424B5
FILING INFORMATION
CALCULATION
OF THE REGISTRATION FEE
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Title of Each Class of
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Maximum Aggregate
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Amount of
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Securities Offered
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Offering Price
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Registration Fee(1)
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Common Stock, par value $0.625 per share
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$690,000,000
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$27,117
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(1) |
Calculated in accordance with Rule 457(r) of the
Securities Act of 1933.
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Filed Pursuant to Rule 424(b)(5)
Registration No. 333-150448
PROSPECTUS SUPPLEMENT
(To Prospectus dated April 25, 2008)
60,000,000 Shares
Common Stock
We are offering 60,000,000 shares of our common stock to be sold
in this offering. We will receive all of the net proceeds from
the sale of the shares of common stock.
Our common stock is listed on the New York Stock Exchange under
the symbol FHN. The last reported sale price of our
common stock on April 25, 2008 was $10.75 per share.
The common stock is not a savings account, deposit or other
obligation of any of our bank or non-bank subsidiaries and is
not insured by the FDIC or any other governmental agency.
Investing in our common stock involves a high degree of risk.
Before buying any shares, you should read the discussion of
risks of investing in our common stock in Risk
factors beginning on
page S-4
of this prospectus supplement.
None of the Securities and Exchange Commission, any state
securities commission or the Commissioner of the Department of
Commerce & Insurance of the State of Tennessee has
approved or disapproved of these securities or determined if
this prospectus supplement or the accompanying prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
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Per share
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Total
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Public offering price
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$
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10
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.000
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$
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600,000,000
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Underwriting discounts and commissions
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$
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0
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.425
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$
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25,500,000
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Proceeds, before expenses, to us
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$
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9
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.575
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$
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574,500,000
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The underwriters may also purchase up to an additional 9,000,000
shares of common stock from us at the public offering price,
less underwriting discounts and commissions payable by us,
within 30 days from the date of this prospectus supplement.
If the underwriters exercise the option in full, the total
underwriting discounts and commissions will be $29,325,000, and
the total proceeds, before expenses, to us will be $660,675,000.
The underwriters are offering the shares of our common stock as
set forth under Underwriting. Delivery of the shares
of common stock will be made on or about May 2, 2008.
Joint Book-Running Managers
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Goldman,
Sachs & Co. |
UBS Investment Bank |
Senior Co-Manager
FTN Midwest
Securities
The date of this prospectus supplement is April 28,
2008.
Unless otherwise indicated, you may rely on the information
contained in this prospectus supplement, the accompanying
prospectus and the documents incorporated by reference. Neither
we nor any underwriter has authorized anyone to provide
information different from that contained in this prospectus
supplement, the accompanying prospectus and the documents
incorporated by reference. When you make a decision about
whether to invest in the common stock, you should not rely upon
any information other than the information in this prospectus
supplement, the accompanying prospectus and the documents
incorporated by reference. Neither the delivery of this
prospectus supplement nor sale of the common stock means that
information contained in this prospectus supplement, the
accompanying prospectus or the documents incorporated by
reference is correct after their respective dates. This
prospectus supplement and the accompanying prospectus are not an
offer to sell or solicitation of an offer to buy shares of the
common stock in any circumstances under which the offer or
solicitation is unlawful.
TABLE OF
CONTENTS
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Page
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Prospectus Supplement
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ii
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ii
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S-1
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S-3
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S-4
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S-7
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S-8
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S-11
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S-11
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S-12
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S-15
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S-16
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S-19
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S-22
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S-22
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Prospectus
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About This Prospectus
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2
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Where You Can Find More Information
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2
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Use of Proceeds
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3
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Plan of Distribution
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3
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Validity of Securities
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Experts
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i
About
this prospectus supplement
This document consists of two parts. The first part is the
prospectus supplement, which describes the specific terms of
this offering. The second part is the prospectus, which contains
more general information. You should read both this prospectus
supplement and the accompanying prospectus, together with
additional information described under the heading Where
You Can Find More Information in the accompanying
prospectus.
When acquiring any common stock discussed in this prospectus
supplement, you should rely only on the information provided in
this prospectus supplement and the accompanying prospectus,
including the information incorporated by reference. Neither
First Horizon nor any underwriters or agents have authorized
anyone to provide you with different information. We are not
offering the common stock in any state where the offer is
prohibited. You should not assume that the information in this
prospectus supplement or any document incorporated by reference
is accurate or complete at any date other than the date listed
on the cover page of these documents.
Unless otherwise mentioned or unless the context requires
otherwise, all references in this prospectus supplement to
First Horizon, we, us,
our, or similar references mean First Horizon
National Corporation and includes its subsidiaries and
affiliates.
Forward-looking
statements
This prospectus supplement, the accompany prospectus and the
documents incorporated herein by reference contain certain
forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 with respect to
our beliefs, plans, goals, expectations, and estimates.
Forward-looking statements are statements that are not a
representation of historical information but rather are related
to future operations, strategies, financial results or other
developments. The words believe, expect,
anticipate, intend,
estimate, should, is likely,
will, going forward, and other
expressions that indicate future events and trends identify
forward-looking statements.
Forward-looking statements are necessarily based upon estimates
and assumptions that are inherently subject to significant
business, operational, economic and competitive uncertainties
and contingencies, many of which are beyond First Horizons
control, and many of which are subject to change. Examples of
uncertainties and contingencies include, among other important
factors: general and local economic and business conditions;
recessions and other economic downturns; expectations of and
actual timing and amount of interest rate movements, including
the slope of the yield curve, which can have a significant
impact on a financial services institution; market and monetary
fluctuations, including fluctuations in mortgage markets and
housing prices; inflation or deflation; customer and investor
responses to these conditions; the financial condition of
borrowers and other counterparties; market volatility;
competition within and outside the financial services industry;
geopolitical developments including possible terrorist activity;
natural disasters; effectiveness of our hedging practices;
technology; demand for our product offerings; new products and
services in the industries in which we operate; and critical
accounting estimates. Other factors are those inherent in
originating, selling, and servicing loans including prepayment
risks, pricing concessions, fluctuation in U.S. housing
prices, fluctuation of collateral values, and changes in
customer profiles. Additionally, the actions of the SEC, the
Financial Accounting Standards Board, the Office of the
Comptroller of the Currency (OCC), the Board of
Governors of the Federal Reserve System (Federal Reserve),
Financial Industry Regulatory Authority, and other regulators;
regulatory, administrative, and judicial proceedings and changes
in laws and regulations applicable to us; and our success in
executing our business plans and strategies and managing the
risks involved in the foregoing, could cause actual results to
differ, perhaps materially, from those contemplated by the
forward-looking statements.
ii
We assume no obligation to update any forward-looking statements
that are made in this prospectus supplement, the accompanying
prospectus or incorporated by reference herein. Actual results
could differ, possibly materially, because of one or more
factors described under Risk factors in this
prospectus supplement and under Item 1A of our Annual
Report on
Form 10-K
for the year ended December 31, 2007, and discussed in the
documents incorporated by reference. You should carefully
consider the factors described under Risk factors in
this prospectus supplement and under Item 1A of our Annual
Report on
Form 10-K
for the year ended December 31, 2007, among others, in
evaluating forward-looking statements and assessing First
Horizon and its prospects.
iii
SUMMARY
This summary highlights information contained elsewhere, or
incorporated by reference, in this prospectus supplement. As a
result, it does not contain all of the information that may be
important to you or that you should consider before investing in
the common stock. You should read this entire prospectus
supplement and the accompanying prospectus, including the
Risk factors section, and in the documents
incorporated by reference, which are described under Where
You Can Find More Information.
