<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 22, 1994
REGISTRATION NO. 33-52561
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FIRST TENNESSEE NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
TENNESSEE 62-0803242
(State or other jurisdiction of (IRS employer
incorporation or organization) identification number)
</TABLE>
165 MADISON AVENUE, MEMPHIS, TENNESSEE 38103
(901) 523-4444
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
HARRY A. JOHNSON, III
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
FIRST TENNESSEE NATIONAL CORPORATION
165 MADISON AVENUE, MEMPHIS, TENNESSEE 38103
(901) 523-4444
(Name, Address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
H. RODGIN COHEN, ESQ.
PATRICIA A. CERUZZI, ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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* *
* Information contained herein is subject to completion or amendment. A *
* registration statement relating to these securities has been filed *
* with the Securities and Exchange Commission. These securities may not *
* be sold nor may offers to buy be accepted prior to the time the *
* registration statement becomes effective. This prospectus shall not *
* constitute an offer to sell or the solicitation of an offer to buy *
* nor shall there be any sale of these securities in any State in which *
* such offer, solicitation or sale would be unlawful prior to *
* registration or qualification under the securities laws of any such *
* State. *
* *
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SUBJECT TO COMPLETION, DATED MARCH 22, 1994
$300,000,000
FIRST TENNESSEE NATIONAL CORPORATION
DEBT SECURITIES, PREFERRED STOCK AND COMMON STOCK
---------------------
First Tennessee National Corporation ("First Tennessee" or the
"Corporation") may offer from time to time in one or more series (i) debt
securities ("Debt Securities"), consisting of debentures, notes and/or other
unsecured evidences of indebtedness, which may be senior ("Senior Debt
Securities") or subordinated ("Subordinated Debt Securities"), (ii) preferred
stock, without par value, of the Corporation ("Preferred Stock") or (iii) common
stock, par value $2.50 per share, of the Corporation ("Common Stock") (the Debt
Securities, Preferred Stock and Common Stock are collectively referred to as the
"Securities"), at an aggregate initial offering price not to exceed U.S.
$300,000,000, at prices and on terms to be determined at the time of sale. The
Senior Debt Securities when issued will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Corporation, and the
Subordinated Debt Securities when issued will be subordinated as described
herein under "Description of Debt Securities -- Subordination of the
Subordinated Debt Securities." The Debt Securities, Preferred Stock and Common
Stock may be offered, separately or together, in separate series, in amounts, at
prices and on terms to be set forth in the applicable supplement or supplements
to this Prospectus (each a "Prospectus Supplement").
The accompanying Prospectus Supplement sets forth with regard to the
particular Securities in respect of which this Prospectus is being delivered (i)
in the case of Debt Securities, the title, aggregate principal amount,
denominations, maturity, rate of interest, if any (which may be fixed or
variable), or method of calculation thereof, time of payment of any interest,
any terms for redemption at the option of the Corporation or the holder, any
terms for sinking fund payments, subordination terms, if any, any conversion or
exchange rights, and the initial public offering price and the terms of the
offering thereof, (ii) in the case of Preferred Stock, the specific title, the
number of shares, any dividend, liquidation, redemption, conversion, voting or
other rights and whether interests in such Preferred Stock will be evidenced by
Depositary Shares (as defined herein) and in such event the Depositary (as
defined herein), the initial offering price and the terms of the offering
thereof and (iii) in the case of Common Stock, the number of shares, the initial
offering price and the terms of the offering thereof.
The Common Stock of the Corporation is quoted through the NASDAQ National
Market System under the symbol "FTEN." The accompanying Prospectus Supplement
also contains information, where applicable, as to any listing on a securities
exchange of the Securities covered by such Prospectus Supplement.
The Corporation may sell Securities to or through underwriters acting as
principals for their own account or as agents, and also may sell Securities
directly to other purchasers or through agents designated from time to time. The
accompanying Prospectus Supplement sets forth the names of any underwriters or
agents involved in the sale of the Securities in respect of which this
Prospectus is being delivered, the amounts of Securities, if any, to be
purchased by underwriters and the compensation, if any, of such underwriters or
agents. See "Plan of Distribution."
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THE DEBT SECURITIES WILL BE UNSECURED OBLIGATIONS OF THE CORPORATION AND NO
SECURITIES OFFERED HEREBY WILL BE SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF ANY BANK SUBSIDIARY OF THE CORPORATION OR WILL BE INSURED BY THE
BANK INSURANCE FUND OR THE SAVINGS ASSOCIATION INSURANCE FUND OF THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR BY ANY OTHER GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is , 1994.
<PAGE> 3
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). The reports, proxy
statements and other information filed by the Corporation with the Commission
can be inspected and copied at the Commission's public reference facilities at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the following regional offices of the Commission: 7 World Trade Center, 13th
Floor, New York, New York 10007 and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such information can
be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
This Prospectus constitutes a part of a registration statement on Form S-3
(the "Registration Statement") filed by the Corporation with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"). As
permitted by the rules and regulations of the Commission, this Prospectus omits
certain of the information contained in the Registration Statement and reference
is hereby made to the Registration Statement and related exhibits for further
information with respect to the Corporation and the Securities offered hereby.
Statements contained herein concerning the provisions of any document filed as
an exhibit to the Registration Statement, incorporated by reference herein or
otherwise filed with the Commission are not necessarily complete, and in each
instance reference is made to the copy of such document so filed. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Corporation with the
Commission and are hereby incorporated by reference into this Prospectus: (1)
the Corporation's Current Report on Form 8-K, dated October 1, 1993, filed
October 18, 1993; (2) the Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993; (3) the description of the Corporation's
Common Stock included in the Corporation's registration statement on Form 10
(File No. 0-4491) filed on April 14, 1970 pursuant to Section 12 of the Exchange
Act (and any amendments or reports filed for the purpose of updating the
description); and (4) the description of the Corporation's rights to purchase
Participating Preferred Stock (the "Rights") included in the Corporation's
registration statement on Form 8-A (File No. 0-4491) filed on September 8, 1989
pursuant to Section 12 of the Exchange Act. All other documents and reports
filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act from the
date of this Prospectus and prior to the termination of the offering of the
Securities shall be deemed to be incorporated by reference herein and shall be
deemed to be a part hereof from the date of the filing of such reports and
documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of the Registration Statement or this
Prospectus.
The Corporation will provide without charge to each person to whom a copy
of this Prospectus is delivered, on written or oral request of such person, a
copy of any or all documents which are incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in the document which this Prospectus incorporates).
Requests should be directed to the Treasurer of the Corporation, 165 Madison
Avenue, Memphis, Tennessee 38103; telephone number (901) 523-4444.
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<PAGE> 4
THE CORPORATION
The Corporation is a Tennessee corporation incorporated in 1968 and
registered as a bank holding company under the Bank Holding Company Act of 1956,
as amended (the "BHCA"). Through First Tennessee Bank National Association (the
"Bank") and its other subsidiaries, the Corporation provides a broad range of
financial services. At December 31, 1993, the Corporation had consolidated total
assets of approximately $9.6 billion and consolidated total deposits of
approximately $7.1 billion. As of December 31, 1993, the Corporation ranked 63rd
among bank holding companies in the United States and first among bank holding
companies headquartered in Tennessee in terms of total assets.
The Corporation operates principally through the Bank, which as of December
31, 1993 was the largest commercial bank headquartered in Tennessee both in
terms of total assets and deposits. At December 31, 1993, the Bank had total
assets of approximately $9.4 billion and total deposits of approximately $7.0
billion. The Bank conducts a broad range of retail and commercial banking and
fiduciary services and had 211 banking locations at December 31, 1993. The Bank
also offers a comprehensive range of financial services, including bond
broker/agency services, mortgage banking and check clearing, to companies
nationally. Bond broker/agency services provided by the Bank consist primarily
of the sale of bank-eligible securities to other financial institutions.
Subsidiaries of the Corporation and the Bank are engaged primarily in providing
mortgage banking, integrated check processing solutions, discount brokerage,
equipment finance, venture capital, investment management and credit life
insurance.
The Corporation coordinates the financial resources of the consolidated
enterprise and maintains systems of financial, operational and administrative
control that allow coordination of selected policies and activities. The
Corporation derives substantially all of its consolidated total revenues from
the banking business of its subsidiaries. The Corporation's principal executive
offices are located at 165 Madison Avenue, Memphis, Tennessee 38103; telephone:
(901) 523-4444.
USE OF PROCEEDS
The Corporation intends to use the net proceeds of the sales of the
Securities for general corporate purposes, which may include the reduction of
indebtedness, investments in or extensions of credit to existing and future
subsidiaries and the financing of acquisitions or such other uses as may be set
forth in the accompanying Prospectus Supplement.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
AND COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
For purposes of the following ratios, (i) earnings represent income from
continuing operations before income taxes, plus fixed charges, (ii) fixed
charges represent interest expense (excluding interest on deposits where
indicated) plus the estimated interest component of net rental expense and (iii)
combined fixed charges and preferred stock dividend requirements represent
interest expense (excluding interest on deposits where indicated), and an amount
equal to the pre-tax earnings required to meet applicable preferred stock
dividend requirements and the estimated interest component of net rental
expense. There were no shares of preferred stock outstanding during any of the
periods below indicated and therefore the ratio of earnings to combined fixed
charges and preferred stock dividend requirements would have been the same as
the ratio of earnings to fixed charges for each period indicated.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
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1993 1992 1991 1990 1989
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<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges:
Including interest on deposits........................... 1.77x 1.52x 1.28x 1.19x 1.12x
Excluding interest on deposits........................... 4.69x 4.47x 2.94x 2.13x 1.67x
</TABLE>
3
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SUPERVISION AND REGULATION
The following discussion sets forth certain of the elements of the
comprehensive regulatory framework applicable to bank holding companies and
banks and provides certain specific information relevant to the Corporation and
its subsidiaries. Federal regulation of financial institutions such as the
Corporation and its subsidiaries is intended primarily for the protection of
depositors and the Federal Deposit Insurance Corporation Bank Insurance Fund
rather than shareholders or other creditors. See also "Available Information"
and "Incorporation of Certain Documents by Reference."
GENERAL
As a bank holding company, the Corporation is subject to the regulation and
supervision of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board") under the BHCA. Under the BHCA, bank holding companies
may 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
Board. The BHCA also restricts the types of activities in which a bank holding
company and its subsidiaries may engage. Generally, activities are limited to
banking and activities found by the Federal Reserve Board to be so closely
related to banking as to be a proper incident thereto.
In addition, the BHCA generally prohibits the Federal Reserve Board from
approving an application by a bank holding company to acquire shares of a bank
or bank holding company located outside the acquiror's principal state of
operations unless such an acquisition is specifically authorized by statute in
the state in which the bank or bank holding company whose shares are to be
acquired is located. Tennessee has adopted legislation that authorizes
nationwide interstate bank acquisitions, subject to certain state law
reciprocity requirements, including the filing of an application with and
approval of the Tennessee Commissioner of Financial Institutions. The Tennessee
Bank Structure Act of 1974 prohibits a bank holding company from acquiring any
bank in Tennessee if the banks that it controls hold 16 1/2% or more of the
total deposits in individual, partnership and corporate demand and other
transaction accounts, savings accounts and time deposits in all federally
insured financial institutions in Tennessee, subject to certain limitations and
exclusions. As of December 31, 1993, the Corporation estimates that its
subsidiary banks (the "Subsidiary Banks") held approximately 12% of such
deposits. Also, under this act, no bank holding company may acquire any bank in
operation for less than five years or begin a de novo bank in any county in
Tennessee with a population, in 1970, of 200,000 or less, subject to certain
exceptions. Under Tennessee law, branch banking is permitted in any county in
the state.
The Subsidiary Banks are subject to supervision and examination by
applicable federal and state banking agencies. The Bank is a national banking
association subject to regulation and supervision by the Comptroller of the
Currency (the "Comptroller") as its primary federal regulator, as is First
Tennessee Bank National Association Mississippi, which is headquartered in
Southaven, Mississippi. The remaining Subsidiary Bank, Peoples and Union Bank,
is a Tennessee state-chartered bank that is not a member of the Federal Reserve
System, and therefore is subject to the regulations of and supervision by the
Federal Deposit Insurance Corporation (the "FDIC") as well as state banking
authorities. In addition, all of the Subsidiary Banks are insured by, and
subject to regulation by, the FDIC. The Subsidiary Banks are 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 such regulation, commercial banks are
affected significantly by the actions of the Federal Reserve Board as it
attempts to control the money supply and credit availability in order to
influence the economy.
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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.
Each Subsidiary Bank that is a national bank is required by federal law to
obtain the prior approval of the Comptroller for the payment of dividends if the
total of all dividends declared by the board of directors of 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).
State-chartered banks are subject to varying restrictions on the payment of
dividends under applicable state laws. With respect to Peoples and Union Bank,
Tennessee law imposes dividend restrictions substantially similar to those
imposed under federal law on national banks, as described above.
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 Board, 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 Corporation Improvement
Act of 1991 ("FDICIA"), an FDIC-insured depository institution may not make
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. See "-- FDICIA."
At December 31, 1993, under dividend restrictions imposed under applicable
federal and state laws, the Subsidiary Banks, without obtaining regulatory
approval, could legally declare aggregate dividends of approximately $168.2
million.
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.
TRANSACTIONS WITH AFFILIATES
There are various legal restrictions on the extent to which the Corporation
and its nonbank subsidiaries 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
guarantees, 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 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
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quality of collateral which must secure such extensions of credit by the
Subsidiary Banks to the Corporation or to such other affiliates. Finally,
extensions of credit and other transactions between a Subsidiary Bank and the
Corporation or other such 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.
CAPITAL ADEQUACY
The Federal Reserve Board 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%. 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
other intangible assets, subject to certain exceptions ("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, 1993, the Corporation's
consolidated Tier 1 Capital and Total Capital ratios were 9.60% and 12.14%,
respectively.
In addition, the Federal Reserve Board has established minimum leverage
ratio guidelines for bank holding companies. These guidelines provide for a
minimum ratio of Tier 1 Capital to average assets, less goodwill and certain
other intangible assets subject to certain exceptions (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 at least 100 to 200 basis points. The Corporation's Leverage Ratio at
December 31, 1993 was 6.55%. 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 Board 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.
Each of the Subsidiary Banks is subject to risk-based and leverage capital
requirements similar to those described above adopted by the Comptroller or the
FDIC, as the case may be. The Corporation believes that each of the Subsidiary
Banks was in compliance with applicable minimum capital requirements as of
December 31, 1993. 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 "-- FDICIA."
All of the federal banking agencies have proposed regulations that would
add an additional risk-based capital requirement based upon the amount of an
institution's exposure to interest rate risk.
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 other creditors in the event of liquidation
of a bank subsidiary.
Under Federal Reserve Board 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 Board 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
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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 Federal Deposit Insurance Act (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 other Subsidiary Banks.
FDICIA
FDICIA, which was enacted on December 19, 1991, substantially revised the
depository institution regulatory and funding provisions of the FDIA and made
revisions to several other federal banking statutes. Among other things, FDICIA
requires the federal banking regulators to take "prompt corrective action" in
respect of FDIC-insured depository institutions that do not meet minimum capital
requirements. FDICIA establishes five capital tiers: "well capitalized,"
"adequately capitalized," "undercapitalized," "significantly undercapitalized"
and "critically undercapitalized." Under applicable regulations, an FDIC-insured
depository institution is defined to be well capitalized if it maintains a
Leverage Ratio of at least 5%, a risk-adjusted Tier 1 Capital Ratio of at least
6% and a Total Capital Ratio of at least 10% and is not subject to a directive,
order or written agreement to meet and maintain specific capital levels. An
insured depository institution is defined to be adequately capitalized if it
meets all of its minimum capital requirements as described above. An insured
depository 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 insured depository 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.
FDICIA 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. A 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
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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, 1993 all of the Subsidiary
Banks were well capitalized under the criteria discussed above.
Various other legislation, including proposals to revise the bank
regulatory system and to limit the investments that a depository institution may
make with insured funds, is from time to time introduced in Congress.
BROKERED DEPOSITS AND "PASS-THROUGH" INSURANCE
The FDIC has adopted regulations under FDICIA governing the receipt of
brokered deposits and "pass-through" insurance. Under the regulations, a bank
cannot accept or rollover or renew brokered deposits unless (i) it is well
capitalized or (ii) it is adequately capitalized and receives a waiver from the
FDIC. A bank that cannot receive brokered deposits also cannot offer
"pass-through" insurance on certain employee benefit accounts. Whether or not it
has obtained such a waiver, an adequately capitalized bank may not pay an
interest rate on any deposits in excess of 75 basis points over certain
prevailing market rates specified by regulation. There are no such restrictions
on a bank that is well capitalized. Because it believes that all the Subsidiary
Banks were well capitalized as of December 31, 1993, the Corporation believes
the brokered deposits regulation will have no present effect on the funding or
liquidity of any of the Subsidiary Banks.
FDIC INSURANCE PREMIUMS
The Subsidiary Banks are required to pay semiannual FDIC deposit insurance
assessments. As required by FDICIA, the FDIC adopted a risk-based premium
schedule which has increased the assessment rates for most FDIC insured
depository institutions. Under the new schedule, the premiums initially range
from $.23 to $.31 for every $100 of deposits. Each financial institution is
assigned to one of three capital groups -- well capitalized, adequately
capitalized or undercapitalized -- and further assigned to one of three
subgroups within a capital group, on the basis of supervisory evaluations by the
institution's primary federal and, if applicable, state supervisors and other
information relevant to the institution's financial condition and the risk posed
to the applicable FDIC deposit insurance fund. The actual assessment rate
applicable to a particular institution will, therefore, depend in part upon the
risk assessment classification so assigned to the institution by the FDIC.
