-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NIAMWOl4Kuanp98QgF6/I7T65hxLj6X/HApGkRvxvDkk0c1x1syKvuJBQ7Bg59yc AGxvNYIYEaoHW4SNYd2CFg== 0000950117-04-000935.txt : 20040310 0000950117-04-000935.hdr.sgml : 20040310 20040310162029 ACCESSION NUMBER: 0000950117-04-000935 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 16 CONFORMED PERIOD OF REPORT: 20031231 FILED AS OF DATE: 20040310 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST TENNESSEE NATIONAL CORP CENTRAL INDEX KEY: 0000036966 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 620803242 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15185 FILM NUMBER: 04660472 BUSINESS ADDRESS: STREET 1: 165 MADISON AVE CITY: MEMPHIS STATE: TN ZIP: 38103 BUSINESS PHONE: 9015234638 MAIL ADDRESS: STREET 1: 165 MADISON AVE CITY: MEMPHIS STATE: TN ZIP: 38103 FORMER COMPANY: FORMER CONFORMED NAME: FIRST TENNESSEE BANKS INC DATE OF NAME CHANGE: 19600201 10-K 1 a37190.txt FIRST TENNESSEE NATIONAL CORPORATION UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2003 - or - [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition period from __________ to__________ Commission File Number 000-4491 FIRST TENNESSEE NATIONAL CORPORATION (Exact name of registrant as specified in its charter) TENNESSEE 62-0803242 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 165 Madison Avenue, Memphis, Tennessee 38103 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including Area Code: 901-523-4444 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Exchange on which Registered ------------------- ------------------------------------ $0.625 Par Value Common Capital Stock New York Stock Exchange, Inc. (including rights attached thereto) Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] YES [ ] NO Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). [X] YES [ ] NO At June 30, 2003, the aggregate market value of the voting and non-voting common equity of the registrant held by non-affiliates of the registrant was approximately $5.4 billion. At February 27, 2004, the registrant had 124,077,101 shares of common stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE: 1. Portions of Proxy Statement furnished to shareholders in connection with Annual Meeting of Shareholders scheduled for 4/20/04 -- Parts I, II, III and IV. PART I ITEM 1 BUSINESS General. First Tennessee National Corporation (the "Corporation") is a Tennessee corporation incorporated in 1968. The Corporation is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, and is a financial holding company under the provisions of the Gramm-Leach-Bliley Act. At December 31, 2003, the Corporation had total assets of $24.5 billion and ranked 2nd in terms of total assets among Tennessee-headquartered bank holding companies and ranked 33rd nationally. Through its principal subsidiary, First Tennessee Bank National Association (the "Bank"), and its other banking-related subsidiaries, the Corporation provides diversified financial services though five business segments, First Tennessee Banking Group, First Horizon, FTN Financial, Transaction Processing and Corporate, which are described in more detail in the response to Item 7 of Part II hereof and Note 22 to the Consolidated Financial Statements contained in an Appendix to the Corporation's Proxy Statement furnished to shareholders in connection with the Annual Meeting of Shareholders scheduled for April 20, 2004 (herein referred to, including such Appendix, as the "2004 Proxy Statement"), which note is incorporated herein by reference. During 2003 approximately 67% of revenues were provided by fee income and approximately 33% of revenues were provided by net interest income. As a financial holding company, the Corporation coordinates the financial resources of the consolidated enterprise and maintains systems of financial, operational and administrative control intended to coordinate selected policies and activities, including as described in Item 9A of Part II hereto. The Bank is a national banking association with principal offices in Memphis, Tennessee. It received its charter in 1864. During 2003 through its various business segments, including consolidated subsidiaries, the Bank generated gross revenue (net interest income plus noninterest income) of approximately $2.4 billion and contributed substantially all of consolidated net income from continuing operations. At December 31, 2003, the Bank had $24.3 billion in total assets, $15.8 billion in total deposits, and $13.9 billion in net loans. Among Tennessee headquartered banks at September 30, 2003, the Bank ranked 2nd in terms of total assets and ranked 1st in Tennessee deposit market share. Nationally, it ranked 32nd among banks in terms of total assets as of September 30, 2003. On December 31, 2003, the Bank had 478 banking locations (179 financial centers and 299 off-premises ATMs) in 21 Tennessee counties, including all of the major metropolitan areas of the state, 12 banking locations (6 financial centers and 6 off-premises ATMs) in Mississippi, one off premises ATM in Arkansas, and one financial center in Virginia. At December 31, 2003, First Horizon Home Loan Corporation, a subsidiary of the Bank, and its affiliates provided mortgage banking services through 301 office, including satellite branches, in 39 states and ranked in the top 15 nationally in retail mortgage loan originations and mortgage loan servicing, as reported by Inside Mortgage Finance. FTN Financial Group, at December 31, 2003, had 14 offices in 11 states, and FTN Financial Capital Markets, a division of the Bank, ranked as one of the leading underwriters of U.S. agency debt. The Corporation provides the following services through its subsidiaries: o general banking services for consumers, businesses, financial institutions, and governments 1 o mortgage banking services o through FTN Financial-sales and underwriting of bank-eligible securities and securities eligible for underwriting by financial subsidiaries, mortgage loans and advisory services, and equity research. o transaction processing - credit card merchant processing, nationwide check clearing services, and remittance processing o trust, fiduciary, and agency services o credit card products o discount brokerage and brokerage o venture capital o equipment finance o investment and financial advisory services, including investment advisor to First Funds, a family of mutual funds o mutual fund sales as agent o retail and commercial insurance sales as agent o private mortgage reinsurance o consumer lending An element of the Corporation's business strategy is to seek acquisitions and consider divestitures that would enhance long-term shareholder value. The Corporation has a department charged with this responsibility which is constantly reviewing and developing opportunities to achieve this element of the Corporation's strategy. Acquisitions and divestitures which closed during the past three years are described in Note 2 to the Consolidated Financial Statements. All of the Corporation's subsidiaries are listed in Exhibit 21. The Bank has filed notice with the Comptroller of the Currency ("Comptroller") as a government securities broker/dealer. The FTN Financial Capital Markets division of the Bank is registered with the Securities and Exchange Commission ("SEC") as a municipal securities dealer. The Bank is supervised and regulated as described below. Highland Capital Management Corp., Martin and Company, Inc. and First Tennessee Advisory Services, a separately identifiable department of the Bank, are registered with the SEC as investment advisers. First Tennessee Brokerage, Inc. is registered as an investment adviser in all states where it conducts advisory business for which registration is required. Hickory Venture Capital Corporation is licensed as a Small Business Investment Company. First Tennessee Brokerage, Inc., FTN Financial Securities Corporation and FTN Midwest Research Securities Corporation are registered as broker-dealers with the SEC and all states where they conduct business for which registration is required. First Horizon Home Loan Corporation is licensed as a mortgage lender (or exempt from licensing) in all states where it does business and is regulated by the Comptroller. First Tennessee Insurance Services ("FTIS"), a department of the Bank, and First Horizon Insurance Services, Inc. ("FHIS") are licensed as insurance agencies in all states where they do business for which licensing is required. FT Reinsurance Company is licensed by the state of South Carolina as a monoline insurance company. FT Insurance Corporation is licensed as an insurance agency in Alabama. Synaxis, Inc.'s subsidiaries, which include Polk & Sullivan Group, Inc., Mann, Smith & Cummings, Inc., Synaxis Risk Services, Inc., Merritt & McKenzie, Inc., Frost Specialty Risk, Inc., and Van Meter Insurance, Inc., are licensed as insurance agencies in all states where they do business for which licensing is required. FTN Financial Securities Corporation, FTN Midwest Research Securities Corporation, FHIS and all of the subsidiaries listed in the preceding sentence are financial subsidiaries under the Gramm-Leach-Bliley Act. First Tennessee Brokerage, Inc. is licensed as an insurance agency in the states where it does business for which licensing is required for the sale of annuity products. 2 Expenditures for research and development activities were not material in any of the last three fiscal years. Neither the Corporation nor any of its significant subsidiaries is dependent upon a single customer or very few customers. At December 31, 2003, the Corporation and its subsidiaries had 11,494 full-time-equivalent employees, not including contract labor for certain services. For additional information on the business of the Corporation, refer to the Management's Discussion and Analysis and Glossary sections contained in the 2004 Proxy Statement, which sections are incorporated herein by reference. The Corporation's Internet address is www.firsttennessee.com. The Corporation makes available free of charge on its Internet website its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments thereto as soon as reasonably practicable after the Corporation files such material with, or furnishes such material to, the Securities and Exchange Commission, as applicable. Corporate Governance and NYSE Disclosures. The Corporation's Board of Directors adopted Corporate Governance Guidelines, which are available on the Corporation's website, along with the charters of the Board's Audit Committee, Nominating and Corporate Governance Committee, and Compensation (previously named Human Resources) Committee. To access the information at the website address (www.firsttennessee.com), click on "Company Information," then "Investor Relations," and then "Corporate Governance." Written copies of any of the documents are available to shareholders upon request to the Corporate Secretary. The Corporation's Board of Directors has also adopted a Code of Business Conduct and Ethics, which includes a number of policies and guidelines that have been in place over the years. The Code is available on the Corporation's website and written copies will be provided to shareholders upon request to the Corporate Secretary. Any waiver of this Code for an executive officer or director will be promptly disclosed to shareholders by posting such information on the Corporation's website. See Item 10 of Part III below for information on the Corporation's Code of Ethics for Senior Financial Officers. The Corporation's Chief Executive Officer will be required to certify annually to the New York Stock Exchange ("NYSE") that the Chief Executive Officer is unaware of any violation by the Corporation of NYSE corporate governance listing standards, and this certification will be disclosed annually (commencing in 2005) in the Corporation's proxy statement or Form 10-K or by another method authorized by the NYSE. Supervision and Regulation. The following summary sets forth certain of the material elements of the regulatory framework applicable to bank holding companies and financial holding companies and their subsidiaries and to companies engaged in securities and insurance activities and provides certain specific information about the Corporation. The bank regulatory framework is intended primarily for the protection of depositors and the Federal Deposit Insurance Funds and not for the protection of security holders. In addition, certain 3 activities of the Corporation and its subsidiaries are subject to various securities and insurance laws and are regulated by the Securities and Exchange Commission and the state insurance departments of the states in which they operate. To the extent that the following information describes statutory and regulatory provisions, it is qualified in its entirety by express reference to each of the particular statutory and regulatory provisions. A change in applicable statutes, regulations or regulatory policy may have a material effect on the business of the Corporation. General The Corporation is a bank holding company and financial holding company within the meaning of the Bank Holding Company Act of 1956, as amended (the "BHCA") and is registered with the Board of Governors of the Federal Reserve System (the "Federal Reserve"). The Corporation is subject to the regulation and supervision of and examination by the Federal Reserve under the BHCA. The Corporation is required to file with the Federal Reserve annual reports and such additional information as the Federal Reserve may require pursuant to the BHCA. Under the BHCA, prior to March 13, 2000, bank holding companies could not in general directly or indirectly acquire the ownership or control of more than 5% of the voting shares or substantially all of the assets of any company, including a bank, without the prior approval of the Federal Reserve, and a bank holding company and its subsidiaries were generally limited to engaging in banking and activities found by the Federal Reserve to be so closely related to banking as to be a proper incident thereto. Since March 13, 2000, eligible bank holding companies that elect to become financial holding companies may affiliate with securities firms and insurance companies and engage in activities that are "financial in nature" generally without the prior approval of the Federal Reserve. See "Gramm-Leach-Bliley Act" below. In addition, the BHCA permits the Federal Reserve to approve an application by a bank holding company to acquire a bank located outside the acquirer's principal state of operations without regard to whether the transaction is prohibited under state law. See "Interstate Banking and Branching Legislation." The Tennessee Bank Structure Act of 1974, among other things, prohibits (subject to certain exceptions) a bank holding company from acquiring a bank for which the home state is Tennessee (a "Tennessee bank") if, upon consummation, the company would directly or indirectly control 30% or more of the total deposits in insured depository institutions in Tennessee. As of June 30, 2003, the Corporation estimates that it held approximately 18% of such deposits. Subject to certain exceptions, the Tennessee Bank Structure Act prohibits a bank holding company from acquiring a bank in Tennessee which has been in operation for less than five years. Tennessee law permits a Tennessee bank to establish branches in any county in Tennessee. See also "-- Interstate Banking and Branching Legislation" below. The Bank is a national banking association subject to regulation, examination and supervision by the Comptroller as its primary federal regulator. In addition, the Bank is insured by, and subject to regulation by, the Federal Deposit Insurance Corporation (the "FDIC"). The Bank is also subject to various requirements and restrictions under federal and state law, including requirements to maintain reserves against deposits, restrictions on the types and amounts of loans that may be granted and the interest that may be charged thereon and limitations on the types of investments that may be made, activities that may be engaged in, and types of services that may be offered. Various consumer laws and regulations also affect the operations of the Bank. In addition to the impact of regulation, commercial banks are affected significantly by the actions of the Federal Reserve as it attempts to control the money supply and credit availability in order to influence the economy. 4 Payment of Dividends The Corporation is a legal entity separate and distinct from its banking and other subsidiaries. The principal source of cash flow of the Corporation, including cash flow to pay dividends on its stock or principal (premium, if any) and interest on debt securities, is dividends from the Bank. There are statutory and regulatory limitations on the payment of dividends by the Bank to the Corporation, as well as by the Corporation to its shareholders. As a national bank, the Bank is required by federal law to obtain the prior approval of the Comptroller for the payment of dividends if the total of all dividends declared by the board of directors of the Bank in any year will exceed the total of (i) its net profits (as defined and interpreted by regulation) for that year plus (ii) the retained net profits (as defined and interpreted by regulation) for the preceding two years, less any required transfers to surplus. A national bank also can pay dividends only to the extent that retained net profits (including the portion transferred to surplus) exceed bad debts (as defined by regulation). If, in the opinion of the applicable federal bank regulatory authority, a depository institution or a holding company is engaged in or is about to engage in an unsafe or unsound practice (which, depending on the financial condition of the depository institution or holding company, could include the payment of dividends), such authority may require that such institution or holding company cease and desist from such practice. The federal banking agencies have indicated that paying dividends that deplete a depository institution's or holding company's capital base to an inadequate level would be such an unsafe and unsound banking practice. Moreover, the Federal Reserve, the Comptroller and the FDIC have issued policy statements which provide that bank holding companies and insured depository institutions generally should only pay dividends out of current operating earnings. In addition, under the Federal Deposit Insurance Act ("FDIA"), an FDIC-insured depository institution may not make any capital distributions (including the payment of dividends) or pay any management fees to its holding company or pay any dividend if it is undercapitalized or if such payment would cause it to become undercapitalized. At December 31, 2003, under dividend restrictions imposed under applicable federal laws, the Bank, without obtaining regulatory approval, could legally declare aggregate dividends of approximately $508.4 million. Under Tennessee law, the Corporation is not permitted to pay dividends if, after giving effect to such payment, it would not be able to pay its debts as they become due in the usual course of business or the Corporation's total assets would be less than the sum of its total liabilities plus any amounts needed to satisfy any preferential rights if the Corporation was dissolving. The payment of dividends by the Corporation and the Bank may also be affected or limited by other factors, such as the requirement to maintain adequate capital above regulatory guidelines and debt covenants. Transactions with Affiliates There are various legal restrictions on the extent to which the Corporation and its nonbank subsidiaries (including for purposes of this paragraph, in certain situations, subsidiaries of the Bank) can borrow or otherwise obtain credit from the Bank. There are also legal restrictions on the Bank's purchases of or investments in the securities of and purchases of assets from the Corporation and its nonbank subsidiaries, the Bank's loans or extensions of credit to third parties collateralized by the 5 securities or obligations of the Corporation and its nonbank subsidiaries, the issuance of guaranties, acceptances and letters of credit on behalf of the Corporation and its nonbank subsidiaries, and certain bank transactions with the Corporation and its nonbank subsidiaries, or with respect to which the Corporation and its nonbank subsidiaries act as agent, participate or have a financial interest. Subject to certain limited exceptions, the Bank (including for purposes of this paragraph all subsidiaries of the Bank) may not extend credit to the Corporation or to any other affiliate (other than another subsidiary bank and certain exempted affiliates) in an amount which exceeds 10% of the Bank's capital stock and surplus and may not extend credit in the aggregate to all such affiliates in an amount which exceeds 20% of its capital stock and surplus. Further, there are legal requirements as to the type, amount and quality of collateral which must secure such extensions of credit by the Bank to the Corporation or to such other affiliates. Also, extensions of credit and other transactions between the Bank and the Corporation or such other affiliates must be on terms and under circumstances, including credit standards, that are substantially the same or at least as favorable to the Bank as those prevailing at the time for comparable transactions with non-affiliated companies. Also, the Corporation and its subsidiaries are prohibited from engaging in certain tie-in arrangements in connection with any extension of credit, lease or sale of property or furnishing of services. Capital Adequacy The Federal Reserve has adopted risk-based capital guidelines for bank holding companies. The minimum guideline for the ratio of total capital ("Total Capital") to risk-weighted assets (including certain off-balance-sheet items, such as standby letters of credit) is 8%, and the minimum ratio of Tier 1 Capital (defined below) to risk-weighted assets is 4%. At least half of the Total Capital must be composed of common stock, minority interests in the equity accounts of consolidated subsidiaries, noncumulative perpetual preferred stock and a limited amount of cumulative perpetual preferred stock, less goodwill and certain other intangible assets ("Tier 1 Capital"). The remainder may consist of qualifying subordinated debt, certain types of mandatory convertible securities and perpetual debt, other preferred stock and a limited amount of loan loss reserves. At December 31, 2003, the Corporation's consolidated Tier 1 Capital and Total Capital ratios were 9.22 and 13.19%, respectively. The Federal Reserve Board, the FDIC and the OCC have adopted rules to incorporate market and interest-rate risk components into their risk-based capital standards and that explicitly identify concentration of credit risk and certain risks arising from non-traditional activities, and the management of such risks, as important factors to consider in assessing an institution's overall capital adequacy. Under the market risk requirements, capital is allocated to support the amount of market risk related to a financial institution's ongoing trading activities for banks with relatively large trading activities. Institutions will be able to satisfy this additional requirement, in part, by issuing short-term subordinated debt that qualifies as Tier 3 capital. Based on present practices and activity levels, those trading related market risk rules have no significant impact on the Corporation's regulatory capital requirements. In addition, the Federal Reserve has established minimum leverage ratio guidelines for bank holding companies. These guidelines provide for a minimum ratio of Tier 1 Capital to quarterly average assets, less goodwill and certain other intangible assets (the "Leverage Ratio"), of 3% for bank holding companies that meet certain specific criteria, including having the highest regulatory rating. All other bank holding companies generally are required to maintain a Leverage Ratio of at least 3%, plus an additional cushion of 100 to 200 basis points. The Corporation's Leverage Ratio at December 31, 2003 was 7.19%. The guidelines also provide that bank holding companies experiencing internal growth or making acquisitions will be expected to maintain strong capital positions substantially above the minimum supervisory levels without significant reliance on intangible assets. Furthermore, the Federal 6 Reserve has indicated that it will consider a "tangible Tier 1 Capital leverage ratio" (deducting all intangibles) and other indicia of capital strength in evaluating proposals for expansion or new activities. The Bank is subject to risk-based and leverage capital requirements similar to those described above adopted by the Comptroller. The Corporation believes that the Bank was in compliance with applicable minimum capital requirements as of December 31, 2003. Neither the Corporation nor the Bank has been advised by any federal banking agency of any specific minimum Leverage Ratio requirement applicable to it. Failure to meet capital guidelines could subject a bank to a variety of enforcement remedies, including the termination of deposit insurance by the FDIC, and to certain restrictions on its business and in certain circumstances to the appointment of a conservator or receiver. See "--Prompt Corrective Action." In June 1999, the Basel Committee on Banking Supervision launched its efforts to develop an improved capital adequacy framework by issuing its proposals to revise the 1988 Capital Accord. The new capital framework would consist of minimum capital requirements, a supervisory review process and the effective use of market discipline. In its proposal for minimum capital requirements, the Committee set out options from which banks could choose depending on the complexity of their business and the quality of their risk management. A standardized approach would refine the current measurement framework and introduce the use of external credit assessments to determine a bank's capital charge. Banks with more advanced risk management capabilities could make use of an internal risk-rating based approach. Under this approach, some of the key elements of credit risk, such as the probability of default of the borrower, would be estimated internally by a bank. The Committee also proposes an explicit capital charge for operational risk to provide for problems like internal systems failure. The supervisory review aspect of the new framework would seek to ensure that a bank's capital position is consistent with its overall risk profile and strategy. The supervisory review process would also encourage early supervisory intervention when a bank's capital position deteriorates. The third aspect of the new framework, market discipline, would call for detailed disclosure of a bank's capital adequacy in order to encourage high disclosure standards and to enhance the role of market participants in encouraging banks to hold adequate capital. Banks must also disclose how they evaluate their own capital adequacy. In April 2003, the Basel Committee issued a revised proposal (referred to as the Third Consultative Paper) resulting from most recent public comments. In July 2003, the U.S. regulators followed by issuing an Advanced Notice of Proposed Rulemaking outlining the proposed application for U.S. banks. This notice proposes required implementation including the use of the advanced measurement methods for large internationally active banks (core banks) and allows for other banks to opt-in should they so choose. Under the proposed rules First Tennessee would not be considered a core bank that would be required to implement the new rules but could evaluate whether to opt-in. For those banks that do not opt-in, the current capital rules will continue to apply. Based on feedback from this advanced notice, it is expected that a notice of proposed rulemaking will be issued in 2004 along with a comprehensive field test of its proposals for banks (referred to as the fourth quantitative impact study, or QIS4). A final rule is expected in 2005 with implementation of some form of the new guidelines expected in 2007. The Corporation cannot predict at this time whether the new capital adequacy framework will be adopted by U.S. regulators or in what form, or the effect it would have on the financial condition or results of operations of the Bank or the Corporation. The Corporation will continue to monitor the evolution of the proposed rulemaking and its potential impacts to the Corporation and the industry. 