-----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, DFfCFwU1j+VJzgKWQIvRin9Oc9nOOzlNsMKXZ47kKiI3doXaQB51fP5cG3cp41zJ 743igxcu8AGo6LkL714QJA== 0000950144-03-003353.txt : 20030319 0000950144-03-003353.hdr.sgml : 20030319 20030319143629 ACCESSION NUMBER: 0000950144-03-003353 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030319 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: 03608977 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 g81115e10vk.htm FIRST TENNESSEE NATIONAL CORPORATION FIRST TENNESSEE NATIONAL CORPORATION
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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, 2002    
- or -
o TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
   
    For the Transition period from _______________  to _______________    

Commission File Number 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
(including rights attached thereto)
  New York Stock Exchange, Inc.

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.            

At February 21, 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 $4.6 billion.

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

YES   [X]          NO  [  ]

At June 28, 2002, the aggregate market value of the voting and non-voting common equity of the registrant held by non-affiliates of the registrant was approximately $4.7 billion.

At February 21, 2003, the registrant had 125,710,620 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 4/15/03 — Parts I, II, III and IV.

 


PART I
ITEM I BUSINESS
ITEM 2 PROPERTIES
ITEM 3 LEGAL PROCEEDINGS
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 4A EXECUTIVE OFFICERS OF REGISTRANT
PART II
ITEM 5 MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
ITEM 6 SELECTED FINANCIAL DATA
ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 11 EXECUTIVE COMPENSATION
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PART IV
ITEM 14 CONTROLS AND PROCEDURES
ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
CERTIFICATIONS
EXHIBIT INDEX
EX-10.S 2002 BANK DIRECTOR AND ADVISORY BOARD
Ex-10.T 1997 BANK DIRECTOR AND ADVISORY BOARD
Ex-10.U 1991 BANK ADVISORY DIRECTOR DEFERRAL PLAN
Ex-21 SUBSIDIARIES OF THE CORPORATION
Ex-23.A ACCOUNTANTS' CONSENTS
Ex-23.B REGISTRANT'S DISCLOSURE RE: ACCOUNTING
Ex-24 POWERS OF ATTORNEY
Ex-99.D REPORT OF PREDECESSOR INDEPENDENT PUBLIC


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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 elected, effective March 13, 2000, to become a financial holding company pursuant to the provisions of the Gramm-Leach-Bliley Act. See “Supervision and Regulation — Financial Modernization Legislation” below. At December 31, 2002, the Corporation had total assets of $23.8 billion and ranked second in terms of total assets among Tennessee-headquartered bank holding companies and ranked 31st nationally.

      Through its principal subsidiary, First Tennessee Bank National Association (the “Bank”), and its other banking and banking-related subsidiaries, the Corporation provides diversified financial services though six business segments, FTN Banking Group, First Horizon, FTN Financial, Transaction Processing, Corporate and Strategic Initiative Items, 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 15, 2003 (herein referred to, including such Appendix, as the “2003 Proxy Statement”), which note is incorporated herein by reference. During 2002 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 14 of Part IV hereto.

      The Bank is a national banking association with principal offices in Memphis, Tennessee. It received its charter in 1864 and operates primarily on a regional basis. During 2002 through its various business segments, including consolidated subsidiaries, the Bank generated gross revenue (net interest income plus noninterest income) of approximately $2.38 billion and contributed substantially all of consolidated net income from continuing operations. At December 31, 2002, the Bank had $23.4 billion in total assets, $15.5 billion in total deposits, and $11.1 billion in net loans. Among Tennessee headquartered banks at September 30, 2002, the Bank ranked second in terms of total assets and ranked first in Tennessee deposit market share. Nationally, it ranked 40th among banks in terms of total assets as of September 30, 2002. On December 31, 2002, the Corporation’s subsidiary banks had 464 banking locations (176 financial centers and 288 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 and 9 banking locations (4 financial centers and 5 off-premises ATMs) in Arkansas, and 3 consumer finance offices with customers in 46 states. First Horizon Home Loan Corporation, a subsidiary of the Bank, and its affiliates, at December 31, 2002, provided mortgage banking services through approximately 187 offices in 37 states and, as of December 31, 2002, ranked in the top 20 nationally in retail mortgage loan originations and mortgage loan servicing, as reported by Inside Mortgage Finance. FTN Financial Group, at December 31, 2002, had 17 offices in 13 states, and

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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:

    general banking services for consumers, businesses, financial institutions, and governments
 
    mortgage banking services
 
    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.
 
    transaction processing — credit card merchant processing, nationwide check clearing services, and remittance processing
 
    trust, fiduciary, and agency services
 
    credit card products
 
    discount brokerage and brokerage
 
    venture capital
 
    equipment finance
 
    investment and financial advisory services, including investment advisor to First Funds, a family of mutual funds
 
    mutual fund sales as agent
 
    retail and commercial insurance sales as agent
 
    private mortgage reinsurance
 
    consumer finance 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 subsidiary banks are 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 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

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licensed as an insurance agency in Alabama. Synaxis, Inc.’s subsidiaries, which include Polk & Sullivan Group, Inc., Mann, Smith & Cummings, Inc., MASMIC, 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, 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.

      Expenditures for research and development activities were not material for the years 2000, 2001 or 2002.

      Neither the Corporation nor any of its significant subsidiaries is dependent upon a single customer or very few customers.

      At December 31, 2002, the Corporation and its subsidiaries had 10,632 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 2003 Proxy Statement, which sections are incorporated herein by reference.

      The Corporation’s Internet address is The Corporation makes available free of charge on its Internet website is 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.

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 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

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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 “Financial Modernization Legislation” 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, 2002, the Corporation estimates that it held approximately 16% 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 Corporation’s subsidiary banks (the “Subsidiary Banks”) are subject to supervision and examination by federal banking agencies. The Bank and First National Bank of Springdale, Springdale, Arkansas, are national banking associations subject to regulation and supervision by the Comptroller as their primary federal regulator. In addition, the Subsidiary Banks are insured by, and subject to regulation by, the Federal Deposit Insurance Corporation (the “FDIC”). The Subsidiary Banks are 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 Subsidiary Banks. 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.

      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 Subsidiary Banks. There are statutory and regulatory limitations on the payment of dividends by the Subsidiary Banks to the Corporation, as well as by the Corporation to its shareholders.

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      Each Subsidiary Bank is a national bank and as such 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 such Subsidiary 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, 2002, under dividend restrictions imposed under applicable federal laws, the Subsidiary Banks, without obtaining regulatory approval, could legally declare aggregate dividends of approximately $367 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 Subsidiary Banks 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 Subsidiary Banks) can borrow or otherwise obtain credit from the Subsidiary Banks. There are also legal restrictions on the Subsidiary Banks’ purchases of or investments in the securities of and purchases of assets from the Corporation and its nonbank subsidiaries, a Subsidiary Bank’s loans or extensions of credit to third parties collateralized by the 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, a Subsidiary Bank (including for purposes of this paragraph all subsidiaries of such Subsidiary Bank) may not extend credit to the Corporation or to any

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other affiliate (other than another Subsidiary Bank and certain exempted affiliates) in an amount which exceeds 10% of the Subsidiary 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 Subsidiary Banks to the Corporation or to such other affiliates. Also, extensions of credit and other transactions between a Subsidiary 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 such Subsidiary 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, 2002, the Corporation’s consolidated Tier 1 Capital and Total Capital ratios were 8.93% and 11.54%, 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, 2002 was 6.91%. 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 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.

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      Each of the Subsidiary Banks is subject to risk-based and leverage capital requirements similar to those described above adopted by the Comptroller. The Corporation believes that each of the Subsidiary Banks was in compliance with applicable minimum capital requirements as of December 31, 2002. Neither the Corporation nor any of the Subsidiary Banks 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.”

