RELEASE: Immediate
DATE: October 20, 1998
CONTACT: Xxxxxx Xxxxxx
(000) 000-0000
or
Xxx Xxxxxx, APR
(000) 000-0000
MEMPHIS, TENN. -- In contemplation of the expiration of its present
shareholder rights plan in 1999, the Board of Directors of First Tennessee
National Corp. today adopted a Shareholder Protection Rights Agreement and
declared a dividend of one Right on each outstanding share of First Tennessee
Common Stock. The dividend will be paid on Nov. 12, 1998, to shareholders of
record on Nov. 2, 1998.
The Rights Agreement is virtually identical to the present plan and
will only take effect upon the expiration or redemption of the presently
outstanding rights. Like the present plan, it was not adopted in response to any
specific effort to acquire control of First Tennessee. Rather, it was adopted to
deter abusive takeover tactics that can be used to deprive shareholders of the
full value of their investment.
Until it is announced that a person or group has acquired 10% or more
of First Tennessee's Common Stock (an "Acquiring Person") or commences a tender
offer that will result in such a person or group owning 10% or more of First
Tennessee's Common Stock, the Rights will be evidenced by the Common Stock
certificates, will automatically trade with the Common Stock and will not be
exercisable. Thereafter, separate Rights certificates will be distributed and
each Right will entitle its holder to purchase Participating Preferred Stock
having economic and voting terms similar to those of one share of Common Stock
for an exercise price of $150.
Upon announcement that any person or group has become an Acquiring
Person, then 10 days thereafter (or such earlier or later date as the Board may
decide) (the "Flip-in Date") each Right (other than Rights beneficially owned by
any Acquiring Person or transferees thereof, which Rights become void) will
entitle its holder to purchase, for the exercise price, a number of shares of
First Tennessee Common Stock having a market value of twice the exercise price.
Also, if after an Acquiring Person controls First Tennessee's Board of
Directors, First Tennessee is involved in a merger or sells more than 50% of its
assets or earning power or is involved with an Acquiring Person in certain
"self-dealing" transactions (or has entered into an agreement to do any of the
foregoing) and, in the case of a merger, the Acquiring Person will receive
different treatment than all other stockholders, each Right will entitle its
holder to purchase, for
the exercise price, a number of shares of common stock of the Acquiring Person
having a market value of twice the exercise price. If any person or group
acquires between 10 percent and 50 percent of First Tennessee's Common Stock,
First Tennessee's Board of Directors may, at its option, exchange one share of
First Tennessee Common Stock for each Right.
The Rights may generally be redeemed by the Board of Directors for
$0.001 per Right prior to the Flip-in Date.
Xxxxx Xxxx, chairman and CEO of First Tennessee, said "The Rights
Agreement is not intended to and will not prevent a takeover of First Tennessee
at a full and fair price. However, the Rights may cause substantial dilution to
a person or group that acquires 10 percent or more of the Common Stock unless
the Rights are first redeemed by the Board of Directors of the company.
Nevertheless, the Rights should not interfere with a transaction that is in the
best interests of the company and its stockholders because the Rights can be
redeemed prior to a triggering event.
"The Rights Agreement does not in any way alter First Tennessee's
long-term strategic course, interfere with its business plans or weaken its
financial strength. The issuance of the Rights has no dilutive effect, will not
affect reported earnings per share, is not taxable to First Tennessee or its
shareholders and will not change the way in which First Tennessee shares are
traded."
A letter to shareholders regarding the Rights Agreement and a Summary
of certain terms of the Rights Agreement will be mailed to shareholders.
First Tennessee, headquartered in Memphis, Tenn., is a nationwide,
diversified financial services institution and is one of the 50 largest bank
holding companies in the United States in asset size and market capitalization.
First Tennessee reported total assets of $17.2 billion and shareholders' equity
of $1.1 billion at Sept. 30, 1998. The corporation's common stock is trade over
the counter on the Nasdaq Stock Market's national market system under the symbol
FTEN. It is listed in the financial section of most newspapers as FstTN Ntl and
is included in the Standard & Poor's MidCap 400 index. More information is
available at First Tennessee's website at xxx.xxx.xxx.
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