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FIRST TENNESSEE NATIONAL CORPORATION
1997 EMPLOYEE STOCK OPTION PLAN
(Adopted 10-22-96, Amended and Restated 4-18-00)
1. PURPOSE. The 1997 Employee Stock Option Plan (the "Plan") of First
Tennessee National Corporation and any successor thereto, (the "Company") is
designed to enable employees of the Company and its subsidiaries to obtain a
proprietary interest in the Company, and thus to share in the future success of
the Company's business. Accordingly, the Plan is intended as a further means
not only of attracting and retaining outstanding personnel, but also of
promoting a closer identity of interest between employees and shareholders.
2. DEFINITIONS. As used in the Plan, the following terms shall have the
respective meanings set forth below:
(a) "Change in Control" means the occurrence of any one of the
following events:
(i) individuals who, on January 21, 1997,
constitute the Board (the "Incumbent Directors") cease for
any reason to constitute at least a majority of the Board,
provided that any person becoming a director subsequent to
January 21, 1997, whose election or nomination for election
was approved by a vote of at least three-fourths (3/4) of the
Incumbent Directors then on the Board (either by a specific
vote or by approval of the proxy statement of the Company in
which such person is named as a nominee for director, without
written objection to such nomination) shall be an Incumbent
Director; provided, however, that no individual elected or
nominated as a director of the Company initially as a result
of an actual or threatened election contest with respect to
directors or as a result of any other actual or threatened
solicitation of proxies or consents by or on behalf of any
person other than the Board shall be deemed to be an
Incumbent Director;
(ii) any "Person" (as defined under Section 3(a)
(9) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and as used in Section 13(d) or Section 14(d)
of the Exchange Act) is or becomes a "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company's then
outstanding securities eligible to vote for the election of
the Board (the "Company Voting Securities"); provided,
however, that the event described in this paragraph (ii)
shall not be deemed to be a change in control by virtue of
any of the following acquisitions: (A) by the Company or any
entity in which the Company directly or indirectly
beneficially owns more than 50% of the voting securities or
interests (a "Subsidiary"), (B) by an employee stock
ownership or employee benefit plan or trust sponsored or
maintained by the Company or any Subsidiary, (C) by any
underwriter temporarily holding securities pursuant to an
offering of such securities, or (D) pursuant to a
Non-Qualifying Transaction (as defined in paragraph (iii));
(iii) the shareholders of the Company approve a
merger, consolidation, share exchange or similar form of
corporate transaction involving the Company or any of its
Subsidiaries that requires the approval of the Company's
shareholders, whether for such transaction or the issuance of
securities in the transaction (a "Business Combination"),
unless immediately following such Business Combination: (A)
more than 50% of the total voting power of (x) the
corporation resulting from such Business Combination (the
"Surviving Corporation"), or (y) if applicable, the ultimate
parent corporation that directly or indirectly has beneficial
ownership of 100% of the voting securities eligible to elect
directors of the Surviving Corporation (the "Parent
Corporation"), is represented by Company Voting Securities
that were outstanding immediately prior to the consummation
of such Business Combination (or, if applicable, is
represented by shares into which such Company Voting
Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof
is in substantially the same proportion as the voting power
of such Company Voting Securities among the holders thereof
immediately prior to the Business Combination, (B) no person
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(other than any employee benefit plan sponsored or maintained
by the Surviving Corporation or the Parent Corporation), is
or becomes the beneficial owner, directly or indirectly, of
20% or more of the total voting power of the outstanding
voting securities eligible to elect directors of the Parent
Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) and (C) at least a majority of the
members of the board of directors of the Parent Corporation
(or, if there is no Parent Corporation, the Surviving
Corporation) were Incumbent Directors at the time of the
Board's approval of the execution of the initial agreement
providing for such Business Combination (any Business
Combination which satisfies all of the criteria specified in
(A), (B) and (C) above shall be deemed to be a
"Non-Qualifying Transaction"); or
(iv) the shareholders of the Company approve a
plan of complete liquidation or dissolution of the Company or
a sale of all or substantially all of the Company's assets.
Computations required by paragraph (iii) shall be made on and as of
the date of shareholder approval and shall be based on reasonable assumptions
that will result in the lowest percentage obtainable.