7 Holding Company Structure and Support of Subsidiary Banks Because the Corporation is a holding company, its right to participate in the assets of any subsidiary upon the latter's liquidation or reorganization will be subject to the prior claims of the subsidiary's creditors (including depositors in the case of the Bank) except to the extent that the Corporation may itself be a creditor with recognized claims against the subsidiary. In addition, depositors of a bank, and the FDIC as their subrogee, would be entitled to priority over the creditors in the event of liquidation of a bank subsidiary. Under Federal Reserve policy, the Corporation is expected to act as a source of financial strength to, and to commit resources to support, the Bank. This support may be required at times when, absent such Federal Reserve policy, the Corporation may not be inclined to provide it. In addition, any capital loans by a bank holding company to any of its subsidiary banks are subordinate in right of payment to deposits and to certain other indebtedness of such subsidiary bank. In the event of a bank holding company's bankruptcy, any commitment by the bank holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to a priority of payment. Cross-Guarantee Liability Under the FDIA, a depository institution insured by the FDIC can be held liable for any loss incurred by, or reasonably expected to be incurred by, the FDIC in connection with (i) the default of a commonly controlled FDIC-insured depository institution or (ii) any assistance provided by the FDIC to any commonly controlled FDIC-insured depository institution "in danger of default." "Default" is defined generally as the appointment of a conservator or receiver and "in danger of default" is defined generally as the existence of certain conditions indicating that a default is likely to occur in the absence of regulatory assistance. The FDIC's claim for damages is superior to claims of shareholders of the insured depository institution or its holding company but is subordinate to claims of depositors, secured creditors and holders of subordinated debt (other than affiliates) of the commonly controlled insured depository institution. Following the sale by the Corporation of substantially all of the assets of the First National Bank of Springdale, the Bank is currently the only depository institution owned by the Corporation. In the event that the Corporation established or acquired another depository institution, any loss suffered by the FDIC in respect of another subsidiary bank would likely result in assertion of the cross-guarantee provisions, the assessment of such estimated losses against the Corporation's other subsidiary bank and a potential loss of the Corporation's investment in such subsidiary bank. Prompt Corrective Action The FDIA requires, among other things, the federal banking regulators to take "prompt corrective action" in respect of FDIC-insured depository institutions that do not meet minimum capital requirements. Under the FDIA, insured depository institutions are divided into five capital tiers: "well capitalized," "adequately capitalized," "undercapitalized," "significantly undercapitalized" and "critically undercapitalized." Under applicable regulations, an institution is defined to be well capitalized if it maintains a Leverage Ratio of at least 5%, a Tier 1 Capital ratio of at least 6% and a Total Capital ratio of at least 10% and is not subject to a directive, order or written agreement to meet and maintain specific capital levels. An institution is defined to be adequately capitalized if it meets all of its minimum capital 8 requirements as described above. An institution will be considered undercapitalized if it fails to meet any minimum required measure, significantly undercapitalized if it has a Total Risk-Based Capital ratio of less than 6%, a Tier 1 Risk-Based Capital ratio of less than 3% or a Leverage Ratio of less than 3% and critically undercapitalized if it fails to maintain a level of tangible equity equal to at least 2% of total assets. An institution may be deemed to be in a capitalization category that is lower than is indicated by its actual capital position if it receives an unsatisfactory examination rating. The FDIA generally prohibits an FDIC-insured depository institution from making any capital distribution (including payment of dividends) or paying any management fee to its holding company if the depository institution would thereafter be undercapitalized. Undercapitalized depository institutions are subject to restrictions on borrowing from the Federal Reserve System. In addition, undercapitalized depository institutions are subject to growth limitations and are required to submit capital restoration plans. An insured depository institution's holding company must guarantee the capital plan, up to an amount equal to the lesser of 5% of the depository institution's assets at the time it becomes undercapitalized or the amount of the capital deficiency when the institution fails to comply with the plan, for the plan to be accepted by the applicable federal regulatory authority. The federal banking agencies may not accept a capital plan without determining, among other things, that the plan is based on realistic assumptions and is likely to succeed in restoring the depository institution's capital. If a depository institution fails to submit an acceptable plan, it is treated as if it is significantly undercapitalized. Significantly undercapitalized depository institutions may be subject to a number of requirements and restrictions, including orders to sell sufficient voting stock to become adequately capitalized, requirements to reduce total assets and cessation of receipt of deposits from correspondent banks. Critically undercapitalized depository institutions are subject to appointment of a receiver or conservator, generally within 90 days of the date on which they become critically undercapitalized. The Corporation believes that at December 31, 2003 the Bank had sufficient capital to qualify as "well capitalized" under the regulatory capital requirements discussed above. Interstate Banking and Branching Legislation The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the "IBBEA") authorizes interstate acquisitions of banks and bank holding companies without geographic limitation. In addition, a bank may merge with a bank in another state as long as neither of the states has opted out of interstate branching prior to May 31, 1997. Tennessee did not opt out of interstate branching. A bank may establish and operate a de novo branch in a state in which the bank does not maintain a branch if that state explicitly permits de novo branching. Tennessee permits de novo branching on a reciprocity basis. Once a bank has established branches in a state through an interstate merger transaction, the bank may establish and acquire additional branches at any location in the state where any bank involved in the interstate merger transaction could have established or acquired branches under applicable federal or state law. A bank that has established a branch in a state through de novo branching may establish and acquire additional branches in such state in the same manner and to the same extent as a bank having a branch in such state as a result of an interstate merger. If a state opts out of interstate branching within the specified time period, no bank in any other state may establish a branch in the opting out of state, whether through an acquisition or de novo. Gramm-Leach-Bliley Act The Gramm-Leach-Bliley Act repealed or modified a number of significant provisions of current laws, including the Glass-Steagall Act and the Bank Holding Company Act of 1956, which impose 9 restrictions on banking organizations' ability to engage in certain types of activities. The Act generally allows bank holding companies such as the Corporation broad authority to engage in activities that are financial in nature or incidental to such a financial activity, including insurance underwriting and brokerage; merchant banking; securities underwriting, dealing and market-making; real estate development; and such additional activities as the Federal Reserve in consultation with the Secretary of the Treasury determines to be financial in nature or incidental thereto. A bank holding company may engage in these activities directly or through subsidiaries by qualifying as a "financial holding company." To qualify a bank holding company must file a declaration with the Federal Reserve and certify that all of its subsidiary depository institutions are well-managed and well-capitalized. The Act also permits national banks such as the Bank to engage in certain of these activities through financial subsidiaries. To control or hold an interest in a financial subsidiary, a national bank must meet the following requirements: (1) the national bank must receive approval from the Comptroller for the financial subsidiary to engage in the activities, (2) the national bank and its depository institution affiliates must each be well-capitalized and well-managed, (3) the aggregate consolidated total assets of all of the national bank's financial subsidiaries must not exceed 45% of the national bank's consolidated total assets or, if less, $50 billion, (4) the national bank must have in place adequate policies and procedures to identify and manage financial and operational risks and to preserve the separate identities and limited liability of the national bank and the financial subsidiary, and (5) if the financial subsidiary will engage in principal transactions and the national bank is one of the one hundred largest banks, the national bank must have outstanding at least one issue of unsecured long-term debt that is currently rated in one of the three highest investment grade rating categories (or if in the second fifty largest banks, an alternative requirement is that the national bank has a current long-term issuer credit rating within the three highest investment grade rating categories). No new financial activity may be commenced under the Act unless the national bank and all of its depository institution affiliates have at least "satisfactory" CRA ratings. Certain restrictions apply if the bank holding company or the national bank fails to continue to meet one or more of the requirements listed above. In addition, the Act contains a number of other provisions that may affect the Bank's operations, including functional regulation of the Bank's securities and investment management operations by the SEC and the Bank's insurance operations by the States and limitations on the use and disclosure to third parties of customer information. The Act generally became effective March 11, 2000, although certain provisions took effect later, such as functional regulation (May 12, 2001, except for certain matters), and compliance with privacy regulations was required by July 1, 2001. The Corporation is a financial holding company and currently, the Bank has 9 financial subsidiaries. The Corporation cannot predict at this time the potential effect that the Act will have on its business and operations, although the Corporation expects that the general effect of the Act will be to increase competition in the financial services industry generally. FDIC Insurance Assessments; DIFA The FDIC insurance premium charged on bank deposits insured by the Bank Insurance Fund ("BIF") and on deposits insured by the Savings Association Insurance Fund ("SAIF"), including savings association deposits acquired by banks, ranges from 0 to 27 cents per $100 of deposits, depending on the institution's risk classification, based on capital and supervisory risk factors. The Deposit Insurance Funds Act of 1996 ("DIFA") provides for assessments to be imposed on insured depository institutions with respect to deposits insured by the BIF (in addition to any assessments imposed on depository institutions with respect to SAIF-insured deposits) to pay for the cost of Financing Corporation ("FICO") bonds. All banks are assessed to pay the interest due on FICO bonds. The cost to the Corporation on an annual basis is immaterial. Under the FDIA, insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue 10 operations or has violated any applicable law, regulation, rule, order or condition imposed by a federal bank regulatory agency. Depositor Preference Federal law provides that deposits and certain claims for administrative expenses and employee compensation against an insured depository institution would be afforded a priority over other general unsecured claims against such an institution, including federal funds and letters of credit, in the "liquidation or other resolution" of such an institution by any receiver. Securities Regulation Certain of the Corporation's subsidiaries are subject to various securities laws and regulations and capital adequacy requirements promulgated by the regulatory and exchange authorities of the jurisdictions in which they operate. The Corporation's registered broker-dealer subsidiaries are subject to the SEC's net capital rule, Rule 15c3-1. That rule requires the maintenance of minimum net capital and limits the ability of the broker-dealer to transfer large amounts of capital to a parent company or affiliate. Compliance with the rule could limit operations that require intensive use of capital, such as underwriting and trading. Certain of the Corporation's subsidiaries and a division of the Bank are registered investment advisers who are regulated under the Investment Advisers Act of 1940. These subsidiaries, among other activities, provide investment advice to investment companies regulated under the Investment Company Act of 1940. Advisory contracts with these investment companies automatically terminate under these laws upon an assignment of the contract by the investment adviser unless appropriate consents are obtained. Subsidiaries of the Corporation are subject to certain restrictions in their dealings with investment companies advised by a subsidiary of the Corporation. Insurance Activities Subsidiaries of the Corporation sell various types of insurance as agent in a number of the states. Insurance activities are subject to regulation by the states in which such business is transacted. Although most of such regulation focuses on insurance companies and their insurance products, insurance agents and their activities are also subject to regulation by the states, including, among other things, licensing and marketing and sales practices. Competition. The Corporation and its subsidiaries face substantial competition in all aspects of the businesses in which they engage from national and state banks located in Tennessee and large out-of-state banks as well as from savings and loan associations, credit unions, other financial institutions, consumer finance companies, trust companies, investment counseling firms, money market mutual funds, insurance companies, securities firms, mortgage banking companies and others. For certain information on the competitive position of the Corporation and the Bank, refer to the "General" subsection above of this Item 1. Also, refer to the subsections entitled "Supervision and Regulation" and "Effect of Governmental Policies," both of which are relevant to an analysis of the Corporation's competitors. Due to the intense competition in the financial industry, the Corporation makes no representation that its competitive position has remained constant, nor can it predict whether its position will change in the future. 11 Sources and Availability of Funds. Specific reference is made to the Management's Discussion and Analysis and Glossary sections, including the subsections entitled "Deposits and Other Sources of Funds," and "Liquidity Risk Management," contained in the 2004 Proxy Statement, which sections are incorporated herein by reference. Effect of Governmental Policies. The Bank is affected by the policies of regulatory authorities, including the Federal Reserve System and the Comptroller. An important function of the Federal Reserve System is to regulate the national money supply. Among the instruments of monetary policy used by the Federal Reserve are: purchases and sales of U.S. Government securities in the marketplace; changes in the discount rate, which is the rate any depository institution must pay to borrow from the Federal Reserve; and changes in the reserve requirements of depository institutions. These instruments are effective in influencing economic and monetary growth, interest rate levels and inflation. The monetary policies of the Federal Reserve System and other governmental policies have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future. Because of changing conditions in the national economy and in the money market, as well as the result of actions by monetary and fiscal authorities, it is not possible to predict with certainty future changes in interest rates, deposit levels, loan demand or the business and earnings of the Corporation and the Bank or whether the changing economic conditions will have a positive or negative effect on operations and earnings. Various bills are from the time to time introduced in the United States Congress and the Tennessee General Assembly and other state legislatures, and regulations are proposed by the regulatory agencies which could affect the business of the Corporation and its subsidiaries. It cannot be predicted whether or in what form any of these proposals will be adopted or the extent to which the business of the Corporation and its subsidiaries may be affected thereby. Statistical Information Required by Guide 3. The statistical information required to be displayed under Item I pursuant to Guide 3, "Statistical Disclosure by Bank Holding Companies," of the Exchange Act Industry Guides is incorporated herein by reference to the Consolidated Financial Statements and the notes thereto and the Management's Discussion and Analysis and Glossary sections in the 2004 Proxy Statement; certain information not contained in the 2004 Proxy Statement, but required by Guide 3, is contained in the tables immediately following: 12 FIRST TENNESSEE NATIONAL CORPORATION ADDITIONAL GUIDE 3 STATISTICAL INFORMATION ON DECEMBER 31 (Unaudited)
Investment Portfolio (Dollars in thousands) 2003 2002 2001 - ---------------------------------------------------------------------------------------- Mortgage-backed securities & collateralized mortgage obligations $2,200,862 $2,396,530 $2,153,012 U.S. Treasury and other U. S. government agencies 49,141 84,575 136,827 States and political subdivisions 14,423 28,890 45,416 Other 205,944 190,290 190,615 ---------- ---------- ---------- Total $2,470,370 $2,700,285 $2,525,870 ========== ========== ==========
Loan Portfolio (Dollars in thousands) 2003 2002 2001 2000 1999 - ------------------------------------------------------------------------------------------------------------------------------ Commercial: Commercial, financial and industrial $ 4,502,917 $ 4,134,158 $ 4,176,738 $ 3,964,396 $3,660,642 Real estate commercial 968,064 1,037,341 929,036 946,903 776,553 Real estate construction 690,402 551,449 492,531 415,713 353,659 Retail: Real estate residential 6,817,122 4,721,307 3,732,767 3,573,260 2,814,249 Real estate construction 527,260 342,127 211,429 179,515 132,740 Other retail 212,362 286,069 459,510 840,228 1,018,110 Credit card receivables 272,398 272,994 281,132 319,435 607,205 ----------- ----------- ----------- ----------- ---------- Total $13,990,525 $11,345,445 $10,283,143 $10,239,450 $9,363,158 =========== =========== =========== =========== ==========
Short-Term Borrowings (Dollars in thousands) 2003 2002 2001 - ---------------------------------------------------------------------------------------- Federal funds purchased and securities sold under agreements to repurchase $3,079,248 $3,126,350 $2,921,543 Commercial paper 31,793 25,695 22,273 Other short-term borrowings 196,183 335,513 426,878 ---------- ---------- ---------- Total $3,307,224 $3,487,558 $3,370,694 ========== ========== ==========
13 Maturities of Short-Term Purchased Funds on December 31, 2003
0-3 3-6 6-12 Over 12 (Dollars in thousands) Months Months Months Months Total - ----------------------------------------------------------------------------------------------------- Certificates of deposit $100,000 and more $4,249,174 $36,403 $366,795 $651,704 $5,304,076 Federal funds purchased and securities sold under agreements to repurchase 3,079,248 -- -- -- 3,079,248 Commercial paper and other short-term borrowings 222,092 215 459 5,210 227,976 - ----------------------------------------------------------------------------------------------------- Total $7,550,514 $36,618 $367,254 $656,914 $8,611,300 =====================================================================================================
Contractual Maturities of Commercial & Real Estate Construction Loans on December 31, 2003
After 1 Year (Dollars in thousands) Within 1 Year Within 5 Years After 5 Years Total - --------------------------------------------------------------------------------------------------------------------------- Commercial, financial and industrial $2,375,062 $1,849,213 $278,642 $4,502,917 Real estate commercial 312,414 522,166 133,484 968,064 Commercial real estate construction 521,134 167,744 1,524 690,402 Consumer real estate construction 522,464 4,428 368 527,260 - --------------------------------------------------------------------------------------------------------------------------- Total $3,731,074 $2,543,551 $414,018 $6,688,643 =========================================================================================================================== For maturities over one year: Interest rates - floating $1,466,354 $153,986 $1,620,340 Interest rates - fixed 1,077,197 260,032 1,337,229 - --------------------------------------------------------------------------------------------------------------------------- Total $2,543,551 $414,018 $2,957,569 ===========================================================================================================================
ITEM 2 PROPERTIES The Corporation has no properties that it considers materially important to its financial statements. ITEM 3 LEGAL PROCEEDINGS The Corporation is a party to no material pending legal proceedings the nature of which are required to be disclosed pursuant to the Instructions contained in the Form of this Report. ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted during the fourth quarter of 2003 to a vote of security holders, through the solicitation of proxies or otherwise. 14 ITEM 4A EXECUTIVE OFFICERS OF REGISTRANT The following is a list of executive officers of the Corporation as of March 1, 2004. The executive officers are elected at the April meeting of the Corporation's Board of Directors following the annual meeting of shareholders for a term of one year and until their successors are elected and qualified.