First
Horizon
First Horizon National Corporation, a Tennessee corporation,
incorporated in 1968, is registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended (the
BHCA), is a financial holding company, and is
supervised and regulated by the Federal Reserve. Through its
principal, directly-owned subsidiary, First Tennessee Bank
National Association (the Bank), and its other
banking-related subsidiaries, First Horizon provides diversified
financial services through four business segments. The segments
reflect the common activities and operations of aggregated
business segments across the various delivery channels: Regional
Banking, Capital Markets, National Specialty Lending and
Mortgage Banking. In addition, the Corporate segment provides
essential support within First Horizon. During 2007,
approximately 48% of revenues were provided by fee income and
approximately 52% of revenues were provided by net interest
income.
First Horizons subsidiaries have over 500 business
locations in over 40 U.S. states and Hong Kong, excluding
off-premises ATMs. Most of those locations are bank financial
centers, mortgage offices, national construction offices, and
FTN Financial offices.
Based on its consolidated assets as of December 31, 2007,
First Horizon was the largest bank holding company headquartered
in Tennessee and ranked 25th nationally. As of
December 31, 2007 and March 31, 2008, First Horizon,
together with its subsidiaries, had total assets of
approximately $37.0 billion and $37.3 billion,
respectively, total liabilities of approximately
$34.6 billion and $34.9 billion, respectively, and
total shareholders equity of approximately
$2.1 billion and $2.1 billion, respectively. First
Horizons common stock is listed on the New York Stock
Exchange under the symbol FHN.
The Bank, a national banking association with principal offices
in Memphis, Tennessee, received its charter in 1864. As a
national banking association, the Bank is subject to regulation
and examination by the OCC, its primary regulator. In addition,
the deposits of the Bank are insured up to allowable limits by,
and the Bank is subject to regulation by, the Federal Deposit
Insurance Corporation (FDIC). FTN Financial Capital
Markets, a division of the Bank, is ranked as one of the leading
underwriters of U.S. agency debt.
At December 31, 2007 and March 31, 2008, the Bank had
$36.7 billion and $37.1 billion, respectively, in
total assets, $17.2 billion and $16.3 billion,
respectively, in total deposits and $21.8 billion and
$21.4 billion, respectively, in total net loans. Among
Tennessee-headquartered banks, the Bank ranked first in
Tennessee deposit market share at June 30, 2007. As of and
for the quarter ended March 31, 2008, and as of and for the
fiscal year ended December 31, 2007, the Bank accounted for
approximately 99% of First Horizons consolidated total
assets and all of its revenue, respectively.
The principal business offices of First Horizon are located at
165 Madison Avenue, Memphis, Tennessee 38103 and its telephone
number is
901-523-4444.
First Horizons internet address is www.fhnc.com.
Information contained on or accessible from our web site is not
incorporated into this prospectus supplement or the accompanying
prospectus and does not constitute a part of this prospectus
supplement or the accompanying prospectus.
S-1
Risk
factors
An investment in the common stock involves certain risks. You
should carefully consider the risks described under Risk
factors beginning on
page S-4
of this prospectus supplement, the Risk factors
included in Item 1A of our Annual Report on
Form 10-K
for the year ended December 31, 2007, as well as other
information included or incorporated by reference into this
prospectus supplement and the accompanying prospectus before
making an investment decision.
Recent
developments
We released our first quarter earnings on April 17, 2008.
For a more detailed discussion of our financial performance and
result of operations for the first quarter, please refer to our
Current Report on
Form 8-K
filed April 28, 2008.
In light of the decline in First Horizons earnings in
recent periods and the difficult market conditions that First
Horizon faces, the board of directors has determined to cease
paying cash dividends commencing with the next quarterly
dividend period. Instead, the board intends to pay a stock
dividend with a value equal to the previous $0.20 per share cash
dividend rate. Please see Price range of common stock and
dividends for more information on our new dividend policy.
An element of our long-term business strategy is to consider
acquisitions and divestitures that would enhance long-term
shareholder value. In 2007 and continuing into 2008, First
Horizon has been examining its mortgage business and is
presently in the process of evaluating strategic alternatives
for this business. As a part of this evaluation, First Horizon
is actively negotiating for a sale of certain parts of its
mortgage business, but there can be no certainty that such a
transaction will occur or of the final terms of such sale.
Periodically, First Horizon adapts its segments to reflect the
manner in which its chief operating decision makers analyze
First Horizons businesses. Effective January 1, 2008,
First Horizon changed its segments to reflect the segregation of
its national specialty lending businesses and to provide clarity
into its core banking business.
For a more detailed discussion of these recent developments,
please refer to our Current Report on
Form 8-K,
filed April 28, 2008. See Where You Can Find More
Information in the accompanying prospectus for information
on how you can obtain this
Form 8-K.
S-2
SUMMARY
OF THE OFFERING
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Common stock we are offering |
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60,000,000 shares |
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Option to purchase additional shares |
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9,000,000 shares |
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Common stock outstanding after this offering |
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186,766,965 shares(1)(2) |
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Use of proceeds after expenses |
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We expect to receive net proceeds from this offering of
approximately $573,400,000 million (or approximately
$659,475,000 million if the underwriters exercise their
option to purchase additional shares in full). We intend to use
the net proceeds from this offering for general corporate
purposes. |
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New York Stock Exchange, or the NYSE, Listing |
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FHN |
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Dividend Policy |
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Following the cash dividend to be paid on July 1, 2008, the
board of directors of First Horizon has determined that it
intends to pay future dividends in additional shares of common
stock for the foreseeable future. The current anticipated
quarterly dividend rate is shares of common stock with a value
equal to $0.20 per share. |
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(1) |
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The number of shares of our common stock outstanding immediately
after the closing of this offering is based on
126,766,965 shares of our common stock outstanding as of
April 24, 2008. |
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(2) |
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Unless otherwise indicated, the number of shares of our common
stock presented in this prospectus supplement excludes shares
issuable pursuant to the exercise of the underwriters
option to purchase additional shares and approximately
17.9 million shares of our common stock issuable upon the
exercise of stock options outstanding and shares as to which
receipt has been deferred as of April 24, 2008 under our
equity compensation plans. |
S-3
RISK
FACTORS
An investment in the common stock involves certain risks. You
should carefully consider the risks described below and the
Risk factors included in Item 1A of our Annual
Report on
Form 10-K
for the year ended December 31, 2007, as well as the other
information included or incorporated by reference into the
accompanying prospectus before making an investment decision.
Risks
Relating to First Horizon
Under the caption Risk Factors in Item 1A of
our Annual Report on
Form 10-K
for the year ended December 31, 2007, we have described a
number of important factors that could materially impact our
business, future results of operations and future cash flow.
They include competition risks, disposition risks, credit risks,
insurance risks, risks from economic downturns and changes,
hedge risks, reputation risks, operational risks, financing,
funding, and liquidity risks, interest rate and yield curve
risks, securities inventories and market risks, venture capital
risks, regulatory and legal risks, holding company dividends
risks, accounting estimate risks, risks of expense control,
geographic risks, non-US operations risks and risks associated
with recent downturns and disruptions in the housing, credit and
other markets. Investors should review and carefully consider
these factors, as well as the factors described below, before
deciding to invest in our common stock.
In particular, the third paragraph of the discussion concerning
Interest Rate and Yield Curve Risks in
Item 1A of our Annual Report on
Form 10-K
for the year ended December 31, 2007 is amended and
restated as follows:
Our mortgage lending business is affected by changes in interest
rates in another manner. During the period of loan origination
(when loans are in the pipeline) and prior to the
loans sale in the secondary market (when loans are in the
warehouse), we are exposed to the risk of interest
rate changes for those pipeline loans which we have agreed to
lock in the customers mortgage rate and for all warehouse
loans, whether fixed-rate or adjustable-rate. We manage that
rate-change risk through hedging activities and other methods;
however, it is not possible to eliminate all such risks, and a
rate change is just one of the risks that could impact the
demand for, and thus the value of, our pipeline and warehouse
loans. Additional information concerning those risks and our
management of them appears under the caption Pipeline and
Warehouse beginning on page 46 of the
Managements Discussion and Analysis of Results of
Operations and Financial Condition section of our 2007
Annual Report to Shareholders, which is incorporated by
reference into our Annual Report on
Form 10-K
for 2007.
