” were substituted for “sixty percent (60%)” each place it appears in Subsection (j) below.

(j) “Top-Heavy”: This Plan is Top-Heavy if any of the following conditions apply:

(1) If the Top-Heavy Ratio for this Plan exceeds sixty percent (60%) and this Plan is not part of any Required Aggregation Group or Permissive Aggregation Group of plans.

(2) If this Plan is a part of a Required Aggregation Group of plans but not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the Required Aggregation Group of plans exceeds sixty percent (60%).

(3) If this Plan is a part of a Permissive Aggregation Group of plans and the Top-Heavy Ratio for the Permissive Aggregation Group exceeds sixty percent (60%).

(k) “Top Heavy Average Monthly Compensation” shall mean one-twelfth (1/12th) of the average of a Participant’s Top-Heavy Compensation during the five (5) consecutive Plan Years (or the total number of such years of the Participant’s employment, if less than five (5)) which produces the highest average, but taking into account only Top-Heavy Compensation for years that this Plan was Top-Heavy and any years preceding a year that this Plan was Top-Heavy.

(l) “Top-Heavy Compensation” shall have the same meaning as the term ‘Compensation’ defined in Section 7.01(b), but shall include contributions made by the Employer to a plan of deferred compensation otherwise excluded in Section 7.01(b).

(m) “Top-Heavy Ratio” shall mean and be determined as follows:

(1) If the Employer maintains one or more defined contribution plans (including any simplified employee pension plan) and the Employer has never maintained any defined benefit plan which has covered or could cover a

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Participant in this Plan, the Top-Heavy Ratio is a fraction, the numerator of which is the sum of the account balances of all Key Employees as of the Determination Date and the denominator of which is the sum of all account balances of all Participants as of the Determination Date. Both the numerator and denominator of the Top-Heavy Ratio shall be adjusted to reflect any part of any account balance distributed in the five (5) year period ending on the Determination Date and any contribution which is due but unpaid as of the Determination Date. In the case of a defined contribution plan which is not subject to Code §412, the adjustment for contributions due but unpaid is generally the amount of any contributions actually made after the Top-Heavy Valuation Date but on or before the Determination Date; however, for the first plan year of such a plan, the adjustment shall also reflect the amount of any contributions made after the Top-Heavy Valuation Date that are allocated as of a date in that first plan year. In the case of a defined contribution plan that is subject to Code §412, the account balances shall include contributions that would be allocated as of a date not later than the Determination Date, even though those amounts are not yet required to be contributed; furthermore, the adjustment for contributions due but unpaid shall reflect the amount of any contribution actually made (or due to be made) after the Top-Heavy Valuation Date but before the expiration date of the extended payment period in Code §412(c)(10).

(2) If the Employer maintains one or more defined contribution plans (including any simplified employee pension plan) and the Employer maintains or has maintained one or more defined benefit plans which have covered or could cover a Participant in this Plan, the Top-Heavy Ratio is a fraction, the numerator of which is the sum of account balances under the defined contribution plans for all Key Employees and the Present Value of accrued benefits under the defined benefit plans for all Key Employees, and the denominator of which is the sum of the account balances under the defined contribution plans for all Participants and the Present Value of accrued benefits under the defined benefit plans for all Participants. Both the numerator and denominator of the Top-Heavy Ratio are adjusted for any part of any account balance or accrued benefit distributed in the five (5) year period ending on the Determination Date and any contribution to a defined contribution plan due but unpaid as of the Determination Date. In the case of a defined contribution plan which is not subject to Code §412, the adjustment for contributions due but unpaid is generally the amount of any contributions actually made after the Top-Heavy Valuation Date but on or before the Determination Date; however, for the first plan year of such a plan, the adjustment shall also reflect the amount of any contributions made after the Top-Heavy Valuation Date that are allocated as of a date in that first plan year. In the case of a defined contribution plan that is subject to Code §412,

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the account balances shall include contributions that would be allocated as of a date not later than the Determination Date, even though those amounts are not yet required to be contributed; furthermore, the adjustment for contributions due but unpaid shall reflect the amount of any contribution actually made (or due to be made) after the Top-Heavy Valuation Date but before the expiration date of the extended payment period in Code §412(c)(10).