Name and Age Offices and Positions - Year First Elected to Office - ------------ ---------------------------------------------------- Charles G. Burkett President - Retail Financial Services/Memphis Age: 52 Financial Services of the Corporation and the Bank (2001) J. Kenneth Glass Chairman of the Board (1/1/04), President (2001) and Age: 57 Chief Executive Officer (2002) of the Corporation and the Bank John H. Hamilton Executive Vice President, Product Management and Age: 54 Delivery Services (2002) Herbert H. Hilliard Executive Vice President, Risk Management (2001) and Age: 56 Government Relations and CRA (1988) of the Corporation and the Bank Harry A. Johnson, III Executive Vice President (1990) and General Counsel Age: 55 (1988) of the Corporation and the Bank James F. Keen Executive Vice President (2003), Corporate Controller Age: 53 of the Corporation (1988) and the Bank (2001) and principal accounting officer Larry B. Martin President - Business Financial Services/Tennessee Age: 56 Financial Services of the Corporation and the Bank (2001) Marlin L. Mosby, III Executive Vice President (2002) and Chief Financial Age: 40 Officer (2003) Sarah L. Meyerrose Executive Vice President, Corporate (2002) and Age: 48 Employee Services (1998) of the Corporation and the Bank John P. O'Connor, Jr. Executive Vice President of the Corporation Age: 60 (1990) and the Bank (1987) and Chief Credit Officer (1988) Elbert L. Thomas, Jr. Executive Vice President (1995) and Interest Rate Age: 55 Risk Manager (2003)
15 Each of the executive officers has been employed by the Corporation or its subsidiaries during each of the last five years. Prior to July of 2002, Mr. Glass was President and Chief Operating Officer of the Corporation and the Bank, and prior to July 2001, he was President-Retail Financial Services of the Corporation and the Bank. Prior to April of 2000, Mr. Glass was Executive Vice President of the Corporation and prior to April of 1999, he was President-Tennessee Banking Group of the Bank. The Personnel Division changed its name to the Employee Services Division in April of 1999. From July 2001 to July, 2002, Ms. Meyerrose was also Executive Vice President, Wealth Management. Prior to July of 2001, Mr. Burkett was Executive Vice President, Manager Affluent Market of the Bank. Prior to July of 2001, Mr. Martin was Chairman and CEO-Knoxville of the Bank. Prior to June 2002, Mr. Hamilton was Executive Vice President, Manager Bank Services Group and prior to April 2002, he was Executive Vice President-Corporate Financial Services. Prior to April 1999, he was Executive Vice President-Manager Regional Banking. Prior to November 2003, Mr. Mosby was Executive Vice President-Strategic Planning and Investor Relations and prior to April 2002, he was Senior Vice President, Strategic Planning. Mr. Keen was appointed Chief Financial Officer on an interim basis, from December 1, 2002, until November 17, 2003. Mr. Thomas was appointed Executive Vice President-Interest Rate Risk Manager in October 2003 following his return after a disability leave which commenced December 1, 2002. Prior to December 1, 2002, Mr. Thomas was Chief Financial Officer of the Company and the Bank. PART II ITEM 5 MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS (a) Market for the Corporation's Common Stock: The Corporation's common stock, $0.625 par value, is listed and trades on the New York Stock Exchange, Inc. under the symbol FTN. As of December 31, 2003, there were 8,579 shareholders of record of the Corporation's common stock. Additional information called for by this Item is incorporated herein by reference to the Summary of Quarterly Financial Information Table, the Selected Financial and Operating Data Table, Note 18 to the Consolidated Financial Statements, and the "Deposits and Other Sources of Funds," and "Liquidity Risk Management" subsections of the Management's Discussion and Analysis section contained in the 2004 Proxy Statement and to the "Payment of Dividends" and "Transactions with Affiliates" subsections contained in Item 1 of Part I of this Form 10-K, which is incorporated herein by reference. (b) Sale of Unregistered Securities: During 2003 there were no sales of shares of the Corporation's common stock without registration under the Securities Act of 1933, as amended. (c) Description of the Corporation's Capital Stock: Authorized Capital Stock. The authorized capital stock of the Corporation currently consists of 5,000,000 shares of preferred stock, without par value ("preferred stock"), which may be issued from time to time by resolution of the Corporation's Board of Directors (the "Board") and 400,000,000 shares of common stock, $0.625 par value (the "common stock"). As of December 31, 2003 there were 124,834,272 shares of common stock and no shares of preferred stock outstanding. As of that date, 16 approximately 28 million shares of common stock were reserved for issuance under various stock plans, and no shares of preferred stock were reserved for issuance. Although shares have been reserved for issuance under the employee stock plans, the plans generally permit the Corporation to repurchase shares on the open market or privately for issuance under such plans. The Board has authorized management to repurchase shares from time to time for the plans. A total of 4.4 million shares were repurchased and 4.1 million shares were issued for the plans in 2003. Also, the Corporation has announced that the Board approved the repurchase of up to 9.5 million shares by December 31, 2004. Through December 31, 2003, 3.0 million shares have been repurchased pursuant to this authority. Pursuant to Board authority, the Corporation plans to continue to purchase shares from time to time and will evaluate the level of capital and take action designed to generate or use capital as appropriate for the interest of the shareholders. Repurchases will be made in the open market or through privately negotiated transactions and will be subject to market conditions, accumulation of excess equity and prudent capital management. Also, the Corporation has on file with the SEC one effective shelf registration pursuant to which it may offer from time to time, at its discretion, senior or subordinated debt securities, preferred stock, including depository shares, and common stock at an aggregate initial offering price not to exceed $125 million (net of prior issuances) and another effective shelf registration pursuant to which up to $200 million of capital securities (guaranteed preferred beneficial interests in the Corporation's subordinated debentures) is available for issuance. Preferred Stock. The Board is authorized, without further action by the shareholders, to provide for the issuance of up to 5,000,000 shares of preferred stock, from time to time in one or more series and, with respect to each such series, has the authority to fix the powers (including voting power), designations, preferences and relative, participating, optional or other special rights and the qualifications, limitations or restrictions thereof. Common Stock. The Board is authorized to issue a maximum of 400,000,000 shares of common stock. The holders of the common stock are entitled to receive, ratably, such dividends as may be declared by the Board from funds legally available therefor, provided that if any shares of preferred stock are at the time outstanding, the payment of dividends on common stock or other distributions (including purchases of common stock) may be subject to the declaration and payment of full cumulative dividends, and the absence of arrearages in any mandatory sinking fund, on outstanding shares of preferred stock. The holders of the outstanding shares of common stock are entitled to one vote for each such share on all matters presented to shareholders and are not entitled to cumulate votes for the election of directors. Upon any dissolution, liquidation or winding up of the Corporation resulting in a distribution of assets to the shareholders, the holders of common stock are entitled to receive such assets ratably according to their respective holdings after payment of all liabilities and obligations and satisfaction of the liquidation preferences of any shares of preferred stock at the time outstanding. The shares of common stock have no preemptive, redemption, subscription or conversion rights. Under the Corporation's Charter, the Board is authorized to issue authorized shares of common stock without further action by the shareholders. However, the common stock is traded on the New York Stock Exchange, Inc. which requires shareholder approval of the issuance of additional shares of common stock in certain situations. The Transfer Agent for the common stock is Wells Fargo Bank Minnesota, N.A. The Board is divided into three classes, which results in approximately one third of the directors being elected each year. In addition, the Charter and the Bylaws, among other things, generally give to the Board the authority to fix the number of directors on the Board and to remove directors from and fill vacancies on the Board, other than removal for cause and the filling of vacancies created thereby which are reserved to shareholders exercising at least a majority of the voting power of all outstanding voting stock of the Corporation. To change these provisions of the Bylaws, other than by action of the Board, and to amend these provisions of the Charter or to adopt any provision of the Charter inconsistent with 17 such Bylaw provisions, would require approval by the holders of at least 80% of the voting power of all outstanding voting stock. Such classification of the Board and such other provisions of the Charter and the Bylaws may have a significant effect on the ability of the shareholders of the Corporation to change the composition of an incumbent Board or to benefit from certain transactions which are opposed by the Board. Shareholder Protection Rights Plan. On October 20, 1998, the Board adopted a Shareholder Protection Rights Agreement (the "Rights Plan") and declared a dividend of one right on each share of common stock outstanding on November 2, 1998, or issued thereafter and prior to the time the rights separate and thereafter pursuant to options and convertible securities outstanding at the time the rights separate. The Rights Plan became operative upon the expiration on September 18, 1999 of a substantially identical plan that was adopted in 1989. Until the earlier of (i) the 10th business day (subject to certain adjustments by the Board) after commencement of a tender or exchange offer which, if consummated, would result in a person or group owning 10% or more (but not more than 50%) of the outstanding shares of common stock (an "Acquiring Person") and (ii) the tenth business day (the "Flip-in Date") after the first date of public announcement by the Corporation that a person has become an Acquiring Person, the Rights will be evidenced by the common stock certificates, will automatically trade with the common stock, and will not be exercisable. Thereafter, separate rights certificates will be distributed, and each right will entitle its holder to purchase one one-hundredth of a share of Participating Preferred Stock having economic and voting terms similar to those of one share of common stock for $150.00, subject to adjustment (the "Exercise Price"). The Rights will expire on the earliest of (i) the Exchange Time (defined below), (ii) December 31, 2009, and (iii) the date on which the Rights are redeemed as described below. The Board may amend the Rights Plan in any respect prior to the Flip-in Date. The Board may, at its option, at any time prior to the close of business on the Flip-in Date, redeem all the Rights at a price of $0.001 per Right. If a Flip-in Date occurs, each Right (other than Rights beneficially owned by the Acquiring Person or its affiliates, associates or transferees, which Rights will become void) will entitle its holder to purchase a number of shares of common stock or Participating Preferred Stock having a market value of twice the Exercise Price for an amount in cash equal to the then-current Exercise Price. In addition, the Board may, at its option, at any time after a Flip-in Date, elect to exchange the Rights (other than Rights beneficially owned by the Acquiring Person or its affiliates, associates or transferees) for shares of common stock or a Participating Preferred Stock at an exchange ratio of one share of common stock or 1/100th of a share of Participating Preferred Stock per Right (the "Exchange Time"). Also, if after an Acquiring Person controls the Corporation's Board of Directors, the Corporation is involved in a merger or sells more than 50% of its assets or earning power or is involved with an Acquiring Person in certain self-dealing transactions (or has entered into an agreement to do any of the foregoing) and, in the case of a merger, the Acquiring Person will receive different treatment than all other shareholders, each Right will entitle its holder to purchase a number of shares of common stock of the Acquiring Person having a market value of twice the Exercise Price for an amount in cash equal to the then-current Exercise Price. The Rights will not prevent a takeover of the Corporation. The Rights, however, may have certain anti-takeover effects. The Rights may cause substantial dilution to a person or group that acquires 10% or more of the outstanding common stock unless the Rights are first redeemed by the Corporation's Board. 18 ITEM 6 SELECTED FINANCIAL DATA The information called for by this Item is incorporated herein by reference to the Selected Financial and Operating Data table in the 2004 Proxy Statement. ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION The information called for by this Item is incorporated herein by reference to the Management's Discussion and Analysis section, Glossary section, and the Consolidated Historical Statements of Income and Consolidated Average Balance Sheets and Related Yields and Rates tables in the 2004 Proxy Statement. ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information called for by this Item is incorporated herein by reference to the "Interest Rate Risk Management" subsection of Note 1 to the Consolidated Financial Statements and the "Risk Management-Interest Rate Risk Management" subsection of the Management's Discussion and Analysis section contained in the 2004 Proxy Statement. ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information called for by this Item is incorporated herein by reference to the Consolidated Financial Statements and the notes thereto and to the Summary of Quarterly Financial Information table in the 2004 Proxy Statement and to the report of the predecessor independent accountant included as Exhibit 99(c) to this report. ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE The information called for by this Item, reflecting a change in accountants, has been previously reported by the Corporation under Item 4 of Form 8-K, filed 5-12-02, which is incorporated herein by reference. ITEM 9A CONTROLS AND PROCEDURES Evaluation of Disclosures and Procedures. The Corporation's management, with the participation of the Corporation's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Corporation's disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by the annual report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Corporation's disclosure controls and procedures are effective to ensure that material information relating to the Corporation and the Corporation's consolidated subsidiaries is made known to such officers by 19 others within these entities, particularly during the period this annual report was prepared, in order to allow timely decisions regarding required disclosure. Changes in Internal Control over Financial Reporting. There have not been any changes in the Corporation's internal control over financial reporting during the Corporation's fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Corporation's internal control over financial reporting. PART III ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information called for by this Item as it relates to directors and nominees for director of the Corporation, audit committee financial expert, and members of the Audit Committee of the Corporation's Board of Directors is incorporated herein by reference to the "Corporate Governance and Board Matters" section and the "Election of Directors" section of the Corporation's 2004 Proxy Statement (excluding the Audit Committee Report and the statements regarding the independence of members of the Audit Committee). The information required by this Item as it relates to executive officers of the Corporation is incorporated herein by reference to Item 4A in Part I of this Report. The information required by this Item as it relates to compliance with Section 16(a) of the Securities Exchange Act of 1934 is incorporated herein by reference to the "Section 16(a) Beneficial Ownership Reporting Compliance" section of the 2004 Proxy Statement. The Corporation's Board of Directors has adopted a Code of Ethics for Senior Financial Officers that applies to the Chief Executive Officer, Chief Financial Officer and Controller and also applies to all professionals serving in the financial, accounting or audit areas of the Corporation and its subsidiaries. A copy of the Code is filed as Exhibit 14 to this report and is posted on the Corporation's Internet website (www.firsttennessee.com). [Click on "Company Information," then "Investor Relations," and then "Corporate Governance."] There have been no amendments to, or waivers from, provisions of the Code that apply to the Chief Executive Officer, Chief Financial Officer or Controller and that relate to elements of the Code identified in Item 406(b) of SEC Regulation S-K since the Code was adopted, and the Corporation intends to satisfy its disclosure obligations under Item 10 of Form 8-K related thereto by posting such information on the Corporation's Internet website, the address for which is listed above. The Audit Committee of the Board of Directors adopted an Audit and Non-audit Services Pre-approval Policy, which is provided in Appendix C to the 2004 Proxy Statement and incorporated herein by reference. ITEM 11 EXECUTIVE COMPENSATION The information called for by this Item is incorporated herein by reference to the "Executive Compensation" section of the 2004 Proxy Statement (excluding the Total Shareholder Return Performance Graph). 20 ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information called for by this Item is incorporated herein by reference to the "Stock Ownership Information and Table" section and the Equity Compensation Plan Information Table contained in the 2004 Proxy Statement. The Corporation is unaware of any arrangements which may result in a change in control of the Corporation. ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information called for by this Item is incorporated herein by reference to the "Certain Relationships and Related Transactions" section of the 2004 Proxy Statement. ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES The following table discloses the aggregate fees billed for each of the last two fiscal years for professional services rendered by KPMG LLP, the Corporation's independent public accountant:
Type of Service 2002 2003 --------------- ---- ---- Audit fees $ 751,500 $1,031,500 Audit-related fees $ 328,500 $ 385,000 Tax fees $1,052,770(i) $ 17,200 All other fees $ 27,000 $ 61,638 ---------- ---------- Total $2,159,770 $1,495,338 ========== ==========
(i) -- Included in the amount for 2002 is $1 million for tax planning services rendered prior to KPMG LLP's engagement as the Corporation's auditor. The Corporation's Audit Committee adopted an Audit and Non-Audit Services Pre-Approval Policy, which is included in Appendix C to the Corporation's 2004 Proxy Statement and incorporated herein by reference. The information on fees billed by KPMG LLC is incorporated herein by reference to the "Vote Item No. 4"section of the 2004 Proxy Statement. No services were approved by the Audit Committee pursuant to Rule 2-01(c)(7)(i)(c) of Regulation S-X. 21 PART IV ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) The following documents are filed as a part of this Report: Financial Statements: 1. Consolidated Statements of Condition as of December 31, 2003 and 2002. 2. Consolidated Statements of Income for the years ended December 31, 2003, 2002 and 2001. 3. Consolidated Statements of Shareholders' Equity for the years ended December 31, 2003, 2002, and 2001. 4. Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001. 5. Notes to the Consolidated Financial Statements 6. Report of Independent Public Accountants 7. Report of Predecessor Independent Public Accountant The consolidated financial statements of the Corporation, the notes thereto, and the report of independent public accountants, in the 2004 Proxy Statement, as listed above, are incorporated herein by reference. The report of the predecessor independent public accountant is attached hereto as Exhibit 99(c) and incorporated herein by reference. Financial Statement Schedules: Not applicable. Exhibits: Exhibits marked with an "*" represent a management contract or compensatory plan or arrangement required to be identified and filed as an exhibit. (3)(i) Restated Charter of the Corporation, as amended, incorporated herein by reference to Exhibit 3(i) to the Corporation's1997 Annual Report on Form 10-K. (3)(ii) Bylaws of the Corporation, as amended and restated. (4)(a) Shareholder Protection Rights Agreement, dated as of October 20, 1998, between the Corporation and First Tennessee Bank National Association, as Rights Agent, including as Exhibit A the forms of Rights Certificate and Election to Exercise and as Exhibit B the form of Articles of Amendment designating Participating Preferred Stock, incorporated herein by reference to Exhibits 1, 2, and 3 to the Corporation's Registration Statement on Form 8-A filed 10-23-98. (4)(b) The Corporation and certain of its consolidated subsidiaries have outstanding certain long-term debt. See Note 10 in the Corporation's 2004 Proxy Statement. None of such debt exceeds 10% of the total assets of the Corporation and its consolidated subsidiaries. Thus, copies of constituent instruments defining the rights of holders of such debt are not required 22 to be included as exhibits. The Corporation agrees to furnish copies of such instruments to the Securities and Exchange Commission upon request. *(10)(a) First Tennessee National Corporation Non-qualified Deferred Compensation Plan. *(10)(b) 2000Employee Stock Option Plan, as amended and restated, incorporated herein by reference to Exhibit 10(b) to the Corporation's 2000 Annual Report on Form 10-K. *(10)(c) 1997 Employee Stock Option Plan, as amended and restated, incorporated herein by reference to Exhibit 10(c) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 9/30/02. *(10)(d) 1992 Restricted Stock Incentive Plan, as amended and restated, incorporated herein by reference to Exhibit 10(d) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 3-31-99. *(10)(e) 1984 Stock Option Plan, as amended, 1-21-97 amendment and 10-22-97 amendment, incorporated herein by reference to Exhibit 10(e) to the Corporations 1992, 1996 and 1997 Annual Reports on Form 10-K. *(10)(f) 1990 Stock Option Plan, as amended, and 1-21-97, 10-22-97, and 10-18-00 amendments, incorporated herein by reference to Exhibit 10(f) to the Corporation's 1992, 1996, 1997 and 2000 Annual Reports on Form 10-K. *(10)(g) Survivor Benefits Plan, as amended and restated, incorporated herein by reference to Exhibit 10(g) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 9-30-03. *(10)(h) Directors and Executives Deferred Compensation Plan, as amended and restated, incorporated herein by reference to Exhibit 10(h) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 6-30-03 and form of individual agreement, incorporated herein by reference to Exhibit 10(h) to the Corporation's 1996 Annual Report on Form 10-K. *(10)(i) Amended and Restated Pension Restoration Plan, as amended and restated, incorporated herein by reference to Exhibit 10(i) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 9-30-03. *(10)(j) Director Deferral Agreements with schedule, incorporated herein by reference to Exhibit 10(k) to the Corporation's 1992 Annual Report on Form 10-K and Exhibit 10(j) to the Corporation's 1995 Annual Report on Form 10-K. *(10)(k) Form of Severance Agreements dated 1-28-97, incorporated herein by reference to Exhibit 10(k) to the Corporation's 1996 Annual Report on Form 10-K. *(10)(l) 1995 Employee Stock Option Plan, as amended and restated, incorporated herein by reference to Exhibit 10(l) to the Corporation 2000 Annual Report on Form 10-K. 23 *(10)(m) Non-Employee Directors' Deferred Compensation Stock Option Plan, as amended and restated, incorporated herein by reference to Exhibit 10(m) to the Corporation's 1997 Annual Report on Form 10-K. *(10)(n) 2000 Non-Employee Directors' Deferred Compensation Stock Option Plan, incorporated herein by reference to Exhibit 10(n) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 6-30-03. *10(o) Ralph Horn Non-compete and Early Retirement Agreement. *10(p) Non-employee Director Benefits. *10(q) 2002 Management Incentive Plan, incorporated herein by reference to Exhibit 10(q) to the Corporation's 2001 Annual Report on Form 10-K. *10(r) 2003 Equity Compensation Plan, incorporated herein by reference to Appendix A to the Corporation Proxy Statement furnished to shareholders in connection with the annual meeting scheduled for April 15, 2003, filed March 18, 2003. *10(s) 2002 Bank Director and Advisory Board Member Deferral Plan, incorporated herein by reference to Exhibit 10(s) to the Corporation's 2002 Annual Report on Form 10-K. *10(t) [1997] Bank Director and Advisory Board Member Deferral Plan, incorporated herein by reference to Exhibit 10(t) to the Corporation's 2002 Annual Report on Form 10-K. *10(u) [1991] Bank Advisory Director Deferral Plan, incorporated herein by reference to Exhibit 10(u) to the Corporation's 2002 Annual Report on Form 10-K. *10(v) Long-Term Disability Program. 14 Code of Ethics for Senior Financial Officers 16 Letter regarding change in certifying accountant, incorporated herein by reference to Exhibit 16 to the Corporation's Form 8-K, filed May 16, 2002. (21) Subsidiaries of the Corporation. 23(a) Accountants' Consents. 23(b) Registrant's disclosure regarding Accountant's Consent. (24) Powers of Attorney. 31(a) Rule 13a-14(a) Certifications of CEO (pursuant to Section 302 of Sarbanes-Oxley Act of 2002) 31(b) Rule 13a-14(a) Certifications of CFO (pursuant to Section 302 of Sarbanes-Oxley Act of 2002) 32(a) Rule 1350 Certifications of CEO (pursuant to Section 906 of Sarbanes-Oxley Act of 2002) 32(b) Rule 1350 Certifications of CFO (pursuant to Section 906 of Sarbanes-Oxley Act of 2002) 24 (99)(a) The Corporation's Proxy Statement furnished to shareholders in connection with Annual Meeting of Shareholders scheduled for April 20, 2004, including Financial Information Appendix and excluding the Board Compensation Committee Report, the Total Shareholder Return Performance Graph, the Audit Committee Report and the statements regarding the independence of members of the Audit Committee, filed March 10, 2004, and incorporated herein by reference. (99)(b) Annual Report on Form 11-K for the Corporation's Savings Plan and Trust, for fiscal year ended 12/31/03 as authorized by SEC Rule 15d-21 (to be filed as an Amendment to Form l0-K). (99)(c) Report of Predecessor Independent Public Accountant. (99)(d) Form 8-K, filed by the Corporation 5-15-02, and incorporated herein by reference. (b) The following reports on Form 8-K, with the Date of Report indicated, were filed during the fourth quarter 2003: 1. 10/22/03 -- Item 12 -- Earnings Release for third quarter 2003 was furnished. 2. 10/22/03 -- Item 5 -- Announcement of the election of J. Kenneth Glass as Chairman of the Board upon the retirement of Ralph Horn on 12/31/03, the election of Marlin L. Mosby, III as Executive Vice President and Chief Financial Officer, effective 11/17/03, and the election of Elbert L. Thomas, Jr. as Executive Vice President and Interest Rate Risk Manager on 10/22/03. 25 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FIRST TENNESSEE NATIONAL CORPORATION Date: March 10, 2003 By: /s/ Marlin L. Mosby, III --------------------------------------------- Marlin L. Mosby, III, Executive Vice President, and Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- J. Kenneth Glass* Chairman of the Board, President March 10, 2004 - -------------------------- Chief Executive Officer and a Director J. Kenneth Glass (principal executive officer) Marlin L. Mosby, III* Executive Vice President and Chief March 10, 2004 - -------------------------- Financial Officer (principal Marlin L. Mosby, III financial officer) James F. Keen* Executive Vice President, and March 10, 2004 - -------------------------- Corporate Controller (principal James F. Keen accounting officer) Robert C. Blattberg* Director March 10, 2004 - -------------------------- Robert C. Blattberg George E. Cates* Director March 10, 2004 - -------------------------- George E. Cates James A. Haslam, III* Director March 10, 2004 - -------------------------- James A. Haslam, III R. Brad Martin* Director March 10, 2004 - -------------------------- R. Brad Martin Vicki R. Palmer * Director March 10, 2004 - -------------------------- Vicki R. Palmer Michael D. Rose* Director March 10, 2004 - -------------------------- Michael D. Rose Mary F. Sammons* Director March 10, 2004 - -------------------------- Mary F. Sammons
26 William B. Sansom* Director March 10, 2004 - -------------------------- William B. Sansom Jonathan P. Ward* Director March 10, 2004 - -------------------------- Jonathan P. Ward Luke Yancy III* Director March 10, 2004 - -------------------------- Luke Yancy III *By: /s/ Clyde A. Billings, Jr. March 10, 2004 ------------------------------ Clyde A. Billings, Jr. As Attorney-in-Fact
