This filing is made pursuant to Rule 424(b)(5)
Under the Securities Act of 1933
In connection with Registration No. 333-132868

SUBJECT TO COMPLETION, DATED MAY 4, 2007

PRELIMINARY PROSPECTUS SUPPLEMENT
(To Prospectus Dated March 31, 2006)

99,418 Units

ZIONS BANCORPORATION

Zions Bancorporation Employee Stock Option Appreciation Rights Securities,
Series 2007

     We are offering 99,418 units of our Zions Bancorporation Employee Stock Option Appreciation Rights Securities, Series 2007 (the “ESOARS™,” and each unit thereof, an “ESOARS™ Unit”). ESOARS™ are securities that entitle holders to receive specified payments from us upon the exercise, if any, from time to time of stock options comprising a reference pool of stock options that we have granted to our employees. We call our stock options that comprise this reference pool our “reference options.” The ESOARS™ represent our payment obligation but do not represent any ownership interest in us or in any of the reference options.

     We are offering the ESOARS™ in part to provide a market basis that may be used to help us estimate the fair value of our reference options and determine our compensation expense with respect to the issuance of our reference options.

     We will make periodic payments upon the exercise, if any, of reference options to the extent payments are then payable thereunder (as described in this prospectus supplement) on or before the 15th day of the month (or, if any such day is not a business day, then on the next business day) following the end of each calendar quarter. We expect that such periodic payments, if any, will commence on or about July 15, 2008. Each ESOARS™ Unit will entitle the holder thereof to receive, over the term of the reference options, the “net realized value” (as more particularly described herein) realized by employee optionees upon the exercise, if any, of reference options divided by the number of shares of our common stock underlying reference options that vest. Payments to holders may be made, in our sole discretion, in cash, shares of our common stock or some combination of cash and shares of our common stock.

     The price to the public and the allocation of our ESOARS™ will be determined by an auction process through the www.auctions.zionsdirect.com electronic bid submission system (“www.auctions.zionsdirect.com”). The auction will open at 5:00 p.m., E.D.T., on May 4, 2007 and will close at 3:30 p.m., E.D.T., on May 7, 2007, unless extended as described in the section entitled “The Auction Process” beginning on page S-13 of this prospectus supplement. The minimum number of ESOARS™ Units for a bid in the auction will be one. We will not issue fractional ESOARS™ Units.

     The timing and method for submitting bids and a description of this auction process are described in the section entitled “The Auction Process” beginning on page S-13 of this prospectus supplement. In general, once a bidder has submitted and confirmed a bid, the bid will be binding and may not thereafter be rescinded or revoked. As part of this auction process, we are attempting to assess the market demand for our ESOARS™ and to set the price to the public of this offering to meet that demand. Investors should not expect to be able to sell their ESOARS™ for a profit after the conclusion of this offering and the allocation of our ESOARS™.

     We will offer the ESOARS™ directly to investors. Zions Direct, Inc., the auction agent for this offering, is a wholly-owned subsidiary of Zions First National Bank, which is the issuing and paying agent with respect to the ESOARS™. Zions First National Bank, in turn, is a wholly-owned subsidiary of Zions Bancorporation.

     We expect to deliver the ESOARS™ through the facilities of The Depository Trust Company in book-entry form on or about May 10, 2007.

     We will not list the ESOARS™ on any securities exchange. Currently there is no public market for the ESOARS™. We cannot assure you that an active market for the ESOARS™ will develop.

     

     Investing in our ESOARS™ involves risk. See “Risk Factors” beginning on page S-7 of this prospectus supplement.

     Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying base prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus supplement is           , 2007.

TABLE OF CONTENTS

Prospectus Supplement

		Page
About This Prospectus Supplement		iii
Where You Can Find More Information		iv
Disclosure Regarding Forward-Looking Statements		iv
Summary			S-1
Risk Factors			S-7
Use of Proceeds			S-10
Description of Our ESOARS™			S-10
The Auction Process			S-13
Zions Bancorporation 2005 Stock Option and Incentive Plan			S-18
Description of Reference Options			S-21
Historical Stock Option Exercise Data			S-22
Valuation of Recent Stock Option Grants			S-39
Material United States Federal Income Tax Consequences			S-41
Certain ERISA Considerations			S-44
Legal Investment Considerations			S-44
Legal Ownership and Book-Entry Issuance			S-45
Legal Matters			S-46
Experts			S-46
ANNEX A – Form of Global Certificate			A-1
ANNEX B – Zions Bancorporation 2005 Stock Option and Incentive Plan			B-1
ANNEX C – Standard Stock Option Award Agreement			C-1

Base Prospectus

		Page
About This Prospectus			1
Where You Can Find More Information			1
Disclosure Regarding Forward-Looking Statements			2
Use of Proceeds			3
Description of Debt Securities We May Offer			3
Description of Warrants or Other Rights We May Offer			22
Description of Stock Purchase Contracts We May Offer			27
Description of Units We May Offer			28
Description of Common Stock We May Offer			31
Description of Preferred Stock We May Offer			34
Description of Depositary Shares We May Offer			36
The Issuer Trusts			39
Description of Capital Securities and Related Instruments			41
Description of Junior Subordinated Debentures			52
Description of Guarantees			64
Relationship Among the Capital Securities and the Related Instruments			68
Legal Ownership and Book-Entry Issuance			69
Securities Issued in Bearer Form			74
Considerations Relating to Indexed Securities			78
United States Taxation			80
Plan of Distribution			101
Employee Retirement Income Security Act			104
Validity of the Securities			105
Experts			105

ABOUT THIS PROSPECTUS SUPPLEMENT

     This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of this offering. The second part is the accompanying base prospectus, which gives more general information about us and our securities that we may offer, some of which information does not apply to this offering. Generally, when we refer to the “prospectus,” we are referring to both parts combined. If information varies between this prospectus supplement and the accompanying base prospectus, you should rely on the information in this prospectus supplement.

     You should carefully read this entire prospectus supplement, the accompanying base prospectus and the other information we have incorporated by reference, as described under the section entitled “Where You Can Find More Information” on page 1 of the accompanying base prospectus, to understand fully the terms of the ESOARS™ being offered hereby, as well as the tax and other considerations that you should consider before making your investment decision. You should pay special attention to the section entitled “Risk Factors” beginning on page S-7 of this prospectus supplement and on page 9 of our Annual Report on Form 10-K for our fiscal year ended December 31, 2006, to determine whether an investment in our ESOARS™ is appropriate for you. See “Where You Can Find More Information” on page 1 of the accompanying base prospectus.

     The information in this prospectus supplement is accurate as of May 4, 2007. You should rely only on the information contained in this prospectus supplement, the accompanying base prospectus and the information we have incorporated by reference. We have not authorized anyone to provide you with different information. You should not assume that the information provided by this prospectus supplement, the accompanying base prospectus or the information we have incorporated by reference is accurate as of any date other than the date of the respective document or information, as applicable. If information in any of the documents we have incorporated by reference or in the accompanying base prospectus conflicts with information in this prospectus supplement, you should rely on the most recent information. If information in an incorporated document conflicts with information in another incorporated document, you should rely on the information in the most recent incorporated document. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.

     For purposes of this prospectus supplement, unless the context otherwise indicates:

	•		references to “Zions Bancorporation,” “we,” “our” and “us” are only to Zions Bancorporation, excluding its consolidated subsidiaries;
	•		references to “you” are to any investor who invests in our ESOARS™ being offered hereby, whether they are the holders or only indirect owners of those ESOARS™;
	•		references to “ESOARS™” are to the Zions Bancorporation Employee Stock Option Appreciation Rights Securities, Series 2007;
	•		references to “this offering” or “the offering” are to the initial offering of our ESOARS™ made in connection with their original issuance, and not to any subsequent resales of our ESOARS™ in market-making transactions; and
	•		references to “holders” are to those persons or entities that own any of our ESOARS™, registered in their own names, on the books that we or our agent maintain for this purpose, and not those who own beneficial interests in our ESOARS™ registered in street name or in ESOARS™ Units issued in book-entry form through one or more depositaries.

WHERE YOU CAN FIND MORE INFORMATION

     You may request a copy of any of the documents or information we have incorporated by reference in this prospectus supplement, as described in the section entitled “Where You Can Find More Information” on page 1 of the accompanying base prospectus, at no cost to you by writing or telephoning us at:

Investor Relations
Zions Bancorporation
One South Main Street, Suite 1500
Salt Lake City, Utah 84111
(801) 524-4787

     In addition, you may also access further information about us by visiting our website at www.zionsbancorporation.com. Please note that the information and materials found on our website, except for our SEC filings incorporated by reference in this prospectus supplement, are not part of this prospectus supplement and are not incorporated by reference into this prospectus supplement.

     For additional information concerning this offering, the ESOARS™ being offered hereby, the website www.auctions.zionsdirect.com or the registration and auction process, you may contact Zions Direct:

	•		by telephone at (800) 524-8875 or (800) 554-1688 (ask for ESOARS™ support); or
	•		by e-mail at auctions@zionsdirect.com.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

     This prospectus supplement, including information incorporated by reference, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements provide current expectations or forecasts of future events and include, among others:

	•		statements with respect to our beliefs, plans, objectives, goals, guidelines, expectations, anticipations and future financial condition, results of operations and performance of Zions Bancorporation and its consolidated subsidiaries; and
	•		statements preceded by, followed by or that include the words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “project” or similar expressions.

     These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing our management’s views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties, and actual results may differ materially from those presented, either expressed or implied, in this prospectus supplement, including the information incorporated by reference. You should carefully consider those risks and uncertainties in reading this prospectus supplement. Factors that might cause such differences include, but are not limited to:

	•		our ability to successfully execute our business plans, manage our risks and achieve our objectives;
	•		changes in political and economic conditions, including the economic effects of terrorist attacks against the United States and related events;
	•		changes in financial market conditions, either nationally or locally in areas in which we conduct our operations, including without limitation, reduced rates of business formation and growth, commercial real estate development and real estate prices;
	•		fluctuations in the equity and fixed-income markets;
	•		changes in interest rates, the quality and composition of the loan and securities portfolios, demand for loan products, deposit flows and competition;
	•		acquisitions and integrations of acquired businesses;
	•		increases in the levels of losses, customer bankruptcies, claims and assessments;
	•		changes in fiscal, monetary, regulatory, trade and tax policies and laws, including policies of the U.S. Treasury and the Federal Reserve Board;
	•		continuing consolidation in the financial services industry;
	•		new litigation or changes in existing litigation;
	•		success in gaining regulatory approvals, when required;

	•		changes in consumer spending and saving habits;
	•		increased competitive challenges and expanding product and pricing pressures among financial institutions;
	•		demand for financial services in our market areas;
	•		inflation and deflation;
	•		technological changes and our implementation of new technologies;
	•		our ability to develop and maintain secure and reliable information technology systems;
	•		legislation or regulatory changes which adversely affect our operations or business;
	•		our ability to comply with applicable laws and regulations; and
	•		changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies.

     You should not put undue reliance on any forward-looking statements. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by such statements.

     See the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of our Annual Report on Form 10-K for our fiscal year ended December 31, 2006, which is incorporated by reference in this prospectus supplement, for a more detailed description of these and other factors that may affect any forward-looking statements. When considering forward-looking statements, you should keep in mind the risk factors described under the section entitled “Risk Factors” beginning on page S-7 of this prospectus supplement and on page 9 of our Annual Report on Form 10-K for our fiscal year ended December 31, 2006. We will not update any forward-looking statements unless the securities laws require us to do so.

SUMMARY

Zions Bancorporation

     Zions Bancorporation is a financial holding company organized under the laws of the State of Utah in 1955, and registered under the Bank Holding Company Act of 1956, as amended. Zions Bancorporation, together with its consolidated subsidiaries, owns and operates eight commercial banks with a total of 470 offices at year-end 2006. We provide a full range of banking and related services through our banking and other subsidiaries, primarily in Utah, California, Texas, Arizona, Nevada, Colorado, Idaho, Washington and Oregon.

     We focus on maintaining community-minded banking services by continuously strengthening our core business lines of: (1) small, medium-sized business and corporate banking; (2) commercial and residential development, construction and term lending; (3) retail banking; (4) treasury cash management and related products and services; (5) residential mortgage; and (6) investment activities. We operate eight different banks in ten Western and Southwestern states with each bank operating under a different name and each having its own board of directors, chief executive officer and management team. The banks provide a wide variety of commercial and retail banking and mortgage lending products and services. They also provide a wide range of personal banking services to individuals, including home mortgages, bankcard, student and other installment loans, home equity lines of credit, checking accounts, savings accounts, time certificates of various types and maturities, trust services, safe deposit facilities, direct deposit and 24-hour ATM access. In addition, certain banking subsidiaries provide services to key market segments through their Women’s Financial, Private Client Services and Executive Banking Groups. We also offer wealth management services through a subsidiary, Contango Capital Advisors, Inc., that was launched in 2004.

     In addition to these core businesses, we have built specialized lines of business in capital markets, public finance and certain financial technologies, and are also a leader in U.S. Small Business Administration (“SBA”) lending. Through our eight banking subsidiaries, we provide SBA 7(a) loans to small businesses throughout the United States and are also one of the largest providers of SBA 504 financing in the nation. We own an equity interest in the Federal Agricultural Mortgage Corporation (“Farmer Mac”) and are the nation’s top originator of secondary market agricultural real estate mortgage loans through Farmer Mac. We are a leader in municipal finance advisory and underwriting services. We also control four venture capital funds that provide early-stage capital primarily for start-up companies located in the Western United States. Finally, our NetDeposit, Inc. and P5, Inc. subsidiaries are national leaders in the provision of check imaging and clearing software and of web-based medical claims tracking and cash management services, respectively.

     Our executive offices are located at One South Main, Suite 1500, Salt Lake City, Utah 84111, and our telephone number is (801) 524-4787.

