<PAGE> 1
As filed with the Securities and Exchange Commission on January 31, 1994
Registration No. 33-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FIRST TENNESSEE NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
TENNESSEE 6021 62-0803242
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</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) 523-5624
(Name,address, including zip code, and telephone number,
including area code, of agent for service
With Copies to:
LINDA M. CROUCH
HEISKELL, DONELSON, BEARMAN, ADAMS, WILLIAMS & CALDWELL
2000 FIRST TENNESSEE BUILDING
165 MADISON AVENUE
MEMPHIS, TENNESSEE 38103
(901) 526-2000
Approximate date of commencement of proposed sale of the securities to
the public: As soon as practicable after this Registration Statement becomes
effective and pursuant to the terms of the Registration Rights Agreement dated
as of January 4, 1994.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the follow
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].
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of each Amount Proposed maximum Proposed maximum Amount
class of to be offering price aggregate of
securities registered(1) per unit(2) offering price Registration Fee
to be registered
<S> <C> <C> <C> <C>
Common Stock and 1,568,310 $37.875 $59,399,741 $20,481
Associated Rights
</TABLE>
(1) Based upon the average high and low prices reported by the NASDAQ/NMS
on January 27, 1994 pursuant to Rule 457(c).
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.
<PAGE> 2
PROSPECTUS
FIRST TENNESSEE NATIONAL CORPORATION
1,568,310 SHARES OF COMMON STOCK
This Prospectus relates to 1,568,310 shares of the common stock, $2.50
par value per share ("Common Stock") and associated rights of First Tennessee
National Corporation ("FTNC"). The 1,568,310 shares of Common Stock and
associated rights that are offered for resale hereby are collectively referred
to as the "Shares." The Shares may be offered by certain shareholders of FTNC
(the "Selling Shareholders") from time to time in transactions in the
over-the-counter market, in negotiated transactions or a combination of such
methods of sale, at fixed prices which 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 Selling Shareholders may effect such
transactions by selling the Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions
or commissions from the Selling Shareholders and/or the purchasers of the
Shares for whom such broker-dealers may act as agents or to whom they sell as
principals, or both (which compensation as to a particular broker-dealer might
be in excess of customary commissions). See "Selling Shareholders" and "Sale
of the Shares."
The Selling Shareholders listed in the table on page 7 acquired the
Shares in connection with the acquisition of SNMC Management Corporation
("SNMC") by First Tennessee Bank National Association, the principal banking
subsidiary of FTNC, on January 4, 1994, and the Shares are offered hereby
pursuant to a Registration Rights Agreement by and among FTNC and the Selling
Shareholders dated as of January 4, 1994.
None of the proceeds from the sale of the Shares by the Selling
Shareholders will be received by FTNC. FTNC will bear all expenses (other than
selling commissions and fees) in connection with the registration and sale of
the Shares being offered by the Selling Shareholders.
The outstanding shares of Common Stock are included for quotation on
the National Association of Securities Dealers Automated Quotations
System/National Market System ("NASDAQ/NMS"). The last reported sale price of
FTNC Common Stock on the NASDAQ/NMS on ____________, 1994 was $___________ per
share.
THE SHARES OF FTNC COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS
ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR 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.
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE HEREIN
CONTAINED AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY FTNC OR THE SELLING SHAREHOLDERS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF ANY
OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE AN OFFER OR SOLICITATION. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF FTNC
SINCE THE DATE HEREOF.
------------------------------------------------
THE DATE OF THIS PROSPECTUS IS ___________, 1994
<PAGE> 3
AVAILABLE INFORMATION
FTNC 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 "SEC"). Copies of such reports, proxy
statements and other information can be obtained, upon payment of prescribed
fees, from the SEC at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549. In addition, such reports, proxy statements and other information can
be inspected at the SEC's facilities referred to above and at the SEC's
Regional Offices at 7 World Trade Center, Suite 1300, New York, New York 10048
and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. The FTNC Common Stock is included for quotation on NASDAQ/NMS and such
reports, proxy statements and other information concerning FTNC should be
available for inspection and copying at the offices of the National Association
of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006. This
Prospectus is part of a Registration Statement filed and effective under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
shares of Common Stock and associated rights to be issued. This Prospectus
does not contain all the information set forth in the Registration Statement.
Such additional information may be obtained from the SEC's principal office in
Washington, D.C. Statements contained in this Prospectus or in any document
incorporated by reference in this Prospectus as to the contents of any contract
or other document referred to herein or therein are not necessarily complete,
and in each instance reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement or such other
document, each such statement being qualified in all respects by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the SEC are hereby incorporated by
reference in this Prospectus and made a part hereof: (a) FTNC's Annual Report
on Form 10-K for the year ended December 31, 1992, and its Form 8 filed March
23, 1993, and Forms 10-K/A filed on April 28 and June 29, 1993, amending its
Annual Report on Form 10-K; (b) FTNC's Current Reports on Form 8-K filed
February 18, 1993, August 25, 1993 and October 18, 1993; (c) FTNC's Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1993, June 30, 1993 and
September 30, 1993; (d) FTNC's proxy statement dated March 12, 1993, exclusive
of the Board Compensation Committee Report and the Total Shareholder Return
Performance Graph on pages 11-14 thereof; (e) the description of FTNC Common
Stock contained in FTNC's registration statement on Form 10, filed 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 (f) FTNC's registration
statement on Form 8-A, filed September 8, 1989, pursuant to which FTNC
registered the Shareholder Protection Rights under the Exchange Act.
All documents filed by FTNC pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering registered hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated herein by reference will be
deemed to be modified or superseded for the purpose of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is, or is deemed to be, incorporated herein by reference
modifies or supersedes such statement. Any such statement so modified or
superseded will not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
FTNC HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO
WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL
REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO
ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED BY REFERENCE IN THIS PROSPECTUS,
OTHER THAN EXHIBITS TO SUCH DOCUMENTS. REQUESTS FOR SUCH COPIES SHOULD BE
DIRECTED TO THE TREASURER, FIRST TENNESSEE NATIONAL CORPORATION, P.O. BOX 84,
MEMPHIS, TENNESSEE 38101, TELEPHONE NUMBER (901) 523-5630.
- 2 -
<PAGE> 4
FTNC
FTNC is a regional bank holding company incorporated under the laws of
Tennessee, which, through First Tennessee Bank National Association, Memphis,
Tennessee ("FTB") and its other banking and banking-related subsidiaries,
provides a broad range of financial services primarily in the State of
Tennessee. FTNC was incorporated in Tennessee in 1968. At September 30, 1993,
FTNC had consolidated total assets of approximately $9.5 billion, consolidated
total deposits of approximately $6.7 billion and equity capital of
approximately $656.5 million. At December 31, 1992, based on information in
the American Banker, an industry journal, FTNC ranked 61st among bank holding
companies in the United States and first among bank holding companies
headquartered in Tennessee in terms of total assets.