(3) For purposes of (1) and (2) above, the value of account balances and the Present Value of accrued benefits shall be determined as of the most recent Top-Heavy Valuation Date that falls within or ends with the twelve month period ending on the Determination Date and shall exclude any amounts in a Participant’s Account attributable to deductible employee contributions. The account balances and accrued benefits of a Participant who is not a Key Employee but who was a Key Employee in a prior year shall be disregarded. The account balances and accrued benefits of any Participant who has not performed any service for the Employer at any time during the five (5) year period ending on the Determination Date shall be disregarded. In the case of a defined benefit plan, the Present Value of Accrued Benefits shall not reflect any proportional subsidies and shall reflect any non-proportional subsidies provided by the plan. The calculations of the Top-Heavy Ratio, and the extent to which distributions, rollovers and transfers are taken into account shall be made in accordance with Code §416 and the Regulations thereunder. In the case of unrelated rollovers and transfers: (1) the plan making the distribution or transfer shall count the distribution as part of an accrued benefit distributed; and (2) the plan accepting the rollover or transfer shall not consider the rollover or transfer as part of the accrued benefit. In the case of related rollovers and transfers, the plan making the distribution or transfer shall not count the distribution or transfer as part of an accrued benefit distributed, and the plan accepting the rollover or transfer shall count the rollover or transfer as part of the accrued benefit. Deductible employee contributions shall not be taken into account for purposes of computing the Top-Heavy Ratio. When aggregating plans, the value of account balances and accrued benefits will be calculated with reference to the Determination Dates that fall within the same calendar year.

For purposes of the above, a Participant’s Accrued Benefit in a defined benefit plan shall be determined under a uniform accrual method which applies for all defined benefit plans maintained by the Employer or, if there is no such method, under the method described in Code §411(b)(1)(C) which provides the slowest rate of accrual.

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(n) “Top-Heavy Valuation Date” shall mean the date as of which the Present Value of accrued benefits under a defined benefit plan or account balances under a defined contribution plan, which is part of a Permissive Aggregation Group or Required Aggregation Group, is determined for calculating the Top-Heavy Ratio. For a defined benefit plan, such date shall be the same as the actuarial valuation date used for computing plan costs under Code §412, regardless of whether an actuarial valuation is performed that year. For a defined contribution plan, such date shall be the last day of the plan year.

19.03 Top-Heavy or Super Top-Heavy Minimum Required Allocation: For any Plan Year in which the Plan is Top-Heavy or Super Top-Heavy:

(a) Except as otherwise provided below, the Employer contributions and forfeitures allocated on behalf of any Participant who is a Non-Key Employee shall not be less than the lesser of:

(1) three percent (3%) of such Participant’s Top-Heavy Compensation if the Plan is Top-Heavy and five percent (5%) of such Participant’s Top-Heavy Compensation if the Plan is Super Top-Heavy ; or

(2) In the case where the Employer has no defined benefit plan which designates this Plan to satisfy Code §§401 and 416(c), the largest percentage of Employer contributions and forfeitures, as a percentage of the first two hundred thousand dollars ($200,000), (or such larger amount as may be prescribed by the Secretary of the Treasury or his delegate) of the Key Employee’s Top-Heavy Compensation, allocated on behalf of any Key Employee for that year. In calculating this percentage all amounts contributed by the Employer to the Key Employee’s Elective Deferral Account pursuant to a Salary Deferral Agreement shall be treated as Employer contributions. For Plan Years beginning after December 31, 1993, the Plan shall substitute the amount “one hundred fifty thousand dollars ($150,000)” for the amount “two hundred thousand dollars ($200,000)” wherever it appears in this Section. The one hundred fifty thousand dollar amount shall be adjusted each Plan Year as provided in Code §401(a)(17)(B). For any period during which the Plan Year is not or was not coincident with the calendar year, the dollar adjustment in the Annual Compensation limit for the Plan Year shall be based on the amount in effect as of January 1st for the Plan Year beginning within that calendar year.

(b) The minimum allocation shall be determined without regard to any Social Security contribution by the Employer. This minimum allocation shall be made even though, under other Plan provisions, the Participant would not otherwise be entitled to

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receive an allocation, or would have received a lesser allocation for the Plan Year because of:

(1) The Participant’s failure to complete one thousand (1000) Hours of Service (or any equivalent provided in the Plan);

(2) The Participant’s failure to make mandatory employee contributions to the Plan;

(3) Compensation less than a stated amount;

(4) The Employer having no Net Profits; or

(5) In the case of a plan qualified under Code §401(k), the Participant’s failure to make elective contributions to such plan.

If a Participant is required to receive a minimum allocation under this Subsection and such amount exceeds the amount that the Participant would receive under other Plan provisions, the Employer shall make an additional contribution for such Participant. Such additional contribution shall be allocated to the Employer Contribution Account of such Participant in the same manner as regular Employer contributions, pursuant to Article VII.

(c) The provisions in Subsections (a) and (b) above shall not apply to any Participant who was not employed by the Employer on the last day of the Plan Year.

(d) The provisions in Subsections (a) and (b) above shall not apply to a Participant if such Participant is covered under a defined contribution plan designated by the Employer to provide the Top-Heavy minimum benefits, and such Participant receives an allocation of Employer contributions and forfeitures under that plan during the subject Plan Year which is at least as great as the amount otherwise required under (a) and (b) above. If the amount of Employer contributions and forfeitures allocated to such a Participant under that plan during the subject Plan Year is less than the amount required under (a) and (b) above, the amount otherwise required under (a) and (b) above shall be reduced by the amount so allocated under that plan.