The FDIC is authorized by federal law to raise insurance premiums in
certain circumstances. Any increase in premiums would have an adverse effect on
the Subsidiary Banks' and the Corporation's earnings.
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
The Omnibus Budget Reconciliation Act of 1993 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 the Senior Securities,
in the "liquidation or other resolution" of such an institution by any receiver.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered hereunder (the "Offered Debt Securities"), including the nature of any
variations
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from the following general provisions applicable to such Offered Debt
Securities, are described in the accompanying Prospectus Supplement relating to
such Offered Debt Securities.
Senior Debt Securities are to be issued under an Indenture (the "Senior
Indenture"), between the Corporation and the trustee named in the applicable
Prospectus Supplement as the trustee therefor (the "Senior Trustee").
Subordinated Debt Securities are to be issued under an Indenture (the
"Subordinated Indenture"), between the Corporation and The First National Bank
of Chicago as the trustee therefor (the "Subordinated Trustee"). Copies of the
forms of the Senior Indenture and the Subordinated Indenture have been filed as
exhibits to the Registration Statement of which this Prospectus is a part. The
Senior Indenture and the Subordinated Indenture are sometimes herein referred to
collectively as the "Indentures" and the Senior Trustee and the Subordinated
Trustee are sometimes herein referred to collectively as the "Trustees." The
following summaries of certain provisions of the Senior Debt Securities, the
Subordinated Debt Securities, the Senior Indenture and the Subordinated
Indenture, as modified or superseded by any applicable Prospectus Supplement,
are brief summaries of certain provisions thereof, do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all the
provisions of the Indenture applicable to a particular series of Debt Securities
(the "Applicable Indenture"), including the definitions therein of certain
terms. Whenever particular provisions or defined terms in one or both of the
Indentures are referred to, such provisions or defined terms are incorporated
herein by reference. Section references used herein are references to the
Applicable Indenture. Capitalized terms not otherwise defined herein shall have
the meaning given to them in the Applicable Indenture.
GENERAL
The Debt Securities will be limited to the aggregate initial offering price
specified on the cover page of this Prospectus and will be direct, unsecured
obligations of the Corporation. The Debt Securities will not be deposits or
other obligations of a savings association or a bank and will not be insured by
the FDIC or any other governmental agency.
The Indentures do not limit the aggregate principal amount of Debt
Securities or of any particular series of Debt Securities which may be issued
thereunder and provide that Debt Securities issued thereunder may be issued from
time to time in one or more series, in each case with the same or various
maturities, at par or at a discount. (Section 301). The Indentures do not limit
the amount of other debt (including additional Senior Indebtedness or Other
Financial Obligations, each as defined in the Subordinated Indenture) that may
be issued by the Corporation and do not contain financial or similar restrictive
covenants. The Corporation expects from time to time to incur additional
indebtedness constituting Senior Indebtedness and Other Financial Obligations.
The Indentures provide that there may be more than one trustee (each, an
"Applicable Trustee") under the Indentures with respect to different series of
Debt Securities.
Because the Corporation is a holding company and a legal entity separate
and distinct from its subsidiaries, the rights of the Corporation to participate
in any distribution of assets of any subsidiary upon its liquidation of assets
or reorganization or otherwise (and thus the ability of Holders of Debt
Securities to benefit indirectly from such distribution) would be subject to the
prior claims of creditors of that subsidiary, except to the extent that the
Corporation itself may be a creditor of that subsidiary with recognized claims.
Claims on the Corporation's Subsidiary Banks by creditors other than the
Corporation include substantial obligations with respect to deposit liabilities
(which have priority in liquidation) and federal funds purchased, securities
sold under repurchase agreements, other short-term borrowing and various other
financial obligations.
The Indentures do not contain any provision intended to provide protection
to Holders of Debt Securities against a sudden or dramatic decline in credit
quality of the Corporation that could result from a takeover, recapitalization,
special dividend or other restructuring, although the Corporation's (or a third
party's) ability to engage in such transactions may be regulated or limited by
various bank regulatory agencies.
Reference is made to the accompanying Prospectus Supplement for the
following terms of the Offered Debt Securities offered thereby: (1) the title of
the Offered Debt Securities; (2) whether the Offered Debt Securities are Senior
Debt Securities or Subordinated Debt Securities; (3) any limit upon the
aggregate
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principal amount of the Offered Debt Securities and the percentage of such
principal amount at which such Offered Debt Securities may be issued; (4) the
date or dates on which the principal of the Offered Debt Securities is scheduled
to become payable (the "Stated Maturity"); (5) the rate or rates(which may be
fixed or variable) per annum at which the Offered Debt Securities will bear
interest, or the method of determining such rate or rates, if any, the date or
dates from which any such interest will accrue, the Interest Payment Dates on
which any such interest will be payable, the Regular Record Date for the
interest payable on any Interest Payment Date, the Person to whom interest or
principal on any Offered Debt Security of such series will be payable, if other
than the Person in whose name that Offered Debt Security (or one or more
predecessor Debt Securities) is registered at the close of business on the
Regular Record Date for such interest and the extent to which, or the manner in
which, any interest payable on a permanent global Offered Debt Security on an
Interest Payment Date will be paid; (6) if other than the location specified in
this Prospectus, the place or places where the principal of and premium, if any,
and interest on the Offered Debt Securities will be payable; (7) the period or
periods within which, the price or prices at which and the terms and conditions
upon which the Offered Debt Securities will, pursuant to any mandatory sinking
fund provisions or otherwise, or may, pursuant to any optional sinking fund
provisions or otherwise, be redeemed in whole or in part by the Corporation; (8)
the period or periods within which, the price or prices at which and the terms
and conditions upon which the Offered Debt Securities may be repaid, in whole or
in part, at the option of the Holders thereof; (9) if other than denominations
of $1,000 and any integral multiple thereof, the denominations in which the
Offered Debt Securities shall be issuable; (10) if other than the principal
amount thereof, the portion of the principal amount of the Offered Debt
Securities which shall be payable upon declaration of acceleration of the
Maturity thereof; (11) if other than U.S. dollars, the currency or currency unit
of payment of principal and premium, if any, and interest on such Offered Debt
Securities, and any index used to determine the amount of payment of principal
or premium, if any, and interest on such Offered Debt Securities; (12) whether
the Offered Debt Securities are to be issuable in permanent global form and, in
such case, the initial depositary with respect thereto and the circumstances
under which such permanent global Offered Debt Security may be exchanged; (13)
whether the subordination provisions summarized below, or different
subordination provisions, including a different definition of "Senior
Indebtedness," "Entitled Persons," "Existing Subordinated Indebtedness" or
"Other Financial Obligations," shall apply to the Offered Debt Securities that
are Subordinated Debt Securities; (14) in the case of convertible Subordinated
Debt Securities, whether the conversion provisions summarized below, or
different conversion provisions, shall apply to the Offered Debt Securities that
are convertible Subordinated Debt Securities, and the Initial Conversion Price,
the Initial Conversion Date and the Final Conversion Date therefor and any other
terms relating to the conversion thereof into Common Stock of the Corporation;
and (15) any other terms of the Offered Debt Securities not specified in this
Prospectus. (Section 301).
FORM, REGISTRATION AND TRANSFER
Unless otherwise indicated in the applicable Prospectus Supplement,
principal, premium, if any, and interest, if any, on the Debt Securities will be
payable, and the Debt Securities will be transferable, at the agency or office
of the Corporation maintained for such purpose in the Borough of Manhattan, The
City of New York except that interest may be paid at the option of the
Corporation by check mailed to the address of the Holder entitled thereto as it
appears on the Security Register. (Sections 301, 305 and 1002).
The Corporation, the Trustee and any agent of the Corporation or Trustee
may treat the Person in whose name an Offered Debt Security is registered as the
owner for all purposes, including for the purpose of receiving payment of
principal (and premium, if any) and interest on such Offered Debt Security.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Debt Securities will be issued only in fully registered form, without coupons
(the "Registered Securities"), in denominations of $1,000 and any integral
multiple thereof. (Section 302). The Indentures provide that Offered Debt
Securities of any series may be issuable in permanent global form. (Section
301). No service charge will be made for any registration of transfer or
exchange of the Debt Securities, but the Corporation may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. (Section 305).
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Both Senior Debt Securities and Subordinated Debt Securities may be issued
as Original Issue Discount Securities to be offered and sold at a substantial
discount below their stated principal amount. Federal income tax consequences
and other special considerations applicable to any such Original Issue Discount
Securities will be described in the applicable Prospectus Supplement. "Original
Issue Discount Security" means any Security which provides for an amount less
than the principal amount thereof to be due and payable upon the declaration of
acceleration of the Maturity thereof in accordance with the terms of the
Applicable Indenture. (Section 101).
Reference is made to the applicable Prospectus Supplement relating to any
series of Debt Securities that are Original Issue Discount Securities for the
particular provisions relating to acceleration of the Maturity of a portion of
the principal amount of such series of Original Issue Discount Securities upon
the occurrence of an Event of Default and the continuation thereof.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities ("Global Securities") that will be
deposited with, or on behalf of, a depositary (the "Global Depositary")
identified in the applicable Prospectus Supplement. Global Securities may be
issued in either registered or bearer form and in either temporary or permanent
form. Unless and until it is exchanged in whole or in part for individual
certificates evidencing Debt Securities in definitive form represented thereby,
a Global Security may not be transferred except as a whole by the Global
Depositary for such Global Security to a nominee of such Global Depositary or by
a nominee of such Global Depositary to such Global Depositary or another nominee
of such Global Depositary or by such Global Depositary or any such nominee to a
successor of such Global Depositary or a nominee of such successor. (Section
305).
The specific terms of the depositary arrangement with respect to any Debt
Securities of a series will be described in the applicable Prospectus
Supplement. The Corporation anticipates that the following provisions will
generally apply to all depositary arrangements although no assurance can be
given that such will be the case.
Upon the issuance of a Global Security, the Global Depositary or its
nominee will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of institutions that have accounts with such Global
Depositary ("participants"). The accounts to be credited shall be designated by
the underwriters or agents of such Debt Securities or by the Corporation, if
such Debt Securities are offered and sold directly by the Corporation. Ownership
of beneficial interests in a Global Security will be limited to participants or
persons that may hold interests through participants. Ownership of beneficial
interests in such Global Securities will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the Global
Depositary or its nominee for such Global Securities (with respect to interests
of participants) and the records of participants (with respect to persons other
than participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.
So long as the Global Depositary, or its nominee, is the owner of a Global
Security, such Global Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Debt Securities represented by such
Global Security for all purposes under the Applicable Indenture. Except as set
forth below, owners of beneficial interests in a Global Security will not be
entitled to have Debt Securities represented by such Global Security registered
in their names, will not receive or be entitled to receive physical delivery of
Debt Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Applicable Indenture.
Subject to the restrictions discussed under "Description of Debt
Securities -- Form, Registration and Transfer," payment of principal of,
premium, if any, and interest, if any, on, Debt Securities registered in the
name of or held by a Global Depositary or its nominee will be made to the Global
Depositary or its nominee, as the case may be, as the registered owner or the
Holder of the Global Security representing such Debt Securities. None of the
Corporation, the Applicable Trustee, any Paying Agent or the Security Registrar
for
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such Debt Securities will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests in a Global Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Corporation expects that the Global Depositary for Debt Securities of a
series, upon receipt of any payment of principal, premium, if any, or any
interest in respect of a permanent Global Security, will credit immediately
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Security
as shown on the records of such Global Depositary or its nominee. The
Corporation also expects that payments by participants to owners of beneficial
interests in such Global Security held through such participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of such participants.
If the Global Depositary for Debt Securities of a series is at any time
unwilling, unable or ineligible to continue as Global Depositary and a successor
Global Depositary is not appointed by the Corporation within 90 days or an Event
of Default has occurred and is continuing, the Corporation will issue Debt
Securities of such series in definitive form in exchange for the Global Security
or Securities representing the Debt Securities of such series. In addition, the
Corporation may at any time and in its sole discretion, subject to any
limitations described in the applicable Prospectus Supplement, determine not to
have any Debt Securities of a series represented by one or more Global
Securities and, in such event, will issue Debt Securities of such series in
definitive form in exchange for the Global Security or Securities representing
such Debt Securities. Further, if the Corporation so specifies with respect to
the Debt Securities of a series, an owner of a beneficial interest in a Global
Security representing Debt Securities of such series may, on terms acceptable to
the Corporation and the Global Depositary for such Global Security, receive Debt
Securities of such series in definitive form in exchange for such beneficial
interests, subject to any limitations described in the applicable Prospectus
Supplement relating to such Debt Securities. In any such instance, an owner of a
beneficial interest in a Global Security will be entitled to physical delivery
in definitive form of Debt Securities of the series represented by such Global
Security equal in principal amount to such beneficial interest and to have such
Debt Securities registered in its name (if the Debt Securities of such series
are issuable as Registered Securities).
SUBORDINATION OF THE SUBORDINATED DEBT SECURITIES
The payment of the principal of, premium, if any, and interest on the
Subordinated Debt Securities will, to the extent set forth in the Subordinated
Indenture, be subordinated in right of payment to the prior payment in full of
all Senior Indebtedness. Unless otherwise specified in the applicable Prospectus
Supplement, in certain events of insolvency, the payment of the principal of,
premium, if any, and interest on the Subordinated Debt Securities will, to the
extent set forth in the Subordinated Indenture, also be effectively subordinated
in right of payment to the prior payment in full of all Other Financial
Obligations. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshalling of assets or any bankruptcy, insolvency or similar
proceedings of the Corporation, the holders of all Senior Indebtedness will
first be entitled to receive payment in full of all amounts due or to become due
thereon before the Holders of the Subordinated Debt Securities will be entitled
to receive any payment in respect of the principal of or interest on the
Subordinated Debt Securities (Section 402 of the Subordinated Indenture). If
upon any such payment or distribution of assets to creditors there remains,
after giving effect to such subordination provisions in favor of the holders of
Senior Indebtedness, any amount of cash, property or securities available for
payment or distribution in respect of Subordinated Debt Securities (defined in
the Subordinated Indenture as "Excess Proceeds") and if, at such time, any
Entitled Persons (as defined in the Subordinated Indenture) in respect of Other
Financial Obligations have not received payment in full of all amounts due or to
become due on or in respect of such Other Financial Obligations, then such
Excess Proceeds shall first be applied to pay or provide for the payment in full
of such Other Financial Obligations before any payment or distribution may be
made in respect of the Subordinated Debt Securities. (Section 1415 of the
Subordinated Indenture). In the event of the acceleration of the Maturity of any
Subordinated Debt Securities, the holders of all Senior Indebtedness
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will first be entitled to receive payment in full of all amounts due thereon
before the Holders of the Subordinated Debt Securities will be entitled to
receive any payment upon the principal of, premium, if any, or interest on the
Subordinated Debt Securities. No payments on account of the principal of, or
premium, if any, or interest on the Subordinated Debt Securities or on account
of the purchase or acquisition thereof shall be made if there shall have
occurred and be continuing a default in any payment with respect to Senior
Indebtedness, or an event of default with respect to Senior Indebtedness
permitting the holders thereof to accelerate the maturity thereof, or if any
judicial proceeding shall be pending with respect to any such default. (Section
1404 of the Subordinated Indenture).
By reason of such subordination in favor of the holders of Senior
Indebtedness, in the event of insolvency, creditors of the Corporation who are
not holders of Senior Indebtedness or Holders of the Subordinated Debt
Securities may recover less, ratably, than the holders of Senior Indebtedness
and may recover more, ratably, than the Holders of the Subordinated Debt
Securities. By reason of the obligation of the Holders of Subordinated Debt
Securities to pay over any Excess Proceeds to Entitled Persons in respect to
Other Financial Obligations, in the event of insolvency, holders of Existing
Subordinated Indebtedness may recover less, ratably, than Entitled Persons in
respect of Other Financial Obligations and may recover more, ratably, than the
Holders of Subordinated Debt Securities (other than Existing Subordinated
Indebtedness).
Unless otherwise specified in the applicable Prospectus Supplement, "Senior
Indebtedness" of the Corporation is defined in the Subordinated Indenture to
mean the principal of, premium, if any, and interest on (1) all indebtedness of
the Corporation (including indebtedness of others guaranteed by the
Corporation), other than the Subordinated Debt Securities and obligations on
account of Existing Subordinated Indebtedness, whether outstanding on the date
of execution of the Indenture or thereafter created, incurred or assumed which
is (i) for money borrowed or (ii) evidenced by a note or similar instrument
given in connection with the acquisition of any business, properties or assets
of any kind, and (2) amendments, renewals, extensions, modifications or
refundings of any such indebtedness, unless in any case in the instrument
creating or evidencing such indebtedness or pursuant to which the same is
outstanding it is provided that such indebtedness is not superior in right of
payment to the Subordinated Debt Securities or is to rank pari passu with or
subordinate to the Subordinated Debt Securities. (Section 101 of the
Subordinated Indenture).
Unless otherwise specified in the applicable Prospectus Supplement, "Other
Financial Obligations" means (a) all obligations of the Corporation under direct
credit substitutes, (b) obligations of, or any such obligation directly or
indirectly guaranteed by, the Corporation for purchased money or funds, (c) any
deferred obligation of, or any such obligation directly or indirectly guaranteed
by, the Corporation incurred in connection with the acquisition of any business,
properties or assets not evidenced by a note or similar instrument given in
connection therewith, and (d) all obligations of the Corporation to make payment
pursuant to the terms of financial instruments, such as (1) securities contracts
and foreign currency exchange contracts, (2) derivative instruments, such as
swap agreements (including interest rate and foreign exchange rate swap
agreements), cap agreements, floor agreements, collar agreements, interest rate
agreements, foreign exchange rate agreements, options, commodity futures
contracts, commodity option contracts, and (3) in the case of both (1) and (2)
above, similar financial instruments, other than (x) obligations on account of
Senior Indebtedness, and (y) obligations on account of indebtedness for money
borrowed ranking pari passu with or subordinate to the Subordinated Debt
Securities. Unless otherwise specified in the applicable Prospectus Supplement
relating to the particular series of Subordinated Debt Securities offered
thereby, "Entitled Person" means any person who is entitled to payment pursuant
to the terms of Other Financial Obligations. (Section 101 of the Subordinated
Indenture).