The Offering

Issuer		Zions Bancorporation.
Securities Offered		Zions Bancorporation Employee Stock Option Appreciation Rights Securities, Series 2007 (the “ESOARS™,” and each unit thereof, an “ESOARS™ Unit”). ESOARS™ are securities that entitle holders to receive specified payments from us upon the exercise, if any, from time to time of stock options comprising a reference pool of stock options that we have granted to our employees. We call our stock options that comprise this reference pool our “reference options.” See “Description of Our ESOARS™.”
		The ESOARS™ represent our payment obligation but do not represent any ownership interest in us or in any of the reference options. See “Risk Factors — Risks Related to an Investment in Our ESOARS™ — You will have no stockholder rights.”
CUSIP Number		989701 305.
Number of ESOARS™ Units We    Are Offering		99,418.
Offering Price		To be determined through an auction process conducted by our auction agent. See “The Auction Process.”
Reference Options		There are 994,180 reference options, which vest ratably over three years, have an exercise price of $83.25 per share and expire on May 3, 2014. See “Description of Reference Options.”
Vesting Period		The three-year period ending on May 4, 2010.
Bid Limit		In order to ensure a broad participation in this offering, we or our auction agent will assign each bidder a bid limit. The auction website allows a bidder to place up to five separate, active bids. A bidder will not be able to place aggregate “in-the-money” bids that exceed that bidder’s bid limit (as described below). See “Description of Our ESOARS™ — Bidding Auction Process; Irrevocability of Bids.”
		Prospective bidders registering to bid on ESOARS™ for the first time on the website www.auctions.zionsdirect.com will automatically qualify to bid for up to a bid limit of $20,000. Prospective bidders who want to bid for more than that amount may contact us by telephone at (800) 524-8875 or by e-mail at auctions@zionsdirect.com to request a greater bid limit. Any decision to increase a bidder’s bid limit, upon such request, will be in our sole and absolute discretion. A bidder’s bid limit will in no event exceed $500,000. A bidder will not be able to place a bid that exceeds that bidder’s bid limit. See “The Auction Process — Qualification of Bidders; Suitability.”
Allocation of ESOARS™		To be determined through our auction process based on the number of ESOARS™ Units designated as “in-the-money” by the auction website. See “The Auction Process — Allocation.”
Purpose		We are offering the ESOARS™ in part to provide a market basis that may be used to help us estimate the fair value of our reference options and determine our compensation expense with respect to the issuance of our reference options, as required under Statement of Financial Accounting Standards No. 123R, Share Based Payment, issued by the Financial Accounting Standards Board, or FASB. See “Description of Our ESOARS™ — Purpose of the Offering.”

Auction Agent; Issuing and Paying     Agent		Our auction agent is Zions Direct, Inc., a wholly-owned subsidiary of Zions First National Bank, which is our issuing and paying agent. Zions First National Bank, in turn, is a wholly-owned subsidiary of us.
Use of Proceeds		We intend to use the net cash proceeds from this offering for general corporate purposes. See “Use of Proceeds.”
Listing		The ESOARS™ will not be listed on any securities exchange.
Periodic Payments		We will, from time to time, deposit with Zions First National Bank, as our paying agent, the applicable amounts per ESOARS™ Unit determined as described under the caption “Calculation of Payments” below. We will make each deposit on or before the fifth business day of the month following the end of each calendar quarter, commencing on or about July 8, 2008. Zions First National Bank will then make the applicable payments to each holder of our ESOARS™ on or before the 15th day of that month (or, if any such day is not a business day, then on the next business day). We expect that such periodic payments will commence on or about July 15, 2008.
		Each date that the paying agent makes a payment with respect to the ESOARS™ is referred to in this prospectus supplement as a “payment date.” See “Description of Our ESOARS™ — Payments.”
Calculation of Payments		The calculations of payments, if any, made to holders of ESOARS™ described below include adjustments intended to eliminate the effect of any forfeiture of reference options prior to vesting. The aggregate of payments, if any, made to holders of ESOARS™ will be equal to the aggregate amount they would have received if all of the reference options had vested, assuming that the reference options forfeited prior to vesting would have been exercised at the same times and market prices as those options that vest. See “Description of our ESOARS™ — Calculation of Payments.”
Net Realized Value		For purposes of the calculation of payments in respect of ESOARS™ Units, the “net realized value” for a particular payment period means the amount, if any, by which:
		•     the trading price per share of our common stock on The Nasdaq Stock Market (or other national stock exchange on which our common stock is then traded) at the applicable time of exercise of a reference option, exceeds
		•     the exercise price of that reference option,
		multiplied by:
		•     the number of shares of our common stock as to which the applicable reference option was exercised.

Payments During Vesting Period		During the vesting period, payments from time to time in respect of each ESOARS™ Unit will be equal to:
		•     the “net realized value” realized upon the exercise of any reference options during the period (any such period, a “payment period”) beginning on the first day of each calendar quarter (or in the case of the first payment period, beginning on May 4, 2008) and ending on and including the last day of such calendar quarter,
		multiplied by
		•     the percentage of the annual vesting periods that have been completed as of the last day of such calendar quarter, divided by
		•     the number of shares of our common stock underlying reference options that have vested as of the last day of such calendar quarter.
Additional Payment to Adjust for    Pre-Vesting Forfeitures		Holders of ESOARS™ Units may be entitled to an additional payment, which will be made on July 15, 2010 (the first payment date following the completion of the vesting period or, if such day is not a business day, then on the next business day), to adjust for any reference options forfeited by our employee optionees prior to the vesting of such options. The amount of such payment, if any, in respect of each ESOARS™ Unit will be equal to:
		•     the aggregate “net realized value” realized upon the exercise of any reference options during the vesting period divided by the number of shares of our common stock underlying reference options that have vested as of the completion of the vesting period,
		minus
		•     the sum of the amounts previously paid in respect of each ESOARS™ Unit during the vesting period.
Payment if None of the Reference    Options Vest		If, upon the completion of the first annual vesting period, all of the reference options have been forfeited prior to vesting, an amount equal to the initial public offering price per ESOARS™ Unit sold in this offering, together with interest in respect of such amount at a rate of 5.0% per annum for the period from the settlement date for the ESOARS™ to (but not including) the date of such payment, will be paid in respect of each ESOARS™ Unit on July 15, 2008 (or, if such day is not a business day, then the next business day) and the ESOARS™ will thereafter be canceled.
Payments During Post-Vesting     Period		Following the completion of the vesting period, payments from time to time in respect of each ESOARS™ Unit will be equal to:
		•     the “net realized value” realized upon the exercise of any reference options during the relevant payment period,
		divided by
		•     the number of shares of our common stock underlying reference options that have vested.
Form of Payment		Payments to holders of ESOARS™ Units on each payment date may be in the form of cash, shares of our common stock or some combination of cash and shares of our common stock, in our sole discretion. If payment is made in shares of our common stock, the number of shares delivered will be determined by dividing the cash value of the payment due (or portion thereof) by the closing price of

		our shares of common stock on The Nasdaq Stock Market (or, if our common stock is not listed on The Nasdaq Stock Market, on the principal exchange or over-the-counter market on which our common stock is then listed) on the last trading day prior to the applicable payment date. We may deliver cash in lieu of any fractional shares of common stock based on the closing price of our shares of common stock determined in accordance with the immediately preceding sentence.
Record Date		The record date to determine holders eligible to receive payments on a given payment date will be the last business day of the calendar quarter preceding that payment date.
Modification of Reference Options		If one or more reference options is modified or canceled (pursuant to Section 2.5 of our 2005 Stock Option and Incentive Plan) in a manner that would be treated as a modification pursuant to paragraphs 51-57 of FASB Statement No. 123R, Share-Based Payment, or in other specified circumstances, we will pay in respect of each ESOARS™ Unit an amount equal to the cancellation value of the modified reference option(s) divided by the number of shares of our common stock underlying reference options that have not been forfeited prior to vesting. The cancellation value of the modified reference options will be determined by an independent valuation agent appointed by us. See “Description of Our ESOARS™ — Modification of Reference Options.”
Book-Entry Form		The ESOARS™ will be evidenced by one or more fully-registered global certificates, a form of which is attached hereto as Annex A. The global certificate(s) will be deposited with, or on behalf of, The Depository Trust Company (“DTC”), and will be registered in the name of Cede & Co., a nominee of DTC.
		Cede & Co. will be the only registered holder of the ESOARS™. Your beneficial interest in the ESOARS™ will be evidenced solely by entries on the books of the securities intermediary acting on your behalf as a direct or indirect participant in DTC.
		In this prospectus supplement, all references to payments or notices to “you” or to a “holder” or “holders” mean payments or notices to DTC or its nominee, in either case as the registered holder of our ESOARS™, and not those persons or entities that hold beneficial interests in our ESOARS™. For more information regarding DTC and book-entry securities, see “Legal Ownership and Book-Entry Issuance.”
Settlement		We expect that settlement will take place three business days following the conclusion of the auction and the allocation of our ESOARS™. Institutional customers will settle delivery versus payment through their Zions Direct account. Winning bidders who are individuals and who do not have an account with Zions Direct will be required to open such an account, or arrange for their primary broker to enter into a selling group agreement with Zions Direct, in order to facilitate delivery and payment for their ESOARS™ Units. See “The Auction Process — Settlement.”
Federal Income Tax Considerations		The proper U.S. federal income tax characterization of our ESOARS™ is unclear. In the absence of clear authority, we intend to file information returns with the Internal Revenue Service reporting income with respect to our ESOARS™ under a method analogous to the method applicable to income with respect to cash-settled call options if an ESOARS™ Unit is cash settled, or under a method analogous to the method applicable to income with respect to stock settled stock appreciation rights if an ESOARS™ Unit is settled in stock. However, it is unclear whether either method of reporting income on our ESOARS™ is proper. Prospective investors should carefully consider the discussion in the section below entitled “Material United States Federal Income Tax Consequences” with their own tax advisors.

Certain ERISA Matters		No ESOARS™ may be purchased by or transferred to:
		•     any “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (whether or not subject to ERISA, and including, without limitation, foreign or government plans);
		•     any “plan” described in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended; or
		•     any entity whose underlying assets include plan assets of any of the foregoing by reason of an employee benefit plan’s or plan’s investment in such entity.
		Any purported purchase or transfer of the ESOARS™ in violation of the foregoing restrictions will be null and void ab initio. Each bidder who purchases the ESOARS™ will be deemed to have represented, warranted and acknowledged to us that its purchase or transfer is not in violation of the restrictions set forth above.
Governing Law		State of New York.

RISK FACTORS

     You should consider carefully the risk factors discussed below and the risk factors discussed in the section entitled “Risk Factors” beginning on page 9 of our Annual Report on Form 10-K for our fiscal year ended December 31, 2006, which is incorporated by reference in this prospectus supplement, for a discussion of particular factors you should consider before determining whether an investment in our ESOARS™ is appropriate for you. Investing in our ESOARS™ is speculative and involves risk.

     Any of the risks described in this prospectus supplement or in our Annual Report on Form 10-K for our fiscal year ended December 31, 2006 could materially and adversely impair our business, financial condition and operating results. In such case, the trading price, if any, of our ESOARS™ could decline or you could lose all or part of your investment. Because the investment return, if any, realized by a holder of ESOARS™ will depend on the behavior of our employee optionees and other factors beyond our control, you may lose some or all of your investment even if our business, financial condition and operating results were not materially and adversely impaired.

Risks Related to an Investment in Our ESOARS™

You may lose some or all of your investment.

     Any investment return realized by a holder of ESOARS™ will be affected by many factors that are out of our and your control. Some of these factors include:

	•		the amounts and timing of exercises, if any, of the reference options by our employee optionees;
	•		the vesting schedule of the reference options;
	•		the exercise price(s) of the reference options and the other terms of the reference options;
	•		the modification of the exercise price(s) or other terms of the reference options;
	•		the trading price per share of our common stock in the public markets at the time of exercise, if any, of the reference options;
	•		decreases in the trading price per share of our common stock in the public markets between the last trading day prior to the applicable payment date and the delivery to ESOARS™ holders of the shares by the paying agent, if we elect to make payment in the form of shares of our common stock;
	•		the post-vesting termination of an employee optionee’s employment with us (whether that termination is at our election for cause or at the election of the employee) since the reference options are generally canceled when an employee’s employment with us ceases; and
	•		the death or disability of any employee optionee.

     For example, if our common stock price in the public markets were below the exercise price(s) of the reference options in any period in which an employee optionee is eligible to and willing to exercise a reference option, the optionee would be unlikely to exercise the reference option because that would result in a purchase of our common stock at a price per share that is higher than the price that is available in the open market. In addition, if the option exercise period were to expire or the optionee were no longer eligible to exercise the reference option due to termination of employment, death, disability or other factors, the reference option would expire unexercised. In each such case, the reference option would not yield any net realized value, and no payments would be made to any ESOARS™ holder with respect to any such reference option that had vested.

     Summary information regarding the reference options are set forth in the section entitled “Description of Reference Options” on page
S-21 of this prospectus supplement. Information regarding our business and financial results may be found in our Annual Report on Form
10-K for our fiscal year ended December 31, 2006 and our other filings that we have made with the SEC. As a result of the interaction between the above-described and other factors, the actual return, if any, on our ESOARS™ may vary substantially over the life of the reference options. As a consequence, you may lose some or all of your investment.

You will not receive any payments with respect to the ESOARS™ until July 15, 2008, if at all.

     The reference options are subject to a three-year vesting schedule, which will prevent any employee from exercising any reference options until May 4, 2008. Absent special circumstances such as an unforeseen modification of reference options, holders of ESOARS™ will not receive any payments with respect to their ESOARS™ until the payment date in July 2008 at the earliest. The reference options will not fully vest until May 4, 2010, so the number of reference options that may be exercised prior to that date is restricted by the vesting schedule. We cannot assure you that you will ever receive payments as an ESOARS™ holder even with respect to vested reference options, since payments on the ESOARS™ will ordinarily be generated only as a result of actual exercises of the reference options by our employees.

The ESOARS™ will not be listed; there is no secondary market for our ESOARS™.

     Our ESOARS™ will not be listed on any securities exchange. Therefore, there may be little or no secondary market for the ESOARS™. If a secondary market does develop, there is no assurance that it will be sustained. Even if there is a secondary market, it may not provide enough liquidity to allow you to easily trade or sell the ESOARS™. We do not expect that market makers will participate significantly in a secondary market, if any, for the ESOARS™.

The amount, if any, and timing of returns on our ESOARS™ is uncertain.

