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EXHIBIT 10(b)
FIRST TENNESSEE NATIONAL CORPORATION
2000 EMPLOYEE STOCK OPTION PLAN
(Adopted 10-20-99, Amended and Restated October 18, 2000)
1. PURPOSE. The 2000 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
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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
(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
this 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 5:00 p.m
Memphis time on the date corresponding numerically with the
date reflected in the Company's records as the effective date
of termination of employment in the third month following the
month in which the effective date of
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termination of employment occurs (or in the event that such
third following month does not have a date so corresponding,
then the last day of the third following month). Also, if the
last day of such period is not a business day, then the period
will end at 5:00 p.m. Memphis time on the last business day of
such period.
(j) "Five years after (an event occurring on day x)" and "five
years from (an event occurring on day x)" means 5:00 p.m. on
the date in the fifth year following the year in which day x
occurred corresponding numerically with day x (or in the event
that day x is February 29, then February 28 in the fifth
following year). Also, if the last day of such period is not a
business day, then the period will end at 5:00 p.m. Memphis
time on the last business day of such period.
(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.
(l) "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."
3. EFFECTIVE DATE OF PLAN. The Plan shall become effective upon approval
at a shareholder meeting by the holders of a majority of the shares of Company
common stock present, or represented, at such meeting and entitled to vote on
the Plan. No options may be granted under the Plan after the month and day in
the year 2010 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, 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.
(a) The Company may grant options under the Plan authorizing the
issuance of no more than 1,500,000 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 or by the issuance of previously authorized but
unissued shares. For purposes of computing the maximum number
of shares that may be issued under the Plan, if shares are
tendered in payment of all or a portion of the exercise price,
then the number of shares issued in connection with such
exercise is the number of shares subject to option that was
exercised, net of the number tendered in payment.
(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.
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(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 terms and 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, 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 are granted to an individual during
the term of the Plan, as defined in Section 3 hereof, shall
not exceed 1,000,000 shares. Incentive stock options granted
hereunder shall be clearly identified as such at the time of
grant.
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 of the option (which
must be a non-qualified option and not an incentive stock
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 New York
Stock Exchange on the valuation day 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
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be cumulated and be available for purchase in later periods.
In exercising an 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
Executive Vice President-Employee Services is deemed to be the
Committee's designee) the following items:
(i) A notice, in the form and by the method (which may include
use of a telephone or other means of electronic communication)
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 irrevocable
instructions (which may be by the use of a telephone or other
means of electronic communication) 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
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, as specified by the grantee.
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(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.
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, workforce reduction, 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 three
years (unless the option was granted in lieu of compensation, in which case it
shall be 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. If the grantee of one or more stock options described in the second
sentence of Section 7 of the Plan or as to which the number of shares awarded
was based on a formula which included a percentage of the grantee's annual bonus
or target bonus or participation in a bonus plan shall cease to be employed as a
result of a workforce reduction, then each of such stock options shall terminate
on the date specified by the Committee, not to exceed five years after the date
of termination, unless it terminates earlier under other provisions of the Plan.
Although such exercise is not limited to the exercise rights which had accrued
at the date of termination, such exercise
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shall be subject to all applicable conditions and restrictions prescribed in
Section 8 hereof. If the grantee of one or more stock options not described in
the prior two sentences of this paragraph shall cease to be employed as a result
of a workforce reduction, then each of such stock options shall terminate on the
date specified by the Committee, not to exceed three years after the date of
termination, unless it terminates earlier under other provisions of the Plan.
Although such exercise is not limited to exercise rights which had accrued at
the date of termination, such exercise shall be subject to all applicable
conditions and restrictions prescribed 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 three years (unless the option was granted in lieu of
compensation, in which case it shall be 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 available to grant to any one person;
(c) in the number subject to options then outstanding; and
(d) 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 all such
adjustments shall be conclusive; provided, however, that the Board shall not
make any adjustments with respect to the number of shares subject to previously
granted incentive stock options or available for grant as options if such
adjustment would constitute the adoption of a new plan requiring shareholder
approval before further incentive stock options could be granted.
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
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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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