Unless otherwise specified in the applicable Prospectus Supplement,
"Existing Subordinated Indebtedness" means the obligations of the Corporation
under securities issued pursuant to the indenture, dated as of June 1, 1987,
between the Corporation and Security Pacific National Trust Company (New York),
as trustee, relating to the Corporation's 10 3/8% Subordinated Capital Notes due
1999 (the "Subordinated Capital Notes"). (Section 101 of the Subordinated
Indenture). As of the date of this Prospectus, there was outstanding
approximately $75.0 million aggregate principal amount of Existing Subordinated
Indebtedness.
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The Corporation's obligations under the Subordinated Debt Securities shall
rank pari passu in right of payment with each other and with the Existing
Subordinated Indebtedness, subject (unless otherwise specified in the applicable
Prospectus Supplement relating to the particular series of Subordinated Debt
Securities offered thereby) to the obligations of the Holders of Subordinated
Debt Securities (other than Existing Subordinated Indebtedness) to pay over any
Excess Proceeds to Entitled Persons in respect of Other Financial Obligations as
provided in the Subordinated Indenture.
The applicable Prospectus Supplement may further describe the provisions,
if any, applicable to the subordination of the Subordinated Debt Securities of a
particular series offered thereby.
CONVERSION OF THE SUBORDINATED DEBT SECURITIES
If so specified in the applicable Prospectus Supplement, Subordinated Debt
Securities offered hereby will be convertible into Common Stock of the
Corporation prior to redemption during the time period specified in the
applicable Prospectus Supplement, initially at the Initial Conversion Price
therefor specified in such Prospectus Supplement ("Convertible Subordinated Debt
Security"). (Section 1501 of the Subordinated Indenture).
The conversion price will be subject to adjustment in certain events,
including (i) dividends (and other distributions) payable in Common Stock on any
class of capital stock of the Corporation, (ii) the issuance to all holders of
Common Stock of rights or warrants entitling them to subscribe for or purchase
Common Stock at less than the current market price (as defined), (iii)
subdivisions, combinations and reclassifications of Common Stock, and (iv)
distributions to all holders of Common Stock of evidences of indebtedness of the
Corporation or assets (including securities, but excluding those dividends,
rights, warrants and distributions referred to above and dividends and
distributions paid in cash out of the retained earnings of the Corporation). In
addition to the foregoing adjustments, the Corporation will be permitted to make
such reductions in the conversion price as it considers to be advisable in order
that any event treated for Federal income tax purposes as a dividend of stock or
stock rights will not be taxable to the holders of the Common Stock. (Section
1504 of the Subordinated Indenture). In case of certain consolidations or
mergers to which the Company is a party or the transfer of substantially all of
the assets of the Corporation, each Convertible Subordinated Debt Security then
outstanding would, without the consent of any Holders of such Convertible
Subordinated Debt Security, become convertible only into the kind and amount of
securities, cash and other property receivable upon the consolidation, merger or
transfer by a holder of the number of shares of Common Stock into which such
Convertible Subordinated Debt Security might have been converted immediately
prior to such consolidation, merger or transfer (assuming such holder of Common
Stock failed to exercise any rights of election and received per share the kind
and amount received per share by a plurality of non-electing shares). (Section
1512 of the Subordinated Indenture). Generally no adjustments to the conversion
price will be required to be made until cumulative adjustments amount to 1% or
more of the conversion price as last adjusted. (Section 1505 of the Subordinated
Indenture).
Fractional shares of Common Stock are not to be issued upon conversion,
but, in lieu thereof, the Corporation will pay a cash adjustment based upon
market price (as determined by the Board of Directors). (Section 1504 of the
Subordinated Indenture). Convertible Subordinated Debt Securities surrendered
for conversion during the period from the close of business on any Regular
Record Date next preceding any Interest Payment Date to the opening of business
on such Interest Payment Date (except Convertible Subordinated Debt Securities
called for redemption on a Redemption Date within such period) must be
accompanied by payment of an amount equal to the interest thereon which the
registered Holder is to receive. If any Convertible Subordinated Debt Security
is converted after any Regular Record Date and on or prior to the next
succeeding Interest Payment Date (other than any Convertible Subordinated Debt
Security whose Maturity is prior to such Interest Payment Date), interest whose
Stated Maturity is on such Interest Payment Date shall be payable on such
Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name that Convertible Subordinated Debt Security (or one or more
Predecessor Securities) is registered at the close of business on such Regular
Record Date. Except where Convertible Subordinated Debt Securities surrendered
for conversion must be accompanied by payment as described above, no interest on
converted Convertible
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Subordinated Debt Securities will be payable by the Corporation on any Interest
Payment Date subsequent to the date of conversion. No other payment or
adjustment for interest or dividends is to be made upon conversion. (Sections
307 and 1503 of the Subordinated Indenture).
If at any time the Corporation makes a distribution of property to its
shareholders which would be taxable to such shareholders as a dividend for
Federal income tax purposes (e.g., distributions of evidences of indebtedness or
assets of the Corporation, but generally not stock dividends or rights to
subscribe for Common Stock) and, pursuant to the anti-dilution provisions of the
Subordinated Indenture, the conversion price of Convertible Subordinated Debt
Securities is reduced, such reduction may be deemed to be the payment of a
taxable dividend to holders of Convertible Subordinated Debt Securities.
LIMITATION ON DISPOSITION OF VOTING STOCK OF PRINCIPAL SUBSIDIARY BANKS
The Senior Indenture contains a covenant by the Corporation that it will
not sell, assign, transfer, grant a security interest in or otherwise dispose of
any shares of, securities convertible into or options, warrants or rights to
subscribe for or purchase shares of, Voting Stock (other than directors'
qualifying shares) of any Principal Subsidiary Bank and that it will not permit
any Principal Subsidiary Bank to issue (except to the Corporation) shares of,
securities convertible into, or options, warrants or rights to subscribe or
purchase shares of, Voting Stock, except for sales, assignments, transfers,
grants of security interests or other dispositions which: (1) are for fair
market value (as determined by the Board of Directors of the Corporation) and,
after giving effect to such dispositions and to any potential dilution, the
Corporation will own not less than 80% of the shares of Voting Stock of such
Principal Subsidiary Bank; (2) are made in compliance with an order of a court
or regulatory authority of competent jurisdiction, a condition imposed by any
such court or authority permitting the acquisition by the Corporation, directly
or indirectly, of any other bank or entity the activities of which are legally
permissible for a bank holding company or a subsidiary thereof to engage in, or
an undertaking made to such authority in connection with such an acquisition
(provided that the assets of the bank or entity being acquired and its
consolidated subsidiaries equal or exceed 75% of the assets of such Principal
Subsidiary Bank or such Subsidiary owning, directly or indirectly, any shares of
voting stock of such Principal Subsidiary Bank and its respective consolidated
Subsidiaries on the date of acquisition); or (3) are made to the Corporation or
any Wholly-Owned Subsidiary if such Wholly-Owned Subsidiary agrees to be bound
by this covenant and the Corporation agrees to maintain such Wholly-Owned
Subsidiary as a Wholly-Owned Subsidiary. Notwithstanding the foregoing, any
Principal Subsidiary Bank may be merged into or consolidated with another
banking institution organized under the laws of the United States, any State
thereof or the District of Columbia, if after giving effect to such merger or
consolidation, the Corporation or any Wholly-Owned Subsidiary owns at least 80%
of the Voting Stock of such other banking institution then issued and
outstanding free and clear of any security interest and if, immediately after
giving effect thereto, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have happened and
be continuing. (Sections 101 and 1008 of the Senior Indenture). A "Principal
Subsidiary Bank" is defined in the Senior Indenture to mean any Subsidiary which
is a Bank and has total assets equal to 30% or more of the consolidated assets
of the Corporation determined as of the date of the most recent audited
financial statements of such entities. At present, the only Principal Subsidiary
Bank is First Tennessee Bank National Association. "Voting Stock" is defined in
the Senior Indenture to mean stock of the class or classes having general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such corporation (irrespective of whether or
not at the time stock of any other class or classes shall have contingent voting
rights).
The Subordinated Indenture contains no such covenant and the foregoing
covenant is not a covenant for the benefit of any series of Subordinated Debt
Securities. The Indenture relating to the Subordinated Capital Notes, however,
does contain a substantially identical covenant for the benefit of such
Subordinated Capital Notes.
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DEFAULTS
The Senior Indenture
An Event of Default is defined in the Senior Indenture as, with respect to
Senior Debt Securities of any series issued thereunder: (1) default in payment
of principal of or premium, if any, on any Senior Debt Security of that series
at Maturity; (2) default for 30 days in payment of interest on any Senior Debt
Security of that series; (3) default in the deposit of any sinking fund payment
when due in respect of that series; (4) default in the performance, or breach,
of any other covenant of the Corporation in the Senior Indenture or in the
Senior Debt Securities of that series, continued for 30 days after written
notice to the Corporation by the Senior Trustee or to the Corporation and the
Senior Trustee by the Holders of not less than 25% of the aggregate principal
amount of the Outstanding Senior Debt Securities of that series; (5) failure to
pay when due any indebtedness of the Corporation or any Principal Subsidiary
Bank for borrowed money in excess of $5,000,000, or acceleration of the maturity
of any such indebtedness in excess of such amount if acceleration results from a
default under the instrument giving rise to such indebtedness and is not
annulled within 30 days after due notice, unless in either case such default is
contested in good faith by appropriate proceedings; (6) certain events of
bankruptcy, insolvency or reorganization of the Corporation, or any Principal
Subsidiary Bank; and (7) any other Event of Default with respect to Senior Debt
Securities of that series that is specified in the applicable Prospectus
Supplement. (Section 501 of the Senior Indenture).
The Senior Indenture provides that, if any Event of Default with respect to
Senior Debt Securities of any series at the time outstanding thereunder occurs
and is continuing, either the Senior Trustee or the Holders of not less than 25%
in principal amount of the Outstanding Senior Debt Securities of that series may
declare the principal amount (or, if the Senior Debt Securities of that series
are Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms of that series) of all Senior Debt Securities of
that series to be due and payable immediately (provided that no such declaration
is required upon certain events of bankruptcy). The Holders of a majority in
aggregate principal amount of the Outstanding Senior Debt Securities of that
series may annul a declaration of acceleration of the Senior Debt Securities of
such series, but only if all Events of Default have been remedied and all
payments due on the Senior Debt Securities of that series (other than those due
as a result of acceleration) have been made and certain other conditions have
been met. (Section 502 of the Senior Indenture). Subject to the duty of the
Senior Trustee upon the occurrence and continuation of an Event of Default to
act with the required standard of care, the Senior Trustee will be under no
obligation to exercise any of its rights or powers under the Senior Indenture at
the request or direction of any of the Holders of Senior Debt Securities, unless
such Holders shall have offered to the Senior Trustee reasonable indemnity.
(Section 603 of the Senior Indenture). The Holders of a majority in aggregate
principal amount of the Outstanding Senior Debt Securities of that series will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Senior Trustee or exercising any trust or power
conferred on the Senior Trustee. (Section 512 of the Senior Indenture). The
Holders of a majority in aggregate principal amount of the Outstanding Senior
Debt Securities of that series may waive any past default under the Senior
Indenture with respect to such series, except a default in the payment of
principal or interest or a default in respect of each covenant in the Senior
Indenture which cannot be modified without the consent of the Holder of each
Outstanding Senior Debt Security of the series affected. (Section 513 of the
Senior Indenture). See the second paragraph under "Modification and Waiver"
below. In the event of the bankruptcy, insolvency or reorganization of the
Corporation, the claims of Holders of Senior Debt Securities would be subject as
to enforcement to the broad equity power of a Federal Bankruptcy Court, and to
the determination by that court of the nature of the rights of the Holders.
The Senior Indenture contains a provision entitling the Senior Trustee,
subject to the duty of the Senior Trustee upon the occurrence and continuation
of an Event of Default to act with the required standard of care, to be
indemnified by the Holders of any series of Outstanding Senior Debt Securities
thereunder before proceeding to exercise any right or power under the Indenture
at the request of the Holders of such series of Senior Debt Securities. (Section
603 of the Senior Indenture). The Senior Indenture provides that the Holders of
a majority in principal amount of Outstanding Senior Debt Securities thereunder
of any series may direct the time, method and place of conducting any proceeding
for any remedy available to the Senior Trustee, or exercising any trust or other
power conferred on the Senior Trustee, with respect to the Senior
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Debt Securities of such series, provided that the Senior Trustee may decline to
act if such direction is contrary to law or the Senior Indenture. (Section 512
of the Senior Indenture).
The Corporation will file annually with the Senior Trustee a certificate as
to compliance with all conditions and covenants in the Senior Indenture.
(Section 1004 of the Senior Indenture).
The Subordinated Indenture
Payment of principal of the Subordinated Debt Securities may be accelerated
only upon an Event of Default (as defined below). There is no right of
acceleration in the case of a default in the payment of interest or the payment
of principal prior to the date of Maturity or a default in the performance of
any other covenant of the Corporation in the Subordinated Indenture, unless the
terms of a particular series of Subordinated Debt Securities specifically
provide otherwise, in which case any such extension of such right of
acceleration will be described in the applicable Prospectus Supplement.
An "Event of Default" is defined in the Subordinated Indenture as certain
events involving the bankruptcy, insolvency or reorganization of the Corporation
and any other Event of Default which may be provided for with respect to the
Subordinated Debt Securities of that series. (Section 501 of the Subordinated
Indenture). A "Default," with respect to Subordinated Debt Securities of that
series, is defined in the Subordinated Indenture to include: (1) any Event of
Default with respect to any Subordinated Debt Securities of that series; (2) a
default in the payment of principal or premium, if any, of any Subordinated Debt
Security of that series at its Maturity; (3) default in the payment of any
interest on any Subordinated Debt Security of that series when due, continued
for 30 days; (4) default in the making of any sinking fund payment; (5) default
in the performance, or breach, of any other covenant or warranty of the
Corporation in the Subordinated Indenture or in the Subordinated Debt Securities
of that series, continued for 30 days after written notice to the Corporation by
the Subordinated Trustee or to the Corporation and the Subordinated Trustee by
the Holders of not less than 25% in aggregate principal amount of the
Outstanding Subordinated Debt Securities of such series; or (6) any other
Default with respect to Subordinated Debt Securities of that series that is
specified in the applicable Prospectus Supplement. (Section 503 of the
Subordinated Indenture). If an Event of Default with respect to the Subordinated
Debt Securities of any series occurs and is continuing, either the Subordinated
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Subordinated Debt Securities of that series may accelerate the
maturity of all Outstanding Subordinated Debt Securities of such series. The
Holders of a majority in aggregate principal amount of the Outstanding
Subordinated Debt Securities of that series may annul a declaration of
acceleration of the Subordinated Debt Securities of such series, but only if all
Events of Default have been remedied and all payments due on the Subordinated
Debt Securities of that series (other than those due as a result of
acceleration) have been made and certain other conditions have been met.
(Section 502 of the Subordinated Indenture). Subject to the duty of the
Subordinated Trustee upon the occurrence and continuation of a Default to act
with the required standard of care, the Subordinated Trustee will be under no
obligation to exercise any of its rights or powers under the Subordinated
Indenture at the request or direction of any of the Holders of Subordinated Debt
Securities, unless such Holders shall have offered to the Subordinated Trustee
reasonable indemnity. (Section 603 of the Subordinated Indenture). The Holders
of a majority in aggregate principal amount of the Outstanding Subordinated Debt
Securities of that series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Subordinated
Trustee or exercising any trust or power conferred on the Subordinated Trustee.
(Section 512 of the Subordinated Indenture). The Holders of a majority in
aggregate principal amount of the Outstanding Subordinated Debt Securities of
that series may waive any past default under the Subordinated Indenture with
respect to such series, except a default in the payment of principal or interest
or a default in respect of a covenant in the Subordinated Indenture which cannot
be modified without the consent of the Holder of each Outstanding Subordinated
Debt Security of the series affected. (Section 513 of the Subordinated
Indenture). See the second paragraph under "Modification and Waiver" below.
In the event of the bankruptcy, insolvency or reorganization of the
Corporation, the claims of the Holders of Subordinated Debt Securities would be
subject as to enforcement to the broad equity power of a Federal Bankruptcy
Court, and to the determination by that court of the nature of the rights of the
Holders.
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The Corporation will file annually with the Subordinated Trustee a
certificate as to compliance with all conditions and covenants in the
Subordinated Indenture. (Section 1004 of the Subordinated Indenture).