Weakness
in the economy and in the real estate markets in which we
operate has adversely affected us and may continue to adversely
affect us.
In recent periods our operating results have been adversely
affected by weakness in the economy and in real estate markets.
In particular, we have experienced significant deterioration in
our portfolios of national construction and home equity loans
and regional commercial loans. If the strength of the U.S.
economy in general and the strength of the local economies in
which we conduct operations continues to decline, this could
result in, among other things, a further deterioration in credit
quality or a reduced demand for credit, including a resultant
adverse effect on our loan portfolio and allowance for loan
losses. A portion of our residential mortgage and commercial
real estate loan portfolios are comprised of loans to borrowers
in certain geographic markets that have been more adversely
affected by declines in real estate values and home sale
volumes, job losses and declines in new home building, such as
certain markets in California, Florida, Northern Virginia/D.C.
and Nevada. These factors contributed to our increasing
provisions for loan losses in the fourth quarter of 2007 and
first quarter of 2008 and the potential for future loan losses
and loss provisions for the remainder of 2008, which may result
in loan loss provisions in excess of charge-offs, higher
delinquencies and/or greater charge-offs in future periods,
which may adversely affect our financial condition and results
of operations. In addition, further deterioration of the U.S.
economy may adversely impact our traditional banking business.
S-4
The
allowance for loan losses may prove inadequate or be negatively
affected by credit risk exposures.
Our banking business depends on the creditworthiness of our
borrowing customers. We regularly review the allowance for loan
losses for adequacy considering economic conditions and trends,
collateral values and credit quality indicators, including past
charge-off experience and levels of past due loans and
nonperforming assets as well as changes in housing price
appreciation and depreciation. Determining the appropriateness
of the allowance is complex and requires judgment by management
about the effect of matters that are inherently uncertain. If
the credit quality of our customer base materially weakens, if
the risk profile of a market, industry or group of customers
changes materially, or if the allowance for loan losses is not
adequate, our financial condition or results of operations could
be adversely affected.
Potential
regulatory and legislative actions that may adversely affect our
mortgage business.
Legislative and regulatory initiatives by federal, state or
local legislative bodies or administrative agencies, if enacted
or adopted, could delay foreclosure, provide new defenses to
foreclosure or otherwise impair our ability to foreclose on a
defaulted mortgage loan, adversely affect our rights if a
borrower declares bankruptcy, or otherwise adversely affect our
rights with respect to borrowers who are in default or who
qualify for such initiatives. The outcome of these initiatives
is uncertain.
Risks
Relating to the Common Stock
New
dividend policy; dividends to be paid in common
stock.
The board of directors of First Horizon has determined that,
after the dividend payable on July 1, 2008, it will no
longer pay cash dividends but instead intends to pay dividends
in shares of common stock for the foreseeable future. The
current anticipated quarterly dividend rate is shares of common
stock with a value equal to $.20 per share. See Price
range of common stock and dividends for more information
on our new dividend policy. This policy will result in
additional dilution to shareholders. Shares of common stock
received as dividends by non-affiliate shareholders will be
freely transferable, and sales of shares of common stock
received by shareholders may depress the price of our common
stock.
We may
need to raise additional capital, which could have a dilutive
effect on existing shareholders of our common
stock.
We and our banking subsidiary must maintain certain capital
ratios in order to remain a well-capitalized
institution for regulatory purposes and to maintain capital
levels commensurate with the risk in our business. If we or our
banking subsidiary are unable to meet these capital ratios, we
or our banking subsidiary could be forced to raise additional
capital through the issuance of additional shares of common
stock, preferred stock or other securities. The terms and
pricing of these securities could be dilutive to existing
shareholders and cause the price of our outstanding common stock
to decline.
Our board of directors may issue preferred stock without any
action on the part of our existing shareholders and set the
terms of any such classes or series of preferred stock that may
be issued, including voting rights, dividend rights, and
preferences over our common stock with respect to dividends or
upon our liquidation, dissolution, or winding up and other
terms. If we issue preferred stock in the future that has a
preference over our common stock with respect to the payment of
dividends or upon our liquidation, dissolution, or winding up,
or if we issue preferred stock with voting rights that dilute
the voting power of our common stock, the rights of holders of
our common stock
and/or the
market price of our common stock could be adversely affected.
The issuance of the common stock in this offering will increase
our capital levels significantly above the general requirements
for a well-capitalized institution established by the federal
bank regulatory agencies. We believe that, in view of the risks
set forth or referenced in this prospectus supplement, a margin
above such requirements is prudent and expected by the
regulators. The following ratios are based on our March 31,
2008 financial statements to include the proceeds of the common
stock from this offering. They reflect proceeds of
$600 million of the offering and do not reflect offering
expenses.
S-5
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Regulatory
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Requirements for
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Capital Ratio
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Well-Capitalized
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First Horizon
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Tier 1 Risk-Based Capital
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6
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10.1
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Total Risk-Based Capital
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10
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14.8
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Leverage
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5
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8.2
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The
price of our common stock may fluctuate significantly, and this
may make it difficult for you to resell shares of common stock
owned by you at times or at prices you find
attractive.
The price of our common stock on the NYSE is constantly changing
and we expect that it will continue to fluctuate. Our stock
price may fluctuate as a result of a variety of factors, many of
which are beyond our control. In addition to the risks described
above and in the incorporated documents, these factors include:
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quarterly variations in our operating results or the quality of
our assets;
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operating results that vary from the expectations of management,
securities analysts and investors;
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our dividend policy;
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the credit, mortgage and housing markets;
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the operating and securities price performance of other
companies that investors believe are comparable to us;
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the market for similar securities;
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future sales of our equity or equity-related securities; and
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changes in global financial markets and global economies and
general market conditions, such as interest or foreign exchange
rates, stock, commodity or real estate valuations or volatility.
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Volatility in the market price of our common stock may make it
more difficult for you to sell the common stock you receive in
this offering.
We are
a holding company and depend on our subsidiaries for dividends,
distributions and other payments.
We are a separate and distinct legal entity from our banking and
non-banking subsidiaries and depend on dividends, distributions
and other payments from our banking and non-banking subsidiaries
to fund any cash dividend payments on our common stock and to
fund payments on our other obligations. Many of our subsidiaries
are subject to laws that restrict, or authorize regulatory
bodies to restrict or reduce, the flow of funds from those
subsidiaries to us. Restrictions of that kind could impede
access to funds we need to make dividend payments on any future
preferred stock, any future cash payments on our common stock or
payments on our other obligations. For example, because the Bank
experienced a loss for 2007, regulatory constraints will prevent
the Bank from declaring and paying dividends to us in 2008
unless and until the Banks earnings are greater than
$74.0 million plus preferred dividends. Furthermore, our
right to participate in a distribution of assets upon a
subsidiarys liquidation or reorganization is subject to
the prior claims of the subsidiarys creditors.
S-6
REGULATORY
CONSIDERATIONS
As a bank holding company under the BHCA, the Federal Reserve
regulates, supervises and examines First Horizon. For a
discussion of the material elements of the regulatory framework
applicable to bank holding companies and their subsidiaries and
specific information relevant to First Horizon, please refer to
the section BusinessSupervision and Regulation
in First Horizons Annual Report on
Form 10-K
for the fiscal year ended December 31, 2007, and to any
subsequent reports we file with the SEC, which are incorporated
by reference in this prospectus supplement and the accompanying
prospectus. This regulatory framework is intended primarily for
the protection of depositors and the federal deposit insurance
funds and not for the protection of security holders.