      The federal banking regulators have adopted a final rule which amends their regulatory capital standards regarding certain recourse obligations, direct credit substitutes, residual interests and other positions in securitized transactions that expose banking organizations to credit risk. The final rule, which was effective January 1, 2002 treats recourse obligations and direct credit substitutes more consistently than the current risk-based capital standards, and introduces a credit ratings-based approach to assigning risk weights within a securitization. In addition, the rule imposes a “dollar-for-dollar” capital charge on residual interests and a concentration limit of 25% of Tier 1 capital on credit-enhancing interest-only strips, a subset of residual interests. The Corporation does not expect the adoption of this final rule to have a material effect on the financial condition or results of operations of the Bank or the Corporation.

      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 1998 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 October 2002, the Basel Committee released a comprehensive field test of its proposals for banks (referred to as the third quantitative impact study, or QIS3), which focused on the proposed minimum capital requirements. The Committee intends to determine from QIS3 whether further modifications are required to the proposed capital adequacy framework prior to the release of a formal package for public comment in second quarter 2003. A final rule is expected in December 2003 with

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implementation of some form of the new guidelines expected in 2006. The Corporation cannot predict at this time whether the new capital adequacy framework will be adopted or in what form, or the effect it would have on the financial condition or results of operations of the Bank or the Corporation.

      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 Subsidiary Banks) 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, each of the Subsidiary Banks. 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 after August 9, 1989 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. The Subsidiary Banks are subject to these cross-guarantee provisions. As a result, any loss suffered by the FDIC in respect of any of the Subsidiary Banks would likely result in assertion of the cross-guarantee provisions, the assessment of such estimated losses against the Corporation’s other Subsidiary Banks and a potential loss of the Corporation’s investment in such Subsidiary Banks.

      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

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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 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, 2002 all of the Subsidiary Banks 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 beginning one year after enactment. In addition, since June 1, 1997, a bank may merge with a bank in another state as long as neither of the states has opted out of interstate branching between the date of enactment of the IBBEA and 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. Effective July 1, 2001, 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

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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.

      Financial Modernization Legislation

      The Gramm-Leach-Bliley Act was enacted into law on November 12, 1999. The Act repeals or modifies a number of significant provisions of current laws, including the Glass-Steagall Act and the Bank Holding Company Act of 1956, which impose 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 has elected to become a financial holding company and currently, the Bank has nine 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.

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      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 31 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 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

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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.

Sources and Availability of Funds.

      Specific reference is made to the Management’s Discussion and Analysis and Glossary sections, including the subsection entitled “Deposits, Other Sources of Funds, and Liquidity Management,” contained in the 2003 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

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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 2003 Proxy Statement; certain information not contained in the 2003 Proxy Statement, but required by Guide 3, is contained in the tables immediately following:

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FIRST TENNESSEE NATIONAL CORPORATION
ADDITIONAL GUIDE 3 STATISTICAL INFORMATION
AS OF DECEMBER 31
(Unaudited)

Investment Portfolio

                           
(Dollars in thousands)   2002   2001   2000

 
 
 
Mortgage-backed securities & collateralized mortgage obligations
  $ 2,396,530     $ 2,153,012     $ 2,303,079  
U.S. Treasury and other U. S. government agencies
    84,575       136,827       143,152  
States and political subdivisions
    28,890       45,416       55,976  
Other
    190,290       190,615       336,849  
 
   
     
     
 
 
Total
  $ 2,700,285     $ 2,525,870     $ 2,839,056  
 
   
     
     
 

Loan Portfolio

                                             
(Dollars in thousands)   2002   2001   2000   1999   1998

 
 
 
 
 
Commercial:
                                       
 
Commercial, financial and industrial
  $ 4,134,158     $ 4,176,738     $ 3,964,396     $ 3,660,642     $ 3,460,215  
 
Real estate commercial
    1,037,341       929,036       946,903       776,553       667,674  
 
Real estate construction
    551,449       492,531       415,713       353,659       303,759  
Retail:
                                       
 
Real estate residential
    4,721,307       3,732,767       3,573,260       2,814,249       2,476,355  
 
Real estate construction
    342,127       211,429       179,515       132,740       73,115  
 
Other retail
    286,069       459,510       840,228       1,018,110       981,479  
 
Credit card receivables
    272,994       281,132       319,435       607,205       594,467  
 
   
     
     
     
     
 
   
Total
  $ 11,345,445     $ 10,283,143     $ 10,239,450     $ 9,363,158     $ 8,557,064  
 
 
   
     
     
     
     
 

Short-Term Borrowings

                           
(Dollars in thousands)   2002   2001   2000

 
 
 
Federal funds purchased and securities sold under agreements to repurchase
  $ 3,126,350     $ 2,921,543     $ 2,981,026  
Commercial paper
    25,695       22,273       19,169  
Other short-term borrowings
    335,513       426,878       437,366  
 
   
     
     
 
 
Total
  $ 3,487,558     $ 3,370,694     $ 3,437,561  
 
   
     
     
 

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Maturities of Short-Term Purchased Funds on December 31, 2002

                                         
    0-3   3-6   6-12   Over 12        
(Dollars in thousands)   Months   Months   Months   Months   Total

 
 
 
 
 
Certificates of deposit $100,000 and more
  $ 3,906,169     $ 96,513     $ 454,571     $ 355,553     $ 4,812,806  
Federal funds purchased and securities sold under agreements to repurchase
    3,126,350                         3,126,350  
Commercial paper and other short-term borrowings
    354,342       5,117       262       1,487       361,208  
 
   
     
     
     
     
 
Total
  $ 7,386,861     $ 101,630     $ 454,833     $ 357,040     $ 8,300,364  
 
   
     
     
     
     
 

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Foreign Outstandings on December 31

                                                   
      2002   2001   2000
     
 
 
              % Total           % Total           % Total
(Dollars in thousands)   Amount   Assets   Amount   Assets   Amount   Assets

 
 
 
 
 
 
By country:
                                               
Israel
  $ 1,011       .01 %   $ 996     .01 %   $ 1,062       .01 %
Taiwan
    287             601             556        
Canada
    264             174             790       .01  
Korea
    0             387                    
All other
    49             1,047       .01       753        
 
   
     
     
     
     
     
 
Total
  $ 1,611       .01 %   $ 3,205     .02 %   $ 3,161       .02 %
 
   
     
     
     
     
     
 
By type:
                                               
Loans:
                                               
 
Banks and other financial institutions
  $ 236       %   $ 1,962     .01 %   $ 1,721       .01 %
 
Governments and other institutions
    999             987       .01       1,000       .01  
 
   
     
     
     
     
     
 
Total loans
    1,235       .01       2,949       .02       2,721       .02  
Customers’ acceptances
    297                         384        
Cash
    67             252             33        
Accrued interest receivable
    12             4             23        
 
   
     
     
     
     
     
 
Total
  $ 1,611       .01 %   $ 3,205     .02 %   $ 3,161       .02 %
 
   
     
     
     
     
     
 

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Contractual Maturities of Commercial & Real Estate Construction Loans on December 31, 2002

                                   
              After 1 Year                
(Dollars in thousands)   Within 1 Year   Within 5 Years   After 5 Years   Total

 
 
 
 
Commercial, financial and industrial
  $ 2,359,120     $ 1,540,056     $ 234,982     $ 4,134,158  
Real estate commercial
    405,794       534,614       96,933       1,037,341  
Commercial real estate construction
    417,255       131,632       2,562       551,449  
Consumer real estate construction
    339,359       2,273       495       342,127  
 
   
     
     
     
 
Total
  $ 3,521,528     $ 2,208,575     $ 334,972     $ 6,065,075  
 
   
     
     
     
 
For maturities over one year:
                               
 
Interest rates — floating
          $ 1,142,616     $ 107,200     $ 1,249,816  
 
Interest rates — fixed
            1,065,959       227,772       1,293,731  
 
           
     
     
 
Total
          $ 2,208,575     $ 334,972     $ 2,543,547  
 
           
     
     
 

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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 2002 to a vote of security holders, through the solicitation of proxies or otherwise.