DEFEASANCE AND DISCHARGE
Each Indenture provides that the terms of any series of Debt Securities
issued thereunder may provide that the Corporation may terminate all or certain
of its obligations under such Indenture with respect to the Debt Securities of
such series on the terms and subject to the conditions contained in the
Applicable Indenture, by (a) depositing irrevocably with the Applicable Trustee
as trust funds in trust (1) in the case of Debt Securities denominated in a
foreign currency, money in such foreign currency or Foreign Government
Obligations (as defined below) of the foreign government or governments issuing
such foreign currency which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, such foreign currency,
(2) in the case of Debt Securities denominated in U.S. dollars, U.S. dollars or
U.S. Government Obligations (as defined below), which through the payment of
interest, principal or premium, if any, in respect thereof in accordance with
their terms will provide, not later than one business day before the due date of
any payment, money, or (3) a combination of money and U.S. Government
Obligations (as hereinafter defined) or Foreign Government Obligations, as
applicable, in each case in an amount sufficient to pay the principal of or
premium, if any, and interest on, the Debt Securities of such series as such are
due and (b) satisfying certain other conditions precedent specified in the
Applicable Indenture. Such deposit and termination is conditioned, among other
things, upon the Corporation's delivery of (a) an opinion of independent counsel
that the Holders of the Debt Securities of such series will have no federal
income tax consequences as a result of such deposit and termination and (b) if
the Debt Securities of such series are then listed on the New York Stock
Exchange, an opinion of counsel that the Debt Securities of such series will not
be delisted as a result of the exercise of this option. (Article Thirteen).
"U.S. Government Obligations" means securities that are (1) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (2) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, under
clause (1) or (2) are not callable or redeemable at the option of the issuer
thereof. "Foreign Government Obligations" means securities denominated in a
Foreign Currency that are (1) direct obligations of a foreign government for the
payment of which its full faith and credit is pledged or (2) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of
a foreign government the payment of which is unconditionally guaranteed as a
full faith and credit obligation by such foreign government, which, in either
case, under clause (1) or (2) are not callable or redeemable at the option of
the issuer thereof. (Section 101).
The accompanying Prospectus Supplement states whether any defeasance
provisions of the Applicable Indenture will apply to the Offered Debt
Securities.
MODIFICATION AND WAIVER
Certain modifications and amendments of each of the Indentures may be made
by the Corporation and the Trustee under the Applicable Indenture only with the
consent of the Holders of not less than a majority in aggregate principal amount
of the Outstanding Debt Securities of each series issued under such Indenture
and affected by the modification or amendment, provided that no such
modification or amendment may, without the consent of the Holder of each
Outstanding Debt Security issued under such Indenture and affected thereby: (1)
change the Stated Maturity of the principal of, or any installment of principal
of or interest on, any such Debt Security; (2) reduce the principal amount of,
or the premium, if any, or the interest on, any such Debt Security (including in
the case of an Original Issue Discount Security the amount payable upon
acceleration of the Maturity thereof); (3) change the place of payment where, or
the coin or currency or currency unit in which, any principal of, or premium, if
any, or interest on, any such Debt Security is payable; (4) impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date); (5) reduce the above-stated
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percentage of Outstanding Debt Securities of any series the consent of the
Holders of which is necessary to modify or amend the Applicable Indenture; or
(6) modify the foregoing requirements or reduce the percentage of aggregate
principal amount of Outstanding Debt Securities of any series required to be
held by Holders seeking to waive compliance with certain provisions of the
Applicable Indenture or seeking to waive certain defaults. (Section 902).
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Debt Securities of any series may on behalf of the Holders of
all Debt Securities of that series waive, insofar as that series is concerned,
compliance by the Corporation with certain restrictive provisions of the
Applicable Indenture. (Section 1008 of the Subordinated Indenture, Section 1009
of the Senior Indenture). The Holders of not less than a majority in aggregate
principal amount of the Outstanding Debt Securities of any series may on behalf
of the Holders of all Debt Securities of that series waive any past default
under the Applicable Indenture with respect to that series, except a default in
the payment of the principal of, or premium, if any, or interest on any Debt
Security of that series or in respect of a covenant or provision which under the
Applicable Indenture cannot be modified or amended without the consent of the
Holder of each Outstanding Debt Security issued thereunder of the series
affected. (Section 513).
Each of the Senior Indenture and the Subordinated Indenture may be modified
or amended by the Corporation and the Trustee under the Applicable Indenture
without the consent of Holders of the Outstanding Debt Securities issued under
such Indenture for the following purposes: (i) to evidence the succession of
another Person to the Corporation and the assumption by such successor of the
covenants of the Corporation, (ii) to add to the covenants of the Corporation or
to surrender any of its rights or powers, (iii) to add any Defaults or Events of
Default, (iv) to add to or change the provisions of the Applicable Indenture to
facilitate the issuance of Debt Securities in bearer or uncertificated form, (v)
to modify the Applicable Indenture provided that such modification (A) will not
apply to any Debt Securities of any series created prior to such modification or
modify the rights of any holder of such Debt Security and (B) will become
effective only when there is no such Debt Security Outstanding, (vi) to secure
the Debt Securities, (vii) to establish the form and terms of Debt Securities of
any series in accordance with the Applicable Indenture, (viii) to evidence the
acceptance of an appointment by a successor Trustee with respect to Debt
Securities of one or more series or to add to or change any provisions of the
Indentures to provide for or facilitate the administration of the trusts
thereunder by more than one trustee, or (ix) to make provision for conversion
rights or (x) to cure any ambiguity, correct or supplement any defective or
inconsistent provision or make other provisions with respect to matters arising
under the Indentures which do not adversely affect the interests of the Holders
of Debt Securities of any series in any material respect. (Section 901).
Each Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities issued under such
Indenture have given any request, demand, authorization, direction, notice,
consent or waiver thereunder or are present at a meeting of Holders of Debt
Securities for quorum purposes, (1) the principal amount of an Original Issue
Discount Security that shall be deemed to be Outstanding shall be the amount of
the principal thereof that would be due and payable as of the date of such
determination upon acceleration of the Maturity thereof, and (2) the principal
amount of a Debt Security denominated in a foreign currency or currency unit
shall be the U.S. dollar equivalent, determined on the date of original issuance
of such Debt Security, of the principal amount of such Debt Security or, in the
case of an Original Issue Discount Security, the U.S. dollar equivalent,
determined on the date of original issuance of such Debt Security, of the amount
determined as provided in (1) above. (Section 101).
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indentures each provide that the Corporation may not consolidate with
or merge into any other Person or transfer its properties and assets
substantially as an entirety to any Person unless (1) the Person formed by such
consolidation or into which the Corporation is merged or the Person to which the
properties and assets of the Corporation are so transferred shall be a
corporation or partnership organized and validly existing under the laws of the
United States, any State thereof or the District of Columbia and shall expressly
assume by a supplemental indenture the payment of the principal of and premium,
if any, and interest on the Senior Debt Securities or the Subordinated Debt
Securities, as the case may be, and the performance of the
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other covenants of the Corporation under the Applicable Indenture; (2)
immediately after giving effect to such transaction, no Event of Default or
Default, as applicable, and no event which, after notice or lapse of time or
both, would become an Event of Default or Default, as applicable, shall have
occurred and be continuing; and (3) certain other conditions are met. (Section
801).
TRUSTEES
Any Trustee may resign or be removed with respect to one or more series of
Debt Securities and a successor Trustee may be appointed to act with respect to
such series. (Section 610). In the event that two or more persons are acting as
Trustee with respect to different series of Debt Securities, each such Trustee
shall be a Trustee of a trust under the Applicable Indenture separate and apart
from the trust administered by any other such Trustee (Section 611), and any
action described herein to be taken by the "Trustee" may then be taken by each
such Trustee with respect to, and only with respect to, the one or more series
of Debt Securities for which it is Trustee.
In the normal course of business, the Corporation and its subsidiaries may
conduct banking transactions with any Trustee, and any Trustee may conduct
banking transactions with the Corporation and its subsidiaries.
The First National Bank of Chicago will be the Subordinated Trustee under
the Subordinated Indenture, unless otherwise specified with respect to any
series of Subordinated Debt Securities in the applicable Prospectus Supplement.
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and construed
in accordance with, the laws of the State of New York.
DESCRIPTION OF CAPITAL STOCK
The Corporation's Restated Charter, as amended (the "Charter") authorizes
the issuance of up to 50,000,000 shares of Common Stock and 5,000,000 shares of
Preferred Stock. The Corporation intends to propose for shareholder approval at
the annual shareholders' meeting in April 1994 an amendment to the Charter to
increase the number of authorized shares of Common Stock from 50,000,000 to
100,000,000. As of February 23, 1994, 30,175,456 shares of Common Stock and no
shares of Preferred Stock were issued and outstanding, approximately 3.3 million
shares of Common Stock were reserved for issuance under various employee stock
plans and the Corporation's dividend reinvestment plan, and approximately 1.6
million shares were reserved for issuance in connection with pending
acquisitions anticipated to close in the first quarter of 1994. In addition,
301,755 shares of Preferred Stock are reserved for issuance under the Rights
Plan (defined below). The Common Stock of the Corporation is quoted through the
NASDAQ National Market System under the symbol "FTEN."
DESCRIPTION OF PREFERRED STOCK
The following is a description of certain general terms and provisions of
the Preferred Stock. The particular terms of any series of Preferred Stock will
be described in the applicable Prospectus Supplement. If so indicated in a
Prospectus Supplement, the terms of any such series may differ from the terms
set forth below.
The summary of terms of the Corporation's Preferred Stock contained in this
Prospectus and in any Prospectus Supplement does not purport to be complete and
is subject to, and qualified in its entirety by, the provisions of the Charter
and the Articles of Amendment relating to each series of the Preferred Stock
(the "Articles of Amendment"), filed as an exhibit to the Registration Statement
of which this Prospectus is a part.
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General
Under the Charter, the Corporation's Preferred Stock may be issued from
time to time in one or more series, without shareholder approval, when
authorized by the Board of Directors. Subject to limitations prescribed by law,
the Board of Directors is authorized to determine the voting powers (if any),
designation, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, for each
series of Preferred Stock that may be issued, and to fix the number of shares of
each such series. Thus, the Board of Directors, without shareholder approval,
could authorize the issuance of Preferred Stock with voting, conversion and
other rights that could adversely affect the voting power and other rights of
holders of Common Stock or other series of Preferred Stock.
The Preferred Stock shall have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise described in a Prospectus
Supplement relating to a particular series of the Preferred Stock. The
applicable Prospectus Supplement will describe the following terms of the series
of Preferred Stock in respect of which this Prospectus is being delivered: (1)
the title of such Preferred Stock and the number of shares offered; (2) the
amount of liquidation preference per share; (3) the initial public offering
price at which such Preferred Stock will be issued; (4) the dividend rate (or
method of calculation), the dates on which dividends shall be payable and the
dates from which dividends shall commence to cumulate, if any; (5) any
redemption or sinking fund provisions; (6) any conversion or exchange rights;
(7) any additional voting, dividend, liquidation, redemption, sinking fund and
other rights, preferences, privileges, limitations and restrictions; (8) any
listing of such Preferred Stock on any securities exchange; and (9) the relative
ranking and preferences of such Preferred Stock as to dividend rights and rights
upon liquidation, dissolution or winding up of the affairs of the Corporation.
The Preferred Stock offered hereby will be issued in one or more series.
Shares of Preferred Stock, upon issuance against full payment of the purchase
price therefor, will be fully paid and nonassessable. Neither the par value nor
the liquidation preference is indicative of the price at which the Preferred
Stock will actually trade on or after the date of issuance.
Rank
The Preferred Stock shall, with respect to dividend rights and rights upon
liquidation, winding up and dissolution of the Corporation, rank prior to the
Corporation's Common Stock and to all other classes and series of equity
securities of the Corporation now or hereafter authorized, issued or outstanding
(the Common Stock and such other classes and series of equity securities
collectively may be referred to herein as the "Junior Stock"), other than any
classes or series of equity securities of the Corporation which by their terms
specifically provide for a ranking on a parity with (the "Parity Stock") or
senior to (the "Senior Stock") the Preferred Stock as to dividend rights and
rights upon liquidation, winding up or dissolution of the Corporation. The
Preferred Stock shall be junior to all outstanding debt of the Corporation. The
Preferred Stock shall be subject to creation of Senior Stock, Parity Stock and
Junior Stock to the extent not expressly prohibited by the Corporation's
Charter. Unless otherwise specified in the applicable Prospectus Supplement, the
Preferred Stock shall rank on a parity with all other preferred stock of the
Corporation and with each other series of Preferred Stock.
Dividends
Holders of Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds of the Corporation legally
available for payment, cash dividends, payable at such dates and at such rates
per share per annum as described in the applicable Prospectus Supplement. Such
rates may be fixed or variable or both. Each declared dividend shall be payable
to holders of record as they appear at the close of business on the stock books
of the Corporation on such record dates, not more than 60 calendar days
preceding the payment dates therefor, as are determined by the Board of
Directors (each of such dates, a "Record Date").
Such dividends may be cumulative or noncumulative, as described in the
applicable Prospectus Supplement. If dividends on a series of Preferred Stock
are noncumulative and if the Board of Directors fails
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to declare a dividend in respect of a dividend period with respect to such
series, then holders of such Preferred Stock will have no right to receive a
dividend in respect of such dividend period, and the Corporation will have no
obligation to pay the dividend for such period, whether or not dividends are
declared payable on any future dividend payment dates. If dividends of a series
of Preferred Stock are cumulative, the dividends on such shares will accrue from
and after the date set forth in the applicable Prospectus Supplement.
No full dividends shall be declared or paid or set apart for payment on
preferred stock of the Corporation of any series ranking, as to dividends, on a
parity with or junior to the series of Preferred Stock offered by the applicable
Prospectus Supplement for any period unless full dividends for the immediately
preceding dividend period on such Preferred Stock (including any accumulation in
respect of unpaid dividends for prior dividend periods, if dividends on such
Preferred Stock are cumulative) have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof is set apart for
such payment. When dividends are not so paid in full (or a sum sufficient for
such full payment is not so set apart) upon such Preferred Stock and any other
preferred stock of the Corporation ranking on a parity as to dividends with the
Preferred Stock, dividends upon such Preferred Stock and dividends on such other
Preferred Stock ranking on a parity with the Preferred Stock shall be declared
pro rata so that the amount of dividends declared per share on such Preferred
Stock and such other Preferred Stock ranking on a parity with the Preferred
Stock shall in all cases bear to each other the same ratio that accrued
dividends for the then-current dividend period per share on such Preferred Stock
(including any accumulation in respect of unpaid dividends for prior dividend
periods, if dividends on such Preferred Stock are cumulative) and accrued
dividends, including required or permitted accumulations, if any, on shares of
such other Preferred Stock, bear to each other. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment(s) on
Preferred Stock which may be in arrears. Unless full dividends on the series of
Preferred Stock offered by the applicable Prospectus Supplement have been
declared and paid or set apart for payment for the immediately preceding
dividend period (including any accumulation in respect of unpaid dividends for
prior dividend periods, if dividends on such Preferred Stock are cumulative),
(a) no cash dividend or distribution (other than in shares of Junior Stock) may
be declared, set aside or paid on the Junior Stock, (b) the Corporation may not,
directly or indirectly, repurchase, redeem or otherwise acquire any shares of
its Junior Stock (or pay any monies into a sinking fund for the redemption of
any shares) except by conversion into or exchange for Junior Stock, and (c) the
Corporation may not, directly or indirectly, repurchase, redeem or otherwise
acquire any Preferred Stock ranking on parity as to dividends (or pay any monies
into a sinking fund for the redemption of any shares of any such stock)
otherwise than pursuant to pro rata offers to purchase or a concurrent
redemption of all, or a pro rata portion, of the outstanding Preferred Stock
ranking on parity as to dividends (except by conversion into or exchange for
Junior Stock).
Any dividend payment made on a series of Preferred Stock shall first be
credited against the earliest accrued but unpaid dividend due with respect to
shares of such series which remains payable.
Redemption
The terms, if any, on which Preferred Stock of any series may be redeemed
will be set forth in the applicable Prospectus Supplement.
Liquidation
In the event of a voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, the holders of a series of
Preferred Stock will be entitled, subject to the rights of creditors, but before
any distribution or payment to the holders of Common Stock or any other security
ranking junior to the Preferred Stock on liquidation, dissolution or winding up
of the Corporation, to receive a liquidating distribution in the amount of the
liquidation preference per share as set forth in the applicable Prospectus
Supplement, plus accrued and unpaid dividends for the then-current dividend
period (including any accumulation in respect of unpaid dividends for prior
dividend periods, if dividends on such series of Preferred Stock are
cumulative). If the amounts available for distribution with respect to the
Preferred Stock, and all other outstanding stock of the Corporation ranking on a
parity with the Preferred Stock upon liquidation, dissolution or winding up are
not sufficient to satisfy the full liquidation rights of all the outstanding
Preferred
22
<PAGE> 24
Stock and stock ranking on a parity therewith upon liquidation, dissolution or
winding up, then the holders of each series of such stock will share ratably in
any such distribution of assets in proportion to the full respective
preferential amount (which in the case of Preferred Stock may include
accumulated dividends) to which they are entitled. After payment of the full
amount of the liquidation preference, the holders of Preferred Stock will not be
entitled to any further participation in any distribution of assets by the
Corporation.
Voting
The terms, if any, on which Preferred Stock of any series may be entitled
to vote will be set forth in the applicable Prospectus Supplement.
Conversion
The terms, if any, on which Preferred Stock of any series may be converted
into another class or series of securities of the Corporation will be set forth
in the applicable Prospectus Supplement.
No Other Rights
The shares of a series of Preferred Stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or in the applicable Prospectus Supplement or the
Charter and in the applicable Articles of Amendment or as otherwise required by
law.
Transfer Agent and Registrar
The transfer agent for each series of Preferred Stock will be described in
the related Prospectus Supplement.
DESCRIPTION OF COMMON STOCK
The following summary of the terms and provisions of the Common Stock does
not purport to be complete and is qualified in its entirety by reference to the
Charter, which is filed as an exhibit to the Registration Statement of which
this Prospectus is a part.
The holders of Common Stock are entitled to receive, ratably, such
dividends as may be declared by the Board of Directors of the Corporation 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 Board of Directors of the Corporation currently intends to maintain
its present policy of paying regular quarterly cash dividends; however, the
declaration and amount of future dividends will depend on circumstances existing
at the time, including the Corporation's earnings, financial condition and
capital requirements. See "Supervision and Regulation."