FTNC 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. FTNC
operates principally through FTB, which was chartered as a national banking
association in 1864. As of September 30, 1993, FTB was the largest commercial
bank headquartered in Tennessee both in terms of total assets and deposits. At
September 30, 1993, FTB had total assets of approximately $9.3 billion, total
deposits of approximately $6.6 billion and equity capital of approximately
$611.3 million. FTB conducts a broad range of retail banking and fiduciary
services and had 205 banking locations at September 30, 1993. FTB also offers
a comprehensive range of financial services, including bond broker/ agency
services and nationwide check clearing, to companies throughout the
southeastern United States and selected national markets. Bond broker/agency
services provided by FTB consist primarily of the sale of bank-eligible
securities to other financial institutions. Subsidiaries of FTNC and FTB are
engaged primarily in providing mortgage banking, integrated check processing
solutions, discount brokerage, equipment finance, venture capital, investment
management and credit life insurance.
The principal executive offices of FTNC are located at 165 Madison
Avenue, Memphis, Tennessee 38103, and its telephone number is (901) 523-4444.
Additional information about FTNC and its subsidiaries is included in
documents incorporated by reference in this Prospectus. See "Incorporation of
Certain Documents by Reference."
- 3 -
<PAGE> 5
RECENT DEVELOPMENTS
The following is certain financial information for FTNC for the three
months and the twelve months ended December 31, 1993 and 1992 and for the
period end. This information has been derived from unaudited consolidated
statements and reflects all normal recurring adjustments which are, in the
opinion of management, necessary for a fair statement of results of operations
for the periods presented.
First Tennessee National Corporation
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
--------------------------------- --------------------------------
December 31 December 31
--------------------------------- --------------------------------
1993 1992(1) 1993 1992(1)
---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Summary Statements of Income (Dollars in
thousands, except per share data):
Interest income $151,648 $145,796 $586,467 $599,237
Less interest expense 60,617 62,246 239,913 276,303
-------- ------- ------- -------
Net interest income 91,031 83,550 346,554 322,934
Provision for loan losses 7,475 10,460 34,540 43,171
-------- ------- ------- -------
Net interest income after provision
for loan losses 83,556 73,090 312,014 279,763
Investment banking income 22,282 16,922 91,525 80,275
Securities gains (losses) (769) (785) 725 (1,678)
Service and fee income 61,654 39,289 178,239 146,412
------- ------- ------- -------
Adjusted gross income after provision
for loan losses 166,723 128,516 582,503 504,772
Noninterest operating expense 119,369 99,444 398,386 360,476
------- ------- ------- -------
Income before income taxes 47,354 29,072 184,117 144,296
Applicable income taxes 16,726 17,275 63,452 55,131
------- ------- ------- -------
Net income $ 30,628 $ 11,797 $120,665 $ 89,165
======= ======= ======= =======
Per Share Data:
Net income $ 1.06 $ .42 $ 4.26 $ 3.19
Dividends declared .42 .36 1.50 1.26
Book value 23.97 21.25 23.97 21.25
Selected Financial Ratios:
Return on average assets 1.28% .55% 1.35% 1.07%
Return on average equity 18.33 7.78 18.99 15.44
Net interest margin 4.36 4.41 4.35 4.37
Net charge-offs to average loans .55 .87 .57 .81
</TABLE>
____________________________
(1) Includes one-time costs related to the Home Financial
Corporation acquisition as follows: provision for loan
losses, $1.3 million; noninterest operating expense, $9.4
million; applicable income taxes, $4.9 million.
- 4 -
<PAGE> 6
Period-End Balance Sheet Data (Dollars in thousands):
<TABLE>
<CAPTION>
December 31
--------------------------------------
1993 1992
------------------- ----------------
<S> <C> <C>
Loans, net of unearned income(1) $5,987,568 $4,610,018
Investment securities(2) 2,169,736 3,031,105
Other earning assets 323,863 474,968
--------- ---------
Total earning assets 8,481,167 8,116,091
Cash and due from banks 602,416 496,526
Other assets 525,265 313,157
--------- ---------
Total assets $9,608,848 $8,925,774
========= =========
Interest-bearing deposits $5,258,418 $5,448,923
Short-term borrowed funds 1,330,048 1,010,283
Long-term debt 89,962 126,872
--------- ---------
Total interest-bearing liabilities 6,678,428 6,586,078
Demand deposits 1,888,333 1,467,839
Other liabilities 363,102 274,344
Shareholders' equity 678,985 597,513
--------- ---------
Total liabilities and shareholders' equity $9,608,848 $8,925,774
========= =========
Period-end shares outstanding 28,325,565 28,122,606
</TABLE>
_____________________
(1) Includes loans held for sale.
(2) Includes investment securities held for sale.
FTNC had earnings of $120.7 million for 1993, compared to $89.2
million reported in 1992, or $104.8 million for 1992 after adjusting for
one-time merger costs related to the Home Financial Corporation ("HFC") merger
which closed during the fourth quarter of 1992. Net income for 1993 increased
15.2% over 1992 earnings after adjusting for the HFC one-time costs. Fourth
quarter net income of $30.6 million increased 11.7% over the fourth quarter of
1992 earnings of $27.4 million, also adjusted for the HFC one-time costs.
Earnings per share were $4.26 for the year and $1.06 for the quarter, increases
of 13.6% and 8.2%, respectively, over 1992 earnings adjusted for the HFC
one-time costs.
Return on equity was 18.99% in 1993, compared to the 18.14% return of
1992, adjusted for HFC one-time costs. Return on assets was 1.35% for the
year, improving upon last year's adjusted level of 1.26%.
Growth in 1993 net income resulted from 12.0% revenue growth on a
fully taxable equivalent basis, lower loan loss provision, and an absence of
one-time costs incurred in the fourth quarter of 1992 from the HFC merger.
Pretax income, adjusted for the HFC merger, on a fully taxable equivalent basis
increased 16.5% over 1992 but higher federal taxes reduced net income growth to
15.2%. The Maryland National Mortgage Corporation ("MNMC") acquisition, which
closed in the fourth quarter of 1993, added 7.5% to noninterest income growth,
1.6% to net interest income growth, and 5.5% to noninterest expense growth in
1993. Noninterest income related to MNMC was lowered during the fourth quarter
due to the purchase accounting treatment which required FTNC to purchase MNMC
loans held for sale at market value and reduced the accounting gain realized on
sales to investors.
Net interest income growth was fueled by increases in earning assets,
as the net interest margin held level to last year's average. The net interest
margin rose in the fourth quarter of 1993 to 4.36% from 4.23% in the third
quarter due to the additional loans from consumer lending and short-term
warehouse loans resulting from the MNMC acquisition. Average loan growth
accelerated in 1993, with loans rising at an annual rate of 9.6% above the 1992
level. Loan growth was strongest in consumer lending, especially first and
second mortgage real estate-related installment loans, as consumer loans rose
24.7% above 1992. Average commercial and construction loans increased 5.0%,
showing signs of growth for the first time in six years.
- 5 -
<PAGE> 7
Noninterest income growth provided 67% of the increase in revenue
during 1993, raising the percentage of revenue related to fee income to 43% for
1993 and to 47% in the fourth quarter with the inclusion of MNMC. The bond
division reported record revenues in 1993 of $91.5 million, 14.0% above 1992.
Strong growth rates were also reported for other sources of fee income: trust
income increased by 10.7%, bank card income by 9.3%, deposit services by 8.7%,
and other fee income, including mortgage banking, by 45.4%. Security gains for
1993 were $0.7 million compared with losses of $1.7 million for 1992.