Depository institutions, like the Bank, are also affected by
various federal laws, including those relating to consumer
protection and similar matters. In addition, certain activities
of First Horizon and its subsidiaries are subject to various
insurance laws and are regulated by the state insurance
departments of the states in which they operate. First Horizon
also has other financial services subsidiaries regulated,
supervised and examined by the SEC, as well as other relevant
state and federal regulatory agencies and self-regulatory
organizations. First Horizons non-bank subsidiaries may be
subject to other laws and regulations of the federal government
or the various states in which they are authorized to do
business.
S-7
DESCRIPTION
OF COMMON STOCK
The following information outlines some of the provisions in
First Horizons charter, bylaws and the Tennessee Business
Corporation Act (the TNBC Act). This information is
qualified in all respects by reference to the provisions of
First Horizons charter and bylaws, which are incorporated
by reference into the accompanying prospectus supplement by
reference to First Horizons Annual Report in
Form 10-K
for the year ended December 31, 2007 (see Where You
Can Find More Information in the accompanying prospectus).
In this part of this prospectus supplement all reference to
First Horizon, we, us or
similar references mean only First Horizon National Corporation,
the parent bank holding company, and do not include its
subsidiaries or affiliates.
Authorized
Common Stock
First Horizons authorized common stock consists of
400,000,000 shares of common stock, par value $0.625 per
share. As of April 24, 2008, 126,766,965 shares of
common stock were issued and outstanding and approximately
20.8 million shares were reserved for issuance under
various employee plans. First Horizons common stock is
listed on the New York Stock Exchange under the symbol
FHN.
General
Subject to the prior rights of any First Horizon preferred
shareholder then outstanding, common shareholders are entitled
to receive such dividends as First Horizons board of
directors may declare out of funds legally available for these
payments. In the event of liquidation, dissolution or winding up
of First Horizon, common shareholders are entitled to receive
First Horizons net assets remaining after paying all
liabilities and after paying all preferred shareholders the full
preferential amounts to which those holders are entitled. As of
the date of this prospectus supplement, 5,000,000 shares of
our preferred stock are authorized, none of which was issued or
outstanding.
Subject to the prior rights of any preferred shareholders,
common shareholders have all voting rights, with each share
being entitled to one vote on all matters requiring shareholder
action. There is no cumulative voting in the election of
directors and a plurality of the votes cast is required to elect
the nominees as directors, which means that the holders of a
majority of the outstanding common stock can elect all of the
directors then standing for election. Common shareholders have
no preemptive, subscription or conversion rights. All of the
outstanding shares of common stock are, and any common stock
issued and sold pursuant to this prospectus supplement will be,
fully paid and nonassessable.
Wells Fargo is the transfer agent and dividend disbursement
agent for the common stock.
Other
Provisions
First Horizons charter and bylaws contain various
provisions which may discourage or delay attempts to gain
control of First Horizon. First Horizons charter
provisions include:
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dividing the board of directors into three classes with only one
class up for reelection at annual meetings of shareholders;
however, shareholders at First Horizons 2008 annual
meeting of shareholders approved an amendment to the charter
that provides for the phased-in elimination of the
classification of the board beginning in 2009;
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empowering the board of directors to increase the size of the
board and fill any newly created directorships resulting from
such an increase;
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providing that only the board may fill board vacancies,
including those caused by an increase in the size of the board,
except for vacancies on the board resulting from a
directors removal (which shareholders may choose to fill);
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providing that shareholders may remove a director only for cause
and only by a majority vote of all outstanding voting
stock; and
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requiring the affirmative vote by holders of at least 80% of the
voting power of all outstanding voting stock to alter any of the
above provisions.
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First Horizons bylaws provisions include:
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authorizing only the board of directors or First Horizons
Chairman of the Board to call a special meeting of shareholders;
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requiring timely notice before a shareholder may nominate a
director or propose other business to be considered at
shareholders meetings; and
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requiring the affirmative vote by holders of at least 80% of the
voting power of all outstanding voting stock to alter any of the
above provisions.
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In addition, in certain instances, the ability of First
Horizons board to issue authorized but unissued shares of
common stock or preferred stock may have an anti-takeover effect.
Regulatory
Restrictions
The Change in Bank Control Act prohibits a person or group of
persons from acquiring control of a bank holding
company unless:
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the Federal Reserve has been given 60 days prior
written notice of the proposed acquisition, and
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within that time period, the Federal Reserve has not issued a
notice disapproving the proposed acquisition or extending the
period during which such a disapproval may be issued
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or unless the acquisition otherwise requires Federal Reserve
approval. An acquisition may be made before expiration of the
disapproval period if the Federal Reserve issues written notice
that it intends not to disapprove the action. The acquisition of
10% or more of a class of voting stock of a bank holding company
with publicly held securities, such as First Horizon, is
presumed to constitute the acquisition of control.
Any company would be required to obtain Federal
Reserve approval before acquiring control over First
Horizon. Control generally means:
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the ownership or control of 25% or more of a class of voting
securities,
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the ability to elect a majority of the directors, or
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the ability otherwise to exercise a controlling influence over
management and policies.
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In addition, if the acquiror is a bank holding company, this
approval is required before acquiring 5% of the outstanding
common stock.
The Tennessee Business Combination Act contains business
combination statutes that protect domestic corporations from
hostile takeovers, and from actions following such a takeover,
by prohibiting some transactions once an acquiror has gained a
significant holding in the corporation.
Existence of the above provisions could result in First Horizon
being less attractive to a potential acquirer, or result in
First Horizon shareholders receiving less for their shares of
common stock than otherwise might be available if there is a
takeover attempt.
Rights
Plan
Under First Horizons Shareholder Protection Rights
Agreement, between First Horizon and the Bank, as rights agent,
each outstanding share of common stock has a right attached to
it. This right remains attached unless a separation time occurs.
At separation time, common shareholders will receive separate
certificates for these rights. Each right entitles its owner to
purchase at separation time one one-hundredth of a share of a
participating preferred stock for $150, subject to adjustment in
certain circumstances. Such participating
S-9
preferred stock would have economic and voting terms similar to
those of one share of common stock. Separation time would
generally occur at the earlier of the following two dates:
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the tenth business day after any person or group commences a
tender or exchange offer that, if completed, would entitle that
person to 10% or more of the outstanding common stock; or
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the tenth business day after First Horizon publicly announces
that a person has acquired beneficial ownership of 10% or more
of the outstanding common stock.
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These rights will not trade separately from the shares of common
stock until the separation time occurs. The rights will expire
at the earliest of:
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the date on which First Horizons board of directors elects
to exchange all (but not less than all) the rights for common
stock shares,
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the close of business on December 31, 2009, or
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the date on which the rights are redeemed.
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Once First Horizon publicly announces that a person has acquired
10% of outstanding common stock, First Horizon can allow for
rights holders to buy our common stock for half of its market
value. For example, First Horizon would sell to each rights
holder common stock shares worth $300 for $150 in cash. At the
same time, any rights held by the 10% owner or any of its
affiliates, associates or transferees will be void. In addition,
if First Horizon is acquired in a merger or other business
combination after a person has become a 10% owner, the rights
held by shareholders would become exercisable to purchase the
acquiring companys common stock for half of its market
value.
The rights may be redeemed by First Horizon at a price of $0.001
per right by payments to holders before their exercise date. In
the alternative, First Horizons board of directors may
elect to exchange all of the then outstanding rights for shares
of common stock at an exchange ratio of one common stock share
for one right. Upon election of this exchange, a right will no
longer be exercisable and will only represent a right to receive
one share of common stock.
The rights will not prevent a takeover of First Horizon. The
rights, however, may cause substantial dilution to a person or
group that acquires 10% or more of common stock unless First
Horizons board first redeems the rights. Nevertheless, the
rights should not interfere with a transaction that is in First
Horizons and its shareholders best interests because
the rights can be terminated by the board before that
transaction is completed.
The rights have no voting rights and are not entitled to
dividends.
The complete terms of the rights are contained in the
Shareholder Protection Rights Agreement. This agreement is
incorporated by reference as an exhibit to the registration
statement of which this prospectus is a part, and the
description above is qualified entirely by that document.