     Some articles and research reports have been written on rates of return for employee stock options similar to the reference options, and we have provided specified historical information regarding exercises of our stock options in the section entitled “Historical Stock Option Exercise Data” beginning on page S-22 of this prospectus supplement. Nonetheless, the ESOARS™ are a novel financial instrument for which, to our knowledge, there is no source for relevant data or standardized method of measuring the anticipated return with regard to the ESOARS™ or the reference options. Furthermore, the past performance of our stock options is not necessarily indicative of their future performance. Because the characteristics and behaviors of the employees comprising each pool of employees varies, you should not rely on the historical information relating thereto in this prospectus supplement as an indicator of the behavior of the employees who have been granted the reference options. You should be aware that our ESOARS™ are a relatively new and novel type of financial product with no meaningful performance history. You should therefore consider and determine for yourself the likely amount and timing of returns on our ESOARS™ during the life of the reference options.

You will have no stockholder rights.

     Investing in our ESOARS™ is not equivalent to investing in us. The ESOARS™ represent our payment obligation but do not represent any ownership interest in us or in any of the reference options. As an investor in our ESOARS™, you will not have voting rights, rights to receive dividends or other distributions, or any other rights generally understood to be incidental to ownership of our equity securities, except as expressly set forth in this prospectus supplement with respect to our ESOARS™.

The U.S. federal tax characterization of our ESOARS™ is uncertain.

     There are no cases, Treasury regulations, revenue rulings or other binding authorities that directly address the U.S. federal income tax characterization of our ESOARS™ or of securities with terms substantially the same as those of our ESOARS™. Therefore, the proper U.S. federal tax characterization of, and method of reporting income and loss with respect to, our ESOARS™ is uncertain. In the absence of guidance, we intend to file information returns with the Internal Revenue Service reporting income with respect to our ESOARS™ under a method analogous to the method applicable to income with respect to cash-settled call options if an ESOARS™ Unit is cash settled, or under a method analogous to the method applicable to income with respect to stock settled stock appreciation rights if an ESOARS™ Unit is settled in stock. However, other U.S. federal income tax characterizations of, and methods of reporting payments on, our ESOARS™ are possible. If these other characterizations or methods applied, they could materially adversely affect the amount, timing and character of income or loss that is properly reportable with respect to our ESOARS™, as compared to the method reported by us. In addition, we intend to take the position that payments on our ESOARS™ that are made to non-U.S. investors are subject to a 30 percent U.S. withholding tax, unless the non-U.S. investor establishes an exemption. Therefore, our ESOARS™ may not be an appropriate investment for non-U.S. investors. Because of the uncertainty of treatment of income and loss with respect to our ESOARS™, we urge prospective investors to consult their own tax advisors as to the proper classification and reporting of income and loss with respect to our ESOARS™ for U.S. federal income tax purposes. See “Material United States Federal Income Tax Consequences” beginning on page S-41 of this prospectus supplement.

The interests of holders of ESOARS™ may differ from the interests of us or our affiliates.

     We or one or more of our affiliates may engage in trading activities, including securities offerings of shares of our common stock, or other activities, including business restructurings, that involve termination of service of one or more of our employees who are holders of the reference options, or involve repricings or modifications of the reference options. These activities may not necessarily be in your best interests. Any of these activities may negatively affect the value of, and returns on, our ESOARS™. We do not have, and we specifically disclaim, any duty or obligation to act in the best interests of holders.

Risks Related to the Auction Process

Once you submit a bid, you may generally not revoke it.

     Once you have submitted and confirmed a bid, you may not subsequently lower your bid price or lower the number of ESOARS™ Units bid for in that bid. Therefore, even if circumstances arise after you have placed and confirmed a bid that make you want to decrease your original bid price or the number of ESOARS™ originally bid for, you will nonetheless be bound by that bid.

We reserve the right to reject any bid.

     We reserve the right, in our sole discretion, to reject any bid that we deem to be manipulative, mistaken or made due to a misunderstanding of our ESOARS™ on the part of the bidder. We reserve this right in order to preserve the integrity of the auction process. Other conditions for valid bids, including eligibility and account funding requirements of participating dealers and individuals, may vary. As a result of these varying requirements, we may reject a bidder’s bid, even while we accept another bidder’s identical bid. See the section entitled “The Auction Process — Allocation” on page S-16 of this prospectus supplement.

You may receive a full allocation of our ESOARS™ Units that you bid for if your bid is successful; therefore, you should not bid for more ESOARS™ than you are prepared to purchase.

     Successful bidders may be allocated all or nearly all of the ESOARS™ Units that they bid for in the auction. See “The Auction Process — Allocation.” Therefore, we caution investors against submitting a bid that does not accurately represent the number of ESOARS™ Units that they are willing and prepared to purchase.

Even if you submit a bid that equals or exceeds the market-clearing price, you may not be allocated the full number of ESOARS™ Units for which you bid.

     We will determine the initial public offering price for our ESOARS™ sold in this offering through an auction conducted by Zions Direct, our auction agent. The auction process will reveal a market-clearing price for our ESOARS™ offered in this offering. The market-clearing price is the highest price at which all of the ESOARS™ Units offered hereby will be sold to bidders. For an explanation of the meaning of the market-clearing price, see “The Auction Process — Market-Clearing Price” beginning on page S-16 of this prospectus supplement. If your bid price equals the market-clearing price, you will be allocated ESOARS™ Units only to the extent that ESOARS™ have not been allocated to bidders with higher bid prices. If there are two or more bids with bid prices that equal the market-clearing price, then the ESOARS™ Units that have not been allocated to bidders with higher bid prices will be allocated on a pro rata basis to those bidders.

You should not expect to sell your ESOARS™ Units after the conclusion of this offering and the allocation of our ESOARS™.

     As we mentioned above, the auction process will reveal a market-clearing price for our ESOARS™ offered in this offering. However, this clearing price may bear little or no relationship to market demand for our ESOARS™ following this offering, or the price at which the ESOARS™ may be sold. If there is little or no market demand for our ESOARS™ following the closing of the auction, the price of our ESOARS™ may decline. If your objective is to make a short-term profit by selling your ESOARS™ after the conclusion of the auction, you should not submit a bid in the auction. See the risk factor above entitled “— The ESOARS™ will not be listed; there is no secondary market for our ESOARS™.”

USE OF PROCEEDS

     We intend to use the net cash proceeds from this offering for general corporate purposes.

DESCRIPTION OF OUR ESOARS™

     In this prospectus supplement, all references to payments or notices to “you” or to a “holder” or “holders” mean payments or notices to DTC or its nominee, in either case as the registered holder of the ESOARS™, and not those persons or entities that hold beneficial interests in the ESOARS™. For more information regarding DTC and book-entry securities, see the section entitled “Legal Ownership and Book-Entry Issuance” beginning on page S-45 of this prospectus supplement. You will own a “beneficial interest” in our ESOARS™ if you hold ESOARS™ through direct or indirect participants in DTC. Owners of beneficial interests in our ESOARS™ should read the section entitled “Legal Ownership and Book-Entry Issuance” beginning on page S-45 of this prospectus supplement.

General

     We will issue the Zions Bancorporation Employee Stock Option Appreciation Rights Securities, Series 2007 (the “ESOARS™,” and each unit thereof, an “ESOARS™ Unit”) directly to investors. The ESOARS™ are securities that entitle holders to receive specified payments from us upon the exercise, if any, from time to time of stock options comprising a reference pool of stock options that we have granted to our employees. We call our stock options that comprise this reference pool our “reference options.” Some characteristics of the reference options are described in the section entitled “Description of Reference Options.”

     The ESOARS™ will be issued only in fully-registered book-entry form.

     Upon the exercise, if any, from time to time by our employees of our reference options, holders of our ESOARS™ will be entitled to receive payments as described below in “— Payments.”

     The ESOARS™ represent our payment obligation but do not represent any ownership interest in us or in any of the reference options. See “Risk Factors — Risks Related to an Investment in Our ESOARS™ — You will have no stockholder rights.”

Purpose of the Offering

     We are offering our ESOARS™ in part to provide a market basis that may be used to help us estimate the fair value of our reference options and determine our compensation expense with respect to the issuance of the reference options, as required under Statement of Financial Accounting Standards No. 123R, Share Based Payment, issued by the FASB.

Determination of Offering Price; Allocation

     The price to the public and the allocation of our ESOARS™ will be determined through an auction process in which prospective investors will bid for our ESOARS™. See the section entitled “The Auction Process” beginning on page S-13 of this prospectus supplement.

Payments

     We will, from time to time, deposit with Zions First National Bank, as our paying agent, the applicable amounts per ESOARS™ Unit as described under “— Calculation of Payments” below. We will make each deposit on or before the fifth business day of the month following the end of each calendar quarter, commencing on or about July 8, 2008. Zions First National Bank will then make the applicable payments to each holder of our ESOARS™ on or before the 15th day of that month (or, if any such day is not a business day, then on the next business day). We expect that such periodic payments will commence on or about July 15, 2008. However, we will also make payments as described below in “Calculation of Payments — Additional Payment to Adjust for Pre-Vesting Forfeitures,” “Calculation of Payments — Payment if None of the Reference Options Vest” and “— Modification of Reference Options.”

     Each date that the paying agent makes a payment with respect to the ESOARS™ is referred to in this prospectus supplement as a “payment date.”

Calculation of Payments

     ESOARS™ are intended to track the cost to us of the reference options. Because under FASB Statement No. 123R options that do not vest will not result in compensation expense to the option-granting company, ESOARS™ are designed to determine the fair market value of a vested option. Accordingly, in order that bidders in the auction are not required to consider the effect of pre-vesting forfeitures of reference options when determining the price they are willing to pay for our ESOARS™, the calculations of payments, if any, made to holders of ESOARS™ described below include adjustments intended to eliminate the effect of any forfeiture of reference options prior to vesting.

     Because the number of reference options that will vest cannot be known until the end of the vesting period, a different calculation will apply for payments during the vesting period and payments during the post-vesting period, as described below. In addition, an additional payment may be required following the completion of the vesting period to effectively adjust the payments, if any, made during the vesting period so that cumulative payments, if any, made up to that payment date reflect the actual number of reference options that have vested. As a result of the calculations of payments described below, the aggregate of payments, if any, made to holders of ESOARS™ will be equal to the aggregate amount they would have received if all of the reference options had vested, assuming that the reference options forfeited prior to vesting would have been exercised at the same times and market prices as those options that vest. However, if upon completion of the first annual vesting period, all of the reference options have been forfeited prior to vesting, an amount equal to the initial public offering price per ESOARS™ Unit sold in this offering, together with interest specified below, will be paid to the holders of ESOARS™.

     For purposes of the calculation of payments in respect of ESOARS™ Units, the “net realized value” for a particular payment period means the amount, if any, by which:

	•		the trading price per share of our common stock on The Nasdaq Stock Market (or other national stock exchange on which our common stock is then traded) at the applicable time of exercise of a reference option, exceeds
	•		the exercise price of that reference option,

     multiplied by:

•

the number of shares of our common stock as to which the applicable reference option was exercised.

     Payments During Vesting Period. During the vesting period, payments from time to time in respect of each ESOARS™ Unit will be equal to:

•

the “net realized value” realized upon the exercise of any reference options during the period (any such period, a “payment period”) beginning on the first day of each calendar quarter (or in the case of the first payment period, beginning on May 4, 2008) and ending on and including the last day of such calendar quarter,

          multiplied by

	•		the percentage of the annual vesting periods that have been completed as of the last day of such calendar quarter, divided by
	•		the number of shares of our common stock underlying reference options that have vested as of the last day of such calendar quarter.

     Additional Payment to Adjust for Pre-Vesting Forfeitures. Holders of ESOARS™ Units may be entitled to an additional payment, which will be made on July 15, 2010 (the first payment date following the completion of the vesting period or, if such day is not a business day, then on the next business day), to adjust for any reference options forfeited by our employee optionees prior to the vesting of such options. The amount of such payment, if any, in respect of each ESOARS™ Unit will be equal to:

	•		the aggregate “net realized value” realized upon the exercise of any reference options during the vesting period divided by the number of shares of our common stock underlying reference options that have vested as of the completion of the vesting period,
	minus
	•		the sum of the amounts previously paid in respect of each ESOARS™ Unit during the vesting period.

     Payment if None of the Reference Options Vest. If, upon the completion of the first annual vesting period, all of the reference options have been forfeited prior to vesting, an amount equal to the initial public offering price per ESOARS™ Unit sold in this offering, together with interest in respect of such amount at a rate of 5.0% per annum for the period from the settlement date for the ESOARS™ to (but not including) the date of such payment, will be paid in respect of each ESOARS™ Unit on July 15, 2008 (or, if such day is not a business day, then on the next business day) and the ESOARS™ will thereafter be canceled.

     Payments During Post-Vesting Period. Following the completion of the vesting period, payments from time to time in respect of each ESOARS™ Unit will be equal to:

	•		the “net realized value” realized upon the exercise of any reference options during the relevant payment period, divided by
	•		the number of shares of our common stock underlying reference options that have vested.

Form of Payment

     Payments to holders of ESOARS™ Units on each payment date may be in the form of cash, shares of our common stock or some combination of cash and shares of our common stock, in our sole discretion. If payment is made in shares of our common stock, the number of shares delivered will be determined by dividing the cash value of the payment due (or portion thereof) by the closing price of our shares of common stock on The Nasdaq Stock Market (or, if our common stock is not listed on The Nasdaq Stock Market, on the principal exchange or over-the-counter market on which our common stock is then listed) on the last trading day prior to the applicable payment date. We may deliver cash in lieu of any fractional shares of common stock based on the closing price of our shares of common stock determined in accordance with the immediately preceding sentence.

     The maximum aggregate number of shares of our common stock that we will issue in connection with payments, if any, in respect of our ESOARS™ is 300,000.

Reports and Notices

     No later than 15 days after a given payment date, we will deliver to each holder a report relating to payments made on the applicable payment date. The report will set forth, with respect to the applicable payment period, information such as:

	•		the number of reference options exercised during the preceding calendar quarter;
	•		the exercise price(s) at which the reference options were exercised;
	•		the number of reference options forfeited, if any, upon the termination of any optionee’s employment with us;
	•		the number of reference options, if any, deemed modified pursuant to paragraphs 51-57 of FASB Statement No. 123R during the preceding calendar quarter and their cancellation value; and
	•		the calculation of the payment with respect to each ESOARS™ Unit.