Noninterest operating expense grew 13.5% compared to 1992 levels
excluding the one-time expenses related to the HFC merger. Expenses grew due
to an increase in bond division and mortgage banking activity in 1993 and the
impact of the MNMC acquisition. Excluding these expenses, noninterest
operating expense grew 6.3%.
Asset quality showed improvement as the provision for loan losses
dropped by $8.6 million from 1992. Nonperforming loans at December 31, 1993,
were $25.4 million, compared with $30.0 million at the end of 1992. Total
nonperforming assets increased to $58.1 million at December 31, 1993, 6.3%
above the $54.7 million at December 31, 1992. This increase was due to the
$14.1 million increase in foreclosed properties related to the MNMC
acquisition. Net charge-offs for 1993 were $28.4 million compared to $36.4
million in 1992, while the ratio of net charge-offs to average loans fell from
.81% in 1992 to .57% in 1993.
In January 1994, Hickory Venture Capital Corporation ("Hickory"), a
subsidiary of FTB, realized an after-tax gain of approximately $8 million from
one of its investments. The acquisition of SNMC Management Corporation
("SNMC"), parent of Sunbelt National Mortgage Corporation ("Sunbelt"), was
closed in January and the previously announced one-time after-tax expenses of
approximately $3 million were recognized. The Hickory gain will allow a larger
proportion of the mortgage servicing rights originated by Sunbelt during the
first quarter to be held rather than sold, thereby accelerating the growth of
the mortgage servicing portfolio. FTNC will adopt SFAS 112, "Employers'
Accounting for Postemployment Benefits," in the first quarter and will
recognize the one-time costs associated with these postemployment benefit
obligations.
- 6 -
<PAGE> 8
SELLING SHAREHOLDERS
The following table shows the name of each Selling Shareholder and the
number of Shares being offered by each. After completion of the offering,
assuming all of the Shares being offered are sold, the Selling Shareholders
will not own any shares of Common Stock.
<TABLE>
<CAPTION>
Common Stock Beneficially Owned
-------------------------------
Upon Percentage
Completion Owned Upon
Prior to Offered of the Completion of
Selling Shareholder Offering Hereby Offering Offering
------------------- -------- ------ -------- --------
<S> <C>
Continental Illinois Venture 771,553
Corporation
John R. Willis 62,644
Avy H. Stein 64,296
Daniel G. Helle 9,185
Marcus D. Wedner 9,185
Harrison I. Steans 34,239
Jennifer W. Steans 83,405
Robin M. Steans 83,405
Heather A. Steans 83,405
George P. Bauer 134,325
K&E Partners 11,120
J-WAR, LTD. 110,774
TLT, LTD. 110,774
</TABLE>
FTNC has agreed to bear all expenses (other than selling commissions
and fees) in connection with the registration and sale of the Shares being
offered by the Selling Shareholders in over-the-counter market transactions or
in negotiated transactions. See "Sale of the Shares." FTNC has filed with the
Commission a Registration Statement on Form S-3 under the Securities Act with
respect to the resale of the Shares from time to time in the over-the-counter
market or in negotiated transactions and has agreed to prepare and file such
amendments and supplements to the Registration Statement as may be necessary to
keep the Registration Statement effective until the earliest of (i) two years
from the date the Registration Statement is declared effective by the
Commission, (ii) the completion of five offerings under the Registration
Statement, or (iii) the date as of which fewer than 10% of the initial number
of Shares are held by the Selling Shareholders. This Prospectus forms a part
of such Registration Statement.
SALE OF THE SHARES
The sale of the Shares by the Selling Shareholders may be effected
from time to time in transactions in the over-the- counter market, in
negotiated transactions or through a combination of such methods of sale, at
fixed prices, which may be changed, at market prices prevailing at the time of
the sale, at prices related to such prevailing market prices or at negotiated
prices. The Selling Shareholders may effect such transactions by selling the
Shares to or through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
Selling Shareholders and/or the purchasers of the Shares for which such
broker-dealers may act as agents or to whom they sell as principals, or both
(which compensation as to a particular broker-dealer may be in excess of
customary compensation).
- 7 -
<PAGE> 9
The Selling Shareholders and any broker-dealers who act in connection
with the sale of the Shares hereunder may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, and any commissions
received by them and profit on any resale of the Shares as principals might be
deemed to be underwriting discounts and commissions under the Securities Act.
DESCRIPTION OF FTNC CAPITAL STOCK
The following summaries of certain provisions of the Restated Charter,
as amended (the "Charter"), and Bylaws, as amended, of FTNC, the Rights Plan
(defined below) and the Indenture (defined below) do not purport to be
complete, are qualified in their entirety by reference to such instruments,
each of which is an exhibit to the Registration Statement of which this
Prospectus is a part, and are subject, in all respects, to applicable Tennessee
law.
AUTHORIZED CAPITAL STOCK
The authorized capital stock of FTNC currently consists of 5,000,000
shares of Preferred Stock, without par value ("Preferred Stock"), which may be
issued from time to time by resolution of the FTNC Board and 50,000,000 shares
of FTNC Common Stock. As of January 6, 1994, there were 30,124,038 shares of
FTNC Common Stock and no shares of Preferred Stock outstanding. Also,
approximately 3.3 million shares of FTNC Common Stock are reserved for issuance
under various employee stock plans and FTNC's dividend reinvestment plan,
approximately 1.8 million shares are reserved for issuance in connection with
pending acquisitions and, 281,640 shares of Preferred Stock are reserved for
issuance under the Rights Plan (as defined herein).
PREFERRED STOCK
The FTNC Board is authorized, without further action by the
shareholders, to provide for the issuance of up to 5,000,000 shares of
Preferred Stock, without par value, from time to time in one or more series
and, with respect to each such series, has the authority to fix the powers
(including voting power), designations, preferences and relative,
participating, optional or other special rights and the qualifications,
limitations or restrictions thereof. Currently, no shares of Preferred Stock
are outstanding.
FTNC COMMON STOCK
The FTNC Board is authorized to issue a maximum of 50,000,000 shares
of Common Stock, $2.50 par value per share. The holders of the FTNC Common
Stock are entitled to receive such dividends as may be declared by the FTNC
Board from funds legally available therefor. The holders of the outstanding
shares of FTNC Common Stock are entitled to one vote for each such share on all
matters presented to shareholders and are not entitled to cumulate votes for
the election of directors. Upon any dissolution, liquidation or winding up of
FTNC resulting in a distribution of assets to the shareholders, the holders of
FTNC Common Stock are entitled to receive such assets ratably according to
their respective holdings after payment of all liabilities and obligations and
satisfaction of the liquidation preferences of any shares of Preferred Stock at
the time outstanding. The shares of FTNC Common Stock have no preemptive,
redemption, subscription or conversion rights. The shares of FTNC Common Stock
will be, when issued in accordance with the Merger Agreement, fully paid and
nonassessable. Under FTNC's Charter, the FTNC Board is authorized to issue
authorized shares of FTNC Common Stock without further action by FTNC's
shareholders. However, the FTNC Common Stock is traded in the over-the-counter
market and is quoted on the NASDAQ/NMS, which requires shareholder approval of
the issuance of additional shares of FTNC Common Stock in certain situations.
The Transfer Agent for the Common Stock is The First National Bank of Boston.
