EXHIBIT 10.7
ZIONS
BANCORPORATION
THIRD RESTATED DEFERRED
COMPENSATION PLAN FOR DIRECTORS
(Effective January 1,
2005)
ARTICLE I
INTRODUCTION
1.1 Restatement of Existing
Plan . Zions
Bancorporation previously established the Zions Bancorporation
Deferred Compensation Plan for Directors effective April 23,
1986 (“Original Plan”). The Original Plan was amended
effective as of May 1, 1991 and again effective July 1,
2003 (“Prior Plan”) and amended effective
January 1, 2005 (“Second Restated Plan”). It is a
purpose of this Plan to have those amounts which were 100% vested
and credited to a Deferral Account prior to January 1, 2005
(“Grandfather Amounts”) be governed by the applicable
laws and rules governing deferred compensation arrangements, prior
to the enactment of Section 409A of the Code
(“409A”) together with the provisions of the Prior
Plan. Notwithstanding the foregoing, there shall only be one Plan
which will include a Deferral Account for Grandfather Amounts and a
Deferral Account for post December 31, 2004 deferrals.
Accordingly, the provisions of the Prior Plan shall govern that
portion of a Participant’s Deferral Account which consists of
Grandfather Amounts. Unless specifically provided herein, the
provisions of this Plan Document where different from the Prior
Plan shall apply only to amounts deferred and vested after
December 31, 2004. If the application of any provision of this
Plan document, would constitute a “material
modification” with respect to Grandfather Amounts under
guidance issued by the Service under 409A, then such provision will
not be applied to any Grandfather Amounts and the provision of the
Prior Plan will control. By this document the Second Restated Plan
is restated and revised as of the Effective Date and to read as set
forth hereafter.
1.2 Purpose of Plan
. Zions Bancorporation has
established this Plan to provide members of the Board of Directors
of Zions Bancorporation and members of the Board of Directors of
participating subsidiaries of Zions Bancorporation the opportunity
to defer the receipt of compensation paid to them for their
services as members of the respective Boards of Directors until
such time as they are entitled to receive the compensation under
the provisions of this Plan. Zions Bancorporation intends to
maintain the Plan solely for the foregoing purpose and to comply at
all times with Sections 201(2), 301(a)(3) and 401(a)(1) of the
Employee Retirement Income Security Act of 1974, as amended. The
Plan will be interpreted in a manner consistent with these
intentions.
ARTICLE II
DEFINITIONS
Definitions are contained in this
article and throughout other sections of the Plan. The location of
a definition is for convenience only and should not be given any
significance. A word or term defined in this article (or in any
other article) will have the same meaning throughout the Plan
unless the context clearly requires a different meaning.
2.1 Beneficiary
means the individual(s) or
entity(ies) designated by a Participant, or by the Plan, to receive
any benefit payable upon the death of a Participant or Beneficiary.
A Beneficiary designation must be executed by the Participant and
delivered to the Committee pursuant to procedures specified by the
Committee for that purpose. In the absence of a valid or effective
Beneficiary designation, the Beneficiary will be the
Participant’s surviving spouse, or if there is no surviving
spouse, the Participant’s estate.
2.2 Board means the Board of Directors of the Company or
the Board of Directors of a participating affiliate or subsidiary
of the Company.
2.3 Code means the Internal Revenue Code of 1986, as
amended from time to time.
2.4 Committee
means the Zions Bancorporation
Benefits Committee. The Committee will serve as the “plan
administrator” to manage and control the operation and
administration of the Plan, within the meaning of ERISA
Section 3(16)(A).
2.5 Company
means Zions Bancorporation, any
successor to Zions Bancorporation, and any subsidiary or affiliate
of Zions Bancorporation which elects, with the approval of Zions
Bancorporation, to participate in this Plan. In the event one or
more affiliates or subsidiaries of Zions Bancorporation participate
in this Plan, all rights, duties and responsibilities for operation
of this Plan, including all rights reserved to amend, alter,
supplement or terminate this Plan, shall remain exclusively with
and be exercised solely by Zions Bancorporation, unless
specifically allocated by Zions Bancorporation to one or more of
the participating affiliates or subsidiaries.