19.04 Non-forfeitability of Minimum Top-Heavy Allocation: The minimum allocation of Employer contributions or forfeitures required under Section 19.03 (to the extent required to be non-forfeitable under Code §416(b)) shall not be forfeited in the case of a suspension of benefits under Code §411(a)(3)(B) or a withdrawal of mandatory employee contributions under Code §411(a)(3)(D).

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19.05 Top Heavy Compensation Limitation: For any Plan Year in which the Plan is Top-Heavy, only the first one hundred fifty thousand dollars ($150,000) of a Participant’s Annual Compensation or Top-Heavy Compensation shall be taken into account for purposes of this Plan. Notwithstanding the previous sentence, no such limitation shall be imposed for purposes of Sections 5.07 and 7.01. The one hundred fifty thousand dollar amount shall be adjusted each Plan Year as provided in Code §401(a)(17)(B).

Effective for Plan Years commencing on and after January 1, 2002, Top Heavy Compensation of each Participant taken into account under this Article XIX shall not exceed two hundred thousand dollars ($200,000), as adjusted for cost-of-living increases in accordance with Code §401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year applies to Top Heavy Compensation for the Plan Year that begins with or within such calendar year.

19.06 Minimum Vesting Provision: For any Plan Year in which this Plan is Top-Heavy, the following vesting schedule shall automatically apply to each Participant in the Plan, unless under Section 11.01 the Participant would be entitled to a larger vested benefit, in which case the benefit as provided in Section 11.01 shall apply to such Participant:

Years of Vesting Service	Vesting Percentage
Less than 3	0%
3 or more	100%

This vesting schedule applies to all accrued benefits within the meaning of Code §411(a)(7), except those attributable to employee contributions, including benefits accrued before the effective date of Code §416 and benefits accrued before the Plan became Top-Heavy. Further, no reduction in vested benefits may occur in the event the Plan’s status as Top-Heavy changes for any Plan Year and any change in the Plan’s vesting schedule due to a change in Top-Heavy status shall be subject to the provision of Section 11.10. However, this Section does not apply to the Accrued Benefit of any Employee who does not have an Hour of Service after the Plan has initially become Top Heavy; such Employee’s Vested Interest attributable to Employer contributions and forfeitures shall be determined without regard to this Section.

19.07 Adjustments to Limitations: For any Plan Year in which the Plan is Top-Heavy, the following adjustments shall be made to the denominators of the Defined Benefit Fraction and Defined Contribution Fraction as defined in Section 7.01.

(a) Super Top-Heavy: In any Plan Year in which the Plan is Super Top-Heavy the denominators shall be computed by substituting “one hundred percent (100%)” for “one hundred twenty-five percent (125%)” each place it appears in such definitions.

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(b) Not Super Top-Heavy: In any Plan Year in which the Plan is Top-Heavy but not Super Top-Heavy the denominators shall be computed by substituting “one hundred percent (100%)” for “one hundred twenty-five percent (125%)” each place it appears in such definitions.

For Limitation Years commencing after December 31, 1999, this Section 19.07 shall not apply.

19.08 Participant Elective Deferrals: Elective Deferrals shall not be taken into account in determining under Section 19.03(b) the amount of Employer contributions to be allocated to a Participant who is a Non-key Employee.

19.09 EGTRRA Modification of Top-Heavy Rules: Notwithstanding any other provision of this Article XIX, this Section shall apply for purposes of determining whether the Plan is a top-heavy plan under Code §416(g) for Plan Years beginning after December 31, 2001, and whether the Plan satisfies the minimum benefits requirements of Code §416(c) for such years.

(a) Determination of top-heavy status / Key Employee. Key employee means any Employee or Former Employee (including any deceased Employee) who at any time during the Plan Year that includes the determination date was an officer of the Employer having Annual Compensation greater than $130,000 (as adjusted under Code §416(i)(1)for Plan Years beginning after December 31, 2002), a 5-percent owner of the Employer, or a 1-percent owner of the Employer having annual compensation of more than $150,000. For this purpose, Annual Compensation means Compensation within the meaning of Section 7.01(b). The determination of who is a key employee will be made in accordance with Code 416(i)(1) and the applicable regulations and other guidance of general applicability issued thereunder.

(b) Determination of present values and amounts. This sub-section 19.09(b) shall apply for purposes of determining the present values of Accrued Benefits and the amounts of Account balances of Employees as of the determination date.