- 8 -
<PAGE> 10
The FTNC Board is divided into three classes, which results in
approximately 1/3 of the directors being elected each year. In addition, the
Charter and the Bylaws, among other things, generally give to the FTNC Board
the authority to fix the number of directors on the FTNC Board and to remove
directors from and fill vacancies on the FTNC Board, other than removal for
cause and the filling of vacancies created thereby which are reserved to
shareholders exercising at least a majority of the voting power of all
outstanding voting stock of FTNC. To change these provisions of the Bylaws,
other than by action of the FTNC 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 FTNC Board
and such other provisions of the Charter and the Bylaws may have a significant
effect on the ability of the shareholders of FTNC to change the composition of
an incumbent FTNC Board or to benefit from certain transactions which are
opposed by the FTNC Board.
SHAREHOLDER PROTECTION RIGHTS PLAN
Each share of FTNC Common Stock has, and each share of the FTNC Common
Stock issued in the Merger will have, attached to it one right (a "Right")
issued pursuant to a Shareholder Protection Rights Agreement dated as of
September 7, 1989 (the "Rights Plan"). Each Right entitles its holder 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's
becoming the beneficial owner of 10% or more of the outstanding shares of FTNC
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 FTNC Board 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 FTNC 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 FTNC Board 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 FTNC Common Stock, elect to exchange
the Rights (other than Rights beneficially owned by the Acquiring Person) for
shares of FTNC Common Stock at an exchange ratio of one share of FTNC Common
Stock per Right (the "Exchange Time").
FTNC 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 FTNC. The Rights, however,
may have certain anti-takeover effects. The Rights may cause substantial
dilution to a person or group that acquires 10% or more of the outstanding FTNC
Common Stock unless the Rights are first redeemed by the FTNC Board.
SUBORDINATED CAPITAL NOTES DUE 1999
On June 10, 1987, FTNC issued $75,000,000 principal amount of 10 3/8%
Subordinated Capital Notes Due 1999 (the "Capital Notes"). The Capital Notes
currently constitute Tier 2 capital under the Federal Reserve Board's
risk-based capital guidelines. Pursuant to the Indenture, dated as of June 1,
1987 (the "Indenture"), between FTNC and Security Pacific National Trust
Company (New York), Trustee, at maturity the Capital Notes are required to be
exchanged for Common Stock, Preferred Stock or certain other eligible capital
securities to be issued by FTNC ("Capital Securities") having a market value
equal to the principal amount of the Capital Notes,
- 9 -
<PAGE> 11
except to the extent that FTNC, at its option, shall elect to pay in cash such
principal amount from amounts representing proceeds of other issuances of
Capital Securities designated for such use.
USE OF PROCEEDS
None of the proceeds from the sale of the Shares by the Selling
Shareholders will be received by FTNC.
LEGAL MATTERS
A legal opinion to the effect that the Shares and associated Rights
offered hereby, when sold, will be validly issued, fully paid and
nonassessable, has been rendered by Clyde A. Billings, Jr., Vice President and
Counsel, FTNC. Mr. Billings beneficially owns approximately 9,200 shares of
FTNC Common Stock.
EXPERTS
The consolidated financial statements of FTNC and its subsidiaries
incorporated by reference in FTNC's Annual Report on Form 10-K for the year
ended December 31, 1992 have been audited by Arthur Andersen & Co., independent
public accountants, as set forth in their report thereon dated January 19,
1993, included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance on such
report given upon the authority of such firm as experts in accounting and
auditing.
With respect to the 1991 and 1990 financial statements of Home
Financial Corporation, a company acquired by FTNC 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
FTNC's Form 10-K for 1992 and is incorporated herein by reference.
- 10 -
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
<TABLE>
<S> <C>
Registration fee to the SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,549
Printing expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000
Accounting fees and expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Miscellaneous expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 451
------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $33,000
======
</TABLE>
All fees and expenses are estimates except for the registration fee to
the SEC.
Item 15. Indemnification of Directors and Officers
Tennessee Code Annotated Sections 48-18-501 through 48-18-509
authorize 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. FTNC has adopted the provisions of the Tennessee statute pursuant
to Article XXVIII of its Bylaws. Also, FTNC 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. FTNC has adopted the
provisions of the statute in Article 13 of its charter.
The shareholders of FTNC have approved an amendment to Article XXVIII
of the Bylaws pursuant to which FTNC is required to indemnify each director and
any officers designated by the FTNC Board, and advance expenses, to the maximum
extent not prohibited by law. In accordance with the foregoing, the FTNC 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.
Item 16. Exhibits
<TABLE>
<CAPTION>
Exhibits
Number Description
------ -----------
<S> <C>
4(a) Form of Common Stock Certificate, incorporated by reference to Exhibit 3(B) to FTNC's registration statement on
Form S-4 (No. 33-51223), filed November 30, 1993
4(b) Shareholder Protection Rights Agreement, dated as of September 7, 1989, between FTNC and FTB as Rights Agent,
incorporated by reference to FTNC's Registration Statement on Form 8-A, filed September 8, 1989
4(c) Indenture, dated as of June 1, 1987, between FTNC and Security Pacific National Trust Company (New York), Trustee
incorporated by reference to FTNC's Annual Report on Form 10-K for the fiscal year ended December 31, 1991
</TABLE>
II-1
<PAGE> 13
<TABLE>
<S> <C>
4(d) FTNC and certain of its consolidated subsidiaries have outstanding certain long-term debt. See Note 13 on Page 34
of FTNC's 1992 Annual Report to Shareholders. None of such debt exceeds 10% of the total assets of FTNC and its
consolidated subsidiaries. Thus, copies of constituent instruments defining the rights of holders of such debt are
not required to be included as exhibits. FTNC agrees to furnish copies of such instruments to the SEC upon
request.
5 Opinion Regarding Legality
23(a) Consent of Arthur Andersen & Co.
23(b) Consent of Baylor and Backus
23(c) Consent of Ernst & Young
23(d) Consent of Clyde A. Billings, Jr. included in Exhibit 5
24 Powers of Attorney
28 Registration Rights Agreement dated as of January 4, 1994 by and among First Tennessee National Corporation and the
Selling Shareholders
</TABLE>
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales of the
securities 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 any facts or events arising after the effective
date (or most recent post-effective amendment) 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 or any material
change to such information set forth in the Registration
Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8, and the
information required [or] 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 section 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 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.
II-2
<PAGE> 14
(b) 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 foregoing provisions 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 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant for 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 Act and
will be governed by the final adjudication of such issue.
(c) 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 the initial bona fide offering
thereof.
II-3
<PAGE> 15
SIGNATURES
Pursuant to the requirement of the Securities Act of 1933, the Registrant
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 its Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Memphis, State of Tennessee, on January 28, 1994.