Notwithstanding the foregoing, a change in control of the Company
shall not be deemed to occur solely because any person acquires beneficial
ownership of more than 20% of the Company Voting Securities as a result of the
acquisition of Company Voting Securities by the Company which reduces the
number of Company Voting Securities outstanding; provided, that if after such
acquisition by the Company such person becomes the beneficial owner of
additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person, a
change in control of the Company shall then occur.
(b) "Committee" means the Stock Option Committee or any successor
committee designated by the Board of Directors to administer
the Stock Option Plan, as provided in Section 5(a) hereof.
(c) "Early Retirement" means termination of employment after an
employee has fulfilled all service requirements for an early
pension, and before his or her Normal Retirement Date, under
the terms of the First Tennessee National Corporation Pension
Plan, as amended from time to time.
(d) "Quota" means the portion of the total number of shares
subject to an option which the grantee of the option may
purchase during the several periods of the term of the option
(if the option is subject to quotas), as provided in Section
8(b) hereof.
(e) "Retirement" means termination of employment after an
employee has fulfilled all service requirements for a pension
under the terms of the First Tennessee National Corporation
Pension Plan, as amended from time to time.
(f) "Subsidiary" means a subsidiary corporation as defined in
Section 425 of the Internal Revenue Code.
(g) "Successor" means the legal representative of the estate of a
deceased grantee or the person or persons who shall acquire
the right to exercise an option or related SAR by bequest or
inheritance or by reason of the death of the grantee, as
provided in Section 10 hereof.
(h) "Term of the Option" means the period during which a
particular option may be exercised, as provided in Section
8(a) hereof.
(i) "Three months after cessation of employment" means a period
of time beginning at 12:01 A.M. on the day following the date
notice of termination of employment was given and ending at
11:59 P.M. on the date in the third following month
corresponding numerically with the date notice of termination
of employment was given ( or in the event that the third
following month does not have a date so corresponding, then
the last day of the third following month).
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(j) "Five years after (an event occurring on day x)" and "five
years from (an event occurring on day x)" means a period of
time beginning at 12:01 A.M. on the day following day x and
ending at 11:59 P.M. on the date in the fifth following year
corresponding numerically with day x (or in the event that
the fifth following year does not have a date so
corresponding, then the last day of the sixtieth following
month).
(k) "Voluntary Resignation" means any termination of employment
that is not involuntary and that is not the result of the
employee's death, disability, early retirement or retirement.
3. EFFECTIVE DATE OF PLAN. The Plan shall become effective upon approval
by the Board of Director of the Company. No options may be granted under the
Plan after the month and day in the year 2006 corresponding to the day before
the month and day on which the Plan becomes effective. The term of options
granted on or before such date may, however, extend beyond that date.
4. SHARES SUBJECT TO THE PLAN.
(a) The Company may grant options under the Plan authorizing the
issuance of no more than 17,200,000 shares of its $0.625 par
value (adjusted for any stock splits) common stock, which
will be provided from shares purchased in the open market or
privately (that became authorized but unissued shares under
state corporation law) or by the issuance of previously
authorized but unissued shares.
(b) Shares as to which options previously granted under this Plan
shall for any reason lapse shall be restored to the total
number available for grant of options.
5. PLAN ADMINISTRATION.
(a) The Plan shall be administered by a Stock Option Committee
(the "Committee") whose members shall be appointed from time
to time by, and shall serve at the pleasure of, the Board of
Directors of the Company. In addition, all members shall be
directors and shall meet the definitional requirements for
"non-employee director" (with any exceptions therein
permitted) contained in the then current SEC Rule 16b-3 or
any successor provision.
(b) The Committee shall adopt such rules of procedure as it may
deem proper.
(c) The powers of the Committee shall include plenary authority
to interpret the Plan, and subject to the provisions hereof,
to determine the persons to whom options shall be granted,
the number of shares subject to each option, the term of the
option, and the date on which options shall be granted.
6. ELIGIBILITY.
(a) Options may be granted under the Plan to employees of the
Company or any subsidiary selected by the Committee.
Determination by the Committee of the employees to whom
options shall be granted shall be conclusive.
(b) An individual may receive more than one option.