S-10
PRICE
RANGE OF COMMON STOCK AND DIVIDENDS
Our common stock trades on the NYSE under the symbol
FHN. As of April 24, 2008, there were
126,766,965 shares of our common stock issued and
outstanding and there were approximately 7,350 shareholders
of record. The following table provides the high and low closing
sales price per share during the periods indicated, as reported
by the NYSE, and dividends paid per share of our common stock
during such periods. On April 17, 2008, we announced that
our board of directors has declared a cash dividend on our
common stock equal to $0.20 per share, payable on July 1,
2008 to holders of record as of June 13, 2008.
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Common
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Period-end
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stock
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Low sale price
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High sale price
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sale price
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dividends/shr
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2008:
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Second Quarter (through April 25, 2008)
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$
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10.75
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$
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14.95
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$
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10.75
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$
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0.20
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First Quarter
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14.01
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22.11
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14.01
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0.45
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2007:
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Fourth Quarter
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18.00
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28.22
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18.15
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0.45
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Third Quarter
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26.66
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39.19
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26.66
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0.45
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Second Quarter
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38.43
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41.20
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39.00
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0.45
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First Quarter
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39.93
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45.13
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41.53
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0.45
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2006:
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Fourth Quarter
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38.23
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41.90
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41.78
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0.45
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Third Quarter
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38.01
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42.76
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38.01
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0.45
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Second Quarter
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38.64
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42.42
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40.20
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0.45
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First Quarter
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37.20
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41.68
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41.65
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0.45
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In light of the decline in First Horizons earnings in
recent periods and the difficult market conditions that First
Horizon faces, our board of directors has determined to cease
paying cash dividends following the cash dividend payable on
July 1, 2008. Instead, the board intends to pay a dividend
in shares of common stock with a value equal to the previous
$0.20 per share cash dividend rate. The board currently intends
to reinstate a cash dividend at an appropriate and prudent level
once earnings and other conditions improve sufficiently,
consistent with regulatory and other constraints. The board
anticipates that this policy will remain in effect for the
foreseeable future.
This policy will result in additional dilution to shareholders.
Shares of common stock received as dividends by non-affiliate
shareholders will be freely transferable, and sales of shares of
common stock received by shareholders may depress the price of
our common stock.
The last reported sales price per share of our common stock on
April 25, 2008, as reported by the NYSE, was $10.75.
USE OF
PROCEEDS
We expect to receive net proceeds from this offering of
approximately $573,400,000 million (or approximately
$659,475,000 million if the underwriters exercise their
option to purchase additional shares in full), after expenses
and underwriting discounts. We intend to use the net proceeds
from this offering for general corporate purposes.
S-11
U.S.
FEDERAL INCOME AND ESTATE TAX CONSEQUENCES TO
NON-U.S.
HOLDERS
The following is a summary of the material U.S. federal
income and estate tax consequences of the purchase, ownership
and disposition of our common stock as of the date hereof.
Except where noted, this summary deals only with common stock
that is held as a capital asset by a
non-U.S. holder.
A
non-U.S. holder
means a person (other than a partnership) that is not for
U.S. federal income tax purposes any of the following:
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an individual citizen or resident of the United States;
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a corporation (or any other entity treated as a corporation for
U.S. federal income tax purposes) created or organized in
or under the laws of the United States, any state thereof or the
District of Columbia;
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an estate, the income of which is subject to U.S. federal
income taxation regardless of its source; or
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a trust if it (1) is subject to the primary supervision of
a court within the United States and one or more United States
persons have the authority to control all substantial decisions
of the trust or (2) has a valid election in effect under
applicable United States Treasury regulations to be treated as a
United States person.
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This summary is based upon provisions of the Internal Revenue
Code of 1986, as amended, or the Code, and
regulations, rulings and judicial decisions as of the date
hereof. Those authorities may be changed, perhaps retroactively,
so as to result in U.S. federal income and estate tax
consequences different from those summarized below. This summary
does not address all aspects of U.S. federal income and
estate taxes and does not deal with foreign, state, local or
other tax considerations that may be relevant to
non-U.S. holders
in light of their personal circumstances. In addition, it does
not represent a detailed description of the U.S. federal
income tax consequences applicable to you if you are subject to
special treatment under the U.S. federal income tax laws
(including if you are a U.S. expatriate, controlled
foreign corporation, passive foreign investment
company or a partnership or other pass-through entity for
U.S. federal income tax purposes). We cannot assure you
that a change in law will not alter significantly the tax
considerations that we describe in this summary.
If a partnership holds our common stock, the tax treatment of a
partner will generally depend upon the status of the partner and
the activities of the partnership. If you are a partner of a
partnership holding our common stock, you should consult your
tax advisors.
If you are considering the purchase of our common stock, you
should consult your own tax advisors concerning the particular
U.S. federal income and estate tax consequences to you of
the ownership of the common stock, as well as the consequences
to you arising under the laws of any other taxing jurisdiction.
Dividends
Dividends paid to a
non-U.S. holder
of our common stock generally will be subject to withholding of
U.S. federal income tax at a 30% rate or such lower rate as
may be specified by an applicable income tax treaty. However,
dividends that are effectively connected with the conduct of a
trade or business by the
non-U.S. holder
within the United States (and, if required by an applicable
income tax treaty, are attributable to a U.S. permanent
establishment) are not subject to the withholding tax, provided
certain certification and disclosure requirements are satisfied.
Instead, such dividends are subject to U.S. federal income
tax on a net income basis in the same manner as if the
non-U.S. holder
were a United States person as defined under the Code. Any such
effectively connected dividends received by a foreign
corporation may be subject to an additional branch profits
tax at a 30% rate or such lower rate as may be specified
by an applicable income tax treaty.
A
non-U.S. holder
of our common stock who wishes to claim the benefit of an
applicable treaty rate and avoid backup withholding, as
discussed below, for dividends will be required (a) to
complete Internal Revenue Service
Form W-8BEN
(or other applicable form) and certify under penalty of perjury
that such holder is not a United States person as defined under
the Code and is eligible for treaty benefits or (b) if our
common stock
S-12
is held through certain foreign intermediaries, to satisfy the
relevant certification requirements of applicable United States
Treasury regulations. Special certification and other
requirements apply to certain
non-U.S. holders
that are pass-through entities rather than corporations or
individuals.
A
non-U.S. holder
of our common stock eligible for a reduced rate of
U.S. withholding tax pursuant to an income tax treaty may
obtain a refund of any excess amounts withheld by filing an
appropriate claim for refund with the Internal Revenue Service.
Gain on
Disposition of Common Stock
Any gain realized on the disposition of our common stock
generally will not be subject to U.S. federal income tax
unless:
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the gain is effectively connected with a trade or business of
the
non-U.S. holder
in the United States (and, if required by an applicable income
tax treaty, is attributable to a U.S. permanent
establishment of the
non-U.S. holder);
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the
non-U.S. holder
is an individual who is present in the United States for
183 days or more in the taxable year of that disposition,
and certain other conditions are met; or
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we are or have been a United States real property holding
corporation for U.S. federal income tax purposes.
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An individual
non-U.S. holder
described in the first bullet point immediately above will be
subject to tax on the net gain derived from the sale under
regular graduated U.S. federal income tax rates. An
individual
non-U.S. holder
described in the second bullet point immediately above will be
subject to a flat 30% tax on the gain derived from the sale,
which may be offset by U.S. source capital losses, even
though the individual is not considered a resident of the United
States. If a
non-U.S. holder
that is a foreign corporation falls under the first bullet point
immediately above, it will be subject to tax on its net gain in
the same manner as if it were a United States person as defined
under the Code and, in addition, may be subject to the branch
profits tax equal to 30% of its effectively connected earnings
and profits or at such lower rate as may be specified by an
applicable income tax treaty.
