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EXHIBIT 4(e)
FIRST TENNESSEE NATIONAL CORPORATION
NON-EMPLOYEE DIRECTORS' DEFERRED
COMPENSATION STOCK OPTION PLAN
1. PURPOSE. The Non-Employee Directors' Deferred Compensation Stock
Option Plan of the First Tennessee National Corporation has been
adopted to advance the interests of shareholders by encouraging
non-employee members of the Board of Directors to acquire proprietary
interests in the Company in the form of Stock Options granted in lieu
of Retainer/Fees that otherwise would have been paid in cash for
serving on the Board of Directors or any committee thereof.
2. DEFINITIONS. As used in the Plan, the following terms shall have the
respective meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Common Stock" means the common stock, par value $2.50 per
share, of the Company.
(c) "Company" means the First Tennessee National Corporation, a
corporation established under the laws of the State of
Tennessee.
(d) "Deferred Compensation Stock Option" or "Stock Option" means a
right granted at the election of a Non-Employee Director
pursuant to Section 6.
(e) "Disability" means total and permanent disability, which if
the Participant were an employee of the Company, would be
treated as a total and permanent disability under the terms of
the Company's long-term disability plan for employees, as may
be in effect from time to time.
(f) "Early Retirement" means retirement from Board service after
the age of 55 with 120 or more full months of aggregate Board
service.
(g) "Fair Market Value" means the average of the high and low
sales prices at which shares of Common Stock are traded, as
publicly reported by the Wall Street Journal, on the
applicable date or, if there were no sales of Common Stock
reported for such date, the last prior date for which a sale
is reported.
(h) "Grant Date" means the applicable date, as specified in
Section 7, on which a Stock Option is granted to a Non-
Employee Director by reason of an election made pursuant to
Section 6.
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(i) "Non-Employee Director" means a member of the Board who is not
an employee of the Company or any subsidiary or affiliate of
the Company at the time such person elects to receive
Retainer/Fees in the form of Stock Options.
(j) "Normal Retirement" means the date at which any Non-Employee
Director is no longer qualified to serve on the Board based on
the then-current retirement age policy contained in the
Company's by-laws or, if not in the by-laws, as adopted by the
Board.
(k) "Participant" means a person who has received one or more
Stock Options or the legal representative, heir or estate of
such person.
(l) "Plan" means the Non-Employee Directors' Deferred Compensation
Stock Option Plan.
(m) "Retainer/Fees" means the retainer and meeting attendance fees
payable to a Non-Employee Director for service as member of
the Board and/or member of any committee of the Board.
(n) "1934 Act" means the Securities Exchange Act of 1934, as
amended from time to time.
3. EFFECTIVE DATE. The Plan shall be effective on the date it is
approved by the shareholders of the Company and shall remain in effect
through the last Grant Date occurring in calendar year 1999, unless
the Plan is terminated by the Board earlier than such date subject to
the provisions of Section 11. If shareholder approval is not obtained
by June 30, 1995, the Plan shall be nullified and all elections to
receive Stock Options shall be rescinded and all Non-Employee
Directors shall receive cash equal to all Retainer/Fees that had been
the subject of an election hereunder. Upon termination of the Plan,
the applicable terms of the Plan shall continue to apply to all Stock
Options which are outstanding on the date the Plan is terminated and
to any Stock Options which are granted subsequent to such date
pursuant to Section 11.
4. PLAN OPERATION. The Plan is intended to meet the requirements of a
"formula" plan" for purposes of Rule 16b-3 under the 1934 Act as
currently applicable to the Plan and accordingly is intended to be
self-governing. To this end the Plan is expected to require no
discretionary action by any administrative body except as contemplated
by Section 5(b). However, should any questions of interpretation
arise, they shall be resolved by the Human Resources Committee of the
Board or such other Committee as the Board may from time to time
designate. The Plan shall be interpreted to comply with Rule 16b-3
under the 1934 Act, as then applicable to the Company's employee
benefit plans, and any action under this Plan that would be
inconsistent with the requirements of Rule 16b-3 as then applicable
shall be null and void.