27 EXHIBIT INDEX Item No. Description - -------- ----------- (3)(i) Restated Charter of the Corporation, as amended, incorporated herein by reference to Exhibit 3(i) to the Corporation's 1997 Annual Report on Form 10-K. (3)(ii) Bylaws of the Corporation, as amended and restated. (4)(a) Shareholder Protection Rights Agreement, dated as of October 20, 1998, between the Corporation and First Tennessee Bank National Association, as Rights Agent, including as Exhibit A the forms of Rights Certificate and Election to Exercise and as Exhibit B the form of Articles of Amendment designating Participating Preferred Stock, incorporated herein by reference to Exhibits 1, 2, and 3 to the Corporation's Registration Statement on Form 8-A filed 10-23-98. (4)(b) The Corporation and certain of its consolidated subsidiaries have outstanding certain long-term debt. See Note 10 in the Corporation's 2004 Proxy Statement. None of such debt exceeds 10% of the total assets of the Corporation and its consolidated subsidiaries. Thus, copies of constituent instruments defining the rights of holders of such debt are not required to be included as exhibits. The Corporation agrees to furnish copies of such instruments to the Securities and Exchange Commission upon request. *(10)(a) First Tennessee National Corporation Non-qualified Deferred Compensation Plan. *(10)(b) 2000 Employee Stock Option Plan, as amended and restated, incorporated herein by reference to Exhibit 10(b) to the Corporation's 2000 Annual Report on Form 10-K. *(10)(c) 1997 Employee Stock Option Plan, as amended and restated, incorporated herein by reference to Exhibit 10(c) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 9/30/02. *(10)(d) 1992 Restricted Stock Incentive Plan, as amended and restated, incorporated herein by reference to Exhibit 10(d) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 3-31-99. *(10)(e) 1984 Stock Option Plan, as amended, and 1-21-97 and 10-22-97 amendments, incorporated herein by reference to Exhibit 10(e) to the Corporation's 1992, 1996 and 1997 Annual Reports on Form 10-K. *(10)(f) 1990 Stock Option Plan, as amended, and 1-21-97, 10-22-97 and 10-18-00 amendments, incorporated herein by reference to Exhibit 10(f) to the Corporation's 1992, 1996, 1997 and 2000 Annual Reports on Form 10-K. *(10)(g) Survivor Benefits Plan, as amended and restated, incorporated herein by reference to Exhibit 10(g) to the Corporation's 2003 Quarterly Report on Form 10-Q for the quarter ended 9-30-03. *(10)(h) Directors and Executives Deferred Compensation Plan, as amended and restated, incorporated herein by reference to Exhibit 10(h) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 6-30-03 and form of individual agreement, incorporated herein by reference to Exhibit 10(h) to the Corporation's 1996 Annual Report on Form 10-K. *(10)(i) Amended and Restated Pension Restoration Plan, as amended and restated, incorporated herein by reference to Exhibit 10(i) to the Corporation's 2003 Quarterly Report on Form 10-Q for the quarter ended 9-30-03. *(10)(j) Director Deferral Agreements with schedule, incorporated herein by reference to Exhibit 10(k) to the Corporation's 1992 Annual Report on Form 10-K and Exhibit 10(j) to the Corporation's 1995 Annual Report on Form 10-K. *(10)(k) Form of Severance Agreements dated 1-28-97, incorporated herein by reference to Exhibit 10(k) to the Corporation's 1996 Annual Report on Form 10-K. *(10)(l) 1995 Employee Stock Option Plan, as amended and restated, incorporated herein by reference to Exhibit 10(l) to the Corporation's 2000 Annual Report on Form 10-K. *(10)(m) Non-Employee Directors Deferred Compensation Stock Option Plan, as amended and restated, incorporated herein by reference to Exhibit 10(m) to the Corporation's 1997 Annual Report on Form 10-K. *(10)(n) 2000 Non-Employee Directors' Deferred Compensation Stock Option Plan, incorporated herein by reference to Exhibit 10(n) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 6-30-03. *10(o) Ralph Horn Non-Compete and Early Retirement Agreement. *10(p) Non-employee Director Benefits. *10(q) 2002 Management Incentive Plan, incorporated herein by reference to Exhibit 10(q) to the Corporation's 2001 Annual Report on Form 10-K. *10(r) 2003 Equity Compensation Plan, incorporated herein by reference to Appendix A to the Corporation's Proxy Statement furnished to shareholders in connection with the annual meeting scheduled for April 15, 2003, filed March 18, 2003. *10(s) 2002 Bank Directors and Advisory Board Member Deferral Plan, incorporated herein by reference to Exhibit 10(s) to the Corporation's 2002 Annual Report on Form 10-K. *10(t) [1997] Bank Director and Advisory Board Member Deferral Plan, incorporated herein by reference to Exhibit 10(t) to the Corporation's 2002 Annual Report on Form 10-K. *10(u) [1991] Bank Advisory Director Deferral Plan, incorporated herein by reference to Exhibit 10(u) to the Corporation's 2002 Annual Report on Form 10-K. *10(v) Long-Term Disability Program. 14 Code of Ethics for Senior Financial Officers (16) Letter regarding change in certifying accountant, incorporated herein by reference to Exhibit 16 to the Corporation's Form 8-K, filed May 16, 2002. (21) Subsidiaries of the Corporation. (23)(a) Accountants' Consents. (23)(b) Registrant's Disclosure regarding Accountant's Consent. (24) Powers of Attorney 31(a) Rule 13a-14(a) Certifications of CEO (pursuant to Section 302 of Sarbanes-Oxley Act of 2002) 31(b) Rule 13a-14(a) Certifications of CFO (pursuant to Section 302 of Sarbanes-Oxley Act of 2002) 32(a) Rule 1350 Certifications of CEO (pursuant to Section 906 of Sarbanes-Oxley Act of 2002) 32(b) Rule 1350 Certifications of CFO (pursuant to Section 906 of Sarbanes-Oxley Act of 2002) (99)(a) The Corporation's Proxy Statement furnished to shareholders in connection with Annual Meeting of Shareholders scheduled for April 20, 2004, including Financial Information Appendix and excluding the Board Compensation Committee Report, the Total Shareholder Return Performance Graph, the Audit Committee Report, the Audit Committee Charter, and the statements regarding the independence of members of the Audit Committee, filed March 10, 2004, and incorporated herein by reference. (99)(b) Annual Report on Form ll-K for the Corporation's Savings Plan and Trust, for fiscal year ended 12/31/03, as authorized by SEC Rule 15d-21 (to be filed as an amendment to Form 10-K). (99)(c) Report of Predecessor Independent Public Accountant. (99)(d) Form 8-K, filed by the Corporation 5-15-02, and incorporated herein by reference. * Exhibits marked with an "*" represent a management contract or compensatory plan or arrangement required to be identified and filed as an exhibit. EX-3 3 ex3-ii.txt EXHIBIT 3(II) Exhibit 3(ii) BYLAWS OF FIRST TENNESSEE NATIONAL CORPORATION (As Amended and Restated January 20, 2004) ARTICLE ONE OFFICES 1.1 Principal Office. The principal office of First Tennessee National Corporation (the "Corporation") shall be 165 Madison Avenue, Memphis, Tennessee. 1.2 Other Offices. The Corporation may have offices at such other places, either within or without the State of Tennessee, as the Board of Directors may from time to time designate or as the business of the Corporation may from time to time require. 1.3 Registered Office. The registered office of the Corporation required to be maintained in the State of Tennessee shall be the same as its principal office and may be changed from time to time as provided by law. ARTICLE TWO SHAREHOLDERS 2.1 Place of Meetings. Meetings of the shareholders of the Corporation may be held either in the State of Tennessee or elsewhere; but in the absence of notice to the contrary, shareholders' meetings shall be held at the principal office of the Corporation in Memphis, Tennessee. 2.2 Quorum and Adjournments. The holders of a majority of the shares issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall be requisite, and shall constitute a quorum at all meetings of the shareholders, for the transaction of business, except as otherwise provided by law, the Restated Charter of the Corporation, as amended from time to time (the "Charter"), or these Bylaws. In the event a quorum is not obtained at the meeting, the holders of a majority of the shares entitled to vote thereat, present in person or by proxy, shall have power to adjourn the meeting from time to time and, whether or not a quorum is obtained at the meeting, the Chairman of the meeting shall have the power to adjourn the meeting from time to time, in either case without notice, except as otherwise provided by law, other than announcement at the meeting. At such adjourned meeting at which the requisite amount of voting shares shall be represented, any business may be transacted which might have been transacted at the meeting as originally notified. 2.3 Notice of Meetings. Unless otherwise required by applicable law, written notice of the annual and each special meeting stating the date, time and place of the meeting shall be mailed, postage prepaid, or otherwise delivered to each shareholder entitled to vote thereat at such address as appears on the records of shareholders of the Corporation, at least ten (10) days, but not more than two (2) months, prior to the meeting date. In addition, notice of any special meeting shall state the purpose or purposes for which the meeting is called and the person or persons calling the meeting. In the event of an adjournment of a meeting to a date more than four months after the date fixed for the original meeting or the Board of Directors fixes a new record date for the adjourned meeting, a new notice of the adjourned meeting must be given to shareholders as of the new record date. Any previously scheduled meeting may be postponed, and any special meeting may be canceled, by resolution of the Board of Directors upon public notice given prior to the date scheduled for such meeting. 2.4 Annual Meetings. The annual meeting of shareholders for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held each year on the third Tuesday in April, or if that day is a legal holiday, on the next succeeding business day not a legal holiday, at 10:00 a.m. Memphis time or on such other date and/or at such other time as the Board of Directors may fix by resolution by vote of a majority of the entire Board of Directors. At the meeting, the shareholders shall elect by ballot, by plurality vote, directors to succeed directors in the class of directors whose term expires at the meeting and directors elected by the Board of 1 Directors to fill vacancies in other classes of directors and may transact such other business as may properly come before the meeting. 2.5 Special Meetings. Special meetings of the shareholders for any purpose or purposes, unless otherwise prescribed by statute, may be called by Chairman of the Board and shall be called by the Chairman of the Board or the Secretary at the request in writing of a majority of the Board of Directors. Only such business within the purpose or purposes described in the notice of the meeting may be conducted at the meeting. 2.6 Waiver of Notice. Any shareholder may waive in writing notice of any meeting either before, at or after the meeting. Attendance by a shareholder in person or by proxy at a meeting shall constitute a waiver of objection to lack of notice or defective notice and a waiver of objection to consideration of a matter that was not described in the meeting notice unless the shareholder objects in the manner required by law. 2.7 Voting. Unless otherwise required by the Charter, at each meeting of shareholders, each shareholder shall have one vote for each share of stock having voting power registered in the shareholder's name on the records of the Corporation on the record date for that meeting, and every shareholder having the right to vote shall be entitled to vote in person or by proxy appointed by instrument in writing or any other method permitted by law. 2.8 Procedures for Bringing Business before Shareholder Meeting. At an annual or special meeting of shareholders, only such business shall be conducted, and only such proposals shall be acted upon, as shall have been properly brought before an annual or special meeting of shareholders. To be properly brought before an annual or special meeting of shareholders, business must be (i) in the case of a special meeting called by the Chairman of the Board or at the request of the Board of Directors, specified in the notice of the special meeting (or any supplement thereto), or (ii) in the case of an annual meeting properly brought before the meeting by or at the direction of the Board of Directors or (iii) otherwise properly brought before the annual or special meeting by a shareholder. For business to be properly brought before such a meeting of shareholders by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a shareholder's notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than 90 days nor more than 120 days prior to the date of the meeting; provided, however, that if fewer than 100 days' notice or prior public disclosure of the date of the meeting is given or made to shareholders, notice by the shareholders to be timely must be so delivered or received not later than the close of business on the 10th day following the earlier of (i) the day on which such notice of the date of such meeting was mailed or (ii) the day on which such public disclosure was made. A shareholder's notice to the Secretary shall set forth as to each matter the shareholder proposes to bring before a meeting of shareholders (i) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (ii) the name and address, as they appear on the Corporation's books, of the shareholder proposing such business and any other shareholders known by such shareholder to be supporting such proposal, (iii) the class and number of shares of the Corporation which are beneficially owned by such shareholder on the date of such shareholder's notice and by any other shareholders known by such shareholder to be supporting such proposal on the date of such shareholder's notice, and (iv) any material interest of the shareholder in such proposal. Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at a meeting of shareholders except in accordance with the procedures set forth in this Section 2.8. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that the business was not properly brought before the meeting in accordance with the procedures prescribed by these Bylaws, and if the Chairman should so determine, the Chairman shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. 2.9 SEC Proxy Rules. In addition to complying with the provisions of Section 2.8, a shareholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder with respect to the matters set forth in Section 2.8. Nothing in Section 2.8 shall be deemed to affect any rights of shareholders to request inclusion of proposals in the Corporation's proxy statement pursuant to rules of the Securities and Exchange Commission. For such proposals to be acted upon at a meeting, however, compliance with the notice provisions of Section 2.8 is also required. 2 ARTICLE THREE DIRECTORS 3.1 Powers of Directors. The business and affairs of the Corporation shall be managed under the direction of and all corporate powers shall be exercised by or under the authority of the Board of Directors. 3.2 Number and Qualifications. The Board of Directors shall consist of eleven members. The Board of Directors has the power to change from time to time the number of directors specified in the preceding sentence. Any such change in the number of directors constituting the Corporation's Board Directors must be made exclusively by means of an amendment to these Bylaws adopted by a majority of the entire Board of Directors then in office. Directors need not be shareholders of the Corporation nor residents of the State of Tennessee. 3.3 Term of Office. Except as otherwise provided by law or by the Charter, the term of each director hereafter elected shall be from the time of his or her election and qualification until the third annual meeting next following such election and until a successor shall have been duly elected and qualified; subject, however, to the right of the removal of any director as provided by law, by the Charter or by these Bylaws. 3.4 Compensation. The directors shall be paid for their services on the Board of Directors and on any Committee thereof such compensation (which may include cash, shares of stock of the Corporation and options thereon) and benefits together with reasonable expenses, if any, at such times as may, from time to time, be determined by resolution adopted by a majority of the entire Board of Directors; provided that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and being compensated therefor. 3.5 Committees. The directors, by resolution adopted by a majority of the entire Board of Directors, may designate an executive committee and other committees, consisting of two or more directors, and may delegate to such committee or committees all such authority of the Board of Directors that it deems desirable, including, without limitation, authority to appoint corporate officers, fix their salaries, and, to the extent such is not provided by law, the Charter or these Bylaws, to establish their authority and responsibility, except that no such committee or committees shall have and exercise the authority of the Board of Directors to: (a) authorize distributions (which include dividend declarations), except according to a formula or method prescribed by the Board of Directors, (b) fill vacancies on the Board of Directors or on any of its committees, (c) adopt, amend or repeal bylaws, (d) authorize or approve the reacquisition of shares, except according to a formula or method prescribed by the Board of Directors, or (e) authorize or approve the issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences and limitations of a class or series of shares, except that the Board of Directors may authorize a committee to do so within limits specifically prescribed by the Board of Directors. 3.6 Procedures for Director Nominations. Except as provided in Section 3.7 with respect to vacancies on the Board of Directors, only persons nominated in accordance with the procedures set forth in this Section 3.6 shall be eligible for election as directors. Nominations of persons for election to the Board of Directors may be made at a meeting of shareholders (i) by or at the direction of the Board of Directors, or (ii) by any shareholder of the Corporation entitled to vote for the election of directors at such meeting who complies with the notice procedures set forth in this Section 3.6. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a shareholder's notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than 90 days nor more than 120 days prior to the date of a meeting; provided, however, that if fewer than 100 days' notice or prior public 3 disclosure of the date of the meeting is given or made to shareholders, notice by the shareholder to be timely must be so delivered or received not later than the close of business on the 10th day following the earlier of (i) the day on which such notice of the date of such meeting was mailed or (ii) the day on which such public disclosure was made. A shareholder's notice to the Secretary shall set forth (i) as to each person whom the shareholder proposes to nominate for election or reelection as a director (a) the name, age, business address and residence address of such person, (b) the principal occupation or employment of such person, (c) the class and number of shares of the Corporation which are beneficially owned by such person on the date of such shareholder's notice and (d) any other information relating to such person that is required to be disclosed in solicitations of proxies for election of directors or, is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including, without limitation, such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (ii) as to the shareholder giving the notice (a) the name and address, as they appear on the Corporation's books, of such shareholder and any other shareholders known by such shareholder to be supporting such nominees and (b) the class and number of shares of the Corporation which are beneficially owned by such shareholder on the date of such shareholder's notice and by any other shareholders known by such shareholder to be supporting such nominees on the date of such shareholder's notice. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 3.6. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these Bylaws, and if the Chairman should so determine, the Chairman shall so declare to the meeting and the defective nomination shall be disregarded. 3.7 Vacancies; Removal from Office. Except as otherwise provided by law or by the Charter, newly created directorships resulting from any increase in the authorized number of directors or any vacancies on the Board of Directors resulting from death, resignation, retirement, disqualification or any other cause (except removal from office) shall be filled only by the Board of Directors, provided that a quorum is then in office and present, or only by a majority of the directors then in office, if less than a quorum is then in office or by the sole remaining director. Any vacancies on the Board of Directors resulting from removal from office may be filled by the affirmative vote of the holders of at least a majority of the voting power of all outstanding voting stock or, if the shareholders do not so fill such a vacancy, by a majority of the directors then in office. Directors elected to fill a newly created directorship or other vacancy shall hold office for a term expiring at the next shareholders' meeting at which directors are elected and until such director's successor has been duly elected and qualified. The directors of any class of directors of the Corporation may be removed by the shareholders only for cause by the affirmative vote of the holders of at least a majority of the voting power of all outstanding voting stock. 3.8 Place of Meetings. The directors may hold meetings of the Board of Directors or of a committee thereof at the principal office of the Corporation in Memphis, Tennessee, or at such other place or places, either in the State of Tennessee or elsewhere, as the Board of Directors or the members of the committee, as applicable, may from time to time determine by resolution or by written consent or as may be specified in the notice of the meeting. 3.9 Quorum. A majority of the directors shall constitute a quorum for the transaction of business, but a smaller number may adjourn from time to time, without further notice, if the time and place to which the meeting is adjourned are fixed at the meeting at which the adjournment is taken and if the period of adjournment does not exceed thirty (30) days in any one (1) adjournment. The vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, unless the vote of a greater number is required by law, the Charter, or these Bylaws. 3.10 Regular Meetings. Following each annual meeting of shareholders, the newly elected directors, together with the incumbent directors whose terms do not expire at such meeting, shall meet for the purpose of organization, the appointment of officers and the transaction of other business, and, if a majority of the directors be present at such place, day and hour, no prior notice of such meeting shall be required to be given to the directors. The place, day and hour of such meeting may also be fixed by resolution or by written consent of the directors. In addition, the Board of Directors may approve an annual schedule for additional regular meetings of the Board of Directors and of committees thereof. 4 3.11 Special Meetings. Special meetings of the directors may be called by the Chairman of the Board, the Chief Executive Officer, or the President (or as to any committee of the Board of Directors, by the person or persons specified in the resolution of the Board of Directors establishing the committee) on two days' notice by mail or on one day's notice by telegram or cablegram, or on two hours' notice given personally or by telephone or facsimile transmission to each director (or member of the committee, as appropriate), and shall be called by the Chairman of the Board or Secretary in like manner on the written request of a majority of directors then in office. The notice shall state the day and hour of the meeting and the place where the meeting is to be held. Special meetings of the directors may be held at any time on written waiver of notice or by consent of all the directors, either of which may be given either before, at or after the meeting. 3.12 Action without a Meeting. The directors may (whether acting in lieu of a meeting of the Board of Directors or of a committee thereof) take action which they are required or permitted to take, without a meeting, on written consent setting forth the action so taken, signed by all of the directors entitled to vote thereon. If all the directors entitled to vote consent to taking such action without a meeting, the affirmative vote of the number of directors necessary to authorize or take such action at a meeting is the act of the Board of Directors or committee, as appropriate. 3.13 Telephone Meetings. Directors may participate in a meeting of the Board of Directors or of a committee thereof by, or conduct a meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director so participating is deemed to be present in person at such meeting. ARTICLE FOUR OFFICERS 4.1 Designated Officers. The officers of the Corporation shall consist of a Chairman of the Board, a Chief Executive Officer, a President, such number of Vice Chairmen as the Board may from time to time determine and appoint, an Auditor, a Chief Credit Officer, a Chief Financial Officer, a Controller, a General Counsel, an Executive Vice President-Risk Management, an Executive Vice President-Corporate and Employee Services, a President-Business Financial Services, a President-Retail Financial Services, an Executive Vice President-Interest Rate Risk Manager, an Executive Vice President-Product Management and Delivery Services, a Secretary, and a Treasurer, and such number of Senior Executive Vice Presidents, Executive Vice Presidents, Senior Vice Presidents and Vice Presidents and such other Officers and assistant Officers as may be from time to time determined and appointed in accordance with the provisions of this Article Four. The title of any officer may include any additional descriptive designation determined to be appropriate. Any person may hold two or more offices, except that the President shall not also be the Secretary or an Assistant Secretary. The officers, other than the Chairman of the Board, need not be directors, and officers need not be shareholders. 4.2 Appointment of Officers. Except as otherwise provided in this Section 4.2, the officers of the Corporation shall be appointed by the Board of Directors at the annual organizational meeting of the Board of Directors following the annual meeting of shareholders. The Board of Directors may delegate to a committee of the Board of Directors the power to create corporate offices, define the authority and responsibility of such offices, except to the extent such authority or responsibility would not be consistent with the law or the Charter, and to appoint persons to any office of the Corporation except the offices of the Chairman of the Board, Chief Executive Officer, and President, any office the incumbent in which is designated by the Board as an Executive Officer (as defined in Section 4.5 hereof), and, upon the recommendation of the Audit Committee, the Auditor. In addition, the Board of Directors may delegate to the officers appointed to the Corporation's personnel committee, acting as a committee, the authority to appoint persons to any offices of the Corporation of the level of Vice President and below annually at the personnel committee meeting following the annual meeting of shareholders and to appoint persons to any office of the Corporation of the level of Executive Vice President and below during the period of time between the annual appointment of officers by the Board of Directors or pursuant to this section 4.2 of the Bylaws. Notwithstanding the delegation of authority pursuant to this section 4.2 of the Bylaws, the Board of Directors retains the authority to appoint all officers and such other officers and agents as it shall deem necessary, who shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. 5 4.3 Term. The officers of the Corporation shall be appointed for a term of one (1) year and until their successors are appointed and qualified, subject to the right of removal specified in Section 4.4 of these Bylaws. The designation of a specified term does not grant to any officer any contract rights. 4.4 Vacancies, Resignations and Removal. If the office of any officer or officers becomes vacant for any reason, the vacancy may be filled by the Board of Directors or, if such officer was appointed by a committee, by the committee appointing such officer. Any officer may resign at any time by delivering a written notice to the Chairman of the Board, Chief Executive Officer, President, Secretary, or Executive Vice President-Employee Services of the Corporation, or the designee of any of them, which shall be effective upon delivery unless it specifies a later date acceptable to the Corporation. Any officer designated by the Board as an Executive Officer shall be subject to removal at any time with or without cause only by the affirmative vote of a majority of the Board of Directors. The Auditor shall be subject to removal at any time with or without cause only by the affirmative vote of a majority of the Board of Directors, upon the recommendation of the Audit Committee. Any other officer shall be subject to removal at any time with or without cause by the affirmative vote of a majority of the Board of Directors, and in the event the officer was, or could have been, appointed by a committee, then by the affirmative vote of a majority of either such committee or the Board of Directors. 4.5 Compensation. The Board of Directors, or a committee thereof, shall fix the compensation of Executive Officers (as defined herein) of the Corporation. "Executive Officers" shall be those officers of the Corporation identified as such from time to time in a resolution or resolutions of the Board of Directors. The compensation of officers who are not Executive Officers shall be fixed by the Board of Directors, by a committee thereof, or by management under such policies and procedures as shall be established by the Board of Directors or a committee thereof. 4.6 Delegation of Officer Duties. In case of the absence of any officer of the Corporation, or for any reason that the Board of Directors (or, in addition, in the case of any officer appointed by a committee, such committee or any other committee which could appoint such officer pursuant to Section 4.2 of these Bylaws) may deem sufficient, the Board of Directors (or committee, as applicable) may delegate, for the time being, the powers or duties, or any of them, of such officer to any other officer, or to any director. 