Mergers and Similar Transactions Permitted; No Control Rights

     The ESOARS™ do not restrict our ability to merge or consolidate with, or sell all or substantially all of our assets to, another corporation or other entity, or engage in any other transactions. If at any time we merge or consolidate with, or sell all or substantially all of our assets to another corporation or other entity, the successor entity may assume our obligations with respect to the ESOARS™. We will then be relieved of any further obligation with respect to the ESOARS™. In addition, subject to applicable law and the terms of our stock option plans and any stock option agreements covering the reference options, we and an acquirer of us or all or substantially all of our assets may determine to terminate or modify the reference options. In such case, we will appoint an independent valuation agent to determine the cancellation value of the modified or terminated reference options, as described under “— Modification of Reference Options” below.

     Holders will not have any control or other rights with respect to our employees who were granted reference options, including any control as to whether or not such employee optionees exercise any reference options.

Modification of Reference Options

     If one or more reference options is modified or canceled (pursuant to Section 2.5 of our 2005 Stock Option and Incentive Plan) in a manner that would be treated as a modification pursuant to paragraphs 51-57 of FASB Statement No. 123R, Share-Based Payment, then we will pay in respect of each ESOARS™ Unit an amount equal to the cancellation value of the modified reference option(s) divided by the number of shares of our common stock underlying reference options that have not been forfeited prior to vesting.

     We will deposit the applicable amount payable to holders of ESOARS™ on or before the fifth business day of the month following the end of each calendar quarter in which a qualifying modification occurs. Payment to holders of ESOARS™ will occur on or before the 15^th day of the month (or, if any such day is not a business day, then on the next business day) following the end of the calendar quarter in which such modification occurred. The cancellation value of the modified reference options will be determined by an independent valuation agent appointed by us.

     The reference options will also be considered to be modified and we will follow the procedures contained in the immediately preceding paragraph with respect to determination and payment of cancellation value, upon the occurrence of specified events, including without limitation:

	•		a liquidation, dissolution or winding up of us;
	•		any consolidation or merger of us with or into any other corporation or other entity, or any other corporate reorganization in which our stockholders immediately prior to such consolidation, merger or reorganization own less than 50% of the surviving entity’s voting power immediately after such consolidation, merger or reorganization; and
	•		a sale or other disposition to a third party of all or substantially all of our assets.

Amendment

     The ESOARS™ may be amended or supplemented, and any existing default or non-compliance with any provision of the ESOARS™ may be waived, with the consent of persons holding at least a majority of the ESOARS™ then outstanding. Notwithstanding the foregoing, the ESOARS™ may be amended or supplemented, without the consent of any holder of ESOARS™, in order to cure any ambiguity, defect, omission or inconsistency in the certificate evidencing the ESOARS™.

Governing Law

     The ESOARS™ will be governed by the laws of the State of New York.

THE AUCTION PROCESS

     The method of distribution that we will use in this offering is an auction, which will be conducted by Zions Direct, Inc., our auction agent. The public offering price for our ESOARS™ and the allocation thereof will be determined by the auction process. The auction will be modeled after that used by the United States Treasury Department, with some notable differences, some of which are described below. The auction will be held on the website www.auctions.zionsdirect.com, which also contains the rules that govern the auction. The following describes how our auction agent will conduct the auction.

Date, Time and Location of Auction

     The auction will open at 5:00 p.m., E.D.T., on May 4, 2007 and will close at 3:30 p.m., E.D.T., on May 7, 2007, unless extended as described under “— Bidding Auction Process; Irrevocability of Bids.” The auction will be hosted on the internet website www.auctions.zionsdirect.com.

     Bidders that have registered prior to the opening of the auction may place bids prior to the opening of the auction as described below in “— Early Bids.”

Qualification of Bidders; Suitability

     Our objective is to conduct an auction in which you submit informed bids.

     Prospective bidders that want to bid for our ESOARS™ will, by registering with the website www.auctions.zionsdirect.com, automatically qualify to bid for up to a bid limit of $20,000. Prospective bidders who want to bid for more than that amount may contact us by telephone at (800) 524-8875 or by e-mail at auctions@zionsdirect.com to request a greater bid limit. Any decision to increase a bidder’s bid limit, upon such request, will be in our sole and absolute discretion. To ensure that we will have sufficient time to process requests for an increase in a bidder’s automatically assigned bid limit prior to the end of the auction, requests must be made prior to the start of the auction. If you request an increase in your bid limit after the start of the auction, we cannot assure you that we can or will process this request prior to the end of the auction. Bidders may be required to submit specified financial information in order to establish bid limits greater than $20,000 and the suitability of the bidder for a larger investment in our ESOARS™. We or our auction agent may contact such bidders to request any other pertinent information that we or our auction agent require to establish the bid limit and the suitability of such bidder.

     Bidders that registered for the auction of our Employee Stock Option Appreciation Rights Securities, Series 2006 will be able to bid for up to their previously assigned bid limit.

     We caution you that our ESOARS™ may not be a suitable investment for you even if you qualify to participate in the auction. Moreover, even if you qualify to participate in the auction and place a bid, you may not receive an allocation of ESOARS™ in our offering for a number of reasons described below.

     No employees of Zions Direct, our auction agent, will be allowed to participate in the auction. Additionally, specified employees of us and some of our other affiliates will not be allowed to participate in the auction. Some of these employees include specified executive officers, our stock option plan administrators, anyone involved in the creation and structuring of our ESOARS™ and employees involved in the auction process.

Registration

     A prospective bidder should register electronically at www.auctions.zionsdirect.com. A prospective bidder registers by:

	•		providing all of the information required by the Bidder Registration Form found at www.auctions.zionsdirect.com, and
	•		submitting that fully-completed form to our auction agent through www.auctions.zionsdirect.com.

     During the registration process, each prospective bidder will select a user identification, or user ID, and password to access the bid page on www.auctions.zionsdirect.com and to submit bids in the auction.

     In connection with the registration process, prospective bidders will be required to answer certain questions that indicate that such bidder has accessed or received the offering materials and understands the risk of investing in ESOARS™ and that ESOARS™ are suitable for such bidder. In addition, by registering to bid in the auction, a prospective bidder represents and warrants to us that such bidder’s bid is submitted for and on behalf of such prospective bidder by himself, herself or itself, as applicable, or by an officer or agent who is duly authorized to bind the prospective bidder to a legal, valid and enforceable contract with respect to the bid for, and purchase of, our ESOARS™.

     We will confirm by e-mail a prospective bidder’s successful registration. A prospective bidder is not obligated to submit a bid in the auction simply because that bidder has registered to bid in the auction.

     Each prospective bidder will be solely responsible for making necessary arrangements to access www.auctions.zionsdirect.com for purposes of submitting its bid in a timely manner and in compliance with the requirements described in this prospectus supplement.

Bid Limit

     Individuals and institutions registered at www.auctions.zionsdirect.com will be able to participate in the auction.

     In order to ensure a broad participation in this offering, we or our auction agent will assign to each bidder a bid limit. The auction website allows a bidder to place up to five separate, concurrent bids. A bidder will not be able to place aggregate “in-the-money” bids that exceed that bidder’s bid limit (as described below).

     Prospective bidders registering to bid on ESOARS™ for the first time on the website www.auctions.zionsdirect.com will automatically qualify to bid for up to a bid limit of $20,000. Prospective bidders who want to bid for more than that amount may contact us by telephone at (800) 524-8875 or by e-mail at auctions@zionsdirect.com to request a greater bid limit. Any decision to increase a bidder’s bid limit, upon such request, will be in our sole and absolute discretion. A bidder’s bid limit will in no event exceed $500,000. A bidder will not be able to place a bid that exceeds that bidder’s bid limit.

Bidding Auction Process; Irrevocability of Bids

     The auction will open at 5:00 p.m., E.D.T., on May 4, 2007 and will close at 3:30 p.m., E.D.T., on May 7, 2007, unless extended as described below. Bids must be submitted electronically at www.auctions.zionsdirect.com, except as described below in “— Early Bids.” Each prospective bidder will be solely responsible for registering to bid at www.auctions.zionsdirect.com as described above.

     You will not be able to bid in the auction unless you have registered on www.auctions.zionsdirect.com. Each bidder will be able to access the auction beginning at 5:00 p.m., E.D.T., on May 4, 2007, using the user ID and password obtained at the time of registration.

     The minimum size of a bid is one whole ESOARS™ Unit. You will not be allowed to bid for fractional ESOARS™ Units. We reserve the right in our sole discretion to reject any bid that we deem to be manipulative, mistaken or made due to a misunderstanding of our ESOARS™ on the part of the bidder. We reserve this right in order to preserve the integrity of the auction process.

     You should be aware that your bid will be generally binding on you once you submit and confirm it. Unless you change a bid to increase the resulting net value of your bid as described below, you will not thereafter be able to retract or cancel that bid. Once you have posted and confirmed a bid, you may not then lower the bid price or lower the number of ESOARS™ Units bid for. You will be able to only:

	•		increase the number of ESOARS™ Units that you are interested in purchasing; or
	•		increase the bid price per ESOARS™ Unit that you are willing to pay; or
	•		both.

     Each bidder may place up to five separate, concurrent bids. Each bid may be made for different numbers of ESOARS™ Units and for different bid prices. A bidder who has one active bid will be able to bid up to his bid limit in that one bid. However, if a bidder has more than one active bid, the aggregate amount of “in-the-money” bids (as described below) cannot exceed that bidder’s bid limit. The bid limit is allocated first to the highest price per unit bid multiplied by the number of ESOARS™ Units bid at that price. Any remaining bid limit is then allocated to the next highest price per unit bid multiplied by the number of ESOARS™ Units bid at that price, and so on until the bid limit assigned to that bidder has been reached. The bids of a bidder who has placed multiple bids may be deemed to be “in-the-money” only to the extent that (1) the bid price is at or above the market-clearing price and (2) the aggregate dollar amount of the multiple bids that are “in-the-money” is less than or equal to that bidder’s bid limit. In short, the maximum number of ESOARS™ Units that a bidder may be allocated will be those ESOARS™ Units designated as “in-the-money” by the auction website.

     Each separate bid may be modified as described above in order to increase the number of ESOARS™ Units bid for or to increase the bid price, or both. There is no limit to the number of times that a bidder may improve an individual bid. In no event will a bidder be allowed to submit or modify a bid in a manner that would result in a reduction in that bidder’s aggregate number of ESOARS™ Units that are currently designated as “in-the-money.” A modification of one bid does not modify any other bid. Because each bid is independent of any other bid, each bid may result in an allocation of ESOARS™ Units; consequently, the sum of a bidder’s bid sizes should be no more than the total number of ESOARS™ Units the bidder is willing to purchase.

     Once the auction begins, all bidders that have registered may submit bids only through www.auctions.zionsdirect.com.

     You should consider all the information in this prospectus supplement and the accompanying base prospectus in determining whether to submit a bid, the number of ESOARS™ Units you are interested in purchasing and the price per ESOARS™ Unit that you are willing to pay.

     In connection with submitting a bid, you must log on to www.auctions.zionsdirect.com and do the following:

	•		state the number of ESOARS™ Units that you are interested in purchasing;
	•		state the purchase price per ESOARS™ Unit that you are willing to pay; and
	•		review your bid to ensure accuracy, then confirm that bid.

     Once an investor:

	•		places a bid on www.auctions.zionsdirect.com, and
	•		confirms that bid on www.auctions.zionsdirect.com,

that bid will constitute an irrevocable offer to purchase our ESOARS™ Units (except as set forth above), on the terms provided for in the bid.

     For purposes of the electronic bidding process at www.auctions.zionsdirect.com, the time as maintained on www.auctions.zionsdirect.com will constitute the official time of a bid. Bidders will be able to monitor the status of their bids as described more fully below. Bids submitted on www.auctions.zionsdirect.com must be received by us before 3:30 p.m., E.D.T., on May 7, 2007, which is when the auction ends, unless the auction is extended as described in the next succeeding paragraph.

     If any bid is received in the final two minutes of the auction that would change the allocation of ESOARS™ Units if the auction were closed at such time, the auction will automatically be extended two minutes from the receipt of such bid. There is no limit on the number of two-minute periods by which the auction may be extended.

     While the auction platform has been subjected to stress testing to confirm its functionality and ability to handle numerous bidders, it is impossible for us to predict the response of the investing public to this offering. Bidders should be aware that if enough bidders try to access the platform and submit bids simultaneously, there may be a delay in receiving and/or processing their bids. Bidders should be aware that auction website capacity limits may prevent last-minute bids from being received by the auction website and should plan their bidding strategy accordingly. We make no guarantee that any submitted bid will be received, processed and accepted during the auction process.

     The auction is modeled after that used by the United States Treasury, with some notable differences. The auction will be an “open” auction, with bidders being updated on the status of their bids relative to other bidders, as described in this paragraph. At no point during the auction, however, will bidders have access to other bidders’ actual bids, and at no point will bidders have access to other bidders’ identities. After submission and confirmation of bid quantity and price, the www.auctions.zionsdirect.com web page will indicate whether that bid is at that time in a winning position, or “in-the-money.” If a bid is “in-the-money” at a particular point in time during the auction, that means that, if the auction ended at that particular time, the number of “in-the-money” ESOARS™ Units of that bidder’s bid would be accepted. In order for a bid to be accepted, a bid must be “in-the-money” at the close of the auction. In order to monitor the progress of the auction, bidders may need to manually refresh the bid page to see whether their status has changed. This process will continue until the end of the auction, at which point our auction agent will review the submitted bids and determine the auction winners and allocations. See “Risk Factors — Risks Related to the Auction Process” beginning on page S-8 of this prospectus supplement.

     Neither we nor our auction agent have any duty or obligation to undertake such registration to bid for any prospective bidder or to provide or assure such access to any prospective bidder, and neither we nor our auction agent will be responsible for a bidder’s failure to register to bid or for proper operation of www.auctions.zionsdirect.com, or have any liability for any delays or interruptions of, or any damages caused by, www.auctions.zionsdirect.com.

Early Bids

     As a convenience to bidders, we will accept early bids from bidders that have registered prior to the opening of the auction, within the registration and bidding parameters described herein. We will accept early bids that we receive prior to the opening of the auction. You may submit an early bid by facsimile, e-mail or mail as follows:

	•		facsimile at (888) 264-6188;
	•		e-mail sent to auctions@zionsdirect.com; or
	•		mail sent to Zions Direct, Attention: ESOARS™, One South Main, 17th Floor, Salt Lake City, Utah 84111.