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5. COMMON STOCK AVAILABLE FOR STOCK OPTIONS.
(a) A maximum of 225,000 shares of Common Stock may be issued upon
the exercise of Stock Options granted under the Plan. Shares
of Common Stock shall not be deemed issued until the
applicable Stock Option has been exercised and, accordingly,
any shares of Common Stock represented by Stock Options which
expire unexercised or which are cancelled shall remain
available for issuance under the Plan.
(b) The Board, as it deems appropriate to preserve Particpant's
benefits and to meet the intent of the Plan, may make
equitable adjustments to the number of shares available under
the Plan and covered by outstanding Stock Options and to the
exercise prices of outstanding Stock Options in the event of
any change in capitalization or similar action affecting
Common Stock. Such actions may include, but are not limited
to, any stock dividend, stock split, combination or exchange
of shares, merger, consolidation, recapitalization, spin-off
or other distribution (other than normal cash dividends) of
Company assets to shareholders, or any other change affecting
the Common Stock.
6. ELECTIONS TO RECEIVE STOCK OPTIONS. Each Non-Employee may make a
one-time irrevocable election to receive Stock Options under the Plan,
provided that such election conforms to the following:
(a) Each Non-Employee Director serving as of January 1, 1995, must
make his or her election under the Plan no later than January
31, 1995. Such election, if any, shall be applicable to
Retainer/Fees otherwise payable to such Non-Employee Director
for service from February 1, 1995 through December 31, 1999,
subject to the requirements of Section 9.
(b) Each Non-Employee Director who is newly appointed or elected
to the Board after January 1, 1995, must make his or her
election, if any, under the Plan no later than 30 days
following the commencement of such person's Board service.
Such election, if any, shall be applicable to Retainer/Fees
earned by such Non-Employee Director from the date of such
election through December 31, 1999, subject to the
requirements of Section 9. The above notwithstanding, no
election under the Plan shall be permitted after June 30,
1999.
(c) In making an irrevocable election to receive Retainer/Fees in
the form of Stock Options, the Non-Employee Director must
designate that the election is for all or a specified portion
of the Retainer/Fees payable to him or her through December
31, 1999.
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7. EFFECTIVE GRANT DATES.
(a) The Grant Dates for Stock Options granted pursuant to an
election covered by Section 6(a) made by a Non-Employee
Director serving on the Board as of January 1, 1995 shall be
June 30 and December 31 for each of the calendar years such
election is in effect.
(b) The Grant Dates for Stock Options granted pursuant to an
election covered by Section 6(b) made by a Non-Employee
Director elected or appointed to the Board after January 1,
1995, shall be:
(i) For the initial Stock Option granted, the earliest
calendar date specified by Section 7(a) to occur
after such election, or, if then required by Rule
16b-3 under the 1934 Act as then applicable to the
Plan, the last day of the second full calendar
quarter of Board service after an election pursuant
to Section 6 has been made.
(ii) For all Stock Options granted subsequent to the
initial Stock Option, each subsequent June 30 and
December 31 for each of the calendar years such
election is in effect.
8. STOCK OPTION GRANTS. Stock Options granted under the Plan shall have
the following terms and conditions:
(a) Each Stock Option shall have a per share exercise price equal
to 85% of the Fair Market Value on the Grant Date.
(b) Each Stock Option shall cover the number of shares determined
by the following formula:
Amount of Retainer/Fees Earned
------------------------------ = Number of Common Shares
Fair Market Value - 85% x Fair Market Value
If the number of Common Shares resulting from this calculation
is not a whole number, the amount will be rounded up to the
next whole number. The "Amount of Retainer/Fees Earned" for
purposes of this calculation shall be such amount as was
payable to the Participant since the prior applicable Grant
Date or since February 1, 1995, in the case of an election
pursuant to Section 6(a), or the date of the election in the
case of an election pursuant to Section 6(b).
(c) Each Stock Option shall expire on the twentieth anniversary of
its Grant Date, subject to earlier or later expiration in
accordance with Section 9.
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(d) Each Stock Option shall be immediately exercisable upon grant,
except, however, that the Board may postpone the exercise of a
Stock Option during such period of time that is deemed
reasonably necessary to prevent any acts or omissions that the
Board reasonably believes could result in the violation of any
state or federal law.