2.6 Compensation
means the remuneration paid to a
Director for the services provided by the Director to the Company
in the capacity as a member of the Board, including remuneration
for services on any sub-committee or division of the Board, but
excluding (i) any amount paid solely to reimburse the Director
for expenses incurred, and (ii) any amounts credited as
earnings under this Plan. Deferral elections under this Plan shall
be computed on the amount of the Director’s
Compensation.
2.7 Deferral Account
means a bookkeeping account
established for and maintained on behalf of a Participant to which
Compensation amounts are deferred, and net income (or losses)
thereon, are credited under this Plan.
2.8 Deferred Compensation
Agreement means an
agreement described in Section 3.4 and entered into by a
Participant and the Company to reduce the Participant’s
Compensation for a specified period and contribute such amounts to
the Plan, in accordance with Article III.
2.9 Director
means a member of the Board of Zions
Bancorporation or any other participating Company.
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2.10 Disability
means “disability” (or
similar term) a Participant is unable to engage in any substantial
gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death or
can be expected to last for a continuous period of not less than 12
months, or is, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not
less than 3 months under an accident and health plan covering
employees of the Company.
2.11 Effective Date
means January 1, 2005, the date
this Plan, as restated, shall be deemed effective. The original
effective date is April 23, 1986. Notwithstanding the
foregoing, amounts deferred and vested under the Plan prior to
January 1, 2005 shall not be subject to any amendments to the
Plan with an effective date subsequent to December 31,
2004.
2.12 ERISA
means the Employee Retirement Income
Security Act of 1974, as amended.
2.13 Hardship
means an unforeseeable emergency
which is a severe financial hardship to the Participant resulting
from an illness or accident of the Participant, the
Participant’s spouse, the Participant’s beneficiary, or
the Participant’s dependent (as defined in section 152 of the
Code without regard to section 152(b)(1), (b)(2) and (d)(1)(b));
loss of the Participant’s property due to casualty (including
a need to rebuild a home following damage to a home not otherwise
covered by insurance, for example, not as a result of a natural
disaster); or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of
the Participant. For example, the imminent foreclosure of or
eviction from the Participant’s primary residence may
constitute an unforeseeable emergency. In addition, the need to pay
medical expenses, including nonrefundable deductibles, as well as
for the costs of prescription drug medication may constitute an
unforeseeable emergency. Finally, the need to pay for the funeral
expenses of a spouse, a beneficiary, or a dependent (as defined in
section 152 of the Code without regard to section 152(b)(1), (b)(2)
and (d)(1)(b)) may also constitute an unforeseeable emergency.
Generally the purchase of a home or the payment of college tuition
are not unforeseeable emergencies. Whether a Participant is faced
with an unforeseeable emergency is to be determined based on the
relevant facts and circumstances of each case, but, in any case, a
distribution on account of unforeseeable emergency may not be made
to the extent that such emergency is or may be relieved through
reimbursement or compensation from insurance or otherwise, by
liquidation of the Participant’s assets, to the extent the
liquidation of assets would not cause severe financial hardship, or
by cessation of deferrals under the plan. A Hardship and any
resulting distribution will be determined in accordance with
section 409A of the Code and guidance issued by the Service there
under. The Committee will have sole discretion to determine whether
a Hardship condition exists and the amount of the distribution. The
Committee’s determination will be final.
A Participant must submit a written
request for a distribution based on Hardship to the Committee on
the form and in the manner prescribed by the Committee. The
Hardship request must: (i) describe and certify the Hardship
condition substantiating the severe unforeseeable emergency and all
circumstances necessary to meet the definition of Hardship;
(ii) state the amount the Participant requests as a withdrawal
of all or a portion of his Deferral Account; and
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(iii) demonstrate the amounts requested to be
distributed do not exceed the amounts necessary to satisfy such
emergency plus amounts necessary to pay any federal, state, local,
or foreign income taxes or penalties reasonably anticipated as a
result of the distribution. Determinations of amounts necessary to
satisfy an emergency must take into account any additional
compensation that will be made available due to the restriction on
further deferrals set forth below in this Section. The Committee
will have sole discretion to determine whether a Hardship exists
and to determine the appropriate action, if any, provided however,
in no event will the Committee approve a Hardship distribution
request for expenses related to any medical condition or expenses
related to the death of any person unless the request for
distribution is submitted to the Committee and approved by the
Committee for Hardship distribution prior to the date on which the
expense is incurred. The Committee, in its sole discretion, may
make exception to the foregoing rule if it determines that the
circumstances creating the expense for which reimbursement is
sought were not reasonably foreseeable. Regardless of whether the
Participant desires to reduce or cease any Compensation amounts to
be deferred after the Hardship request is made, the Participant
will be precluded from deferring Compensation for the remainder of
the Plan Year in which a Hardship is approved by the
Committee.