7. OPTION PRICE. The option price per share to be paid by the grantee to
the Company upon exercise of the option shall be determined by the Committee,
but shall not be less than 100% of the fair market value of the share at the
time the option is granted, nor shall the price per share be less than the par
value of the share. Notwithstanding the prior sentence, the option price per
share may be less than 100% of the fair market value of the share at the time
the option is granted if:
(a) The grantee of the option has entered into an agreement with
the Company pursuant to which the grant
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of the option is in lieu of the payment of compensation; and
(b) The amount of such compensation when added to the cash
exercise price of the option equals at least 100% of the fair
market value (at the time the option is granted) of the
shares subject to option.
"Fair market value" for purposes of the Plan shall be the mean between the high
and low sales prices at which shares of the Company were sold on the valuation
day as quoted by the Nasdaq Stock Market or, if there were no sales on that
day, then on the last day prior to the valuation day during which there were
sales. In the event that this method of valuation is not practicable, then the
Committee, in its discretion, shall establish the method by which fair market
value shall be determined.
8. TERMS OR QUOTAS OF OPTIONS:
(a) TERM. Each option granted under the Plan shall be exercisable
only during a term (the "Term of the Option") commencing one
year, or such other period of time (which may be less than or
more than one year) as is determined to be appropriate by the
Committee, after the date when the option was granted and
ending (unless the option shall have terminated earlier under
other provisions of the Plan) on a date to be fixed by the
Committee. Notwithstanding the foregoing, each option granted
under the Plan shall become exercisable in full immediately
upon a Change in Control.
(b) QUOTAS. The Committee shall have authority to grant options
exercisable in full at any time during their term, or
exercisable in quotas. Quotas or portions thereof not
purchased in earlier periods shall be cumulated and be
available for purchase in later periods. In exercising his or
her option, the grantee may purchase less than the full quota
available to him or her.
(c) EXERCISE OF STOCK OPTIONS. Stock options shall be exercised
by delivering, mailing, or transmitting to the Committee or
its designee (for all purposes under the Plan, in the absence
of an express designation by the Committee, the Company's
Personnel Division Manager is deemed to be the Committee's
designee) the following items:
(i) A notice, in the form, by the method, and at times
prescribed by the Committee, specifying the number of shares
to be purchased; and
(ii) A check or money order payable to the Company for the
full option price.
In addition, the Committee in its sole discretion may
determine that it is an appropriate method of payment for
grantees to pay, or make partial payment of, the option price
with shares of Company common stock in lieu of cash. In
addition, in its sole discretion the Committee may determine
that it is an appropriate method of payment for grantees to
pay for any shares subject to an option by delivering a
properly executed exercise notice together with a copy of
irrevocable instructions to a broker to deliver promptly to
the Company the amount of sale or loan proceeds to pay the
purchase price (a "cashless exercise"). To facilitate the
foregoing, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms. The
value of Company common stock surrendered in payment of the
exercise price shall be its fair market value, determined
pursuant to Section 7, on the date of exercise. Upon receipt
of such notice of exercise of a stock option and upon payment
of the option price by a method other than a cashless
exercise, the Company shall promptly deliver to the grantee
(or, in the event the grantee has executed a deferral
agreement, the Company shall deliver to the grantee at the
time specified in such deferral agreement) a certificate or
certificates for the shares purchased, without charge to him
or her for issue or transfer tax.
(d) POSTPONEMENTS. The Committee may postpone any exercise of an
option for such period of time as the Committee in its
discretion reasonably believes necessary to prevent any acts
or omissions that the Committee reasonably believes will be
or will result in the violation of any state or federal law;
and
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the Company shall not be obligated by virtue of any provision
of the Plan or the terms of any prior grant of an option to
recognize the exercise of an option or to sell or issue
shares during the period of such postponement. Any such
postponement shall automatically extend the time within which
the option may be exercised, as follows: The exercise period
shall be extended for a period of time equal to the number of
days of the postponement, but in no event shall the exercise
period be extended beyond the last day of the postponement
for more days than there were remaining in the option
exercise period on the first day of the postponement. Neither
the Company nor any subsidiary of the Company, nor any of
their respective directors or officers shall have any
obligation or liability to the grantee of an option or to a
successor with respect to any shares as to which the option
shall lapse because of such postponement.