     Each bid submitted as provided in the preceding sentence must be written on an Early Bid Submission Form, which you can request that we send you by facsimile or e-mail, and must include:

	•		your user ID and password;
	•		the number of ESOARS™ Units bid for;
	•		the proposed purchase price of each ESOARS™ Unit bid for; and
	•		the bid total purchase price of the ESOARS™ Units bid for.

     All of the terms and conditions of the auction described in this prospectus supplement will apply to eligible bidders who submit early bids. In particular, you should know that if you submit an early bid, it will be deemed submitted and confirmed at the time that you actually submit your early bid, notwithstanding that you may, for example, want to revoke your early bid before the opening of the auction. You will be able to amend your early bid only as permitted above in “— Bidding Auction Process; Irrevocability of Bids.”

     If you submit an early bid before you have registered to participate in the auction, your bid will not be processed. We will enter early bids on behalf of early bidders as soon as practicable after the opening of the auction. We do not assume any responsibility or liability from the failure of any facsimile, e-mail or mail transmission (whether such failure arises from equipment failure, communications failure or otherwise). We do not assume any responsibility or liability from our or our auction agent’s failure to accurately submit an early bid in the auction on your behalf. To ensure that your bid is accurately placed, you should submit your bid on www.auctions.zionsdirect.com during the auction.

Market-Clearing Price

     The market-clearing price for our ESOARS™ will be the highest price at which all of the ESOARS™ Units offered hereunder are sold. We will determine this price by moving down the list of accepted bids in descending order of bid price until the total quantity of ESOARS™ Units bid for is greater than or equal to the 99,418 ESOARS™ Units being offered hereunder.

     For example, assume that 100,000 ESOARS™ Units are being offered and that the following bidders have bid as follows:

Bidder		ESOARS™ Units Represented by Bid		Bid Price
A		50,000		$100.00
B		50,000		$  75.00
C		50,000		$  50.00

     In this example, $100.00 is not the market-clearing price because only 50,000 of the ESOARS™ Units offered could be sold at that price. Furthermore, $50.00 is not the market-clearing price because, although all of the ESOARS™ Units being offered are sold for prices over $50.00, this is not the highest price at which all of the ESOARS™ Units offered could be sold. Instead, all of the ESOARS™ Units being offered in this example would be sold at the higher price of $75.00. Therefore, $75.00 is the market-clearing price in this example.

     The entire issue of ESOARS™ Units would be sold at the market-clearing price (similar to the United States Treasury auction). Therefore, in the example above, all of the ESOARS™ Units sold, even those that were bid for at $100.00, would have been sold for $75.00. We caution you that the market-clearing price may have little or no relationship to the price that would be established using other indicators of value. The scenario above is an example only and should not be considered indicative of an appropriate or likely market-clearing price of our ESOARS™.

Allocation

     Once the market-clearing price of our ESOARS™ has been determined, our auction agent will begin the allocation process. Bidders bidding above the market-clearing price will be allocated the entire quantity of ESOARS™ Units for which they bid; however, in no event will a bidder be allowed to purchase more ESOARS™ Units than the lesser of (1) the number of ESOARS™ Units that that bidder’s bid limit would purchase and (2) the total number of ESOARS™ Units of that bidder’s bid designated as “in-the-money” by the auction website. In the event that multiple bidders bid at the market-clearing price and the total quantity of ESOARS™ Units for which they have bid exceeds the number of available ESOARS™ Units not allocated to higher bidders, the auction agent will determine the pro rata percentage of the remaining ESOARS™ Units to be allocated to such bidders by dividing:

	•		the number of ESOARS™ Units not previously allocated to higher bidders, by
	•		the total number of ESOARS™ Units bid for at the market-clearing price.

     The auction agent will then allocate to each such bidder a number of the remaining ESOARS™ Units equal to:

	•		the pro rata percentage, multiplied by
	•		the number of ESOARS™ Units bid for by each such bidder at the market-clearing price,

     rounded up to the nearest whole number of ESOARS™ Units.

     For example, assume again that 100,000 ESOARS™ Units are being offered and that the following bidders have again bid as follows:

Bidder		ESOARS™ Units Represented by Bid		Bid Price
A		50,000		$100.00
B		50,000		$  75.00
C		50,000		$  75.00

     In this example, $75.00 is the market-clearing price because it is the highest price at which all of the ESOARS™ Units offered could be sold. Therefore, Bidder A is allocated all 50,000 ESOARS™ Units bid for. This leaves 50,000 ESOARS™ Units to be allocated to the bidders that bid at the market-clearing price. However, Bidder B and Bidder C bid for an aggregate of 100,000 ESOARS™ Units. Therefore, the remaining 50,000 ESOARS™ Units are allocated on a pro rata basis to Bidder B and Bidder C. In this example, because Bidder B and Bidder C bid identically, each is allocated 25,000 ESOARS™ Units. This scenario is an example only and should not be considered indicative of an appropriate or likely market-clearing price for our ESOARS™.

     In the event that a single bidder bids at the market-clearing price but the available quantity is less than that for which the bidder bid, the bidder will receive the available quantity. If an allocation of our ESOARS™ Units to a bidder would result in the issuance of a fractional ESOARS™ Unit to that bidder, then we will round up to a whole ESOARS™ Unit.

     We reserve the right to alter the method of allocation of the ESOARS™ Units as we deem necessary to ensure a fair and orderly distribution.

Results of Auction and Bid Acceptance

     Bidders may view the results of the auction on www.auctions.zionsdirect.com. You should be aware that the auction agent will accept successful bids by sending an electronic notice of acceptance and that bidders who submitted successful bids will be obligated to purchase the ESOARS™ Units allocated to them, regardless of whether they are aware that the electronic notice of acceptance has been sent.

Settlement

     We expect that settlement will take place three business days following the conclusion of the auction and the allocation of our ESOARS™. Institutional customers will settle delivery versus payment through their Zions Direct account. Winning bidders who are individuals and who do not have an account with Zions Direct will be required to open such an account, or arrange for their primary broker to enter into a selling group agreement with Zions Direct, in order to facilitate delivery and payment for their ESOARS™ Units. Zions Direct will make a suitability determination with respect to those winning bidders seeking to open a Zions Direct account.

ZIONS BANCORPORATION 2005 STOCK OPTION AND INCENTIVE PLAN

     We issued each of the reference options pursuant to our 2005 Stock Option and Incentive Plan dated effective as of May 6, 2005 (the “Incentive Plan”). We filed a copy of our Incentive Plan as Exhibit 4.7 to our Registration Statement on Form S-8, which we filed with the SEC on May 6, 2005. We have attached a copy of our Incentive Plan as Annex B of this prospectus supplement. We also filed a copy of our Standard Stock Option Award Agreement (the “Standard Option Agreement”) as Exhibit 10.5 to our Quarterly Report on Form 10-Q for our fiscal quarter ended March 31, 2005, which we filed with the SEC on May 5, 2005. We have attached a copy of our Standard Option Agreement as Annex C of this prospectus supplement. We issued substantially all of our reference options pursuant to the terms and conditions contained in the Standard Option Agreement.

     The following description is only a summary of the material relevant provisions of our 2005 Stock Option and Incentive Plan. It does not restate the Incentive Plan in its entirety. This summary, as well as any other discussion of our Incentive Plan and our reference option grants in this prospectus supplement, is qualified by reference to the text of the Incentive Plan and the Standard Option Agreement. We urge you to read the Incentive Plan and the Standard Option Agreement, because they, and not this description or any other discussion in this prospectus supplement, define the terms under which an employee optionee may exercise a reference option.

Summary of Our 2005 Stock Option and Incentive Plan

     Purpose. The purpose of the Incentive Plan is to promote our long-term success by providing an incentive for the officers, employees and directors of, and consultants and advisors to, us and our affiliates to acquire a proprietary interest in our success, to remain in our service or the service of our affiliates and to render superior performance during such service.

     Administration. The Incentive Plan is administered by the executive compensation committee of our board of directors or a subcommittee thereof (the “Committee”). The Committee has the authority to:

	•		construe, interpret and implement the Incentive Plan;
	•		prescribe, amend and rescind rules and regulations relating to the Incentive Plan;
	•		make all determinations necessary or advisable in administering the Incentive Plan;
	•		correct any defect, supply any omission and reconcile any inconsistency in the Incentive Plan;
	•		amend the Incentive Plan to reflect changes in applicable law;
	•		determine whether awards may be settled in shares of our common stock, cash or other property;
	•		determine whether amounts payable under an award should be deferred; and
	•		make other determinations and take other actions relative to the Incentive Plan.

The determination of the Committee on all matters relating to the Incentive Plan or any award agreement is final and binding.

     Eligibility. Acting and prospective directors, officers and employees of, and consultants and advisors to, us and our affiliates, as selected by the Committee in its discretion, are eligible to participate in the Incentive Plan.

     Approximately 8,000 of our directors, officers and employees are eligible to participate; however, because the Incentive Plan provides for broad discretion in selecting grantees and in making awards, we cannot determine the total number of persons who may participate and the respective benefits to be accorded to them.

     Shares of Common Stock Available for Issuance Through the Incentive Plan. Up to 8,900,000 shares of our common stock were initially authorized for issuance through the Incentive Plan. As of December 31, 2006, 6,630,337 of those shares remained available for issuance in connection with future stock option grants. Only 994,180 shares of our common stock are subject to reference options. See “Description of Reference Options.” Shares of our common stock may be issued under the Incentive Plan from authorized but unissued shares of our common stock or authorized and issued shares of our common stock held in our treasury or otherwise acquired for the purposes of the Incentive Plan.

     Provisions in our Incentive Plan permit the reuse or reissuance of shares of our common stock underlying forfeited, terminated or canceled awards of stock-based compensation. If awards or underlying shares of our common stock are tendered or withheld as payment for the exercise price of an award, then we may not reuse or issue, or otherwise treat as available under our Incentive Plan, the shares of our common stock. Any shares of our common stock delivered by us, any shares of common stock with respect to which awards under the Incentive Plan are made by us and any shares of common stock with respect to which we become obligated to make awards, through the assumption of, or in substitution for, outstanding awards previously granted by an acquired entity, are not counted against the shares available for awards under the Incentive Plan.

     The Committee has the authority to adjust the terms of any outstanding awards and the number of shares of our common stock issuable under our Incentive Plan for any increase or decrease in the number of issued shares of common stock resulting from a stock split, reverse stock split, stock dividend, recapitalization, rights offering, combination or reclassification of the common shares, or other events affecting our capitalization.

     Stock Options. The Committee has discretion to award to eligible employees:

	•		incentive stock options (“ISOs”), which are intended to comply with Section 422 of the Internal Revenue Code of 1986, as amended, or
	•		nonqualified stock options, which are not intended to comply with Section 422 of the Internal Revenue Code of 1986, as amended.

     The Committee determines the number of shares of our common stock covered by the applicable option and the exercise period and exercise price of such option. However, the exercise period may not exceed ten years and the exercise price may not be less than the fair market value of a share of our common stock on the date the option is granted. The Committee has discretion to set such additional limitations, conditions and provisions on or relating to option grants as it deems appropriate.

     Upon the exercise of an option granted under our Incentive Plan, the exercise price is payable in full to us either:

	•		in cash or its equivalent;
	•		by delivery of shares of our common stock having a fair market value at the time of exercise equal to all or a part of the exercise price (provided such shares have been held for at least six months prior to their tender); or
	•		any other method approved by the Committee in its discretion.

     Grantees of an option award generally will not have any of the rights of our shareholders with respect to shares subject to their award until the issuance of the shares.

     Performance Goals. The Committee may grant awards under the Incentive Plan subject to the attainment of specified performance goals. The performance goals applicable to an award may provide for a targeted or measured level or levels of achievement or change using one or more of the following measures:

	•		revenue;
	•		earnings per share;
	•		net income;
	•		return on assets;
	•		return on equity;
	•		stock price;
	•		economic profit or shareholder value added; and
	•		total shareholder return.

     Termination of Employment and Change in Control. The Incentive Plan determines the extent to which a grantee will have the right to exercise or obtain the benefits of an award or underlying shares following termination of the grantee’s employment or service by or for us or our affiliates or upon a change in control of us, unless modified by the Committee with respect to an award.

     The Incentive Plan provides that, unless the Committee determines otherwise at the time of an award, upon a change in control of us, the exercisability of, and the lapse of restrictions with respect to, the award will be accelerated, the exercise period, if any, of the award will be extended and, if so determined by the Committee, the award may be cashed out. The termination and change in control provisions need not be uniform among all grantees and may reflect distinctions based on the reasons for termination of employment or service by or for us or our affiliates.

     Adjustments and Amendments. The Incentive Plan provides for appropriate adjustments in the number and nature of shares of our common stock subject to awards and available for future awards and in the exercise price of options in the event of changes in our issued and outstanding common stock by reason of a merger, stock split or other specified events.

     The Committee may amend the Incentive Plan at any time and for any purpose that the Committee deems appropriate. However, no amendment may adversely affect any outstanding awards in a material way without the affected holder’s consent, except in specified circumstances.

     No Repricing or Reloads. Options issued under our Incentive Plan may not be repriced without the approval of our shareholders. The plan does not allow reload options to be issued upon exercise of outstanding options.

     Nontransferability. Unless the Committee determines otherwise in specified circumstances, no award (including options) granted pursuant to, and no right to payment under, our Incentive Plan will be assignable or transferable by a grantee except by will or by the laws of descent and distribution, and any option or similar right will be exercisable during a grantee’s lifetime only by the grantee or by the grantee’s legal representative.

     Duration of the Incentive Plan. Unless earlier terminated by our board of directors, our Incentive Plan will terminate on the tenth anniversary of adoption of the plan by our board of directors; provided, however, that the terms of our Incentive Plan will continue to govern until all then-outstanding options granted thereunder have been satisfied or terminated pursuant to the terms of the Incentive Plan, and all restricted periods and performance periods have lapsed.