ITEM 4A
EXECUTIVE OFFICERS OF REGISTRANT

      The following is a list of executive officers of the Corporation as of March 1, 2003. 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: 51   Financial Services of the Corporation and the Bank (2001)
     
J. Kenneth Glass   President (2001) and Chief Executive Officer (2002)
Age: 56   of the Corporation and the Bank
     
John H. Hamilton   Executive Vice President, Product Management and
Age: 53   Delivery Services (2002)
     
Herbert H. Hilliard   Executive Vice President, Risk Management (2001) and
Age: 55   Government Relations and CRA (1988) of the Corporation and the Bank
     
Ralph Horn   Chairman of the Board (1996) of the Corporation and
Age: 61   the Bank

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Name and Age   Offices and Positions - Year First Elected to Office

 
Harry A. Johnson, III   Executive Vice President (1990) and General Counsel
Age: 54   (1988) of the Corporation and the Bank
     
James F. Keen   Senior Vice President, Chief Financial Officer (2002),
Age: 52   Corporate Controller of the Corporation (1988) and the Bank (2001) and principal accounting officer
     
Larry B. Martin   President – Business Financial Services of the
Age: 55   Corporation and the Bank (2001)
     
Marlin L. Mosby, III   Executive Vice President, Strategic Planning and
Age: 39   Investor Relations (2002)
     
Sarah L. Meyerrose   Executive Vice President, Corporate (2002) and
Age: 47   Employee Services (1998) of the Corporation and the Bank
     
John P. O’Connor, Jr.   Executive Vice President of the Corporation
Age: 59   (1990) and the Bank (1987) and Chief Credit Officer (1988)

      Each of the executive officers has been employed by the Corporation or its subsidiaries during each of the last five years. From 1991 through July 2001, Mr. Horn also served as President of the Corporation and the Bank and from 1994 - - July 2002 as Chief Executive Officer of the Corporation and the Bank. 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 June of 1998, Ms. Meyerrose was President, Kingsport/Bristol of the Bank. 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 April 2002, Mr. Mosby was Senior Vice President, Strategic Planning. Mr. Keen was appointed Chief Financial Officer on an interim basis, effective December 1, 2002, pending the return of Elbert L. Thomas, Jr., as set forth in the Corporation’s Form 8-K, filed 10-16-02.

PART II

ITEM 5
MARKET FOR THE REGISTRANT’S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS

      (a)  Market for the Corporation’s Common Stock:

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      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, 2002, there were 8,944 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, Other Sources of Funds, and Liquidity Management” subsection of the Management’s Discussion and Analysis section contained in the 2003 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 2002 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, 2002 there were 125,600,024 shares of common stock and no shares of preferred stock outstanding. As of that date, approximately 29 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 3.1 million shares were repurchased and 2.6 million shares were issued for the plans in 2002. 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, 2002, 2.5 million shares were 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 $225 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

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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 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

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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.

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 2003 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 2003 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 “Interstate 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 2003 Proxy Statement.

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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 2003 Proxy Statement and to the report of the predecessor independent accountant included as Exhibit 99(d) to this report..

ITEM 9
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE

      The information called for by this Item has been previously reported by the Corporation under Item 4 of Form 8-K, filed May 15, 2002, which is incorporated herein by reference.

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 is incorporated herein by reference to the “Election of Directors” section of the Corporation’s 2003 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 2003 Proxy Statement.

ITEM 11
EXECUTIVE COMPENSATION

      The information called for by this Item is incorporated herein by reference to the “Executive Compensation” section of the 2003 Proxy Statement (excluding the Board Compensation Committee Report and the Total Shareholder Return Performance Graph).

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” section, the Stock Ownership Table, the “Equity Compensation Plan Information” subsection and the Equity Compensation Plan Information Table contained in the 2003 Proxy Statement.

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      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 2003 Proxy Statement.

PART IV

ITEM 14
CONTROLS AND PROCEDURES

      Evaluation of Disclosure Controls and Procedures. The Corporation’s chief executive officer and chief financial officer have evaluated the effectiveness of the design and operation of the Corporation’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-14(c)) as of a date within 90 days of the filing date of this annual report. Based on that evaluation, the chief executive officer and 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 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 Controls. There have not been any significant changes in the Corporation’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

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:

    Consolidated Statements of Condition as of December 31, 2002 and 2001
 
    Consolidated Statements of Income for the years ended December 31, 2002, 2001 and 2000.
 
    Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2002, 2001, and 2000.
 
    Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2002, 2001 and 2000.
 
    Notes to the Consolidated Financial Statements
 
    Report of Independent Public Accountants
 
    Report of Predecessor Independent Public Accountant

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      The consolidated financial statements of the Corporation, the notes thereto, and the report of independent public accountants, in the 2003 Proxy Statement, as listed above, are incorporated herein by reference. The report of the predecessor independent public accountant is attached hereto as Exhibit 99(e) 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’s 1997 Annual Report on Form 10-K.
     
(3)(ii)   Bylaws of the Corporation, as amended and restated, incorporated herein by reference to Exhibit 3(ii) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended 9-30-02.
     
(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 2003 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)   Management Incentive Plan, as amended and restated, incorporated herein by reference to Exhibit 10(a) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended 9-30-01.
     
*(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.
     

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*(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 1997 Annual Report on Form 10-K.
     
*(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 6-30-01 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 2001 Annual Report on Form 10-K.
     
*(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.
     
*(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(o) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended 9-30-99.
     
*10(o)   John C. Kelley, Jr. Non-compete and Early Retirement Agreement, incorporated herein by reference to Exhibit 10(o) to the Corporation’s 2001 Annual Report on Form 10-K.
     
*10(p)   Susan Schmidt Bies Non-compete and Early Retirement Agreement, incorporated herein by reference to Exhibit 10(p) to the Corporation’s 2001 Annual Report on Form 10-K.
     
*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.

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*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.
     
*10(t)   [1997] Bank Director and Advisory Board Member Deferral Plan.
     
*10(u)   [1991] Bank Advisory Director Deferral Plan.
     
*10(v)   Non-employee Director Benefits, incorporated herein by reference to Exhibit 10(r) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended 3-31-02.
     
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.
     
(99)(a)   The Corporation’s Proxy Statement furnished to shareholders in connection with Annual Meeting of Shareholders scheduled for April 15, 2003, 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 18, 2003, 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 12/31/02, as authorized by SEC Rule 15d-21 (to be filed as an Amendment to Form l0-K).
     
(99)(c)   Form 8-K, filed by the Corporation 5/15/02, and incorporated herein by reference.
     
(99)(d)   Report of Predecessor Independent Public Accountant.
     
(b)   A report on Form 8-K was filed during the fourth quarter on October 16, 2002 (with a date of report of October 15, 2002) disclosing under Item 5 that the Corporation’s Chief Financial Officer, Elbert L. Thomas, Jr., was commencing disability leave on December 1, 2002 and that the Corporation’s Controller and principal accounting officer, James F. Keen, was replacing Mr. Thomas as Chief Financial Officer on an interim basis.

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      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 19, 2003   By:   /s/ James F. Keen
       
        James F. Keen, Senior Vice President,
Chief Financial Officer and Corporate Controller

      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

 
 
         
 
Ralph Horn*

Ralph Horn
  Chairman of the Board and
a Director
  March 19, 2003
 
J. Kenneth Glass*

J. Kenneth Glass
  President, Chief Executive
Officer and a Director (principal
executive officer)
  March 19, 2003
 
James F. Keen*

James F. Keen
  Senior Vice President, Chief Financial
Officer and Corporate Controller
(principal financial officer and principal
accounting officer)
  March 19, 2003
 
Robert C. Blattberg*

Robert C. Blattberg
  Director   March 19, 2003
 
George E. Cates*

George E. Cates
  Director   March 19, 2003
 
James A. Haslam, III*

James A. Haslam, III
  Director   March 19, 2003
 
R. Brad Martin*

R. Brad Martin
  Director   March 19, 2003
 
Joseph Orgill, III*

Joseph Orgill, III
  Director   March 19, 2003
 
Vicki R. Palmer *

Vicki R. Palmer
  Director   March 19, 2003

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Signature   Title   Date

 
 
 
Michael D. Rose*

Michael D. Rose
  Director   March 19, 2003
 
William B. Sansom*

William B. Sansom
  Director   March 19, 2003
 
Luke Yancy III*

Luke Yancy III
  Director   March 19, 2003
         
*By: /s/ Clyde A. Billings, Jr.