(1) Distributions during year ending on the determination date. The present values of Accrued Benefits and the amounts of Account balances of an employee as of the determination date shall be increased by the distributions made with respect to the Employee under the Plan and any plan aggregated with the Plan under Code §416(g)(2) during the 1-year period ending on the determination date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under Code §416(g)(2)(A)(i). In the case of a distribution made for a reason other than separation from service, death, or disability, this provision shall be applied by substituting “5-year period” for “1-year period.”

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(2) Employees not performing services during year ending on the determination date. The Accrued Benefits and Accounts of any individual who has not performed services for the Employer during the 1-year period ending on the determination date shall not be taken into account.

(c) Minimum benefits.

(1) Matching contributions. Employer matching contributions shall be taken into account for purposes of satisfying the minimum contribution requirements of Code §416(c)(2) and the Plan. The preceding sentence shall apply with respect to matching contributions under the Plan or, if the Plan provides that the minimum contribution requirement shall be met in another plan, such other plan. Employer matching contributions that are used to satisfy the minimum contribution requirements shall be treated as matching contributions for purposes of the actual contribution percentage test and other requirements of Code §401(m).

(2) Contributions under other plans. The minimum benefit requirement of this Section 19.09 shall be met through contributions to this Plan regardless of whether the Employer maintains any other plan (including another plan which may consist solely of a cash or deferred arrangement which meets the requirements of Code §401(k)(12) and matching contributions with respect to which the requirements of Code §401(m)(11) are met).

(d) So long as this Plan satisfies the requirements for a safe harbor plan under Code §410(k)(12) for Plan Years after December 31, 2001, the provisions of Code §416 and this Article XIX shall not apply.

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ARTICLE XX

PROVISIONS AFFECTING BENEFITS

20.01 Availability of Loans: Upon acceptance of an application by a Participant who is an active Employee, the Plan Administrator shall direct the Trustee to make a loan to the Participant from his Plan Accounts (including any Rollover Accounts, but excluding his Employer Securities Account and his Dividend Account), subject to the provisions of this Article. In considering a Participant’s application for a loan, the Plan Administrator shall base its decision whether to grant a loan on a uniform and non-discriminatory policy, without regard to the race, color, religion, sex, age or national origin of the applicant.

20.02 Loan Administration: The Employer shall prepare and adopt a written Participant Loan Administration Policy Statement, whose provisions shall be made part of this Plan. The Policy Statement shall set forth:

(a) the identity of the person or persons authorized to administer the loan program;

(b) the procedure for applying for a loan;

(c) the basis on which loans will be approved or denied;

(d) limitations, if any, on the types and amounts of loans offered;

(e) the procedure for determining a reasonable rate of interest;

(f) the types of collateral which may secure a loan; and

(g) the events constituting default and the steps to be taken to preserve plan assets in the event of a default.

20.03 Amount of Loan: The amount of any loan to a Participant shall not be less than one thousand dollars ($1,000). When added to the outstanding balance of any previous loans made to a Participant pursuant to this Article or under any other qualified plan maintained by the Employer, the amount of any loan shall not exceed the lesser of:

(a) Fifty percent (50%) of the Vested Interest in his Plan Accounts (including any Rollover Accounts, but excluding his Employer Securities Account); or

(b) $50,000, reduced by the excess (if any) of:

(1) the highest outstanding balance of loans from the plan during the 1-year period ending on the day before the date on which such loan was made, over

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(2) the outstanding balance of loans from the plan on the date on which such loan was made.

20.04 Collateral Requirements: Any loan to a Participant shall be secured solely by the balance in his Plan Account (including any Rollover Accounts, but excluding his Employer Securities Account). In the event of default on the loan, however, foreclosure and attachment of the security shall not occur until a distributable event occurs under the Plan.

20.05 Loan Terms: Any loan made to a Participant by the Trustee shall be evidenced by a promissory note of the Participant drawn in favor of the Trust. The note shall bear a reasonable rate of interest and shall be amortized in level installments payable at least quarterly within a specified period of time not to exceed five (5) years, unless the loan is used to acquire a dwelling unit which, within a reasonable period of time (determined at the time the loan is made), will be used as the principal residence of the Participant, in which case the specified period of time shall not exceed ten (10) years. Effective January 1, 2002, repayment of a loan to a Participant who is on a leave of absence may be suspended for the shorter of (i) one year or (ii) the term of the leave of absence, provided that upon commencement of repayments, the loan shall continue to satisfy all requirements of the Plan and all applicable laws and regulations. Suspension of loan repayments shall also be governed by the rules in Section 3.13(f) with respect to any Qualified Military Service.

20.06 Accounting for Loans: Any loan to a Participant pursuant to this Article shall be treated as a directed investment of his Participant Accounts (excluding his Employer Security Account). For purposes of allocating income in the General Investments Account of the Trust Fund pursuant to Section 6.03(c), the balance in his General Investments Account shall be treated as equal to the actual balance in the Account minus the outstanding balance of any loans. Furthermore, for purposes of Section 6.03, repayments of principal and interest on the loan shall be treated as deposits to the adjusted balance (determined pursuant to the preceding sentence) of his General Investments Account .