4.7 Chairman of the Board. The Chairman of the Board shall preside at all meetings of the shareholders and of the Board of Directors and shall have such powers and perform such duties as may be provided for herein and as are normally incident to the office and as may be assigned by the Board of Directors. If and at such times as the Board of Directors so determines, the Chairman of the Board may also serve as the Chief Executive Officer of the Corporation. 4.8 Chief Executive Officer. The Chief Executive Officer, in the absence of the Chairman of the Board, shall preside at all meetings of the shareholders and of the Board of Directors. The Chief Executive Officer shall be responsible for carrying out the orders of and the resolutions and policies adopted by the Board of Directors and shall have general management of the business of the Corporation and shall exercise general supervision over all of its affairs. In addition, the Chief Executive Officer shall have such powers and perform such duties as may be provided for herein and as are normally incident to the office and as may be prescribed by the Board of Directors. If and at such time as the Board of Directors so determines, the Chief Executive Officer may also serve as the President of the Corporation. 4.9 President. The President, in the absence of the Chairman of the Board and the Chief Executive Officer, shall preside at all meetings of the shareholders and of the Board of Directors. The President shall be the Chief Executive Officer of the Corporation unless the Board of Directors has appointed another person to such office, in which case the President shall be the Chief Operating Officer of the Corporation and shall have such powers and perform such duties as may be provided for herein and as are normally incident to the office and as may be prescribed by the Board of Directors, the Chairman of the Board, or the Chief Executive Officer. 4.10 Vice Chairmen. Vice Chairmen shall perform such duties and exercise such powers as may be prescribed by the Board of Directors, the Chairman of the Board, or the Chief Executive Officer. 4.11 Chief Financial Officer. The Chief Financial Officer shall be the principal financial officer of the Corporation. The Chief Financial Officer is authorized to sign any document filed with the Securities and Exchange 6 Commission or any state securities commission on behalf of the Corporation and shall perform such duties and exercise such powers as are normally incident to the office and as may be prescribed by the Board of Directors, the Chairman of the Board, or the Chief Executive Officer. 4.12 Chief Credit Officer. The Chief Credit Officer shall perform such duties and exercise such powers as are normally incident to the office and as may be prescribed by the Board of Directors, the Chairman of the Board, or the Chief Executive Officer. 4.13 General Counsel. The General Counsel shall perform such duties and exercise such powers as are normally incident to the office and as may be prescribed by the Board of Directors, the Chairman of the Board, or the Chief Executive Officer. 4.14 Executive Vice President-Corporate and Employee Services. The Executive Vice President-Employee Services shall perform such duties and exercise such powers as are normally incident to the office and as may be prescribed by the Board of Directors, the Chairman of the Board, or the Chief Executive Officer. 4.15 President-Business Financial Services. The President-Business Financial Services shall perform such duties and exercise such powers as are normally incident to the office and as may be prescribed by the Board of Directors, the Chairman of the Board, or the Chief Executive Officer. 4.16 President-Retail Financial Services. The President-Retail Financial Services shall perform such duties and exercise such powers as are normally incident to the office and as may be prescribed by the Board of Directors, the Chairman of the Board, or the Chief Executive Officer. 4.17 Executive Vice President-Risk Management. The Manager of Risk Management Executive Vice President-Risk Management shall perform such duties and exercise such powers as are normally incident to the office and as may be prescribed by the Board of Directors, the Chairman of the Board, or the Chief Executive Officer. 4.18 Executive Vice President-Product Management and Delivery Services. The Executive Vice President-Product Development and Delivery Services shall perform such duties and exercise such powers as are normally incident to the office and as may be prescribed by the Board of Directors, the Chairman of the Board, or the Chief Executive Officer. 4.19 Executive Vice President-Interest Rate Risk Manager. The Executive Vice President-Interest Rate Risk Manager shall perform such duties and exercise such powers as are normally incident to the office and as may be prescribed by the Board of Directors, the Chairman of the Board, or the Chief Executive Officer. 4.20 Senior Executive Vice Presidents, Executive Vice Presidents, Senior Vice Presidents and Vice Presidents. Senior Executive Vice Presidents, Executive Vice Presidents, Senior Vice Presidents and Vice Presidents shall perform such duties and exercise such powers as may be prescribed by the Board of Directors, a committee thereof, the personnel committee, the Chairman of the Board, or the Chief Executive Officer. 4.21 Secretary. The Secretary shall attend all sessions of the Board of Directors and of the shareholders and record all votes and the minutes of all proceedings in books to be kept for that purpose. The Secretary shall give or cause to be given notice of all meetings of the shareholders and of the Board of Directors, shall authenticate records of the Corporation, and shall perform such other duties as are incident to the office or as may be prescribed by the Board of Directors, the Chairman of the Board or the Chief Executive Officer. In the absence or disability of the Secretary, the Assistant Secretary or such other officer or officers as may be authorized by the Board of Directors or Executive Committee thereof shall perform all the duties and exercise all of the powers of the Secretary and shall perform such other duties as the Board of Directors, Chairman of the Board or the Chief Executive Officer shall prescribe. 4.22 Treasurer. The Treasurer shall have the custody of the funds and securities of the Corporation and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all monies and other valuable effects in the name and to the credit of the Corporation in such depositories as may 7 be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, or the President, taking proper vouchers for such disbursements, and shall render to the Board of Directors, the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, or the President, whenever they may require it, an account of all of his or her transactions as Treasurer and of the financial condition of the Corporation, and at a regular meeting of the Board of Directors preceding the annual shareholders' meeting, a like report for the preceding year. The Treasurer shall keep or cause to be kept an account of stock registered and transferred in such manner and subject to such regulations as the Board of Directors may prescribe. The Treasurer shall give the Corporation a bond, if required by the Board of Directors, in such a sum and in form and with security satisfactory to the Board of Directors for the faithful performance of the duties of the office and the restoration to the Corporation, in case of his or her death, resignation or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his or her possession, belonging to the Corporation. The Treasurer shall perform such other duties as the Board of Directors may from time to time prescribe or require. In the absence or disability of the Treasurer, the Assistant Treasurer shall perform all the duties and exercise all of the powers of the Treasurer and shall perform such other duties as the Board of Directors, the Chairman of the Board, or the Chief Executive Officer shall prescribe. 4.23 Auditor. The Auditor shall perform such duties and exercise such powers as are normally incident to the office and as may be prescribed by the Board of Directors or the Chairman of the Audit Committee. 4.24 Controller. The Controller shall be the principal accounting officer of the Corporation. The Controller is authorized to sign any document filed with the Securities and Exchange Commission or any state securities commission on behalf of the Corporation and shall assist the management of the Corporation in setting the financial goals and policies of the Corporation, shall provide financial and statistical information to the shareholders and to the management of the Corporation and shall perform such other duties and exercise such other powers as may be prescribed by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President. In the absence or disability of the Controller, the Assistant Controller shall perform all the duties and exercise all powers of the Controller and shall perform such duties as the Board of Directors or the Chairman of the Board or the Chief Executive Officer shall prescribe. 4.25 Other Officers. Officers holding such other offices as may be created pursuant to Sections 4.1 and 4.2 of these Bylaws shall have such authority and perform such duties and exercise such powers as may be prescribed by the Board of Directors, a committee thereof, the personnel committee, the Chairman of the Board or the Chief Executive Officer. 4.26 Officer Committees. The directors, by resolution adopted by a majority of the entire Board of Directors, may designate one or more committees, consisting of two or more officers, and may delegate to such committee or committees all such authority that the Board of Directors deems desirable that is permitted by law. Members of such committees may take action without a meeting and may participate in meetings to the same extent and in the same manner that directors may take action and may participate pursuant to Sections 3.12 and 3.13 of these Bylaws. ARTICLE FIVE SHARES OF STOCK 5.1 Certificates. The certificates representing shares of stock of the Corporation shall be numbered, shall be entered in the books or records of the Corporation as they are issued, and shall be signed by the Chairman of the Board or the Chief Executive Officer and any one of the following: the President, the Treasurer, or the Secretary. Either or both of the signatures upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent, or registered by a registrar other than an officer or employee of the Corporation. Each certificate shall include the following upon the face thereof: (a) A statement that the Corporation is organized under the laws of the State of Tennessee; (b) The name of the Corporation; 8 (c) The name of the person to whom issued; (d) The number and class of shares, and the designation of the series, if any, which such certificate represents; (e) The par value of each share represented by such certificate; or a statement that the shares are without par value; and (f) Such other provisions as the Board of Directors may from time to time require. 5.2 Shares Not Represented by Certificates. Notwithstanding the provisions of Section 5.1 of these Bylaws, the Board of Directors may authorize the issuance of some or all of the shares of any class without certificates. The Corporation shall send to each shareholder to whom such shares have been issued or transferred at the appropriate time any written statement providing information about such shares, which is required by law. 5.3 Stock Transfers and Record Dates. Transfers of shares of stock shall be made upon the books of the Corporation by the record owner or by an attorney, lawfully constituted in writing, and upon surrender of any certificate therefor. The Board of Directors may appoint suitable agents in Memphis, Tennessee, and elsewhere to facilitate transfers by shareholders under such regulations as the Board of Directors may from time to time prescribe. The transfer books may be closed by the Board of Directors for such period, not to exceed 40 days, as may be deemed advisable for dividend or other purposes, or in lieu of closing the books, the Board of Directors may fix in advance a date as the record date for determining shareholders entitled notice of and to vote at a meeting of shareholders, or entitled to payment of any dividend or other distribution. The record date for voting or taking other action as shareholders shall not be less than 10 days nor more than 70 days prior to the meeting date or action requiring such determination of shareholders. The record date for dividends and other distributions shall not be less than 10 days prior to the payment date of the dividend or other distribution. All certificates surrendered to the Corporation for transfer shall be canceled, and no new certificate shall be issued until the former certificate for like number of shares shall have been surrendered and canceled, except that in case of a lost or destroyed certificate a new one may be issued on the terms prescribed by Section 5.5 of these Bylaws. 5.4 Record Owners. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof; and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, except as required by applicable law. 5.5 Lost, Destroyed, Stolen or Mutilated Certificates. The agent for transfer of the Corporation's stock may issue new share certificates in place of certificates represented to have been lost, destroyed, stolen or mutilated upon receiving an indemnity satisfactory to the agent and the Secretary or Treasurer of the Corporation, without further action of the Board of Directors. ARTICLE SIX INDEMNIFICATION 6.1 Indemnification of Officers When Wholly Successful. If any current or former officer of the Corporation [including for purposes of this Article an individual who, while an officer, is or was serving another corporation or other enterprise (including an employee benefit plan and a political action committee, which serves the interests of the employees of the Corporation or any of its subsidiaries) in any capacity at the request of the Corporation and unless the context requires otherwise the estate or personal representative of such officer] is wholly successful, on the merits or otherwise, in the defense of any threatened, pending or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal ("Proceeding"), to which the officer was a party because he or she is or was an officer of the Corporation, the officer shall be indemnified by the Corporation against all reasonable expenses, including attorney fees, incurred in connection with such Proceeding, or any appeal therein. As used in this Article, "Proceeding" shall include, but is not limited to, any threatened, pending or contemplated action, suit or proceeding, whether civil, criminal, administrative, or investigative, and whether formal or informal, arising out 9 of or alleging any acts, errors, or omissions by the officer in the rendering or failure to render professional services, including legal and accounting services, for or at the request of the Corporation or any of its subsidiaries; provided such professional services are within the reasonably anticipated scope of the officer's duties. Additionally, as used in this Article, "Proceeding" shall include, but is not limited to, any threatened, pending or contemplated action, suit or proceeding arising out of or alleging negligence on the part of the Officer. 6.2 Indemnification of Officers When Not Wholly Successful. If any current or former officer of the Corporation has not been wholly successful on the merits or otherwise, in the defense of a Proceeding, to which the officer was or was threatened to be made a party because he or she was or is an officer, the officer shall be indemnified by the Corporation against any judgment, settlement, penalty, fine (including any excise tax assessed with respect to an employee benefit plan), or other liability and any reasonable expenses, including attorney fees, incurred as a result of such Proceeding, or any appeal therein, if authorized in the specific case after a determination has been made that indemnification is permissible because the following standard of conduct has been met: (a) The officer conducted himself or herself in good faith, and (b) The officer reasonably believed: (i) in the case of conduct in the officer's official capacity as an officer of the Corporation that the officer's conduct was in the Corporation's best interest; and (ii) in all other cases that the officer's conduct was at least not opposed to its best interests; and (c) In the case of any criminal proceeding, the officer had no reasonable cause to believe his or her conduct was unlawful; provided, however, the Corporation may not indemnify an officer in connection with a Proceeding by or in the right of the Corporation in which the officer was adjudged liable to the Corporation or in connection with any other proceeding charging improper benefit to the officer, whether or not involving action in his or her official capacity, in which the officer was adjudged liable on the basis that personal benefit was improperly received by the officer. 6.3 Procedures for Indemnification Determinations. The determination required by Section 6.2 herein shall be made as follows: (a) By the Board of Directors by a majority vote of a quorum consisting of directors not at the time parties to the Proceeding; (b) If a quorum cannot be obtained, by majority vote of a committee duly designated by the Board of Directors (in which designation directors who are parties may participate) consisting solely of two or more directors not at the time parties to the Proceeding; (c) By independent special legal counsel: (i) selected by the Board of Directors or its committee in the manner prescribed in subsection (a) or (b); or (ii) if a quorum of the Board of Directors cannot be obtained under subsection (a) and a committee cannot be designated under subsection (b), selected by majority vote of the full Board of Directors (in which selection directors who are parties may participate); or, if a determination pursuant to subsections (a), (b), or (c) of this Section 6.3 cannot be obtained, then (d) By the shareholders, but shares owned by or voted under the control of directors who are at the time parties to the Proceeding may not be voted on the determination. 6.4 Serving at the Request of the Corporation. An officer of the Corporation shall be deemed to be serving another corporation or other enterprise or employee benefit plan or political action committee at the request of the Corporation only if such request is reflected in the records of the Board of Directors or a committee appointed by the Board of Directors for the purpose of making such requests. Approval by the Board of Directors, or a committee thereof, may occur before or after commencement of such service by the officer. 10 6.5 Advancement of Expenses. The Corporation shall pay for or reimburse reasonable expenses, including attorney fees, incurred by an officer who is a party to a Proceeding in advance of the final disposition of the Proceeding if: (a) The officer furnishes to the Corporation a written affirmation of the officer's good faith belief that the officer has met the standard of conduct described in Section 6.2 herein; (b) The officer furnishes to the Corporation a written undertaking, executed personally or on behalf of the officer, to repay the advance if it is ultimately determined that the officer is not entitled to indemnification; and (c) A determination is made that the facts then known to those making the determination would not preclude indemnification under this bylaw. 6.6 Undertaking Required for Expenses. The undertaking required by Section 6.5 herein must be an unlimited general obligation of the officer but need not be secured and may be accepted without reference to financial ability to make repayment. 6.7 Procedures for Expense Determinations. Determinations and authorizations of payments under Section 6.5 herein shall be made in the same manner as is specified in Section 6.3 herein. 6.8 Indemnification of Employees and Former Directors. Every employee and every former director of the Corporation shall be indemnified by the Corporation to the same extent as officers of the Corporation. 6.9 Nonexclusivity of Right of Indemnification. The right of indemnification set forth above shall not be deemed exclusive of any other rights, including, but not limited to, rights created pursuant to Section 6.11 of these Bylaws, to which an officer, employee, or former director seeking indemnification may be entitled. No combination of rights shall permit any officer, employee or former director of the Corporation to receive a double or greater recovery. 6.10 Mandatory Indemnification of Directors and Designated Officers. The Corporation shall indemnify each of its directors and such of the non-director officers of the Corporation or any of its subsidiaries as the Board of Directors may designate, and shall advance expenses, including attorney's fees, to each director and such designated officers, to the maximum extent permitted (or not prohibited) by law, and in accordance with the foregoing, the Board of Directors is expressly authorized to enter into individual indemnity agreements on behalf of the Corporation with each director and such designated officers which provide for such indemnification and expense advancement and to adopt resolutions which provide for such indemnification and expense advancement. 6.11 Insurance. Notwithstanding anything in this Article Six to the contrary, the Corporation shall have the additional power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Corporation, or who, while a director, officer, employee or agent of the Corporation, is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, political action committee, or other enterprise, against liability asserted against or incurred by the person in that capacity or arising from the person's status as a director, officer, employee, or agent, whether or not the Corporation would have the power to indemnify the person against the same liability. ARTICLE SEVEN RETIREMENT 7.1 Non-Employee Directors. Directors who are not also officers of the Corporation or its affiliates shall be retired from the Board of Directors as follows: (a) Any director who shall attain the age of sixty-five (65) on or before the last day of the term for which he or she was elected shall not be nominated for re-election and shall be retired from the Board of 11 Directors at the expiration of such term; provided, however, any director first elected to the Board of Directors prior to April 17, 1996, may serve a minimum of two three-year terms. (b) For the purpose of maintaining boards of active business and professional persons, directors leaving the occupation or the position held at their last election (by retirement or otherwise) will be expected to tender their resignation for consideration at the next regularly scheduled meeting of the Board of Directors. A resignation will be accepted unless the Board in its judgment determines (i) the director has assumed another position deemed to be appropriate, (ii) the director is so engaged in a specific project for the Board as to make his or her resignation detrimental to the Corporation, or (iii) it is beneficial to the Board and in the best interests of the Corporation for the director to continue for such period of time as the Board deems appropriate. Directors who are also officers of the Corporation or any of its affiliates will be retired from the Board of Directors on the date of the annual meeting coincident with or next following the date of the director's retirement from or other discontinuation of active service with the Corporation and its affiliates. 7.2 Officers and Employees. Except as provided in the following sentence, the Corporation has no compulsory retirement age for its officers or employees. Each officer or employee who has attained 65 years of age and who, for the two-year period immediately before attaining such age, has been employed in a "bona fide executive" or a "high policy-making" position as those terms are used and defined in the Age Discrimination in Employment Act, Section 12(c), and the regulations relating to that section prescribed by the Equal Employment Opportunity Commission, all as amended from time to time (collectively, the "ADEA"), shall automatically be terminated by way of compulsory retirement and his or her salary discontinued on the first day of the month coincident with or immediately following the 65th birthday, provided such employee is entitled to an immediate nonforfeitable annual retirement benefit, as specified in the ADEA, in the aggregate amount of at least $44,000. Notwithstanding the prior sentence, the Board of Directors, in its discretion, may continue any such officer or employee in service and designate the capacity in which he or she shall serve, and shall fix the remuneration he or she shall receive. The Board of Directors may also re-employ any former officer who had theretofore been retired. ARTICLE EIGHT EXECUTION OF DOCUMENTS 8.1 Definition of "Document." For purposes of this Article Eight of the Bylaws, the term "document" shall mean a document of any type, including, but not limited to, an agreement, contract, instrument, power of attorney, endorsement, assignment, transfer, stock or bond power, deed, mortgage, deed of trust, lease, indenture, conveyance, proxy, waiver, consent, certificate, declaration, receipt, discharge, release, satisfaction, settlement, schedule, account, affidavit, security, bill, acceptance, bond, undertaking, check, note or other evidence of indebtedness, draft, guaranty, letter of credit, and order. 8.2 Execution of Documents. Except as expressly provided in Section 5.1 of these Bylaws (with respect to signatures on certificates representing shares of stock of the Corporation), the Chairman of the Board, the Chief Executive Officer, the President, any Vice Chairman, any Senior Executive Vice President, any Executive Vice President, any Senior Vice President, any Vice President, the Chief Financial Officer, the Chief Credit Officer, the General Counsel, the Executive Vice President-Corporate and Employee Services, the President-Retail Financial Services, the President-Business Financial Services, the Executive Vice President-Risk Management, the Executive Vice President-Interest Rate Risk Manager, the Executive Vice President-Product Management and Delivery Services, the Controller, the Treasurer, the Secretary, and any other officer, or any of them acting individually, may (i) execute and deliver in the name and on behalf of the Corporation or in the name and on behalf of any division or department of the Corporation any document pertaining to the business, affairs, or property of the Corporation or any division or department of the Corporation, and (ii) delegate to any other officer, employee or agent of the Corporation the power to execute and deliver any such document. 8.3 Method of Execution by Secretary. Unless otherwise required by law, the signature of the Secretary on any document may be a facsimile. 12 ARTICLE NINE EMERGENCY BYLAWS 9.1 Definition of "Emergency." The provisions of this Article Nine shall be effective only during an "emergency." An "emergency" shall be deemed to exist whenever any two of the officers identified in Section 9.2 of these Bylaws in good faith determine that a quorum of the directors cannot readily be assembled because of a catastrophic event. 9.2 Notice of Meeting. A meeting of the Board of Directors may be called by any one director or by any one of the following officers: Chairman of the Board, Chief Executive Officer, President, any Vice Chairman, any Senior Executive Vice President, any Executive Vice President, Chief Credit Officer, Chief Financial Officer, Controller, General Counsel, Executive Vice President-Risk Management, Executive Vice President-Corporate and Employee Services, President-Business Financial Services, President-Retail Financial Services, Executive Vice President-Interest Rate Risk Manager, Executive Vice President-Product Management and Delivery Services, or Secretary. Notice of such meeting need be given only to those directors whom it is practical to reach by any means the person calling the meeting deems feasible, including, but not limited to, by publication and radio. Such notice shall be given at least two hours prior to commencement of the meeting. 9.3 Quorum and Substitute Directors. If a quorum has not been obtained, then one or more officers of the Corporation or the Bank present at the emergency meeting of the Board of Directors, as are necessary to achieve a quorum, shall be considered to be substitute directors for purposes of the meeting, and shall serve in order of rank, and within the same rank in order of seniority determined by hire date by the Corporation, the Bank or any of their subsidiaries. In the event that less than a quorum of the directors (including any officers who serve as substitute directors for the meeting) are present, those directors present (including such officers serving as substitute directors) shall constitute a quorum. 9.4 Action at Meeting. The Board as constituted pursuant to Section 9.3 and after notice has been provided pursuant to Section 9.2 may take any of the following actions: (i) prescribe emergency powers of the Corporation, (ii) delegate to any officer or director any of the powers of the Board of Directors, (iii) designate lines of succession of officers and agents in the event that any of them are unable to discharge their duties, (iv) relocate the principal office or designate alternative or multiple principal offices, and (v) take any other action that is convenient, helpful, or necessary to carry on the business of the Corporation. 9.5 Effectiveness of Non-emergency Bylaws. All provisions of these Bylaws not contained in this Article Nine, which are consistent with the emergency bylaws contained in Article Nine, shall remain effective during the emergency. 