FIRST TENNESSEE NATIONAL CORPORATION
By: /s/ James F. Keen
-----------------------------------------
James F. Keen, Senior Vice President and
Controller
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board and January 28, 1994
- ---------------------------------- Chief Executive Officer (principal
Ronald Terry executive officer)
* Executive Vice President and January 28, 1994
- ---------------------------------- Chief Financial Officer (principal
Susan Schmidt Bies financial officer)
* Senior Vice President and January 28, 1994
- ---------------------------------- Controller (principal
James F. Keen accounting officer)
Director January __, 1994
- ----------------------------------
Jack A. Belz
* Director January 28, 1994
- ----------------------------------
Robert C. Blattberg
* Director January 28, 1994
- ----------------------------------
John Hull Dobbs
* Director January 28, 1994
- ----------------------------------
Ralph Horn
* Director January 28, 1994
- ----------------------------------
J. R. Hyde, III
* Director January 28, 1994
- ----------------------------------
Joseph Orgill, III
Director January __, 1994
- ----------------------------------
Cameron E. Perry
</TABLE>
II-4
<PAGE> 16
<TABLE>
<S> <C> <C>
* Director January 28, 1994
- ----------------------------------
Richard E. Ray
* Director January 28, 1994
- ----------------------------------
Vicki G. Roman
* Director January 28, 1994
- ----------------------------------
Michael D. Rose
Director January __, 1994
- ----------------------------------
William B. Sansom
Director January __, 1994
- ----------------------------------
Gordon P. Street
* Director January 28, 1994
- ----------------------------------
Ronald Terry
* Director January 28, 1994
- ----------------------------------
Norfleet R. Turner
By: /s/ /Clyde A. Billings, Jr. January 28, 1994
----------------------------
Clyde A. Billings, Jr.
*As Attorney-in-Fact
</TABLE>
(The Power of Attorney is included herein as Exhibit 24.)
II-5
<PAGE> 1
Exhibit 5
FIRST TENNESSEE NATIONAL CORPORATION
January 31, 1994
Board of Directors
First Tennessee National Corporation
165 Madison Avenue
Memphis, TN 38103
Gentlemen:
I have acted as counsel to First Tennessee National Corporation, a
Tennessee corporation (the "Company"), in connection with the registration on
Form S-3, Registration Statement (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Act"), of 1,568,310 shares (the
"Securities") of Common Stock, par value $2.50 per share, of the Company and
associated stock purchase rights (the "Rights") to be sold by certain
shareholders (the "Selling Shareholders") from time to time and as described in
the Registration Statement. The Securities were issued to the Selling
Shareholders in exchange for shares of common stock of SNMC Management
Corporation pursuant to the terms of the Agreement and Plan of Merger dated
November 3, 1993, by and among the Company, First Tennessee Bank National
Association, SNMC Management Corporation and Sunbelt National Mortgage Company.
The Registration Statement is being filed in connection with that certain
Registration Rights Agreement by and among the Company and the Selling
Shareholders dated as of January 4, 1994. I have examined the originals or
copies, certified or otherwise identified to may satisfaction, of such
corporate records, certificates and other documents, and such questions of law,
as I have considered necessary or appropriate for the purposes of this opinion.
Upon the basis of such examination, it is my opinion that:
1. The Securities have been duly issued pursuant to the terms of
the Agreement and are validly issued, fully paid and
nonassessable.
2. Assuming that the Rights Agreement has been duly authorized,
executed and delivered by the Rights Agent, the rights
attributable to the Securities are validly issued.
In connection with my opinion set forth in paragraph (2) 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
circumstances existing at that time and, accordingly, is beyond the scope of
such opinion.
The foregoing opinion is limited to the federal laws of the United
States and the laws of the State of Tennessee, and I am addressing 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 statements, 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 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.
Very truly yours,
/s/ Clyde A. Billings, Jr.
<PAGE> 1
Exhibit 23 (a)
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 of our report dated
January 19, 1993, incorporated by reference in First Tennessee National
Corporation's Form 10-K for the year ended December 31, 1992, and to all
references to our firm included in this registration statement
Arthur Andersen & Co.
Memphis, Tennessee
January 31, 1994
<PAGE> 1
Exhibit 23(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 of our report for the
years ended December 31, 1991 and 1990 dated February 21, 1992, except with
respect to the information discussed in Note 27, as to which the date is
October 21, 1992, incorporated by reference in First Tennessee National
Corporation's Form 10-K for the year ended December 31, 1992, and to all
references to our firm included in this registration statement.
Baylor and Backus
Certified Public Accountants
Johnson City, Tennessee
January 31, 1994
<PAGE> 1
Exhibit 23(c)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-3) and related Prospectus of First Tennessee National Corporation for
the registration of 1,568,310 shares of its common stock 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
January 27, 1994
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint SUSAN SCHMIDT BIES, JAMES F.
KEEN, and CLYDE A. BILLINGS, JR., jointly and each of them severally, his true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities to execute and sign the Registration Statement on Form S-3 to be
filed with the Securities and Exchange Commission, pursuant to the provisions
of the Securities Act of 1933, by First Tennessee National Corporation
("Corporation") relating to the sale of its Common Stock, par value $2.50
per share, pursuant to the Agreement and Plan of Merger dated as of November 3,
1993, by and among SVMC Management Corporation, Sunbelt National Mortage
Corporation, First Tennessee Bank National Association and the Corporation,
and, further, to execute and sign any and all pre-effective and
post-effective amendments thereto and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, or their or his or her substitute or substitutes, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as
the undersigned might or could do in person, hereby ratifying and confirming
all the acts that said attorney-in-fact and agents, or any of them, or their or
his or her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Ronald Terry Chairman of the Board and Chief Executive January 28, 1994
Officer (principal executive officer)
/s/ Susan Schmidt Bies Executive Vice President and Chief financial January 28, 1993
Officer (principal financial officer)
/s/ James F. Keen Senior Vice President and Controller January 28, 1994
(principal accounting officer)
/s/ Robert C. Blattberg Director January 28, 1994
/s/ John Hull Dobbs Director January 28, 1994
/s/ Ralph Horn Director January 28, 1994
/s/ J. R. Hyde, III Director January 28, 1994
/s/ Joseph Orgill, III Director January 28, 1994
/s/ Richard E. Ray Director January 28, 1994
/s/ Vicki G. Roman Director January 28, 1994
/s/ Michael D. Rose Director January 28, 1994
/s/ Norfleet R. Turner Director January 28, 1994
</TABLE>
<PAGE> 1
Exhibit 28
REGISTRATION RIGHTS AGREEMENT
<PAGE> 2
================================================================================
REGISTRATION RIGHTS AGREEMENT
================================================================================
This Registration Rights Agreement, dated as of January 4, 1994 (this
"Agreement"), is made by and among First Tennessee National Corporation
("FTNC") and the persons listed on the signature pages hereto (the
"Shareholders").
RECITAL
This Agreement is being entered into pursuant to the Agreement and
Plan of Merger dated as of November 3, 1993, between FTNC, First Tennessee Bank
National Association, SNMC Management Corporation ("Management") and Sunbelt
National Mortgage Corporation (The "Merger Agreement"), as amended. As a
condition to the closing of the merger of First Tennessee Interim Corporation
with and into Management pursuant to the Merger Agreement, FTNC has agreed to
provide registration rights with respect to the shares of common stock, par
value $2.50 per share (the "Stock"), of FTNC to be issued to the Shareholders
as consideration pursuant to the Merger Agreement, as set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises, and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
(a) "Affiliate," with respect to any company, shall mean
any company controlling controlled by or under common control with such
company.
(b) "CIVC" shall mean Continental Illinois Venture
Corporation.
(c) "Closing Date" shall mean the Closing Date specified
in the Merger Agreement.
(d) "Commission" shall mean the Securities and Exchange
Commission created under the Exchange Act, or, if at any time after the
execution of this Agreement such Commission is not existing and performing the
duties now assigned to it under the Exchange Act or the Securities Act,
whichever is the relevant statute for the particular purpose, then "Commission"
shall mean the body performing such duties at such time.