We believe we are not and do not anticipate becoming a
United States real property holding corporation for
U.S. federal income tax purposes.
Federal
Estate Tax
Common stock held by an individual
non-U.S. holder
at the time of death will be included in such holders
gross estate for U.S. federal estate tax purposes, unless
an applicable estate tax treaty provides otherwise.
Information
Reporting and Backup Withholding
We must report annually to the Internal Revenue Service and to
each
non-U.S. holder
the amount of dividends paid to such holder and the tax withheld
with respect to such dividends, regardless of whether
withholding was required. Copies of the information returns
reporting such dividends and withholding may also be made
available to the tax authorities in the country in which the
non-U.S. holder
resides under the provisions of an applicable income tax treaty.
A
non-U.S. holder
will be subject to backup withholding for dividends paid to such
holder unless such holder certifies under penalty of perjury
that it is a
non-U.S. holder
(and the payor does not have actual knowledge or reason to know
that such holder is a United States person as defined under the
Code), or such holder otherwise establishes an exemption.
S-13
Information reporting and, depending on the circumstances,
backup withholding will apply to the proceeds of a sale of our
common stock within the United States or conducted through
certain
U.S.-related
financial intermediaries, unless the beneficial owner certifies
under penalty of perjury that it is a
non-U.S. holder
(and the payor does not have actual knowledge or reason to know
that the beneficial owner is a United States person as defined
under the Code), or such owner otherwise establishes an
exemption.
Any amounts withheld under the backup withholding rules may be
allowed as a refund or a credit against a
non-U.S. holders
U.S. federal income tax liability provided the required
information is furnished to the Internal Revenue Service.
S-14
CERTAIN
ERISA CONSIDERATIONS
Each person considering the use of plan assets
(within the meaning of Section 3(42) of the Employee
Retirement Income Security Act of 1974, as amended, or
ERISA) of a pension, profit-sharing or other
employee benefit plan, individual retirement account, Keogh plan
or other retirement plan, account or arrangement, or a
plan, to acquire or hold the common stock should
consider whether an investment in the common stock would be
consistent with the documents and instruments governing the
plan, and whether the investment would involve a prohibited
transaction under Section 406 of ERISA or Section 4975
of the Internal Revenue Code of 1986, as amended, or the
Code.
Section 406 of ERISA and Section 4975 of the Code
prohibit plans subject to Title I of ERISA
and/or
Section 4975 of the Code, including entities (such as
collective investment funds, partnerships and separate accounts
or insurance company pooled separate accounts or insurance
company general accounts) whose underlying assets include the
assets of such plans, or collectively, Plans, from
engaging in certain transactions involving plan
assets with persons who are parties in
interest under ERISA or disqualified persons
under the Code with respect to the Plan. A violation of these
prohibited transaction rules may result in civil penalties or
other liabilities under ERISA
and/or an
excise tax under Section 4975 of the Code for those
persons, unless exemptive relief is available under an
applicable statutory, regulatory, class or administrative
exemption. Certain plans including those that are governmental
plans (as defined in Section 3(32) of ERISA), certain
church plans (as defined in Section 3 (33) of ERISA)
and foreign plans (as described in Section 4(b)(4) of
ERISA) are not subject to the prohibited transaction provisions
of section 406 of ERISA or Section 4975 of the Code
but may be subject to similar provisions under other applicable
federal, state, local, foreign or other regulations, rules or
laws, or Similar Laws.
The acquisition or holding of the common stock by a Plan with
respect to which we or certain of our affiliates is or becomes a
party in interest may constitute or result in prohibited
transactions under ERISA or Section 4975 of the Code,
unless the common stock is acquired or held pursuant to and in
accordance with an applicable exemption.
Accordingly, the common stock may not be purchased or held by
any Plan or any person investing plan assets of any
Plan, unless such purchase or holding is eligible for the
exemptive relief available under a Prohibited Transaction Class
Exemption, or PTCE, such as
PTCE 96-23,
PTCE 95-60,
PTCE 91-38,
PTCE 90-1
or
PTCE 84-14
issued by the U.S. Department of Labor, or there is some
other basis on which the purchase and holding of the common
stock is not prohibited, such as the exemption under
Section 408(b)(17) of ERISA and Section 4975(d)(20) of
the Code, for certain transactions with non-fiduciary service
providers for transactions that are for adequate consideration.
Each purchaser or holder of the common stock or any interest
therein, and each person making the decision to purchase or hold
the common stock on behalf of any such purchaser or holder will
be deemed to have represented and warranted in both its
individual capacity and its representative capacity (if any),
that on each day from the date on which the purchaser or holder
acquires its interest in the common stock to the date on which
the purchaser disposes of its interest in the common stock, that
such purchaser and holder, by its purchase or holding of the
common stock or any interest therein that (a) its purchase
and holding of the common stock is not made on behalf of or with
plan assets of any Plan, or (b) if its purchase
and holding of the common stock is made on behalf of or with
plan assets of a Plan, then its purchase and holding
of the common stock will not result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975
of the Code. Each purchaser and holder of the common stock or
any interest therein on behalf of any governmental plan will be
deemed to have represented and warranted by its purchase or
holding of the common stock or any interest therein that such
purchase and holding does not violate any applicable Similar
Laws.
Due to the complexity of these rules and the penalties that may
be imposed upon persons involved in nonexempt prohibited
transactions, it is important that fiduciaries or other persons
considering purchasing the common stock on behalf of or with
plan assets of any plan or plan asset entity consult
with their counsel regarding the availability of exemptive
relief under any of the PTCEs listed above or any other
applicable exemption, or the potential consequences of any
purchase or holding under Similar Laws, as applicable.
S-15
UNDERWRITING
We are offering the shares of our common stock described in this
prospectus supplement through the underwriters named below.
Goldman, Sachs & Co., UBS Securities LLC and FTN
Midwest Securities Corp., which is an affiliate of ours
(discussed further below) are the underwriters and Goldman,
Sachs & Co., and UBS Securities LLC are the
representatives and joint book-running managers of this
offering. We have entered into an underwriting agreement with
the representatives on behalf of the underwriters. Subject to
the terms and conditions of the underwriting agreement, each of
the underwriters has severally agreed to purchase the number of
shares of common stock listed next to its name in the following
table:
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Underwriters
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Number of shares
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Goldman, Sachs & Co.
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29,875,000
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UBS Securities LLC
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29,875,000
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FTN Midwest Securities Corp.
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250,000
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Total
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60,000,000
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The underwriting agreement provides that the underwriters must
buy all of the shares if they buy any of them. However, the
underwriters are not required to take or pay for the shares
covered by the underwriters option to purchase additional
shares described below.
Our common stock is offered subject to a number of conditions,
including:
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receipt and acceptance of our common stock by the
underwriters; and
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the underwriters right to reject orders in whole or in
part.
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In connection with this offering, certain of the underwriters or
securities dealers may distribute prospectuses electronically.
Option to
Purchase Additional Shares
We have granted the underwriters an option to buy up to an
aggregate of 9,000,000 additional shares of our common stock.
The underwriters have 30 days from the date of this
prospectus to exercise this option. If the underwriters exercise
this option, they will each purchase additional shares
approximately in proportion to the amounts specified in the
table above.
Commissions
and Discounts
Shares sold by the underwriters to the public will initially be
offered at the offering price set forth on the cover of this
prospectus supplement. Any shares sold by the underwriters to
securities dealers may be sold at a discount of up to $0.255 per
share from the offering price. Sales of shares made outside of
the United States may be made by affiliates of the underwriters.
If all the shares are not sold at the public offering price, the
representatives may change the offering price and the other
selling terms. Upon execution of the underwriting agreement, the
underwriters will be obligated to purchase the shares at the
price and upon the terms stated therein and, as a result, will
thereafter bear any risk associated with changing the offering
price to the public or other selling terms.