Federal Income Tax Consequences to Employees With Respect to Stock Options

     Incentive Stock Options. A grantee will not be subject to tax upon the grant of an ISO, or, generally, upon the exercise of an ISO. However, the excess of the fair market value of the shares of our common stock on the date of exercise over the exercise price paid will generally be included in the grantee’s alternative minimum taxable income. Whether a grantee is subject to the alternative minimum tax will depend on his or her particular circumstances. Following exercise of an ISO, if a grantee disposes of the shares of our common stock acquired upon exercise of an option on or after the later of:

	•		the second anniversary of the date of grant of the ISO, and
	•		the first anniversary of the date of exercise of the ISO (the “statutory holding period”),

     then the grantee will recognize a capital gain or loss in an amount equal to the difference between the amount realized on such disposition and the grantee’s basis in the shares. If the grantee disposes of those shares before the end of the statutory holding period, he or she will have engaged in a “disqualifying disposition.” As a result, the disposition will be subject to tax:

	•		on the excess of the fair market value of the shares on the date of exercise (or the amount realized on the disqualifying disposition, if less) over the exercise price paid, as ordinary income, and
	•		on the excess, if any, of the amount realized on such disqualifying disposition over the fair market value of the shares on the date of exercise, as capital gain.

     If the amount a grantee realizes from a disqualifying disposition is less than the exercise price paid and the loss sustained upon such disposition would otherwise be recognized, the grantee will not recognize any ordinary income from such disqualifying disposition and instead will recognize a capital loss. In the event of a disqualifying disposition, the amount recognized by the grantee as ordinary income is generally deductible by us. We are currently not obligated to withhold income or other employment taxes upon a disqualifying disposition of an ISO.

     Nonstatutory Stock Options. A grantee will not be subject to tax upon the grant of an option which is not intended to be (or does not qualify as) an ISO (a “nonstatutory stock option”). Upon exercise of a nonstatutory stock option, an amount equal to the excess of the fair market value of the shares acquired on the date of exercise over the exercise price paid is taxable to the grantee as ordinary income, and such amount is generally deductible by us. This amount of income will be subject to income tax and employment tax withholding.

DESCRIPTION OF REFERENCE OPTIONS

      Our board of directors approved the reference options on May 4, 2007. The board approved the granting of 994,180 options. The exercise price of $83.25 per share was set at the market closing price on May 4, 2007. One-third of the reference options vest on the grant date anniversary in each of the first three years. There are no other vesting conditions. The vesting conditions are identical for all reference options. The reference options expire seven years after the grant date, on May 3, 2014.

     Some of the granted options will be classified as incentive stock options, with the remainder classified as non-qualified options. In general, incentive and non-qualified differ as to their tax consequences for the option grantee. Other than the classification of our reference options as incentive or non-qualified options, the reference options are identical. There are no differences in terms, including vesting, termination or cancellation.

     The Standard Option Agreement, under which we issued substantially all of the reference options, generally provides that the reference options will terminate immediately upon:

	•		the employee’s termination of his or her employment with us for any reason, or
	•		our termination of that employee’s employment for cause.

     The following table shows the allocation of the reference options among employee groups.

		Number of				Number of
		Employees				Reference Options Granted
Executives(1)			47				688,427
Upper-level Managers(2)			56				226,853
Mid-level Managers & Other Top Performers(3)			46				78,900
Total			149				994,180

     Of the 149 employees who were granted reference options, 41 employees (receiving options relating to an aggregate of 360,997 shares of our common stock) were eligible for retirement under the terms of our 2005 Stock Option and Incentive Plan at the date of grant. By contrast, of the 121 employees who were granted options in connection with our May 1, 2006 grant of options, 32 employees (receiving options relating to an aggregate of 312,060 shares of our common stock) were eligible for retirement under the terms of our 2005 Stock Option and Incentive Plan at the date of grant. Some of these option grantees may have negotiated separate employment contracts that may have retirement provisions that differ from those in our 2005 Stock Option and Incentive Plan.

HISTORICAL STOCK OPTION EXERCISE DATA

     The tables, charts and graphs shown on the following pages are select summaries of our past large option grants and the exercise behavior of our employee recipients of those options. The data from which these select summaries are derived is available at www.auctions.zionsdirect.com. The information and materials found on that website are not part of this prospectus supplement and are not incorporated by reference into this prospectus supplement. While we have attempted to summarize this data in a useful way, you should determine its usefulness for yourself. Also, you may determine that alternative analyses of the data are more useful.

     Our option grants and incentive option plans have varied in material ways over time. The composition of the group of employees in terms of specific individuals and rank and/or title of individuals has also varied over time. For example, prior to 2005, we granted a larger number of stock options to more varied groups of employees. To illustrate, we have granted:

	•		1,473,270 stock options in 2001;
	•		1,577,550 stock options in 2002;
	•		1,463,450 stock options in 2003; and
	•		1,699,750 stock options in 2004.

     However, we granted only:

	•		741,941 stock options in 2005;
	•		936,024 stock options in 2006; and
	•		994,180 stock options in 2007.

     The number of individuals to whom we have issued stock options has also recently declined. The following shows the number of persons to whom we have granted stock option grants for the past four years:

	•		for 2004, 879 individuals;
	•		for 2005, 102 individuals, mainly executives and upper-level managers;
	•		for 2006, 121 individuals, mainly executives and upper-level managers; and
	•		for 2007, 149 individuals, mainly executives and upper-level managers.

     Also, we granted shares of restricted stock to 615 employees in 2005 and 888 employees in 2006, in each case mostly in middle management.

     The pattern of exercise of the reference options may differ significantly from that of options granted in years 2004 and earlier, as the composition of the employee group receiving options changed significantly. Additionally, the terms of our option plans have varied over time with respect to, among other things, vesting, expiration date and employment termination conditions. Because of these and other differences between our previous option grants and the May 4, 2007 grant of the reference options, you should consider this past exercise behavior as general background information only. You should not consider that it is necessarily indicative of future exercise behavior, nor should you necessarily rely on it for precise analysis.

     The option grants summarized below represent summaries of the large option grants that we have made annually to select employees. From time to time throughout each year, we have also made additional, smaller option grants largely to newly-hired employees. We do not reflect these additional, smaller option grants in the tables, charts and graphs below. We also do not reflect option grants to our directors and option grants made pursuant to our “You’re the Owner” program, which program has been discontinued. In 2000, we made two sizeable option grants, summaries for each of which we have provided below.

     The summary for each grant contains brief information about the key vesting conditions and the length of time until expiration. You can find additional details regarding the option terms by reading our previous form of option award agreements and stock option plans under which we have granted the options described in this section, which we have filed with the SEC. See “Where You Can Find More Information” on page iv of this prospectus supplement.

     Grant Summary Table. The “Grant Summary” table for each year (or, in the case of 2000, for the applicable grant date) contains summary information regarding the grant date, number of options granted, grant price, the number of options exercised and the number of options canceled. The “Grant Date” is the date on which our board of directors approved the granting of the options.

     The “Grant Price” is the exercise, or “strike,” price of the options granted and is equal to the closing market price of our common stock on the date of the option grant. The number of options exercised is equal to the number of the granted options exercised, and in the case of option grants that have not expired, it is the number exercised through March 31, 2007. “Canceled” options represent vested options that were not exercised (in the case of grants that have expired) or options that will not be exercised (in the case of options that have not expired). Typically, canceled options result upon termination of employment. Holders of ESOARS™ will not receive any payments with respect to any vested reference options that are canceled as a result of the termination of an employee’s employment with us.

     Exercise by Year Table. The “Exercise by Year” table for each year (or, in the case of 2000, for the applicable grant date) contains year-by-year summary information regarding the number of options exercised, the weighted average market value at which they were exercised, the dollar value realized from the exercises and the cumulative percentage of options exercised. The number of options exercised represents the options exercised during the calendar year. Note that due to vesting provisions and the expiration of the options on the option grant date anniversary, exercises will not occur throughout the entirety of the calendar year in the initial and final calendar year of the period during which the reference options may be exercised. We computed the figures in the “Weighted Average Market Value at Exercise” column by:

	•		multiplying each option exercised in a given year by the price at which it was exercised;
	•		summing all such products for all of the exercises in the calendar year; and

     dividing that sum by:

•

the number of options exercised during said calendar year.

     We obtained the figures in the “$Value Realized” column by multiplying, for each option exercise:

•

the number of options exercised

     by the difference between:

	•		the price at which they were exercised, and
	•		the grant price (also known as the exercise, or “strike,” price).

     We arrived at the figures in the “Cumulative % Exercised” column for a given year by taking:

•

the sum of all options exercised in that year and prior years,

     divided by:

•

the total number of options that we granted.

     Cumulative Exercise Graph. The “Cumulative Exercise” graph for each year (or, in the case of 2000, for the applicable grant date) contains the cumulative options exercised over time, as well as the cumulative dollar value realized over time. The graphs start with the first anniversary of the grant date, which is the first date at which options may be exercised, and end with the expiration of the option period. We created the graph for the cumulative percentage of stock options exercised by plotting the numbers derived by:

	•		dividing the cumulative options exercised for each day covered by the graph, by
	•		the total number of options granted.

     We created the graph for cumulative dollar value realized by plotting the cumulative dollar value realized for each day covered by the graph. We obtained the amount of dollar value realized by multiplying for each option exercise:

•

the number of options exercised,

     by the difference between:

	•		the price at which those options were exercised, and
	•		the grant price (also known as the exercise, or “strike,” price).

     The cumulative dollar value realized is the sum of the dollar value realized starting with the first anniversary of the option grant up to the day represented by each point in the graph. For grants that have not yet expired, the scale for cumulative dollar value realized is chosen to scale the graph approximately in line with the cumulative percent exercised and should not be interpreted as indicative of the final cumulative value that will be realized. The final cumulative value that will be realized with respect to unexpired grants is unknown.

Zions Bancorporation March 18, 1994 Option Grant

		Grant Terms
Vesting		Vest 25% after each of first four years
Term		Expire after 6 years

Grant Summary
Grant Date		Granted				Grant Price				Exercised				Canceled
3/18/1994			397,000			$	9.94				364,996				17,252

Exercise by Year
						Weighted Average
						Market Value at								Cumulative %
Year		Number Exercised				Exercise				$ Value Realized				Exercised
1995			17,988			$	14.36			$	79,523				4.5	%
1996			43,696			$	20.30			$	452,702				15.5	%
1997			85,430			$	32.78			$	1,950,829				37.1	%
1998			101,213			$	50.32			$	4,086,678				62.6	%
1999			79,273			$	63.46			$	4,242,491				82.5	%
2000			37,396			$	48.03			$	1,424,380				91.9	%
Total			364,996							$	12,236,602

Zions Bancorporation April 28, 1995 Option Grant

		Grant Terms
Vesting		Vest 25% after each of first four years
Term		Expire after 6 years

Grant Summary
Grant Date		Granted				Grant Price				Exercised				Canceled
4/28/1995			277,700			$	10.66				260,920				3,005

Exercise by Year
						Weighted Average
						Market Value at								Cumulative %
Year		Number Exercised				Exercise				$ Value Realized				Exercised
1996			14,792			$	19.96			$	137,621				5.3	%
1997			33,128			$	33.57			$	758,957				17.3	%
1998			55,300			$	50.58			$	2,207,844				37.2	%
1999			76,464			$	63.04			$	4,005,034				64.7	%
2000			38,932			$	44.73			$	1,326,378				78.7	%
2001			42,304			$	53.20			$	1,799,401				94.0	%
Total			260,920							$	10,235,235

Zions Bancorporation March 8, 1996 Option Grant

		Grant Terms
Vesting		Vest 25% after each of first four years
Term		Expire after 6 years

Grant Summary
Grant Date		Granted				Grant Price				Exercised				Canceled
3/8/1996			348,700			$	18.13				315,936				7,664

Exercise by Year
						Weighted Average
						Market Value at								Cumulative %
Year		Number Exercised				Exercise				$ Value Realized				Exercised
1997			20,732			$	35.05			$	350,763				5.9	%
1998			52,405			$	50.78			$	1,710,853				21.0	%
1999			60,741			$	63.08			$	2,730,358				38.4	%
2000			45,367			$	47.67			$	1,340,075				51.4	%
2001			54,893			$	53.23			$	1,926,983				67.1	%
2002			81,798			$	51.69			$	2,744,823				90.6	%
Total			315,936							$	10,803,854

Zions Bancorporation March 21, 1997 Option Grant

		Grant Terms
Vesting		Vest 25% after each of first four years
Term		Expire after 6 years

Grant Summary
Grant Date		Granted				Grant Price				Exercised				Canceled
3/21/1997			456,100			$	31.00				405,084				12,091

Exercise by Year
						Weighted Average
						Market Value at								Cumulative %
Year		Number Exercised				Exercise				$ Value Realized				Exercised
1998			29,811			$	51.81			$	620,475				6.5	%
1999			50,801			$	63.63			$	1,657,426				17.7	%
2000			26,501			$	49.76			$	497,257				23.5	%
2001			76,100			$	55.11			$	1,834,524				40.2	%
2002			73,722			$	50.92			$	1,468,443				56.3	%
2003			148,149			$	41.72			$	1,588,215				88.8	%
Total			405,084							$	7,666,340

Zions Bancorporation April 24, 1998 Option Grant

		Grant Terms
Vesting		Vest 25% after each of first four years
Term		Expire after 6 years

Grant Summary
Grant Date		Granted				Grant Price				Exercised				Canceled
4/24/1998			624,725			$	48.50				461,382				63,518

Exercise by Year
						Weighted Average
						Market Value at								Cumulative %
Year		Number Exercised				Exercise				$ Value Realized				Exercised
1999			19,148			$	63.14			$	280,383				3.1	%
2000			5,311			$	55.64			$	37,907				3.9	%
2001			57,644			$	56.77			$	476,595				13.1	%
2002			35,598			$	55.07			$	234,027				18.8	%
2003			127,250			$	58.18			$	1,231,706				39.2	%
2004			216,431			$	57.73			$	1,998,545				73.9	%
Total			461,382							$	4,259,163

Zions Bancorporation April 23, 1999 Option Grant

		Grant Terms
Vesting		Vest 25% after each of first four years
Term		Expire after 6 years

Grant Summary
Grant Date		Granted				Grant Price				Exercised				Canceled
4/23/1999			746,750			$	69.13				28,750				589,553