<PAGE> 3
(e) "Exchange Act" shall mean the Securities Exchange Act of
1934, or any successor thereto, and the rules and regulations promulgated
thereunder, all as the same shall be amended from time to time.
(f) "Offering" shall mean the offering or sale of shares of
Stock by one or more Shareholders pursuant to the Registration Statement (as
defined below) in accordance with the intended methods and timing of
disposition by Shareholders as set forth in the Registration Statement.
(g) "Person" shall mean an individual, corporation,
association, partnership, joint venture, trust, unincorporated organization,
government or political subdivision thereof or governmental agency.
(h) "Securities Act" shall mean the Securities Act of 1933,
or any successor thereto, and the rules, regulations and forms promulgated
thereunder, all as the same shall be amended from time to time.
(i) "Selling Shareholder" shall mean a Shareholder selling
shares of Stock in an Offering.
2. Registration Under the Securities Act. Not later than ten (10)
business days after the Closing Date, FTNC shall file a "shelf" registration
statement (the "Registration Statement") providing for the sale by the
Shareholders (individually or collectively) of the Stock, pursuant to Rule 415
of the Commission under the Securities Act, and/or any similar rule that may be
adopted by the Commission, with respect to all of the Stock. FTNC agrees to
use its best efforts to cause the Registration Statement to be effective on or
about the first day a person who is an "affiliate" (for purposes of Rule 145
under the Securities Act) could sell Stock without disqualifying the merger for
pooling-of-interests accounting treatment, which in general is the period
ending at the time of publication of financial results covering at least thirty
(30) days of combined operations of FTNC and Management within the meaning of
Section 201-01 of the Commission's Codification of Financial Reporting Policies
and to keep such Registration Statement continuously effective until the
earliest of (i) two (2) years from the date the Registration Statement is
declared effective by the Commission, (ii) the completion of five (5) Offerings
under the Registration Statement, or (iii) the date as of which fewer than ten
percent (10%) of the initial number of shares of the Stock are held by the
Shareholders.
3. Procedures for Offerings. (a) At any time after the Registration
Statement is declared effective by the Commission, upon not less than eight (8)
days' prior written notice ("Notice") one or more of the Shareholders may
notify FTNC in writing of their intent to participate as Selling Shareholders
in an Offering to be completed within twenty-one (21) days following the date
that any supplements to the Registration Statement and prospectus are made and
the Offering commences (the "Offering Period"); provided, however, if such
notice is given to FTNC by a Shareholder other than CIVC, such Shareholder
shall provide notice to CIVC, simultaneously with its notice to FTNC, and CIVC
-2-
<PAGE> 4
shall have the right to object to, by written notice to the Selling Shareholder
and FTNC within five (5) days of receipt of the Notice, or participate in the
proposed Offering, in its sole and absolute discretion. In the event that CIVC
exercises its right to object to the proposed Offering, the Selling Shareholder
and FTNC shall not proceed with such proposed Offering.
(b) Each Notice delivered to FTNC pursuant to Section
3(a) hereto shall specify the number of shares of Stock intended to be offered
and sold by the Selling Shareholder(s), shall express the present intent of
such Selling Shareholder(s) to offer such shares for sale, shall describe the
nature or method of the proposed offering, including whether such Offering
shall be underwritten and naming the underwriter(s) if known, and shall contain
an undertaking of the Selling Shareholder(s) to provide all information and
materials and take all other action as may be required in order to permit FTNC
to comply with all applicable requirements of the Commission.
(c) At any time after receipt of Notice of a proposed
Offering and prior to the end of the Offering Period, FTNC may by notice (a
"Blackout Notice") to the Selling Shareholders, and any underwriters, postpone
completion of the Offering (i) for a period of up to sixty (60) days in
connection with any matter referred to in Section 4(d)(v)(B) (the "Blackout
Period"); or (ii) for such shorter period as is reasonably necessary to take
any action required as a result of an event referred to in Section 4(d)(ii),
(iii), (iv) or (v)(A). Unless FTNC delivers a Blackout Notice as provided
above, in the event that an Offering shall not be completed within the
respective Offering Period, FTNC shall be under no further obligation to effect
such Offering hereunder.
(d) If FTNC shall provide the Selling Shareholders with a
Blackout Notice during any Offering Period, at such time as the events or
circumstances which necessitated the Blackout Notice cease to exist, FTNC shall
notify the Selling Shareholder(s) of such fact.
(e) The Selling Shareholder(s) hereby agree to notify
FTNC if the number of shares of Stock intended to be offered pursuant to an
Offering are sold prior to the end of the respective Offering Period which
notice shall terminate the Offering Period.
4. Registration Procedures. In connection with FTNC's
obligations pursuant to Sections 2 and 3 hereof, FTNC shall:
(a) prepare and file with the Commission the Registration
Statement on Form S-3 (or any other form for with FTNC is eligible and which
will permit distribution of the Stock in the manner contemplated hereby) and
use its best efforts to cause the Registration Statement to become effective as
soon as practicable thereafter:
(b) prepare and file with the Commission such amendments
and supplements to the Registration Statement or statements hereunder and the
prospectus used in connection therewith as may be necessary to maintain the
effectiveness of the
-3-
<PAGE> 5
Registration Statement for the applicable period specified in Section 2 hereof,
and comply with the provisions of the Securities Act with respect to each
offering made during such applicable period;
(c) provide the Shareholders and any underwriters to be included
in the Registration Statement hereunder (which term, for purposes of this
Agreement, shall include a person deemed to be an underwriter within the
meaning of Section 2(11) of the Securities Act) of the securities being sold
and counsel for such underwriters the opportunity to participate in the
preparation of the Registration Statement, each prospectus included therein or
filed with the Commission, and each amendment or supplement thereto; and,
subject to the execution of confidentiality agreements in a form or forms
reasonably satisfactory to FTNC, make available for inspection by such persons
such financial and other information, books and records of FTNC, and cause the
officers, directors and employees of FTNC, and counsel and independent
certified public accountants of FTNC, to respond to such inquiries, as shall be
reasonably necessary, in the opinion of counsel to the Shareholders and any
such underwriters, to conduct a reasonable investigation within the meaning of
the Securities Act;
(d) promptly notify the Shareholders and the managing
underwriters, if any, of the securities being sold and (if requested by any
such person) confirm such advice in writing, (i) when the Registration
Statement, the prospectus or any prospectus supplement or post-effective
amendment has been filed, and, with respect to the Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the Commission for amendments or supplements to the Registration
Statement or the prospectus or for additional or supplemental information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose, (iv) of the receipt by FTNC of any notification
with respect to the suspension of the qualification of the Stock sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, or (v) at any time when a prospectus is required to be delivered under
the Securities Act, of (A) the happening of any event as a result of which such
Registration Statement, prospectus, any prospectus supplement, or any document
incorporated by reference in any of the foregoing contains an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, in the
light of the circumstances under which they are made and FTNC shall promptly
prepare a supplement or amendment to such prospectus or Registration Statement
so that such prospectus will not contain any untrue statement of material fact
or omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading or (B) that FTNC is in possession
of material information that it deems advisable not to disclose in a
registration statement;
(e) promptly notify the Shareholders of, and make reasonable
efforts to obtain the withdrawal at the earliest possible date of, any order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto;
-4-
<PAGE> 6
(f) if requested by any Selling Shareholder, promptly
incorporate in a prospectus supplement or post-effective amendment such
information as such Selling Shareholder or such managing underwriter or
underwriters specify should be included therein relating to the Offering,
including, without limitation, information with respect to the number of shares
of Stock being sold to such underwriters, the purchase price being paid
therefor by such underwriters and with respect to any other terms of the
underwritten (or best efforts underwritten) offering of the Stock to be sold in