The holders of outstanding shares of Common Stock are entitled to one vote
for each share on all matters presented to shareholders, including elections of
directors. There is no cumulative voting in the election of directors, which
means that the holders of a majority of the outstanding Common Stock can elect
all of the directors then standing for election. The holders of Common Stock do
not have any conversion, redemption or preemptive rights to subscribe to any
securities of the Corporation. Upon any dissolution, liquidation or winding up
of the Corporation resulting in a distribution of assets to the shareholders,
the number of shares of Common Stock are entitled to receive such assets ratably
according to their respective number of shares after payment of all liabilities
and obligations and satisfaction of the liquidation preferences of any shares of
Preferred Stock at the time outstanding.
The Corporation's Board of Directors is divided into three classes, which
results in approximately one-third of the directors being elected each year. In
addition, the Charter and the Corporation's bylaws, among other things,
generally give to the Board the authority to fix the number of directors and to
remove directors from and fill vacancies on the Board, other than removal for
cause and the filling of vacancies created thereby
23
<PAGE> 25
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.
Under the Corporation's Shareholder Protection Rights Agreement, dated as
of September 7, 1989 (the "Rights Plan"), each share of Common Stock has, and
each share of Common Stock offered hereby will have, attached to it a Right to
purchase 1/100th of a share of Participating Preferred Stock, without par value,
for $76.67 (the "Exercise Price"), subject to adjustment, upon the business day
following the earlier of (i) the 10th day after commencement of a tender or
exchange offer which, if consummated, would result in a person becoming the
beneficial owner of 10% or more of the outstanding shares of Common Stock (an
"Acquiring Person") and (ii) the first date (the "Flip-in Date") of public
announcement that a person has become an Acquiring Person. The Rights will
expire on the earliest of (i) the Exchange Time (defined below), (ii) September
18, 1999 and (iii) the date on which the Rights are redeemed as described below.
The Board of Directors may, at its option, at any time prior to the Flip-in
Date, redeem all the Rights at a price of $.01 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), to
the extent permitted by applicable law, will constitute the right to purchase
shares of Common Stock or Participating Preferred Stock having an aggregate
market price equal to twice the Exercise Price for an amount in cash equal to
the then-current Exercise Price. In addition, the Board of Directors may, at its
option, at any time after a Flip-in Date and prior to the time that an Acquiring
Person becomes the beneficial owner of more than 50% of the outstanding shares
of Common Stock, 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 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 Right"). The Corporation may not agree to be acquired
by an Acquiring Person without providing that each Right, upon such acquisition,
will constitute the right to purchase common stock of the Acquiring Person
having an aggregate market price equal to 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 an Acquiring Person unless
the Rights are first redeemed by the Board of Directors.
The Common Stock shall have equal dividend, distribution, liquidation and
other rights, and shall have no preference, appraisal or exchange rights. All
outstanding shares of Common Stock are, and the shares offered hereby, upon
issuance, will be, fully paid and nonassessable.
The transfer agent for the Common Stock is The First National Bank of
Boston.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement and of the Depositary Shares and Depositary
Receipts (each as defined below) does not purport to be complete and is subject
to and qualified in its entirety by reference to the forms of Deposit Agreement
and Depositary Receipts relating to each series of the Preferred Stock which
have been or will be filed with the Commission at or prior to the time of the
offering of such series of the Preferred Stock. If so indicated in a Prospectus
Supplement, the terms of any series of Depositary Shares may differ from the
terms set forth herein.
GENERAL
The Corporation may, at its option, elect to offer fractional interests in
shares of Preferred Stock ("Depositary Shares"), rather than shares of Preferred
Stock. In the event such option is exercised, the Corporation will provide for
the issuance by a Depositary to the public of receipts for Depositary Shares
24
<PAGE> 26
("Depositary Receipts"), each of which will represent a fractional interest (to
be set forth in the Prospectus Supplement relating to a particular series of
Preferred Stock which will be filed with the Commission at or prior to the time
of offering such series of the Preferred Stock as described below) of a share of
Preferred Stock.
The shares of any series of the Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") each between the Corporation and a bank or trust company selected by
the Corporation having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000 (the "Depositary"). The
Prospectus Supplement relating to a series of Depositary Shares will set forth
the name and address of the Depositary with respect to such series. Subject to
the terms of the applicable Deposit Agreement, each owner of a Depositary Share
will be entitled, in proportion to the applicable fractional interest in a share
of Preferred Stock underlying such Depositary Shares, to all the rights and
preferences of the Preferred Stock underlying such Depositary Share (including
dividend, voting, redemption, conversion and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of the Corporation, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Corporation's expense.
Upon surrender of Depositary Receipts at the office of the Depositary and
upon payment of the charges provided in the Deposit Agreement and subject to the
terms thereof, a holder of Depositary Shares is entitled to have the Depositary
deliver to such holder the whole shares of Preferred Stock underlying the
Depositary Shares evidenced by the surrendered Depositary Receipts. No
fractional shares of such Preferred Stock shall be delivered.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant record
date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of Depositary Shares a fraction of
one cent, and any balance not so distributed shall be added to and treated as
part of the next sum received by the Depositary for distribution to record
holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Corporation, sell such property and distribute the net proceeds from such
sale to such holders.
The Deposit Agreement will also contain provisions relating to the manner
in which any subscription or similar rights offered by the Corporation to
holders of the Preferred Stock shall be made available to holders of Depositary
Shares.
REDEMPTION OF DEPOSITARY SHARES
If the series of Preferred Stock represented by the applicable series of
Depositary Shares is redeemable, such Depositary Shares will be redeemable from
the proceeds received by the Depositary resulting from the redemption, in whole
or in part, of such Preferred Stock. Whenever the Corporation redeems any
Preferred Stock held by the Depositary, the Depositary will redeem as of the
same redemption date the number of Depositary Shares representing the Preferred
Stock so redeemed.
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<PAGE> 27
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the number of shares of Preferred Stock
underlying such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the number of shares of Preferred Stock
underlying such Depositary Shares in accordance with such instructions, and the
Corporation will agree to take all action which may be deemed necessary by the
Depositary in order to enable the Depositary to do so. To the extent the
Depositary does not receive specific instructions from the holders of Depositary
Shares relating to such Preferred Stock, it will abstain from voting the related
shares of Preferred Stock unless otherwise indicated in the Prospectus
Supplement.
AMENDMENT AND TERMINATION OF DEPOSITARY AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Corporation and the Depositary. However, any amendment which
materially and adversely alters the rights of the existing holders of Depositary
Shares will not be effective unless such amendment has been approved by the
record holders of at least a majority of the Depositary Shares issued under such
Depositary Agreement then outstanding. A Deposit Agreement may be terminated by
the Corporation or the Depositary only if (i) all outstanding Depositary Shares
relating thereto have been redeemed or (ii) there has been a final distribution
in respect of the Preferred Stock of the relevant series in connection with any
liquidation, dissolution or winding up of the Corporation and such distribution
has been distributed to the holders of the related Depositary Shares.
CHARGES OF DEPOSITARY
The Corporation will pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary arrangements. The
Corporation will pay charges of the Depositary in connection with the initial
deposit of the Preferred Stock and any redemption of the Preferred Stock.
Holders of Depositary Shares will pay other transfer and other taxes and
governmental charges and such other charges as are expressly provided in the
Deposit Agreement to be for their accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from the Corporation which are delivered to the Depositary
and which the Corporation is required to furnish to the holders of the Preferred
Stock.
Neither the Depositary nor the Corporation will be liable if it is
prevented or delayed by law or any circumstance beyond its control in performing
its obligations under the Deposit Agreement. The obligations of the Corporation
and the Depositary under the Deposit Agreement will be limited to performance in
good faith of their duties thereunder and they will not be obligated to
prosecute or defend any legal proceeding in respect of any Depositary Shares or
Preferred Stock unless satisfactory indemnity is furnished. They may rely upon
written advice of counsel or accountants, or information provided by persons
presenting Preferred Stock for deposit, holders of Depositary Shares or other
persons believed to be competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Corporation
notice of its election to do so, and the Corporation may at any time remove the
Depositary, and such resignation or removal will take effect upon the
appointment of a successor Depositary and its acceptance of such appointment.
Such successor Depositary must be appointed within 60 days after delivery of the
notice of resignation or removal and must be a bank or
26
<PAGE> 28
trust company having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000.
PLAN OF DISTRIBUTION
The Corporation may sell the Securities to one or more underwriters for
public offering and sale by them or may sell the Securities to investors
directly or through agents. The applicable Prospectus Supplement will set forth
the terms of the offering of the Securities offered thereby, including the names
of any underwriters, agents or dealers, the purchase price of such Securities
and the proceeds to the Corporation from any sale, any underwriting discounts
and other items constituting underwriters' compensation and any discounts and
commissions allowed or reallowed or paid to dealers or agents. The Corporation
has reserved the right to sell the Securities directly to investors on its own
behalf in those jurisdictions where it is authorized to do so.
Underwriters may offer and sell the Securities at a fixed price or prices
that may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The
Corporation also may, from time to time, authorize dealers, acting as the
Corporation's agents, to offer and sell the Securities upon such terms and
conditions as set forth in the related Prospectus Supplement. In connection with
the sale of the Securities, underwriters may receive compensation from the
Corporation in the form of underwriting discounts or commissions and may also
receive commissions from purchasers of the Securities for whom they may act as
agent. Underwriters may sell the Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concession or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents.
Any underwriting compensation paid by the Corporation to underwriters or
agents in connection with the offering of the Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the related Prospectus Supplement. Dealers and agents
participating in the distribution of the Securities may be deemed to be
underwriters, and any discounts and commissions received by them and any profit
realized by them on resale of the Securities may be deemed to be underwriting
discounts and commissions. Underwriters, dealers and agents may be entitled,
under agreements entered into with the Corporation, to indemnification against
and contribution towards certain civil liabilities.
If so indicated in the related Prospectus Supplement, the Corporation will
authorize dealers acting as the Corporation's agents to solicit agreements by
certain institutions to purchase Securities from the Corporation at the public
offering price set forth in the related Prospectus Supplement pursuant to
delayed delivery contracts ("Contracts") providing for payment and delivery on
the date or dates stated in a Prospectus Supplement. Each Contract will be for
an amount not less than, and the aggregate amount of the Securities based on the
principal amount or liquidation value, as the case may be, thereof, sold
pursuant to Contracts will be not less nor more than the respective amounts
stated in a Prospectus Supplement. Institutions, with whom Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and other institutions, but will in all cases be subject to the
approval of the Corporation. Contracts will be subject to the condition that the
purchase by an institution of the Securities covered by Contracts will not at
the time of delivery be prohibited under the laws of any jurisdiction in the
United States to which such institution is subject.
Any Securities issued hereunder (other than Common Stock) will be new
issues of securities with no established trading market. Any underwriters or
agents to or through whom such Securities are sold by the Corporation for public
offering and sale may make a market in such Securities, but such underwriters or
agents will not be obligated to do so and may discontinue any market at any time
without notice. No assurance can be given as to the liquidity of the trading
market for any such Securities.
Certain of the underwriters, dealers or agents and their associates may be
customers of, engage in transactions with, and perform services for, the
Corporation and certain of its affiliates in the ordinary course of business.
27
<PAGE> 29
VALIDITY OF THE SECURITIES
The validity of the Securities will be passed upon for the Corporation by
Harry A. Johnson, III, Esq., Executive Vice President and General Counsel of the
Corporation, unless otherwise specified in the applicable Prospectus Supplement,
and for any underwriters by the counsel named in the applicable Prospectus
Supplement. At February 28, 1994, Mr. Johnson beneficially owned approximately
30,948 shares of Common Stock.
EXPERTS
The consolidated financial statements of the Corporation and its
subsidiaries incorporated in this Prospectus by reference from the Corporation's
Annual Report on Form 10-K for the year ended December 31, 1993 have been
audited by Arthur Andersen & Co., independent public accountants, as stated in
their report, dated January 18, 1994, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
With respect to the 1991 financial statements of Home Financial
Corporation, a company acquired by the Corporation during 1992 in a transaction
accounted for as a pooling-of-interests, Arthur Andersen & Co. relied upon the
report of Baylor and Backus, independent accountants, whose report dated
February 21, 1992, except with respect to the information discussed in Note 27,
as to which the date is October 21, 1992, was incorporated by reference in the
Corporation's Form 10-K for 1993 and is incorporated herein by reference.
The consolidated financial statements of Maryland National Mortgage
Corporation and subsidiaries, appearing in First Tennessee National
Corporation's Current Report on Form 8-K, dated October 1, 1993, for the year
ended December 31, 1992, have been audited by Ernst & Young, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference. Such consolidated financial statements referred to above
are incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
28
<PAGE> 30
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution of
the securities being registered, other than Underwriting Compensation, are as
follows:
<TABLE>
<S> <C>
SEC registration fee........................................... $103,449
Printing and engraving expenses................................ 20,000
Legal fees and disbursements................................... 150,000
Accounting fees and disbursements.............................. 200,000
Trustee's fees and disbursements............................... 8,000
Blue Sky fees and expenses..................................... 20,000
Miscellaneous (including transfer agent, listing and rating
agency fees)................................................. 73,551
--------
Total................................................ $575,000
--------
--------
</TABLE>
- ---------------
* To be provided by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Tennessee Code Annotated, Sections 48-1-406 through 48-1-411 authorizes a
corporation to provide for the indemnification of officers, directors, employees
and agents in terms sufficiently broad to permit indemnification under certain
circumstances for liabilities (including reimbursement for expenses incurred)
arising under the Securities Act of 1933, as amended. The Corporation has
adopted the provisions of the Tennessee statute pursuant to Article XXVIII of
its Bylaws. Also, the Corporation has a Directors' and Officers' Liability
Insurance Policy which provides coverage sufficiently broad to permit
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended.
Tennessee Code Annotated Section 48-12-102 permits the inclusion in the
charter of a Tennessee corporation of a provision, with certain exceptions,
eliminating the personal monetary liability of directors to the corporation or
its shareholders for breach of the duty of care. The Corporation has adopted the
provisions of the statute in Article 13 of its charter.
The shareholders of the Corporation have approved an amendment to Article
XXVIII of the Bylaws pursuant to which the Corporation is required to indemnify
each director and any officers designated by the Corporation's Board of
Directors, and advance expenses, to the maximum extent not prohibited by law. In
accordance with the foregoing, the Board is authorized to enter into individual
indemnity agreements with the directors and such officers. Such indemnity
agreements have been approved for all of the directors and certain officers.
Reference is also made to the Underwriting Agreements filed as Exhibits
hereto, for provisions regarding indemnification of the registrant's officers
and directors against certain liabilities.
II-1
<PAGE> 31
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- --------------------------------------------------------------------------------
<S> <C> <C>
1.1 -- Form of Underwriting Agreement (for Common Stock)*
1.2 -- Form of Underwriting Agreement (for Preferred Stock)*
1.3 -- Form of Underwriting Agreement (for Debt Securities)
4.1 -- Restated Charter, as amended, of the Registrant (incorporated by reference to
the Registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1991)
4.2 -- By-laws, as amended, of the Registrant (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December 31,
1993)
4.3 -- Specimen certificate representing Common Stock (incorporated by reference to the
Registrant's Registration Statement on Form S-4 (No. 33-51223) filed on November
30, 1993)
4.4 -- Form of Articles of Amendment with respect to the Preferred Stock
4.5 -- [intentionally omitted]
4.6 -- Form of Indenture for Senior Debt Securities**
4.7 -- Form of Senior Debt Security (included in Exhibit 4.6)
4.8 -- Form of Indenture for Subordinated Debt Securities**
4.9 -- Form of Subordinated Debt Security (included in Exhibit 4.8)
4.10 -- Form of Deposit Agreement**
5 -- Opinion of Harry A. Johnson, III, Esq., Executive Vice President and General
Counsel of the Corporation
12 -- Statement Regarding Computation of Consolidated Ratios of Earnings to Fixed
Charges and Combined Fixed Charges and Preferred Stock Dividend Requirements**
23.1 -- Consent of Arthur Andersen & Co.**
23.2 -- Consent of Baylor and Backus**
23.3 -- Consent of Harry A. Johnson, III, Esq. (included in his opinion filed as Exhibit
5)
23.4 -- Consent of Ernst & Young
24 -- Powers of Attorney**
25 -- Statement of Eligibility of Trustee on Form T-1**
</TABLE>
- ---------------
* To be filed by post-effective amendment or by a current report on Form 8-K
pursuant to the Securities Exchange Act of 1934, as appropriate.
** Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
II-2
<PAGE> 32
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of section 310 of the Trust Indenture Act of 1939 in accordance with the
rules and regulations prescribed by the Commission under section 305(b)(2) of
the Trust Indenture Act of 1939.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-3
<PAGE> 33
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, FIRST TENNESSEE
NATIONAL CORPORATION CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
AMENDMENT TO THE REGISTRATION STATEMENT ON FORM S-3 TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF MEMPHIS AND STATE
OF TENNESSEE, ON MARCH 22, 1994.