Exercise by Year
						Weighted Average
						Market Value at								Cumulative %
Year		Number Exercised				Exercise				$ Value Realized				Exercised
2000			0				n/a			$	0				0.0	%
2001			0				n/a			$	0				0.0	%
2002			0				n/a			$	0				0.0	%
2003			0				n/a			$	0				0.0	%
2004			0				n/a			$	0				0.0	%
2005			28,750			$	69.99			$	24,817				3.9	%
Total			28,750							$	24,817

Zions Bancorporation March 31, 2000 Option Grant

		Grant Terms
Vesting		Vest one-third after each of first three years
Term		Expire after 7 years

Grant Summary
Grant Date		Granted				Grant Price				Exercised				Canceled
3/31/2000			947,500			$	41.63				780,805				45,358

Exercise by Year
						Weighted Average
						Market Value at								Cumulative %
Year		Number Exercised				Exercise				$ Value Realized				Exercised
2001			49,144			$	55.72			$	692,907				5.2	%
2002			81,606			$	55.74			$	1,151,915				13.8	%
2003			219,646			$	56.57			$	3,281,856				37.0	%
2004			161,142			$	61.62			$	3,222,213				54.0	%
2005			138,234			$	71.65			$	4,149,930				68.6	%
2006			45,527			$	80.64			$	1,776,266				73.4	%
2007			85,506			$	85.48			$	3,749,623				82.4	%
Total			780,805							$	18,024,710

Zions Bancorporation May 26, 2000 Option Grant

		Grant Terms
Vesting		Vest one-third after each of first three years
Term		Expire after 7 years

Grant Summary
Grant Date		Granted				Grant Price				Exercised				Canceled
5/26/2000			352,250			$	44.94				268,360				13,144

Exercise by Year
						Weighted Average
						Market Value at								Cumulative %
Year		Number Exercised				Exercise				$ Value Realized				Exercised
2001			13,339			$	56.72			$	157,129				3.8	%
2002			28,386			$	54.89			$	282,633				11.8	%
2003			83,642			$	56.81			$	993,150				35.6	%
2004			63,565			$	61.41			$	1,047,166				53.6	%
2005			31,682			$	70.19			$	800,086				62.6	%
2006			19,478			$	81.09			$	704,720				68.2	%
2007			28,268			$	84.64			$	1,122,446				76.2	%
Total			268,360							$	5,106,880

Zions Bancorporation April 20, 2001 Option Grant

		Grant Terms
Vesting		Vest one-third after each of first three years
Term		Expire after 7 years

Grant Summary
Grant Date		Granted				Grant Price				Exercised				Canceled
4/20/2001			1,473,270			$	54.35				904,481				89,167

Exercise by Year
						Weighted Average
						Market Value at								Cumulative %
Year		Number Exercised				Exercise				$ Value Realized				Exercised
2002			2,648			$	55.88			$	4,039				0.2	%
2003			90,827			$	59.72			$	487,349				6.3	%
2004			348,693			$	62.91			$	2,986,146				30.0	%
2005			245,027			$	70.57			$	3,973,886				46.6	%
2006			137,335			$	80.64			$	3,609,863				56.0	%
2007			79,751			$	85.40			$	2,482,824				61.4	%
2008
Total			904,481							$	13,544,107

Zions Bancorporation April 26, 2002 Option Grant

		Grant Terms
Vesting		Vest one-third after each of first three years
Term		Expire after 7 years

Grant Summary
Grant Date		Granted				Grant Price				Exercised				Canceled
4/26/2002			1,577,550			$	53.72				930,406				27,993

Exercise by Year
						Weighted Average
						Market Value at								Cumulative %
Year		Number Exercised				Exercise				$ Value Realized				Exercised
2003			64,510			$	60.43			$	432,709				4.1	%
2004			258,272			$	62.71			$	2,322,646				20.5	%
2005			370,094			$	70.90			$	6,356,924				43.9	%
2006			141,743			$	80.78			$	3,835,482				52.9	%
2007			95,787			$	85.38			$	3,032,792				59.0	%
2008
2009
Total			930,406							$	15,980,553

Zions Bancorporation January 22, 2003 Option Grant

		Grant Terms
Vesting		Vest one-third after each of first three years
Term		Expire after 7 years

Grant Summary
Grant Date		Granted				Grant Price				Exercised				Canceled
1/22/2003			1,463,450			$	42.00				887,536				17,062

Exercise by Year
						Weighted Average
						Market Value at								Cumulative %
Year		Number Exercised				Exercise				$ValueRealized				Exercised
2004			220,278			$	61.11			$	4,209,737				15.1	%
2005			294,362			$	69.59			$	8,121,154				35.2	%
2006			260,506			$	80.49			$	10,025,774				53.0	%
2007			112,390			$	84.86			$	4,816,855				60.6	%
2008
2009
2010
Total			887,536							$	27,173,519

Zions Bancorporation April 30, 2004 Option Grant

		Grant Terms
Vesting		Vest one-third after each of first three years
Term		Expire after 7 years

Grant Summary
Grant Date		Granted				Grant Price				Exercised				Canceled
4/30/2004			1,699,750			$	56.59				506,255				10,484

Exercise by Year
						Weighted Average
						Market Value at								Cumulative %
Year		Number Exercised				Exercise				$ Value Realized				Exercised
2005			192,083			$	71.57			$	2,878,023				11.3	%
2006			230,066			$	81.21			$	5,665,296				24.8	%
2007			84,106			$	84.97			$	2,386,763				29.8	%
2008
2009
2010
2011
Total			506,255							$	10,930,083

Zions Bancorporation May 6, 2005 Option Grant

		Grant Terms
Vesting		Vest one-third after each of first three years
Term		Expire after 7 years

Grant Summary
Grant Date		Granted				Grant Price				Exercised				Canceled
5/6/2005			741,941			$	70.79				44,537				2,101

Exercise by Year
						Weighted Average
						Market Value at								Cumulative %
Year		Number Exercised				Exercise				$ Value Realized				Exercised
2006			17,207			$	81.96			$	192,144				2.3	%
2007			27,330			$	85.48			$	401,382				6.0	%
2008
2009
2010
2011
2012
Total			44,537							$	593,525

Zions Bancorporation May 1, 2006 Option Grant

		Grant Terms
Vesting		Vest one-third after each of first three years
Term		Expire after 7 years

Grant Summary
Grant Date		Granted				Grant Price				Exercised				Canceled
5/1/2006			936,024			$	81.15				0				0

Exercise by Year
						Weighted Average
						Market Value at								Cumulative %
Year		Number Exercised				Exercise				$ Value Realized				Exercised
2007
2008
2009
2010
2011
2012
2013
Total			0							$	0

VALUATION OF RECENT STOCK OPTION GRANTS

     Prior to January 1, 2006, we accounted for our share-based compensation, including our stock options, under Accounting Principles Board Opinion No. 25 (“APB 25”), Accounting for Stock Issued to Employees, and related Interpretations, as permitted by SFAS No. 123, Accounting for Stock-Based Compensation. Accordingly, we did not record any compensation expense with respect to stock options granted prior to 2006, as the exercise price of the options was equal to the quoted market price of our common stock on the date of grant.

     Effective January 1, 2006, we adopted SFAS No. 123R, Share-Based Payment, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of income based on their fair values. This accounting utilizes a “modified grant-date” approach in which the fair value of an equity award is estimated on the grant date without regard to service or performance vesting conditions. We adopted SFAS No. 123R using the “modified prospective” transition method. Under this transition method, compensation expense is recognized beginning January 1, 2006 based on the requirements of SFAS No. 123R for all share-based payments granted after December 31, 2005, and based on the requirements of SFAS No. 123 for all awards granted to employees prior to January 1, 2006 that remain unvested as of that date.

     SFAS No. 123R generally recognizes three approaches to stock option valuation:

	•		a closed-form model such as the Black-Scholes option-pricing formula;
	•		the binomial (lattice) method; and
	•		market-based valuation.

     We have used the Black-Scholes method to estimate the value of stock options and the pro forma share-based compensation. We believe that the Black-Scholes method is currently the most widely-used method of stock option valuation, and we have determined that it is the most appropriate method for our financial reporting purposes, pending the development of an acceptable market-based approach. Our ESOARS™ are designed to provide a basis for market-based valuation of stock options. We believe a market-based approach, such as that intended to be demonstrated by this offering of ESOARS™, may ultimately provide a viable, if not superior, alternative to the Black-Scholes and binomial methods for valuing stock options.

     The Black-Scholes model estimates the value of a stock option using various assumptions. The more significant assumptions used to apply this model include:

	•		a weighted average risk-free interest rate;
	•		a weighted average expected life;
	•		an expected dividend yield; and
	•		an expected volatility.

     Use of these assumptions is subjective and requires judgment. Using the Black-Scholes model, in 2006, we recorded compensation expense of $17,542,000 for stock options and reported in the footnotes to our financial statements that the pro forma share-based compensation expense of our stock options granted in 2005 and 2004, for all stock options awarded during those years, net of related tax effects, is as follows:

Year of Stock Options Grant		Pro Forma Share-Based Compensation Expense
2005		$	9,793,000
2004		$	12,503,000

     The following table summarizes the weighted average of fair value and the significant assumptions used in applying the Black-Scholes option-pricing model to compute the fair value of share-based compensation expense for our stock options granted in the years indicated:

		2006				2005				2004
Weighted average of fair value for options granted		$	15.02			$	15.33			$	11.85
Weighted average assumption used:
Expected dividend yield			2.0	%			2.0	%			2.0	%
Expected volatility			18.0	%			25.0	%			26.8	%
Risk-free interest rate			4.95	%			3.95	%			3.11	%
Expected life (in years)			4.1				4.1				3.8

     Presented under the section “Historical Stock Option Exercise Data” in this prospectus supplement is information regarding specified historical option grants. In particular, grant and exercise information regarding only some of our large annual grants is presented in that section. In contrast, the information presented above in this section and reported in our financial statements pertains to all stock options granted during each year represented.

     The following table is included for reference only and contains the weighted average grant price (or strike or exercise price) for all stock options granted in the respective years:

Year		Total Options Granted				Weighted Average Grant Price
2006			979,274			$	81.14
2005			912,905			$	71.37
2004			2,279,621			$	57.28

     The Black-Scholes fair values shown above do not factor in the possibility that not all granted options will be exercised due to forfeiture, cancellation, termination, failure to exercise or other factors. Investors in ESOARS™ should consider both the valuation of the reference options granted as well as the number of options that will be exercised by our employees after vesting, because payments, if any, to holders of ESOARS™ are determined not only by our stock price movements, which the option valuation attempts to capture, but also by the actual exercise of the reference options by employees.

     Under SFAS No. 123R, we are also required to estimate the pre-vesting forfeiture rate of our granted options in order to estimate our share-based compensation expense. The pre-vesting forfeiture rate is used to adjust the option grant value for the possibility that prior to vesting some options will not be exercised when an employee’s employment is terminated and the options are canceled as a result. We then adjust this estimate over the vesting period to reconcile the original estimate to our actual experience. The effect of forfeiture of reference options prior to vesting on ESOARS™ is intended to be eliminated by adjusting payments in the vesting period for known pre-vesting forfeitures, by making an additional payment, if necessary, for payments made relating to the vesting period and by adjusting upward the payments, if any, made during the post-vesting period. See “Description of Our ESOARS™ — Calculation of Payments.”

     For additional information regarding the calculation of our share-based compensation expense using the Black-Scholes method, see the section entitled “Share-Based Compensation” on pages 38 and 39 of the Annual Report on Form 10-K for our fiscal year ended December 31, 2006, and Note 17 of the Notes to Consolidated Financial Statements also included in that Annual Report on Form 10-K.

     There are many approaches to valuing stock options recognized by financial analysts in addition to those described above. Each method has its perceived strengths and weaknesses, and most rely on subjective judgments and the application of various assumptions that may or may not reflect the actual performance of stock options and relevant markets. Prospective investors are urged to make their own judgments and determinations as to the future performance of the reference options and the ESOARS™ in deciding whether to bid for the ESOARS™ and, if so, at what price.

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

     The following is a summary of the material United States federal income tax consequences as of the date hereof expected to be applicable to the purchase, ownership and disposition of our ESOARS™ by U.S. Holders (as defined below), other than those in special situations or subject to special U.S. federal income tax rules. Except to the extent specified herein, any discussion herein of matters of U.S. federal income tax law or legal conclusions under U.S. federal income tax law constitutes the opinion of our counsel, Mayer, Brown, Rowe & Maw LLP.

     Except where noted herein, this discussion addresses only ESOARS™ held as capital assets within the meaning of section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). Under section 1221 of the Code, a capital asset is, generally speaking, property that you hold for investment purposes. In addition, as noted above, this discussion does not address consequences that may apply to an investment in our ESOARS™ by investors in special situations or that are subject to special U.S. federal income tax rules. In particular, special U.S. federal income tax considerations may apply to an investment in our ESOARS™ by investors that are dealers or traders in securities, banks, tax-exempt investors, insurance companies, partnerships and other pass-through entities, non-resident alien individuals, non-U.S. corporations, other non-U.S. investors, and investors that have a functional currency other than the U.S. dollar. In addition, this summary does not describe any U.S. tax consequences of the purchase, ownership or disposition of our ESOARS™ arising under the laws of any state, locality or taxing jurisdiction other than the United States federal government. In general, this summary assumes that a holder acquires our ESOARS™ at original issuance and does not hold our ESOARS™ as part of a hedge, straddle, conversion transaction within the meaning of section 1258 of the Code, or other integrated investment constituting of one or more ESOARS™ Units and one or more other positions.

     This summary is based on the United States tax laws, regulations, rulings, judicial and administrative decisions, and other authorities in effect or available on the date of this prospectus supplement. All of the foregoing are subject to change, which change may apply retroactively and could affect the continued validity of this summary.

     Prospective purchasers of our ESOARS™ are urged to consult their own tax advisors as to U.S. federal income tax consequences in light of their particular situations of the purchase, ownership and disposition of our ESOARS™, including the possible application of state, local, non-U.S. or other tax laws.

     As used herein, the term “U.S. Holder” means a beneficial owner of our ESOARS™ who is, or is treated for U.S. federal income tax purposes as, a citizen or resident of the United States, a corporation or other entity created in or organized under the laws of the United States, or an estate or trust (other than a “foreign estate” or a “foreign trust,” each as defined in the Code). If a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of our ESOARS™, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. Partnerships considering the purchase of our ESOARS™ are urged to consult their own tax advisors regarding the potential consequences to their partners of an investment in our ESOARS™.