such Offering, except to the extent that FTNC is advised in a written opinion
of counsel that the inclusion of such information is reasonably likely to
violate applicable securities laws; and make all required filings of such
prospectus supplement or post-effective amendment promptly after notification
of the matters to be incorporated in such prospectus supplement or
post-effective amendment;
(g) furnish to each Selling Shareholder and each
underwriter, if any, of the securities being sold such number of copies of the
Registration Statement, each such amendment and supplement thereto (in each
case including all exhibits thereto), the prospectus included in the
Registration Statement and such other documents as any Selling Shareholder and
such underwriter, if any, may reasonably request in order to facilitate the
disposition of the Stock being offered; FTNC consents to the use of the
prospectus or any amendment or supplement thereto by each Selling Shareholder,
and the underwriters, if any in connection with the Offering solely covered by
such prospectus or any supplement or amendment thereto;
(h) use its best efforts to (i) register or qualify the
Stock and each Offering under such other securities laws or Blue Sky laws of
such jurisdictions as any Selling Shareholder shall reasonably request, (ii)
take any and all such actions as may be reasonably necessary or advisable to
enable any Selling Shareholder and each underwriter, if any, of Stock being
sold to consummate such Offering in such jurisdictions of such Stock; provided,
however, that FTNC shall not be required for any such purpose to (A) qualify
generally to do business as a foreign corporation in any jurisdiction wherein
it would not otherwise be required to qualify but for the requirements of this
Section 4(h) or (B) consent to general service of process in any such
jurisdiction;
(i) use its best efforts to cause all of the Stock to be
registered with or approved by such other governmental agencies or authorities
as may be necessary by virtue of the business and operations of FTNC to allow
consummation of each Offering;
(j) cause all such shares of Stock to be listed on each
securities exchange on which similar securities issued by FTNC are then listed;
and
(k) cooperate with each Selling Shareholder and the
managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Stock to be sold in an Offering.
FTNC may require any Selling Shareholder and any underwriter to
furnish to FTNC
-5-
<PAGE> 7
such information regarding such Selling Shareholder and the distribution of
Stock as FTNC may from time to time reasonably request in order to comply with
the Securities Act. Each Shareholder, on behalf of itself, its Affiliates and
any underwriter, agrees to notify FTNC as promptly as practicable of any
inaccuracy or change in information previously furnished by them to FTNC or of
the happening of any event in either case as a result of which any prospectus
contains an untrue statement of a material fact regarding any Shareholder or
the distribution of such Stock or omits to state any material fact regarding
any Seller or the distribution of such Stock required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading, and to furnish promptly to FTNC any
additional information required to correct or update any previously furnished
information or required so that such prospectus shall not contain, with respect
to such person or the distribution of such Stock, an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing.
5. Expenses. All expenses incident to FTNC's performance of or
compliance with this Agreement will be borne by FTNC, including, without
limitation: all Commission and any National Association of Securities Dealers,
Inc. registration and filing fees and expenses; fees and expenses of compliance
with securities and Blue Sky laws (including reasonable fees and disbursements
of counsel for the underwriters, if any, in connection with Blue Sky
qualifications of the Stock and the preparation of legal investment surveys, if
any) and listing on any national securities exchange or exchanges on which
listing may be sought, document and security, certificate preparation and
printing expenses, messenger and delivery expenses; fees and expenses of any
transfer agent; internal expenses (including, without limitation, all salaries
and expenses of FTNC's officers and employees performing legal or accounting
duties); fees and disbursements of counsel and independent certified public
accountants of FTNC collectively, the "expenses"). Notwithstanding the
foregoing, the Selling Shareholders shall pay all underwriting discounts and
commissions attributable to the sale of Stock and the fees and disbursements of
any counsel or other advisors or experts retained by any Selling Shareholder or
any underwriters; provided, that in the case of any underwritten offering, the
underwriters shall be represented by a firm of counsel reasonably acceptable to
FTNC.
6. Indemnification.
(a) Indemnification by FTNC. FTNC shall, and it hereby
agrees to, indemnify and hold harmless each Selling Shareholder and each of
their directors and officers, and each other person, if any, which controls any
such person within the meaning of the Securities Act, and each person who
participates as an underwriter in the offering or sale of Stock, each
affiliate, officer, director or partner of such underwriter, and each other
person, if any, which controls any such underwriter within the meaning of the
Securities Act, from and against any and all losses, claims, damages or
liabilities, joint or several, and expenses (including any amounts paid in any
settlement effected (including legal fees) with the consent of FTNC) to which
such Selling Shareholder, such director,
-6-
<PAGE> 8
officer or controlling person thereof, such underwriter, such officer, director
or partner of such underwriter, or such controlling person thereof may become
subject under the Securities Act, the common law or otherwise insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) or expenses arise out of or are
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any preliminary,final or
summary prospectus contained therein, or any amendment or supplement thereto,
or (ii) any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement therein not
misleading, and FTNC shall reimburse each Selling Shareholder, such director,
officer or controlling person thereof; such underwriter, such affiliate,
officer, director or partner of such underwriter, and such controlling person
for any legal or any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, liability, action or
proceeding; provided, however, that FTNC shall not be liable to any such person
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding, whether commenced or threatened, in respect thereof) or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such Registration Statement,
or preliminary, final or summary prospectus, or amendment or supplement, in
reliance upon and in conformity with written information furnished to FTNC by
such person; and provided, further, that FTNC shall not be liable to any such
person under the indemnity agreement in this Section 6(a) with respect to any
preliminary prospectus to the extent that any such loss, claim, damage or
liability of such person results from the fact that shares of Stock were sold
to a person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the prospectus (excluding documents
incorporated by reference) or of the prospectus as then amended or supplemented
(excluding documents incorporated by reference) if FTNC has previously
furnished copies thereof to such Selling Seller or such underwriter in
compliance with Section 4(g) of this Agreement.
(b) Indemnification by Sellers. Each Selling Shareholder
and each underwriter, if any, shall, and each Shareholder hereby agrees to and
each Selling Shareholder and each underwriter, by acting in such capacity shall
be deemed to agree to, hold harmless FTNC, each director, officer of FTNC and
each other person, if any, who controls FTNC within the meaning of the
Securities Act, from and against any and all losses, claims, damages or
liabilities, joint or several, and expenses including fees of counsel and any
amounts paid in settlement effected with the consent of such holder) to which
FTNC, such director or officer or controlling person may become subject under
the Securities Act, the common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) or expenses arise out of or (i) are based upon
any untrue statement or alleged untrue statement of any material fact in or
omission or alleged omission to state a material fact required to be stated in
the Registration Statement, or any preliminary, final or summary prospectus
contained therein, or any amendment or supplement thereto, or necessary to make
the statements therein not misleading, to the extent, but only to the extent,
such statement or alleged statement or omission or alleged omission was made in
reliance upon
-7-
<PAGE> 9
and in conformity with written information furnished to FTNC by any Shareholder
or such underwriter or (ii) results from the fact that shares of Stock were
sold to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the prospectus (excluding
documents incorporated by reference) or of the prospectus as then amended or
supplemented (excluding documents incorporated by reference) if FTNC has
previously furnished copies thereof to such Selling Seller or such underwriter
in compliance with Section 4(g) of this Agreement.