20.07 Effect of Termination of Employment or Plan: If a Participant terminates employment with the Employer for any reason, the outstanding balance of any loans made to him shall become fully payable no later than the last day of the calendar quarter following the calendar quarter in which his Termination of Employment occurs, or, if earlier, on his Distribution Date. In the event of a termination of the Plan, any outstanding loans shall be due and fully payable within ninety (90) days of the effective date of such termination, or the date the Participant or Beneficiary is notified of such termination. If the Participant or Beneficiary has not fully repaid any loan as of the date full payment is due, any unpaid balance shall be deducted from his Vested Accrued Benefit prior to determining the amount of any immediate or deferred benefit payable to the Participant or Beneficiary, his spouse or his Beneficiary and applied toward repayment of the loan. The deduction shall be applied only against the Participant’s General Investments Account.

20.08 No Spousal Consent: No spousal consent shall be required for any loan from any Account in the Plan.

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20.09 Anti-Alienation: Except as specifically provided in Section 20.10 no benefit which shall be payable out of the Trust Fund to any person (including a Participant, Former Participant or Beneficiary) shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be void. No benefit shall in any manner be liable for or subject to the debts, contracts, liabilities, engagements, or torts of any person, nor shall it be subject to attachment or legal process for or against person, and the same shall not be recognized by the Trustee, except to such extent as may be required by law.

20.10 Qualified Domestic Relations Orders: Section 20.09 shall apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a Participant, Former Participant or Beneficiary pursuant to a Domestic Relations Order, unless such Domestic Relations Order is determined to be a Qualified Domestic Relations Order (“QDRO”). In the event the Plan, the Trustee, or the Plan Administrator receives a Domestic Relations Order, the Plan Administrator shall promptly notify the Participant, Former Participant or Beneficiary whose benefit is the subject of such order and provide him with a copy of the Plan’s written procedures for administering QDROs. Unless and until the order is set aside, the following provisions shall apply:

(a) The Plan Administrator shall establish reasonable procedures to determine whether an order received by it or the Trustee is a QDRO and to administer distributions pursuant to said order. The procedures shall set forth all rules to be applied by the Plan for notice to affected parties, suspension of Account activity, including distributions, investment direction and participant loans, and payment of benefits based upon the QDRO or the failure of the Domestic Relations Order to be a QDRO.

(b) The Plan Administrator shall within a reasonable time determine whether the order is a QDRO and shall notify the Participant, Former Participant or Beneficiary whose benefit is the subject of the order, of its determination. The Plan Administrator may designate a representative to carry out its duties under this Section 20.10.

(c) Nothing in this Section 20.10 shall be deemed to allow payment under a QDRO to an Alternate Payee of any benefit prior to the first day of the month following the date the Participant or Former Participant whose benefits are subject to the QDRO terminates employment or attains age fifty (50), unless (i) earlier distribution is specifically provided under the terms of the QDRO and (ii) if the value of the Alternate Payee’s benefit exceeds $5,000, the Alternate Payee consents to any distribution occurring prior to the Participant’s attainment of earliest retirement age.

20.11 QDRO Definitions: For purposes of Section 20.10 the following definitions and rules shall apply:

(a) “Alternate Payee” shall mean any spouse, former spouse, child or other dependent of a Participant or Former Participant who is recognized by a QDRO as having a

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right to receive all, or a portion of, the benefits payable under this Plan with respect to the Participant or Former Participant.

(b) “Domestic Relations Order” shall mean any judgment, decree, or order (including approval of a property settlement agreement) which:

(1) relates to the provision of child support, alimony payments, or marital property rights to a spouse, child, or other dependent of a Participant or Former Participant and

(2) is made pursuant to a state domestic relations law (including a community property law).

(c) “Qualified Domestic Relations Order” shall mean any Domestic Relations Order which satisfies the criteria set forth in the QDRO procedures established by the Plan Administrator.

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ARTICLE XXI

MULTIPLE EMPLOYER PROVISIONS

21.01 Adoption by Other Zions Employers: With the consent of the Sponsoring Employer and by a properly executed document evidencing the intent and will of the adopting Zions Employer, any other Zions Employer may adopt this Plan and all of the provisions hereof and participate herein and be known as a Participating Employer.

21.02 Requirements of Participating Zions Employers:

(a) Each Participating Zions Employer shall be required to use the Trustee determined by the Plan Sponsor or Plan Administrator.