   March 19, 2003  
  Clyde A. Billings, Jr.      
  As Attorney-in-Fact      

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CERTIFICATIONS

I, J. Kenneth Glass, 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 annual report;
 
3.   Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual 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-14 and 15d-14) for the registrant and have:

  a.   designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
 
  b.   evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and;
 
  c.   presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.   The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

  a.   all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
 
  b.   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.   The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:  March 19, 2003

     
    /s/ J. Kenneth Glass

    J. Kenneth Glass, President and Chief
Executive Officer (principal executive officer)

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I, James F. Keen, Senior Vice President, Chief Financial Officer and Corporate Controller 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 annual report;
 
3.   Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual 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-14 and 15d-14) for the registrant and have:

  a.   designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
 
  b.   evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and;
 
  c.   presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.   The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

  a.   all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
 
  b.   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.   The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:  March 19, 2003

     
    /s/  James F. Keen
    James F. Keen, Senior Vice
President, Chief Financial Officer
and Corporate Controller (principal
financial officer)

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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, incorporated herein by reference to Exhibit 3(ii) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended 9-30-02.
     
(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 2003 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)   Management Incentive Plan, as amended and restated, incorporated herein by reference to Exhibit 10(a) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended 9-30-01.
     
*(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 1997 Annual Report on Form 10-K.

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Item No.   Description

 
*(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 6-30-01 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 2001 Annual Report on Form 10-K.
     
*(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(o) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended 9-30-00.
     
*10(o)   John C. Kelley, Jr. Non-Compete and Early Retirement Agreement, incorporated herein by reference to Exhibit 10(o) to the Corporation’s 2001 Annual Report on Form 10-K.
     
*10(p)   Susan Schmidt Bies Non-Compete and Early Retirement Agreement, incorporated herein by reference to Exhibit 10(p) to the Corporation’s 2001 Annual Report on Form 10-K.
     
*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.
     
*10(t)   [1997] Bank Director and Advisory Board Member Deferral Plan.
     
*10(u)   [1991] Bank Advisory Director Deferral Plan.
     
*10(v)   Non-employee Director Benefits, incorporated herein by reference to Exhibit 10(r) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended 3-31-02.

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Item No.   Description

 
(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.
     
(99)(a)   The Corporation’s Proxy Statement furnished to shareholders in connection with Annual Meeting of Shareholders scheduled for April 15, 2003, 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 18, 2003, 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 12-31-02, as authorized by SEC Rule 15d-21 (to be filed as an amendment to Form 10-K).
     
(99)(c)   Form 8-K, filed by the Corporation 5-15-02 and incorporated herein by reference.
     
(99)(d)   Report of Predecessor Independent Public Accountant.
     


*   Exhibits marked with an “*” represent a management contract or compensatory plan or arrangement required to be identified and filed as an exhibit.

34 EX-10.S 3 g81115exv10ws.htm EX-10.S 2002 BANK DIRECTOR AND ADVISORY BOARD Ex-10.S 2002 BANK DIRECTOR AND ADVISORY BOARD

 

Exhibit 10(s)

FIRST TENNESSEE NATIONAL CORPORATION
2002 BANK DIRECTOR AND ADVISORY BOARD MEMBER DEFERRAL PLAN
(Adopted October 16, 2001)

     1.     Purpose. The First Tennessee National Corporation Bank Director and Advisory Board Member Deferral Plan (“Plan”) is designed to attract and retain directors of bank affiliates of First Tennessee National Corporation (“Company”) and advisory board members of First Tennessee Bank National Association (“Bank”), as described in Section 5 herein, of outstanding ability by providing an attractive method to defer compensation by allowing participants to elect to receive stock options on shares of the common stock of the Company, the parent company of the Bank and the bank affiliates, in lieu of fees.

     2.     Effective Date and Duration of Plan. The Plan shall become effective when approved by the Board of Directors of the Company (“Board of Directors”). No options may be granted under the Plan after the first business day of January 2007. The term of options granted on or before such date may, however, extend beyond that date.

     3.     Shares Subject to Plan. Subject to adjustment as provided in Section 9 herein, the shares issuable under the Plan upon the exercise of stock options shall not exceed in the aggregate 200,000 shares of the common stock, par value $0.625 (as adjusted for stock splits), of the Company. Such shares may be provided from shares purchased in the open market or privately or by the issuance of previously authorized but unissued shares. If any options previously granted under the Plan for any reason lapse or are forfeited, the shares subject to such option shall be restored to the total number available for grant.

     4.     Administration of Plan. The Plan shall be administered by a committee (the “Committee”) whose members shall be appointed from time to time by, and shall serve at the pleasure of, the Board of Directors. In addition, all members shall be directors of the Company and shall meet the definitional requirements for “non-employee director” (with any exceptions therein permitted) contained in the then current SEC Rule 16b-3 or any successor provision. Subject to the provisions of the Plan, the Committee is granted the authority to interpret the Plan, adopt such rules of procedure as it may deem proper, and make all other determinations necessary or advisable for the administration of the Plan; provided, however, the Committee shall have no discretion to make awards under the Plan. The Plan provides for the automatic, non-discretionary grant of stock options to eligible Participants (hereinafter defined) who elect to participate in the Plan.

     5.     Participation in Plan. All directors of bank affiliates (whether currently existing or hereafter acquired or formed) of the Company who are not salaried employees of the Company or any subsidiary of the Company and who are not directors of the Company or the Bank and all advisory board members of the Bank who are members of Regional or Community Bank Advisory Boards who are not salaried employees of the Company or any subsidiary of the Company and who are not directors of the Company or Bank (“Participant”) are eligible to participate in the Plan. Participation shall commence on the first day of the month (but not before January 1, 2002) following receipt by the Committee or its designee of an irrevocable election to receive stock options in lieu of all retainers, if any, of any kind, including bonuses, and all attendance fees to be earned on and after such day and prior to January 1, 2007.

     6.     Non-statutory Stock Options. All options granted under the Plan shall be non-statutory stock options not intended to qualify as incentive stock options under Section 422A of the Internal Revenue Code of 1986, as amended.

     7.     Terms, Conditions, and Form of Options. Each option granted under the Plan shall have the following terms and conditions and shall be evidenced by appropriate documentation prescribed by the Committee or its designee (for all purposes under the Plan, in the absence of an express designation by the Committee, the Company’s Executive Vice President-Employee Services is deemed to be the Committee’s designee):

     (a)  Option Grant Dates. Options shall be granted automatically on the first business day of each January and July subsequent to the first day of participation to each eligible Participant who is participating in the Plan.

-1-


 

     (b)  Option Formula. The number of shares subject to option grant to an eligible Participant shall be equal to the nearest whole number of shares computed in accordance with the following formula:

     
    Number of shares = A/B, where
     
A=   Retainer, if any, and attendance fees earned during the two consecutive quarters preceding the option grant date. (For the initial grant, only retainer and attendance fees earned on or subsequent to the first day of participation shall be included in the computation.)
     
B=   One half of the fair market value of one share of Company common stock on the option grant date.

     (c)  Option Price. The option price per share to be paid by the Participant to the Company upon the exercise of the option shall be 50 percent of the fair market value of a share on the option grant date. “Fair Market Value” for purposes of the Plan shall be the mean between the high and low sales prices at which shares of Company common stock were sold on the valuation day on the New York Stock Exchange or, if there were no sales on that date, then on the last day prior to the valuation day during which there were sales. In the event that this method of valuation is not practicable, then the Committee in its discretion shall establish the method by which fair market value shall be determined.