FIRST TENNESSEE NATIONAL CORPORATION,
By: JAMES F. KEEN
------------------------------------
James F. Keen
Senior Vice President and
Controller
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------- ---------------
<C> <S> <C>
RONALD TERRY* Chairman of the Board and Chief March 22, 1994
- ------------------------------------------ Executive Officer (Chief
Ronald Terry Executive Officer)
SUSAN SCHMIDT BIES* Executive Vice President and March 22, 1994
- ------------------------------------------ Chief Financial Officer
Susan Schmidt Bies (Principal Financial Officer)
JAMES F. KEEN* Senior Vice President and March 22, 1994
- ------------------------------------------ Controller (Principal
James F. Keen Accounting Officer)
JACK A. BELZ* Director March 22, 1994
- ------------------------------------------
Jack A. Belz
ROBERT C. BLATTBERG* Director March 22, 1994
- ------------------------------------------
Robert C. Blattberg
JOHN HULL DOBBS* Director March 22, 1994
- ------------------------------------------
John Hull Dobbs
RALPH HORN* Director March 22, 1994
- ------------------------------------------
Ralph Horn
J. P. HYDE, III* Director March 22, 1994
- ------------------------------------------
J. P. Hyde, III
JOSEPH ORGILL, III* Director March 22, 1994
- ------------------------------------------
Joseph Orgill, III
CAMERON E. PERRY* Director March 22, 1994
- ------------------------------------------
Cameron E. Perry
</TABLE>
II-4
<PAGE> 34
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------- ---------------
<C> <S> <C>
RICHARD E. RAY* Director March 22, 1994
- ------------------------------------------
Richard E. Ray
VICKI G. ROMAN* Director March 22, 1994
- ------------------------------------------
Vicki G. Roman
MICHAEL D. ROSE* Director March 22, 1994
- ------------------------------------------
Michael D. Rose
WILLIAM B. SANSON* Director March 22, 1994
- ------------------------------------------
William B. Sanson
GORDON P. STREET, JR.* Director March 22, 1994
- ------------------------------------------
Gordon P. Street, Jr.
Director
- ------------------------------------------
Norfleet R. Turner
*By: CLYDE A. BILLINGS, JR.
- ------------------------------------------
Clyde A. Billings, Jr.
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 1
FIRST TENNESSEE NATIONAL CORPORATION
Debt Securities
Underwriting Agreement
1. Introductory. First Tennessee National Corporation,
a Tennessee corporation ("Company"), proposes to issue and sell from time to
time certain of its debt securities registered under the registration statement
referred to in Section 2(a) ("Registered Securities"). The Registered
Securities will be issued under an indenture, dated as of _______ __, 199_ (as
amended or supplemented from time to time, the "Indenture"), between the
Company and ____________, as trustee (the "Trustee"), in one or more series,
which series may vary as to interest rates, maturities, redemption provisions,
selling prices and other terms, with all such terms for any particular series
of the Registered Securities being determined at the time of sale. Particular
series of the Registered Securities will be sold pursuant to a Terms Agreement
referred to in Section 3, for resale in accordance with terms of the offering
determined at the time of sale.
The Registered Securities involved in any such offering are
hereinafter referred to as the "Securities". The firm or firms which agree to
purchase the Securities are hereinafter referred to as the "Underwriters" of
such Securities, and the representative or representatives of the Underwriters,
if any, specified in a Terms Agreement referred to in Section 3 are hereinafter
referred to as the "Representatives"; provided, however, that if the Terms
Agreement does not specify any representative of the Underwriters, the term
"Representatives", as used in this Agreement (other than in Sections 2(b), 5(c)
and 6 and the second sentence of Section 3), shall mean the Underwriters.
2. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 33-________), including
a prospectus, relating to the Registered Securities has been filed
with the Securities and Exchange Commission ("Commission") and has
become effective. Such registration statement, as amended at the time
of any Terms Agreement referred to in Section 3, is hereinafter
referred to as the "Registration Statement", and the prospectus
included in such Registration Statement, as supplemented as
contemplated by Section 3 to reflect the terms of the Securities and
the terms of offering thereof, as first filed with the Commission
pursuant to and in accordance with Rule 424(b) ("Rule 424(b)") under
the Securities Act of 1933, as amended ("Act"), including all material
<PAGE> 2
2
incorporated by reference therein, is hereinafter referred to as the
"Prospectus".
(b) On the effective date of the Registration Statement
relating to the Registered Securities, such Registration Statement
conformed in all material respects to the requirements of the Act, the
Trust Indenture Act of 1939, as amended ("Trust Indenture Act"), and
the rules and regulations of the Commission ("Rules and Regulations")
and did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and on the date of each
Terms Agreement referred to in Section 3, the Registration Statement
and the Prospectus will conform in all respects to the requirements of
the Act, the Trust Indenture Act and the Rules and Regulations, and
neither of such documents will include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
except that the foregoing does not apply to statements in or omissions
from any of such documents based upon written information furnished to
the Company by any Underwriter through the Representatives, if any,
specifically for use therein.
3. Purchase and Offering of Securities. The obligation
of the Underwriters to purchase the Securities will be evidenced by an exchange
of telegraphic or other written communications ("Terms Agreement") at the time
the Company determines to sell the Securities. The Terms Agreement will
incorporate by reference the provisions of this Agreement, except as otherwise
provided therein, and will specify the firm or firms which will be
Underwriters, the names of any Representatives, the principal amount to be
purchased by each Underwriter, the purchase price to be paid by the
Underwriters and the terms of the Securities not already specified in the
Indenture, including, but not limited to, interest rate, maturity, any
redemption provisions and any sinking fund requirements and whether any of the
Securities may be sold to institutional investors pursuant to Delayed Delivery
Contracts (as defined below). The Terms Agreement will also specify the time
and date of delivery and payment (such time and date, or such other time not
later than seven full business days thereafter as the Representatives and the
Company agree as the time for payment and delivery, being herein and in the
Terms Agreement referred to as the "Closing Date"), the place of delivery and
payment and any details of the terms of offering that should be reflected in
the prospectus supplement relating to the offering of the Securities. The
obligations of the Underwriters to purchase the Securities will be several and
not joint. It is understood that the Underwriters propose to
<PAGE> 3
3
offer the Securities for sale as set forth in the Prospectus. The Securities
delivered to the Underwriters on the Closing Date will be in definitive
fully-registered form, in such denominations and registered in such names as
the Underwriters may request.
If the Terms Agreement provides for sales of Securities
pursuant to delayed delivery contracts, the Company authorizes the Underwriters
to solicit offers to purchase Securities pursuant to delayed delivery contracts
substantially in the form of Annex I attached hereto ("Delayed Delivery
Contracts") with such changes therein as the Company may authorize or approve.
Delayed Delivery Contracts are to be with institutional investors, including
commercial and savings banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. On the Closing Date the
Company will pay, as compensation, to the Representatives for the accounts of
the Underwriters, the fee set forth in such Terms Agreement in respect of the
principal amount of Securities to be sold pursuant to Delayed Delivery
Contracts ("Contract Securities"). The Underwriters will not have any
responsibility in respect of the validity or the performance of Delayed
Delivery Contracts. If the Company executes and delivers Delayed Delivery
Contracts, the Contract Securities will be deducted from the Securities to be
purchased by the several Underwriters and the aggregate principal amount of
Securities to be purchased by each Underwriter will be reduced pro rata in
proportion to the principal amount of Securities set forth opposite each
Underwriter's name in such Terms Agreement, except to the extent that the
Representatives determine that such reduction shall be otherwise than pro rata
and so advise the Company. The Company will advise the Representatives not
later than the business day prior to the Closing Date of the principal amount
of Contract Securities.
4. Certain Agreements of the Company. The Company
agrees with the several Underwriters that it will furnish to Simpson Thacher &
Bartlett, counsel for the Underwriters, one signed copy of the registration
statement relating to the Registered Securities, including all exhibits, in the
form it became effective and of all amendments thereto and that, in connection
with each offering of Securities:
(a) The Company will file the Prospectus with the
Commission pursuant to and in accordance with Rule 424(b)(2) (or, if
applicable and if consented to by the Representatives, subparagraph
(5)) not later than the second business day following the execution
and delivery of the Terms Agreement.
<PAGE> 4
4
(b) The Company will advise the Representatives promptly
of any proposal to amend or supplement the Registration Statement or
the Prospectus and will afford the Representatives a reasonable
opportunity to comment on any such proposed amendment or supplement;
and the Company will also advise the Representatives promptly of the
filing of any such amendment or supplement and of the institution by
the Commission of any stop order proceedings in respect of the
Registration Statement or of any part thereof and will use its best
efforts to prevent the issuance of any such stop order and to obtain
as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act in connection
with sales by any Underwriter or dealer, any event occurs as a result
of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company promptly will prepare and file with the Commission an
amendment or supplement which will correct such statement or omission
or an amendment which will effect such compliance. Neither the
Representatives' consent to, nor the Underwriters', delivery of, any
such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 5.
(d) As soon as practicable, but not later than 16 months,
after the date of each Terms Agreement, the Company will make
generally available to its securityholders an earnings statement
covering a period of at least 12 months beginning after the later of
(i) the effective date of the registration statement relating to the
Registered Securities, (ii) the effective date of the most recent
post-effective amendment to the Registration Statement to become
effective prior to the date of such Terms Agreement and (iii) the date
of the Company's most recent Annual Report on Form 10-K filed with the
Commission prior to the date of such Terms Agreement, which will
satisfy the provisions of Section 11(a) of the Act.
(e) The Company will furnish to the Representatives
copies of the Registration Statement, including all exhibits, any
related preliminary prospectus, any related preliminary prospectus
supplement, the Prospectus and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as
are reasonably requested.
<PAGE> 5
5
(f) The Company will arrange for the qualification of the
Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as the Representatives
designate and will continue such qualifications in effect so long as
required for the distribution.
(g) During the period of five years after the date of any
Terms Agreement, the Company will furnish to the Representatives and,
upon request, to each of the other Underwriters, if any, as soon as
practicable after the end of each fiscal year, a copy of its annual
report to stockholders for such year; and the Company will furnish to
the Representatives (i) as soon as available, a copy of each report or
definitive proxy statement of the Company filed with the Commission
under the Securities Exchange Act of 1934 or mailed to stockholders,
and (ii) from time to time, such other information concerning the
Company as the Representatives may reasonably request.
(h) The Company will pay all expenses incident to the
performance of its obligations under this Agreement and will reimburse
the Underwriters for any reasonable expenses (including fees and
disbursements of counsel) incurred by them in connection with the
qualification of the Registered Securities for sale and determination
of their eligibility for investment under the laws of such
jurisdictions as the Representatives may designate and the printing of
memoranda relating thereto, for any fees charged by investment rating
agencies for the rating of the Securities, for any filing fees of the
National Association of Securities Dealers, Inc. in connection with the
Registered Securities and for expenses incurred in distributing the
Prospectus, any preliminary prospectuses and any preliminary prospectus
supplements to Underwriters.
(i) For a period beginning at the time of execution of
the Terms Agreement and ending on the Closing Date, without the prior
consent of the Representatives, the Company will not offer, sell,
contract to sell or otherwise dispose of any United States
dollar-denominated debt securities issued or guaranteed by the Company
and having a maturity of more than one year from the date of issue.
5. Conditions of the Obligations of the Underwriters.
The obligations of the several Underwriters to purchase and pay for the
Securities will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to
<PAGE> 6
6
the performance by the Company of its obligations hereunder and to the
following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of
delivery thereof, of Arthur Andersen & Co., confirming that they are
independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating in
effect that:
(i) in their opinion, the financial
statements and schedules examined by them and included in the
prospectus contained in the registration statement relating to
the Registered Securities, as amended at the date of such
letter, comply in form in all material respects with the
applicable accounting requirements of the Act and the related
published Rules and Regulations;
(ii) they have made a review of any
unaudited financial statements included in such prospectus in
accordance with standards established by the American
Institute of Certified Public Accountants as indicated in
their report or reports attached to such letter;
(iii) on the basis of the review referred
to in (ii) above, a reading of the latest available interim
financial statements of the Company, inquiries of officials of
the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that the
unaudited financial statements, if any, included in such
prospectus do not comply in form in all material respects with
the applicable accounting requirements of the Act and the
related published Rules and Regulations or that any material
modifications should be made to such financial statements to
be in conformity with generally accepted accounting
principles; and
(iv) they have compared specified dollar
amounts (or percentages derived from such dollar amounts) and
other financial information contained in such prospectus (in
each case to the extent that such dollar amounts, percentages
and other financial information are derived from the general
accounting records of the Company and its subsidiaries subject
to the internal controls of the Company's accounting system or
are derived directly from such records by analysis or
computation) with the results obtained from
<PAGE> 7
7
inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise
specified in such letter.
All financial statements and schedules included in material
incorporated by reference into such prospectus shall be deemed
included in such prospectus for purposes of this subsection.
(b) The Prospectus shall have been filed with the
Commission in accordance with the Rules and Regulations and Section
4(a) of this Agreement. No stop order suspending the effectiveness of
the Registration Statement or of any part thereof shall have been
issued and no proceedings for that purpose shall have been instituted
or, to the knowledge of the Company or any Underwriter, shall be
contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement,
there shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting particularly the
business or properties of the Company or its subsidiaries which, in
the judgment of a majority in interest of the Underwriters, including
any Representatives, materially impairs the investment quality of the
Securities or the Registered Securities; (ii) any downgrading in the
rating of any debt securities or preferred stock of the Company by any
"nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act), or any public announcement
that any such organization has under surveillance or review its rating
of any debt securities or preferred stock of the Company (other than
an announcement with positive implications of a possible upgrading,
and no implication of a possible downgrading, of such rating); (iii)
any suspension or limitation of trading in securities generally on the
New York Stock Exchange, or any setting of minimum prices for trading
on such exchange, or any suspension of trading of any securities of
the Company on any exchange or in the over-the-counter market; (iv)
any banking moratorium declared by Federal, New York or Tennessee
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by
Congress or any other substantial national or international calamity
or emergency if, in the judgment of a majority in interest of the
Underwriters, including any Representatives, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale of
and payment for the Securities.
<PAGE> 8
8
(d) The Representatives shall have received an opinion,
dated the Closing Date, of Sullivan & Cromwell, counsel for the
Company, to the effect that:
(i) The Company has been duly
incorporated and is an existing corporation in good standing
under the laws of the State of Tennessee;
(ii) The Company has been duly registered
as a bank holding company under the Bank Holding Company Act
of 1956, as amended;
(iii) The Indenture has been duly
authorized, executed and delivered by the Company and duly
qualified under the Trust Indenture Act; the Securities, other
than any Contract Securities, have been duly authorized,
executed, authenticated, issued and delivered; the Indenture
and the Securities, other than any Contract Securities,
constitute, and any Contract Securities, when executed,
authenticated, issued and delivered in the manner provided in
the Indenture and sold pursuant to Delayed Delivery Contracts,
will constitute, valid and legally binding obligations of the
Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles; and the Securities other than any Contract
Securities conform, and any Contract Securities, when so
issued and delivered and sold, will conform, to the
description thereof contained in the Prospectus;
(iv) The Terms Agreement has been duly
authorized, executed and delivered by the Company;
(v) All regulatory consents,
authorizations, approvals and filings required to be obtained
or made by the Company under the Federal laws of the United
States and the laws of the State of New York for the issuance,
sale and delivery of the Securities by the Company to the
Underwriters have been obtained or made;
(vi) The issuance of the Securities in
accordance with the terms of the Indenture and the sale of the
Securities by the Company to the Underwriters pursuant to the
Terms Agreement do not, and the performance by the Company of
its obligations under the Indenture and the Securities will
not, violate any Federal law of the United States or law of
the State of New York applicable
<PAGE> 9
9
to the Company or any of its significant subsidiaries (as
defined in Rule 1-02 of Regulation S-X of the Rules and
Regulations); provided that for purposes of this opinion, such
counsel need not express any opinion with respect to Federal
or State securities laws, antifraud laws, fraudulent transfer
laws or antitrust laws; and provided, further, that insofar as
the performance by the Company of its obligations under the
Indenture and the Securities is concerned, such counsel need
not express any opinion as to bankruptcy, insolvency,
reorganization, moratorium or similar laws of general
applicability relating to or affecting creditors' rights; and
(vii) The Registration Statement has been
declared effective under the Act and the Prospectus has been
filed with the Commission within the time period specified by
Rule 424(b), and, to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are
pending or contemplated under the Act; and the registration
statement relating to the Registered Securities, as of its
effective date, the Registration Statement and the Prospectus,
as of the date of the Terms Agreement, and any amendment or
supplement thereto, as of its date, appeared on their face to
be appropriately responsive, in all material respects, with
the requirements of the Trust Indenture Act and the rules and
regulations of the Commisson thereunder
In rendering such opinion, Sullivan & Cromwell may rely as to all
matters governed by Tennessee law upon the opinion of Harry A.
Johnson, III, referred to below.