(b) The Trustee may, but shall not be required to, commingle, hold and invest as one Trust Fund all contributions made by Participating Zions Employers, as well as all increments thereof. The assets of the Plan shall, on an ongoing basis, be available to pay benefits to all Participants and Beneficiaries under the Plan without regard to the Participating Zions Employer who contributed such assets.

(c) The transfer of any Participant from or to Zions Employer participating in this Plan, whether he is an Employee of the Sponsoring Employer or a Participating Zions Employer, shall not affect the Participant’s rights under the Plan, and the Participant’s Accounts, as well as all accumulated service with the transferor or predecessor, shall continue to his credit.

(d) Any expenses of the Trust and Plan which are to be paid by the Employer or borne by the Trust Fund, including funding of benefits, shall be paid by each Participating Zions Employer in the same proportion that the total amount of the Accounts standing to the credit of all Participants employed by such Zions Employer bears to the total of the Accounts standing to the credit of all Participants.

21.03 Designation of Agent: Each Participating Zions Employer shall be deemed to be a part of this Plan. With respect to all of its relations with the Trustee and Plan Administrator for the purpose of this Plan, each Participating Zions Employer shall be deemed to have designated irrevocably the Sponsoring Employer as its agent. Unless the context of the Plan clearly indicates the contrary, the word “Employer” shall be deemed to include each Participating Zions Employer as related to its adoption of the Plan.

21.04 Employee Transfers: It is anticipated that an Employee may be transferred between Participating Zions Employers, and in the event of any transfer, the Employee involved shall carry with him all of his accumulated service and eligibility. No transfer shall effect a termination of employment hereunder, and the Participating Zions Employer to which the Employee is transferred

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shall thereupon become obligated hereunder with respect to such Employee in the same manner as was the Participating Zions Employer from whom the Employee was transferred.

21.05 Amendment: The Sponsoring Employer may amend this Plan at any time without regard to whether there are Participating Zions Employers hereunder. No written action of a Participating Zions Employer shall be required to validate an amendment.

21.06 Discontinuance of Participation: A Participating Zions Employer shall be permitted to discontinue or revoke its participation in the Plan. At the time of any discontinuance or revocation, satisfactory evidence thereof and of any applicable conditions imposed shall be delivered to the Trustee. If so directed by the Plan Administrator, the Trustee shall transfer, deliver and assign Contracts and other Fund assets allocable to the Participants of such Participating Zions Employer to the new Trustee as shall have been designated by the Participating Zions Employer, in the event that it has established a separate pension plan for its Employees. No such transfer shall be made if the result is the elimination or reduction of any Code §411(d)(6) protected benefits. If no successor is designated, the Trustee shall retain the assets for the Employees of the Participating Zions Employer pursuant to the provisions of the Plan. In no event shall any part of the corpus or income of the Trust as it relates to the Participating Zions Employer be used for or diverted for purposes other than for the exclusive benefit of the Employees of the Participating Zions Employer.

21.07 Administrator’s Authority: The Plan Administrator shall have authority to make any and all necessary rules or regulations, binding upon all Participating Zions Employers and all Participants, to effectuate the purposes of this Article.

21.08 Participating Employer Contributions: All contributions made by a Participating Zions Employer, as provided for in this Plan, shall be determined separately for each Participating Zions Employer, and shall be allocated only among Participants eligible to share who are Employees of the Participating Zions Employer making the contribution. The Administrator shall keep separate books and records concerning the affairs of each Participating Zions Employer hereunder and as to the accounts and credits of the Employees of each Participating Zions Employer. The Trustee may, but need not, register Contracts so as to evidence that a particular Participating Zions Employer is the interested Employer hereunder. In the event of an Employee transfer from one Participating Zions Employer to another, the employing Employer shall immediately notify the Administrator.

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ARTICLE XXII

PURCHASE OF EMPLOYER SECURITIES

22.01 No Put option: The Plan may not obligate itself to acquire Employer Securities from a particular holder thereof at any indefinite time determined upon the happening of an event such as the death of the holder. So long as all Employer Securities held by the Plan are tradable on an established market, the Plan may not obligate itself to acquire Employer Securities under a put option binding upon the Plan.

22.01 Purchase Price For Employer Securities: All purchases of Employer Securities shall be made at a price which, in the judgment of the Plan Administrator, does not exceed the fair market value thereof. All sales of Employer Securities shall be made at a price which, in the judgment of the Plan Administrator, is not less than the fair market value thereof.

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ARTICLE XXIII

MISCELLANEOUS

23.01 Participant’s Rights: This plan shall not be deemed to constitute a contract between the Employer and any Participant or to be a consideration or an inducement for the employment of any Participant or Employee. Nothing contained in this Plan shall be deemed to give any Participant or Employee the right to be retained in the service of the Employer or to interfere with the right of the Employer to discharge any Participant or Employee at any time regardless of the effect which such discharge shall have upon him as a Participant of this Plan.