The following table shows the per share and total underwriting
discounts and commissions we will pay to the underwriters,
assuming both no exercise and full exercise of the
underwriters option to purchase up to an additional
9,000,000 shares:
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No exercise
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Full exercise
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Per share
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$
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0.425
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$
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0.425
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Total
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$
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25,500,000
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$
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29,325,000
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We estimate that the total expenses of this offering payable by
us, not including the underwriting discounts and commissions,
will be approximately $1,100,000.
In compliance with FINRA guidelines, the maximum commission or
discount to be received by any FINRA member or independent
broker-dealer may not exceed 8% of the aggregate amount of the
securities offered pursuant to this prospectus supplement.
No Sales
of Similar Securities
We and our executive officers and directors have entered into
lock-up
agreements with the underwriters. Under these agreements,
subject to certain exceptions, we and each of these persons may
not, without the prior written approval of Goldman,
Sachs & Co. and UBS Securities LLC, issue, offer,
sell, contract to sell or otherwise dispose of, directly or
indirectly, or hedge our common stock or securities convertible
into or exchangeable or exercisable for our common stock. These
restrictions will be in effect for a period of 90 days
after the date of this prospectus supplement. At any time and
without public notice, Goldman, Sachs & Co. and UBS
Securities LLC may, in their discretion, release all or some of
the securities from these
lock-up
agreements. These restrictions will not prevent us from issuing
shares of common stock or other awards under our current
employee benefit plans or pursuant to certain acquisitions of
other companies or businesses for common stock, or, in the case
of our executive officers, the withholding of common stock to
pay the exercise price or withholding taxes on the exercise of
stock options or similar equity investments, certain transfers
for estate planning purposes, or transfers to related persons or
entities that agree to comply with the foregoing restrictions.
Indemnification
and Contribution
We have agreed to indemnify the underwriters against certain
liabilities, including certain liabilities under the Securities
Act. If we are unable to provide this indemnification, we have
agreed to contribute to payments the underwriters may be
required to make in respect of those liabilities.
New York
Stock Exchange Listing
Our common stock is listed on the New York Stock Exchange under
the symbol FHN.
Price
Stabilization; Short Positions
In connection with this offering, the underwriters may engage in
activities that stabilize, maintain or otherwise affect the
price of our common stock, including:
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stabilizing transactions;
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short sales;
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purchases to cover positions created by short sales;
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imposition of penalty bids; and
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syndicate covering transactions.
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Stabilizing transactions consist of bids or purchases made for
the purpose of preventing or retarding a decline in the market
price of our common stock while this offering is in progress.
These transactions may also include making short sales of our
common stock, which involve the sale by the underwriters of a
greater number of shares of common stock than they are required
to purchase in this offering and purchasing shares of common
stock on the open market to cover positions created by short
sales. Short sales may be covered short sales, which
are short positions in an amount not greater than the
underwriters option to purchase additional shares referred
to above, or may be naked short sales, which are
short positions in excess of that amount.
The underwriters may close out any covered short position either
by exercising their option to purchase additional shares, in
whole or in part, or by purchasing shares in the open market. In
making this determination, the underwriters will consider, among
other things, the price of shares available for purchase in
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the open market compared to the price at which they may purchase
shares through the option to purchase additional shares.
Naked short sales are sales in excess of the option to purchase
additional shares. The underwriters must close out any naked
short position by purchasing shares in the open market. A naked
short position is more likely to be created if the underwriters
are concerned that there may be downward pressure on the price
of the common stock in the open market that could adversely
affect investors who purchased in this offering.
The underwriters also may impose a penalty bid. This occurs when
a particular underwriter repays to the underwriters a portion of
the underwriting discount received by it because the
representative has repurchased shares sold by or for the account
of that underwriter in stabilizing or short covering
transactions.
As a result of these activities, the price of our common stock
may be higher than the price that otherwise might exist in the
open market. If these activities are commenced, they may be
discontinued by the underwriters at any time. The underwriters
may carry out these transactions on the New York Stock Exchange,
in the over-the-counter market or otherwise.
Affiliations
After the distribution of the common stock, FTN Midwest
Securities Corp. will not be able to make a market in the common
stock due to certain regulatory restrictions arising from its
affiliation with First Horizon. Additionally, FTN Midwest
Securities Corp. will not be able to effect any transactions for
the account of any customers in the common stock except on an
unsolicited basis.
FTN Midwest Securities Corp. is an indirect, wholly owned
subsidiary of First Horizon and is a member of FINRA.
Accordingly, the offering of the common stock will conform to
the requirements set forth in Rule 2720 of the FINRA
Conduct Rules. The underwriters may not confirm sales to any
discretionary account without the prior specific written
approval of a customer.
The underwriters and their affiliates have from time to time
provided and may provide certain investment banking, commercial
banking and other financial advisory services to us and our
affiliates, for which they have received and may continue to
receive customary fees and commissions. The underwriters and
their affiliates may from time to time in the future engage in
transactions with us and perform services for us in the ordinary
course of their business.
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SELLING
RESTRICTIONS
European
Economic Area
In relation to each Member State of the European Economic Area,
or EEA, which has implemented the Prospectus Directive (each, a
Relevant Member State), with effect from, and including, the
date on which the Prospectus Directive is implemented in that
Relevant Member State, or the Relevant Implementation Date, our
common stock will not be offered to the public in that Relevant
Member State prior to the publication of a prospectus in
relation to our common stock that has been approved by the
competent authority in that Relevant Member State or, where
appropriate, approved in another Relevant Member State and
notified to the competent authority in that Relevant Member
State, all in accordance with the Prospectus Directive, except
that, with effect from, and including, the Relevant
Implementation Date, our common stock may be offered to the
public in that Relevant Member State at any time:
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a)
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to legal entities which are authorized or regulated to operate
in the financial markets, or, if not so authorized or regulated,
whose corporate purpose is solely to invest in
securities; or
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b)
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to any legal entity which has two or more of (1) an average
of at least 250 employees during the last financial year;
(2) a total balance sheet of more than 43,000,000 and
(3) an annual net turnover of more than 50,000,000,
as shown in its last annual or consolidated accounts; or
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c)
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to fewer than 100 natural or legal persons (other than qualified
investors as defined in the Prospectus Directive) subject to
obtaining the prior consent of the representatives for any such
offer; or
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d)
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in any other circumstances which do not require the publication
by us of a prospectus pursuant to Article 3 of the
Prospectus Directive.
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As used above, the expression offered to the public
in relation to any of our common stock in any Relevant Member
State means the communication in any form and by any means of
sufficient information on the terms of the offer and our common
stock to be offered so as to enable an investor to decide to
purchase or subscribe for our common stock, as the same may be
varied in that Member State by any measure implementing the
Prospectus Directive in that Member State and the expression
Prospectus Directive means Directive 2003/71/ EC and
includes any relevant implementing measure in each Relevant
Member State.
United
Kingdom
Our common stock may not be offered or sold, and will not be
offered or sold, to any persons in the United Kingdom other than
to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or
as agent) for the purposes of their businesses and in compliance
with all applicable provisions of the Financial Services and
Markets Act 2000, or the FSMA, with respect to anything done in
relation to our common stock in, from, or otherwise involving
the United Kingdom. In addition, each underwriter has only
communicated, or caused to be communicated, and will only
communicate or cause to be communicated, any invitation or
inducement to engage in investment activity (within the meaning
of Section 21 of the FSMA) received by it in connection
with the issue or sale of our common stock in circumstances in
which Section 21(1) of the FSMA does not apply to us.
Without limitation to the other restrictions referred to herein,
this prospectus is directed only at (1) persons outside the
United Kingdom, (2) persons having professional experience
in matters relating to investments who fall within the
definition of investment professionals in
Article 19(5) of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005; or (3) high net
worth bodies, corporate, unincorporated associations and
partnerships and trustees of high value trusts as described in
Article 49(2) of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005. Without limitation to the
other restrictions referred to herein, any investment or
investment activity to which this prospectus relates is
available only to, and will be engaged in only with, such
persons, and persons within the United Kingdom who receive this
communication (other than persons who fall within (2) or
(3) above) should not rely or act upon this communication.