(e) NON-TRANSFERABILITY. All options granted under the Plan shall
be non-transferable other than by will or by the laws of
descent and distribution, subject to Section 10 hereof, and
an option may be exercised during the lifetime of the grantee
only by him or her or by his/her guardian or legal
representative.
(f) CERTIFICATES. The stock certificate or certificates to be
delivered under this Plan may, at the request of the grantee,
be issued in his or her name or, with the consent of the
Company, the name of another person as specified by the
grantee.
(g) RESTRICTIONS. This subsection (g) shall be void and of no
legal effect in the event of a Change of Control.
Notwithstanding anything in any other section or subsection
herein to the contrary, the following provisions shall apply
to all options (except options designated by the Committee as
FirstShare options), exercises and grantees. An amount equal
to the spread realized in connection with the exercise of an
option within six months prior to a grantee's voluntary
resignation shall be paid to the Company by the grantee in
the event that the grantee, within six months following
voluntary resignation, engages, directly or indirectly, in
any activity determined by the Committee to be competitive
with any activity of the Company or any of its subsidiaries.
(h) TAXES. The Company shall be entitled to withhold the amount
of any tax attributable to amounts payable or shares
deliverable under the Plan, and the Company may defer making
payment or delivery of any benefits under the Plan if any tax
is payable until indemnified to its satisfaction. The
Committee may, in its discretion and subject to such rules
which it may adopt, permit a grantee to satisfy, in whole or
in part, any federal, state and local withholding tax
obligation which may arise in connection with the exercise of
a stock option, by electing either:
(i) to have the Company withhold shares of Company common
stock from the shares to be issued upon the exercise of the
option;
(ii) to permit a grantee to tender back shares of Company
common stock issued upon the exercise of an option; or
(iii) to deliver to the Company previously owned shares of
Company common stock, having, in the case of (i), (ii), or
(iii), a fair market value equal to the amount of the
federal, state, and local withholding tax associated with the
exercise of the option.
(i) ADDITIONAL PROVISIONS APPLICABLE TO OPTION AGREEMENTS IN LIEU
OF COMPENSATION. If the Committee, in its discretion permits
participants to enter into agreements as contemplated by
Section 7 herein, then such agreements must be irrevocable
and cannot be changed by the participant once made, and such
agreements must be made at least prior to the performance of
any services with respect to which an option may be granted.
If any participant who enters into such an agreement
terminates employment prior to the grant of the option, then
the option will not be granted and all compensation which
would have been covered by the option will be paid to the
participant in cash.
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9. EXERCISE OF OPTION BY GRANTEE ON CESSATION OF EMPLOYMENT. If a person
to whom an option has been granted shall cease, for a reason other than his or
her death, disability, early retirement, retirement, or voluntary resignation,
to be employed by the Company or a subsidiary, the option shall terminate three
months after the cessation of employment, unless it terminates earlier under
other provisions of the Plan. Until the option terminates, it may be exercised
by the grantee for all or a portion of the shares as to which the right to
purchase had accrued under the Plan at the time of cessation of employment,
subject to all applicable conditions and restrictions provided in Section 8
hereof. If a person to whom an option has been granted shall retire or become
disabled, the option shall terminate five years after the date of early
retirement, retirement or disability, unless it terminates earlier under other
provisions of the Plan. Although such exercise by a retiree or disabled grantee
is not limited to the exercise rights which had accrued at the date of early
retirement, retirement or disability, such exercise shall be subject to all
applicable conditions and restrictions prescribed in Section 8 hereof. If a
person shall voluntarily resign, his option to the extent not previously
exercised shall terminate at once. In the event that the sale of certain assets
and assumption of certain liabilities (referred to herein as "the sale of the
Division") of the HomeBanc Mortgage Corporation division (the "Division") of
First Horizon Home Loan Corporation occurs, then notwithstanding anything
herein to the contrary, if the grantee of one or more stock options described
in the second sentence of Section 7 of the Plan is employed by the Division
immediately prior to the closing of the sale of the Division and is not an
employee of the Equibanc department of the Division and if the employment of
the grantee of such option or options terminates at the time of the closing of
the sale of the Division, then each of such stock options shall terminate at
5:00 p.m. Memphis time on the fifth anniversary of the closing of the sale of
the Division (or if such date is not a business day, then on the immediately
preceding business day), unless it terminates earlier under the Plan. The
exercise of each of such options is subject to all applicable conditions and
restrictions provided in Section 8 hereof.