23.02 Actions Consistent with Terms of Plan: All actions taken by the Employer, Plan Administrator or Trustee with respect to Trust assets shall be in accordance with the terms of the Plan and Trust.

23.03 Performance of Duties: All parties to this Plan and Trust, or those claiming any interest hereunder, agree to perform any and all acts and execute any and all documents and papers which are necessary or desirable for carrying out this Plan and Trust or any of its provisions.

23.04 Validity of Plan: This Plan shall be construed in a way that is consistent with ERISA and regulations thereunder, the Internal Revenue Code and regulations thereunder, and, to the extent state law has not been preempted by federal law, the laws of the State in which the Plan Sponsor has its principal office. In case any provision of this Plan shall be held illegal or invalid for any reason, such determination shall not affect the remaining provisions of the Plan; but the Plan shall be construed and enforced as if such provision had never been included therein.

23.05 Legal Action: In the event any claim, suit, or proceeding is brought regarding the Trust and/or Plan established hereunder to which the Trustee or the Plan Administrator may be a party, and such claim, suit, or proceeding is resolved in favor of the Trustee or Plan Administrator, they shall be entitled to be reimbursed from the Trust Fund for any and all costs, attorney’s fees, and other expenses pertaining thereto incurred by them for which they shall have become liable.

23.06 Gender and Number: Wherever any words are used herein in the masculine, feminine or neuter gender, they shall be construed as though they were also used in another gender in all cases where they would so apply, and whenever any words are used herein in the singular or plural form, they shall be construed as though they were also used in the other form in all cases where they would so apply.

23.07 Uniformity: All provisions of this Plan shall be interpreted and applied in a uniform, nondiscriminatory manner.

23.08 Headings: The headings and subheadings of this Agreement have been inserted for convenience of reference and are to be ignored in any construction of the provisions hereof.

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23.09 Receipt and Release for Payments: Any payment to any Participant, his legal representative, Beneficiary, or to any guardian or committee appointed for such Participant or Beneficiary in accordance with the provisions of the Plan, shall, to the extent thereof, be in full satisfaction of all claims against the Trustee and the Employer, either of whom may require such Participant, legal representative, Beneficiary, guardian or committee, as a condition precedent to such payment, to execute a receipt and release thereof in such form as shall be determined by the Trustee or Employer.

23.10 Payments to Minors, Incompetents: In the event the Plan Administrator must direct a payment from the Plan to or for the benefit of any minor or incompetent Participant or Beneficiary, the Plan Administrator, in its sole and absolute discretion may, but need not, order the Trustee to make distribution to any of the following: a legal or natural guardian of the minor or other relative or adult with whom the minor temporarily or permanently resides, a court-appointed conservator of any incompetent, a relative or adult with whom the incompetent temporarily or permanently resides, a residential care facility, rest home, sanitarium or similar entity with which the incompetent temporarily or permanently resides, a person or entity which has applied for and been designated by the United States Government as the recipient or custodian for Social Security benefits for the minor or incompetent. The Plan Administrator may also make payment as directed by the attorney-in-fact of an incompetent Participant when such direction is pursuant to an unrevoked and valid durable power of attorney. Any guardian, conservator, relative, attorney-in-fact, other person or entity shall have full authority and discretion to expend the distribution for the use and benefit of the minor or incompetent. The receipt of the distribution by the guardian, conservator, relative, attorney-in-fact, other person or entity shall be a complete discharge to the Plan, Plan Administrator and Trustee, without any responsibility on the part of the Trustee or the Plan Administrator to see to the application thereof. A Participant shall be deemed incompetent if he or she is incapable of properly using, expending, investing, or otherwise disposing of the distribution, and a court order or the written opinion of a qualified physician, psychiatrist or psychologist setting forth facts consistent with the standards outlined in this Section is presented to the Plan Administrator.

23.11 Missing Persons: Notwithstanding any provision in this Plan and Trust to the contrary, if the Plan Administrator is unable to locate any Former Participant who is entitled to benefits under this Plan within three (3) years of the date he becomes entitled to a distribution from the Trust Fund, any amounts being held for his behalf shall be forfeited and used to reduce the Employer’s contributions to the Plan and Trust. The Plan Administrator shall proceed with due diligence in attempting to locate any Former Participant. In the Plan Administrator’s sole discretion, due diligence may include inquiry of any Beneficiary or Alternate Payee of the Former Participant whose names and addresses are known to the Plan Administrator or use by the Plan Administrator of a commercial locator service. Provided, however, no forfeiture shall occur until the Plan Administrator has mailed the Former Participant a notice of the benefits and the provisions of this section to his last known address, via U.S. Mail postage prepaid, return receipt requested. And, provided further, if the Former Participant is located subsequent to such forfeiture, the forfeited amount shall be reinstated and the Former Participant shall receive a distribution of his Vested Interest in accordance with the provisions of the Plan.