9. TERMINATION OF BOARD SERVICE.
(a) If a Non-Employee Director terminates Board service for any
reason (or becomes an employee of the Company) prior to a
Grant Date upon which he or she would otherwise receive a
Stock Option under the Plan, no future Stock Options shall be
granted to him or her and any Retainer/Fees that have been
earned, but which were to be paid in the form of a Stock
Option will be paid in cash instead.
(b) If a Participant terminates Board service with less than 120
full months of aggregate Board service or prior to Normal or
Early Retirement for any reason other than death or
Disability, all outstanding Stock Options held by such
Participant shall expire on the first anniversary of such
person's termination of Board service.
(c) If a Participant terminates Board service due to death,
Disability or because of Normal or Early Retirement, each
outstanding Stock Option held by such Participant shall
terminate at the earlier of the fifth anniversary of such
Participant's termination of Board service or the end of the
term of the Stock Option.
(d) The above notwithstanding, any Stock Option held by a
Participant at the time of the Participant's death shall
expire on the later of the date provided for by Section 9(b)
or 9(c), or the first anniversary of the Participant's death.
10. EXERCISE PAYMENT. A Stock Option, or portion thereof, may be
exercised by written notice of the exercise delivered to the Human
Resources Committee of the Board, or its designee, accompanied by
payment of the exercise price. Such payment may be made by cash,
personal check or Common Stock already owned by the Participant,
valued at the Fair Market Value on the date of exercise, or a
combination of such payment methods. As soon as practicable after
notice of exercise and receipt of full payment for shares of Common
Stock being acquired, the Company shall deliver a certificate to the
Participant representing the Common Stock purchased through the Stock
Option.
11. TERMINATION, SUSPENSION AND AMENDMENT OF THE PLAN. The Board may at
any time terminate, suspend or amend the Plan, except that the Plan
may not be amended in any manner which knowingly would: (a) cause the
Plan not to comply with Rule 16b-3 under the 1934 Act as then
applicable to the Company's employee benefit
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plans; (b) cause Participants not to be deemed "disinterested persons"
for purposes of Rule 16b-3 under the 1934 Act as then applicable to
the Company's employee benefits plans; or (c) adversely affect a
Participant's rights under the Plan, without the consent of the
Participant. If the Plan is terminated or suspended prior to December
31, 1999, any Retainer/Fees which have been earned but not paid as of
the effective date of termination of the Plan and which are the
subject of an election pursuant to Section 6, will be delivered in the
form of Stock Options on the appropriate Grant Date, notwithstanding
that such date is subsequent to the date the Plan has otherwise been
terminated or suspended.
12. GENERAL PROVISIONS.
(a) Stock Options shall not be transferable or assignable other
than by (a) will or the laws of descent and distribution, or
(b) to the extent permitted by Rule 16b-3 under the 1934 Act
as then applicable to the Company's employee benefits plans,
by gift or other transfer to either (i) any trust or estate in
which the original award recipient or such person's spouse or
other immediate relative has a substantial beneficial interest
or (ii) a spouse or other immediate relative, provided that
such a transfer will continue to require such Stock Options to
be disclosed pursuant to Item 403 of Regulation S-K under the
Securities Act of 1933, as amended from time to time.
(b) Stock Options shall be evidenced by written agreements or such
other appropriate documentation prescribed by the Human
Resources Committee of the Board or its designee.
(c) Neither the Plan nor the granting of Stock Options nor any
other action taken pursuant to the Plan, shall constitute or
be evidence of any agreement or understanding, express or
implied, that the Company shall retain the services of a
Participant for any period of time or at any particular rate
of compensation as a member of the Board. Nothing in the Plan
shall in any way limit or affect the right of the Board or the
shareholders of the Company to remove any Participant from the
Board or otherwise terminate his or her service as a member of
the Board.
(d) The validity, construction and effect of the plan and any such
actions taken under or relating to the Plan shall be
determined in accordance with the laws of the State of
Tennessee and applicable federal law.
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