9.6 Termination of Emergency. Any emergency causing this Article Nine to become operative shall be deemed to be terminated whenever either of the following conditions is met: (i) the directors and any substitute directors determine by a majority vote at a meeting that the emergency is over or (ii) a majority of the directors elected pursuant to the provisions of these Bylaws other than this Article Nine hold a meeting and determine that the emergency is over. 9.7 Action Taken in Good Faith. Any corporate action taken in good faith in accordance with the provisions of this Article Nine binds the Corporation and may not be used to impose liability on any director, substitute director, officer, employee or agent of the Corporation. 13 ARTICLE TEN MISCELLANEOUS PROVISIONS 10.1 Fiscal Year. The Board of Directors of the Corporation shall have authority from time to time to determine whether the Corporation shall operate upon a calendar year basis or upon a fiscal year basis, and if the latter, said Board of Directors shall have power to determine when the said fiscal year shall begin and end. 10.2 Dividends. Dividends on the capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting pursuant to law. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve fund to meet contingencies, or for equalizing dividends or for repairing or maintaining any property of the Corporation, or for such other purposes as the directors shall think conducive to the interest of the Corporation. 10.3 Seal. This Corporation shall have a Corporate Seal which shall consist of an imprint of the name of the Corporation, the state of its incorporation, the year of incorporation and the words "Corporate Seal." The Corporate Seal shall not be required to establish the validity or authenticity of any document executed in the name and on behalf of the Corporation. 10.4 Notices. Whenever notice is required to be given to any director, officer or shareholder under any of the provisions of the law, the Charter, or these Bylaws (except for notice required by Sections 2.8 and 3.6 of these Bylaws), it shall not be construed to require personal notice, but such notice may be given in writing by depositing the same in the United States mail, postage prepaid, or by telegram, teletype, facsimile transmission or other form of wire, wireless, or other electronic communication or by private carrier addressed to such shareholder at such address as appears on the Corporation's current record of shareholders, and addressed to such director or officer at such address as appears on the records of the Corporation. If mailed as provided above, notice to a shareholder shall be deemed to be effective at the time when it is deposited in the mail. 10.5 Bylaw Amendments. The Board of Directors shall have power to make, amend and repeal the Bylaws or any Bylaw of the Corporation by vote of not less than a majority of the directors then in office, at any regular or special meeting of the Board of Directors. The shareholders may make, amend and repeal the Bylaws or any Bylaw of this Corporation at any annual meeting or at a special meeting called for that purpose only by the affirmative vote of the holders of at least eighty percent (80%) of the voting power of all outstanding voting stock, and all Bylaws made by the directors may be amended or repealed by the shareholders only by the vote of the holders of at least eighty percent (80%) of the voting power of all outstanding voting stock. Without further authorization, at any time the Bylaws are amended, the Secretary is authorized to restate the Bylaws to reflect such amendment, and the Bylaws, as so restated, shall be the Bylaws of the Corporation. 10.6 Authority to Vote Shares. The Chief Executive Officer, President-Retail Financial Services, and President-Business Financial Services, or the designee or designees of them or any of them, are authorized, jointly or severally, to vote all shares (or other indicia of ownership) beneficially owned by the Company for any purposes and to take any action on behalf of the Company that is required to be taken by the Company as a shareholder or other beneficial owner of any entity whose shares (or other indicia of ownership) are beneficially owned by the Company, which they, or any of them, deem appropriate at meetings, annual or special, or without a meeting. 14 EX-10 4 ex10-a.txt EXHIBIT 10(A) Exhibit 10(a) FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN ARTICLE I Establishment and Purpose.....................................................Page 3 ARTICLE II Definitions...................................................................Page 3 ARTICLE III Eligibility and Participation.................................................Page 8 ARTICLE IV Deferral Elections, Company Discretionary Contributions, Account Valuation....Page 8 ARTICLE V Distributions and Withdrawals................................................Page 13 ARTICLE VI Administration...............................................................Page 16 ARTICLE VII Amendment and Plan Termination...............................................Page 17 ARTICLE VIII Informal Funding.............................................................Page 17 ARTICLE IX Claims.......................................................................Page 18 ARTICLE X General Conditions..............................................................Page 20
2 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN ARTICLE I ESTABLISHMENT AND PURPOSE First Tennessee National Corporation hereby sponsors the First Tennessee National Corporation Nonqualified Deferred Compensation Plan. The purpose of the Plan is to provide selected eligible employees of the Company and the Bank, members of the Company's Board of Directors, and such of the divisions or affiliates of the Company or the Bank that have adopted the Plan for their Eligible Employees with an opportunity to defer receipt of a portion of their base salary, bonus, commission and, in the case of Directors, Directors' Fees, and such other specified cash compensation (if any) as is permitted from time to time by the Committee. The Plan is not intended to meet the qualification requirements of Section 401(a) of the Internal Revenue Code, but is intended to be an unfunded arrangement providing deferred compensation to eligible employees who are part of a select group of management or highly compensated employees of the Company and selected subsidiaries within the meaning of Sections 201, 301 and 401 of ERISA. The Plan is intended to be exempt from the requirements of Parts 2, 3 and 4 of Title I of ERISA as a "top hat" plan, and to be eligible for the alternative method of compliance for reporting and disclosure available for unfunded "top hat" plans. ARTICLE II DEFINITIONS 2.1 Account Balance. Account Balance means, with respect to the Deferred Compensation Account or a Sub-Account, the total value of all the Investment Options in which the Participant deferrals, and Company Discretionary Contributions, have been Deemed Invested as of a specific date, taking into account the value of all distributions from that Account or Sub-Account to the specific date. 2.2 Allocation Election. Allocation Election means a choice by a Participant of one or more Investment Options, and the allocation among them, in which future Participant deferrals and/or existing Account Balances are Deemed Invested for purposes of determining earnings in a particular Sub-Account. 2.3 Allocation Election Form. Allocation Election Form means the form (or web site screen) approved by the Plan Administrator on which the Participant makes an Allocation Election, Rebalances a Sub-Account, or elects a Transfer. 2.4 Annual Valuation Date. Annual Valuation Date means the anniversary of the Termination Valuation Date or In-Service Distribution Valuation Date utilized to determine the amount of an annual installment payment. 2.5 Bank. The Bank means First Tennessee Bank National Association, a wholly owned subsidiary of the Company. 3 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN 2.6 Beneficiary. Beneficiary means a natural person, estate, or trust designated by a Participant on the form designated by the Plan Administrator to receive benefits to which a Beneficiary is entitled under and in accordance with provisions of the Plan. The Participant's estate shall be the Beneficiary if: (i) the Participant has not designated a natural person or trust as Beneficiary, or (ii) the designated Beneficiary has predeceased the Participant. 2.7 Chief Executive Officer. Chief Executive Officer means the individual who performs the functions of a Chief Executive Officer for the Company. 2.8 Code. Code means the Internal Revenue Code, as amended from time to time. 2.9 Company. Company means First Tennessee National Corporation, its successors and assigns. 2.10 Company Discretionary Contributions. Company Discretionary Contribution means a credit to a Participant's Retirement/Termination Account by a Participating Employer at a time and in an amount determined in the sole discretion of the Committee. 2.11 Compensation. Compensation means, for purposes of this Plan, base salary (including any deferred salary under a Code Section 401(k) or 125 plan), bonus, commission, Directors' annual retainers, Directors' Fees, and such other cash compensation (if any) approved by the Committee as Compensation for purposes of this Plan. 2.12 Compensation Deferral Agreement. Compensation Deferral Agreement means the deferral election form, or such other forms furnished by the Plan Administrator (or screens on the Participant web site approved by the Plan Administrator), on which a Participant elects: (a) the amount and type of Compensation to defer for the following Plan Year (in dollar amount or percentage); (b) any In-Service Distribution Dates for that year's, or a portion of that year's, deferrals; and (c) the payment schedule for Retirement and In-Service distributions. The Allocation Election Form may also be part of the Compensation Deferral Agreement, in the discretion of the Plan Administrator. 2.13 Death Benefit. Death Benefit means a distribution of the total amount of the Participant's Deferred Compensation Account Balance, including any remaining unpaid In-Service Account balances, to the Participant's Beneficiary(ies) in accordance with Article V of the Plan. 2.14 Deemed Investment. A Deemed Investment (or "Deemed Invested") means the notional conversion of a dollar amount of deferred Compensation and Company Discretionary Contributions credited to a Participant's Deferred Compensation Account into shares or units (or a fraction of such measures of ownership, if applicable) of the underlying investment (e.g. mutual fund or other investment) which is referred to by the Investment Option(s) selected by the Participant. The conversion shall occur as if shares (or units) of the designated investment were being purchased (or sold, in the case of a distribution) at 4 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN the purchase price as of the close of business of the day on which the Deemed Investment occurs. At no time shall a Participant have any real or beneficial ownership in the actual investment to which the Investment Option refers. 2.15 Deferred Compensation Account ("Account"). A Participant's Deferred Compensation Account means the aggregate of all Sub-Accounts maintained for Participant deferrals and Company Discretionary Contributions, together with a record of Deemed Investments in accordance with Participants' Allocation Elections, minus any withdrawals or distributions from said Account. The Account, and all component Sub-Accounts, shall be a bookkeeping account utilized solely as a device for the measurement of amounts to be paid to the Participant under the Plan. The Account, and all Sub-Accounts, shall not constitute or be treated as an escrow, trust fund, or any other type of funded account for Code or ERISA purposes and, moreover, amounts credited thereto shall not be considered "plan assets" for ERISA purposes. 2.16 Deferred Compensation Committee or "Committee". Committee means the Human Resources Committee of the Company's Board of Directors. 2.17 Director. Director means a member of the board of directors of the Company who is not also an Employee. 2.18 Directors' Fees. Directors' Fees means the annual cash retainer, meeting fees, and committee fees paid to Directors during the Plan Year. 2.19 Disability. Disability means a disability that would qualify as a total and permanent disability under the long-term disability plan then in effect at the company employing the Participant at the onset of such total and permanent disability. 2.20 Eligible Employee. Eligible Employee means an Employee who is part of a select group of management or highly compensated employees of an Employer within the meaning of Sections 201, 301 and 401 of ERISA, and who is selected by the Plan Administrator to participate in the Plan. 2.21 Employee. Employee means a full-time salaried employee of an Employer. 2.22 Employer. Employer (or "Participating Employer") means the Company, the Bank, and such subsidiaries or affiliates of the Company or the Bank that have adopted the Plan for their Eligible Employees. 2.23 ERISA. ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time. 2.24 In-Service Distribution. In-Service Distribution means a payment by the Company to the Participant following a date elected by the Participant (the In-Service Distribution Date) of the amount represented by the account balance in the In-Service Sub-Account 5 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN pertaining to that In-Service Distribution. In-Service Distributions shall be made in accordance with Participants' In-Service Distribution form of payment election. 2.25 In-Service Account. In-Service Account means a separate Sub-Account of the Deferred Compensation Account, created whenever a Participant elects a new In-Service Distribution Date (not already established with a Sub-Account) with respect to a portion, or all, of his or her deferral contributions, to which such portion of deferral specified by the Participant is credited and Deemed Invested in accordance with the Participant's Allocation Election. 2.26 In-Service Distribution Date. In-Service Distribution Date means the date selected by the Participant, following which the In-Service Distribution Sub-Account Balance shall be distributed in accordance with the Plan. 2.27 In-Service Distribution Valuation Date. In-Service Distribution Valuation Date means the last day of the calendar month in which the In-Service Distribution Date occurs. 2.28 Investment Option. Investment Option means a security or other investment such as a mutual fund, life insurance sub-account, or other investment approved by the Plan Administrator for use as part of an Investment Option menu, which a Participant may elect as a measuring device to determine Deemed Investment earnings (positive or negative) to be valued in the Participant's Account or Sub-Account. The Participant has no real or beneficial ownership in the security or other investment represented by the Investment Option. 2.29 Participant. Participant means a Director or an Eligible Employee who: (1) is selected to participate in this Plan in accordance with Section 3.1 and has elected to defer Compensation in accordance with the Plan in any Plan Year; (2) has been credited with a Plan Balance Transfer; (3) has received a Company Contribution; or (4) has an Account Balance in his or her Deferred Compensation Account, including any Sub-Account, greater than zero prior to his or her death. A Participant's continued participation in the Plan shall be governed by Section 3.2 of the Plan. 2.30 Plan. Plan means the First Tennessee National Corporation Nonqualified Deferred Compensation Plan as documented herein and as may be amended from time to time hereafter. 2.31 Plan Administrator. Plan Administrator means a committee of individuals appointed by the Company's EVP Corporate and Employee Services which is responsible for the day-to-day decision making, record keeping, and administration of the Plan; provided, that the Plan Administrator may delegate duties of the Plan Administrator to employees or others to assist in the administration of the Plan. 2.32 Plan Balance Transfer. Plan Balance Transfer means the crediting to the Participant's Retirement/Termination Account an amount equal to the Participant's account balance in 6 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN an existing nonqualified deferred compensation plan sponsored by the Company (other than this Plan) at such time and in accordance with such procedures as are established by the Plan Administrator in its sole discretion. 2.33 Plan Year. Plan Year means January 1 through December 31. 2.34 Rebalance. Rebalance means an Allocation Election which pertains to a Participant's then existing Sub-Account and which reallocates the Sub-Account Balance among Investment Options available in the Plan. 2.35 Retirement. Retirement means the voluntary termination of employment with the Company: (a) upon reaching age 65 with at least 5 "Years of Service" (as defined in the Company pension plan); or (b) after reaching age 55 with at least 15 Years of Service; or (c) after attaining an age, which when added to the Participant's Years of Service, totals at least 75. Retirement shall also mean such involuntary terminations as are designated as a Retirement for purposes of this Plan in the sole discretion of the Committee. In the case of a Director, Retirement means the cessation of performing services as a Director. 2.36 Retirement/Termination Account. Retirement/Termination Account means a Sub-Account of the Deferred Compensation Account containing deferrals, Plan Balance Transfers, Company Discretionary Contributions and Deemed Investment earnings thereon which have not been allocated to In-Service Account(s) by the Participant. 2.37 Sub-Account. Sub-Account means a portion of the Deferred Compensation Account maintained separately by the Plan Administrator in order to properly administer the Plan. 2.38 Termination of Employment. Termination of Employment means the termination of a Participant's employment with the Employer for which the Participant performs services, for any reason other than Retirement. The foregoing notwithstanding, a continuation of employment with an affiliate or other subsidiary of the Company or of the Bank which is not a Participating Employer in this Plan or in any other nonqualified deferred compensation plan sponsored by the Company, or a continuation of employment with an affiliate or subsidiary of the Company or of the Bank for which the Company sponsors a nonqualified deferred compensation plan accompanied with a Plan Balance Transfer to the plan of the Participant's new Employer, with no break in service, shall not constitute a Termination of Employment. 2.39 Termination Valuation Date. Termination Valuation Date means the last day of the calendar month in which Termination of Employment or Retirement occurs. 2.40 Transfer. Transfer means a partial Allocation Election with respect to a Participant's then existing Sub-Account where a Participant transfers a portion of the Sub-Account balance from one Investment Option to another. 7 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN ARTICLE III ELIGIBILITY AND PARTICIPATION 3.1 Eligibility and Participation. Each Eligible Employee, determined in the sole discretion of the Plan Administrator, and each Director shall be eligible to participate in this Plan. 3.2 Duration. Once an Employee or Director becomes a Participant, such Employee or Director shall continue to be a Participant so long as he or she is entitled to receive benefits hereunder, notwithstanding any subsequent Termination of Employment. 3.3 Revocation of Future Participation. Notwithstanding the provisions of Section 3.2, the Plan Administrator may revoke such Participant's eligibility to make future deferrals under this Plan. Such revocation will not affect in any manner a Participant's Deferred Compensation Account or other terms of this Plan. 3.4 Notification. Each newly Eligible Employee and Director shall be notified by the Plan Administrator, in writing, of his or her eligibility to participate in this Plan. ARTICLE IV DEFERRAL ELECTIONS, COMPANY DISCRETIONARY CONTRIBUTIONS, AND PARTICIPANT ACCOUNT VALUATION 4.1 Deferral Elections, generally (a) A Participant shall make deferral elections under the Plan by completing and submitting to the Plan Administrator a written Compensation Deferral Agreement provided by the Plan Administrator (or completing and electronically submitting the deferral election screen on the Participant web site, when made available by the Plan Administrator). Deferral elections become effective upon the first day of the Plan Year following the date of the election or, in the case of a newly Eligible Employee, upon the first pay day which follows the date of the election. Deferral elections are made during an annual enrollment period which ends no later than September 30, with respect to deferrals of annual bonus, and December 31, with respect to base salary and all other forms of Compensation, preceding the Plan Year to which the deferral election relates unless the enrollment period is extended by the Plan Administrator because of extraordinary circumstances. In no event may an enrollment period be extended beyond the last day of the month prior to the beginning of the Plan Year to which the deferral elections refer. Other cash Compensation deferral elections shall be made prior to the time such amounts have been earned, during special enrollment periods announced by the Plan Administrator. 8 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN (b) An Eligible Employee or Director who becomes eligible to be a Participant during any Plan Year may, in the initial year of eligibility only, make deferral elections with respect to Compensation which will be earned during the balance of such Plan Year but after such elections in such Plan Year, within 30 days of the date of notification of eligibility as required in Section 3.4 of the Plan. (c) Deferral elections shall be effective for one Plan Year and shall expire at the end of the Plan Year to which they refer and may not be modified during the Plan Year except in the event of a financial emergency determined in the sole discretion of the Plan Administrator. (d) A deferral election shall designate the amount of Compensation to be deferred in dollar amount or in whole percentages. An Eligible Employee Participant may defer into this Plan up to 75% of his or her Compensation, minus the amount (if any) of deferrals made by the Participant into the First Tennessee National Corporation Deferred Compensation Stock Option Program for the same Plan Year. A Director Participant may defer into this Plan up to 100% of his or her Compensation. The minimum deferral amount into this Plan for any Participant must be at least $5,000 for each Plan Year. A Participant may elect different percentages for different types of Compensation as permitted by the Plan Administrator. (e) The foregoing notwithstanding, in the event a Participant's deferral election results in insufficient non-deferred Compensation from which to withhold taxes in accordance with applicable law, the deferral election shall be reduced as necessary to allow the Employer to satisfy tax withholding requirements. (f) Deferrals pertaining to base salary shall be deducted by the Employer on a pro rata basis from a Participant's base salary for each pay period during the Plan Year, and the amount deferred shall be credited to the Participant's elected Sub-Account and a Deemed Investment shall be made in the investment(s) represented by the Investment Option(s) elected by the Participant as of the close of business on the date it would otherwise have been paid as Compensation to the Participant. Deferrals pertaining to other forms of Compensation shall be deducted by the Employer from the Participant's Compensation payment on the date of payment of such Compensation and the amount deferred shall be credited to the Participant's elected Sub-Account and a Deemed Investment shall be made in the investment(s) represented by the Investment Option(s) elected by the Participant as of the close of business on the date it would otherwise have been paid as Compensation to the Participant. (g) The Compensation Deferral Agreement shall indicate the Participant's election of a payment schedule for his or her Retirement/Termination Account. A Participant shall elect to have such Retirement/Termination Account distributed: (a) a portion, or all, in a single lump sum payable as soon as administratively 9 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN practicable following the Termination Valuation Date; and/or (b) the balance in up to five (5) annual installment payments payable in accordance with Section 5.3 of the Plan. An election of a payment schedule for a Participant's Retirement/Termination Account shall pertain to the entire Retirement/Termination Account balance (e.g. new payment schedule elections override previously elected payment schedules). A Participant shall be permitted to change (override) his or her Retirement/Termination Account payment schedule election at any time by filing a new Compensation Deferral Agreement (or by following such procedures as are set by the Plan Administrator regarding using the Participant website, when available), provided such election is made at least thirteen (13) months prior to the Participant's date of Retirement. Any payment schedule election made within thirteen months of Retirement shall be null and void, and the most recent payment schedule election which is dated at least thirteen months prior to Retirement will be in effect. 4.2 In-Service Distribution Date Election. (a) The Compensation Deferral Agreement shall also indicate the Participant's election of In-Service Distribution Date(s) (if any). An In-Service Distribution election shall pertain to such portion of deferred Compensation for the Plan Year as elected by the Participant and shall cause an In-Service Account to be established (unless such Account already exists), to which such portion of deferred Compensation shall be credited. In the event an In-Service Account has already been established for the In-Service Distribution Date referred to in the deferral election, such portion of deferred Compensation shall be credited to the existing In-Service Account. (b) A Participant may maintain up to three (3) In-Service Accounts. (c) A newly established In-Service Distribution Date must be at least two (2) years from the end of the Plan Year to which the election which creates it refers. Participants may allocate deferred compensation to existing In-Service Accounts so long as the In-Service Distribution Date for the In-Service Account occurs after the end of the Plan Year to which the election refers. (d) A Participant may change or cancel an In-Service Distribution Date once only, as follows: (i) An In-Service Distribution Date change (including a cancellation) may be made by submitting a new Compensation Deferral Agreement or such other form as may be provided for In-Service Distribution Date changes by the Plan Administrator (or completing and electronically submitting the appropriate screen on the Participant website, when available) at any time, so long as the date that such form is submitted to the Plan Administrator is at least thirteen (13) months prior to the In-Service Distribution Date being changed; and 10 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN (ii) The In-Service Distribution Date may be extended to a subsequent year (and must be extended by at least one year), but it may not be made to occur sooner than the original date. (iii) The In-Service Distribution Date may be cancelled, even after a change. A cancellation of an In-Service Distribution Date shall cause the In-Service Sub-Account associated with it to be merged into the Retirement/Termination Sub-Account. (iv) Making an In-Service Distribution Date change or cancellation in accordance with the Plan is specific to the In-Service Distribution to which it refers, and shall not affect other In-Service Distributions or the ability of the Participant to make new In-Service Distribution elections with respect to new deferral contributions. (e) Any portion of a deferral not credited to an In-Service Distribution Account will be credited to the Retirement/Termination Account. (h) The Compensation Deferral Agreement shall also indicate the Participant's election of payment schedule for each In-Service Distribution Date. Permitted payment schedules for In-Service Distributions are a single lump sum or from two (2) to five (5) annual installment payments. An election of a payment schedule for a Participant's In-Service Account shall pertain to the entire In-Service Account balance (e.g. new payment schedules override previously elected payment schedules). A Participant shall be permitted to change (override) his or her payment schedule election for an In-Service Distribution at any time by filing a new Compensation Deferral Agreement (or by following such procedures as are set by the Plan Administrator regarding using the Participant website, when available), provided such election is made at least thirteen (13) months prior to the In-Service Distribution Date. Any payment schedule election made within thirteen months of an In-Service Distribution Date shall be null and void, and the most recent payment schedule election which is dated at least thirteen months prior to the In-Service Distribution Date will be in effect. 4.3 Company Discretionary Contributions and Vesting (a) The Committee may, in its sole and absolute discretion, make Company Discretionary Contributions to any or all Participant(s) by crediting to said Participants' Retirement/Termination Accounts an amount determined in the sole and absolute discretion of the Committee. The Committee shall be under no obligation to make Company Discretionary Contributions unless the Company so obligates itself under an employment agreement or other agreement. (b) Company Discretionary Contributions and Deemed Investment earnings thereon shall be subject to a vesting schedule established by the Committee for each Company Discretionary Contribution. Such vesting schedule shall be communicated in writing to the Participant receiving a Company Discretionary 11 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN Contribution at the time of crediting to the Participant's Account, and a copy shall be retained by the Plan Administrator. If no vesting schedule is communicated in accordance herewith, the Company Discretionary Contribution shall be 100% vested from the date of crediting. (c) Deemed Investments shall be made in the same manner as for deferrals (Section 4.1 of the Plan) on the date the Company Matching Contribution is credited to the Participant's Retirement/Termination Account. 