(e) The Representatives shall have received an opinion,
dated the Closing Date, of Harry A. Johnson, III, Executive Vice
President and General Counsel of the Company, to the effect that:
(i) The Company has been duly incorporated and is
an existing corporation in good standing under the laws of the
State of Tennessee, with corporate power and authority to own
its properties and conduct its business as described in the
Prospectus; and the Company is duly qualified to do business
as a foreign corporation in good standing in all other
jurisdictions in which the conduct of its business requires
such qualification, other than any such jurisdiction in which
the failure to so qualify would not have a material adverse
effect
<PAGE> 10
10
on the Company and its subisidiaries taken as a whole;
(ii) The Indenture has been duly authorized,
executed and delivered by the Company; the Securities have
been duly authorized; the Securities other than any Contract
Securities have been duly executed, authenticated, issued and
delivered;
(iii) All regulatory consents, authorizations,
approvals and filings required to be obtained or made by the
Company under the laws of the State of Tennessee for the
issuance, sale and delivery of the Securities by the Company
to the Underwriters have been obtained or made;
(iv) The issuance of the Securities in accordance
with the terms of the Indenture and the sale of the Securities
by the Company to the Underwriters and the performance by the
Company of its obligations under the Indenture and the
Securities will not (A) violate the charter or by-laws of the
Company or any of its significant subsidiaries (as defined in
Rule 1-02 of Regulation S-X of the Rules and Regulations), (B)
violate any law of the State of Tennessee applicable to the
Company or any of its significant subsidiaries or any of their
respective properties (C) result in a breach of, or constitute
a default under, any agreement or instrument known to such
counsel to which the Company or any of its significant
subsidiaries is a party or by which the Company or any of its
significant subsidiaries is bound or to which any of their
respective properties are subject; provided that for purposes
of this opinion, such counsel need not express any opinion
with respect to State securities laws, antifraud laws,
fraudulent transfer laws or antitrust laws; and provided,
further, that insofar as the performance by the Company of its
obligations under the Indenture and the Securities is
concerned, such counsel need not express any opinion with
respect to bankruptcy, insolvency, reorganization, moratorium
or similar laws of general applicability relating to or
affecting creditors' rights;
(v) To the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are
pending or contemplated under the Act; the registration
statement relating to the Registered Securities, as of its
effective
<PAGE> 11
11
date, the Registration Statement and the Prospectus, as of the
date of the Terms Agreement, and any amendment or supplement
thereto, as of its date, complied as to form in all material
respects with the requirements of the Act and the Rules and
Regulations; such counsel has no reason to believe that such
registration statement, as of its effective date, the
Registration Statement or the Prospectus, as of the date of
the Terms Agreement, or any such amendment or supplement, as
of its date, contained any untrue statement of a material fact
or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading; the descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings and
contracts and other documents are accurate and fairly present
the information required to be shown; and such counsel does
not know of any legal or governmental proceedings required to
be described in the Prospectus which are not described as
required or of any contracts or documents of a character
required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required; it
being understood that such counsel need express no opinion as
to the financial statements or other financial or statistical
data contained in the Registration Statement or the
Prospectus; and
(vi) The Terms Agreement (including the provisions
of this Agreement) and any Delayed Delivery Contracts have
been duly authorized, executed and delivered by the Company.
(f) The Representatives shall have received from Simpson
Thacher & Bartlett, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to the incorporation of
the Company, the validity of the Securities, the Registration
Statement, the Prospectus and other related matters as they may
require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass
upon such matters. In rendering such opinion, Simpson Thacher &
Bartlett may rely as to all matters governed by Tennessee law upon the
opinion of Harry A. Johnson, III, referred to above.
(g) The Representatives shall have received a
certificate, dated the Closing Date, of the Chairman, President or any
Executive Vice-President and the principal financial or accounting
officer of the Company
<PAGE> 12
12
in which such officers, to the best of their knowledge after
reasonable investigation, shall state that the representations and
warranties of the Company in this Agreement are true and correct, that
the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date, that no stop order suspending the
effectiveness of the Registration Statement or of any part thereof has
been issued and no proceedings for that purpose have been instituted
or are contemplated by the Commission and that, subsequent to the date
of the most recent financial statements in the Prospectus, there has
been no material adverse change in the financial position or results
of operation of the Company and its subsidiaries except as set forth
in or contemplated by the Prospectus or as described in such
certificate.
(h) The Representatives shall have received a letter,
dated the Closing Date, of Arthur Andersen & Co., which reconfirms the
matters set forth in their letter delivered pursuant to subsection (a)
of this Section and states in effect that:
(i) in their opinion, any financial statements or
schedules examined by them and included in the Prospectus and
not covered by their letter delivered pursuant to subsection
(a) of this Section comply in form in all material respects
with the applicable accounting requirements of the Act and the
related published Rules and Regulations;
(ii) they have made a review of any unaudited
financial statements included in such prospectus in accordance
with standards established by the American Institute of
Certified Public Accountants as indicated in their report or
reports attached to such letter;
(iii) on the basis of the reading referred to in
(ii) above, a reading of the latest available interim
financial statements of the Company, inquiries of officials of
the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial statements,
if any, included in the Prospectus do not comply in
form in all material respects with the applicable
accounting requirements of the Act and the related
published Rules and Regulations or are not in
conformity with
<PAGE> 13
13
generally accepted accounting principles applied on a
basis substantially consistent with that of the
audited financial statements included in the
Prospectus;
(B) the unaudited capsule information,
if any, included in the Prospectus does not agree
with the corresponding amounts set forth in the
unaudited consolidated financial statements from
which it was derived or was not determined on a basis
substantially consistent with that of the audited
financial statements included in the Prospectus;
(C) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than five days
prior to the Closing Date, there was any change in
the capital stock, any decrease in consolidated
stockholders' equity or any increase in long-term
indebtedness of the Company and consolidated
subsidiaries as compared with amounts shown on the
latest balance sheet included in the Prospectus; or
(D) for the period from the date of the
latest income statement included in the Prospectus to
the closing date of the latest available income
statement read by such accountants there were any
decreases, as compared with the corresponding period
of the previous year, in consolidated net interest
income, in consolidated income before extraordinary
items, in consolidated net income or in the ratio of
earnings to fixed charges;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts
(or percentages derived from such dollar amounts) and other
financial information included in the Prospectus and not
covered by their letter delivered pursuant to subsection (a)
of this Section (in each case to the extent that such dollar
amounts, percentages and other financial information are
derived from the general accounting records of the Company and
its subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such
records by analysis or computation) with the
<PAGE> 14
14
results obtained from inquiries, a reading of such general
accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and
other financial information to be in agreement with such
results, except as otherwise specified in such letter.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included
in the Prospectus for the purposes of this subsection.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as they reasonably request.
6. Indemnification and Contribution. (a) The Company
will indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives, if any,
specifically for use therein.
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Prospectus, or any amendment
or supplement thereto, or any related preliminary prospectus or preliminary
prospectus supplement, or arise out of or are based upon the omission or the
alleged omission to state therein a material
<PAGE> 15
15
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representatives, if any,
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses
are incurred.
(c) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the indemnifying
party of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under subsection (a) or (b) above. In
case any such action is brought against any indemnified party and it notifies
the indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(d) If the indemnification provided for in this Section
is unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other
<PAGE> 16
16
from the offering of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of the
Company who has signed the
<PAGE> 17
17
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
7. Default of Underwriters. If any Underwriter or
Underwriters default in their obligations to purchase Securities under the
Terms Agreement and the aggregate principal amount of the Securities that such
defaulting Underwriter or Underwriters agreed but failed to purchase does not
exceed 10% of the total principal amount of the Securities, the Representatives
may make arrangements satisfactory to the Company for the purchase of such
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by the Closing Date, the nondefaulting Underwriters shall
be obligated severally, in proportion to their respective commitments under
this Agreement and the Terms Agreement, to purchase the Securities that such
defaulting Underwriters agreed but failed to purchase. If any Underwriter or
Underwriters so default and the aggregate principal amount of the Securities
with respect to which such default or defaults occur exceeds 10% of the total
principal amount of the Securities and arrangements satisfactory to the
Representatives and the Company for the purchase of such securities by other
persons are not made within 36 hours after such default, such Terms Agreement
will terminate without liability on the part of any non-defaulting Underwriter
or the Company, except as provided in Section 8. As used in the Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under
this Section. Nothing herein will relieve a defaulting Underwriter from
liability for its default. The respective commitments of the several
Underwriters for the purposes of this Section shall be determined without
regard to reduction in the respective Underwriters' obligations to purchase the
principal amount of the Securities set forth opposite their names in the Terms
Agreement as a result of Delayed Delivery Contracts entered into by the
Company.
The foregoing obligations and agreements set forth in this
Section will not apply if the Terms Agreement specified that such obligations
and agreements will not apply.
8. Survival of Certain Representations and Obligations.
The respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results
thereof, made by or on behalf of any Underwriter, the Company or any of their
respective representatives, officers or directors or any controlling person and
will survive delivery of and payment for the Securities. If the Terms
Agreement is terminated pursuant to
<PAGE> 18
18
Section 7 or if for any reason the purchase of the Securities by the
Underwriters under the Terms Agreement is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 4 and the respective obligations of the Company and the Underwriters
pursuant to Section 6 shall remain in effect. If the purchase of the
Securities by the Underwriters is not consummated for any reason other than
solely because of the termination of this Agreement pursuant to Section 7 or
the occurrence of any event specified in clause (iii), (iv) or (v) of Section
5(c), the Company will reimburse the Underwriters for all out-of-pocket
expenses (including fees and disbursements of counsel) reasonably incurred by
them in connection with the offering of the Securities.
9. Notices. All communications hereunder will be in
writing and, if sent to the Underwriters, will be mailed, delivered or
telegraphed and confirmed to them at their addresses furnished to the Company
in writing for the purpose of communications hereunder or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at 165
Madison Avenue, Memphis, Tennessee 38103, Attention: Theresa A. Fenrman
Treasurer, and Harry A. Johnson, III, Executive Vice President and General
Counsel or to such other address as may be furnished to the Underwriters in
writing for purposes of communications hereunder
10. Successors. This Agreement will inure to the benefit
of and be binding upon the Company and such Underwriters as are identified in
Terms Agreements and their respective successors and the officers and directors
and controlling persons referred to in Section 6, and no other person will have
any right or obligation hereunder.
11. Applicable Law. This Agreement and the Terms
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York.
<PAGE> 19
ANNEX I
(Three copies of this Delayed Delivery Contract
should be signed and returned
to the address shown below so as
to arrive not later than 9:00 A.M.,
New York time, on __________ __, 19__*.)
DELAYED DELIVERY CONTRACT
(Insert date of initial
public offering)
First Tennessee National Corporation
c/o CS FIRST BOSTON CORPORATION
Park Avenue Plaza
New York, NY 10055
Attention:
Gentlemen:
The undersigned hereby agrees to purchase from First Tennessee
National Corporation, a Tennessee corporation ("Company"), and the Company
agrees to sell to the undersigned, ( if one delayed closing, insert - as of the
date hereof, for delivery on , 19 ("Delivery Date").)
$
---------------
principal amount of the Company's (insert title of securities) ("Securities"),
offered by the Company's Prospectus dated , 19 and a Prospectus
Supplement dated , 19 relating thereto, receipt of copies of
which is hereby acknowledged, at ___% of the principal amount thereof plus
accrued interest, if any, and on the further terms and conditions set forth in
this Delayed Delivery Contract ("Contract").
( If two or more delayed closings, insert:
The undersigned will purchase from the Company as of the date hereof,
for delivery on the dates set forth below, Securities in the amounts set forth
below:
Delivery Date Principal Amount
------------- ----------------
-------------------------- ----------------
-------------------------- ----------------
- --------------------------
* Insert date which is third full business day prior to Closing Date
under the Terms Agreement.
<PAGE> 20
2
Each of such delivery dates is hereinafter referred to as a Delivery Date.)
Payment for the Securities that the undersigned has agreed to
purchase for delivery on (the) (each) Delivery Date shall be made to the
Company or its order by certified or official bank check in (New York Clearing
House (next day) funds) at the office of at
__.M. on (the) (such) Delivery Date upon delivery to the undersigned of the
Securities to be purchased by the undersigned for delivery on such Delivery
Date in definitive fully-registered form and in such denominations and
registered in such names as the undersigned may designate by written or
telegraphic communication addressed to the Company not less than five full
business days prior to (the) (such) Delivery Date.
It is expressly agreed that the provisions for delayed
delivery and payment are for the sole convenience of the undersigned; that the
purchase hereunder of Securities is to be regarded in all respects as a
purchase as of the date of this Contract; that the obligation of the Company to
make delivery of and accept payment for, and the obligation of the undersigned
to take delivery of and make payment for, Securities on [the] [each] Delivery
Date shall be subject only to the conditions that (1) investment in the
Securities shall not at (the) (such) Delivery Date be prohibited under the laws
of any jurisdiction in the United States to which the undersigned is subject
and (2) the Company shall have sold to the Underwriters the total aggregate
principal amount of the Securities less the aggregate principal amount thereof
covered by this and other similar Contracts. The undersigned represents that
its investment in the Securities is not, as of the date hereof, prohibited
under the laws of any jurisdiction to which the undersigned is subject and
which governs such investment.
Promptly after completion of the sale to the Underwriters the
Company will mail or deliver to the undersigned at its address set forth below
notice to such effect, accompanied by a copy of the opinions of counsel for the
Company delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon
the parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other.
<PAGE> 21
3
It is understood that the acceptance of any such Contract is
in the Company's sole discretion and, without limiting the foregoing, need not
be on a first-come, first-served basis. If this Contract is acceptable to the
Company, it is requested that the Company sign the form of acceptance below and
mail or deliver one of the counterparts hereof to the undersigned at its
address set forth below. This will become a binding contract between the
Company and the undersigned when such counterpart is so mailed or delivered.
Yours very truly,
------------------------
(Name of Purchaser)
By
---------------------
---------------------
(Title of Signatory)
---------------------
---------------------
(Address of Purchaser)
Accepted, as of the above date.
FIRST TENNESSEE NATIONAL CORPORATION
By
----------------------
(Insert Title)
<PAGE> 1
FORM OF
ARTICLES OF AMENDMENT
TO THE CHARTER OF
FIRST TENNESSEE NATIONAL CORPORATION
Pursuant to the provisions of Sections 48-16-102, 48-20-102 and
48-20-106 of the Tennessee Business Corporation Act, the undersigned
corporation adopts the following Articles of Amendment to its Charter:
1. The name of the corporation is First Tennessee National Corporation.
2. The amendment adopted is: Article 10 of the Company's Charter is
hereby amended to add thereto, at the end thereof, the following
provisions:
Series __ Preferred Stock
1. Designation and Rank. There is hereby designated a
series of Preferred Stock which shall be designated as _____% Preferred
Stock, Series __ (the "Series __ Preferred Stock"). The maximum number
of shares of Series __ Preferred Stock shall be ____________________.
Shares of the Series __ Preferred Stock shall have a liquidation
preference of ____ per share. The Series __ Preferred Stock shall rank
prior to the Company's Common Stock and to all other classes and series
of equity securities of the Company now or hereafter authorized, issued
or outstanding (the Common Stock and such other classes and series of
equity securities collectively may be referred to herein as the "Junior
Stock"), other than any classes or series of equity securities of the
Company ranking on a parity with (the "Parity Stock") or senior to (the
"Senior Stock") the Series __ Preferred Stock as to dividend rights and
rights upon liquidation, winding up or dissolution of the Company. The
Series __ Preferred Stock shall be junior to all outstanding debt of
the Company. [The Series __ Preferred Stock shall be senior to the
Series __ Preferred Stock as to both payments of dividends and
distribution of assets upon liquidation, dissolution and winding up of
the Company.] The Series __ Preferred Stock shall be subject to
creation of Senior
<PAGE> 2
Stock, Parity Stock and Junior Stock to the extent
not expressly prohibited by the Company's Charter.
2. (Noncumulative) (Cumulative) Dividends;
Priority.
(a) Payment of Dividends. The holders of
record of shares of Series __ Preferred Stock shall be entitled to
receive, when, as, and if declared by the Board, out of funds legally
available therefor, [noncumulative] [cumulative] cash dividends at the
rate of _____% [if variable rate, insert formula] per annum per share,
which shall accrue from the original issue date and be payable
quarterly in arrears on the first day of _____, _______, ________,
_________ in each year, commencing on ____________________, 19__, or,
if such day is a non-business day, on the next business day (each of
such dates, a "Dividend Payment Date"). Each declared dividend shall
be payable to holders of record as they appear on the stock books of
the Company at the close of business on such record dates, not more
than 60 calendar days preceding the payment dates therefor, as are
determined by the Board or a duly authorized committee thereof (each of
such dates, a "Record Date"). (Quarterly) dividend periods (each a
"Dividend Period") shall commence on and include the first day of
______, ______, ______ and ______ of each year and shall end on and
include the date next preceding the next following Dividend Payment
Date.
(If noncumulative, insert -- If a dividend on
the shares of Series ___ Preferred Stock with respect to any Dividend
Period is not declared by the Board of Directors of the Company, then
the Company shall have no obligation at any time to pay a dividend on
the shares of Series ___ Preferred Stock in respect of such Dividend
Period.) Holders of the shares of the Series ___ Preferred Stock shall
not be entitled to any dividends, whether payable in cash, property or
securities, in excess of the dividends declared by the Board of
Directors as set forth herein.
The amount of dividends payable per share for
each full Dividend Period shall be computed by dividing by ____ the
amount determined by applying the _____% annual dividend rate to the
$_____ liquidation preference of such share. Dividends on the Series
__ Preferred Stock shall accrue day by day. The initial quarterly
dividend payable on ____________________, 19__ and the amount of any
-2-
<PAGE> 3
dividend payable for any other period shorter than a full Dividend
Period shall be computed on the basis of a (360-day year composed of
twelve 30-day months and the actual number of days elapsed in such
period).
(b) Priority as to Dividends. No full
dividends shall be declared or paid or set apart for payment on
Preferred Stock of any series ranking, as to dividends, on a parity
with or junior to the Series __ Preferred Stock for any period unless
full dividends for the immediately preceding Dividend Period on the
Series __ Preferred Stock (including any accumulation in respect of
unpaid dividends from prior Dividend Periods) have been or
contemporaneously are declared and paid (or declared and a sum
sufficient for the payment thereof set apart for such payment). When
dividends are not paid in full (or declared and a sum sufficient for
such full payment is not so set apart) upon the Series __ Preferred
Stock and any other Preferred Stock ranking on a parity as to dividends
with the Series __ Preferred Stock, dividends declared upon shares of
Series __ Preferred Stock and such other Preferred Stock ranking on a
parity as to dividends shall be declared pro rata, so that the amount
of dividends declared per share on the Series __ Preferred Stock and
such other Preferred Stock shall bear in all cases to each other the
same ratio that accrued dividends for the then-current Dividend Period
per share on the shares of Series __ Preferred Stock (including any
accumulation in respect of unpaid dividends for prior Dividend Periods)
and accrued dividends, including required or permitted accumulations,
if any, of such other Preferred Stock, bear to each other.