     (d)  Non-transferability. Each option granted under the Plan shall be non-transferable other than by will or by the laws of descent and distribution, subject to Section 7(k) hereof, and each option may be exercised during the lifetime of the grantee only by him or her or by his or her guardian or legal representative.

     (e)  Option Term. Each option granted under the Plan shall be exercisable only during a term commencing on the option grant date and ending (unless the option shall have terminated earlier under other provisions of the Plan) on the month and day in the 20th year following the year of grant corresponding to the day before the month and day on which the option was granted.

     (f)  Exercise of Options. Options shall be exercised by delivering, mailing or transmitting to the Committee or its designee: (1) A notice, in the form, by the method, and at times prescribed by the Committee, specifying the number of shares to be purchased; (2) A check or money order payable to the Company for the full option price. In addition, in its sole discretion the Committee may determine that it is an appropriate method of payment for grantees to pay for any shares subject to an option by delivering a properly executed exercise notice together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds to pay the purchase price (a “cashless exercise”). To facilitate the foregoing, the Company may enter into agreements for coordinated procedures with one or more brokerage firms. Upon receipt of such notice of exercise of a stock option and upon payment of the option price by a method other than a cashless exercise, the Company shall promptly deliver to the grantee a certificate or certificates for the shares purchased, without charge to him or her for issue or transfer tax.

     (g)  Postponements. The Committee may postpone any exercise of an option for such period of time as the Committee in its discretion reasonably believes necessary to prevent any acts or omissions that the Committee reasonably believes will be or will result in the violation of any state or federal law; and the Company shall not be obligated by virtue of any provision of the Plan or the terms of any prior grant of an option to recognize the exercise of an option or to sell or issue shares during the period of such postponement. Any such postponement shall automatically extend the time within which the option may be exercised, as follows: The exercise period shall be extended for a period of time equal to the number of days of the postponement, but in no event shall the exercise period be extended beyond the last day of the postponement for more days than there were remaining in the option exercise period on the first day of the postponement. Neither the Company nor Bank nor any of the bank affiliates nor any of their directors or officers shall have any obligation or liability to the grantee of an option or to a successor with respect to any shares as to which the option shall lapse because of such postponement.

-2-


 

     (h)  Certificates. The stock certificate or certificates to be delivered under this Plan may, at the request of the grantee, be issued in his or her name or, with the consent of the Company, the name of another person as specified by the grantee.

     (j)  Taxes. The Company may defer making payment or delivery of any benefits under the Plan if any withholding tax is payable until the grantee tenders the amount of the withholding tax due.

     (j)  Exercise of Option on Termination as a Bank Director/Advisory Board Member. If the grantee of an option shall cease, for a reason other than his or her death, disability or retirement (defined for purposes hereof as any termination, not caused by death or disability, after 10 years of service as a bank director or advisory board member, as the case may be), to be a bank director or advisory board member, as the case may be, the option shall terminate one year after such termination, unless it terminates earlier under other provisions of the Plan. If a person to whom an option has been granted shall retire or become disabled, the option shall terminate three years after the date of retirement or disability, unless it terminates earlier under the Plan. Such exercise shall be subject to all applicable conditions and restrictions prescribed in Section 7 hereof.

     (k)  Exercise of Option After Death of Bank Director/Advisory Board Member. If the grantee of an option shall die while serving as a bank director or advisory board member, as the case may be, or within three months after termination as a bank director or advisory board member, as the case may be, and if the option was in effect at the time of his or her death, the option may, until the expiration of three years from the date of death of the grantee or until the earlier expiration of the term of the option, be exercised by the successor of the deceased grantee. Such exercise shall be subject to all applicable conditions and restrictions prescribed in Section 7 hereof. “Successor” means the legal representative of the estate of a deceased grantee or the person or persons who shall acquire the right to exercise an option by bequest or inheritance or by reason of the death of the grantee.

     8.     Limitation of Rights. No person shall have any rights as a shareholder by virtue of a stock option granted to him or her except with respect to shares actually issued to him or her, and issuance of shares shall confer no retroactive right to dividends. Neither the Plan nor the grant of an option nor any other action taken pursuant to the Plan shall constitute or be evidence of any agreement or understanding, express or implied, that the Bank or the bank affiliate, as applicable, will retain a bank director or advisory board member for any period of time or for any particular compensation.

     9.     Adjustment for Changes in Capitalization. Any increase in the number of outstanding shares of common stock of the Company occurring through stock splits or stock dividends after the adoption of the Plan shall be reflected proportionately (1) in an increase in the aggregate number of shares then available for the grant of options under the Plan, or becoming available through the termination or forfeiture of options previously granted but unexercised and (2) in the number subject to options then outstanding, and a proportionate reduction shall be made in the per-share option price as to any outstanding options or portions thereof not yet exercised. Any fractional shares resulting from such adjustments shall be eliminated. If changes in capitalization other than those considered above shall occur, the Board of Directors shall make such adjustments in the number and class of shares for which options may thereafter be granted, in the number and class of shares remaining subject to options previously granted, and in the per-share option price as the Board in its discretion may consider appropriate, and all such adjustments shall be conclusive.

     10.     Termination, Suspension or Modification of Plan. The Board of Directors may at any time terminate, suspend or modify the Plan, except that the Board of Directors shall not amend the Plan in violation of law. No termination, suspension or modification of the Plan (which terms do not include the postponement of the exercise of an option) shall adversely affect any right acquired by any grantee, or by any successor of a grantee, under the terms of an option granted before the date of such termination, suspension or modification, unless such grantee or successor shall consent; but it shall be conclusively presumed that any adjustment for changes in capitalization as provided in Section 9 does not adversely affect any such right.

-3-


 

     11.     Application of Proceeds. The proceeds received by the Company from the sale of its shares under the Plan will be used for general corporate purposes.

     12.     Governing Law. The Plan and all determinations thereunder shall be governed by and construed in accordance with the laws of the State of Tennessee.

-4- EX-10.T 4 g81115exv10wt.htm EX-10.T 1997 BANK DIRECTOR AND ADVISORY BOARD Ex-10.T 1997 BANK DIRECTOR AND ADVISORY BOARD

 

Exhibit 10(t)

FIRST TENNESSEE NATIONAL CORPORATION
BANK DIRECTOR AND ADVISORY BOARD MEMBER DEFERRAL PLAN
(Adopted October 23, 1996)

     1.     Purpose. The First Tennessee National Corporation Bank Director and Advisory Board Member Deferral Plan (“Plan”) is designed to attract and retain directors of bank affiliates of First Tennessee National Corporation (“Company”) and advisory board members of First Tennessee Bank National Association (“Bank”), as described in Section 5 herein, of outstanding ability by providing an attractive method to defer compensation by allowing participants to elect to receive stock options on shares of the common stock of the Company, the parent company of the Bank and the bank affiliates, in lieu of fees.

     2.     Effective Date and Duration of Plan. The Plan shall become effective when approved by the Board of Directors of the Company (“Board of Directors”). No options may be granted under the Plan after the first business day of January 2002. The term of options granted on or before such date may, however, extend beyond that date.

     3.     Shares Subject to Plan. Subject to adjustment as provided in Section 9 herein, the shares issuable under the Plan upon the exercise of stock options shall not exceed in the aggregate 85,000 shares of the common stock, par value $1.25 (as adjusted for stock splits), of the Company. Such shares may be provided from shares purchased in the open market or privately or by the issuance of previously authorized but unissued shares. If any options previously granted under the Plan for any reason lapse or are forfeited, the shares subject to such option shall be restored to the total number available for grant.

     4.     Administration of Plan. The Plan shall be administered by a committee (the “Committee”) whose members shall be appointed from time to time by, and shall serve at the pleasure of, the Board of Directors. In addition, all members shall be directors of the Company and shall meet the definitional requirements for “non-employee director” (with any exceptions therein permitted) contained in the then current SEC Rule 16b-3 or any successor provision. Subject to the provisions of the Plan, the Committee is granted the authority to interpret the Plan, adopt such rules of procedure as it may deem proper, and make all other determinations necessary or advisable for the administration of the Plan; provided, however, the Committee shall have no discretion to make awards under the Plan. The Plan provides for the automatic, non-discretionary grant of stock options to eligible Participants (hereinafter defined) who elect to participate in the Plan.