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Hong
Kong
Our common stock may not be offered or sold by means of any
document other than (i) in circumstances which do not
constitute an offer to the public within the meaning of the
Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to
professional investors within the meaning of the
Securities and Futures Ordinance (Cap.571, Laws of Hong Kong)
and any rules made thereunder, or (iii) in other
circumstances which do not result in the document being a
prospectus within the meaning of the Companies
Ordinance (Cap.32, Laws of Hong Kong), and no advertisement,
invitation or document relating to our common stock may be
issued or may be in the possession of any person for the purpose
of issue (in each case whether in Hong Kong or elsewhere), which
is directed at, or the contents of which are likely to be
accessed or read by, the public in Hong Kong (except if
permitted to do so under the laws of Hong Kong) other than with
respect to shares which are, or are intended to be, disposed of
only to persons outside Hong Kong or only to professional
investors within the meaning of the Securities and Futures
Ordinance (Cap. 571, Laws of Hong Kong) and any rules made
thereunder.
Singapore
This prospectus has not been registered as a prospectus with the
Monetary Authority of Singapore. Accordingly, this prospectus
and any other document or material in connection with the offer
or sale, or invitation for subscription or purchase, of our
common stock may not be circulated or distributed, nor may our
common stock be offered or sold, or be made the subject of an
invitation for subscription or purchase, whether directly or
indirectly, to persons in Singapore other than (i) to an
institutional investor under Section 274 of the Securities
and Futures Act, Chapter 289 of Singapore (the
SFA), (ii) to a relevant person, or any person
pursuant to Section 275(1A), and in accordance with the
conditions, specified in Section 275 of the SFA or
(iii) otherwise pursuant to, and in accordance with the
conditions of, any other applicable provision of the SFA.
Where the shares are subscribed or purchased under
Section 275 by a relevant person which is: (a) a
corporation (which is not an accredited investor) the sole
business of which is to hold investments and the entire share
capital of which is owned by one or more individuals, each of
whom is an accredited investor; or (b) a trust (where the
trustee is not an accredited investor) whose sole purpose is to
hold investments and each beneficiary is an accredited investor,
shares, debentures and units of shares and debentures of that
corporation or the beneficiaries rights and interest in
that trust will not be transferable for 6 months after that
corporation or that trust has acquired the shares under
Section 275 except: (1) to an institutional investor
under Section 274 of the SFA or to a relevant person, or
any person pursuant to Section 275(1A), and in accordance
with the conditions, specified in Section 275 of the SFA;
(2) where no consideration is given for the transfer; or
(3) by operation of law.
Japan
Our common stock has not been and will not be registered under
the Securities and Exchange Law of Japan (the Securities and
Exchange Law) and our common stock will not be offered or sold,
directly or indirectly, in Japan, or to, or for the benefit of,
any resident of Japan (which term as used herein means any
person resident in Japan, including any corporation or other
entity organized under the laws of Japan), or to others for
re-offering or resale, directly or indirectly, in Japan, or to a
resident of Japan, except pursuant to an exemption from the
registration requirements of, and otherwise in compliance with,
the Securities and Exchange Law and any other applicable laws,
regulations and ministerial guidelines of Japan.
Switzerland
Shares of our common stock may be offered in Switzerland only on
the basis of a non-public offering. This prospectus does not
constitute an issuance prospectus according to
articles 652a or 1156 of the Swiss Federal Code of
Obligations or a listing prospectus according to article 32
of the Listing Rules of the Swiss exchange. The shares of our
common stock may not be offered or distributed on a professional
basis in or from Switzerland and neither this prospectus nor any
other offering material relating to shares of our common
S-20
stock may be publicly issued in connection with any such offer
or distribution. The shares have not been and will not be
approved by any Swiss regulatory authority. In particular, the
shares are not and will not be registered with or supervised by
the Swiss Federal Banking Commission, and investors may not
claim protection under the Swiss Investment Fund Act.
Canada
The underwriters have not offered or sold, and will not offer or
sell, any shares of common stock, directly or indirectly, in any
province or territory of Canada or to, or for the benefit of,
any resident of any province or territory of Canada in
contravention of the securities laws thereof. The underwriters
will ensure that any offer or sale of shares of common stock in
Canada will be made only (a) in accordance with an
exemption from the requirement to file a prospectus in the
province or territory of Canada in which such offer or sale is
made, and (b) by a dealer duly registered under the
applicable securities laws of that province or territory or in
circumstances where an exemption from the applicable registered
dealer requirements is available and will send to any dealer who
purchases from it any of our shares of common stock a notice
stating in substance that, by purchasing such shares, such
dealer represents and agrees that it has not offered or sold,
and will not offer or sell, directly or indirectly, any of such
shares in any province or territory of Canada or to, or for the
benefit of, any resident of any province or territory of Canada
in contravention of the securities laws thereof and that any
offer or sale of shares of common stock in Canada will be made
only (a) in accordance with an exemption from the
requirement to file a prospectus in the province or territory of
Canada in which such offer or sale is made, and (b) by a
dealer duly registered under the applicable securities laws of
that province or territory or in circumstances where an
exemption from the applicable registered dealer requirements is
available, and that such dealer will deliver to any other dealer
to whom it sells any of such shares a notice containing
substantially the same statement as is contained in this
sentence. The underwriters have also agreed to comply with all
applicable laws and regulations, and make or obtain all
necessary filings, consents or approvals, in each Canadian
jurisdiction in which they purchase, offer, sell or deliver
shares of common stock (including, without limitation, any
applicable requirements relating to the delivery of this
prospectus), in each case, at their own expense. In connection
with sales of and offers to sell shares of common stock made by
them, the underwriters will either furnish to each Canadian
Person to whom any such sale or offer is made a copy of the then
current prospectus, or inform such person that such prospectus
will be made available upon request, and will keep an accurate
record of the names and addresses of all persons to whom they
give copies of this prospectus, or any amendment or supplement
to this prospectus; and when furnished with any subsequent
amendment to this prospectus, any subsequent prospectus or any
medium outlining changes in this prospectus, the underwriters
will promptly forward copies thereof to such persons or inform
such persons that such amendment, subsequent prospectus or other
medium will be made available upon request.
Canadian Person means any national or resident of
Canada (other than an individual resident in a Canadian province
or territory where such individual is prohibited from purchasing
securities under local provincial and territorial securities
laws), or any corporation, person, profit-sharing or other trust
or other entity organized under the laws of Canada or of any
political subdivision thereof (other than a branch located
outside Canada of any or Canadian Person), and includes any
Canadian branch of a person who is otherwise not a Canadian
Person.
S-21
VALIDITY
OF COMMON STOCK
The validity of the common stock will be passed upon for First
Horizon by Charles T. Tuggle, Jr., Executive Vice President
and General Counsel of First Horizon, and for the underwriters
by Simpson Thacher & Bartlett LLP. Simpson
Thacher & Bartlett LLP will rely upon the opinion of
Mr. Tuggle as to matters of Tennessee law. As of
April 16, 2008, Mr. Tuggle beneficially owned
41,899 shares of our common stock, including shares to be
acquired upon the exercise of options and shares held in our
401(k) Plan.
EXPERTS
Our consolidated statements of condition as of December 31,
2007 and 2006, and the related consolidated statements of
income, shareholders equity and cash flows for each of the
years in the three-year period ended December 31, 2007, and
the effectiveness of internal control over financial reporting
as of December 31, 2007, included in our Annual Report on
Form 10-K
for the year ended December 31, 2007, and incorporated by
reference herein, have been incorporated by reference herein in
reliance upon the reports of KPMG LLP, independent registered
public accounting firm, and upon the authority of said firm as
experts in accounting and auditing.
S-22