4.4 Plan Balance Transfers. (a) The Plan Administrator, in its sole discretion, may determine that a portion (or all) of an account balance maintained for all Participants in another Company sponsored nonqualified deferred compensation plan may upon such determination (and if the Participant so elects) be "transferred" to this Plan (the unfunded obligation of the Company to the Participant under the other plan is decreased and the obligation of the Company to the Participant in this Plan is increased in an identical amount). (b) The Plan Balance Transfer amount shall be credited to the Participant's Retirement/Termination Account on the date established by the Plan Administrator, in its sole discretion (the "Plan Balance Transfer Effective Date"). 4.5 Allocation Elections and Valuation of Accounts (a) A Participant shall elect Investment Options from a menu provided by the Plan Administrator. The initial election shall be made on the Allocation Election form approved by the Plan Administrator (or Allocation Election Screen on the Participant website approved by the Plan Administrator) and shall specify the allocations among the Investment Options elected. A Participant may make different Allocation Elections for each Account. A Participant's Accounts shall be valued as the sum of the value of all Deemed Investments minus any withdrawals or distributions from said Account. Investment Options shall be utilized to determine the earnings attributable to the Account. Elections of Investment Options do not represent actual ownership of, or any ownership rights in or to, the securities or other investments to which the Investment Options refer, nor is the Company in any way bound or directed to make actual investments corresponding to Deemed Investments. (b) The Plan Administrator, in its sole discretion, shall be permitted to add or remove Investment Options provided that any such additions or removals of Investment Options shall not be effective with respect to any period prior to the effective date of such change. Any unallocated portion of an Account or any unallocated portion of new deferrals shall be Deemed Invested in an Investment Option referring to a money market based fund or sub-account. 12 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN (c) A Participant may make a new Allocation Election with respect to future deferrals or Plan Balance Transfers, and may Rebalance or Transfer funds in any of his or her Accounts, provided that such new allocations, Rebalances or Transfers shall be in increments of one percent (1%), and Rebalances and Transfers apply to the entire Account Balance. New Allocation Elections, Rebalances, and Transfers may be made on any business day, and will become effective on the same business day or, in the case of Allocation Elections received after a cut-off time established by the Plan Administrator, the following business day. (d) Notwithstanding anything in this Section to the contrary, the Company shall have the sole and exclusive authority to invest any or all amounts deferred in any manner, regardless of any Allocation Elections by any Participant. A Participant's Allocation Election shall be used solely for purposes of determining the value of such Participant's Accounts and the amount of the corresponding liability of the Company in accordance with this Plan. 4.6 Prohibition Against Modifications to deferral elections. A Participant may not modify or revoke a deferral election during a Plan Year by changing the amount of the Compensation deferral except that, in the case of unforeseen financial hardship, the Plan Administrator in its sole discretion may grant a request by a Participant to revoke such Participant's deferral election for the balance of the Plan Year. ARTICLE V DISTRIBUTIONS AND WITHDRAWALS 5.1 In-Service Distributions. (a) Subject to Section 5.5 of the Plan, an In-Service Distribution shall be paid in accordance with the payment schedule election made with respect thereto, beginning as soon as administratively practicable following the In-Service Distribution Valuation Date. In the event a Participant has elected installment payments for an In-Service Distribution, the installment payments shall be determined and paid in accordance with Section 5.4 of the Plan. (b) Notwithstanding a Participant's election to receive an In-Service Distribution, all remaining undistributed In-Service Distribution Account balances shall be combined with the Retirement/Termination Account in the event of Retirement, Termination of Employment, Death, or Disability if the Retirement, Termination of Employment, Death, or Disability occurs prior to any In-Service Distribution Date or prior to the completion of payment(s) elected in connection with any In-Service Distribution Date. 13 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN 5.2 Retirement Distribution. Subject to Section 5.5 of the Plan, in the event of Retirement of a Participant or in the event of the termination of services of a Director, the vested portion of the Participant's Retirement/Termination Account balance (including In-Service Accounts as aforementioned) will be paid (or the first payment will be made) in accordance with the Participant's payment schedule election for the Retirement/Termination Account beginning as soon as administratively practicable following the Termination Valuation Date. 5.3 Termination of Employment Distribution. In the event of a Participant's Termination of Employment, the vested portion of the Participant's Retirement/Termination Account (including In-Service Accounts as aforementioned) will be paid in a single lump sum as soon as administratively practicable following the Termination Valuation Date. 5.4 Installment Payments. If the Participant has elected installment payments for the Retirement/Termination or In-Service Account and is eligible under the Plan to receive installment payments, annual cash payments will be made beginning as soon as administratively practicable following the applicable Valuation Date (Termination or In-Service) or, in the event of a partial lump sum election, following the first anniversary of the partial lump sum payment made following Retirement. Such payments shall continue annually on or about the anniversary of the previous installment payment until the number of installment payments elected has been paid. The installment payment amount shall be determined annually as the result of a calculation, performed on the Annual Valuation Date, where (i) is divided by (ii): (i) equals the value of the applicable Sub-Account on the Annual Valuation Date; and (ii) equals the remaining number of installment payments. 5.5 Small Account Balance Lump Sum Payment. The foregoing notwithstanding, in the event that a Participant's Retirement/Termination Account Balance is less than $25,000 or a Participant's In-Service Distribution Sub-Account Balance is less than $10,000 on the initial Termination or In-Service Distribution Valuation Date, the In-Service or Retirement/Termination Account balance, as applicable, shall be paid in a single lump sum as soon as administratively practicable following the Valuation Date, and any payment election to the contrary shall be null and void. 5.6 Disability Distribution. In the event of Disability, the Participant shall receive the Retirement/Termination Account balance (including In-Service Accounts as aforementioned) in a single lump sum as soon as administratively practicable following the end of the month in which Disability occurred. The Valuation Date for purposes of determining the Disability distribution shall be the last day of the month in which the Participant's Disability occurs. 5.7 Death Distribution. In the event of death, a Participant's beneficiary shall receive the Retirement/Termination Account balance (including In-Service Accounts as aforementioned) in a single lump sum as soon as administratively practicable following 14 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN the end of the month in which death occurred. The Valuation Date for purposes of determining the death distribution shall be the last day of the month in which the Participant's death occurs. 5.8 Hardship Distribution. In the event a Participant experiences an Unforeseeable Emergency, said Participant may request, in writing to the Plan Administrator, a distribution under the Plan to meet the financial burden caused by the Unforeseeable Emergency. An "Unforeseeable Emergency" is a severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent (as defined in Code section 152(a)) of the Participant, loss of the Participant's property due to casualty, or some other similar extraordinary and unforeseeable circumstance arising as a result of events beyond the control of the Participant. The circumstances that will constitute an unforeseeable emergency will depend upon the facts of each case, but, in any case, payment may not be made to the extent that such hardship is or may be relieved--(i) through reimbursement or compensation by insurance or otherwise; (ii) by liquidation of the Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship; or (iii) by cessation of deferrals under the Plan. Examples of what are not considered to be Unforeseeable Emergencies include the need to send a Participant's child to college or the desire to purchase a home. Distributions in the event of an Unforeseeable Emergency shall only be made in an amount calculated by the Participant, and approved by the Plan Administrator, to be necessary to reasonably satisfy the emergency need. 5.9 Voluntary Distribution. A Participant who is an active employee or Director may request, in writing to the Plan Administrator, to have up to 100% of the Participant's Deferred Compensation Account distributed in a single lump sum to the Participant at any time and for any reason, subject to a penalty of 10% of the amount distributed. The penalty shall be forfeited to the Company. There is a minimum distribution request amount of $10,000. A requesting Participant's deferral elections shall be revoked for the balance of the Plan Year in which the voluntary distribution request is granted and deferrals shall not be permitted for the following Plan Year. The amount of the distribution shall be subtracted first from the vested portion of the Participant's Retirement/Termination Account until depleted and then from the In-Service Accounts (if any) beginning with the most distant. Values for purposes of administering this Section shall be determined on the date the Plan Administrator approves the amount of the distribution, or such other date determined by the Plan Administrator. 5.10 Court Order. In the event of a final, non-appealable valid order of a Court of competent jurisdiction in a domestic relations matter which requires a distribution of a Participant's Account or portion thereof , the Plan Administrator may, in its sole discretion, treat such request as though it were a request for a Hardship withdrawal which satisfied the requirements of an unforeseen severe financial hardship and make a distribution to the Participant, or court ordered recipient as the case may be in the amount necessary to satisfy the Court order. 15 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN 5.11 Pro-rata subtraction from Investment Options. In the event a distribution under this Article V (e.g. an installment payment, hardship or voluntary distribution, etc.) is less than the entire Account Balance and the Account is allocated over more than one Investment Option, the distribution shall be subtracted from each Investment Option in a pro-rata manner determined in the sole discretion of the Plan Administrator. ARTICLE VI ADMINISTRATION 6.1 Plan Administration. This Plan shall be administered by the Plan Administrator, which shall have sole discretionary authority to make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Plan and to utilize its discretion to decide or resolve any and all questions, including but not limited to eligibility for benefits and interpretations of this Plan and its terms, as may arise in connection with the Plan. Claims for benefits shall be filed with the Plan Administrator and resolved in accordance with the claims procedures in Article IX. 6.2 Withholding. The Employer shall have the right to withhold from any payment made under the Plan (or any amount deferred into the Plan) any taxes required by law to be withheld in respect of such payment (or deferral). 6.3 Indemnification. The Company shall indemnify and hold harmless each employee, officer, director, agent or organization, to whom or to which is delegated duties, responsibilities, and authority with respect to administration of the Plan, against all claims, liabilities, fines and penalties, and all expenses reasonably incurred by or imposed upon him or it (including but not limited to reasonable attorney fees) which arise as a result of his or its actions or failure to act in connection with the operation and administration of the Plan to the extent lawfully allowable and to the extent that such claim, liability, fine, penalty, or expense is not paid for by liability insurance purchased or paid for by the Company. Notwithstanding the foregoing, the Company shall not indemnify any person or organization if his or its actions or failure to act are due to gross negligence or willful misconduct or for any such amount incurred through any settlement or compromise of any action unless the Company consents in writing to such settlement or compromise. 6.4 Expenses. The expenses of administering the Plan shall be paid by the Participating Employer(s). 6.5 Delegation of Authority. In the administration of this Plan, the Plan Administrator may, from time to time, employ agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with legal counsel who may be legal counsel to the Company. 16 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN 6.6 Binding Decisions or Actions. The decision or action of the Plan Administrator in respect of any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations thereunder shall be final and conclusive and binding upon all persons having any interest in the Plan. ARTICLE VII AMENDMENT AND PLAN TERMINATION 7.1 Amendment and Plan Termination. The Plan is intended to be permanent, but the Committee may at any time modify, amend, or terminate the Plan, provided that such modification, amendment or termination shall not cancel, reduce, or otherwise adversely affect the amount of benefits of any Participant accrued (and, except as provided in this Section 7.1 any form of payment elected) as of the date of any such modification, amendment, or termination, without the consent of the Participant. The Committee shall be permitted, upon total Plan termination, to instruct the Plan Administrator to pay each Participant (without such Participant's consent) a lump sum in the amount of such Participant's Account Balance as of the date of such Plan termination. 7.2 Adverse Income Tax Determination. Notwithstanding anything to the contrary in the Plan, if any Participant receives a deficiency notice from the United States Internal Revenue Service asserting constructive receipt of amounts payable under the Plan, or if legislation is passed or IRS regulations or other guidance is issued which causes current income taxation of deferred amounts, Company Discretionary Contributions, and/or the investment earnings attributed thereto due to any Participant distribution, right to such distribution, or other Plan provision, the Committee, in its sole discretion, may terminate the Plan or such Participant's participation in the Plan, and/or may declare null and void any Plan provision with respect to affected Participants. In addition, it is intended that this Plan comply with all provisions of the Code and regulations and rulings in effect from time to time regarding the permissible deferral of compensation and taxes thereon, and it is understood that this Plan does so comply. If the laws of the United States or of any relevant state are amended or construed in such a way as to make this Plan (or its intended deferral of compensation and taxes) in whole or in part void, then the Committee, in its sole discretion, may choose to terminate the Plan or it may (to the extent it deems practicable) give effect to the Plan in such a manner as it deems will best carry out the purposes and intentions of this Plan. ARTICLE VIII INFORMAL FUNDING 8.1 General Assets. All benefits in respect of a Participant under this Plan shall be paid directly from the general funds of the Company, or a rabbi trust created by the Company for the purpose of informally funding the Plan, and other than such rabbi trust, if created, 17 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN no special or separate fund shall be established and no other segregation of assets shall be made to assure payment. No Participant, spouse or Beneficiary shall have any right, title or interest whatever in or to any investments which the Company, or any of its subsidiaries or affiliated companies, may make to aid the Company in meeting its obligation hereunder, including any assets held by a rabbi trust. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between the Company, or any if its subsidiaries or affiliated companies, and any Employee, spouse, or Beneficiary. To the extent that any person acquires a right to receive payments from the Company hereunder, such rights are no greater than the right of an unsecured general creditor of the Company. 8.2 Rabbi Trust. The Company may, at its sole discretion, establish a grantor trust, commonly known as a rabbi trust, as a vehicle for accumulating the assets needed to pay the promised benefit, and the Company and/or the Employer may contribute from time to time to such rabbi trust, if established, but the Company shall be under no obligation to establish any such trust or any other informal funding vehicle. ARTICLE IX CLAIMS 9.1 Filing a Claim. Any controversy or claim arising out of or relating to the Plan shall be filed with the Plan Administrator which shall make all determinations concerning such claim. Any decision by the Plan Administrator denying such claim shall be in writing and shall be delivered to the Participant or Beneficiary filing the claim ("Claimant"). Such decision shall set forth the reasons for denial in plain language. Pertinent provisions of the Plan document shall be cited and, where appropriate, an explanation as to how the Claimant can perfect the claim will be provided, including a description of any additional material or information necessary to complete the claim, and an explanation of why such material or information is necessary. The claim denial also shall include an explanation of the claims review procedures and the time limits applicable to such procedures, including a statement of the Claimant's right to bring a civil action under Section 502(a) of ERISA following an adverse decision on review. This notice of denial of benefits will be provided within 90 days of the Plan Administrator's receipt of the Claimant's claim for benefits. If the Plan Administrator fails to notify the Claimant of its decision regarding the Claimant's claim, the claim shall be considered denied, and the Claimant shall then be permitted to proceed with an appeal as provided in this Article. If the Plan Administrator determines that it needs additional time to review the claim, the Plan Administrator will provide the Claimant with a notice of the extension before the end of the initial 90-day period. The extension will not be more than 90 days from the end of the initial 90-day period and the notice of extension will explain the special circumstances that require the extension and the date by which the Plan Administrator expects to make a decision. 18 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN 9.3 Appeal. A Claimant who has been completely or partially denied a benefit shall be entitled to appeal this denial of his claim by filing a written appeal with the Plan Administrator no later than sixty (60) days after: (a) receipt of the written notification of such claim denial, or (b) the lapse of ninety (90) days without an announced decision notice of extension. A Claimant who timely requests a review of his or her denied claim (or his or her authorized representative) may review, upon request and free of charge, copies of all documents, records and other information relevant to the denial and may submit written comments, documents, records and other information relevant to the claim to the Plan Administrator. The Plan Administrator may, in its sole discretion and if it deems appropriate or necessary, decide to hold a hearing with respect to the claim appeal. Following its review of any additional information submitted by the Claimant, the Plan Administrator shall render a decision on its review of the denied claim in the following manner: (a) The Plan Administrator shall make its decision regarding the merits of the denied claim within 60 days following His receipt of the appeal (or within 120 days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). It shall deliver the decision to the Claimant in writing. If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice will indicate the special circumstances requiring the extension of time and the date by which the Plan Administrator expects to render the determination on review. (b) The review will take into account comments, documents, records and other information submitted by the Claimant relating to the claim without regard to whether such information was submitted or considered in the initial benefit determination. (c) The decision on review shall set forth a specific reason for the decision, and shall cite specific references to the pertinent Plan provisions on which the decision is based. (d) The decision on review will include a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, or other information relevant to the Claimant's claim for benefits. (e) The decision on review will include a statement describing any voluntary appeal procedures offered by the plan and a statement of the Claimant's right to bring an action under Section 502(a) of ERISA. (f) A Claimant may not bring any legal action relating to a claim for benefits under the Plan unless and until the Claimant has followed the claims procedures under 19 FIRST TENNESSEE NATIONAL CORPORATION NONQUALIFIED DEFERRED COMPENSATION PLAN the Plan and exhausted his or her administrative remedies under such claims procedures. ARTICLE X GENERAL CONDITIONS 10.1 Anti-assignment Rule. No interest of any Participant, spouse or Beneficiary under this Plan and no benefit payable hereunder shall be assigned as security for a loan, and any such purported assignment shall be null, void and of no effect, nor shall any such interest or any such benefit be subject in any manner, either voluntarily or involuntarily, to anticipation, sale, transfer, assignment or encumbrance by or through any Participant, spouse or Beneficiary. 10.2 No Legal or Equitable Rights or Interest. No Participant or other person shall have any legal or equitable rights or interest in this Plan that are not expressly granted in this Plan. Participation in this Plan does not give any person any right to be retained in the service of the Company or any of its subsidiaries or affiliated companies. The right and power of the Company (or any of its subsidiaries or affiliated companies that is the Employee's employer) to dismiss or discharge an Employee is expressly reserved. 10.3 No Employment Contract. Nothing contained herein shall be construed to constitute a contract of employment between an Employee and the Company or Employer, or any of its subsidiaries or affiliated companies. 10.4 Headings. The headings of Sections are included solely for convenience of reference, and if there is any conflict between such headings and the text of this Plan, the text shall control. 10.5 Invalid or Unenforceable Provisions. If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof and the Plan Administrator may elect in its sole discretion to construe such invalid or unenforceable provisions in a manner that conforms to applicable law or as if such provisions, to the extent invalid or unenforceable, had not been included. 10.6 Governing Law. To the extent not preempted by ERISA, the laws of the State of Tennessee shall govern the construction and administration of the Plan. 20 EX-10 5 ex10-o.txt EXHIBIT 10(O) Exhibit 10(o) December 1, 2003 Mr. Ralph Horn First Tennessee Bank 4385 Poplar OCC 2nd Floor Memphis, TN 38117 Dear Ralph, This letter describes the components of the special separation package approved by the Human Resources Committee of First Tennessee National Corporation (the "Company"). This letter also contains a Non-Solicitation and Non-Compete Agreement. I. Employee Benefits Pension and Supplemental Retirement Based on an election of the 50% Joint & Survivor Annuity Option for your early retirement benefit under the FTNC Pension Plan, you will receive approximately $6984 each month beginning in January 2004. In addition to the monthly pension benefit, you will receive a supplemental retirement payment of approximately $477,468 per year which will be paid in bi-weekly payments of approximately $18,364 beginning in January 2004. These payments are also based on the 50% Joint & Survivor Annuity Option. The total monthly payments from FTNC Pension and supplemental retirement will be approximately $46,773*. All of these payments will be eligible for any cost of living increases that may be provided in the future to retirees through the FTNC Pension Plan. *These numbers are estimates. These amounts will be finalized after your retirement date December 31, 2003. However, please note the pension payment and supplemental payment combined will equal $561,276 per year. Deferred Compensation Your account in the Directors and Executives Deferral Plan will continue to accrue interest at the Applicable Rate. The first payment will be made on or about the January 31st following your 65th birthday (i.e. January 31, 2007). The monthly payment, based on the current Applicable Rate, will be $40,842.50 per month ($490,110 annually) for a period of 180 months (or 15 years). A summary of your total projected benefits under the Deferral Plan will be provided to you. Restricted Stock There are currently 49,258 shares of restricted FTNC stock in your TARSAP account. Subject to remittance to the Company of all applicable withholding taxes, the Committee has approved that the Company release the restrictions on these shares that are currently not vested. These restrictions will be released on January 2, 2004. Medical Insurance You may continue your medical coverage, as an early retiree, provided you make the necessary premium payments. At your death, your spouse will have free coverage for two years and at the end of the two years, she can continue coverage by paying the necessary premiums unless she remarries or becomes covered by another group medical plan. As is the case with all of our retirees, First Tennessee reserves the right to change premiums, make plan revisions or terminate the plan at any time. Executive Survivor Life Insurance At your death, a survivor's income benefit will be paid under the Company's Survivor Benefits Plan to your beneficiary. The benefit will be equal to two times your final year's base salary (exclusive of incentive or bonus compensation). This taxable survivor's benefit, based on your estimated final salary, will be $1,840,852. In the event of a Change in Control, your benefit under the Plan cannot be reduced. Group Life Insurance and Voluntary Group Life You have $50,000 of group term life insurance that will cease as of December 31, 2003. You have no voluntary group life insurance. You may convert your group term life insurance coverage to a whole life insurance policy within 31 days of your coverage ending. Please contact us if you would like a conversion form. Stock Options All outstanding options will continue to vest as scheduled upon your retirement. Unexercised management options will expire three years after date of retirement and unexercised deferral options will expire five years after date of retirement. Office Space You will be provided office space beginning January 2004 at a mutually agreed upon location until you reach age 75. Administrative Support You will be offered administrative support paid for by the Company until age 75. Financial Counseling You may use financial planning and tax preparation services at your discretion, paid for by FTN. This benefit will be available to you until age 75. These benefits extensions are in addition to other benefits to which you would otherwise be entitled upon your Early Retirement. II. Release and Waiver In consideration for the benefits described in paragraph I above, and other good and valuable consideration, the receipt of which you acknowledge by your signature in the space provided below, you do, for yourself, your heirs, personal representatives, agents and assigns, fully, absolutely, and unconditionally release, acquit and forever discharge First Tennessee National Corporation, and any and all of their predecessors, successors, assigns, subsidiaries, parents, affiliates, and their respective directors, officers, employees and agents, attorneys and representatives, both past, present, or future, from any and all claims, losses, demands, liabilities, causes of action, fees (including attorney's fees), compensation, back pay and/or front pay, employment or re-employment and any other benefits, obligation or liability of any kind, known or unknown, whether heretofore asserted or unasserted, including but not limited to all causes of action arising out of or in any way related to your employment by the Bank, or your termination, whether arising out of or related to Title VII of the Civil Rights Act of 1964, as amended ("Title VII"); the amendments to Title VII of the Civil Rights Act of 1991; The Federal Americans with Disabilities Act of 1990; and the AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, (the "ADEA"), the Tennessee Human Rights Commission Act, Tennessee Code Annotated section 4-21-101 et seq., and Tennessee Code Annotated 8-50-103 (Employment of the Handicapped), or any other federal or state, local, city statute, code, ordinance, rule, regulation, or common law governing, controlling or otherwise dealing with