10. EXERCISE OF OPTION AFTER DEATH OF GRANTEE. If the grantee of an option
shall die while in the employ of the Company or within three months after
ceasing to be an employee, and if the option was in effect at the time of his
or her death (whether or not its term had then commenced), the option may,
until the expiration of five years from the date of death of the grantee or
until the earlier expiration of the term of the option, be exercised by the
successor of the deceased grantee. Although such exercise is not limited to the
exercise rights which had accrued at the date of death of the grantee, such
exercise shall be subject to all applicable conditions and restrictions
prescribed in Section 8 hereof.
11. PYRAMIDING OF OPTIONS. The Committee in its sole discretion may from
time to time permit the method of exercising options known as pyramiding (the
automatic application of shares received upon the exercise of a portion of a
stock option to satisfy the exercise price for additional portions of the
option).
12. SHAREHOLDER RIGHTS. No person shall have any rights of a shareholder by
virtue of a stock option except with respect to shares actually issued to him
or her, and issuance of shares shall confer no retroactive right to dividends.
13. ADJUSTMENT FOR CHANGES IN CAPITALIZATION. Any increase in the number of
outstanding shares of common stock of the Company occurring through stock
splits or stock dividends after the adoption of the Plan shall be reflected
proportionately:
(a) in an increase in the aggregate number of shares then
available for the grant of options under the Plan, or
becoming available through the termination or forfeiture of
options previously granted but unexercised;
(b) in the number subject to options then outstanding; and
(c) in the quotas remaining available for exercise under
outstanding options,
and a proportionate reduction shall be made in the per-share option price as to
any outstanding options or portions thereof not yet exercised. Any fractional
shares resulting from such adjustments shall be eliminated. If changes in
capitalization other than those considered above shall occur, the Board of
Directors shall make such adjustments in the number and class of shares for
which options may thereafter be granted, and in the number and class of shares
remaining subject to options previously granted and in the per-share option
price as the Board in its discretion may consider appropriate, and
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all such adjustments shall be conclusive.
14. TERMINATION, SUSPENSION, OR MODIFICATION OF PLAN. The Board of
Directors may at any time terminate, suspend, or modify the Plan, except that
the Board of Directors shall not amend the Plan in violation of law. No
termination, suspension, or modification of the Plan shall adversely affect any
right acquired by any grantee, or by any successor of a grantee (as provided in
Section 10 hereof), under the terms of an option granted before the date of
such termination, suspension, or modification, unless such grantee or successor
shall consent, but it shall be conclusively presumed that any adjustment for
changes in capitalization as provided in Section 13 does not adversely affect
any such right.
15. APPLICATION OF PROCEEDS. The proceeds received by the Company from the
sale of its shares under the Plan will be used for general corporate purposes.
16. NO RIGHT TO EMPLOYMENT. Neither the adoption of the Plan nor the
granting of any stock option shall confer upon the grantee any right to
continue in the employ of the Company or any of its subsidiaries or interfere
in any way with the right of the Company or the subsidiary to terminate such
employment at any time.
17 GOVERNING LAW. The Plan and all determinations thereunder shall be
governed by and construed in accordance with the laws of the State of
Tennessee.
18. SUCCESSORS. This Plan shall bind any successor of the Company, its
assets or its businesses (whether direct or indirect, by purchase, merger,
consolidation or otherwise), in the same manner and to the same extent that the
Company would be obligated under this Plan if no succession had taken place. In
the case of any transaction in which a successor would not by the foregoing
provision or by operation of law be bound by this Plan, the Company shall
require such successor expressly and unconditionally to assume and agree to
perform the Company's obligations under this Plan, in the same manner and to
the same extent that the Company would be required to perform if no such
succession had taken place. The term "Company," as used in the Plan, shall mean
the Company as hereinbefore defined and any successor or assignee to the
business or assets which by reason hereof becomes bound by this Plan.
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