MEMPHIS, Tenn.--Oct. 20, 1998--In contemplation of the expiration of its present shareholder rights plan in 1999, the Board of Directors of First Tennessee National Corp. (NASDAQ/NMS:FTEN) 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 percent 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 percent 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 en
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 en
The Rights may generally be redeemed by the Board of Directors for $0.001 per Right prior to the Flip-in Date.
Ralph Horn, 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 traded 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 www.ftb.com.