Unless full dividends on the Series __
Preferred Stock have been declared and paid or set apart for payment
for the immediately preceding Dividend Period (including any
accumulation in respect of unpaid dividends for prior Dividend Periods)
(i) no cash dividend or other distribution (other than in shares of
Junior Stock) shall be declared or paid or set aside for payment on the
Junior Stock, (ii) the Company may not, directly or indirectly,
repurchase, redeem or otherwise acquire any shares of its Junior Stock
(or any moneys paid to or made available for a sinking fund for the
redemption of any shares except by conversion into or exchange for
Junior Stock) and (iii) the Company may not, directly or indirectly,
repurchase, redeem or otherwise acquire any shares of Series __
Preferred Stock or Parity Stock (or any
-3-
<PAGE> 4
moneys paid to or made available for a sinking fund for the redemption
of any shares of any such stock) otherwise than pursuant to a pro rata
offer to purchase or a concurrent redemption of all, or a pro rata
portion, of the outstanding shares of Series __ Preferred Stock and
Parity Stock (except by conversion into or exchange for Junior Stock).
The Company shall not permit any subsidiary of
the Company to purchase or otherwise acquire for consideration any
shares of stock of the Company for its own account if, under the
preceding paragraph, the Company would be prohibited from purchasing or
otherwise acquiring such shares at such time and in such manner.
3. Redemption.
(a) [If optional redemption, insert -- General. The
shares of the Series __ Preferred Stock will not be redeemable prior to
____________________, 19__. At any time on or after
____________________, 19__, subject to the applicable restrictions set
forth in this Section 3 and applicable law, the shares of Series __
Preferred Stock may be redeemed, in whole or in part, at the election
of the Company, upon notice as provided in Section 3(b) hereof, by
resolution of its Board of Directors, at any time or from time to time,
at the redemption price of $____ per share, plus, in each case, an
amount equal to all accrued and unpaid dividends to the date fixed for
redemption.
If less than all the outstanding shares of
Series __ Preferred Stock are to be redeemed, the Company will select
those to be redeemed pro rata, by lot or by a substantially equivalent
method. On and after the redemption date, dividends shall cease to
accrue on the shares of Series __ Preferred Stock called for
redemption, and they shall be deemed to cease to be outstanding,
provided that the redemption price (including any accrued and unpaid
dividends to the date fixed for redemption) has been duly paid or
provided for.]
[If mandatory redemption, insert -- The
Company shall redeem, out of funds legally available therefore, on
__________, 19__, ___% of all shares of Series __ Preferred Stock that
have been issued, less any shares which previously have been redeemed,
repurchased or otherwise acquired and are no longer
-4-
<PAGE> 5
outstanding, at the redemption price of ________ ($___) per share.
Immediately prior to authorizing or making such redemption with respect
to the Series __ Preferred Stock the Company, by resolution of its
Board of Directors shall, to the extent funds are legally available
therefor, declare a mandatory dividend on the Series __ Preferred Stock
payable on redemption date in the amount equal to any accrued and
unpaid dividends on the Series __ Preferred Stock as of such date and,
if the Company does not have sufficient funds legally available to
declare and pay all dividends accrued at the time of such redemption,
any remaining accrued and unpaid dividends shall be added to the
redemption price. If the Company shall fail to discharge its
obligation to redeem all of the outstanding shares of Series __
Preferred Stock required to be redeemed pursuant to this Section 3(a)
(the "Mandatory Redemption Obligation"), the Mandatory Redemption
Obligation shall be discharged as soon as the Company is able to do so.
If and so long as the Mandatory Redemption Obligation shall not be
fully discharged, (i) dividends on the Series __ Preferred Stock shall
continue to accrue, and (ii) the Company shall not declare or pay any
dividend or make any distribution on its securities not otherwise
permitted by the Charter.]
[If non-redeemable, insert -- The shares of
the Series __ Preferred Stock shall not be redeemed by the Company.]
[If optional or mandatory redemption, insert
-- (b) Notice of Redemption. Notice of any redemption, setting
forth (i) the date and place fixed for said redemption, (ii) the
redemption price and (iii) a statement that dividends on the shares of
Series __ Preferred Stock to be redeemed will cease to accrue on such
redemption date shall be mailed, postage prepaid, at least 30 days but
not more than 60 days prior to said redemption date to each holder of
record of the Series __ Preferred Stock to be redeemed at his address
as the same shall appear on the books of the Company. If less than all
the shares of the Series __ Preferred Stock owned by such holder are
then to be redeemed, the notice shall specify the number of shares
thereof which are to be redeemed and the numbers of the certificates
representing such shares.
If such notice of redemption shall have been
so mailed, and if on or before the redemption date specified in such
notice all funds necessary for such redemption shall have been set
aside by the Company
-5-
<PAGE> 6
separate and apart from its other funds in trust for the account of the
holders of the shares of the Series __ Preferred Stock so to be
redeemed (so as to be and continue to be available therefor), then, on
and after said redemption date, notwithstanding that any certificate
for shares of the Series __ Preferred Stock so called for redemption
shall not have been surrendered for cancellation, the shares of the
Series __ Preferred Stock so called for redemption shall be deemed to
be no longer outstanding, the dividends thereon shall cease to accrue,
and all rights with respect to such shares of the Series __ Preferred
Stock so called for redemption shall forthwith cease and terminate,
except only the right of the holders thereof to receive out of the
funds so set aside in trust the amount payable on redemption thereof,
but without interest, upon surrender (and endorsement or assignment for
transfer, if required by the Company) of their certificates.
However, if such notice of redemption shall
have been so mailed, and if prior to the date of redemption specified
in such notice all said funds necessary for such redemption shall have
been irrevocably deposited in trust for the account of the holders of
the shares of the Series __ Preferred Stock to be redeemed (so as to be
and continue to be available therefor) with a bank or trust company
named in such notice doing business in the City of New York or the
State of Tennessee and having capital surplus and undivided profits of
at least $50,000,000, thereupon and without awaiting the redemption
date, all shares of the Series __ Preferred Stock with respect to which
such notice shall have been so mailed and such deposit shall have been
so made shall be deemed to be no longer outstanding, and all rights
with respect to such shares of the Series __ Preferred Stock shall
forthwith upon such deposit in trust cease and terminate, except only
the right of the holders thereof on or after the redemption date to
receive from such deposit the amount payable upon the redemption, but
without interest, upon surrender (and endorsement or assignment to
transfer, if required by the Company) of their certificates.
In case the holders of shares of the Series __
Preferred Stock which shall have been redeemed shall not within two
years (or any longer period if required by law) after the redemption
date claim any amount so deposited in trust for the redemption of such
shares, such bank or trust company
-6-
<PAGE> 7
shall, upon demand and if permitted by applicable law, pay over to the
Company any such unclaimed amount so deposited with it, and shall
thereupon be relieved of all responsibility in respect thereof, and
thereafter the holders of such shares shall, subject to applicable
escheat laws, look only to the Company for payment of the redemption
price thereof, but without interest from the date of redemption.]
[(c)] Status of Shares Redeemed. Shares of
Series __ Preferred Stock redeemed, purchased or otherwise acquired for
value by the Company, shall, after such acquisition, have the status of
authorized and unissued shares of Preferred Stock and may be reissued
by the Company at any time as shares of any series of Preferred Stock
other than as shares of Series __ Preferred Stock.
4. Voting Rights.
(a) General. Except [as expressly provided
hereinafter in this Section, or] as [otherwise] from time to time
required by applicable law, the Series __ Preferred Stock shall have
[no] voting rights.
[(b) Voting Rights Upon Dividend Arrears.*
-- insert if applicable].
[(c) Other Voting Rights. -- insert if
applicable.]
[5. No Sinking Fund. No sinking fund will be
established for the retirement or redemption of shares of Series __
Preferred Stock.]
6. Liquidation Rights; Priority.
(a) In the event of any liquidation,
dissolution or winding up of the affairs of the Company, whether
voluntary or involuntary, after payment or provision for payment of the
debts and other liabilities of the Company, the holders of shares of
____________________
* Subject to modification to comply with applicable law, stock
exchange rules and usage for noncumulative preferred stock.]
-7-
<PAGE> 8
the Series __ Preferred Stock shall be entitled to receive, out of the
assets of the Company, whether such assets are capital or surplus and
whether or not any dividends as such are declared, $_____ per share
plus an amount equal to all accrued and unpaid dividends for prior
Dividend Periods, and no more, before any distribution shall be made to
the holders of the Common Stock or any other class of stock or series
thereof ranking junior to the Series __ Preferred Stock with respect to
the distribution of assets on liquidation, dissolution or winding up of
the Company. After payment of the full amount of the liquidation
preference, the holders of shares of the Series __ Preferred Stock
shall not be entitled to any further participation.
(b) [Nothing contained in this Section 6
shall be deemed to prevent redemption of shares of the Series __
Preferred Stock by the Company in the manner provided in Section 3.]
Neither the merger nor consolidation of the Company into or with any
other company, nor the merger or consolidation of any other company
into or with the Company, nor a sale, transfer or lease of all or any
part of the assets of the Company, shall be deemed to be a liquidation,
dissolution or winding up of the Company within the meaning of this
Section 6.
(c) Written notice of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of
the Company, stating a payment date and the place where the
distributable amounts shall be payable, shall be given by mail, postage
prepaid, no less than 30 days prior to the payment date stated therein,
to the holders of record of the Series __ Preferred Stock at their
respective addresses as the same shall appear on the books of the
Company.
(d) If the amounts available for distribution
with respect to the Series __ Preferred Stock and all other outstanding
stock of the Company ranking on a parity with the Series __ Preferred
Stock upon liquidation are not sufficient to satisfy the full
liquidation rights of all the outstanding Series __ Preferred Stock and
stock ranking on a parity therewith, then the holders of each series of
such stock will share ratably in any such distribution of assets in
proportion to the full respective preferential amount (which in the
case of Preferred Stock may include accumulated dividends) to which
they are entitled.
-8-
<PAGE> 9
[7. Conversion. -- insert conversion provisions if
applicable.]
3. The amendment was duly adopted by a resolution of the Board of
Directors on _____ __, 19__. Pursuant to Section 48-16-102 of the
Tennessee Business Corporation Act, no shareholder action was required
for the adoption of the amendment.
4. The amendment is effective when filed by the Secretary of State
FIRST TENNESSEE NATIONAL
CORPORATION
By:
----------------------------
[Name and Title]
Date:
-9-
<PAGE> 1
EXHIBIT 5
Harry A. Johnson III FIRST
Executive Vice President TENNESSEE
and General Counsel
First Tennessee National Corporation
Box 84
Memphis, TN 38101
(901) 523-5624
Cable FIRBANK
March 17, 1994
Board of Directors
First Tennessee National Corporation
165 Madison Avenue
Memphis, TN 38103
Gentlemen and Lady:
As Executive Vice President and General Counsel of First Tennessee
National Corporation, a Tennessee corporation (the "Company"), I am familiar
with the registration statement on Form S-3 (the "Registration Statement")
under the Securities Act of 1933, as amended (the "Act"), relating to a
proposed shelf registration of (i) debt securities ("Debt Securities"),
consisting of debentures, notes and/or other unsecured evidences of
indebtedness, which may be senior (the "Senior Debt Securities) or subordinated
(the "Subordinated Debt Securities"), (ii) preferred stock, without par value,
of the Company ("Preferred Stock"), (iii) depositary shares representing
fractional interests in Preferred Stock ("Depositary Shares"), or (iv) common
stock, par value $2.50 per share, of the Company ("Common Stock") (the Debt
Securities, Preferred Stock and Common Stock are collectively referred to as
the "Securities"), to be offered from time to time at prices and on
terms to be determined at the time of sale, at an aggregate initial offering
price not to exceed U.S. $300,000,000. Attached to shares of Common Stock which
may be issued are associated stock purchase rights (the "Rights") to be issued
pursuant to the Shareholder Protection Rights Agreement dated as of September
7, 1989 (the "Rights Agreement") between the Company and First Tennessee Bank
National Association, as Rights Agent (the "Rights Agent").
I have examined, or caused those acting under my supervision to have
examined, the originals or copies, certified or otherwise identified to my
satisfaction, of the restated charter, as amended, of the Company (the
"Charter"), the bylaws, as amended, of the Company, Minutes of the March 2,
1994 Meeting of the Board of Directors of the Company (the "Minutes"), the
Registration Statement, and such other corporate records, certificates and
other documents, and such questions of law, as I have considered necessary or
appropriate for purposes of this opinion. In rendering such opinion, I have
presumed the genuineness of all documents examined and the accuracy of all
statements of fact contained therein.
<PAGE> 2
Board of Directors
Page 2
March 17, 1994
The Subordinated Debt Securities are to be issued pursuant to a
proposed indenture between the Company and the First National Bank of Chicago,
as trustee ("First Chicago") (the "Subordinated Indenture"). The Senior Debt
Securities are to be issued pursuant to a proposed indenture between the
Company and First Chicago, as trustee (the "Senior Indenture", collectively
with the Subordinated Indenture, the "Indentures"). The Common Stock, the
Preferred Stock and the Depositary Shares, when and if the Board of
Directors duly adopts a resolution in accordance with law authorizing the
number and price and, for the Preferred Stock and the Depositary Shares, other
terms of the shares to be issued, will be sold on terms to be determined, and
with respect to the Depositary Shares, pursuant to a proposed deposit
agreement (the "Deposit Agreement"), the terms of which will be determined, and
which will be entered into, by the Company and a depositary.
Upon the basis of such examination and subject to the limitations
contained herein, it is my opinion that:
1. The Debt Securities have been duly authorized and when and if
the Board or the Pricing Committee duly adopts a resolution
pursuant to the Minutes establishing the specific amount and
the terms of the Debt Securities and the applicable Indenture
relating to such Debt Securities has been duly authorized
by the Company pursuant to the Minutes and has been duly
executed and delivered by the Company and duly authorized,
executed and delivered by First Chicago, as trustee, and when
the Debt Securities have been duly executed by the Company and
authenticated by the trustee in accordance with the provisions
of the applicable Indenture and delivered against full
payment therefor, the Debt Securities will be validly issued
and legal, valid and binding obligations of the Company,
enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
<PAGE> 3
Board of Directors
Page 3
March 17, 1994
2. The shares of Preferred Stock have been duly authorized by the
Company's Charter and, when and if the Board of Directors of the
Company duly adopts a resolution and articles of amendment to the
Company's Charter ("Articles of Amendment") in accordance with
the Minutes providing for the issuance of a specific number of
shares of Preferred Stock for a specified price in one or more
series and providing for the terms thereof in accordance with
the authorization expressly provided for in the Company's
Charter and files the Articles of Amendment with the appropriate
Tennessee state offices and when and if such shares of Preferred
Stock have been duly issued and delivered against full payment
therefor, will be validly issued, fully paid and non-assessable.
3. The Depositary Shares have been duly authorized and when and if
the Board of Directors of the Company duly adopts a resolution
authorizing the Deposit Agreement and a specific number of
Depositary Shares pursuant thereto for a specified price and
takes the other action specified in paragraph (2) above with
respect to the Preferred Stock underlying the Depositary Shares,
and when and if the Deposit Agreement has been duly executed and
delivered by the Company and the depositary to be named therein,
the Depository Shares will be validly issued, fully paid and
non-assessable.
4. The shares of Common Stock including any shares of Common Stock
duly issued upon the conversion of the Subordinated Debt
Securities or Preferred Stock have been duly authorized by the
Company's Charter and, when and if the Board of Directors of the
Company duly adopts a resolution in accordance with the Minutes
authorizing the issuance of a specific number of shares of Common
Stock for a specified price, and when and if such shares of
Common Stock have been duly issued and delivered against full
payment therefor, will be validly issued, fully paid and
non-assessable. When the shares of Common Stock have been
validly issued, the Rights attributable to the shares of Common
Stock will be validly issued.
<PAGE> 4
Board of Directors
Page 4
March 17, 1994
In connection with my opinion set forth in paragraph (4) above, I note
that the question whether the Board of Directors of the Company might be
required to redeem the Rights at some future time will depend upon the facts
and circumstances existing at that time, and, accordingly, is beyond on the
scope of this opinion.
In addition, it is my understanding that the Company intends to issue
securities from time to time on a delayed or continuous basis. Accordingly,
this opinion is limited to the laws, including the applicable rules and
regulations, as in effect on the date hereof. I understand that prior to
issuing any Securities, the Company will advise me in writing of the terms and
will afford me an opportunity to review the operative documents pursuant to
which such Securities are to be issued, and I will file such supplement or
amendment to this opinion, if any, as I may reasonably consider necessary or
appropriate by reason of the terms of such Securities.
The foregoing opinion is limited to the federal laws of the United
States and the laws of the State of Tennessee, and I am expressing no opinion
as to the effect of the laws of any other jurisdiction.
In rendering the foregoing opinion, I have relied to the extent I deem
such reliance appropriate as to certain matters on statement, representations
and other information obtained from public officials, officers of the Company
and other sources believed by me to be responsible.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me in the prospectus and any
prospectus supplement that is a part of the Registration Statement. In giving
such consent, I do not thereby admit that I am in the category of persons
whose consent is required under Section 7 of the Act.
Yours very truly,
Harry A. Johnson, III
Harry A. Johnson, III
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3 No. 33-52561) and
related Prospectus of First Tennessee National Corporation and to the
incorporation by reference therein of our report dated March 19, 1993, with
respect to the consolidated financial statements of Maryland National Mortgage
Corporation for the year ended December 31, 1992, included in Form 8-K, dated
October 1, 1993, of First Tennessee National Corporation, filed with the
Securities and Exchange Commission.
Ernst & Young
Baltimore, Maryland
March 14, 1994
