FIRST TENNESSEE NATIONAL
CORPORATION
1995 EMPLOYEE STOCK OPTION PLAN
(As Restated for Amendments through December 15,
2008)
1.
Purpose . The 1995 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:
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(a)
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“Change in Control”
means the occurrence of any one of the following events:
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(i)
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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;
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(ii)
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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));
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(iii)
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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
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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 (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
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(iv)
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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.
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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.
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(b)
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“Committee” means the
Stock Option Committee or any successor committee designate by the
Board of Directors to administer the Stock Option Plan, as provided
in Section 5(a) hereof.
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(c)
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“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.
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(d)
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“Quota” means the
portion of the total number of shares subject to an option which
the grantee of the option may purchase during several periods of
the term of the option (if the option is subject to quotas), as
provided in Section 8(b) hereof. SAR’s are granted, if at
all, at the time of granting a stock option. If a stock option is
subject to quotas, the related SAR is subject to the same
quotas.
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(e)
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“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.
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(f)
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“Subsidiary” means a
subsidiary corporation as defined in Section 425 of the
Internal Revenue Code.
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(g)
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“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.
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(h)
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“Term of the Option”
means the period during which a particular option or related SAR
may be exercised in Section 8(a) hereof.
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(i)
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“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)
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“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).
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(k)
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“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.
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(l)
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“Workforce reduction”
means any termination of employment of one or more employees of the
Company or one or more of its subsidiaries as a result of the
discontinuation by the Company of a business or line of business or
a realignment of the Company, or a part thereof, or any other
similar type of event; provided, however, in the case of any such
event (whether the termination of employment was a result of a
discontinuation, a realignment, or another event), that the
Committee or the Board of Directors has designated the event as a
“workforce reduction” for purposes of this
Plan.
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3.
Effective Date of Plan. The Plan shall become
effective when approved at a shareholder’s meeting by the
holders of a majority of the shares of Company common stock present
or represented at the meeting and entitled to vote on the Plan. No
options or related SAR’s may be granted under the Plan after
the month and day in the year 2005 corresponding to the day before
the month and day on which the Plan becomes effective. The term of
option granted on or before such date may, however, extend beyond
that date, but no incentive stock options may be granted which are
exercisable after the expiration of ten (10) years after the
date of the grant.
4. Shares
Subject to the Plan.
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(a)
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The
Company may grant options and related SAR’s under the Plan
authorizing the issuance of no more than 3,000,000 shares of its
$1.25 par value 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.
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(b)
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When an option is granted under the
Plan, the Committee in its sole discretion may include the grant of
a SAR permitting the grantee to elect to receive stock or cash or a
combination thereof in exchange for the surrender the unexercised
related option or portion thereof. Solely with respect to grantees
subject to the reporting and short-swing profits provisions of
Section 16 of the Securities Exchange Act of 1934
(“Section 16 grantees”), the Committee shall have
the sole discretion to consent to or disapprove the election of the
grantee to receive cash in full or partial settlement of the SAR.
With respect to all other grantees, the election is final without
any action by the Committee.
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(c)
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Shares as to which options and
related SAR’s previously granted under this Plan shall for
any reason lapse shall be restored to the total number available
for grant of options. Shares subject to options surrendered in
exchange for the exercise of a SAR shall not be restored to the
total number available for the grant of options or related
SAR’s.
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(a)
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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
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requirements for
“disinterested person” (with any exceptions therein
permitted) contained in the then current SEC Rule 16b-3 or any
successor provision.
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(b)
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The
Committee shall adopt such rules of procedure as it may deem
proper.
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(c)
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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 and related SAR’s shall
be granted, the number of shares subject to each option and related
SAR, the term of option and related SAR, and the date on which
options and related SAR’s shall be granted.
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(a)
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Options and related SAR’s 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 and related SAR’s
shall be granted shall be conclusive.
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(b)
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An
individual may receive more than one option and related SAR,
subject, however, to the following limitations: (i) in the
case of an incentive stock option (as described in
Section 422A of the Internal Revenue Code of 1986), the
aggregate fair market value (determined at the time the options are
granted) of the Company’s common stock with respect to which
incentive stock options are exercisable for the first time during
any calendar year by any individual employee (under this Plan and
all other similar plans of the Company and its subsidiaries) shall
not exceed $100,000, and (ii) the maximum number of shares with
respect to which options or SAR’s are granted to an
individual during the term of the Plan, as defined in
Section 3 hereof, shall not exceed 200,000 shares. Incentive
stock options granted hereunder shall be clearly identified as such
at the time of grant.
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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:
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(a)
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The
grantee of the option has entered into an agreement with the
Company pursuant to which the grant of the option is in lieu of the
payment of compensation; and
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(b)
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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.
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“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 and Related SAR’s:
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(a)
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Term. Each option and related SAR 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 or related SAR was granted and ending (unless the
option and related SAR shall have terminated earlier under other
provisions of the Plan) on a date to be fixed by the Committee.
Notwithstanding the foregoing, each option and related SAR granted
under the Plan shall become exercisable in full immediately upon a
Change in Control.
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(b)
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Quotas. The Committee shall have authority
to grant options and related SAR’s 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 or related SAR, the grantee may
purchase less than the full quota available to him or
her.
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(c)
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Exercise of Stock
Options. Stock options shall be exercised by
delivering, mailing, or transmitting to the Committee or its
designee the following items:
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(i)
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A
notice, in the form, by the method, and at times prescribed by the
Committee, specifying the number of shares to be purchased;
and
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(ii)
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A
check or money order payable to the Company for
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