(c) Notices of Claims. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 6, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action; provided, however, that the failure
of any indemnified party to give notice as provided herein shall not relieve
the indemnifying party of any obligation under Section 6(a) or 6(b) hereof. In
case any such action is brought against an indemnified party, the indemnifying
party shall be entitled to participate in and to assume the defense thereof,
jointly with any other indemnifying party similarly notified, to the extent
that it may wish, with counsel reasonably satisfactory to such indemnified
party, and after such notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party for any legal or other expenses
subsequently incurred by the latter in connection with the defense thereof
other than reasonable costs of investigation unless the indemnifying party has
failed to assume the defense of such claim and to employ counsel reasonably
satisfactory to such indemnified person. No indemnifying party shall consent
to entry of any judgement or enter into any settlement with respect to a claim
without the consent of the indemnified party, which consent shall not be
unreasonably withheld, or unless such judgment or settlement includes as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim for
all persons that may be entitled to or obligated to provide indemnification or
contribution under this Section 6. No idemnified party shall consent to entry
of any judgement or enter into any settlement of any action the defense of
which has been assumed by an indemnifying party without the consent of such
indemnifying party, which consent shall not be unreasonably withheld.
(d) Contribution. If for any reason the indemnification
provided for in Section 6(a) or Section 6 (b) is unavailable to or insufficient
to hold harmless an indemnified party in respect of any losses, claims,
damages, liabilities or expenses specifically covered by the indemnification
provisions set forth in Section 6(a) or Section 6 (b), then the indemnifying
party shall contribute to the amount paid or payable by the indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and the indemnified party, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue
-8-
<PAGE> 10
statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by, such
indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6 (d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the first sentence of this
paragraph. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
7. Underwritten Offerings.
(a) Selection of Underwriters. If any of the Stock
covered by the Registration Statement pursuant to Section 2 of this Agreement
are to be sold pursuant to an underwritten Offering, the managing underwriter
or underwriters thereof shall be designated by the Selling Shareholders selling
under the Registration Statement, provided that such designated managing
underwriter or underwriters is or are reasonably acceptable to FTNC.
(b) Underwriting Agreement. The Registration Statement
shall include, as an exhibit thereto, a form of underwriting agreement,
containing representations, warranties, covenants and conditions in form and
substance customary for secondary distributions of the type contemplated
hereby. In the case of any underwritten Offering, FTNC, Sellers and the
managing underwriter or underwriters shall become parties to an agreement or
agreements substantially in the form of such underwriting agreement.
8. Maximum Number of Offerings.
(a) Except as provided in this Section 8, the
Shareholders shall be entitled to no more than a total of five (5) Offerings.
(b) If a Blackout Notice is given before (i) all the
Stock subject to the Offering has been sold during the Offering Period, and
(ii) sixteen (16) days of the subject Offering Period have expired, the
discontinued Offering shall not be deemed to be an Offering for purposes of
this Agreement.
9. Confidentially. All information furnished by FTNC to the
Selling Shareholders regarding a Blackout Period, including the Blackout
Notice, shall be kept confidential and the Selling Shareholders shall cause
such information to be kept confidential.
-9-
<PAGE> 11
10. Miscellaneous.
(a) Notices. All notices, requests, claims, demands,
waivers and other communications hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand, if delivered personally,
by courier or by telecopy, or three days after being deposited in the mail
(registered or certified mail, postage prepaid, return receipt requested) as
follows:
<TABLE>
<S> <C>
If to FTNC: Harry A. Johnson, III
Executive Vice President and General Counsel
First Tennessee National Corporation
165 Madison Avenue
Memphis, TN 38103
Copy to: Heiskell, Donelson, Bearman, Adams,
Williams & Caldwell
2000 First Tennessee Building
165 Madison Avenue
Memphis, TN 38103
Attention: Charles T. Tuggle, Jr.
If to
Shareholders: Continental Illinois Venture Corporation
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Daniel G. Helle
Copy to: Kirkland & Ellis
1999 Broadway, Suite 4000
Denver, CO 80202
Attention: John P. Fitzgerald
</TABLE>
(b) Parties in Interest. All the terms and provisions of
this Agreement shall be binding upon, shall inure to the benefit of and shall
be enforceable by the parties hereto and any underwriters acting hereunder in
connection with an underwritten Offering, and their respective successors.
(c) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TENNESSEE, WITHOUT GIVING EFFECTS TO CONFLICT OF LAWS PRINCIPLES.
(d) Headings. The descriptive headings of the several
Sections and paragraphs of this Agreements are for convenience of reference
only, and do not constitute a part of and shall not be deemed to limit or
affect in any way any of the provisions of this Agreement.
-10-
<PAGE> 12
(e) Entire Agreement; Amendments. This Agreement and other
writings referred to herein or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with respect to its
subject matter. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter. This
Agreement may be amended and the observance of any term of this Agreement may
be waived (either generally or in a particular instance and either
retroactively or prospectively) only by a written instrument duly executed by
FTNC and Sellers.
(f) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
* * * * * * * * * * *
-11-
<PAGE> 13
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly
executed as of the date first written above.
FIRST TENNESSEE NATIONAL
CORPORATION
By:/s/ Elbert L. Thomas, Jr.
----------------------------
Name: Elbert L. Thomas, Jr.
--------------------------
Title: Senior Vice President
-------------------------
SHAREHOLDERS:
CONTINENTAL ILLINOIS VENTURE
CORPORATION
By:/s/ Daniel G. Helle
-----------------------------
Name: Daniel G. Helle
--------------------------
Title: Managing Director
-------------------------
/s/ John R. Willis
--------------------------------
JOHN R. WILLIS
/s/ Avy H. Stein
--------------------------------
AVY H. STEIN
/s/ Daniel G. Helle
------------------------------
DANIEL G. HELLE
/s/ Marcus D. Wedner
------------------------------
MARCUS D. WEDNER
/s/ Harrison I. Steans
------------------------------
HARRISON I. STEANS
/s/ Jennifer W. Steans
------------------------------
JENNIFER W. STEANS
/s/ Robin M. Steans
------------------------------
ROBIN M. STEANS
<PAGE> 14
/s/ Heather A. Steans
-------------------------
HEATHER A. STEANS
/s/ GEORGE P. BAUER
------------------------
GEORGE P. BAUER
K&E PARTNERS
By: /s/ Jack S. Levin
---------------------
Name:JACK S. LEVIN
-------------------
Title: Partner
------------------
J-WAR, LTD.,
a Texas limited partnership
By: /s/ James B. Witherow
----------------------
Name:
-------------------
Title:
------------------
TLT, LTD.,
a Texas limited partnership
By: /s/ T. J. Wageman
----------------------
Name: T. J. WAGEMAN
--------------------
Title: Managing General Partner
-------------------