U.S. Federal Income Tax Characterization of Our ESOARS™

     There are no cases, Treasury regulations, revenue rulings or other binding authorities that directly address the U.S. federal income tax characterization of our ESOARS™ or of securities with terms substantially the same as those of our ESOARS™. Accordingly, our counsel, Mayer, Brown, Rowe & Maw LLP, is unable to render an opinion as to that characterization or as to the proper method of reporting income and loss with respect to our ESOARS™. In the absence of guidance, we intend to file information returns with the Internal Revenue Service reporting income with respect to our ESOARS™ settled in cash under a method analogous to the method applicable to income with respect to cash-settled call options and to report any income with respect to ESOARS™ settled for stock under a method analogous to the method for stock settled stock appreciation rights. However, the proper U.S. tax characterization of our ESOARS™ is uncertain, and therefore it is uncertain whether such method of reporting payments on our ESOARS™ would be proper. Other federal income tax characterizations of and methods of reporting payments on our ESOARS™ are possible, which if they applied could materially adversely affect the amount, timing and character of income or loss that is properly reportable with respect to our ESOARS™ as compared to the method reported by us. In general, a U.S. taxpayer may rely only on formal written opinions meeting specific regulatory requirements in order to avoid imposition of U.S. federal tax penalties. This summary does not meet those requirements. Therefore, if an alternative treatment of our ESOARS™ applied, a U.S. Holder could be subject to U.S. federal tax penalties unless the holder obtained appropriate opinions from its own tax advisor and/or met certain other requirements.

     Because of the uncertainty of treatment of income and loss in respect our ESOARS™, prospective investors in our ESOARS™ are urged to consult their own tax advisors as to the proper classification and reporting of income and loss with respect to our ESOARS™ for U.S. federal income tax purposes.

Tax Treatment of U.S. Holders Under Our Proposed Tax Treatment for Holders

     Under the method of reporting income that we will adopt for our ESOARS™ that is analogous to the method applicable to payments with respect to cash-settled call options or stock settled stock appreciation rights, a U.S. Holder of our ESOARS™ would treat our ESOARS™ as a series of cash-settled call options or stock settled stock appreciation rights exercisable by the holder for a portion of the number of shares of our common stock as relate to the reference options, but which call options or stock settled stock appreciation rights are each exercisable for a particular share only upon the exercise by the relevant employee of the related stock option. Thus, each cash-settled call option or stock settled stock appreciation rights embedded in an ESOARS™ Unit would be treated in a manner similar to a “European” style option that is exercisable only at a specific time.

     Under this method, a U.S. Holder should be required to allocate the amount paid for our ESOARS™ as option premium paid with respect to each stock option represented by our ESOARS™. Because all of the reference options have the same exercise price and term, if we are required to take a position as to the appropriate allocation of a U.S. Holder’s purchase price, we intend to take the position that the holder’s purchase price should be allocated ratably to each reference option represented by the holder’s ESOARS™ on the basis of the number of shares of our common stock represented by such reference option. Under this method, on receipt of a payment of cash or shares of our common stock with respect to our ESOARS™, a U.S. Holder should recognize gain equal to the amount of the payment or fair market value of shares issued in settlement of the ESOARS™ less the portion of the purchase price paid for our ESOARS™ that was allocated to the related stock option that was deemed to have been exercised. In addition, the U.S. Holder generally should recognize a loss at the termination of the U.S. Holder’s ESOARS™ in the amount of any remaining purchase price attributable to stock options represented by our ESOARS™ that were not deemed exercised during the term of the ESOARS™.

     Although the character of gain recognized with respect to a cash-settled call option on stock would normally be treated as capital gain, we expect it is more appropriate and intend to file information returns with the Internal Revenue Service reporting income and loss realized by a U.S. Holder with respect to our ESOARS™ as ordinary income and loss.

Sale, Exchange or Other Disposition of Our ESOARS™

     Under the method of reporting payments on our ESOARS™ analogous to the method applicable to payments with respect to cash-settled call options, a U.S. Holder would recognize gain or loss on the sale, exchange or other taxable disposition of our ESOARS™ in an amount equal to the difference between the amount realized on the disposition and the U.S. Holder’s remaining tax basis in the ESOARS™ at the time of disposition (i.e., the portion of the U.S. Holder’s initial tax basis that was allocable to the stock options that remain unexercised at the time of the disposition). Such gain or loss should be capital gain or capital loss (and should be long-term capital gain or capital loss if the ESOARS™ were held for more than one year at the time of the disposition).

Alternative U.S. Federal Tax Characterizations of ESOARS™

     As stated above, our ESOARS™ may be properly characterized, and income and loss with respect to ESOARS™ may be properly reported, for U.S. federal income tax purposes under a different method. For example, income and loss with respect to our ESOARS™ may be properly reported under a method analogous to the method applicable to income and loss with respect to cash-settled forward contracts. Under such a method, the tax consequences for a U.S. Holder should generally be similar to the treatment of our ESOARS™ under the cash-settled call option method described above, although neither the proper recovery of the amount paid for our ESOARS™ nor the character of income or loss under this characterization is clear.

     Although an argument could be made that our ESOARS™ should be treated as debt for U.S. federal tax purposes, we do not believe that ESOARS™ should be so treated because amounts to be paid with respect to our ESOARS™ are entirely contingent.

     Similarly, we do not believe that our ESOARS™ should be treated as notional principal contracts (i.e., swaps) because they do not provide for periodic payments based on an index and a single notional amount. However, the Internal Revenue Service could assert that position.

     Finally, in light of the absence of relevant authorities, it may be appropriate to report income and deductions with respect to our ESOARS™ under general rules for financial instruments for which applicable Treasury regulations do not prescribe specific rules. If so treated, a U.S. Holder may be entitled to use a “wait-and-see” approach to recognition of income. That is, the U.S. Holder should report income when payments are made on our ESOARS™, and probably only after the payments exceed the amount paid for our ESOARS™.

     Other potential characterizations of our ESOARS™ and methods of reporting income and loss with respect to our ESOARS™ are possible. U.S. Holders are urged to consult their tax advisors regarding the potential application of these and other alternative methods of reporting income and loss with respect to our ESOARS™.

United States Taxation of Non-U.S. Holders

     As used herein, a “Non-U.S. Holder” is a beneficial owner of ESOARS™ that is neither a U.S. Holder nor a partnership, an entity treated for U.S. federal tax purposes as a partnership, or an entity organized in or under the laws of the United States, any State thereof or the District of Columbia.

     It is not clear whether income or any payments with respect to ESOARS™ would be treated as fixed or determinable, annual or periodical gains, profits or income of the kind that is subject to U.S. withholding tax. In the absence of clear authority, we intend to withhold U.S. tax at a 30 percent rate from payments, including stock payments, made on our ESOARS™ to a Non-U.S. Holder, unless

	•		the Non-U.S. Holder is eligible for benefits of an income tax treaty providing for an exemption from U.S. tax on such income and delivers to us or our paying agent a properly completed Internal Revenue Service Form W-8BEN establishing such exemption, or
	•		the income with respect to ESOARS™ is effectively connected with the conduct of a trade or business in the United States by the Non-U.S. Holder and the Non-U.S. Holder delivers to us or our paying agent a properly completed Internal Revenue Service Form W-8ECI certifying to such treatment.

Information Reporting and Backup Withholding

     Generally, payments made on our ESOARS™ or stock issued in settlement of our ESOARS™ to a U.S. Holder, and the proceeds of a sale or other disposition of our ESOARS™ by a U.S. Holder, will be subject to information reporting requirements unless the U.S. Holder is a corporation or other “exempt recipient.” In addition, payments to U.S. Holders may be subject to backup withholding (currently at a rate of 28%) unless the U.S. Holder provides to us or our paying agent an Internal Revenue Service Form W-9 or otherwise establishes an exemption.

     Information reporting requirements and backup withholding generally will not apply to payments made to a Non-U.S. Holder, provided that the Non-U.S. Holder certifies to its non-U.S. status (generally by providing to us or our paying agent a properly completed Internal Revenue Service Form W-8BEN) or otherwise establishes an exemption.

     We strongly urge you to consult your own tax advisor with respect to all aspects of the United States federal, state, local and foreign tax treatment of the purchase, ownership and disposition of our ESOARS™.

CERTAIN ERISA CONSIDERATIONS

     No ESOARS™ Unit may be purchased by or transferred to any “employee benefit plan” within the meaning of Section 3(3) of ERISA (whether or not subject to ERISA, and including, without limitation, foreign or government plans) or by any “plan” described in Section 4975(e)(1) of the Code, or any entity whose underlying assets include plan assets of any of the foregoing (each, a “Benefit Plan Investor”). Any purported purchase or transfer of our ESOARS™ in violation of the foregoing restrictions shall be null and void ab initio. Each bidder who purchases the ESOARS™ will be deemed to have represented, warranted and acknowledged to us to such effect. No ESOARS™ Units may be transferred to a Benefit Plan Investor or an entity using Benefit Plan Investor assets. Each investor in an ESOARS™ Unit will be deemed to represent, warrant and covenant that it will not sell, pledge or otherwise transfer such security in violation of the foregoing.

LEGAL INVESTMENT CONSIDERATIONS

     Institutions whose investment activities are subject to legal investment laws and regulations or to review by certain regulatory authorities may be subject to restrictions on investments in our ESOARS™. Any such institution should consult its legal advisors in determining whether and to what extent there may be restrictions on its ability to invest in our ESOARS™. Without limiting the foregoing, any financial institution that is subject to the jurisdiction of the Comptroller of Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the National Credit Union Administration, any state insurance commission, or any other federal or state agencies with similar authority should review any applicable rules, guidelines and regulations prior to purchasing our ESOARS™.

     We do not make any representation as to the proper characterization of the ESOARS™ for legal investment or other purposes, or as to the ability of particular investors to purchase our ESOARS™ for legal investment or other purposes, or as to the ability of particular investors to purchase our ESOARS™ under applicable investment restrictions. The uncertainties described above (and any unfavorable future determinations concerning legal investment or financial institution regulatory characteristics of our ESOARS™) may affect the liquidity of our ESOARS™. Accordingly, all institutions whose activities are subject to legal investment laws and regulations, regulatory capital requirements or review by regulatory authorities should consult their own legal advisors in determining whether and to what extent our ESOARS™ are subject to investment, capital or other restrictions.

LEGAL OWNERSHIP AND BOOK-ENTRY ISSUANCE

     We will issue the ESOARS™ in book-entry form only. This means that ESOARS™ will be represented by one or more fully-registered global certificates representing the entire issuance of ESOARS™. The ESOARS™ will be deposited with, or on behalf of, The Depository Trust Company, which we refer to as “DTC” or the “depositary,” and will be registered in the name of Cede & Co., a nominee of DTC.

     Cede & Co. will be the only registered holder of the ESOARS™. Consequently, because the ESOARS™ will be issued only in global form, we will recognize only DTC as the holder of the ESOARS™, and we will make all payments on the ESOARS™ to DTC. DTC will pass along the payments it receives to its participants, which in turn will pass the payments along to their customers who are the beneficial owners. DTC and its participants do so under agreements they have made with one another or with their customers; they are not obligated to do so under the terms of the ESOARS™. You will not own ESOARS™ directly. Instead, you will own beneficial interests in a global security, through a bank, broker or other financial institution that participates in DTC’s book-entry system or holds an interest through a participant.

     A global security will not be transferred to or registered in the name of anyone other than DTC or its nominee, unless special termination situations arise. We describe those situations below under “— Special Situations When a Global Security Will Be Terminated.” As a result of these arrangements, the depositary, or its nominee, will be the sole registered owner and holder of all ESOARS™, and holders will be permitted to own only beneficial interests in a global security. Beneficial interests must be held by means of an account with a broker, bank or other financial institution that in turn has an account with the depositary or with another institution that does. Thus, you will not be a holder of the security, but only an indirect owner of a beneficial interest in the global security. In the event that termination of the global security occurs, we may issue the ESOARS™ through another book-entry clearing system or decide that the ESOARS™ may no longer be held through any book-entry clearing system.

Special Considerations for Global Securities

     As an indirect owner, a holder’s rights relating to a global security will be governed by the account rules of the depositary, those of the investor’s financial institution (e.g., Euroclear and Clearstream), as well as general laws relating to securities transfers. We do not recognize this type of investor or any intermediary as a holder of securities and instead deal only with the depositary that holds the global security.

     You should be aware of the following:

	•		you cannot cause the ESOARS™ to be registered in your own name and cannot obtain non-global certificates for your interest in the ESOARS™, except in the special situations we describe below;
	•		you will be an indirect holder and must look to your own bank or broker for payments on the ESOARS™ and protection of your legal rights relating to the ESOARS™, as we describe above in this section;
	•		you may not be able to sell interests in the ESOARS™ to some insurance companies and other institutions that are required by law to own their securities in non-book-entry form;
	•		you may not be able to pledge your interest in a global security in circumstances where certificates representing the securities must be delivered to the lender or other beneficiary of the pledge in order for the pledge to be effective;
	•		the depositary’s policies and those of any participant in the depositary’s system or other intermediary (e.g., Euroclear or Clearstream) through which that institution holds security interests, which may change from time to time, will govern payments, transfers, exchanges and other matters relating to your interest in a global security. We will have no responsibility for any aspect of the depositary’s policies or actions or records of ownership interests in a global security. We also do not supervise the depositary in any way;
	•		the depositary will require that those who purchase and sell interests in a global security within its book-entry system use immediately-available funds, and your broker or bank may require you to do so as well; and
	•		financial institutions that participate in DTC’s book-entry system and through which you hold your interest in a global security (including Euroclear and Clearstream) may also have their own policies affecting payments, notices and other matters relating to securities. For example, if you hold an interest in a global security through Euroclear or Clearstream, Euroclear or Clearstream, as applicable, will require those who purchase and sell interests in that security through them to use immediately-available funds and comply with other policies and procedures, including deadlines for giving instructions as to transactions that are to be effected on a particular day. There may be more than one financial intermediary in the chain of ownership for an investor. We do not monitor, and are not responsible for, the policies or actions of any of those intermediaries.