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23.12 Prohibition Against Diversion of Funds: It shall be impossible by operation of the Plan or of the Trust, by termination of either, by power of revocation or amendment, by the happening of any contingency, by collateral arrangement or by any other means, for any part of the corpus or income of any trust fund maintained pursuant to the Plan or any funds contributed thereto to be used for, or diverted to, purposes other than the exclusive benefit of Participants, Former Participants or their Beneficiaries, except as provided in Sections 17.04 and 21.19.

23.13 Applicability of Plan: The provisions of this Plan shall apply only to persons who are or who become Participants in this Plan on or after the Effective Date or with respect to Plan provisions with alternate effective dates, such alternate dates. Except as specifically provided in this Plan, the provisions of the Prior Plan will continue to apply to persons who are Former Participants or who are not employed by a Zions Employer on the Effective Date or as applicable, alternate effective dates, unless and until such time as such persons may again become Participants in this Plan.

23.14 Misstatement of Age: If a Participant or Beneficiary misstates or misrepresents his Age, date of birth or any other material information to the Employer, Plan Administrator or Trustee, the amount, terms and conditions of any benefits payable from the Plan which are attributable to periods prior to the discovery of such misstatement or misrepresentation shall be limited to the lesser (or more restrictive) of: the amount, terms and conditions determined based on the misstated information; or the amount, terms and conditions determined based on the correct information. The Plan Administrator shall have sole and absolute authority for applying the preceding sentence.

23.15 Return of Contributions to the Employer: Notwithstanding any provision of this Plan to the contrary, if any contribution (or portion thereof) by the Employer to the Trust is made as a result of a mistake of fact, or if any contribution (or part thereof) by the Employer to the Trust Fund that is conditioned upon the deductibility of the contribution by the Employer under the Code is disallowed, whether by agreement within the Internal Revenue Service or by final decision of a court of competent jurisdiction, the Employer may demand repayment of the mistaken or disallowed amount. The Trustee shall return the mistaken or disallowed contribution within one (1) year following the time the mistaken contribution was made or the disallowed contribution was disallowed. Investment earnings attributable to the mistaken or disallowed amount shall not be returned, but any investment losses attributable thereto shall reduce the amount so returned.

23.16 Counterparts: This Plan and Trust may be executed in any number of counterparts, each of which shall be deemed to be an original, and the counterparts shall constitute one and the same instrument.

* * *

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IN WITNESS WHEREOF, the Plan Sponsor has caused this Plan to be executed by its duly authorized representative and the Plan Administrator has accepted the Plan this      day of                     , 2003.

PLAN SPONSOR:

Zions Bancorporation

By:

Its:

PLAN ADMINISTRATOR:

Zions Bancorporation

By:

Its:

109

EX-10.2

Exhibit 10.2

Zions Bancorporation

2003 - 2005 Value Sharing Plan

Objective: The purpose of the 2003 – 2005 Zions Bancorporation 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 Zions Bancorporation (the “Company”) 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 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 per share of the Company 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 per share (“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, divided by average fully diluted shares for each year 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) 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);

d) 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).

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 Company 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 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.

APPENDIX

• Qualifying Earnings shall equal the cumulative pre-tax earnings per share of Zions Bancorporation 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 Bancorporation which must be achieved for payment of awards under this Plan is $18.656, which represents 5% annual compounded growth in adjusted pre-tax earnings per share over the course of the Award Period. (Adjusted Base Period pre-tax income is $5.636)

• An Award Fund shall be established, equal to 2.88% of the Qualifying Earnings in excess of $16.908 per share, multiplied by the average number of fully diluted shares outstanding during the Award Period.

• The minimum Marginal ROE of Zions Bancorporation 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 $45,905,000.

• The value of each Unit shall be equal to the total amount in the Award Fund, divided by 10,753,189.

Example:

If a Participant in the Zions Bancorporation 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 $22.50, the average diluted outstanding shares total 92,079,000 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:

        $22.500

        –16.908

            5.592

          X 2.88%

        $    .161

          X 92,079,000

        $14,824,719

Multiplier:

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

                    (.20 – .17)

Total Award Fund:

$14,824,719 X 1.5833 = $23,471,978

Individual Unit Value:

$23,471,978 / 10,753,189 = $2.1828

Total Value of Units:

60,000 X $2.1828 = $130,968.00

EX-10.3

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 = $130,980.00

EX-10.4

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 19^th day of September 1998 (the “Effective Date”).

(b) No awards shall be granted under the Plan after or on the 19^th 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.

4

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.

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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.

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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.

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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

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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.

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/s/    DOYLE L. ARNOLD        

Doyle L. Arnold, Secretary

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