     5.     Participation in Plan. All directors of bank affiliates (whether currently existing or hereafter acquired or formed) of the Company who are not salaried employees of the Company or any subsidiary of the Company and who are not directors of the Company or the Bank and all advisory board members of the Bank who are members of Regional or Community Bank Advisory Boards who are not salaried employees of the Company or any subsidiary of the Company and who are not directors of the Company or Bank (“Participant”) are eligible to participate in the Plan. Participation shall commence on the first day of the month (but not before January 1, 1997) following receipt by the Committee or its designee of an irrevocable election to receive stock options in lieu of all retainers, if any, of any kind, including bonuses, and all attendance fees to be earned on and after such day and prior to January 1, 2002.

     6.     Non-statutory Stock Options. All options granted under the Plan shall be non-statutory stock options not intended to qualify as incentive stock options under Section 422A of the Internal Revenue Code of 1986, as amended.

     7.     Terms, Conditions, and Form of Options. Each option granted under the Plan shall have the following terms and conditions and shall be evidenced by appropriate documentation prescribed by the Committee or its designee (for all purposes under the Plan, in the absence of an express designation by the Committee, the Company’s Personnel Division Manager is deemed to be the Committee’s designee):

     (a)  Option Grant Dates. Options shall be granted automatically on the first business day of each January and July subsequent to the first day of participation to each eligible Participant who is participating in the Plan.

-1-


 

     (b)  Option Formula. The number of shares subject to option grant to an eligible Participant shall be equal to the nearest whole number of shares computed in accordance with the following formula:

     
    Number of shares = A/B, where
     
A=   Retainer, if any, and attendance fees earned during the two consecutive quarters preceding the option grant date. (For the initial grant, only retainer and attendance fees earned on or subsequent to the first day of participation shall be included in the computation.)
     
B=   One half of the fair market value of one share of Company common stock on the option grant date.

     (c)  Option Price. The option price per share to be paid by the Participant to the Company upon the exercise of the option shall be 50 percent of the fair market value of a share on the option grant date. “Fair Market Value” for purposes of the Plan shall be the mean between the high and low sales prices at which shares of Company common stock were sold on the valuation day as quoted by the Nasdaq Stock Market or, if there were no sales on that date, then on the last day prior to the valuation day during which there were sales. In the event that this method of valuation is not practicable, then the Committee in its discretion shall establish the method by which fair market value shall be determined.

     (d)  Non-transferability. Each option granted under the Plan shall be non-transferable other than by will or by the laws of descent and distribution, subject to Section 7(k) hereof, and each option may be exercised during the lifetime of the grantee only by him or her or by his or her guardian or legal representative.

     (e)  Option Term. Each option granted under the Plan shall be exercisable only during a term commencing on the option grant date and ending (unless the option shall have terminated earlier under other provisions of the Plan) on the month and day in the 20th year following the year of grant corresponding to the day before the month and day on which the option was granted.

     (f)  Exercise of Options. Options shall be exercised by delivering, mailing or transmitting to the Committee or its designee: (1) A notice, in the form, by the method, and at times prescribed by the Committee, specifying the number of shares to be purchased; (2) A check or money order payable to the Company for the full option price. In addition, in its sole discretion the Committee may determine that it is an appropriate method of payment for grantees to pay for any shares subject to an option by delivering a properly executed exercise notice together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds to pay the purchase price (a “cashless exercise”). To facilitate the foregoing, the Company may enter into agreements for coordinated procedures with one or more brokerage firms. Upon receipt of such notice of exercise of a stock option and upon payment of the option price by a method other than a cashless exercise, the Company shall promptly deliver to the grantee a certificate or certificates for the shares purchased, without charge to him or her for issue or transfer tax.

     (g)  Postponements. The Committee may postpone any exercise of an option for such period of time as the Committee in its discretion reasonably believes necessary to prevent any acts or omissions that the Committee reasonably believes will be or will result in the violation of any state or federal law; and the Company shall not be obligated by virtue of any provision of the Plan or the terms of any prior grant of an option to recognize the exercise of an option or to sell or issue shares during the period of such postponement. Any such postponement shall automatically extend the time within which the option may be exercised, as follows: The exercise period shall be extended for a period of time equal to the number of days of the postponement, but in no event shall the exercise period be extended beyond the last day of the postponement for more days than there were remaining in the option exercise period on the first day of the postponement. Neither the Company nor Bank nor any of the bank affiliates nor any of their directors or officers shall have any obligation or liability to the grantee of an option or to a successor with respect to any shares as to which the option shall lapse because of such postponement.

-2-


 

     (h)  Certificates. The stock certificate or certificates to be delivered under this Plan may, at the request of the grantee, be issued in his or her name or, with the consent of the Company, the name of another person as specified by the grantee.

     (j)  Taxes. The Company may defer making payment or delivery of any benefits under the Plan if any withholding tax is payable until the grantee tenders the amount of the withholding tax due.

     (j)  Exercise of Option on Termination as a Bank Director/Advisory Board Member. If the grantee of an option shall cease, for a reason other than his or her death, disability or retirement (defined for purposes hereof as any termination, not caused by death or disability, after 10 years of service as a bank director or advisory board member, as the case may be), to be a bank director or advisory board member, as the case may be, the option shall terminate one year after such termination, unless it terminates earlier under other provisions of the Plan. If a person to whom an option has been granted shall retire or become disabled, the option shall terminate three years after the date of retirement or disability, unless it terminates earlier under the Plan. Such exercise shall be subject to all applicable conditions and restrictions prescribed in Section 7 hereof.

     (k)  Exercise of Option After Death of Bank Director/Advisory Board Member. If the grantee of an option shall die while serving as a bank director or advisory board member, as the case may be, or within three months after termination as a bank director or advisory board member, as the case may be, and if the option was in effect at the time of his or her death, the option may, until the expiration of three years from the date of death of the grantee or until the earlier expiration of the term of the option, be exercised by the successor of the deceased grantee. Such exercise shall be subject to all applicable conditions and restrictions prescribed in Section 7 hereof. “Successor” means the legal representative of the estate of a deceased grantee or the person or persons who shall acquire the right to exercise an option by bequest or inheritance or by reason of the death of the grantee.

     8.     Limitation of Rights. No person shall have any rights as a shareholder by virtue of a stock option granted to him or her except with respect to shares actually issued to him or her, and issuance of shares shall confer no retroactive right to dividends. Neither the Plan nor the grant of an option nor any other action taken pursuant to the Plan shall constitute or be evidence of any agreement or understanding, express or implied, that the Bank or the bank affiliate, as applicable, will retain a bank director or advisory board member for any period of time or for any particular compensation.

     9.     Adjustment for Changes in Capitalization. Any increase in the number of outstanding shares of common stock of the Company occurring through stock splits or stock dividends after the adoption of the Plan shall be reflected proportionately (1) in an increase in the aggregate number of shares then available for the grant of options under the Plan, or becoming available through the termination or forfeiture of options previously granted but unexercised and (2) in the number subject to options then outstanding, and a proportionate reduction shall be made in the per-share option price as to any outstanding options or portions thereof not yet exercised. Any fractional shares resulting from such adjustments shall be eliminated. If changes in capitalization other than those considered above shall occur, the Board of Directors shall make such adjustments in the number and class of shares for which options may thereafter be granted, in the number and class of shares remaining subject to options previously granted, and in the per-share option price as the Board in its discretion may consider appropriate, and all such adjustments shall be conclusive.

