1
Exhibit 8
LAW OFFICES
HEISKELL, DONELSON, BEARMAN, ADAMS, WILLIAMS & CALDWELL
A PROFESSIONAL CORPORATION
TWENTIETH FLOOR -- FIRST TENNESSEE BUILDING
165 MADISON AVENUE
MEMPHIS, TENNESSEE 38103
(901)526-2000
FACSIMILE--(901)577-2303
January 25, 1994
First Tennessee National Corporation
165 Madison Avenue
Memphis, Tennessee 38103
Re: MERGER WITH HIGHLAND CAPITAL MANAGEMENT CORPORATION - FEDERAL INCOME
TAX CONSEQUENCES
Gentlemen:
We have acted as counsel for First Tennessee National Corporation
("FTNC") in connection with the Agreement and Plan of Merger dated as of
November 10, 1993 (the "Agreement"), by and between FTNC and its subsidiary,
First Tennessee Investment Management, Inc. ("FTIM"), and Highland Capital
Management Corporation ("HCMC"). The Agreement provides that HCMC will be
merged with and into FTIM under the Tennessee Business Corporation Act and
under the Delaware General Corporation Law (the "Merger"). The corporate
existence of HCMC will cease, and FTIM will become the surviving corporation.
FTIM will immediately change its name to "Highland Capital Management
Corporation". Pursuant to the Agreement, each share of HCMC common stock
issued and outstanding at the Effective Date will be converted into shares of
FTNC common stock based on a Conversion Number set by reference to the average
price of the FTNC common stock for the twenty (20) business day period ending
on the fifth business day prior to the Effective Date. No fractional shares of
FTNC common stock will be issued in connection with the Merger. In lieu of
fractional shares, FTNC will make a cash payment equal to the fractional
interest which an HCMC shareholder would otherwise receive multiplied by the
Average Price of FTNC common stock as defined in Section I(C) of the Agreement.
This opinion is provided pursuant to the requirements of Item 4 of Form S-4 and
Section V(A)(7) of the Agreement. Capitalized terms not defined herein shall
have the meaning ascribed to them in the Agreement.
We have been provided with an Officer's Certificate dated January 24,
1994, in which officers of FTNC make certain representations on behalf of FTNC
regarding the Merger, and we have been provided with a Certificate dated
January 24, 1994, in which officers of HCMC make certain representations on
behalf of HCMC regarding the Merger (the "Certificates"). We assume those
representations to be not only statements in the signers' best information but
also currently true statements of fact, and we rely thereon in rendering this
opinion.
2
In rendering the following opinion, we have considered the Agreement,
the Certificates, applicable case law and applicable provisions of the Internal
Revenue Code of 1986, as amended and as presently in effect (the "Code"), and
regulations adopted thereunder, and Revenue Rulings and Revenue Procedures
published thereunder.
Based on the foregoing, and assuming that the representations made in
the Certificates also will be true as of the Effective Date of the Merger as
defined in the Agreement, we are of the opinion that, upon consummation of the
Merger in accordance with the terms and conditions of the Agreement, for
federal income tax purposes:
(a) Provided that the Merger qualifies as a statutory merger under
the Tennessee Business Corporation Act and the Delaware
General Corporation Law, the Merger will be a reorganization
within the meaning of Section 368(a) of the Code, and FTNC,
FTIM and HCMC will each be a party to the reorganization
within the meaning of Section 368(b) of the Code.
(b) No gain or loss will be recognized by HCMC, FTIM or FTNC by
reason of the Merger.
(c) No gain or loss will be recognized by the shareholders of HCMC
upon receipt of FTNC common stock in exchange for their HCMC
common stock, except as described below with respect to
stockholders who receive cash in lieu of fractional share
interests in FTNC common stock.
(d) The basis of the FTNC common stock received by HCMC
shareholders who exchange HCMC common stock for FTNC common
stock will be the same as the basis of the HCMC common stock
surrendered in exchange therefor (reduced by any amount
allocable to a fractional share interest for which cash is
received).
(e) The holding period of the FTNC common stock received by a HCMC
stockholder will include the period during which the HCMC
common stock surrendered in exchange therefor was held,
provided that such HCMC common stock was held by such HCMC
stockholder as a capital asset on the Effective Date.
(f) A stockholder of HCMC common stock who receives cash in the
Merger in lieu of a fractional share interest in FTNC common
stock will be treated as having received cash in redemption of
such fractional share interest. Provided that such HCMC
common stock was held by such HCMC stockholder as a capital
asset on the Effective Date, the receipt of such cash should
generally result in capital gain or loss equal to the
difference between the amount of cash received and the portion
of such HCMC stockholder's adjusted basis in the shares of
HCMC common stock allocable to the fractional share interest.
Such capital gain or loss will be long-term capital gain or
loss if the holding period for the shares of HCMC common stock
for which cash is received is more than one (1) year.
3
The shares of HCMC common stock referred to herein do not include any
stock rights, rights or options to acquire HCMC common stock.
Based on the foregoing assumptions, we are further of the opinion that
under the corporate income or excise tax laws of the States of Tennessee and
Delaware, no gain or loss will be recognized by HCMC, FTIM or FTNC by reason of
the merger.
This opinion is limited to the effect of the income tax laws of the
United States of America and the States of Tennessee and Delaware, and we have
expressed no opinion as to the laws of any jurisdiction other than the United
States of America and these states. We have not considered the effects of the
transaction on the stockholders of HCMC under the income tax laws of the states
in which they reside, and we have not considered the effects on the
transaction, if any, of sales and use taxes or any other state and local taxes
except for corporate income or excise taxes. We express no opinion as to the
federal income tax consequences of the exchange of HCMC shares by any
individual who receives such shares as compensation and holds them at the
Effective Date subject to any restriction related to employment.
Changes to the Code, regulations, rulings thereunder, and changes by
the courts and the interpretation of the authorities relied upon, may be
applied retroactively and may affect the opinion expressed herein.
The foregoing opinion is furnished to you solely in connection with
the above-described transaction and may not be relied upon by any other person
or entity, or used for any other purpose. Unless a prior written consent of
our firm is obtained, this opinion is not to be quoted or otherwise referred to
in any report, proxy statement, or registration statement, and is not to be
filed with or furnished to any governmental agency or other entity or person,
except as otherwise required by law.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-4, relating to the issuance of shares of FTNC
common stock in the Merger, to be filed by FTNC with the Securities and
Exchange Commission, and to all references to this firm in the Prospectus that
is a part of the Registration Statement.
Very truly yours,
HEISKELL, DONELSON, BEARMAN,
ADAMS, WILLIAMS & CALDWELL, P.C.
By: /s/ William H.D. Fones
----------------------
A Member Thereof