2.14 Insolvent
means the Company is (i) unable
to pay its debts as they become due or (ii) subject to a
pending proceeding as a debtor under the United States Bankruptcy
Code.
2.15 Investment Fund or
Funds means the
investment funds designated by the Committee as the basis for
determining the investment return to be allocated to
Participants’ Deferral Accounts. The Committee may change the
Investment Funds at such times as it deems appropriate.
2.16 Participant
means a Director who is eligible to
participate in the Plan as provided in Section 3.1 and who has
made an election to defer Compensation pursuant to the
Plan.
2.17 Plan means the Zions Bancorporation Second Restated
Deferred Compensation Plan for Directors, as set forth in this
document, and as further amended from time to time.
2.18 Plan Year
means the Company’s fiscal
year, beginning January 1 and ending
December 31.
ARTICLE III
PARTICIPATION
3.1 Eligibility
. A Director shall be eligible to
participate in the Plan only to the extent and for the period that
the Director continues as a member of the Board and receives
Compensation. An individual who is a Director as of the first day
of the Plan Year but who ceases to be a Director during the Plan
Year shall continue to participate in the Plan with respect to any
Deferred Compensation Agreements in effect for the Plan Year, but
shall terminate participation as of the end of the Plan Year. The
Participant shall not be permitted to enter into any new Deferred
Compensation Agreements with the Company unless and until the
individual again becomes a Director.
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3.2 Participation
. A Director who participates in
the Plan may elect to defer the receipt of Compensation earned by
the Director by completing an agreement as described in
Section 3.4. The Director shall make the election in
accordance with Section 3.3. The Company shall withhold
amounts deferred by the Participant in accordance with this
election. The Participant’s deferred amounts shall be
credited to the Deferral Account as provided in Article V and
distributed in accordance with Article VI. An election to
defer receipt of Compensation shall continue in effect for a given
Plan Year unless the Participant terminates as a
Director.
3.3 Election Procedure
. The Director shall elect to defer
Compensation under an agreement described in Section 3.4 by
completing a Deferred Compensation Agreement in the form and in the
manner prescribed by the Committee. The Agreement must be properly
completed in accordance with procedures prescribed by the Committee
prior to the first day of the Plan Year for which Compensation
shall be earned, provided however, that an individual who becomes a
Director for the first time on or after the first day of a Plan
Year may within thirty (30) days of the effective date of his
appointment make an election to defer Compensation that will be
earned after the date such Director by executes a Deferred
Compensation Agreement.
3.4 Deferred Compensation
Agreement . A Deferred
Compensation Agreement shall remain in effect for the Plan Year and
for all subsequent Plan years until amended or revoked by the
Participant or terminated by the Company as provided in
Section 3.5. The Deferred Compensation Agreement shall be
applicable only to Compensation as defined in this Plan and which
is earned after the date on which the Agreement is effective. The
Agreement shall define the amount of Compensation that shall be
deferred for the Plan Year, and for all subsequent Plan Years and
the manner of distribution. The minimum deferral percentage which
may be elected by a Director shall be five percent (5%) and
all deferral percentages shall be in five percent
(5%) increments. The Committee may, in its discretion,
establish a greater minimum deferral percentage amount or
incremental deferral percentage for any given Plan Year.
3.5 Irrevocable
Election . A
Participant’s Deferred Compensation Agreement for a given
Plan Year cannot be amended by the Participant and, except as
provided in Section 3.4 and this Section 3.5, is
irrevocable. Any change as to the timing or manner of payment of
benefits already credited to a Participant’s Deferral Account
(i) must be accomplished by a Participant in accordance with
procedures prescribed by the Committee; (ii) will not take
effect sooner than the earliest date allow