     10.     Termination, Suspension or Modification of Plan. The Board of Directors may at any time terminate, suspend or modify the Plan, except that the Board of Directors shall not amend the Plan in violation of law. No termination, suspension or modification of the Plan (which terms do not include the postponement of the exercise of an option) shall adversely affect any right acquired by any grantee, or by any successor of a grantee, under the terms of an option granted before the date of such termination, suspension or modification, unless such grantee or successor shall consent; but it shall be conclusively presumed that any adjustment for changes in capitalization as provided in Section 9 does not adversely affect any such right.

-3-


 

     11.     Application of Proceeds. The proceeds received by the Company from the sale of its shares under the Plan will be used for general corporate purposes.

     12.     Governing Law. The Plan and all determinations thereunder shall be governed by and construed in accordance with the laws of the State of Tennessee.

-4- EX-10.U 5 g81115exv10wu.htm EX-10.U 1991 BANK ADVISORY DIRECTOR DEFERRAL PLAN Ex-10.U 1991 BANK ADVISORY DIRECTOR DEFERRAL PLAN

 

Exhibit 10(u)

FIRST TENNESSEE NATIONAL CORPORATION
BANK ADVISORY DIRECTOR DEFERRAL PLAN
(Adopted October 18, 1991)

     1.     Purpose. The First Tennessee National Corporation Bank Advisory Director Deferral Plan (“Plan”) is designed to attract and retain advisory directors of First Tennessee Bank National Association (“Bank”) of outstanding ability by providing an attractive method to defer compensation by allow participants to elect to receive stock options on shares of the common stock of Bank’s parent, First Tennessee National Corporation (“Company”), in lieu of fees.

     2.     Effective Date and Duration of Plan. The Plan shall become effective when approved by the Board of Directors of the Company (“Board of Directors”). No options may be granted under the Plan after January 1, 1997. The term of options granted on or before such date may, however, extend beyond that date.

     3.     Shares Subject to Plan. Subject to adjustment as provided in Section 9 herein, the shares issuable under the Plan upon the exercise of stock options shall not exceed in the aggregate 80,000 shares of the common stock, par value $2.50, of the Company. Such shares may be provided from shares purchased in the open market or privately or by the issuance of previously authorized but unissued shares. If any options previously granted under the Plan for any reason lapse or are forfeited, the shares subject to such option shall be restored to the total number available for grant.

     4.     Administration of Plan. The Plan shall be administered by a committee (the “Committee”) whose members shall be appointed from time to time by, and shall serve at the pleasure of, the Board of Directors. In addition, all members shall be directors of the Company and (to the extent necessary for any plan of the Company to comply with SEC Rule 16b-3 or any director to qualify as a disinterested person) shall meet the definitional requirements for “disinterested person” (with any exceptions therein permitted) contained in the then current SEC Rule 16b-3 or any successor provision. Subject to the provisions of the Plan, the Committee is granted the authority to interpret the Plan, adopt such rules of procedure as it may deem proper, and make all other determinations necessary or advisable for the administration of the Plan; provided, however, the Committee shall have no discretion to make awards under the Plan. The Plan provides for the automatic, non-discretionary, grant of stock options to eligible Bank Advisory Directors (hereinafter defined) who elect to participate in the Plan.

     5.     Participation in Plan. All advisory directors of Bank who are members of Regional or Community Bank Advisory Boards who are not salaried employees of the Company or any subsidiary of the Company and who are not directors of Company or Bank (“Bank Advisory Directors”) are eligible to participate in the Plan. Participation shall commence on the first day of the month (but not before January 1, 1992) following receipt by the Committee or its designee of an irrevocable election to receive stock options in lieu of all attendance fees to be earned on and after such day and prior to January 1, 1997.

 


 

     6.     Non-statutory Stock Options. All options granted under the Plan shall be non-statutory stock options not intended to qualify as incentive stock options under Section 422A of the Internal Revenue Code of 1986, as amended.

     7.     Terms, Conditions, and Form of Options. Each option granted under the Plan shall be evidenced by a written agreement in such form as the Committee shall from time to time approve, which agreements shall comply with and be subject to the following terms and conditions:

     (a)  Option Grant Dates. Options shall be granted automatically on the first business day of each January and July subsequent to the first day of participation to each eligible Bank Advisory Director who is participating in the Plan.

     (b)  Option Formula. The number of shares subject to option granted to an eligible Bank Advisory Director shall be equal to the nearest whole number of shares computed in accordance with the following formula: Number of shares = A/B, where

     A = Attendance fees earned during the two consecutive quarters preceding the option grant date. (For the initial grant, only attendance fees earned on or subsequent to the first day of participation shall be included in the computation.)

     B = One half of the fair market value of one share of Company common stock on the option grant date.

     (c)  Option Price. The option price per share to be paid by the Bank Advisory Director to the Company upon the exercise of the option shall be 50 percent of the fair market value of a share on the option grant date. “Fair Market Value” for purposes of the Plan shall be the mean between the high and low sales prices at which shares of Company common stock were sold on the valuation day as quoted by NASDAQ or, if there were no sales on that date, then on the last day prior to the valuation day during which there were sales. In the event that this method of valuation is practicable, then the Committee, in its discretion, shall establish the method by which fair market value shall be determined.

     (d)  Non-transferability. Each option granted under the Plan shall be non-transferable other than by will or by the laws of descent and distribution, subject to Section 7(k) hereof, and each option may be exercised during the lifetime of the grantee only by him or by his guardian or legal representative.

     (e)  Option Grant. Each option granted under the Plan shall be exercisable only during a term commencing on the option grant date and ending (unless the option shall have terminated earlier under other provision of the Plan) on the month and day in the 20th year following the year of grant corresponding to the day before the month and day on which the option was granted.

     (f)  Exercise of Options. Options shall be exercise by delivering the Committee or is designee: (1) A notice, in the form prescribed by the Committee, specifying the number of shares

 


 

to be purchased; (2) A check or money order payable to the Company for the full option price. Upon receipt of such notice of exercise of a stock option and upon payment of the option price, the Company shall promptly deliver to the grantee a certificate or certificates for the shares purchased, without charge to him or her for issue or transfer tax.

     (g)  Postponements. The Committee may postpone any exercise of an option for such period of time as the Committee, in its discretion, reasonably believes necessary to prevent any acts or omissions that the Committee reasonably believes will be or will result in the violation of any state or federal law; and the Company shall not be obligated by virtue of any option agreement or any provision of the Plan to recognize the exercise of an option or to sell or issue shares during the period of such postponement. Any such postponement shall automatically extend the time within which the option may be exercised, as follows: The exercise period shall be extended for a period of time equal to the number of days of the postponement, but in no event shall the exercise period be extended beyond the last day of the postponement for more days than there were remaining in the option exercise period on the first day of the postponement. Neither the Company, nor its Bank advisory directors or officers, shall have any obligations or liability to the grantee of an option or to a successor with respect to any shares as to which the option shall lapse because of such postponement.

     (h)  Certificates. The stock certificate or certificates to be delivered under this Plan shall be issued in the name of the grantee unless the grantee requests that the certificate(s) be issued in his name and the name of another person as joint tenants with right of survivorship.

     (i)  Taxes. The Company may defer making payment or delivery of any benefits under the Plan if any withholding tax is payable until the grantee tenders the amount of the withholding tax due.

     (j)  Exercise of Option on Termination as a Bank Advisory Director. If the grantee of an option shall cease, for a reason other than his death, disability or retirement (defined for purposes hereof as any termination, not caused by death or disability, after 10 years of service as a Bank Advisory Director), to be a Bank Advisory Director, the option shall terminate one year after termination as a Bank Advisory Director, unless it terminates earlier under other provisions of the Plan. If a person to whom an option has been granted shall retire or become disabled, the option shall terminate three years after the date of retirement or disability, unless it terminates earlier under the Plan. Such exercise shall be subject to all applicable conditions and restrictions prescribed in Section 7 hereof.

