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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
August 22, 1994
First Tennessee National Corporation
165 Madison Avenue
Memphis, Tennessee 38103
Re: ACQUISITION OF EMERALD MORTGAGE COMPANY - FEDERAL INCOME TAX CONSEQUENCES
Gentlemen:
We have acted as counsel for First Tennessee National Corporation
("FTNC") in connection with the Stock Exchange Agreement dated as of June 15,
1994, and the amendments thereto (collectively, the "Agreement"), by and
between FTNC, its wholly owned subsidiary, First Tennessee Bank National
Association ("FTB"), Emerald Mortgage Company ("Mortgage Bank") and the five
(5) shareholders of Mortgage Bank ("Sellers"). The Agreement provides that the
Sellers will transfer all of their issued and outstanding stock of Mortgage
Bank to FTB in exchange for shares of FTNC Common Stock with a value equal to
the Base Exchange Price ($7,800,000), plus or minus certain adjustments to be
made at closing and also certain adjustments to be made within sixty (60) days
after closing based on a Closing Date Balance Sheet and other documents as of
the date of closing. The value of the FTNC Common Stock given in exchange for
the common stock of Mortgage Bank will be determined based on the average of
the closing price of the FTNC shares for the twenty (20) trading day period
ending five (5) days before the Closing Date. No fractional shares of FTNC
Common Stock will be issued in connection with the exchange. In lieu of
fractional shares, FTNC will make a cash payment equal to the fractional
interest which a Mortgage Bank shareholder would otherwise receive multiplied
by the Closing Measurement Price of FTNC Common Stock as defined in the
Agreement. This opinion is provided pursuant to the requirements of Item 4 of
Form S-4 and Section 8.2(b) 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 July 8, 1994,
in which officers of FTNC make certain representations on behalf of FTNC
regarding the Acquisition, and we have been provided with a Certificate dated
July 6, 1994, in which shareholders and officers of Mortgage Bank make certain
representations on behalf of Mortgage Bank regarding the Acquisition (the
"Certificates"). We assume those representations to be not only statements in
the
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August 22, 1994
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signers' best information but also currently true statements of fact, and we
rely thereon in rendering this opinion.
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 Closing Date of the Acquisition as
defined in the Agreement, we are of the opinion that, upon consummation of the
Acquisition in accordance with the terms and conditions of the Agreement, for
federal income tax purposes:
1. The Acquisition will be a reorganization within the meaning of
Section 368(a) of the Code, and FTNC, FTB and Mortgage Bank
will each be a party to the reorganization within the meaning
of Section 368(b) of the Code.
2. No gain or loss will be recognized by Mortgage Bank, FTB or
FTNC by reason of the Acquisition.
3. No gain or loss will be recognized by the Sellers upon receipt
of FTNC Common Stock in exchange for their Mortgage Bank
common stock, except as described below with respect to
Sellers who receive cash in lieu of fractional share interests
in FTNC Common Stock.
4. The basis of the FTNC Common Stock received by the Sellers who
exchange Mortgage Bank common stock for FTNC Common Stock will
be the same as the basis of the Mortgage Bank common stock
surrendered in exchange therefor (reduced by any amount
allocable to a fractional share interest for which cash is
received).
5. The holding period of the FTNC Common Stock received by each
Seller will include the period during which the Mortgage Bank
common stock surrendered in exchange therefor was held,
provided that such Mortgage Bank common stock was held by such
Seller as a capital asset as of the Closing Date.
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First Tennessee National Corporation
August 22, 1994
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6. A Seller who receives cash in the Acquisition 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 Mortgage Bank common stock was
held by such Seller as a capital asset as of the Closing 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 Seller's adjusted basis
in the shares of Mortgage Bank 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 Mortgage Bank common stock for which cash is
received is more than one (1) year.
The shares of Mortgage Bank common stock referred to herein do not
include any stock rights, rights or options to acquire Mortgage Bank common
stock.
Based on the foregoing assumptions, we are further of the opinion that
no corporate income or excise tax will be imposed on Mortgage Bank, FTB or FTNC
under the laws of the States of Washington or Tennessee by reason of the
Acquisition.
This opinion is limited to the effect of the income tax laws of the
United States of America and the States of Washington and Tennessee, 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 Mortgage Bank 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 Mortgage Bank shares by
any individual who receives such shares as compensation and holds them at the
Closing 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
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August 22, 1994
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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 Acquisition, 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: William H. D. Fones, Jr.
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A Member Thereof