employment, employment discrimination or equal employment opportunity, unemployment compensation, employment termination, or otherwise all causes of action occurring from the beginning of time to the date of this Agreement. III. Acknowledgment of Compliance Because this Agreement includes a release and waiver as to claims under the AGE DISCRIMINATION IN EMPLOYMENT ACT, your signature below acknowledges that it complies with the Older Workers Benefit Protection Act ("OWBPA") of 1990 and further acknowledges that you confirm, understand and agree to the terms and conditions of this Agreement; that these terms are written in lay persons terms, and that you have been fully advised of your right to seek the advice and assistance of consultants, including an attorney, as well as tax advisors to review this Agreement. Your signature below also acknowledges that you understand that you have twenty-one (21) full days to consider whether to sign this Agreement. By signing this Agreement on the date shown below, you voluntarily elect to forego waiting twenty-one (21) full days to sign this Agreement. You agree that any change, material or immaterial, to the terms of this Agreement does not restart the running of the twenty-one (21) day period. IV. Right of Revocation Your signature also acknowledges that, in Compliance with the OWBPA mentioned above, you have been fully advised by the Company of your right to revoke and nullify this release and Agreement, which right must be exercised if at all, within seven (7) days of the date of your signature. Any revocation of this must be in writing, addressed to the Company, attention William J. Schwindt, and the Company must be notified within the foregoing seven-day period. This Agreement will not become effective or enforceable until the expiration of the seven-day period. In no event shall payment be made by the Company on or before the effective date. V. Confidentiality and Non-Disclosure In order to protect the legitimate interests of the Company, and its subsidiaries, you agree that you will not disclose to others, whether directly or indirectly, any proprietary information relating to the Company's business plans or other confidential business information and/or trade secrets of the Company which you received or to which you were given access during your employment with the Company. This obligation of confidentiality and non-disclosure shall also apply to the content and substance of this letter, except, of course, it may be disclosed to any attorney, financial or tax consultant from whom you seek advice. If the confidentiality provisions of this Agreement are violated by you, then you will be responsible for all costs and enforcement costs including, but not limited to, attorney's fees. Nothing in this Agreement, including the remedy provisions for breach, limit in any way your right to challenge the validity of this Agreement in a legal proceeding under OWPBA with respect to claims under the ADEA. VI. Non-Solicitation and Non-Compete A. Non-Solicitation / Non-Hire - For a period of three (3) years following the termination of your employment, and for such additional period beyond the three years that you continue to receive compensation from the Company, you agree that you will not, either on your own behalf or on behalf of any other person or entity, directly or indirectly, hire, solicit, or encourage to leave the employment of the Company any person who is then an employee of the Company or who was an employee of the Company within six months of the date of such hiring, soliciting, or encouragement to leave the Company. B. Non-Compete - For a period of three (3) years following the termination of your employment, and for such additional period beyond the three years that you continue to receive compensation from the Company, you agree not to compete with the Company or any and all of its subsidiaries, parents or affiliates, by accepting employment from or having any other relationship (including, without limitation, through owning, managing, operating, controlling or consulting) with a financial services business, or any affiliate thereof, which is in competition with the Company and has a business location within fifty (50) miles of Memphis or any of its affiliated banking offices in Tennessee, unless you have received the prior written consent of the Employee Services Division Manager. You acknowledge and agree that the restrictions set forth in paragraphs V & VI hereof are reasonable and necessary for the protection of the Company business and goodwill. You further agree that if you breach or threaten to breach any of your obligations in sections V and VI of this Agreement, the Company, in addition to any other remedies available to it under the law, may obtain specific performance and/or injunctive relief against you to prevent such continued or threatened breach. You also acknowledge and agree that the Company shall be reimbursed by you for all attorney's fees and costs incurred by it in enforcing any of its rights or remedies under sections V and VI of this Agreement. VII. Return of Documents By your signature, you acknowledge and confirm that you have returned to the Company any and all documents belonging to it, as well as any other property which belongs to it, and that no such documents or materials or property have been retained by you. VIII. Binding Effect Upon your signing this Agreement, and after the expiration of seven (7) days, it will become effective and is binding upon you and the Company and its respective successors, assigns, heirs and personal representatives, as is discussed in paragraph II above. IX. Severability A finding that any provision of this Agreement is void or unenforceable shall not affect the validity or enforceability of any other provisions of this Agreement. X. Drafting This Agreement is a product of negotiations between the parties and in construing the provisions of this Agreement, no inference or presumption shall be drawn against either party on the basis of which party or their attorneys drafted this Agreement. XI. Captions The captions to the various paragraphs of this Agreement are for convenience only and are not part of this Agreement. XII. Sole Agreement By your signature, you also confirm that the only consideration for your signing this Agreement are the terms set forth within it, and that no other promise or agreement of any kind has been made to you by the Company or anyone acting by, for, or on its behalf. YOU ALSO AFFIRM THAT YOU HAVE BEEN FREE TO DISCUSS THIS MATTER PRIVATELY AND THOROUGHLY WITH AN ATTORNEY OF YOUR CHOICE AND THAT YOU FULLY UNDERSTAND THE MEANING AND INTENT OF THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ITS FINAL AND BINDING EFFECT. This Agreement is signed in duplicate originals at First Tennessee National Corporation Memphis, Tennessee. The benefits which have been approved by the Human Resources Committee are, of course, conditioned on your acceptance of the terms of this letter, expressed by your signature in the space provided below. Sincerely, /s/ Sarah L. Meyerrose - ---------------------------------- Sarah L. Meyerrose EVP Corporate & Employee Services I HAVE READ, UNDERSTOOD AND KNOWINGLY AND VOLUNTARILY SIGNED AND ACCEPTED WITH FULL KNOWLEDGE OF MY RIGHTS ON THE DATE SET FORTH BELOW. /s/ Ralph Horn 12/10/03 - ----------------------------------- ------------------------ Ralph Horn Date Witnessed by: /s/ Debbie Golladay 12/10/03 - ----------------------------------- ------------------------ Date EX-10 6 ex10-p.txt EXHIBIT 10(P) Exhibit 10(p) RESOLUTIONS OF BOARD OF DIRECTORS OF FIRST TENNESSEE NATIONAL CORPORATION JANUARY 20, 2004 ------------------------------------------------------ BE IT RESOLVED, that the following benefits, be, and they hereby are, reapproved as additional compensation to non-employee directors for service to the Corporation as a director: a personal account executive, a no fee personal checking account for the director and the director's spouse, a FirstCheck card, a no fee VISA gold card, no fee for a safe deposit box, traveler's checks, and cashier's checks, and if the Board has authorized a stock repurchase program, the repurchase of shares of Corporation common stock at the day's volume-weighted average price with no payment of any fees or commissions if the repurchase of the director's shares is otherwise permissible under the program that has been authorized. FURTHER RESOLVED, that these benefits are approved for calendar year 2004 and future years unless and until the Board modifies or terminates such benefits. EX-10 7 ex10-v.txt EXHIBIT 10(V) Exhibit 10(v) The Company offers a fully-insured long-term disability program for all employees that provides a benefit of up to 60 percent of salary, bonus and incentive compensation ("covered compensation"). Monthly benefits for executive officers are capped at $25,000. Executive officers are permitted to purchase up to $5,000 per month in additional coverage, so long as the total monthly benefit does not exceed 75 percent of monthly covered compensation. Monthly benefits for other employees are capped at $10,000. EX-14 8 ex14.txt EXHIBIT 14 Exhibit 14 FIRST TENNESSEE NATIONAL CORPORATION Code of Ethics for Senior Financial Officers (Adopted January 20, 2004) Introduction This Code of Ethics for Senior Financial Officers has been adopted by the Board of Directors of First Tennessee National Corporation pursuant to Section 406 of the Sarbanes-Oxley Act of 2002 to promote honest and ethical conduct, proper disclosure of financial information, and compliance with applicable governmental laws, rules, and regulations by the Corporation's personnel who have financial responsibilities. This Code supplements, but does not replace, the applicable policies of the Corporation as well as the Code of Business Conduct and Ethics, which is the Corporation's statement of its ethical principles, and "A Matter of Principles," which provides practical guidance to employees to allow them to put those ethical principles, and the Corporation's policies, into practice in everyday situations. Both the Code of Business Conduct and Ethics and A Matter of Principles are applicable to all employees of the Corporation and its subsidiaries, including Senior Financial Officers, as defined below. Applicability This Code is applicable to the Corporation's Senior Financial Officers. As used in this Code, "Senior Financial Officer" means the Corporation's Chief Executive Officer, Chief Financial Officer and Controller. In addition, the Principles and Practices contained in this Code shall also apply to all professionals serving in the financial, accounting or audit areas of the Corporation and its subsidiaries ("Financial Professionals"), except where such Principles and Practices are specifically assigned to the Senior Financial Officers. Principles and Practices In performing his or her duties, each of the Senior Financial Officers and Financial Professionals must: (1) engage in and promote honest and ethical conduct, avoiding conflicts of interest, as defined in the Corporation's Conflict of Interest and Confidentiality Policy, between personal and professional relationships; (2) provide, or cause to be provided, full, fair, accurate, timely, and understandable disclosure in reports and documents that the Corporation files with or submits to the Securities and Exchange Commission ("SEC") and in other public communications in compliance with the Corporation's Disclosure Controls and Procedures. Specifically, the Senior Financial Officers will (a) establish and maintain disclosure controls and procedures designed to ensure that material information relating to the Corporation, including its consolidated subsidiaries, is made known to the Corporation's Chief Executive Officer and Chief Financial Officer as well as to those responsible for preparing periodic reports and other public communications containing financial information; (b) establish and maintain internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) promptly disclose to the Audit Committee and the independent auditor (i) any significant deficiencies and material weaknesses in the design or operation of such internal control over financial reporting which are reasonably likely to adversely affect the Corporation's ability to record, process, summarize and report financial information and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Corporation's internal control over financial reporting, as defined in the Corporation's Disclosure Controls and Procedures; and (d) review for accuracy and completeness each periodic report and each other document containing financial information that is required to be discussed with the Audit Committee under the provision of the New York Stock Exchange Listing Standards before it is filed or released; (3) comply and take all reasonable actions to cause others to comply with applicable governmental laws, rules, and regulations; (4) take no action, directly or indirectly, to fraudulently influence, coerce, manipulate or mislead the independent auditor of the Corporation or its subsidiaries for the purpose of rendering the financial statements of the Corporation or its subsidiaries misleading; (5) discharge his or her responsibilities with respect to the disclosure process diligently; and (6) promptly report violations of this Code to the Audit Committee. Waiver Any request for a waiver of any provision of this Code must be in writing and addressed to the Audit Committee. Any waiver of this Code may only be made by the Board of Directors or the Audit Committee, and any waiver with respect to a Senior Financial Officer will be disclosed promptly on Form 8-K or by another means approved by the SEC. 2 Compliance and Accountability The Audit Committee will report material violations of this Code to the Board of Directors and recommend to the Board appropriate action. The Board may designate appropriate persons to determine appropriate action, and such action shall be reasonably designed to deter wrongdoing and to promote accountability for adherence to this Code. Failure to observe the terms of this Code may result in disciplinary action, up to and including termination of employment. Violations of this Code may also constitute violations of law and may result in civil and criminal penalties. 3 EX-21 9 ex21.txt EXHIBIT 21 Exhibit 21 PARENTS AND SUBSIDIARIES The following is a list of all subsidiaries of First Tennessee National Corporation ("FTNC") and information on an unconsolidated entity at December 31, 2003. Each subsidiary is 100% owned by its immediate parent, except as described below in note (4), and all are included in the Consolidated Financial Statements:
Type of Ownership Jurisdiction of Type of Ownership Incorporation/ Subsidiary by FTNC Organization ---------- ----------------- --------------- First National Bank of Springdale (1)* Direct United States First Tennessee Bank National Association (2) Direct United States Check Consultants, Incorporated* Indirect Tennessee Community Leasing Corporation* Indirect Tennessee Community Money Center, Inc.* Indirect Tennessee East Tennessee Service Corporation* Indirect Tennessee Upper East Tennessee Insurance Agency* Indirect Tennessee First Express Remittance Processing, Inc. Indirect Tennessee First Funds, Inc.* Indirect Tennessee First Horizon Insurance Services, Inc. Indirect Tennessee First Horizon Merchant Services, Inc. Indirect Tennessee Global Card Services, Inc. Indirect Florida First Horizon Money Center, Inc.* Indirect Tennessee First Tennessee ABS, Inc. Indirect Delaware First Tennessee Brokerage, Inc. Indirect Tennessee First Tennessee Commercial Loan Management, Inc.* Indirect Tennessee First Tennessee Equipment Finance Corporation Indirect Tennessee First Tennessee Housing Corporation Indirect Tennessee CC Community Development Holdings, Inc. Indirect Tennessee First Tennessee Merchant Equipment, Inc.* Indirect Tennessee FT Building, LLC Indirect Tennessee FT Insurance Corporation Indirect Tennessee FT Mortgage Holding Corporation Indirect Illinois Federal Flood Certification Corporation Indirect Texas FHEL, Inc. Indirect Delaware FHRF, Inc. Indirect Delaware First Horizon Mortgage Loan Corporation Indirect Delaware FT Real Estate Securities Company, Inc. Indirect Arkansas FHRIII, LLC Indirect Delaware FHTRS, Inc. Indirect Delaware FH-FF Mortgage Services, L.P. Indirect Delaware FHR Holding, Inc. Indirect Delaware FHRIV, LLC Indirect Delaware FHRV, LLC Indirect Delaware FHRVI, LLC Indirect Delaware First Horizon Home Loan Corporation (3) Indirect Kansas First Tennessee Mortgage Services, Inc. Indirect Tennessee
First Horizon Asset Securities, Inc. Indirect Delaware FT Real Estate Information Mortgage Solutions Holdings, Inc. Indirect Delaware FT Real Estate Information Mortgage Solutions, Inc. Indirect Delaware FT Reinsurance Company Indirect South Carolina FTN Financial Capital Assets Corporation Indirect Tennessee FTN Financial Securities Corporation Indirect Tennessee FTN Financial Securitization Corporation Indirect Delaware FTN Investment Corp. Indirect Delaware FTN Midwest Research Securities Corporation Indirect Delaware FTN Premium Services, Inc. Indirect Tennessee Hickory Venture Capital Corporation Indirect Alabama JPO, Inc.* Indirect Tennessee Synaxis Group, Inc. Indirect Delaware Frost Specialty Risk, Inc. Indirect Tennessee Mann, Smith & Cummings, Inc. Indirect Tennessee Employers Risk Services, Inc. Indirect Kentucky Merritt & McKenzie, Inc. Indirect Georgia Polk & Sullivan Group, Inc. Indirect Tennessee Synaxis Risk Services, Inc. Indirect Tennessee Van Meter Insurance, Inc. Indirect Kentucky TSMM Corporation* Indirect Tennessee FTB Futures Corporation* Direct Tennessee Hickory Capital Corporation Direct Tennessee Highland Capital Management Corp. Direct Tennessee Martin & Company, Inc. Direct Tennessee Mountain Financial Company* Direct Tennessee Norlen Life Insurance Company Direct Arizona Springdale Trust Company Direct Arkansas
*Inactive. (1) Substantially all of the assets of the bank were sold on 12/31/03. (2) Divisions of this subsidiary do business in certain jurisdictions under the following names: First Express, First Horizon, First Horizon Bank, First Horizon Equity Lending, First Horizon Money Center, FTN Financial Capital Markets, Garland Trust, Gulf Pacific Mortgage. (3) Divisions of this subsidiary do business in certain jurisdictions under the following names: First Horizon Home Loans, First Horizon Lending Center, McGuire Mortgage, OneLoan. (4) The following subsidiaries are not wholly-owned by their immediate parent: FT Mortgage Holding Corporation - FTNC owns <1% of the common stock with the balance owned by the subsidiary's immediate parent. FT Real Estate Securities Company, Inc. - FTNC owns <1% of the common stock with the balance of the common stock owned by the subsidiary's immediate parent. Some preferred stock is not owned directly or indirectly by FTNC. First Horizon Mortgage Loan Corporation - FTNC owns <1% of the common stock directly with the balance of the common stock owned by the subsidiary's immediate parent. First Tennessee Mortgage Services, Inc. - FTNC owns <2% of the common stock directly with the balance of the common stock owned by the subsidiary's immediate parent. FH-FF Mortgage Services, L.P. - FT Real Estate Securities Company, Inc. owns a 99% limited partnership interest and First Tennessee Mortgage Services, Inc. owns a 1% general partnership interest. FHRF, Inc. - First Tennessee Mortgage Services, Inc. owns 1.01% of the common stock with the balance owned by the subsidiary's immediate parent. In addition, FTNC owns 100% of the common securities of the following unconsolidated entity: First Tennessee Capital I, a Delaware business trust. EX-23 10 ex23-a.txt EXHIBIT 23(A) Exhibit 23(a) Independent Auditors' Consent The Board of Directors First Tennessee National Corporation: We consent to the incorporation by reference into the previously filed registration statements Nos. 33-9846, 33-40398, 33-44142, 33-52561, 33-57241, 33-63809, 33-64471, 333-16225, 333-16227, 333-17457, 333-17457-01, 333-17457-02, 333-17457-03, 333-17457-04, 333-70075, 333-91137, 333-92145, 333-92147, 333-56052, 333-73440, 333-73442, 333-106015, 333-108738, 333-108750, 333-109862, and 333-110845 of First Tennessee National Corporation (the Company) of our report dated February 23, 2004, with respect to the Company's consolidated statements of condition as of December 31, 2003 and 2002, and the related consolidated statements of income, shareholders' equity, cash flows, and comprehensive income for the years then ended, which report is included in the Company's 2004 Proxy Statement and incorporated by reference into the Company's 2003 Annual Report on Form 10-K, and to all references to our firm included therein. Our report refers to our audit of the adjustments that were applied for the restatements of the 2001 consolidated financial statements, as more fully described in Notes 1 and 22 to the consolidated financial statements, and the revision described in Note 7 to the consolidated financial statements. However, we were not engaged to audit, review or apply any procedures to the 2001 consolidated financial statements other than with respect to such adjustments. /s/ KPMG LLP Memphis, Tennessee March 10, 2004 EX-23 11 ex23-b.txt EXHIBIT 23(B) Exhibit 23(b) Registrant Disclosure Regarding Accountant's Consent Section 11(a) of the Securities Act of 1933, as amended (the "Securities Act"), provides that if any part of a registration statement at the time it becomes effective contains an untrue statement of a material fact or omits a material fact required to be stated therein or necessary to make the statements therein not misleading, any person acquiring a security pursuant to the registration statement may assert a claim against, among others, an accountant who has consented to be named as having certified any part of the registration statement or as having prepared any report for use in connection with the registration statement unless it is proven that at the time such person acquires the security the person knew of such untruth or omission. First Tennessee National Corporation (the "Corporation") dismissed Arthur Andersen LLP ("Arthur Andersen") as its independent public accountants on May 15, 2002, as described in the Corporation's Form 8-K dated May 15, 2002, and filed May 16, 2002. After reasonable efforts, the Corporation has not been able to obtain Arthur Andersen's consent to the incorporation by reference of Arthur Andersen's report dated January 15, 2002 on the consolidated financial statements of the Corporation as of December 31, 2001 and for the two years in the period then ended, into the Corporation's previously filed registration statement Nos. 33-9846, 33-40398, 33-44142, 33-52561, 33-57241, 33-63809, 33-64471, 333-16225, 333-16227, 333-17457, 333-17457-01, 333-17457-02, 333-17457-03, 333-17457-04, 333-70075, 333-91137, 333-92145, 333-92147, 333-56052, 333-73440, 333-73442, 333-106015, 333-108738, 333-108750, 333-109862 and 333-110845. SEC Rule 437a promulgated pursuant to the Securities Act permits the Corporation to file registration statements that contain or incorporate by reference financial statements in which Arthur Andersen had been acting as the independent public accountant, without filing the written consent of Arthur Andersen required by Section 7 of the Securities Act. The lack of a consent from Arthur Andersen will generally make a claim against the accountant under Section 11(a) of the Securities Act based on a material misrepresentation or omission related to Arthur Andersen's report unavailable with respect to transactions in the Corporation's securities pursuant to the above-referenced registration statements that occur after March 19, 2003, the date the Form 10-K for the year ended December 31, 2002, was filed with the Securities and Exchange Commission. EX-24 12 ex24.txt EXHIBIT 24 Exhibit 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below does hereby constitute and appoint MARLIN L. MOSBY, III, JAMES F. KEEN, CLYDE A. BILLINGS, JR., and MILTON A. GUTELIUS, JR., jointly and each of them severally, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to execute and sign the Annual Report on Form 10-K for the fiscal year ended December 31, 2003 to be filed with the Securities and Exchange Commission, pursuant to the provisions of the Securities Exchange Act of 1934, by First Tennessee National Corporation ("Corporation") and, further, to execute and sign any and all amendments thereto and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, or their or his or her substitute or substitutes, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all the acts that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Signature Title Date --------- ----- ---- J. Kenneth Glass Chairman of the Board, President and March 10, 2004 - ------------------------- Chief Executive Officer and a Director J. Kenneth Glass (principal executive officer) Marlin L. Mosby, III Executive Vice President and Chief March 10, 2004 - ------------------------- Financial Officer (principal financial officer) Marlin L. Mosby, III James F. Keen Executive Vice President and Corporate March 10, 2004 - ------------------------- Controller (principal accounting officer) James F. Keen Robert C. Blattberg Director March 10, 2004 - ------------------------- Robert C. Blattberg George E. Cates Director March 10, 2004 - ------------------------- George E. Cates
Page 1 of 2 James A. Haslam, III Director March 10, 2004 - ------------------------- James A. Haslam, III R. Brad Martin Director March 10, 2004 - ------------------------- R. Brad Martin Vicki R. Palmer Director March 10, 2004 - ------------------------- Vicki R. Palmer Michael D. Rose Director March 10, 2004 - ------------------------- Michael D. Rose Mary F. Sammons Director March 10, 2004 - ------------------------- Mary F. Sammons William B. Sansom Director March 10, 2004 - ------------------------- William B. Sansom Jonathan P. Ward Director March 10, 2004 - ------------------------- Jonathan P. Ward Luke Yancy III Director March 10, 2004 - ------------------------- Luke Yancy III
Page 2 of 2 EX-31 13 ex31-a.txt EXHIBIT 31(A) Exhibit 31(a) FIRST TENNESSEE NATIONAL CORPORATION RULE 13a-14(a) CERTIFICATIONS OF CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (ANNUAL REPORT) CERTIFICATIONS I, J. Kenneth Glass, the Chairman of the Board, President and Chief Executive Officer of First Tennessee National Corporation, certify that: 1. I have reviewed this annual report on Form 10-K of First Tennessee National Corporation; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) for the registrant and have: a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; c. disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a. all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: March 10, 2004 /s/ J. Kenneth Glass - ---------------------------------------- J. Kenneth Glass, Chairman of the Board, President and Chief Executive Officer EX-31 14 ex31-b.txt EXHIBIT 31(B) Exhibit 31(b) FIRST TENNESSEE NATIONAL CORPORATION RULE 13a-14(a) CERTIFICATIONS OF CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (ANNUAL REPORT) CERTIFICATIONS I, Marlin L. Mosby, III, Executive Vice President and Chief Financial Officer of First Tennessee National Corporation, certify that: 1. I have reviewed this annual report on Form 10-K of First Tennessee National Corporation; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) for the registrant and have: a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; c. disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a. all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: March 10, 2004 /s/ Marlin L. Mosby, III - ---------------------------------------- Marlin L. Mosby, III Executive Vice President and Chief Financial Officer EX-32 15 ex32-a.txt EXHIBIT 32(A) Exhibit 32(a) CERTIFICATION OF PERIODIC REPORT RULE 1350 CERTIFICATIONS OF CEO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, As Codefied at 18 U.S.C Section 350 I, the undersigned J. Kenneth Glass, Chairman of the Board, President and Chief Executive Officer of First Tennessee National Corporation ("Corporation"), hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, as follows: 1. The Corporation's Annual Report on Form 10-K for the year ended December 31, 2003 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934. 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation. Dated: March 10, 2004 /s/ J. Kenneth Glass - -------------------------------- J. Kenneth Glass Chairman of the Board, President Chief Executive Officer EX-32 16 ex32-b.txt EXHIBIT 32(B) Exhibit 32(b) CERTIFICATION OF PERIODIC REPORT RULE 1350 CERTIFICATIONS OF CEO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, As Codefied at 18 U.S.C Section 350 I, the undersigned Marlin L. Mosby, III, Executive Vice President and Chief Financial Officer of First Tennessee National Corporation ("Corporation"), hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, as follows: 1. The Corporation's Annual Report on Form 10-K for the year ended December 31, 2003 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934. 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation. Dated: March 10, 2004 /s/ Marlin L. Mosby, III - -------------------------------- Marlin L. Mosby, III Executive Vice President and Chief Financial Officer EX-99 17 ex99-c.txt EXHIBIT 99(C) Exhibit 99(c) REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Shareholders and Board of Directors of First Tennessee National Corporation: We have audited the accompanying consolidated statements of condition of First Tennessee National Corporation (a Tennessee corporation) and subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of income, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of First Tennessee National Corporation and subsidiaries as of December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States. As discussed in Note 1 to the consolidated financial statements, effective January 1, 2001, the Company adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended, and EIFT Issue 99-20, "Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets." /s/ Arthur Andersen LLP Memphis, Tennessee January 15, 2002 This is a copy of the report dated January 15, 2002, previously issued by Arthur Andersen LLP. Arthur Andersen LLP has ceased operations and this report has not been reissued by Arthur Andersen LLP. See Exhibit 23(b) for additional information. -----END PRIVACY-ENHANCED MESSAGE-----