     (k)  Exercise of Option After Death of Bank Advisory Director. If the grantee of an option shall die while serving as a Bank Advisory Director or within three months after termination as a Bank Advisory Director, and if the option was in effect at the time of his death (whether or not its term had then commenced), the option may, until the expiration of three years from the date of death of the grantee or until the earlier expiration of the term of the option, be exercised by the successor of the deceased grantee. Such exercise shall be subject to all applicable conditions and restrictions prescribed in Section 7 hereof. “Successor” means the legal representative of the estate of a deceased grantee or the person or persons who shall acquire the right to exercise an option by bequest or inheritance or by reason of the death of the grantee.

 


 

     8.     Limitation of Rights. No person shall have any rights as a shareholder by virtue of a stock option granted to him except with respect to shares actually issued to him, and issuance of shares shall confer no retroactive right to dividends. Neither the Plan nor the grant of an option nor any other action taken pursuant to the Plan shall constitute or be evidence of any agreement or understanding, express or implied, that the bank will retain a Bank Advisory Director for any period of time or for any particular compensation.

     9.     Adjustment for Changes in Capitalization. Any increase in the number of outstanding shares of common stock of the Company occurring through stock splits or stock dividends after the adoption of the Plan shall be reflected proportionately (1) in an increase in the aggregate number of shares then available for the grant of options under the Plan, or becoming available through the termination or forfeiture of options previously granted but unexercised, (2) in the number available for grant to any one person, and (3) in the number subject to options then outstanding, and a proportionate reduction shall be made in the per-share option price as to any outstanding options or portions thereof not yet exercised. Any fractional shares resulting from such adjustments shall be eliminated. If changes in capitalization other than those considered above shall occur, the Board of Directors shall make such adjustments in the number and class of shares for which options may thereafter be granted, in the number and class of shares remaining subject to options previously granted, and in the per-share option price as the Board in its discretion may consider appropriate, and all such adjustments shall be conclusive.

     10.     Termination, Suspension or Modification of Plan. The Board of Directors may at any time terminate, suspend or modify the Plan, except that the Board of Directors shall not amend the Plan in violation of law. No termination, suspension or modification of the Plan (which terms do not include the postponement of the exercise of an option) shall adversely affect any right acquired by any grantee, or by an successor of a grantee, under the terms of an option granted before the date of such termination, suspension or modification, unless such grantee or successor shall consent; but it shall be conclusively presumed than any adjustment for changes in capitalization as provided in Section 10 does not adversely affect any such right.

     11.     Application of Proceeds. The proceeds received by the Company from the sale of its shares under the Plan will be used for general corporate purposes.

     12.     Governing Law. The Plan and all determinations thereunder shall be governed by and construed in accordance with the laws of the State of Tennessee.

  EX-21 6 g81115exv21.htm EX-21 SUBSIDIARIES OF THE CORPORATION Ex-21 SUBSIDIARIES OF THE CORPORATION

 

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, 2002. Each subsidiary is 100% owned by its immediate parent, except as described below in note (3), and all are included in the Consolidated Financial Statements:

         
    Type of Ownership   Jurisdiction of
Subsidiary   by FTNC   Incorporation

 
 
First National Bank of Springdale   Direct   United States
    FNBS Investment Advisory Corporation, Inc.   Indirect   Tennessee
        FNBS Investments, Inc.   Indirect   Nevada
First Tennessee Bank National Association (1)   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
      First Horizon Money Center, Inc.*   Indirect   Tennessee
      First Tennessee ABS, Inc.   Indirect   Delaware
      First Tennessee Brokerage, Inc.   Indirect   Tennessee
      First Tennessee Capital Assets Corporation   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 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
                                          FH-FF Mortgage Services, L.P.   Indirect   Delaware
                                    FHTRS, Inc.   Indirect   Delaware
                  First Horizon Home Loan Corporation (2)   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 Securities Corporation   Indirect   Tennessee

 


 

         
    Type of Ownership   Jurisdiction of
Subsidiary   by FTNC   Incorporation

 
 
FTN Financial Securitization Corporation   Indirect   Delaware
Hickory Venture Capital Corporation   Indirect   Alabama
JPO, Inc.*   Indirect   Tennessee
Midwest Research Securities Corporation   Indirect   Delaware
Synaxis Group, Inc.   Indirect   Delaware
                  Frost Specialty Risk, Inc.   Indirect   Tennessee
                  Mann, Smith & Cummings, Inc.   Indirect   Tennessee
                  MASMIC, Inc.   Indirect   Tennessee
                  Merritt & McKenzie, Inc.   Indirect   Georgia
                  Polk & Sullivan Group, Inc.   Indirect   Tennessee
                  Van Meter Insurance, Inc.   Indirect   Kentucky
                  Employers Risk Services, 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


*   Inactive.
 
(1)   Divisions of this subsidiary do business in certain jurisdictions under the following names: First Express, First Horizon Equity Lending, First Horizon Money Center, FTN Financial Capital Markets, Garland Trust, Gulf Pacific Mortgage.
 
(2)   Divisions of this subsidiary do business in certain jurisdictions under the following names: First Horizon Home Loans, First Horizon Lending Center, McGuire Mortgage, OneLoan.
 
(3)   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.

       In addition, FTNC owns 100% of the common securities of the following unconsolidated entity:
 
       First Tennessee Capital I, a Delaware business trust.

  EX-23.A 7 g81115exv23wa.htm EX-23.A ACCOUNTANTS' CONSENTS Ex-23.A ACCOUNTANTS' CONSENTS

 

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, and 333-73442 of First Tennessee National Corporation (the Company) of our report dated February 21, 2003, with respect to the Company’s consolidated balance sheet as of December 31, 2002, and the related consolidated statements of earnings, stockholders’ equity, cash flows, and comprehensive income for the year ended December 31, 2002, which report is included in the Company’s 2003 Proxy Statement and incorporated by reference into the Company’s 2002 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 and 2000 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 and 2000 consolidated financial statements other than with respect to such adjustments.

/s/ KPMG LLP

Memphis, Tennessee
March 19, 2003

EX-23.B 8 g81115exv23wb.htm EX-23.B REGISTRANT'S DISCLOSURE RE: ACCOUNTING Ex-23.B REGISTRANT'S DISCLOSURE RE: ACCOUNTING

 

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, and 333-73442.

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 the date the Form 10-K, in which this document is included as an exhibit, is filed with the Securities and Exchange Commission.

EX-24 9 g81115exv24.htm EX-24 POWERS OF ATTORNEY Ex-24 POWERS OF ATTORNEY

 

Exhibit 24

POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below does hereby constitute and appoint 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, 2002 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

 
 
Ralph Horn

Ralph Horn
  Chairman of the Board
and a Director
  March 19, 2003
 
J. Kenneth Glass

J. Kenneth Glass
  President and Chief Executive
Officer and a Director (principal
executive officer)
  March 19, 2003
 
James F. Keen

James F. Keen
  Senior Vice President, Chief
Financial Officer and Corporate
Controller (principal financial officer
and principal accounting officer)
  March 19, 2003
 
Robert C. Blattberg

Robert C. Blattberg
  Director   March 19, 2003

Page 1 of 2


 

         
Signature   Title   Date

 
 
 
George E. Cates

George E. Cates
  Director   March 19, 2003
 
James A. Haslam, III

James A. Haslam, III
  Director   March 19, 2003
 
R. Brad Martin

R. Brad Martin
  Director   March 19, 2003
 
Joseph Orgill, III

Joseph Orgill, III
  Director   March 19, 2003
 
Vicki R. Palmer

Vicki R. Palmer
  Director   March 19, 2003
 
Michael D. Rose

Michael D. Rose
  Director   March 19, 2003
 
William B. Sansom

William B. Sansom
  Director   March 19, 2003
 
Luke Yancy III

Luke Yancy III
  Director   March 19, 2003

Page 2 of 2 EX-99.D 10 g81115exv99wd.htm EX-99.D REPORT OF PREDECESSOR INDEPENDENT PUBLIC Ex-99.D REPORT OF PREDECESSOR INDEPENDENT PUBLIC

 

Exhibit 99(d)

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.

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